China’s “Debt Trap” in Pakistan: The Risk of Diluting the FATF Ruling

Sharing an article of mine Published in Future Directions International on the subject. The URL is placed below.

China’s “Debt Trap” in Pakistan: The Risk of Diluting the FATF Ruling

Under normal circumstances, a one billion dollar loan between two sovereign countries would have gone unnoticed by global the community, but what makes China’s one billion dollar lending to Pakistan so special is the timing of the loan and the strategic intention behind it. The economics of this loan, which is allegedly to support Pakistan’s dwindling foreign currency reserves that have nosedived to US$9.66 billion from US$16.4bn in May 2017, taking China’s lending to Pakistan to over US$5bn in this fiscal year in the process, have been well covered by all the segments of media in India and elsewhere. The messaging and the strategy behind this bailout, however, call for deeper analysis.

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