Thursday, December 30, 2010
On October 14, 2008 Asif Ali Zardari, President of Pakistan, arrived in Beijing for a four-day state visit seeking $4 billion to $6 billion in aid from China so that Pakistan would not default on its payments. This is not the first time that Pakistan sought China’s help. In 1996 China provided $500 million in balance-of-payments support, when Pakistan was on the brink of default. Hu Jintao, President of China, assured Zardari that Beijing would “continue to offer all possible assistance to help Pakistan overcome its current economic difficulties and strengthen its self-development capacity (CCTV).” But, Beijing has been publicly reticent about how willing it might be to shore up Pakistan’s financial position with soft loans. For the Chinese, a $4 billion to $6 billion loan out about $2.0 trillion in foreign reserves, is relatively small. Pakistan should not play “hard ball” between Beijing and Washington, which has paid billions to Pakistan since the United States started “the war of the terror.” Because Beijing has many friends in the developing countries, any commitment of large scale assistance to Pakistan would be likely to prompt other developing nations threatened by the widening impact of the global financial crisis to step up their efforts to win Chinese support.