Pakistan's CPEC Dreams Dashed, China's Message To Sharif? No New Money For Now

International International News

Posted by AI on 2025-09-05 08:33:45 | Last Updated by AI on 2026-06-27 19:53:22

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Pakistani Prime Minister Shehbaz Sharif's visit to China last week yielded no immediate results for his country's pressing need for economic assistance. Sharif was in China for six days, meeting with President Xi Jinping and other Chinese leaders in Shanghai and Beijing but returned without securing new funding for the China-Pakistan Economic Corridor (CPEC) Phase 2.

A source with knowledge of the trip's outcomes told Asia Times that "China is not in a position to give new money for CPEC Phase II right now." The source did not explain further. However, China is grappling with its own extensive COVID-19 lockdowns, destabilising economic fallout, and uncertain global markets.

CPEC is a flagship project of President Xi's Belt and Road Initiative (BRI). But since 2021, Beijing has downscaled BRI funding and projects due to growing international criticism of China's global infrastructure ambitions and their impact on developing nations.

The source said that "the atmosphere was good, but concrete results were minimal," adding that "China has not forgotten Pakistan's loyalty and friendship, but the facts have changed, and Beijing is also under pressure to tighten its belt."

Still, the Pakistani leader's visit included agreements on a range of smaller trade and investment deals, worth roughly $500 million. The two sides also signed a memorandum of understanding on technological cooperation in the poultry sector.

The lack of new CPEC funding leaves Pakistan's economy in a dire situation, with few immediate avenues for relief. The country is currently in talks with the International Monetary Fund (IMF) over a new bailout package worth almost $1.7 billion. But according to the source, " Sharif's government has become increasingly desperate for funds after the IMF recently demanded further austerity measures and structural reforms."

Despite the current challenges, the source said that China and Pakistan remain committed in the long term to their strategic partnership and CPEC projects.

"China is a long-term player, and Pakistan knows China is its only reliable partner at the moment," the source said.

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