The China-Pakistan Economic Corridor (CPEC) has promised to create millions of employment opportunities, and undertake essential infrastructure and energy projects. The author, Muhammad Ali Talib, a practicing advocate of the High Court of Pakistan, notes that despite the benefits of CPEC, the immense Chinese lending to Pakistan has created a debt problem for the latter. An AidData report, analyzing 100 Chinese debt contracts, reveals that the Chinese loan agreements contain confidentiality clauses that prevent borrowers like Pakistan from revealing any details of the agreements to the general public. Furthermore, these contracts include cross-default clauses, stabilization clauses, and “No Paris Club” clauses which increase China’s bargaining power and policy influence over the borrowing states.
Muhammad Ali Talib
Barrister Muhammad Ali Talib is a practicing advocate of the High Court of Pakistan, specializing in corporate, finance, and commercial litigation. Previously, he has worked at various international law firms, namely CMS, Dentons LLP, and Bryan Clave Leighton Paisner.