Pakistan’s Finance Minister Miftah Ismail has announced that China has provided Pakistan with an emergency loan worth 15 billion yuan, or about $2.3 billion. The money has now been successfully transferred into Pakistan’s account, and Ismail says that it will be used to help shore up the country’s finances. This is a welcome development for Pakistan, which has been grappling with a worsening economic crisis in recent months. The loan from China is a symbol of the close relationship between the two countries, and it will no doubt be a major boost for Pakistan’s economy.
What kind of trouble is Pakistan in? From political turmoil, to energy crisis, to a sharp decline in foreign exchange reserves, the Pakistani government is facing extremely severe pressure on its fiscal deficit. At the same time, Pakistan’s high inflation problem also has a great impact on people’s lives, data show that last month, Pakistan’s inflation rate soared to the highest peak value in the past two years, the most serious price increases in addition to food, is fuel.
In order to get the economy back on track, the Pakistani government has been taking measures, such as eliminating fuel subsidies and taxing the rich. The government is in a state of distress and the people are tightening their belts, a scene that is really happening in Pakistan.
So, with the facilitation of the Chinese government, a consortium of Chinese banks signed this 15 billion RMB agreement with Pakistan. The first foot of the RMB arrived, the second foot of the Pakistani rupee to the dollar exchange rate fell for many days immediately rebounded.
On his personal media account, Ismail repeatedly thanked China, saying that the money would help Pakistan to support itself through the immediate problems. And the first reaction of Chinese netizens after learning the news was “enough is not enough, not enough we have.” It is not surprising that such a simple sentiment is happening between China and Pakistan.
China’s helping hand this time, not only the value is high, there are many details worthy of scrutiny. According to reports, the original Chinese side has withdrawn the loan, but seeing that Pakistan is getting more and more difficult, the Chinese side not only lent a helping hand, the interest rate was also reduced from the original 2.5% to 1.5%. The amount is large, the interest rate is low, this time the Chinese assistance is really full of sincerity.
However, several political analysts in Pakistan, while recognizing the Chinese move, also questioned the Pakistani government. They believe that Pakistan has frequently sought loans from neighboring friendly countries, such as China and Saudi Arabia, in order to get through the fiscal deficit crisis. However, relying on the goodwill of friendly countries is not enough to solve the problem completely. Analysts also believe that relying on goodwill is a solution to the problem in the short term, but relying on it in the long term does not bode well.
Leave a Reply