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BEIJING (Reuters) – China will provide economic aid to Pakistan, but talks will be held to resolve the problem, a Chinese diplomat said after Pakistan's new prime minister Imran Khan met with Prime Minister Chinese Minister Li Keqiang on Saturday.
Chinese President Xi Jinping Meets Pakistan's Prime Minister Imran Khan at the Great Hall of the People in Beijing on November 2, 2018. REUTERS / Thomas Peter / Pool
Pakistan's foreign exchange reserves have plunged 42 percent since the beginning of the year and now stand at about $ 8 billion (6.17 billion pounds), less than two months of import cover.
Last month, Pakistan received a $ 6 billion rescue package from Saudi Arabia, but officials said it was not enough and that the country is still considering seeking a rescue from the International Monetary Fund ( IMF) to avoid a balance of payments crisis.
This would be the 13th Pakistan bailout by the multilateral lender since the late 1980s.
Chinese Deputy Foreign Minister Kong Xuanyou, China's deputy foreign minister, told reporters that his country would provide help.
"During the visit, both sides made it clear in principle that the Chinese government would provide the necessary support and assistance to Pakistan to overcome the current economic difficulties," Kong said.
"With regard to the specific measures to be taken, the competent authorities of both sides will have in-depth discussions," he added, without giving details.
The day before, Mr. Khan told Chinese President Xi Jinping that he had inherited "a very difficult economic situation" at home.
Although China is Pakistan's closest ally, Khan's newly elected government has tried to rethink the two-nation flagship project, the $ 60 billion Sino-Pakistani economic corridor, Beijing calls it a flagship infrastructure program in its huge Initiative belt.
Pakistan has sought to modify the CPEC in order to put more emphasis on social development projects rather than infrastructure projects.
Kong said the number of CPEC projects would not be changed.
"There is no change at all. If there were, it would only increase, not reduce, the number of projects, he added.
However, the scope of the project would increase and promote the livelihoods of the people, added Kong, without further details.
After visiting Beijing, Mr. Khan will be one of the main speakers at a major import fair in Shanghai. China hopes that the country will welcome foreign companies and their products.
Report of Ben Blanchard; Edited by Jacqueline Wong
