China Global Television Network reported that Chinese President Xi Jinping hailed relations between China and Pakistan as an “iron brotherhood.” Two nations have always been each other’s trustworthy “iron brother” regardless of the international landscape’s changes.

China Institue of International Studies shows that Pakistanis describe friendship between the 2 countries as “higher than the mountains, deeper than the sea, sweeter than honey, and harder than steel.”

The International Monetary Fund (IMF) reveals that Pakistan owes China 18.4 billion dollars or one-fifth of its external public debt. This amount is not only 4 billion dollars more than officially reported but also the highest lending by any single nation or financial institution.

However, since Sri Lanka declared bankruptcy on July 5, Pakistan is about to follow the crisis-hit country’s footsteps.

Financial Times reported on July 22 that the heavy fall of Pakistan’s currency had highlighted the market’s concern that it will likely become the next emerging economy to default on foreign repayments.

The Pakistani rupee has fallen sharply this year before tumbling 7.6% to Rs228 to the dollar, marking the latest setback in more than 2 decades.

The latest plunge reflects mounting worries that a $1.2 billion IMF loan disbursement approved last week could not be sufficient to prevent a balance of payment crisis. The performance of Pakistan’s bonds has been among the worst in emerging markets this year.

Hasan Askari Rizvi, a Pakistani commentator on national and security affairs, says, “The international fallout from Pakistan’s internal collapse would be much bigger than Sri Lanka.”

He adds, “I think there are many outside [powers] who would want to avoid an outright disaster in Pakistan created by an economic collapse.” 

This week, Fitch Ratings lowered Pakistan’s outlook from stable to negative, citing a “significant deterioration in Pakistan’s external liquidity position and financing conditions.”

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