China dumps Sri Lanka, Pakistan amid financial trouble | Latest English News | WION

Two countries in the Indian subcontinent are grappling with the deepening economic crisis. The economic mismanagement in Sri Lanka has triggered major political turmoil while Pakistan has its own share of economic concerns. The Pakistani rupee has plunged to an all-time low against the dollar. Two friends of China are facing major economic challenges but Chinese president Xi Jinping has been reluctant to pull out the checkbook.

Now two countries in the indian subcontinent are grappling with the deepening economic crisis the economic mismanagement in sri lanka has triggered major political turmoil while pakistan has its own share of economic concerns the pakistani rupee has plunged to an all-time low against the dollar two friends of china are facing economic challenges chinese president

Xi jinping has been reluctant to pull out the checkbook for sri lanka the economic crisis in sri lanka has transformed into a political crisis the streets of colombo witnessed violent clashes but china has not responded to sri lanka’s pleas for 2.5 billion dollars in credit support china has been hesitant in helping its all-weather friend pakistan as well both

Sri lanka and pakistan are burdened under debt from china last month before approaching the international monetary fund for help sri lanka had unilaterally suspended external debt repayments china is one of sri lanka’s largest bilateral lenders 10 percent of the island nation’s debt is from china nearly 10 percent of it is also from japan so china alone cannot

Bail out sri lanka for weeks now the imf loan program for sri lanka has been under discussion the imf says it requires adequate assurances that sri lanka’s debt can be put on a sustainable path for now it has asked sri lanka to restructure its debt before a bailout sri lanka then turned to one of its biggest lenders china to restructure the debt china expressed

Apprehension over sri lanka seeking a bailout package from the imf beijing warned that such a move would impact the ongoing credit talks days later beijing made a u-turn china now says that it backs sri lanka’s decision to work with the imf to restructure its debt beijing played hardball earlier but ultimately gave in sri lanka has received assurances from china

And the imf however there has been no progress so far problems for bankrupt pakistan are also mounting it’s all whether ally china is not helping with the debt crisis the over dependence on china for economic development has clearly not gone well now both pakistan and sri lanka were supposed to be the biggest beneficiaries of the so-called economic assistance

From china but instead of becoming more resilient they landed in an economic mess disappointed and let down pakistan turned to saudi arabia the new prime minister shahbaz sharif met the saudi crown prince and got much needed support in the form of an 8 billion dollar bailout now according to the world bank pakistan owes one-fifth of its external debt to china

In march this year china did accept pakistan’s request to roll over a 4.2 billion dollar debt repayment to provide a major relief the then prime minister imran khan during his meet with xi jinping in february had made a request of a rollover which would be financial relief for the crisis hit pakistan economy and over the past few years china has been accused

Of using debt trap diplomacy to make developing countries dependent on beijing the question is why is china not helping its friends beijing has been hesitant to interfere in messy domestic political situations china is also one of the world’s largest single creditor nations it is carrying a lot of debt with countries where the prospects of paying back are quite

Limited its state-owned policy banks have been lending more to developing countries than the imf and world bank in some recent years all this comes on top of a tightening economic situation at home china is also facing its own economic troubles strict and longer covert 19 lockdowns have shut down its major cities its official growth target of 5.5 percent is also

In jeopardy experts say china’s role in helping to resolve the ongoing crisis in south asia may be limited despite its status as a major creditor new credit lines are now harder to approve as authorities emphasize risk management after years of an all-out push beijing has now chosen a cautious approach even for its high level belt and road initiative so china

Lent out heavily to both sri lanka and pakistan both allies over the years praised xi jinping bet on chinese investments basically they made a deal with the devil but beijing now seems to have abandoned both the countries leaving them high and dry and now it is waiting to see what efforts other actors like the international financial institutions will be making

Before they jump in to offer credit support currently india’s neighborhood is in deep economic turmoil sri lanka pakistan and nepal all three countries are tackling our financial crisis while india has been supporting sri lanka in its path of economic recovery reports say that the new shahbaz government in pakistan is pushing for resumption of commercial ties with new delhi you

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China dumps Sri Lanka, Pakistan amid financial trouble | Latest English News | WION By WION