Know What Happened That Pakistan Kneeled Down In Front Of China

Pakistan has bowed before China in one matter. Due to this, the fear of economic ruin among Pakistani people has increased. In fact, China had been demanding Pakistan open a revolving bank account. Now Pakistan succumbed to China's demand to open a revolving bank account. The account will partially insulate Chinese power plants from circular debt but could cause concern among International Monetary Fund (IMF) officials.

The Express Tribune reported that Pakistan also allowed the import of 580,000 tonnes of wheat at a price of $372 per tonne, excluding incidentals and transportation charges, which would cost the national exchequer at least $216 million. The total cost of wheat imports including incidental charges would be $224 million. Finance Minister Ishaq Dar chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet. The ECC sealed a second government-to-government wheat contract with a Russian state-owned supplier.

A statement issued by the Ministry of Finance said, "The ECC has approved the proposal of the Ministry of Finance to change the title of the revolving fund account for CPEC independent power producers (IPPs) from Pakistan Energy Revolving Fund to Pakistan Energy Revolving Account." "The Ministry of Finance informed the ECC that the fund was reviewed to bring it in line with the original CPEC agreement on November 8, 2014. The Express Tribune reported that it took Pakistan eight years to implement the crucial clause and the delay has not only strained relations with China but also resulted in over $1 billion in dues to Chinese companies.

IMF troubled by Pakistan's move

The move could upset the IMF which has been pressing Pakistan against giving any preference to Chinese companies at the insistence of its largest shareholder - the United States. But good relations with China have once again become important, as the government has not been able to satisfy the IMF. The delay in the start of the ninth review talks with the IMF has rekindled debate on the possibility of a default, which Dar has strongly denied.