ISLAMABAD: The US is concerned about debt owed to China by Pakistan, US state department counselor Derek Chollet said on Thursday during a visit to Islamabad as the country dealt with an economic crisis. Pakistan, historically a close ally of Washington, has become increasingly close to China, which has provided billions in loans and is Islamabad’s largest single creditor.
“We have been very clear about our concerns not just here in Pakistan, but elsewhere all around the world about Chinese debt, or debt owed to China,” Chollet said. China and Chinese commercial banks held about 30% of Pakistan’s total external debt of about $100 billion, according to a report by the IMF released in September last year. Much of that debt has come under the China-Pakistan Economic Corridor, part of Beijing’s Belt and Road Initiative. Cholett said Washington was talking to Islamabad about the “perils” of a closer relationship with Beijing, but would not ask Pakistan to choose between the US and China.
G7 and multilateral lending institutions have long pushed for broad efforts to deliver debt relief to heavily indebted nations. US treasury secretary Janet Yellen and other G7 officials see China, now the world’s largest sovereign creditor, as a key stumbling block in debt-relief efforts. Chollet said the US was working with Pakistan to navigate through the current crisis.
“We have been very clear about our concerns not just here in Pakistan, but elsewhere all around the world about Chinese debt, or debt owed to China,” Chollet said. China and Chinese commercial banks held about 30% of Pakistan’s total external debt of about $100 billion, according to a report by the IMF released in September last year. Much of that debt has come under the China-Pakistan Economic Corridor, part of Beijing’s Belt and Road Initiative. Cholett said Washington was talking to Islamabad about the “perils” of a closer relationship with Beijing, but would not ask Pakistan to choose between the US and China.
G7 and multilateral lending institutions have long pushed for broad efforts to deliver debt relief to heavily indebted nations. US treasury secretary Janet Yellen and other G7 officials see China, now the world’s largest sovereign creditor, as a key stumbling block in debt-relief efforts. Chollet said the US was working with Pakistan to navigate through the current crisis.