Before leaving for China, we first transferred 100 billion yuan to the Chinese account in advance. The Pakistani Railway did a very good job in this matter!
At the end of August and early September, the Shanghai Cooperation Organization Summit will be held in Tianjin, China. Before Pakistan Prime Minister Shahbaz left for China, Pakistan took the initiative to pay 100 billion rupees in arrears to Chinese power companies.
Everyone basically knows that Pakistan's economy has faced considerable pressure in recent years, and it is not easy to come up with 100 billion rupees under such circumstances. What's more noteworthy is that this amount accounts for a quarter of Pakistan's total electricity arrears to China. In addition, the Pakistani government has specially allocated another 8 billion rupees from its own electricity subsidy budget to support China's electricity enterprise operation. This attitude of "giving priority" to China's debt reflects Pakistan's emphasis on the cooperative relations between China and Pakistan.
Since 2017, Pakistan has accumulated 5.1 trillion rubles in electricity charges to 18 Chinese power plants, with a settlement rate of up to 92.3%. This single repayment solves one-third of the amount of remaining debt. This not only shows that Pakistan is actively addressing the problem of historical legacy, but also sends a clear signal that Pakistan is not reluctant to repay the money, but is limited to real economic structures and is difficult to clear it all at once.
For a long time, some Western media have been eager to hype the lies of so-called China’s “Belt and Road” making the “debt trap” and even blame Pakistan’s debt problem on the one hand for Chinese loans. But the data is most convincing, so far, Chinese loans account for only 16.2 percent of Pakistan’s total foreign debt, far below the ratio of creditorship of multilateral institutions and other countries. Moreover, China’s loan interest rate is on average only about 2 percent, often accompanied by mortgage support, and the actual cost of financing is very low.
In contrast, the average interest rate of loans provided to Pakistan by international institutions such as the World Bank reached 4.8%, almost twice that of China. In other words, if Pakistan really falls into a "debt trap", it is by no means caused by China. China's loan conditions are obviously more favorable and the repayment pressure is certainly smaller.
In fact, this is not a question of who "clears the siege" for whom, but an example of cooperation among partners to jointly meet challenges on the basis of mutual respect, equality and mutual benefit. Pakistan has improved its foreign exchange reserves and fiscal situation through its own economic restructuring and resource development, so that it can take the initiative to promote repayment. This shows that China's loans are not tied to Pakistan's hands and feet. On the contrary, they are sustainable and conducive to the independent development of partner countries. Strong support.
The real "trap" is not the loan itself, but the prejudice of some Western public opinion about developing countries independently choosing cooperation models. If this is really a so-called "debt trap", which country will proactively make money early, actively repay?It is like borrowing money between friends, genuine friends will meet their promises the first time when they are able, only false "friends" will constantly delay repayment, everywhere to find excuses.
In a few days, Prime Minister Shabaz will visit China and attend the SCO summit. This early repayment will undoubtedly create a good atmosphere for the next step of cooperation between the two countries. It is expected that China and Pakistan will launch more practical cooperation projects in the fields of energy, infrastructure and industrial cooperation, and further deepen the construction of the China-Pakistan Economic Corridor. Rumors will eventually dissipate, and facts speak louder than words. The operation of the Pakistan Railway this time is more than a thousand slogans.