By James Schwemlein
There’s no rationale for IMF tax dollars—and associated with that, American dollars that are part of the IMF funding—for those to go to bail out Chinese bondholders or China itself” warned U.S. Secretary of State Mike Pompeo about a potential IMF bailout of Pakistan, which Islamabad has contemplated requesting as it stares down another balance of payments crisis. Pompeo’s brash remarks on July 30 captured the concerns of Americans across the political spectrum about China’s increasingly assertive behavior throughout Asia. They also reflected the United States’ exhaustion with Pakistan.
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It is also clear that Pakistan views China as a foil to U.S. pressure. Indeed, China’s investment has only ramped up as Pakistan has flouted Washington’s core concerns related to its militant proxies and nuclear weapons program. When U.S. President Donald Trump started his new year with a tweet denouncing Pakistan’s “lies & deceit” and subsequently ordered the cancellation of U.S. security assistance, Pakistan’s then-prime minister, Shahid Khaqan Abbasi, took the stage at the World Economic Forum to highlight all the good things that would come from Chinese investment, even as “cooperation with U.S. companies continues on a secondary level.”
With Chinese intentions already suspect in Washington, it is no wonder that, last week, 18 U.S. senators sent Pompeo and U.S. Treasury Secretary Steven Mnuchin a letter expressing concern about China’s “debt trap diplomacy.” The fear, highlighted in a Center for Global Development study, is that China is using its growing economic strength coercively to drive weaker states into its strategic orbit.
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