Pakistan: Chinese help stemmed payment crisis

By Islamuddin Sajid

ISLAMABAD, Pakistan

Pakistan's balance of payment crisis is over after Beijing’s assurance it would provide short-term financial relief to Islamabad, the country’s finance minister said on Tuesday.

The announcement came a day before an International Monetary Fund team is due to arrive in Islamabad to discuss a financial package for the country.

Addressing a press conference with Foreign Minister Shah Mehmood Qureshi, Finance Minister Asad Umar said that during Premier Imran Khan’s just-concluded visit to China, Beijing agreed to extend an economic relief package to Pakistan.

"Pakistan urgently needed $12 billion to bridge the gap of the current account deficit, and that gap was almost filled with the help of Saudi Arabia and China," said Umar, but gave no details of China's package.

The governor of Pakistan’s State Bank and Finance Secretary Arif Ahmed Khan will meet Chinese officials on Friday in Beijing to discuss the package, he added.

China's economic future is linked to Pakistan through the China-Pakistan Economic Corridor (CPEC), though which China hopes to gain access to the Arabian Sea.

Saudi Arabia last month announced a $6 billion financial package for Pakistan during Khan’s visit to the kingdom.

Beijing and Islamabad signed 15 agreements and memoranda of understanding during Khan’s visit, including one for using Chinese currency in bilateral trade in lieu of U.S. dollars.

"The use of local currencies in bilateral trade would benefit both countries, while China also offered subsidized foreign exchange rates when both countries trade in local currencies," Umar said.

Qureshi said that both countries agreed to upgrade the strategic dialogue to the foreign minister-level and strengthen cooperation in all fields, including defense and the economy.

China and Pakistan also agreed that prisoners of both countries will serve their remaining sentences in their respective countries, Qureshi added.