In statement, embassy issues point-by-point rejoinder to allegations that the Belt and Road Initiative was increasing Pakistan’s debt burden
China on Wednesday hit out at the U.S. for alleging, once more, that a lack of transparency in projects initiated under the China-Pakistan Economic Corridor (CPEC) were increasing the debt burden on Islamabad.
The Chinese embassy in Pakistan issued the point-by-point rebuke over “negative propaganda” after American diplomat Alice Wells, currently in Islamabad for an official visit, told the audience at a think-tank in the federal capital that Chinese money was not “assistance” but costly loans that would enact a heavy toll on the country’s economy.
“[The] loan for CPEC is about $5.8 billion, accounting for 5.3 percent of Pakistan’s total foreign debt, with a repayment period of 20-25 years and an interest rate of approximately 2 percent. Its repayments will start in 2021, with annual repayments of about $300 million. It will never be a burden to Pakistan,” it said, noting that according to statistics issued by the State Bank of Pakistan international financial institutions such as the Paris Club and IMF were Islamabad’s largest creditors. “Moreover, China has never forced other countries to pay debts, and will not make unreasonable demands from Pakistan. The U.S. keeps fabricating the so-called debt story, their mathematics is bad, and their intention is worse,” it added.
To Wells’ claims that companies blacklisted by the World Bank had got contracts in the CPEC, the embassy said that all Chinese companies that were participating in the project enjoyed positive international reputes. “The Chinese government always requests Chinese companies to operate according to local laws and regulations,” the embassy said. “The entire process is open and transparent and is in line with international norm. We keep in touch with the accountability agencies of Pakistan and it is agreed that the CPEC is clean. The U.S. holds a stick of sanctions all over the world blacklisting this and that country, but it is not for the global economy, just ways to serve its own political purpose,” it said.
On the transparency of CPEC projects, the Chinese embassy said that every project was discussed, carefully studied and jointly implemented by both China and Pakistan. “All projects strictly follow the market-oriented and internationally accepted business model and adopt state-of the-art technology and strict environmental protection standards,” it said.
The U.S. also highlighted the cost escalation of the ML-1 project, which was launched in 2016. The initial design was submitted in May 2017 and in April 2019 it passed a review organized by Pakistan Railways. According to the embassy, the project had not been approved yet, and the expenditure would be adjusted according to the conditions and the needs of Pakistan. “After finalizing the design of the project, we will initiate a bidding process in accordance with international practice. This is a completely normal business practice,” it said.
The embassy said that Wells had employed the same dire warnings from her November 2019 speech, which was rejected by both China and Pakistan and prompted the U.S. envoy to Islamabad to issue a clarifying statement.
“However, the U.S. still ignores the facts and is obsessed with the story it made for the CPEC,” said the Chinese embassy. “We would be more than glad to see the U.S. develop its relationship with Pakistan, but we strongly oppose the U.S. interference in China-Pakistan relations and the CPEC. Although you can never wake up a person who is pretending to be asleep, we have to make our position clear and reject the negative propaganda by the U.S. We must not let the truth be distorted and lies run wild,” it added.
The embassy claimed that unlike the U.S., China wanted both its people and those of Pakistan to benefit from CPEC projects. “We put Pakistani people’s interests first. Major progress has been achieved in the past five years, with 32 projects achieving early harvests. This has significantly improved local transportation infrastructure and power supply, created over 75,000 jobs directly and contributed one to two percent of the GDP growth in Pakistan,” it said. “It shows that the CPEC is playing an important role in boosting Pakistan’s socioeconomic development and improving people’s livelihood. Whether the CPEC works, the answer should be given by the Pakistani people rather than the U.S.”
The statement also hit out at the U.S. for trying to sow discord between Pakistan and China. “Think about how much contribution have you [Washington] made for Pakistan. Did Ms. Wells bring any aid, investment or trade for Pakistan during her visit? If the U.S. truly cares about the development and prosperity of Pakistan and this region, it should bring cash and funds, promote win-win cooperation on the basis of mutual respect, fairness, and justice, rather than act as a world policeman, spreading rumors and provoking China-Pakistan relations,” it said.