CPEC to Push Pakistan Deeper into Debt Burden, Cautions US

China Rejects US Fears of Pakistan's CPEC Debts

The United States has warned Pakistan that the China-Pakistan Economic Corridor (CPEC) would push the country deeper into an already stifling debt burden, foster corruption and repatriate jobs and profits to China.

In a speech, described as “unusually specific” by the international media, the top US diplomat for South Asia warned  that the multi-billion-dollar project would take a toll on Pakistan’s economy at the time of repayments and dividend in the coming years.

Assistant Secretary Alice Wells explained that CPEC was not an aid to Pakistan but a form of financing that guarantees profits for Chinese state-owned enterprises, with little benefits for Islamabad.

“CPEC’s most expensive single project is upgrading the railway from Karachi to Peshawar. When the project was initially announced, the price was set at $8.2 billion,” she said.

“But recent media reports claim the price is now risen to $9 billion,” she added. “So, why doesn’t the Pakistani public know the price for CPEC’s most expensive project or how it’s being determined?”

The US diplomat also underlined the long-term effects in Pakistan of China’s “financing practices” and urged Islamabad to examine “the burdens that are falling on the new government to manage with now an estimated $15 billion debt to the Chinese government and $6.7 billion in Chinese commercial debt”.

The Chinese Ambassador Yao Jing responded Allice  Wella  on Friday by saying that China-Pakistan Economic Corridor (CPEC) projects were free of corruption.

Speaking at the fifth CPEC media forum  in Islamabad, the envoy said that CPEC projects were investigated and it was unanimously concluded that there was no corruption in their affairs. “CPEC is clean,” he said.

Ambassador Yao said he was “shocked and surprised” at Ms Wells’ speech which “fully exposes her ignorance of Pakistan-China relations”.

He said the US should not cast aspersion over something about which it doesn’t have accurate information.

He said that Pak-China relations were based on win-win cooperation and were mutually beneficial.

China always came forward to assist Pakistan in need without any political or government differences.

The envoy said that if Pakistan was in need, China would never ask Pakistan to repay its loans in time. However, he pointed out, the International Monetary Fund (IMF) was strict in its repayment system.

He wondered why the US had suspended its aid promised to Pakistan and said Washington obviously did so because of political priorities. “When in 2013, the Chinese companies were establishing power plants in Pakistan, where was the US? Why it did not invest in Pakistan’s power sector despite knowing that Pakistan was in dire need of electricity?” he asked.

The Chinese ambassador also reacted to the US accusation of providing few jobs to Pakistani workers in CPEC projects, saying that so far over 75,000 Pakistani workers had been given job opportunities and that around 2.3 million jobs are expected to be created in CPEC projects by 2030.

As an international media report pointed out, this specific warning comes at a time when Washington and Islamabad are trying to rebuild their turbulent relationship.

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