Cash-strapped Pakistan is seeking a $3 billion (PKR 529 billion) loan from China and investments in half a dozen sectors during Prime Minister Imran Khan’s visit to Beijing last week. next week, according to a news report published Sunday.
Khan will travel to the Chinese capital on Feb. 3 to attend the opening of the Beijing Winter Olympics and also meet with senior Chinese leaders on the sidelines of bilateral talks.
The Express Tribune reported, citing government sources, that a final meeting to set the agenda for the visit would take place on Tuesday.
A senior finance ministry official said the government is considering asking China to approve another $3 billion loan to China’s State Administration of Foreign Exchange, known as deposits. SAFE, in order to increase its foreign exchange reserves.
China has already placed about USD 11 billion (PKR 1.94 trillion) with Pakistan in the form of commercial loans and foreign reserve support initiatives, including USD 4 billion (PKR 705 billion) in SAFE deposits.
Chinese money is part of the country’s current official foreign exchange reserves, which stand at $16.1 billion (PKR 2.8 trillion).
In the last fiscal year, the country paid more than PKR 26 billion in interest charges to China alone for using a $4.5 billion (PKR 794 billion) Chinese trade finance facility to repay maturing debt.
Last month, Pakistan also received a $3 billion (PKR 529 billion) loan from Saudi Arabia, which the country has used.
The Pakistani government aims to secure Chinese investment in six priority sectors by highlighting the country’s competitive advantages – cheap but skilled labor, geographical access to Europe and Asia and tax exemptions .
“We will commercialize the textile, footwear, pharmaceutical, furniture, agriculture, automobile and information technology sectors for Chinese investment,” the chairman of the board said. Azfar Ahsan investment.
The government should tell the 75 Chinese companies that it has provided access to trade routes to the Middle East, Africa and the rest of the world by offering greater incentives in the form of reduced freight costs .
“Unlike in the past when we only talked about the Pak-Sino friendship as being higher than the Himalayas and sweeter than honey, this time we will prepare for China with a structured approach,” the official said. Federal Minister of Planning and Development, Asad Umar, at The Express. Grandstand.
He added that with the participation of the China-Pakistan Economic Corridor Authority (CPEC), the government has selected foreign investment sectors where there is evidence of huge benefits for Chinese investors.
Pakistani authorities have said they believe its labor is half the price of China’s. This provides a greater opportunity for the relocation of dying Chinese industries.
However, all these areas and the competitive advantages are already known to investors, but they are still reluctant to bring big money to Pakistan due to its inconsistent fiscal and energy policies.
China has decided to shift to a more sophisticated, high-tech oriented textile and apparel industry and engage in higher value-added functions under its 2021-25 plan.
(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.
As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.
Support quality journalism and subscribe to Business Standard.