US concerned about debt Pakistan owes China, official says
Derek Chollet is leading a high-ranking delegation in Pakistan. An official claims that we wouldn't ask Pakistan to choose between the US and China. declares that Washington is collaborating with Islamabad to deal with the current crisis.
ISLAMABAD: During a visit to Islamabad on Thursday as the country dealt with an economic crisis, US State Department Counselor Derek Chollet stated that the United States is concerned about the debt owed to China by Pakistan and other nations.
China, which has provided billions in loans and is Islamabad’s largest single creditor, has become increasingly close to Pakistan, which has historically been a close ally of Washington. Pakistan is in the midst of a crippling economic crisis because of persistent debt repayment obligations, decades-high inflation, and critically low foreign exchange reserves.
After meeting with Pakistani officials, Chollet told journalists at the US Embassy in Islamabad, “We have been very clear about our concerns not just here in Pakistan, but elsewhere all over the world about Chinese debt, or debt owed to China.” Chollet was speaking to the media.
According to a report that was released in September of last year by the International Monetary Fund (IMF), China and Chinese commercial banks held approximately 30% of Pakistan’s total external debt, which was approximately $100 billion.
The China-Pakistan Economic Corridor, a component of Beijing’s Belt and Road Initiative, has contributed substantially to that debt.
Cholett stated that the United States would not ask Pakistan to choose between China and the United States and that Washington was talking to Islamabad about the “perils” of closer ties with Beijing.
Due to the war in Afghanistan, relations between Islamabad and Washington had become icy, but in recent months, there have been more high-level visits.
A multi-nation meeting of a new sovereign debt roundtable will take place on Friday and include representatives from China and the United States.
For a long time, the G7 and multilateral lending institutions have pushed for extensive debt relief for countries with a lot of debt in order to help them avoid cutting social services that could cause social unrest.
China, now the largest sovereign creditor in the world, is seen by US Treasury Secretary Janet Yellen and other G7 officials as a major obstacle to debt relief efforts.
Chollet stated that Pakistan and the United States were working together to resolve the current crisis.
