The tighter the embrace the better for us?

Pakistan has borrowed another $500 million from the Industrial and Commercial Bank of China (ICBC), taking the total to $1 billion in just three months. It is in great difficulty because the US has cut aid to Pakistan from $2.177 billion 2014 to $526 million last year. The US Congress is considering a bill to end non-defence economic aid to Pakistan. This is after US President Donald Trump tweeted, "The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies and deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more." Pakistan naturally found the comments "completely incomprehensible" and expressed "deep disappointment". The Pakistani government has to walk a tightrope because not listening to the US means losing aid money while listening too much will get it into trouble with its own people, wrote A Siddiqa. "Pakistan is one of the states that America has lost to China." The government has borrowed $6.6 billion in this financial year which will take total borrowings to over $10 billion for the second year running. Money is needed to defend the rupee and finance its trade deficit. In December the central bank allowed the rupee to depreciate 5.2% against the dollar but it is still much stronger than IMF recommendation. A weaker rupee will increase inflation rate, which was 4.42% in January, causing anger among people. The problem with defending the currency is that the central bank holds $12.8 billion in reserves and does not want it to fall below $12.3 billion, which is the minimum required for 2 months' imports. This is why it is falling into China's embrace. Pakistan's central bank succumbed to Chinese pressure to accept the yuan for bilateral trade, instead of the dollar. Chinese goods have swept across all of Pakistan which would mean death for local manufacturers. Counterfeit goods from China are being sold openly and may bring more conflict with the US as Donald Trump considers a big fine for intellectual property theft by China. Pakistan is to send troops to Saudi Arabia to help its war against Houthi rebels in Yemen but insisted that they are only for training purposes and will not cross Saudi border. While it needs aid money from Saudi Arabia it cannot anger neighboring Iran which supports the Houthis. Saudi Arabia was angry at Pakistan's refusal to take sides in its quarrel with Qatar which is friendly with Iran. The Saudis maybe behind the cut in US aid, to punish Pakistan, wrote R Zakaria. China and Pakistan in a deadly embrace. We hope they drown together.