Labourers sit under a billboard displaying a picture of Imran Khan, Pakistan's leader. Picture: REUTERS
Labourers sit under a billboard displaying a picture of Imran Khan, Pakistan's leader. Picture: REUTERS

Karachi/Islamabad — A Pakistani official’s critical comments about projects funded by China to the tune of billions of dollars sparked worries on Monday of a souring in ties, a day after Beijing’s top government diplomat concluded a visit.

Abdul Razak Dawood, the Pakistani cabinet member for commerce, industry and investment, suggested that all projects in the $57bn China Pakistan Economic Corridor (CPEC) programme could be eligible for suspension in a review to be conducted this week under the orders of new Prime Minister Imran Khan.

"I think we should put everything on hold for a year, so we can get our act together," Dawood told the Financial Times in an interview. "Perhaps we can stretch CPEC out over another five years or so."

He added that he thought China had been granted too-favourable terms in many projects by the former government of Nawaz Sharif.

"Chinese firms received tax breaks, many breaks and have an undue advantage in Pakistan; this is one of the things we’re looking at because it’s not fair that Pakistan companies should be disadvantaged."

Pakistani markets fell on Monday, with the benchmark KSE 100 index down 477.38 just after midday at 40,374 points, before recovering to close at 40,684, still down 0.4%.

Dawood’s comments were "mind-boggling" and rare public criticism of China, said Mohammad Zubair, privatisation minister in the previous government.

"This is probably the harshest statement about the Chinese in the last 50 years or so," he said. "Even if there are issues with the Chinese, those issues could be dealt with in private rather than being made public."

Later on Monday, Dawood told domestic broadcaster Geo TV that his statements had been misconstrued and he would clarify them later.

The critical comments were published just after China’s top diplomat, foreign minister Wang Yi, visited Pakistan and the two countries had reaffirmed the mutual benefits of the Beijing-funded projects.

Pakistan is struggling to avert a foreign currency crisis that could force it to seek a bailout from the IMF. Its foreign currency reserves have dwindled to $9.9bn in August from about $16bn in mid-2017.

Reuters

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