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IMF bailout for Pakistan shouldn't aid China: Pompeo

Washington - "Make no mistake. We will be watching what the IMF does," Pompeo told CNBC in an interview on Monday.

US Secretary of State Mike Pompeo has warned against providing an International Monetary Fund (IMF) bailout for Pakistan's new government that includes funding to pay off Chinese lenders.

The issue arises from Pakistan's dependence on China for infrastructure subsidies, which have left Islamabad deeply indebted to Beijing. Pakistan reportedly plans to ask for $12 billion from the IMF, but this has not been confirmed yet.

"Make no mistake. We will be watching what the IMF does," Pompeo told CNBC in an interview on Monday.

"There's no rationale for IMF tax dollars - and associated with that, American dollars that are part of the IMF funding - for those to go to bail out Chinese bondholders or China itself."

Pakistan is grappling to avert a currency crisis, making it the biggest challenge for the new government which is likely to take oath in August.

According to Dawn, the Tehreek-e-Insaf's government of Imran Khan will immediately have to approach the IMF for what would be the country's 13th bailout from the fund.

Pompeo said that the US was looking forward to engagement with Pakistan's upcoming government, but added that there was "no rationale" for a bailout that pays off Chinese loans to Pakistan, Washington Examiner reported.

China has pledged $62 billion as part of the Belt and Road Initiative, which Western officials regard as a "predatory" method of expanding its influence over poorer countries.

Beijing has already gained control over a port in Sri Lanka, an island country that bestrides key international shipping lanes. It has invested in Pakistan's Gwadar Sea Port that could give the Chinese military access to another facility west of India.

"We aspire to a regional order - independent nations that can defend their people and compete fairly in the international marketplace," Pompeo said during a speech on the Indo-Pacific region.

"We will help them. We will help them keep their people free from coercion or great power domination."

That was a clear rebuke of Chinese lending practices, though Pompeo avoided mentioning the Communist power by name.