Pakistan signs up for China’s cash

China-Pakistan relations have made considerable headway in recent years, and the leaders from both sides have kept frequent contacts and conducted effective cooperation in areas of trade and investment.
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By Syed Fazl-e-Haider

Chinese Premier Wen Jiabao left Islamabad on Sunday after a three-day official visit that included a commitment to invest about US$20 billion in Pakistan within the next three years and further agreement on private-sector trade deals worth about $15 billion.

Wen, who arrived in Islamabad on December 17 on his first visit there in five years, vowed to boost trade, investment and strategic cooperation with Pakistan. The signed agreements are of considerable importance to Pakistan, whose economy was dealt a big blow by catastrophic flooding this year and which suffers from sluggish foreign investment. China donated $229 million to help the country recover from the floods as well as granting Pakistan a soft loan of $400 million.

The scale of agreements, aimed at increasing bilateral trade to $18 billion by 2015 from about $7 billion last year, were larger than the $16 billion worth of deals China signed earlier in the week during Wen's visit with India, although trade between those two countries is targeted to double to $100 billion a year by 2015.

Agreements with Pakistan include improving the Karakoram highway, which links with China's Xinjiang province, development of oil, gas and mineral resources in Pakistan and help in building up the South Asian country's strength in the space industry, oceanology, and the electronics and heavy industries.

"The future of economic cooperation between the two countries is very bright," Agence France-Presse reported Wen as saying. "China is Pakistan's all-weather strategic partner."

While funds will flow from China to Pakistan, Beijing in return further strengthens access to a close, cheap source of natural resources to fuel China's growing economy and to the seas and trade routes of the Persian Gulf and Arabian Sea region. 

As a sign of the importance of the relationship, Wen inaugurated a $35 million cultural centre on the outskirts of Islamabad built as a monument to Pakistani-Chinese friendship. The countries have had diplomatic relations for nearly 60 years, and 2011 has been declared the "Year of China-Pakistan Friendship".

Almost 260 Chinese delegates and 150 representatives of Pakistan from different investment sectors participated in a Pakistan-China business cooperation summit, which concluded on Saturday. The two countries agreed to conduct currency swaps, which will help to promote bilateral trade, while the Industrial and Commercial Bank of China (ICBC), the world's second-largest bank, is to open branches in Islamabad and Karachi. Analysts said that the presence of the bank in Pakistan would also help to enhance investment and trade dealings between the countries.

Agreements and memorandums of understanding relating to investment worth $10 billion are to be implemented under the public-private partnership basis while $5 billion of investment is to be undertaken under the private sector to private sector investment initiatives, according to the Associated Press of Pakistan.

In his address to the summit, Prime Minister Yousaf Raza Gilani expressed hope that trade between the two countries would rise to between $15 billion and $18 billion over the next five years. Wen said China was aware of Pakistan's desire for cooperation to bridge the pressing supply-demand gap in its energy sector and would continue to cooperate in the peaceful use of nuclear energy with Pakistan.

Islamabad also wants to increase Pakistan's share of outgoing trade with China, which has global imports worth over $1 trillion, which Wen recognised by saying his country was aware of Pakistan's reservations about its low exports, a cause of a heavy trade imbalance. China has a $3.26 billion trade surplus with Pakistan.

China is Pakistan's second-largest source of imports and seventh-largest export market. The country has failed to improve its exports to its fast-growing northern neighbour, while, despite its weak economic performance, Pakistan has become an attractive export destination for China.

Pakistan plans to participate in 15 exhibitions in China and send eight trade delegations in a bid to improve its exports. The Trade Development Authority of Pakistan (TDAP) on Saturday launched a web portal to link businessmen and traders of Pakistan and China by providing information on various trade issues.

"Pakistan is focused on increasing exports to China, reducing the trade imbalance which is heavily in favour of Beijing," a daily reported Tariq Puri, chief executive of TDAP, as saying.

China-Pakistan relations have made considerable headway in recent years, and the leaders from both sides have kept frequent contacts and conducted effective cooperation in areas of trade and investment.

Local analysts believe Wen's visit is likely to open strategic transport links and trade doors between the countries and increase China's stakes in Pakistan, where China's investment has expanded from resources and home appliances to communications and finance.

Some analysts, however, contend that China's support to Pakistan will come at a price that could increase as Beijing moves closer to superpower status. China will expect Pakistan to be more forthright in counter-terrorism as Beijing has its own worries about militancy in western China, where it wants to develop Kashgar city into a major industrial and economic center.

"Pakistan can help China because of its geographical position, but it has to first control terrorism," Agence France-Presse reported local analyst Hasan Askari as saying. "China expects Pakistan to be a reliable partner in the region."

The countries in 2006 signed a free-trade agreement that came into effect on July 1, 2007. During the past two years, the volume of bilateral trade has increased about 30% annually, but it has largely been in favour of China.

China and Pakistan signed $20bn in economic deals

Chinese Premier Wen Jiabao (L) and his Pakistani counterpart Yousuf Raza Gilani hold talks in Islamabad, Pakistan.
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Chinese Premier Wen Jiabao and his Pakistani counterpart Yousuf Raza Gilani reached extensive consensus in Islamabad Friday on further strengthening their countries' strategic cooperative partnership.
"China and Pakistan were, are and will always be good neighbors, good friends, good partners and good brothers," Wen said during his talks with Gilani, citing the profound friendship between the two peoples and the solid foundation of bilateral ties.
In order to enhance communication and cooperation between the two "all-weather" strategic cooperative partners, Wen added, Beijing is ready to establish an annual conference mechanism between the two countries' leaders and a regular dialogue framework between their foreign ministers.
China appreciates the strong support Pakistan has long been offering on issues concerning China's core interests, and will continue backing Pakistan's efforts in defending national sovereignty, maintaining social stability and achieving independent and sustainable economic development, Wen said.
Noting that Pakistan has made huge sacrifice for and important contributions to the global counterterrorism campaign, the Chinese premier said his country is ready to work together with Pakistan to promote regional peace and stability.
Meanwhile, a great potential is yet to be tapped in the two countries' practical cooperation, Wen stressed, saying that concerted efforts are needed in this regard to bring more benefits to the two peoples.
In a three-point proposal, Wen prioritized the task to help Pakistan rebuild after its nationwide deadly flooding this summer, and pledged to offer assistance in road repair, food production and other relief programs if needed.
Additionally, the two sides should consolidate cooperation in infrastructure construction and expand collaboration in trade, investment and financial sectors, Wen added.
On the cultural sphere, he proposed to designate 2011 as the Year of China-Pakistan Friendship, co-sponsor activities to celebrate the 60th anniversary of the establishment of diplomatic relations, further broaden people-to-people exchanges, and thus promote mutual understanding and friendship between the two nations.
Gilani, for his part, said that China is Pakistan's "best" and "most-trusted" friend, and that his country sincerely thanks China for its valuable support and generous aid.
He expressed full agreement with Wen's proposal, saying that Pakistan is willing to join hands with China to beef up top-level contacts and strategic cooperation and pass on the two nations' friendship from generation to generation.
The Pakistani side, Gilani said, is confident that with concerted efforts, the Pakistan-China all-weather strategic cooperative partnership will surely reach higher levels.
Following their talks, the two leaders witnessed the signing of a number of documents on bilateral cooperation in economy, energy, finance, culture and other areas.
Wen arrived here from India earlier in the day for a three-day visit to the South Asian country, where he is also scheduled to address a joint session of the Pakistani parliament and inaugurate the China-Pakistan Friendship Center, a project built to facilitate exchanges among the two countries' students, media and academic circles.

Chinese Premier Wen Jiabao (3rd L, back) and his Pakistani counterpart Yousuf Raza Gilani (4th L, back) attend a signing ceremony of documents in Islamabad, Pakistan.
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China and Pakistan always stood togather in fighting natural disasters, terrorism or countering separatism.  As decades-long close friends and neighbours, China and Pakistan have always lent a helping hand to each other, especially in times of need, said an article by a prominent Chinese scholar appeared in Saturday’s China Daily.  This year has been no exception. When Pakistan was devastated by one of the worst floods in its history earlier this year, China offered about US $250 million in aid to it. As part of the aid, China sent a team of experts to Pakistan in November to help the country expedite its reconstruction work.

China pledged the aid to Pakistan when it itself needed  financial and human resources to recover from a series of natural disasters. The aid to Pakistan has created many records in the history of China’s aid to and relief work in other countries.
“It is the largest aid given to a country. China sent a  medical relief team abroad for the first time. It was the first use of a Chinese helicopter for relief work abroad. And it was the first time that China organized
a fleet of vehicles to travel through land to another country for relief work”, writes  Du Youkang, Director of the Pakistan Study Center, Fudan University,Shanghai.
The Chinese government has promised as much aid as possible to Pakistan to help it expedite its post-disaster reconstruction. It has urged Chinese companies, too, to help Pakistan with its reconstruction work. The hardworking and courageous people of Pakistan, under the leadership of their government and with international support, have overcome a lot of difficulties on their way to rebuilding their homes and lives.
The experience of enduring similar hardships has helped China and Pakistan develop mutual understanding and mutual trust. As a result of their long-lasting friendship, they have mutual sympathy and enjoy mutual support.
When the catastrophic Wenchuan earthquake struck in May 2008, the heads of Pakistani state and government visited the Chinese embassy in Islamabad in person to express their condolences. Pakistan was also one of the first foreign countries to offer China help.
To help the Chinese government fight the severe floods sweeping across the southern parts of the country in summer last year, the Pakistani government mobilized all its transport planes and reserve tents for use in China. Such selfless acts have made Chinese people feel proud of their friendship with Pakistani people.
China and Pakistan have supported each other for a long time without any precondition or any intention of gaining something in return.
It has been China’s consistent stance to support Pakistan to maintain its sovereignty, independence and territorial integrity. China is also supportive of Pakistan’s big role in promoting regional peace and fighting
terrorism.
Similarly, Pakistan regards its ties with China to be the cornerstone of its foreign policy. It has unwaveringly adhered to the one-China policy and supported China’s peaceful reunification efforts. It has always supported China on issues of Beijing’s core interests.
Since the establishment of bilateral diplomatic ties 59 years ago, China and Pakistan have maintained a peaceful and friendly atmosphere along their border, which has become the most secure boundary for the two countries.
Pakistan has consistently extended support to China in its fight against the “East Turkistan” terrorist organization.
On the international stage, Pakistan has stood steadfastly by China’s side on issues of Taiwan, the Tibet autonomous region, Xinjiang and human rights, as well as in China’s battle against terrorism, separatism and extremism, the so-called three evil forces. Islamabad’s staunch support and help to Beijing to protect its core national interests have helped consolidate their decades-long friendship.
Now, Premier Wen Jiabao’s ongoing visit to Pakistan is expected to take the two countries’ friendship and bilateral strategic cooperative partnership to higher levels.

 

 

China and Pakistan have signed nearly $20bn in economic deals, boosting trade and investment as Wen Jiabao became the first Chinese premier in five years to visit the nuclear-armed state.
Business leaders are scheduled to formalise another $10bn worth of deals on Saturday at Islamabad's Marriott Hotel, where a devastating suicide truck bomb killed 60 people in 2008.
Pakistan, on the front line of the US battle with al-Qaeda and struggling with Taliban fighters in its northwest, considers China its closest foreign ally and treated Wen and a massive business delegation to a red-carpet welcome upon his arrival on Friday.
Qamar Zaman Kaira, Pakistan's information minister, said the countries signed 13 agreements and memorandums of understanding on Friday in fields ranging from energy to railways, from reconstruction to agriculture and culture.
Kaira said China had promised to fund "all the energy projects of Pakistan," which he termed a "major breakthrough". Pakistan suffers from a debilitating energy crisis and produces only 80 per cent of the electricity it needs.
"China will provide assistance in 36 projects in Pakistan to be completed in five years," he said.
"Basically this is a five-year development plan."

China and Pakistan have signed nearly $20bn in economic deals, boosting trade and investment as Wen Jiabao became the first Chinese premier in five years to visit the nuclear-armed state.
Business leaders are scheduled to formalise another $10bn worth of deals on Saturday at Islamabad's Marriott Hotel, where a devastating suicide truck bomb killed 60 people in 2008.
Pakistan, on the front line of the US battle with al-Qaeda and struggling with Taliban fighters in its northwest, considers China its closest foreign ally and treated Wen and a massive business delegation to a red-carpet welcome upon his arrival on Friday.
Qamar Zaman Kaira, Pakistan's information minister, said the countries signed 13 agreements and memorandums of understanding on Friday in fields ranging from energy to railways, from reconstruction to agriculture and culture.
Kaira said China had promised to fund "all the energy projects of Pakistan," which he termed a "major breakthrough". Pakistan suffers from a debilitating energy crisis and produces only 80 per cent of the electricity it needs.
"China will provide assistance in 36 projects in Pakistan to be completed in five years," he said.
"Basically this is a five-year development plan."
Although not specifically mentioned, behind-the-scenes talks are also expected on China building a one-gigawatt nuclear power plant as part of Pakistani plans to produce 8,000 megawatts of electricity by 2025 to make up its energy shortfall.
"Today, in a show of massive strategic and military support, a Chinese leader is visiting a Pakistani military base - something that has not happened too often," Pirzada said. "With some $20bn worth of investment, China is sending a strong message to New Delhi and Washington."
Wen is expected to inaugurate a cultural centre built as a monument to Pakistani-Chinese friendship, and is scheduled to hold talks with the country's opposition leader Nawaz Sharif and senior figures in the military, which depends on China for hardware.
After the business leaders' meeting, Asif Ali Zardari, the Pakistani president, is to host a state banquet, before Wen addresses a special joint session of parliament early on Sunday.
"The outcome of the visit is beyond our expectations. It is an historic day," Masood Khan, Pakistan's ambassador to Beijing, said.
Pakistan depends on China's financial and political clout to offset the perceived threat from rival India and rescue its economy from the doldrums of catastrophic flooding, a severe energy crisis and poor foreign investment.
Pakistan's prime minister has expressed hope that trade will rise to between $15bn and $18bn over the next five years.
China, meanwhile, has been concerned about the threat of fighters infiltrating its territory from Pakistan.
Before arriving in Islamabad, Wen visited India, where he and his 400-strong delegation inked deals that will see bilateral trade double to $100bn a year by 2015.