Pakistan Replaces Dollar With Chinese Yuan As Mode Of Trade And Investment With China, 24 Hours After Trump Twitter Tirade

Pakistan appears to be befriending China – the second largest economy in the world, to a greater extent within just 24 hours of the U.S. President Donald Trump criticized Pakistan on Twitter.

It was just one day ago that Pakistan was severely pulled up by Trump on the issue of harboring terrorists in a New Year’s Day tweet. Within 24 hours of that tweet, the dollar was announced to be replaced by the Chinese yuan as a trading and investing currency with Beijing, by the central bank of China.

On that very day, Chinese Foreign Ministry spokesman Geng Shuang said that the country “made great efforts and sacrifices for combating terrorism” and urged the international community to “fully recognize this”, clearly defending the track record of Islamabad in countering terrorism.

The U.S.-Pakistan relationships have gone increasingly strained and China has been watching closely. Trump has been getting closer with Pakistan’s arch-rival India even as he has been issuing demand of Pakistan to do more on the counter terrorism front.

“Pakistan and the U.S. have had a fraught relationship for years, but the big change recently has been China,” said Simon Baptist, Asia regional director at the Economist Intelligence Unit. “China has really gone hard in cementing its existing relationship with Pakistan, it’s really the only place that’s seen significant investment under the Belt and Road initiative and China has been pushing for geopolitical advantage there.”

In the latest U.S. threat to Pakistan, Trump has threatened to cut off security assistance to the South Asian frontier economy. but according to experts, American threats may not impact Pakistan as much now that it has a constant flow of Chinese capital with it.

“Pakistan balks far less at reductions in American aid, which, as the former points out, has dwindled in recent years anyway. China, on the other hand, has promised Pakistan $57 billion in investments on infrastructure and energy under its Belt and Road Initiative,” Madiha Afzal, a nonresident fellow at Brookings, said in a recent note. “All this means that America has far less leverage over Pakistan.”

“The history of Pakistan’s relationships with China and the United States also shows that Pakistan’s policy does not respond to strong-handedness, but to loyalty, and to being treated with dignity,” she continued.

“China and Pakistan enjoy an all-weather strategic partnership of cooperation, Beijing will without doubt not give up on Islamabad”, said an editorial published by Chinese state-run news outlet Global Times.

Pakistan’s Foreign Minister Khawaja Asif had recently commented that he expected the relationship between the U.S. and Pakistan are set to continue this year while dismissing the outburst by Trump as apolitical stunt. This despite the high rhetoric by White House and retaliation by White House.

While it is still uncertain whether Trump’s social media tirade would be transformed into real action on the ground, Baptist said that addressing U.S. concerns over Afghanistan and Iran would ultimately require Pakistani cooperation.

(Adapted from


Categories: Economy & Finance, Geopolitics, Strategy, Sustainability, Uncategorized

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