Pakistan is set to seek a $600 million loan from China for fiscal year 2024. Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb will meet with representatives from the Industrial and Commercial Bank of China (ICBC) and the Bank of China to negotiate the loan, according to high-level sources cited by ProPakistani.

Previous attempts to secure this loan amount have faced challenges. This time, Pakistan will focus on persuading the Chinese banks to ease their stringent loan disbursement conditions. These conditions include a high interest rate of up to 8 percent and a stipulation linking the loan to the payment schedule of Chinese Independent Power Producers (IPPs).

Since July 2023, the federal government has been in continuous discussions to secure the loan. Efforts are ongoing to ensure that the $600 million loan obtained for the next financial year.

In November 2023, ProPakistani reported that authorities were initially seeking $600 million in new loans, with $300 million from each of the two Chinese banks. This move is part of a broader strategy to shore up the country’s financial stability.

It is worth noting that since 2000, China has provided Pakistan with $21.2 billion in loans, making up 30 percent of Pakistan’s overall funding. These loans have been crucial in helping Pakistan avoid default and in bolstering its foreign exchange reserves.

Pakistan’s ongoing efforts to secure this loan from China highlight the country’s need for financial support to stabilize its economy. As Pakistan seeks a $600 million loan from China, the outcome of these negotiations will be critical for its economic future.

Read Also: Pakistan Set to Export SUVs and Other Vehicles to Boost Automotive Sector