China will offer its close ally Pakistan a low-interest US$500 million (€315 million) loan to help ease its growing financial problems, Pakistan's foreign minister said Thursday.Shah Mehmood Qureshi made the announcement after a recent visit to China and after Pakistan hosted a protest-free, security-heavy leg of the Olympic torch relay amid Western criticism of its giant ally's human rights record in Tibet. Qureshi, who accompanied President Pervez Musharraf on the April 10-15 trip, said that it had been "highly successful" and that Beijing was Pakistan's only "time-tested" friend. "If we have any reliable friend, my experience says it is China," Qureshi told a news conference in the capital, Islamabad.
Qureshi is a loyalist of slain former Prime Minister Benazir Bhutto, whose party defeated Musharraf's political supporters in February elections and now leads a new coalition government.
The government has inherited an ailing economy. It faces yawning budget and balance of payments deficits driven by rising world prices for commodities such as oil. The World Bank last month urged the new administration to take urgent action or risk a crisis, even though the economy was still growing at an annual rate of more than 6 percent.
On Thursday, Qureshi said that Pakistan faces "huge economic problems" but that he hoped the government would overcome them. He said that trade between Pakistan and China was worth US$6.8 billion (€4.28 billion), and that he hoped that it would reach US$15 billion (€9.45 billion) by 2011. The two countries' alliance goes back decades, and China is a leading source of investment and arms supplies for Pakistan. They are also rivals of India, which neighbors both.