New Delhi: China is set to give Pakistan a big blow. According to Asia Times report, Dragon has stepped back from its commitment to the Belt and Road Initiative (BRI) of billions amid concerns over Pakistan’s spiraling debt, series of corruption scandals and rising security costs.
With China drastically tightening its purse strings, several important CPEC projects are now either stalled or are lagging behind schedule.
According to Asia Times, only 32 out of the 122 projects under CPEC have been completed till the third quarter of this fiscal year. And not just Pakistan, China’s BRI lending to other nations has also declined significantly in the past few years.
Data compiled by Boston University researchers show that total debt by the state-backed China Development Bank and the Export-Import Bank of China decreased from $ 75 billion in 2016 to only $ 4 billion last year. Estimates for 2020 show that this amount has further shrunk to $3 billion.
A report of Beijing said that Pakistan has forced China to look away from its major projects due to several reasons, including the high-profile corruption scandal in recent years. Research from Boston University has also confirmed this.
The report noted that Beijing is particularly upset at the fact that Chinese companies involved in the projects have entangled themselves in various corruption scandals, especially in the power sector. The report noted that a recent investigation by Pakistan’s Security and Exchange Commission found irregularities in the power sector at over $ 1.8 billion, with 16 Chinese companies involved in CPEC. These companies are receiving unfair subsidies and causing huge financial losses to the national exchequer.
According to Asia Times, the ongoing trade war with the US could be another major reason behind the change in China’s global lending strategy.