Pakistan enjoys strong diplomatic ties with China and Saudi Arabia [Getty/file photo]
Pakistan is reportedly seeking financial support from China and Saudi Arabia as it faces pressure to repay approximately $3.5 billion to the UAE.
The South Asian country is seeking loans and investments to repay the sum owed to Abu Dhabi, after it failed to reach an agreement to roll over the debt for the first time in seven years.
Paying back the hefty amount could have serious repercussions on Pakistan, including straining the country’s already-fragile economy, raising pressure on reserves worth around $16 billion, and risking breaches of IMF programme targets after it repaid a $1.3 billion Eurobond due on 8 April.
So why is Pakistan seeking assistance from Saudi Arabia and China?
Pakistan has developed close ties with economic powerhouses Saudi Arabia and China over the decades, based on cultural commonalities and economic and strategic interests.
Pakistan has often been dubbed as Saudi Arabia’s closest “Muslim and non-Arab ally”, and has enjoyed financial support from the Gulf kingdom over the decades in loans, investment, and donations. Religious ties also play an important role in the country’s relations, as Riyadh finances numerous mosques and Islamic institutions in Pakistan.
Saudi Arabia is also home to 2.5 million Pakistani nationals, whose remittances play an important role in the country’s economy.
Defence ties between Pakistan and Saudi Arabia have also strengthened, especially in 2025, after the two signed the Strategic Defence Mutual Agreement (SDMA), which states that an attack on one country will be treated as an attack on both. Pakistan also sent military personnel and fighter jets to Saudi Arabia over the weekend, in a move interpreted as strengthening the pact.
In his meeting on 10 April with Saudi Finance Minister Mohammed al-Jaadan, Pakistani Prime Minister Shehbaz Sharif expressed “strong commitment to expanding its cooperation with the kingdom in all spheres, particularly in trade, investment, and economic development”.
He also spoke of the kingdom’s longstanding “economic and financial support to Pakistan over the years”, which could indicate that the loan repayment to the UAE was brought up in the discussions.
Saudi Arabia could feel even more compelled to assist Pakistan in this issue as its ties with the UAE have deteriorated over the years, specifically over differing positions regarding the 2025 South Yemen offensive.
The UAE’s loan repayment demand has led to speculations over a diplomatic spat with Pakistan, but its foreign ministry stressed the move was a “routine financial transaction”.
The loan had been rolled over since 2018, including a $3 billion facility at around six percent annual interest, but was shifted from annual to monthly extensions earlier this year before Islamabad decided to repay it in full, with clearance expected by 23 April, government officials told Reuters.
China could also come to the rescue
China, despite cultural and religious differences, has also maintained growing relations with Pakistan since 1950 based on strategic and mutual interests.
Over the years, China has assisted Pakistan financially and militarily, increasing with time following the border dispute resolution in 1963 with the Sino-Pakistan Agreement.
Pakistan also enjoys its status as one of China’s main trading partners. The China–Pakistan Free Trade Agreement (CPFTA), signed in 2006, has seen an increase in trade and partnership between the two.
During the 2022-2023 Pakistani economic crisis, China remained the only country to provide the South Asian nation with loans, lending over $2 billion, and even rolled over the loan’s payment in 2025 so as not to ail the economy further.
Overall, China has lent around $25 billion to the country.
The two countries have also supported each other in territorial disputes and positions on conflicts, notably Kashmir, Taiwan, and Xinjiang.
Saudi Arabia and China’s frequent financial assistance to Pakistan, and Islamabad’s backing of the two countries in diplomacy and other issues, see them both as likely contenders in help Islamabad repay its loan obligations to the UAE.