China agrees US$2 billion loan to Pakistan, report says, as Beijing seeks to keep Imran Khan close

If there were any doubts about China’s intent to keep ties close with its all-weather ally Pakistan, Beijing demolished them with a reported US$2 billion loan just days after the election of a new Pakistani premier.

While cricketing legend Imran Khan attempts to form a coalition government, China has stepped up to reinforce a geopolitical alliance that shapes the South Asian nation’s policies towards the US and India. The announcement caused Pakistan’s rupee to jump the most in nearly a decade as Khan takes power with an economy in chaos.

The gesture speaks to Pakistan’s overwhelming reliance on China as a source of financial, diplomatic and military support at a time when US President Donald Trump has cut military aid to Islamabad.

Ultimately, Khan may not have a choice. Pakistan’s powerful military has continued to push its civilian counterparts for close ties with China to ensure the flow of more than US$60 billion in loans for the China-Pakistan Economic Corridor (CPEC) infrastructure projects.

“There is a deep, far-reaching political consensus in Pakistan for a continued strong partnership with Beijing,” said Michael Kugelman, a senior associate for South Asia at the Woodrow Wilson Centre in Washington. “This is especially true now, with Pakistan’s relationship with America facing an uncertain future.”