China’s assistance for Pakistan can help deliver mutual benefits in the future

By Xiao Xin Source:Global Times Published: 2017/4/27 23:18:41

Loans offered by Chinese banks for Pakistan to fend off a currency crisis make a strong case for China's role as a far-sighted planner while it pushes ahead with the Belt and Road initiative.

China has twice come to Pakistan's aid since last year, providing loans adding up to more than $1 billion to help the South Asian nation, whose stocks of foreign currency have been "depleted in recent months by rising imports and falls in exports and remittances from Pakistanis abroad," the Financial Times reported on Tuesday.

The report also expressed doubts about the relationship between the two countries, saying that "despite its expected benefits, the China-Pakistan Economic Corridor infrastructure project is set to further deplete the foreign currency stocks, needed to pay contractors and suppliers," it said.

But China's investment in "One Belt and One Road" projects revolves around commercial principles rather than following the old path of aid-giving. Li Keping, then vice chairman of China Investment Corporation, the country's sovereign wealth fund, spoke at the 2015 Lujiazui Forum in Shanghai about the challenges the country might face in pushing for the Belt and Road initiative. China's outbound investment should insist on a market orientation and set clear commercial goals, he noted.

That means the country's injections in projects along the route are essentially not philanthropic acts. But it does not mean that China is merely focusing on profit maximization.

China has never looked to be a bean counter, but rather has a pure heart to build joint prosperity across countries and regions along the route. In a sign that investment in Belt and Road projects has actually turned out to be a growth engine, data from PricewaterhouseCoopers showed earlier this year that GDP growth across countries and regions along the route clocked an average of 4.6 percent in 2016, spurred by new infrastructure projects. By comparison, the growth rates of developing economies averaged 3.6 percent.

Such infrastructure investment is inherently long-term and will over the coming years fuel growth momentum for dozens of countries and regions along the route. That said, the loans provided to Pakistan are supposed to get the country back on track without being trapped in a cycle of foreign reserve depletion.

A friend in need is a friend indeed. China's sense of responsibility will lay the groundwork for the joint development of countries and regions along the Belt and Road route. China will also be increasingly viewed as a rare bastion of stability in an otherwise divisive and turbulent global economy.

The author is a reporter with the Global Times.


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