Fazal-ur-Rahman, director for East Asia of the Institute of
Strategic Studies Islamabad (ISSI), a think tank funded by the
Pakistani government, has said in an exclusive interview with
Xinhua that the enhanced Sino-Pakistani economic and trade link
will further consolidate and upgrade their time-tested friendly
relations.
During a comparatively long period since the establishment of
Sino-Pakistani diplomatic relations 55 years ago, the focus of
their relations has mainly been put on political, diplomatic and
defense cooperation, "with no substantive economic interaction
between the two countries," said Rahman, a specialist on Sino-
Pakistani relations.
After entering into the 21st century, the two countries came to
realize the missing economic dimension in their relationship and
started working on improving the bilateral economic and trade
relations, and "now we have come a long way in promoting our
bilateral economic relations," according to the 47-year-old
scholar.
Economic cooperation, covering areas from trade, energy,
transportation, agriculture to infrastructure projects, continues
to remain hot topics during high-level talks between the two
countries in recent years. There is a continuous increase in
activities in trade, investments and development projects between
China and Pakistan.
Trade
During the past five years, the Sino-Pakistani annual bilateral
trade volume has registered an average growth rate of 30 percent,
and in 2005, the annual volume amounted to over US$4.2 billion,
according to figures released by the Chinese Ministry of
Commerce.
Rahman said that according to sources, the 2006 volume of
bilateral trade between China and Pakistan is estimated to reach
US$5 billion.
Official figures show that the bilateral trade volume reached
US$3. 75 billion during the period of January to September 2006,
and that so far China has become Pakistan's third biggest trading
partner.
China and Pakistan have come near to sign a free trade
agreement, which Rahman said will facilitate expansion in trade
between the two countries.
Pakistan has been a major market of contract engineering work
for China in South Asia, and there has been an annual average of
US$500's worth of contracted volume of engineering work and labor
between China and Pakistan, Chinese officials said.
Up to the end of September 2006, the total contracted volume of
contract engineering work and labor that China so far has gained in
Pakistan amounted to US$8.64 billion.
Through the Early Harvest Program that has become operational
since Jan. 1, 2006, Pakistan and China have reduced to zero the
tariff rate of a considerable amount of items from both
countries.
Investment
There is a good prospect of the future development of
investments by the two countries on each other's side, Chinese
officials said.
The total contracted volume of investments that China made in
Pakistan has reached US$110 million, up to the end of September
2006. During the same period, Pakistan has made an actual total
investment of over US$20 million.
In one of his articles, Rahman held that the private sector
engagement would be the main engine for growth in bilateral
economic relations in the future. "Compared to other countries,
investment in Pakistan from the Chinese private sector is still
very low," he said.
"We'd like to see more investments from the Chinese private
sector in Pakistan," he said. "We're looking for Chinese
investments (entering) into exportable items."
The two countries can enter into joint ventures in Pakistan,
which will export the products to the nearby regions of West Asia,
Central Asia, and South Asia, the analyst said.
The Pakistani government is striving to improve the investment
environment, attract foreign money and increase its capability and
variety of exportable items, which are now mostly limited to raw
materials, like cotton, rice, leather and sports goods, a fact
worrying many officials and scholars.
In regard to the security concern that might create setback for
potential investors, Rahman said that Pakistan "is taking very
special measures, trying to root out the extremism and terrorism
from the country."
"Chinese investors can also look into the areas, which are
economically developed, and relatively safer areas," he said. "
Like the industrial zone in east province Punjab, and cities like
Sialkot, Gujranwala, Faisalabad, Lahore, Multan, etc."
Rahman told Xinhua that the Pakistani government has allocated a
special industrial zone for Chinese investors, especially in the
Gwadar deep seaport on the Arabian Sea.
The government is also creating a special textile zone in
Faisalabad and industrial areas in other parts of the country,
where they "prefer the Chinese investors should come," he
added.
Development projects
Around 100 Chinese companies are taking part in the construction
of major engineering projects across Pakistan, among which a number
of mega projects, as officials put, including the Chashma nuclear
power plant and the Gwadar deep seaport, will evolve to be new
landmarks that symbolize the evergreen Sino- Pakistani
friendship.
Rahman said the economic infrastructure projects, like Gwadar
sea port and up-gradation of Karakoram Highway, are going to help
both the countries for extension of the trade, help China extend
trade not only with Pakistan but also with the South Asia area.
Pakistan provides the shortest possible route to the sea from
Gwader through Karakoram Highway to the western regions of China,
which are undergoing a huge economic transformation, and Pakistan
aims to become a trade and energy corridor for China, according to
Rahman.
In a written analysis, he said that economic cooperation would
not only consolidate the comprehensive bilateral relations but also
help in achieving common aspirations for development, peace and
stability in the region.
The visit of Chinese President Hu Jintao starting from Nov. 23 will certainly
consolidate the friendly relations between the two countries and
will further step up the process, which Pakistan has initiated five
or six years back to "upgrade our relationship constantly and
regularly," he said.
"Exchange of the highest-level visits between the two countries,
if you look at each visit in the past four or five years, has taken
our relationship a step ahead," he concluded. "This time the visit
will also further take a step ahead in the Sino-Pakistani
relations."
(Xinhua News Agency November 23, 2006)
