Pakistan/China

Pakistan looks for financial support, nuclear deal on visit to China

Article published on the 2008-10-14 Latest update 2008-10-14 13:13 TU

Pakistani President Asif Ali Zardari arrives in Beijing.
(Photo: Reuters)

Pakistani President Asif Ali Zardari hailed China as “the future of the world” ahead of his visit to the country which begins today. Zardari is expected to use the visit to strengthen economic ties between the countries, including a potential nuclear deal.

In an interview with the Chinese news agency Xinhua, Zardari said that building economic ties would be a top priority during the visit. “A strong China means a strong Pakistan.”

But the visit also comes at a desperate time for Pakistan that has been hit especially hard by the international financial crisis. Pakistan has large debts to foreign creditors, though it denies suggestions that it may default on these loans in the coming months.

“The Pakistani economic outlook is extremely precarious at the moment”, says correspondent Rana Jawad in Islamabad, suggesting that a default could come as soon as November or December.

“We are in desperate need of financial resources”, and China could provide them, Jawad told RFI. The Financial Times reports that Zardari will seek a Chinese loan that could total between 500 million and 1.5 billion dollars (363 million – 1.1 billion euros).

 

Zardari may also use the trip to push for a civilian nuclear pact with China. Masood Khan, Pakistan’s ambassador to China said Tuesday. Pakistan suffers chronic electricity shortages, and has established a plan to increase electricity production exponentially by 2030. Khan suggested that a preliminary deal could be signed in the coming days.

US aid has, until recently, helped Pakistan avoid financial crisis but once President Pervez Musharraf was forced from office those payments were scaled down.

Recent clashes between Pakistani and American forces on the Pakistan-Afghanistan border have done little to improve the situation. After last week’s nuclear deal between the US and Pakistan’s rival neighbour India, Zardari called for equal treatment by the US, and may sign a deal with China to prove his point.