WASHINGTON -- The United States on Thursday (November 21) warned Pakistan that it faced long-term economic damage with little return if China keeps pursuing its giant infrastructure push.
China's economic infrastructure projects in Pakistan will profit only Beijing and the United States offers a better model, said the top US diplomat for South Asia.
"It's clear, or it needs to be clear, that [these projects are] not about aid," said Alice Wells, the acting US assistant secretary of State for South and Central Asian Affairs.
The multibillion-dollar initiative was driven by non-concessionary loans, with Chinese companies sending their own labour and material, she said.
The Beijing initiative "relies primarily on Chinese workers and supplies, even amid rising unemployment in Pakistan," Wells said at the Woodrow Wilson International Centre for Scholars.
A 'growing toll' looms
The corridor "is going to take a growing toll on the Pakistani economy, especially when the bulk of payments start to come due in the next four to six years", she said.
"Even if loan payments are deferred, they are going to continue to hang over Pakistan's economic development potential, hamstringing Prime Minister (Imran) Khan's reform agenda," she said.
Many have criticized China's Belt and Road Initiative, a signature project of President Xi Jinping that aims to build ports, highways and railways around the world.
Pakistani economists are already concerned about the serious damage from the Chinese investments.
But Wells' speech was unusually specific in warning of risks to Pakistan, a historic ally of the United States.
While acknowledging that the United States could not come to Pakistan with offers from state-run companies, Wells said private US investment, coupled with US grants, would improve the troubled economy's fundamentals.
"There is a different model," she said. "Worldwide we see that US companies bring more than just capital; they bring values, processes and expertise that build the capacities of local economies."
She pointed to interest in Pakistan by US companies including Uber, Exxon Mobil, PepsiCo and Coca-Cola, with the soft-drink makers together investing $1.3 billion (Rs. 201.9 billion) in the country.
China has offered to develop Gwadar into a world-class port, besides making other promises.
Beijing hopes to link Gwadar to its western region of Xinjiang, giving the world's second largest economy more access to the oil-rich Middle East and reducing reliance on the dispute-ridden South China Sea.