Finance Minister Asad Umar on Tuesday has said that the China-Pakistan Economic Corridor (CPEC) was an excellent example of cooperation between China and Pakistan and was beneficial for both sides.

“Pakistan has a debt problem for sure, but Pakistan does not have a China debt problem,” he told China Global Television Network (CGTN), at the China International Import Exhibition (CIIE), which is being held in Shanghai.

He made the comments in response to accusations that China was using “debt diplomacy” to expand its influence worldwide.

Asad Umar called the idea of the CPEC being some kind of sinister move by China to cause economic problems to Pakistan “absolute nonsense.”

He emphasized that the CPEC is “an excellent example of cooperation between two countries, which is a benefit to both sides.”

Under the CPEC, a pilot project of Belt and Road Initiative (BRI), the Pakistani government was granted Chinese loans to build billions of dollars of infrastructure projects, from railways to roads. CPEC has become the poster child for these Chinese debt trap allegations.

The minister said China’s debt was not more than 10 per cent of the total, which was a not significant figure.

He said the percentage of debt to GDP of Pakistan was high but still manageable. “The reason why debt sustainability is a problem in Pakistan is that we don’t have enough exports.

We are just not generating enough foreign currency inflows to be able to service the debt, and that’s the fundamental problem,” he added.

Speaking of solutions to this problem, apart from increasing domestic savings, Asad Umar also highlighted the importance of working with bilateral partners such as China to boost exports – cooperation that could be enhanced under the events like the CIIE.