Why is the US trying to bully Pakistan with empty China threats?

US Secretary of State Mike Pompeo warns Islamabad against using IMF money to pay back Beijing as Washington loses influence in a country that was once its top ally in the region

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A currency dealer in Quetta, Pakistan. Photo: AFP

Published: 1:45pm, 4 Aug 2018Updated: 1:51pm, 4 Aug 2018

Being unable to match Chinese investments in its neighbourhood, the US is now trying to bully Pakistan’s new government led by Imran Khan into taking it more seriously with empty threats.

US Secretary of State Mike Pompeo this week warned a prospective International Monetary Fund (IMF) bailout of Pakistan would be conditional on the South Asian country’s promise to ensure that none of the money is used to repay Chinese debt.

What will Pakistan’s new leader Imran Khan deliver for China?

“Make no mistake: we will be watching what the IMF does,” Pompeo told CNBC. “There’s no rationale for IMF tax dollars – and associated with that, American dollars that are part of the IMF funding – for those to go to bail out Chinese bondholders or China itself.”

US Secretary of State Mike Pompeo fired a warning shot at Pakistan. Photo: AFP

Pompeo’s remarks came on the heels of the unveiling of a US$113 million economic development fund for countries located along the Pacific and Indian Ocean rims, launched in conjunction with key US allies Japan and Australia – all of which see China’s ambitious “Belt and Road Initiative” of linking regional economies with infrastructure projects as a threat to their economic competitiveness. But it is a drop in the ocean compared with China’s largesse. The China Pakistan Economic Corridor (CPEC) linking the restive Xinjiang province to the Arabian Sea, the largest programme under the initiative, is valued at US$62 billion.

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“I don’t think Pompeo’s remarks mean the US doesn’t want to see an IMF bailout or that they want China to take on the financial responsibility. It’s just a warning shot,” said Andrew Small, an expert on China-Pakistan relations and fellow at the German Marshall Fund, a Washington think tank.

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