BEIJING: Officials from Pakistan and China have categorically stated that the misleading media’s reports about the debt could never affect the two countries’ growing socio-economic partnership under the economic corridor project.
Hoping that the media will show positivity and due care in their reporting, the officials from both sides in their separate statements issued in Islamabad and Beijing reiterated that the China Pakistan Economic Corridor (CPEC) is meant to ensure better future of their people. It could never be a burden on their economy, as was being portrayed by some media’s circles. Chinese newspaper, the Global Times quoting the officials said Pakistan, China relations will never be affected by an imaginary debt trap. It was reported by a section of the press that Pakistan owes $40 billion to China to repay debt and dividends on the latter’s investments made under the CPEC, raising concerns about a “debt trap,” whereas the actual figure is only $6.017 billion. The Chinese Embassy in Islamabad stated last week that China provided concessional loans of $5.874 billion for major Pakistani transportation projects. The Pakistani government will repay only $6.017 billion, including interest, to China. This was also confirmed by the Pakistan’s Ministry of Finance and the Ministry of Planning and Development. The officials, while clarifying the facts noted recent media reports questioning the viability of CPEC, claiming that it would create an unbearable debt burden for Pakistan. Such media reports are often one-sided, distort facts, and are based on irresponsible statements by individuals who either have no understanding of CPEC or are driven by ulterior motives. They pointed out that the CPEC projects are financed through a composite financing package comprising long-term government-to-government concessional and preferential loans, as well as grants from the Government of China. Repayments on these loans would not commence in the immediate future. It is because of the favourable financing arrangements that Pakistan opted for Chinese investment under CPEC. China stepped forward to support Pakistan’s development at a time when foreign investment had dried up, and economic activity was being crippled by energy shortages and infrastructure gaps. According to the officials, the CPEC has provided enormous opportunities for Pakistan to grow economically.