Two key Pakistani ministers are camping in Beijing to discuss the cash-strapped country's request for rescheduling its outstanding debts with China linked to the ambitious China-Pakistan Economic Corridor.
Muhammad Aurangzeb, Pakistan바카라s Minister for Finance and Revenue, and Sardar Awais Ahmad Khan Laghari, the Minister for Energy (Power Division) are both in Beijing for the last three days, media reports said here on Saturday.
The duo is meeting one authority and agency after the other, including Pan Gongsheng, Governor People바카라s Bank of China (PBoC), and Cao Yuanyuan, Deputy Secretary-General of National Association of Financial Market Institutional Investors (NAFMII).
The concern is that China was initially reluctant to discuss the issue, leading to a delayed visit, signalling their disagreement with Pakistan over talks related to energy loans, media reports said.
바카라Pakistan formally requested China on Thursday to reschedule its debts, with outstanding dues for China-Pakistan Economic Corridor (CPEC) power projects increasing by 44 per cent to Rs 401 billion by the end of the last fiscal year,바카라 The Express Tribune newspaper said.
According to power ministry documents, as of June 2024, the outstanding dues to Chinese power plants surged to Rs 401 billion, up Rs 122 billion or 44 per cent from the previous year.
바카라These unpaid debts, in violation of the 2015 CPEC Energy Framework Agreement, are hindering further financial and commercial relations between the two countries,바카라 the newspaper added.
The Pakistani officials requested an eight-year extension for repaying energy debt, converting US dollar-based interest payments to Chinese currency, and reducing overall interest rates for both CPEC and non-CPEC Chinese-funded projects, according to ministry officials.
These measures aim to lower energy costs and secure International Monetary Fund (IMF) approval for a USD 7 billion bailout package.
The Dawn newspaper said concerns are rising in Pakistan바카라s financial sector over the negotiations with Chinese authorities over the energy sector loans.
Stakeholders are anxious about the talks바카라 outcome which could have vital repercussions for foreign investment and exchange rate stability if the talks are not successful as desired by Pakistan, it added.
바카라We believe China will not outright reject Pakistan바카라s request to reschedule energy sector loans, but the final outcome appears bleak,바카라 a senior banker told the newspaper.
While Chinese investments have declined, they remain the largest in FY24. Combining investments from China and Hong Kong, foreign direct investment (FDI) amounted to nearly half of Pakistan바카라s total inflows, which increased by 17 per cent in FY24, The Dawn said.
바카라Our dependency on China has increased as we negotiate to reschedule USD 15 billion in energy sector loans, receive the highest FDI from China, and rely on them as our largest trade partner,바카라 another banker S S Iqbal told the newspaper.
The International Monetary Fund (IMF) has also pressed for structural changes during the talks for power sector debt relief.
This USD 2 billion loan that PBoC has agreed in March 2018 to give to the State Bank of Pakistan to shore up Pakistan바카라s foreign exchange reserves has been rolled over annually since 2018, with the most recent rollover occurring on February 29, 2024, the daily said, adding, 바카라The loan was due in March and was extended for one year.바카라
Iqbal pointed out that even while China supported Pakistan바카라s reserves, the State Bank stopped a USD 1.8 billion profit outflow to Chinese investors in FY24 and asked: 바카라How can the Chinese sit calm and cool with this kind of treatment?바카라
The Express Tribune said the Finance Ministry announced all the meetings that the minister duo held in Beijing. 바카라However, the Finance Ministry did not confirm whether China agreed to extend the loans or reduce the interest rates, which are critical for easing Pakistan바카라s balance of payments pressure and reducing energy costs,바카라 it added.
Pakistan has breached CPEC agreements by failing to make timely payments for power purchased from Chinese plants. 바카라This has made China Export and Credit Insurance Corp (SINOSURE) hesitant to fund a new coal-fired power plant and two hydroelectric plants,바카라 the report added.
