China says AIIB won't be used for $46 billion Pakistan deal

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China says AIIB won't be used for $46 billion Pakistan deal

Reuters Published April 17, 2015

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BEIJING: China does not plan to use either its new Asian Infrastructure Development Bank (AIIB) or Silk Road fund to finance the $46 billion Pakistan-China Economic Corridor, with money to come from both countries instead, a senior diplomat said on Friday.

President Xi Jinping's trip to Pakistan next week is expected to focus on the corridor, a planned network of roads, railways and energy projects linking Pakistan's deepwater Gwadar port on the Arabian Sea with China's far-western Xinjiang region.

It would shorten the route for China's energy imports, bypassing the Straits of Malacca between Malaysia and Indonesia, a bottleneck at risk of blockade in wartime.

Chinese Assistant Foreign Minister Liu Jianchao said the project would be good for Pakistan's economic development, but would not be drawn on financing details.

“Several different facets will be utilised for the financing of these projects. Both sides will increase cooperation, to jointly provide financing support,” he told a news briefing.

“As to whether the AIIB or the Silk Road fund will be used, at present these [projects] are being looked into, or are in the planning stages. So at the moment we are not considering using these mechanisms or platforms or financial organisations to provide financing,” Liu said.

“The money needed is quite large, and China is willing to provide financing support to Pakistan,” he added, saying details would be released during the visit.

China announced last year it would contribute $40b to set up the Silk Road infrastructure fund to boost connectivity across Asia. The Beijing-founded AIIB will also invest in regional infrastructure.

Xi's trip is his first outside of the country this year, and also the first visit by a Chinese head of state to Pakistan in nine years. While the two countries refer to each other as “all-weather” friends, China has serious security concerns in Pakistan.

Beijing, concerned about stability in its far western region of Xinjiang, has long urged Islamabad to weed out what it says are Islamist separatists from there holed up in a lawless tribal belt on the Pakistan-Afghanistan border, home to a mix of militant groups.

Liu said that said China and Pakistan had very effective cooperation in tackling the militants, and Beijing approved of Islamabad's “resolute and decisive” actions on the problem.

Xi's trip will also include Indonesia, where he will attend the 60th anniversary of the Bandung Conference, a gathering of Asian and African leaders opposed to colonialism.

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Moosa

Apr 17, 2015 04:33pm

i hope our politicians and bureaucrats dont fill their own pockets with this deal. china is to gain heavily from this, we should be having a cut in it.

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Sachin Tandon

Apr 17, 2015 04:40pm

AIIB is not going to finance PAK China deal, instead, both countries will contribute, you understand how??, China have money for their side but PAK don't have, China will get lease of mines of Balochistan, after that Lease of Sui Gas field, after that all the Airports of Pakistan will be leased to China.

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Zak

Apr 17, 2015 04:44pm

Thanks ,we will take a separate loan from AIIB

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Kamal Pasha.

Apr 17, 2015 04:47pm

Very trustworthy friend of Pakiatan. Pakistan is proud to have China as a friend. China will be investing $46 billion from their own reserves.They will not spend AIIB's money. Just imagine $46 billions on a single trip. China is now the richest country in the world.

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Gaurav Arya

Apr 17, 2015 04:53pm

Reminds me of how the British built roads in India, leading to economic colonisation.

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Viking Star

Apr 17, 2015 04:57pm

@Gaurav Arya But its not late 1800 or early 1900. The world has changed a lot. Give n Take, Mutual Benefits is all that matters now. Simple business!

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Harsh

Apr 17, 2015 04:58pm

Within one week China realized that they don't want to fund this project on their own. In any case China can use their road links with India anytime and get even shorter routes.

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Raheem

Apr 17, 2015 05:00pm

Its totally colonising pakistan....We bleed with chines money because they bring their bed, food and loot our resources. They cut their goods delivery journey by 3000Km all the way Malaicca straight where Indian Naval eagal eyes sleeplessly combating....

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Raheem

Apr 17, 2015 05:02pm

At present these [projects] are being looked into, or are in the planning stages....money should come from bot

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Viking Star

Apr 17, 2015 05:03pm

@Kamal Pasha. Hellooooooo Mr Pasha! Who told you China is investing all the money from their pocket? You should read whole news before jumping to conclusion. You did not even read the first para, it clearly says the money would come from "both" countries. BEIJING: China does not plan to use either its new Asian Infrastructure Development Bank (AIIB) or Silk Road fund to finance the $46 billion Pakistan-China Economic Corridor, with money to come from both countries instead, a senior diplomat said on Friday.

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Viking Star

Apr 17, 2015 05:08pm

@Harsh No country has unilaterally funded such big amount in another country ever. Roads from/within India are out of question. India not only have border disputes with China but also the latter claims Arunachal Pradesh is their territory.

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IBN E ASHF AQUE

Apr 17, 2015 05:23pm

@Gaurav Arya The Chinese unlike the petty British have a 5000 years old civilization at their back what they are doing is called a win-win strategy.

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citizen

Apr 17, 2015 05:24pm

"Money has to come from both countries " But where is the money from this side? People were jubliant that all 46 billion will be an aid, but it seems chinese means business..Dhar knows where to get 23 billion for his side..

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goggy

Apr 17, 2015 05:35pm

with money to come from both countries instead, a senior diplomat said on Friday. >>>> How would this be possible when one is an ultra rich and other is a beggar.

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goggy

Apr 17, 2015 05:40pm

“The money needed is quite large, and China is willing to provide financing support to Pakistan,” he added, saying details would be released during the visit. >>> We will give you 23 bn but will take it back with interest ....

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goggy

Apr 17, 2015 05:41pm

While the two countries refer to each other as “all-weather” friends, China has serious security concerns in Pakistan. >>> then how can they be friends ?

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Global Citizen

Apr 17, 2015 05:46pm

Money to come from both countries...???? Pakistan doesn't have $23 Billion to spend. So the Chinese are willing to assist with "financing support"? Guess who makes money on the interest when you finance. So China gets to win both ways. It gets access to Gwadar and also gets to charge money to Pakistan for financing.....and Pakistan assumes another $23 Billion in external debt. Doesn't seem to be a very good deal for Pakistan but then you know Pakistani leadership is very smart........enough said!!!

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Global Citizen

Apr 17, 2015 05:48pm

@Viking Star ....and you think Pakistan has $23 Billion to invest? When you speak of money coming from both countries, take a pause for facts before commenting.

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Waseem

Apr 17, 2015 05:50pm

@Sachin Tandon dear Indian brother, your concerns are very valued for Pakistan, as we have already seen on number of other issues, how Indians stand side by side with us ;)

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Hassan

Apr 17, 2015 06:00pm

Strengthen relations with China, Iran, and Afghanistan and that will put us on road to development. We have no territorial disputes with these countries so most outstanding issues can be resolved.

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Zaffar

Apr 17, 2015 06:28pm

Since Pakistan also required to invest in the projects, money will come from China against mortgage of land and resources. China is a good country and will ensure no loop holes in case of any defaul in payment.

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Harmony

Apr 17, 2015 06:34pm

@Sachin Tandon - Why is that your problem where it comes from?

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shamain

Apr 17, 2015 08:09pm

@Sachin Tandon We will lease the intellect of our advisor to PM and it alone will fetch us billions per month.

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Gawal Mandi ya

Apr 17, 2015 08:49pm

If anyone here thinks that the Chinese are doing all this and investing BILLIONS of DOLLARS because they want to invest in their friendship than you are a fool,first and foremost,its in their best interest,not in Pakistan's,they will end up owning most of Pakistan,remember what they did when they loaned out BILLIONS of DOLLARS to the Americans.Pakistan is in one of the most strategic locations in the world,Americans want to be our friends because we are right nest to Afghanistan,China,Iran,China wants to be our friends because we are next to India,the whole world eyeing us because we are next to China,Iran and not too far from the middle east.Pakistan should use this to their advantage,unfortunately,we are too greedy and are on the verge of self destruction.

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Mustafa

Apr 17, 2015 08:53pm

Very good clarification. AIIB is an undertaking to challenge the Western monopoly on financial institutions, it should not be seen as serving China's governmental policies. $46 billion is a pittance for China anyway, there are a thousand ways to skin a cat.

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Mustafa

Apr 17, 2015 08:55pm

@Gaurav Arya; "Reminds me of how the British built roads in India, leading to economic colonization." Is India now owned by Bill gates??

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Abdullah Yousuf

Apr 17, 2015 08:59pm

Congratulations to PML Nawaz Shareef and his team.This is an historic economic mega event. Current century is win win era for Pakistan,once this nation got strong economically all aspects will be perfect. Although Pak-India trade is ongoing but it could be multiplied to the benefit of both if trust deficit be removed,and both look forward in opening huge opportunities by opening hearts,opening transit trade corridors,opening travel ,like in EU.Let us look forward to a peaceful and prosperous sub-continent.

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ALI

Apr 17, 2015 09:02pm

Money from the both countries means sharing from the pakistan insure that the project is for its benefits like to pay for pakistani labors, and to handle NHA(national highway authority), In all these expenditure pakistan has to pay according to my understanding is 10 percents like before projects karakurum highway.

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Mustafa

Apr 17, 2015 09:02pm

So many Indians are so concerned about Pakistan, it is so sweet. Indians truly believe in philosophy of love.

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Ahmed

Apr 17, 2015 09:39pm

Good job Pmln. Thank you nawaz sharif.pakistan will prosper under your leadership

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chiru

Apr 17, 2015 09:40pm

@Raheem ....its true

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Surinder Kade

Apr 17, 2015 09:43pm

China will give loan for the projects to Pakistan and when Pakistan is unable to repay the loan due to the interst plus the high amount of loan it will be converted in to the equity and China will hold and own every thing.Just look at African countries

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Apr 17, 2015 09:49pm

""It would shorten the route for China's energy imports"".. Does it mean that those millions of barrels of oil, instead of going by the large super tanker ships, would be transported by road from Gwadar? Really!!. Has someone, ever do a little home work on it? The shear vol. is huge and just not possible. Then, the cost.

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Guest

Apr 17, 2015 09:56pm

@Hassan Strengthen relations with China, Iran, and Afghanistan and that will put us on road to development. We have no territorial disputes with these countries so most outstanding issues can be resolved. Nope no territorial disputes at all, except that your guys killed couple of dozens of iranian soldiers last week, few hundred afganis in last few years and couple of chineese

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Alam

Apr 17, 2015 10:34pm

Before having doubt's on Pakistan's ability to provide funds for this projects Indians should look at India's ability to arrange funds for the improvement of infrastructure in India. India have borrowed from world bank USD.3 billion for this purpose. They also borrowed USD. 1.0 billion for cleaning Ganges. Still road network is far better then in India. As far as Pakistan's contribution to this project is concerened, Pakistan will not contribute in US Dollars. Since all the projects will be on its soil, Pakistan can contribute by providing land, buildings, labour for these projects. If China will charge interest, Pakistan will also benefit by charging on the passing traffic. We appreciate Indians for feeling concerned about these proposed projects. A part of proposed silk road will also pass through India and I hope India will not need to borrow from IMF or world bank for the project.

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akram

Apr 17, 2015 10:37pm

The more i read of thie article, the more i am excited about this project. This is an amazing and win-win for both. God bless pakistan and china.

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anony

Apr 17, 2015 11:59pm

Long live Pak-China friendship.

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ali

Apr 18, 2015 12:03am

@Viking Star nothing comes free.

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Ridwan

Apr 18, 2015 12:42am

@Sachin Tandon yes, thats called foreign direct investment. whats the problem? Besides, what you are talking about is different from CPEC. CPEC is about infrastructure more than anything. If we have to pay tolls to use motorway, then who cares? Because at least the motorway will be built and will help Pakistan transition to an export oriented economy. And who cares if they run our airports - have you seen Beijing, Hong Kong, and Shanghai airports compared to Karachi or Lahore? As for mineral wealth - if no one else will invest, then why should we just let it sit in the ground hoping the day will come when someone else will offer us an equally bad deal?

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Ridwan

Apr 18, 2015 12:44am

@Gaurav Arya British infrastructure is what tied India together, Imperial India was the first time the whole subcontinent was under one ruler. And guess what, you Indians still use that old British infrastructure! And of course, let us never forget that China (and India for that matter) have never in their history invaded/colonized other lands with the intention of only enriching the home country. That is a Western ideal not shared in China.

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Ridwan

Apr 18, 2015 12:46am

@Viking Star It just says money will come from both countries. Not that it will be 50-50. In fact, it will be more like China 90%+ and Pakistan 10% max, as has already been mentioned in previous articles. This is China's initiative to open up Xinjiang, and the Chinese won't wait for Pakistan to find the money to foot a big part of the bill.

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Ridwan

Apr 18, 2015 12:53am

@Guest yes despite all those misgivings, Afghanistan is begging to be friends. China is supporting us a true friend. And the Islamic Republic of Iran remains ambivalent as usual (keep in mind, Pakistan was a close friend of the Shah's Iran. It is India who is courting the Islamic fundamentalists ironically).

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Ridwan

Apr 18, 2015 12:54am

@Global Citizen Actually, most of what you argue is based on conjecture. Where on earth did you come up with this idea that Pakistan will finance half the project? This is China's project to open up Xinjiang and to create a stronger and wealthier Pakistani market for Chinese exports.

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Mufhal

Apr 18, 2015 04:16am

@Sachin Tandon sachin of China takes over Pakistan they will run it better then the current politicians of Pakistan

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knightshiner

Apr 18, 2015 05:00am

@Viking Star right! Though Indo-China relations have improved over time but it is silly to assume that such a thing can happen.

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Apr 18, 2015 05:04am

@Alam "India have borrowed from world bank USD.3 billion for this purpose. They also borrowed USD. 1.0 billion for cleaning Ganges." Yes, $4B borrowed would be a very big sum for Pakistan, but not for India. India has close to $400B dollar reserve. Its GDP is $2trillion. So, $4 B is a drop in the bucket. The borrowing is just a management of cash flow and is practiced by all major countries.

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Abdul raheem

Apr 18, 2015 05:11am

This 46 billion is just hype. Any foreign deligate prior visit announce five to ten times of actually in their pocket. Check it happened in indo us and indo chines indo Japan. Nothing will the FO protocol. Do you really think chine will invest that money in your soil. Do you know how many zeros....

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Abdul raheem

Apr 18, 2015 05:12am

Just work on how many zeros you have to put. It's hype prior any visitoring. It's a standard protocol of any foreign office to announce. Not even in ten years that investment reaches your country.

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A Shah

Apr 18, 2015 06:07am

Looks like nothing is going to happen then. .$23 billion please

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iTellYou

Apr 18, 2015 06:10am

This $45 billion investment(spending spree) by China is a necessity and should come as a surprise from macro-economics point of view. Don't be surprised if Xi announces another major investment in India during Modi's visit. The shanghai composite has risen over 75% in the past 6 months and China must be concerned about this speculative asset bubble and the aftermath(anyone remembers the dot com bubble in the US, it was nasty). All the liquidity has been pumped into the stock market by selling US treasury bonds(no wonder Japan replaced China as the #1 US bond holder). China is selling it's US dollar reserves to buy the yuan to prevent the currency collapse and slow the economy from hard landing. It appears Peoples bank of China - PBoC - may be trying do what Hong Kong did in the 1990's to spend billion to prevent an yuan collapse.

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Dr. Bina

Apr 18, 2015 06:39am

Indians so much in love with Pakistani news papers. Thanks for spreading love.

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Mohsin Malik

Apr 18, 2015 06:43am

@Sachin Tandont: While the heartache is understandable, it is the belly ache (maror), which is beyond comprehension. The saffron mindset will always be ill at ease... Sleep on... MOHSIN MALIK CALIFORNIA, USA

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Loimashar

Apr 18, 2015 07:30am

@Harsh are you serious.....or jealous!!

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MHamza

Apr 18, 2015 07:32am

@Sachin Tandon I'm amazed i know a lot about Pak

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satender

Apr 18, 2015 08:13am

@Alam Chinese are begging to invest in India, 100bn $ chinese investment is at our doors but its India who is not responding to them, because we are so cautious about them.they always asks to be part of "make in India" project. now silk route -we have similar project called "Mausam project" which they want to be connected to their silk route project which India refused . also talking about debt, yes India do take debt but India also gives debts and overall we are a debt free nation. where in Pakistan every Pakistani new born baby is under debt of $1000 by birth automatically.Now AIIB- India is founding member and have veto power too. for obvious reason China doesn't want to involve AIIB in this venture – this project is likely going to involve corruption and it would reflect poorly on AIIB. and yes we do care about you because we were once a one nation. we all have have seen east india company tactics and just concerned that history don't repeat itself. rest our best wishes to pakistan

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fahad

Apr 18, 2015 08:23am

@Harsh grapes are sour

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kaka

Apr 18, 2015 09:32am

@Zak for the 1000th time, its investment not loan !!!!

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nation lover

Apr 18, 2015 09:41am

@akram not a win - win position its win position for china by using need of aid for other country...!!

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Sachin Tandon

Apr 18, 2015 09:45am

@Waseem Beware of Chinese doctrine of opportunistic & Expansionist nature, you people might not have forgot how much land you have to hand over to China for this friendship, remember portion of Ladakh which was handed over to China by Pakistan. Always keep in mind, not only Pak needs China, also China needs Pak as well. Gwadar Port, to sell substandard items.

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nation lover

Apr 18, 2015 10:38am

@Alam thanks for your suggestion concern about loans of india from IMF and world bank..!! but you have to know that india's has balance with both IMF and world bank as well as AIIB and also in NDB from brics countries..!! so india will pay the debt with that amount...!!

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yuva

Apr 18, 2015 02:19pm

@Kamal Pasha. the $46 billion Pakistan-China Economic Corridor, with money to come from both countries instead, a senior diplomat said on Friday.

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Kashmiri

Apr 18, 2015 11:56pm

Pakistan's forex reserve is $15 Billion and External debt is whopping $65 Billion. And now China expects you to invest around $23 Billion ..... cool !!

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Kashmiri

Apr 19, 2015 12:05am

@Ridwan Wrong !!. Get your understanding of history corrected. China occupied Tibet , Mangolia and few other erstwhile independent states.

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