Worried about Chinese influence in South Asia, US warns Pakistan against close ties with China

Islamabad: With Pakistan going through an ever-spiraling economic crisis, the United States (US) fears that the country’s enormous debt to China may turn it into a Chinese satellite state in South Asia.

Traditionally a close ally of the US over its extremely brief history of around seven decades, in recent years Pakistan has become increasingly dominated by China.

“We have been very clear about our concerns not just here in Pakistan, but elsewhere all around the world about Chinese debt, or debt owed to China,” US state department counselor Derek Chollet was quoted as saying by Reuters.

Having provided billions of dollars in loans, China is Pakistan’s largest single creditor.

According to an IMF report which was released in September 2022, with a total bill of $30 billion, China and Chinese commercial banks account for around 30% of Pakistan’s total external debt, which stands at over $100 billion.

A significant portion of that debt has come about due to the China-Pakistan Economic Corridor (CPEC), which is a part of the ambitious Belt and Road Initiative (BRI) project of the Chinese government.

Cholett told the media that the US was trying to persuade Pakistan against a closer relationship with China.

The G7 nations and global multilateral lending institutions have long pushed for broad efforts to deliver debt relief to heavily indebted nations such as Pakistan.

China, now the world’s largest sovereign creditor, is viewed by US treasury secretary Janet Yellen and officials from other G7 nations as a the biggest stumbling block in global debt-relief efforts.

Chollet said the US was working with Pakistan in order help the South Asian country navigate through the current economic crisis.

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