Facing Economic Issues at Home, China Scales Back Its Foreign Debt Assistance
MIN READJun 29, 2022 | 19:14 GMT
Chinese Foreign Minister Wang Yi holds a press conference with his Pakistani counterpart (not pictured) in Beijing, China, on Sept. 8, 2017.
(Lintao Zhang/Getty Images)
China’s modest debt assistance to Pakistan, one of its closest partners, shows how Beijing’s domestic economic and financial struggles are reducing its willingness to bail out the growing number of debt-distressed developing countries. On June 24, Pakistan’s finance minister Miftah Ismail announced on Twitter that a consortium of Chinese state banks had agreed to give Pakistan’s central bank $2.3 billion in new loans as a means of rolling over $2 billion in previous loans given by China’s central bank to Pakistan’s central bank that was coming due in June and July. The new funds will allow Pakistan to pay off the existing loans without dipping into the country’s dwindling foreign currency reserves. This comes after Beijing agreed to roll over another $2 billion in loans for Pakistan back in March. Global commodity prices and inflation are causing concerns in Pakistan and many other developing countries about their ability to sustain...