Beijing has pledged to provide some $62 billion in investment loans to Islamabad as part of the China-Pakistan Economic Corridor (CPEC), which is set to become a crucial leg of the broader Belt and Road Initiative, China’s mega-project to connect the country with other parts of the world through massive infrastructure spending.
Debt-ridden Pakistan is looking forward to an inflow of Chinese investments under the CPEC, despite concerns that cooperation with Beijing would entail economic risks for the South Asian country.
Pakistani Prime Minister Imran Khan is expected to visit a Belt and Road forum in Beijing this week. Pakistan now plans to seek investment in sectors such as industry and agriculture from Chinese firms to “demonstrate the benefits flowing to the public”, a Pakistani cabinet minister told Nikkei.
The CPEC includes a series of infrastructure projects (a reconstructed seaport, a network of highways and railways, power plants, solar farms, and pipelines).
Islamabad, which is facing a growing budget deficit and government debt, expects that the CPEC will bring roughly 700,000 jobs to the nation of almost 200 million within ten years and rejuvenate its ailing economy.
Imran Khan has obtained economic relief from China and Saudi Arabia through short-term loans, but observers say a financial bailout from the IMF is inevitable.