China granted $48.5bn in bailing out to Pakistan

[my2cents]

Shouldnt have gone with CPEC. That anounted to the biggest import bill. On top of that it didnt provide anything substantial to the economy.

Thanks to your leaderaan, you are in deep sh**. They misled you about how transformational it will be for Pakistan.

 

[K_Bin_W]

So what's the Bangladeshi version of it?

The way BD is going I bet ya they are not too far behind India oops I meant Beverly Hills ..

 

[StraightEdge]

China needed CPEC more than Pakistan..Pakistan should have told China, "you are welcome tobuild the infra use them and pay tolls/fee to us " till x years and after that they will be ours (like all BOOT projects works) ..China would have happily done ...

So China to spend billions to build them, then pay toll to use them, and then pak gets to keep them forever. Unless the Chinese are proper idiots I don't think anyone is going to take you seriously.

 

[Bevvy Rosh]

JOHANNESBURG (Reuters) – China spent $240 billion bailing out 22 developing countries between 2008 and 2021, with the amount soaring in recent years as more have struggled to repay loans spent building "Belt & Road" infrastructure, according to a study published Tuesday.

Almost 80% of the rescue lending was made between 2016 and 2021, mainly to middle-income countries including Pakistan, Argentina, and Mongolia, according to the report by researchers from the World Bank, Harvard Kennedy School, AidData and the Kiel Institute for the World Economy.

China has lent hundreds of billions of dollars to build infrastructure in developing countries, but lending has tailed off since 2016 as many projects have failed to pay the expected financial dividends.

"Beijing is ultimately trying to rescue its own banks. That's why it has gotten into the risky business of international bailout lending," said Carmen Reinhart, a former World Bank chief economist and one of the study's authors.

Chinese loans to countries in debt distress soared from less than 5% of its overseas lending portfolio in 2010 to 60% in 2022, the study found.

Argentina received the most, with $111.8 billion, followed by Pakistan with $48.5 billion and Egypt with $15.6 billion. Nine countries received less than $1 billion.

The People's Bank of China (PBOC) swap lines accounted for $170 billion of the rescue financing, including in Suriname, Sri Lanka and Egypt. Bridge loans or balance of payments supported by Chinese state-owned banks was $70 billion. Rollovers of both kinds of loans were $140 billion.

China granted $48.5bn in bailing out to Pakistan

China granted $48.5bn in bailing out to Pakistan

dunyanews.tv

However, there are big differences between IMF programmes and Chinese bailouts. One is that Chinese money is not cheap. “A typical rescue loan from the IMF carries a 2 per cent interest rate,” said the study. “The average interest rate attached to a Chinese rescue loan is 5 per cent.”

China grants billions in bailouts as Belt and Road Initiative falters

New study attempts to capture total rescue loans from world’s biggest bilateral creditor

www.ft.com

https://indianmemetemplates.com/wp-content/uploads/maarenge-bhi-hum-aur-bachaayenge-bhi-hum.jpg

 

[BamsiBey]

Gwadar is a shithole for a reason. billions of dollars won't change anything

are you nuts?

We need to build more cities esp in balochistan that has immense resources but hasn't seen any development in decades. probably the most backward province in pakistan.

 

[Olympus81]

Couple of points to provide context.

- CPEC is/was a good initiative. Helps investment in Pakistan and serves strategic purpose for both countries.

- The Sharifs took a huge haircut on the first few tranches of CPEC. The Chief Grade 22 Chaprasi alluded to this fact to a journalist. The Chinese knew it but didn’t say a word, probably because it didn’t hurt them. That ate up into the ROI.

- Pakistan should have been more due diligent in selecting projects for CPEC. They should have been more targeted and revolved around infrastructure that gave the best ROI. Dams, rail, agriculture, industrial estate should be the main priorities. Others can just be financed by the government itself. Projects like Sahiwal Power Plant are a disaster in terms of ROI.

- The crooks of Pakistan just went on a borrowing spree, probably because there was massive kickbacks involved.

- Debt is not a bad thing. Provided you have a clear goal and ROI to pay back the debt. What we have here is bulldozing projects with no where near the ROI required to make the project viable.

 

[AA_]

So now we are are calling this rescue lending. Sounds so much better than debt trap.

All in how you word it. No difference from what the US does or has done.

are you nuts?

We need to build more cities esp in balochistan that has immense resources but hasn't seen any development in decades. probably the most backward province in pakistan.

Good point

 

[aryobarzan]

5% interest on $48 billion is $2.5 billion a year..Wow I did not know China extracts such a price from friendly countries...But as an independent observer I think it is worth it if the investment actually starts generating revenue and job for Pakistan.

 

[Olympus81]

5% interest on $48 billion is $2.5 billion a year..Wow I did not know China extracts such a price from friendly countries...But as an independent observer I think it is worth it if the investment actually starts generating revenue and job for Pakistan.

5% on $48bn is excessive.

Add 10% haircut on the loan for Zardari and Sharifs.

So what you have is $48bn loan, budget of about $43bn and an ROI to achieve is $48bn+5% annual interest.

That’s a f—ked up situation in an infrastructure project. The only people laughing are the Chinese and the Pakistani crooks.

 

[game]

So China to spend billions to build them, then pay toll to use them, and then pak gets to keep them forever. Unless the Chinese are proper idiots I don't think anyone is going to take you seriously.

Forget about paying tolls, but BRI is chinese initiative to access international markets,trade routes or sea ports to move its goods and import from other markets to China..CPEC benefits are tilted ore towards China and not Pakistan
here's how,

Suppose, I have big lot of land which i grow all kinds of veggies and beside it is my neighbours land..his land is almost barren ..uses just small part to grow veggies..enough for his family and little more. My neighbour's land is a adjacent to Highway and if for me to reach highway I have to go round about and travel 10 kms..but if i cut through from side of neighbours land ,it is just 1 km. I convinced my him that the road will get more demand to his land ..My neighbour gave me permission to use his land and access highway .
So, what I did, I hired a contractor and he built a road though my neighbours land and invoiced $100k ,which I sent it to my neighbour .He said he had no money ..then I said I will convert it to as a loan at 12% interest..He has not used the road from last 6 yrs and paying interest
I have convinced my neighbour about the prosperity that brings in
Now tell me who has benefited by the road i built through my neighbours property

 

[NAVDEEP DHALIWAL]

Forget about paying tolls, but BRI is chinese initiative to access international markets,trade routes or sea ports to move its goods and import from other markets to China..CPEC benefits are tilted ore towards China and not Pakistan
here's how,

Suppose, I have big lot of land which i grow all kinds of veggies and beside it is my neighbours land..his land is almost barren ..uses just small part to grow veggies..enough for his family and little more. My neighbour's land is a adjacent to Highway and if for me to reach highway I have to go round about and travel 10 kms..but if i cut through from side of neighbours land ,it is just 1 km. I convinced my him that the road will get more demand to his land ..My neighbour gave me permission to use his land and access highway .
So, what I did, I hired a contractor and he built a road though my neighbours land and invoiced $100k ,which I sent it to my neighbour .He said he had no money ..then I said I will convert it to as a loan at 12% interest..He has not used the road from last 6 yrs and paying interest
I have convinced my neighbour about the prosperity that brings in
Now tell me who has benefited by the road i built through my neighbours property

Your opinion is a little flawed in case of CEPEC. I never commented on cepec because Pakistanis were realy imotianal on this topic.
But now u have started seeing objectively than ask youself 2 questions:

1. What items china can send to other countries through CEPEC which cannot be sent at same price or at less price through Sea route?
2. After cepec how much more money china will make , than using sea route?

If , the answer is not a huge difference , than china will never do it with your terms & conditions

 

[SD 10]

Couple of points to provide context.

- CPEC is/was a good initiative. Helps investment in Pakistan and serves strategic purpose for both countries.

- The Sharifs took a huge haircut on the first few tranches of CPEC. The Chief Grade 22 Chaprasi alluded to this fact to a journalist. The Chinese knew it but didn’t say a word, probably because it didn’t hurt them. That ate up into the ROI.

- Pakistan should have been more due diligent in selecting projects for CPEC. They should have been more targeted and revolved around infrastructure that gave the best ROI. Dams, rail, agriculture, industrial estate should be the main priorities. Others can just be financed by the government itself. Projects like Sahiwal Power Plant are a disaster in terms of ROI.

- The crooks of Pakistan just went on a borrowing spree, probably because there was massive kickbacks involved.

- Debt is not a bad thing. Provided you have a clear goal and ROI to pay back the debt. What we have here is bulldozing projects with no where near the ROI required to make the project viable.

including projects like Metro bus in cpec and not including ML1 shows you exactly our priorities!

 

[etylo]

5% interest on $48 billion is $2.5 billion a year..Wow I did not know China extracts such a price from friendly countries...But as an independent observer I think it is worth it ifthe investment actually starts generating revenue and job for Pakis

British FT is as credible as Indian sources on Chinese matters, they are totally biased against China.

Quotes :

“We do not have a China debt problem, as China’s debt is only 26% of the total external debt of Pakistan,” said Umar while clearing China of Pakistan’s debt mess.

“The average interest rate of the CPEC energy project is 4% compared with 4.25% given by the World Bank, the Asian Development Bank and other western institutions,” he added.

He said a majority of infrastructure project loans were taken at a concessional rate of 2%.

We do not have China debt problem: Umar

 

[uhuru]

The problem is people brainwashed here. Just because its China doesnt mean we have to be onboard with anything and everything.

Chinese have a way of debt traps with countries. Plus it didnt provide any skills to our labour or employment. Most were chinese who didnt want to be here.

The way they are developing gwadar is already nonsensical. The port is cut off from the city and population. It feels and looks like colonization for the local population who are already suffering.



Development? For sure. Debt traps? No.

correct - just because you have good relations it does not mean taking them and putting them on pedestal as the new colonial masters. The new relationship was going that way here until our late Magafuli put end to this nonsense including building white elephants that did not have any valid definition.

CPEC could have been a two way relationship but it was a one way street. Why was there not any local industries sprung up to supply these projects including massive labour forces which could have been leveraged. We saw similar issues - their project, their labour, their materials - our local companies were shafted. So where is the partnership?

For Gwadar - it was to serve the elites and ISlamabad and their proxy sardars but locals be damned as they have been for decades. then to cut their livelihoods and others was nothing short of criminals. Then do you wonder why they are taking to the streets.

Here even the Chinese consulates have admitted, there are criminals in their own midst which is a huge admission.

 

[SaadH]

I do not know what stops China from training Pakistanis to build the roads and dams

Sepoys