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Pakistan

Pakistani PM Imran Khan to visit China as cash-strapped government seeks funds on top of US$6 billion Saudi bailout

  • Prime Minister Imran Khan struck a 12-month deal for a balance of payments lifeline during a visit to Saudi Arabia
  • Khan has sought loans from friendly countries such as China and embarked on a series of high-profile populist austerity measures
PUBLISHED : Thursday, 25 October, 2018, 10:26am
UPDATED : Thursday, 25 October, 2018, 8:18pm

Pakistan’s Prime Minister Imran Khan will visit China next week, authorities said Thursday, as the former cricketer mounts a desperate search for funds to prop up the nation’s dire finances.

The confirmation of Khan’s first visit to China as premier comes days after Pakistan secured US$6 billion dollars in funding from Saudi Arabia to help stave off a widening balance of payment crisis.

Khan said in a televised address on Wednesday that he was working to nail down Saudi-style financing packages from two additional, unnamed countries to reduce the size of a potential loan from the International Monetary Fund.

By the will of Allah, I will give you more good news in the coming days
Imran Khan

The foreign affairs ministry said Khan would meet Chinese President Xi Jinping and Premier Li Keqiang on the November 2-5 trip which will take in Beijing and the commercial hub of Shanghai.

“The visit will provide an opportunity for the two countries to review the entire spectrum of bilateral relations with special reference to CPEC,” foreign ministry spokesman Muhammad Faisal said, referring to the China-Pakistan Economic Corridor.

CPEC is a multibillion-dollar infrastructure project aimed at building energy and transport links connecting the western Chinese region of Xinjiang with the Arabian Sea via Pakistan.

However, given Pakistan’s deteriorating finances, in recent months there have been concerns that portions of the ambitious agreement may have to be scaled down.

Analysts said Khan will be pushing for financial assistance from Beijing during the visit.

“Pakistan would certainly like China to play its role in supporting our balance of payments and this is going to be one major subject of discussions,” said economist Salman Shah.

“China has been providing financial support to Pakistan in difficult times and this will not be something new if they come forward this time also.”

Khan’s government has entered talks with the IMF on a potential bailout as it grapples with mounting deficits.

An IMF team is set to arrive in Pakistan in early November to begin negotiations.

‘Desperate’ Pakistan welcomes Saudi Arabia’s US$6 billion bailout amid global backlash against murder of Jamal Khashoggi

On Wednesday, Pakistani stocks climbed by nearly 4 per cent, after Saudi Arabia pledged to provide Islamabad with US$6 billion in financial help.

The benchmark KSE index of the Pakistan Stock Exchange gained 1,462 points or 3.85 per cent in intra-day trading to push the index to 39,176 points.

The boost came a day after Khan struck a 12-month deal for a balance of payments lifeline during a visit to Saudi Arabia, which will deposit US$3 billion with Pakistan’s central bank and provide a matching deferred payment facility for oil imports.

Since taking power in August, former cricketer Khan has sought loans from friendly countries such as China, promised to recover funds stolen by corrupt officials, and embarked on a series of high-profile populist austerity measures.