China’s President Xi Jinping met Pakistani Prime Minister Shehbaz Sharif in Beijing on Friday, Chinese state media reported, days before Pakistan presents its annual budget and applies for a new International Monetary Fund (IMF) loan.

Pakistan’s location on the Arabian Sea gives it strategic importance for China, providing an overland route out towards the Gulf of Aden and onto the Suez Canal, and enabling Chinese ships to avoid the potential chokepoint of the Malacca Strait.

Sharif’s government is expected to seek at least $6 billion under a new IMF programme after it presents its annual budget, which sources say will happen on June 10. And the $27 billion or so that Pakistan owes China, according to World Bank data, is central to this next round of discussions with the fund, Reuters reported.

The IMF in May opened discussions on the new loan after Islamabad completed a short-term $3 billion programme, which helped stave off a sovereign debt default last summer.

Pakistan owes China almost 13% of its total debt, which was taken on to pay for infrastructure projects over the years and other types of spending.

Beijing has lent Islamabad almost twice as much as its second- and third-ranked multilateral lenders, the World Bank and the Asian Development Bank, to which Pakistan owes $16.2 billion and $13.7 billion respectively.

Chinese firms have also invested a further $14 billion in Pakistan since a new economic corridor connecting their countries was announced in the summer of 2013 as part of Chinese President Xi Jinping’s flagship Belt and Road Initiative, data from the American Enterprise Institute think tank shows.

Most of that investment was made by Chinese state-owned energy companies financing fossil-fuel and nuclear power plants, as well as logistics routes under construction connecting Gwadar Port in the Arabian Sea with the Xinjiang region in China’s northwest.

Indian Prime Minister Narendra Modi was set for a historic third term on Tuesday, but with a vastly diminished majority in a rare electoral setback for a leader who has held a tight grip on the nation’s politics, Reuters reported.

Modi’s ruling Bharatiya Janata Party lost its own majority in parliament for the first time in a decade and is dependent on its regional allies to get past the half-way mark required to run the world’s largest democracy.

For Modi whose approval ratings have been the highest among world leaders and who ran a presidential-style campaign, such a result is the first sign of the ground shifting.

“For the BJP to drop below the majority mark, this is a personal setback for him,” said Yogendra Yadav, a psephologist and the founder of a small political group opposed to the BJP.

Since he took power 10 years ago, riding his Hindu nationalist base, Modi has been the ruling alliance’s unquestioned leader, with concerns growing about what his opponents see as the country’s slide towards authoritarianism, read the report.

The man who as a boy sold tea in his home state of Gujarat has dominated India’s politics so completely in the last decade that few in his party or even the parent ideological group, the Rashtriya Swayamsevak Sangh, dare stand up to him.

Indeed, throughout the campaign in scorching heat, it was Modi with his thinning white hair, a neatly trimmed white beard and immaculate Indian attire who towered over everyone else.

His giant cutouts were everywhere, his face on television screens every day as he courted India’s 968 million voters with a personal “Modi guarantee” to change their lives.

“My sole issue with Modi today is that he has become larger than the party itself,” said Surendra Kumar Dwivedi, a former head of the Department of Political Science at Lucknow University “In a democratic system… a party should always supersede an individual.”

‘LAST 10 YEARS IS ONLY A PREVIEW’

Still, Modi will be only the second leader to win a third term after founding prime minister Jawaharlal Nehru and has promised a transformative next five years.

Under him, India has become the world’s fastest growing major economy and he has said he wants to make it the world’s third largest in three years, behind the United States and China.

“What we have done in the last 10 years is only a preview, a trailer,” Modi told a recent rally. “We have a lot more to do. Modi is taking the country to a different level in the world.”

The BJP has dismissed opposition speculation that Modi, 73, might hang up his boots once he reaches 75, like some other party leaders have done in recent years. Modi has said he wants to lay the groundwork for India to become a fully developed nation by 2047, the 100th year of independence from British colonial rule, read the report.

“Modi will now probably enter in what I call the legacy phase of his prime ministership, driving India forward politically, economically, diplomatically and even militarily,” said Bilveer Singh, deputy head, department of political science, at the National University of Singapore.

The idea would be to make the country a “strong regional power that is also a counterbalance to China, but not to serve Western interest as is sometimes alleged, but mainly to promote India’s interest, power and place in international politics”.

A reduced mandate for Modi’s ruling alliance forecloses the possibility of changes to India’s secular constitution that opposition groups had warned against. Any such measures require the support of two-thirds of members of parliament.

Concerns have grown in recent years that the BJP’s Hindu nationalist agenda has polarised the country with Modi himself turning up the rhetoric, accusing the main opposition Congress of appeasing Muslims for votes, Reuters reported.

Yashwant Deshmukh, founder of CVoter polling agency and a political analyst, said the BJP’s top goal of introducing common civil laws to replace Islam’s sharia-based customs and other religious codes would have to go on the back burner.

“These will have to be debated,” he said.