Pakistan’s new government under Imran Khan has announced its intention to seek an IMF bailout package and talks are on that have begun between the two sides.

The IMF has already said that it will seek “absolute transparency” from Pakistan and austerity measures seem to be in the order.

What does the loan mean for Pakistan and the region where China is a big player?

During his campaign to power, Imran had promised the electorate that he would attempt to create 10 million jobs and establish an Islamic welfare state. If the IMF imposes strict regulations, which it often does, such promises may be difficult to realise for Imran.

This is the 13th time Pakistan has gone to the IMF for assistance.

China’s role in Pakistan is also a factor in the financial mess. In Beijing’s One Belt and One Road initiative, Pakistan is a showcase state. China is also one of Pakistan’s biggest lenders.

The IMF’s eye would be on Pakistan’s financial dependence on China, a matter the US has highlighted, saying the IMF’s dollars could be used by Islamabad to pay off Beijing.

China is known as a hard player when trying to recover debts from friendly countries. Sri Lanka’s government, which was struggling to clear loans to China for the Hambantota port project, ultimately handed the port over to Beijing on a 99-year lease. Whether Pakistan faces a fate similar to Sri Lanka’s is to be seen.