Pakistan caught in China's debt-trap, economy suffering due to…; Pakistani expert's big warning, says CPEC is…
Pakistan and China often describe their relationship as an “Iron Brothers” partnership. However, experts say China has mainly benefited from the relationship while Pakistan has become heavily dependent on. . .
Pakistan and China often describe their relationship as an “Iron Brothers” partnership. However, experts say China has mainly benefited from the relationship while Pakistan has become heavily dependent on Chinese loans. Under China’s Belt and Road Initiative (BRI), the two countries launched the China-Pakistan Economic Corridor (CPEC), with investments worth around $60 billion. A large part of this investment came in the form of high-interest loans. Pakistan is now reportedly seeking a $10 billion loan from the United States to strengthen its foreign exchange reserves and help repay expensive Chinese debt. Former Federal Board of Revenue (FBR) Chairman Syed Mohammad Shabbar Zaidi has blamed China for Pakistan’s worsening economic situation. Former FBR Chief Calls CPEC a FailureIn a recent interview, Syed Mohammad Shabbar Zaidi strongly criticised China and called CPEC a major problem for Pakistan. He said that if Pakistan stopped trading with China, its economy could improve immediately. According to Zaidi, China has caused more damage to Pakistan’s economy than the United States. “I have opposed CPEC from the very beginning,” Zaidi said. “I warned 25 years ago that it was a useless project. It would not bring industries or real economic growth. ”Pakistan Seeks US Loan to Repay Chinese DebtZaidi said that Gwadar Port, once promoted as the biggest success of CPEC, has failed to deliver the expected economic benefits. He also claimed that China built some of the world’s most expensive power plants in Pakistan, leaving the country with massive debt repayment obligations. Pakistan is now reportedly asking the United States for a $10 billion loan to improve its foreign exchange reserves and manage repayments linked to Chinese loans. IMF Loan Also Used to Ease Debt PressureAnalysts say Pakistan hopes its recent diplomatic efforts between the US and Iran could help improve relations with Washington and support its request for financial assistance. Earlier, Pakistan secured a $7 billion loan from the International Monetary Fund (IMF) to stabilise its economy and reduce pressure from costly Chinese loans. Pakistan has also requested China to extend the repayment period for nearly $16 billion in loans related to power projects, but Beijing has not yet approved the request. Pakistan Faces Huge Trade Deficit with ChinaChina remains Pakistan’s largest trading partner, but the trade relationship is heavily one-sided. Pakistan’s trade deficit with China has crossed $16 billion. China exports goods worth around $19. 5 billion to Pakistan each year, while Pakistan exports only about $2. 68 billion worth of goods to China. Experts say this growing trade imbalance has added further pressure on Pakistan’s already struggling economy. First published on:Aug 06, 2026 03:49 PM ISTGet Breaking News First and Latest Updates from India and around the world on News24. Follow News24 onFacebook,Twitter. End of ArticleRelated Story