China / Pakistan: Tensions appear to be rising between China and Pakistan after reports claimed that Beijing has asked Islamabad to immediately clear outstanding dues of $220 million.
According to Pakistani media reports, the payment is linked to a Chinese energy company, and China has warned that failure to pay could lead to a suspension of work on the project.
Concerns Over Investor Confidence
As reported by The News, Chinese authorities have expressed concern that delays in payment may damage investor confidence and disrupt ongoing operations. Officials indicated that prolonged non-payment could create uncertainty for foreign investors involved in Pakistan’s energy sector.
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Gas Supply and Mounting Financial Pressure
Sources from Pakistan’s Petroleum Division revealed that the country’s ambassador in Beijing has sent an urgent message to the government led by Shehbaz Sharif, stressing the need to settle the dues.
The outstanding amount is reportedly tied to gas supplied by UEP to Sui Southern Gas Company (SSGC), which currently receives around 260–270 million cubic feet of gas per day.
Due to financial strain, UEP has already laid off some employees in recent weeks.
Strategic Concerns and External Pressures
The development comes amid reports that China had earlier cautioned Pakistan over its growing efforts to rebuild ties with the United States. Despite these warnings, Islamabad has continued to engage with Washington.
Pakistan’s Special Investment Facilitation Council (SIFC) has also urged immediate payment, highlighting the importance of maintaining trust among foreign investors.
Energy Crisis Adds to Challenges
Pakistan is already grappling with an ongoing energy crisis, worsened by regional tensions affecting oil and gas supplies. The sudden demand for such a large payment has added to the country’s financial burden.
The Chinese-linked company operates major gas fields across Sindh province, including Badin, Tando Muhammad Khan, Thatta, Hyderabad (rural), Matiari, Sanghar, Mirpurkhas, and Khairpur. It also manages offshore exploration blocks in the Arabian Sea and recently acquired additional onshore blocks.
Growing Strain on Pakistan’s Economy
With its economy under pressure, arranging such a significant payment is being seen as a major challenge for Pakistan. Analysts believe the situation reflects increasing impatience from China over delayed financial commitments and project-related payments.