Finance Minister Miftah Ismail shared in a tweet that the government has reached a refinancing agreement of $2.3 billion with Chinese banks. The purpose of this agreement is to strengthen the $9.2 billion foreign exchange reserves (as on 3 June). In addition, extension of additional assistance of between $2.5 to $2.8 billion is also agreed upon.
Good News: The terms and conditions for refinancing of RMB 15 billion deposit by Chinese banks (about US$ 2.3 billion) have been agreed. Inflow is expected shortly after some routine approvals from both sides. This will help shore up our foreign exchange reserves.
— Miftah Ismail (@MiftahIsmail) June 2, 2022
As shared by the Business Recorder, highly placed sources revealed that the negotiations regarding economic package are still going on in Beijing with probably two stages of assistance; $2.3 billion would be flowed in during the initial phase, a vital International Monetary Fund (IMF) condition, and another $2.5 to $2.8 billion would be expended in the second phase.
In addition to these two packages, provision of military aid has also been agreed with a perspective to restore strategic partnership between the two countries and fostering it to the next level of cooperation in a variety of domains under the China-Pakistan Economic Corridor (CPEC).
Read more: Evolving China-Pakistan Relations
Regarding terms and conditions of the refinancing agreement, sources mentioned that the loans will be granted at concessional rates. However, Chinese side repeatedly emphasized the cruciality of refraining from any political disturbance, underlining the requirement for confirming that all predetermined commitments with the Chinese companies are fulfilled. The other side also underscored the importance of reviving projects previously abandoned by the PTI government.
Reaffirmation of strategic partnership between Pak-China militaries
As per the statement issued by the Inter-Services Public Relations (ISPR), the influential tri-force military delegation organized important discussions with Chinese senior military and government officials. The meeting took place on 12 June with the Chief of Army Staff General Qamar Javed Bajwa as lead from Pakistan and General Zhang Youxia Vice Chairman Central Military Commission of China led the Chinese side.
Both the sides exchanged their views on international and regional security conditions and were satisfied on defense cooperation between Pakistan and China.
Read more: Sino – Pakistan Defense and Strategic Cooperation
Moreover, sources also shared that Saudi Arabia has promised to provide assistance of worth $3 billion. Reliant on success of the seventh review, on 28 April during Shehbaz Sharif’s visit to Saudi Arabia, the reports showed that the Saudi government guaranteed further assistance together with the provision of deferred oil payment.
CPEC in the light of rejuvenated Sino-Pak focus
According to reports, Saudis insisted UAE to assist Pakistan deteriorating economy and productive discussions took place in this regard on during the visit of a senior level UAE delegation to Pakistan on Eid day.
Importantly, negotiations for the procurement of liquefied natural gas (LNG) on deferred payment with Qatar are also in their advanced phase.
Pakistan is optimistic after the positive discussions between foreign minister Bilawal Bhutto Zardari and Antony Blinken, US Secretary of State in New York, during the Climate Change conference. To bring Pakistan out of the Financial Action Task Force (FATF) grey list or, at the least, remove all objections, Washington may at best position to lend support.