China rejects 'groundless' reports about gradually ending financial support to Pakistan

Chinese spokesperson says both countries are moving forward in the construction of mega projects

China on Tuesday rejected reports about gradually ending its financial support to Pakistan pledged under China-Pakistan Economic Corridor (CPEC).

During a press briefing in Beijing, Chinese Foreign Ministry spokesperson Zhao Lijian maintained that the reports are 'groundless' and confirmed that both countries are moving forward in the construction of this mega project.

He said that the CPEC International Coordination and Cooperation working group held its second meeting last Friday, adding that Pakistan and China reiterated their commitment to implementing the consensus reached by the leaders of both sides.

Earlier this month, China again bailed out Pakistan as it agreed to immediately provide $1.5 billion financing line to repay the $2 billion Saudi Arabia debt, sources told The Express Tribune.

China has not given the loan from its State Administration of Foreign Exchange, commonly known as SAFE deposits, nor has it extended a commercial loan, said the sources.

Instead, both the countries have agreed to augment the size of a 2011 bilateral Currency-Swap Agreement (CSA) by an additional 10 billion Chinse Yuan or around $1.5 billion, the sources said. This has increased the size of the overall trade facility to 20 billion Chinese Yuan or $4.5 billion.

The CSA is a Chinese trade finance facility that Pakistan has been using since 2011 to repay foreign debt and keep its gross foreign currency reserves at comfortable levels instead for trade related purposes.