*ISLAMABAD – China has assured Pakistan that it will continue to helpPakistan overcome the crunch on foreign payment, senior PTI members toldthe Financial Timeslink.*
“China has promised to continue helping Pakistan overcome the crunch onforeign payments,” one prospective cabinet minister told the FT.
Chinese state-backed banks have lent Pakistan more than $5bn in the pastfinancial year as Islamabad has become increasingly reliant on its northernneighbour to secure its finances.
Another senior party leader said: “The Chinese have signalled their intentto keep helping Pakistan avoid a crisis, a default.” But he added thatChinese officials have urged their Pakistani counterparts “to take steps toreduce the large deficit”.
Imran Khan, the PTI chairman, is going to swear-in as Pakistan’s next PrimeMinister on August 18.
“One of his first tasks will be to repair the country’s balance of paymentsproblem, with high imports and low exports having left it with only $10.4bin foreign currency, according to the latest published statistics — enoughto cover two months’ worth of imports,” the FT wrote.
One finance ministry official told the FT: “Clearly, we mustn’t put all oureggs in the IMF basket. At least for the sake of argument, our future plansshould also include a back-up which is built on Chinese money.”
Beijing has not told Islamabad how much it might be willing to lend, orwhether it will be enough to avoid an IMF bailout. But Mr Umar toldreporters last week the Chinese ambassador to Pakistan had given theincoming government “his assurance that China is a friend that Pakistan cancount on”.