Data from the Pakistan Bureau of Statistics (PBS) reveals that imports reached a historic level of US$ 53 billion, while the trade deficit was US$32.58 billion for the fiscal year 2016/2017. Pakistan’s State Bank attributes the high volume of imports to projects connected with the China-Pakistan Economic Corridor (CPEC). Heavy machinery, equipment, and materials have all been imported from China for construction purposes. Pakistan’s mounting external debts have reached a whopping US$ 79 billion at the end of financial year.The Government has been on a borrowing binge and broke all previous records to acquired US$10.1 billion in foreign loans during fiscal 2016-17 alone. About 37%, or US$ 3.9 billion of that borrowing came from China – Islamabad’s new lifeline. This sum includes US$ 2.3 billion in commercial loans and another US$1.6 billion in bilateral economic assistance. With a view to paying off old debts and supporting its foreign exchange reserve position, the government resorted to short-term commercial loans of over US$ 4.3 billion, against a budgetary allocation of US$ 2 billion. These expensive short-term debts, taken on the prevailing market rates, included US$ 1.7 billion from the China Development Bank, US$ 300 million from the Industrial and Commercial Bank of China and US$ 300 million from Bank of China.
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