China Trade: A Major Factor in Pak-China Relations

China Trade relations with Pakistan are becoming a factor in further cementing Pak-China ties that have stood the test of time all these years in a region that has seen stupendous political, cultural, religious and economic upheavals of gigantic proportions.
Pak-China Friendship Deeper Than the Pacific

Generally in Pakistan it is said that the Pak-China friendship is deeper than the Pacific and higher than Mount Everest, the highest mountain in the world. Fortunately, this common assertion rife in political and diplomatic circles of Islamabad, capital of Pakistan, has been substantiated by certain realities that govern Pak-China relations.

Since 17th December, 2010 Chinese Prime Minister Mr. Wen Jiabao is in Pakistan on a three day state visit that is primarily aimed at cementing Pak-China relations. Going beyond the political, cultural and diplomatic vistas of state diplomacy, China has dually recognized the new factor that has recently played an abiding role in cementing the interests of two nations: economic ties.


China, Pakistan’s Natural Choice

Due to natural causes and domestic law and order situations coupled with corruption that has decayed bureaucracy from within and soiled all sectors of Pakistan’s social life, Pakistan's economy is experiencing significant problems.

With unfriendly, rather hostile India on its eastern borders having no appetite to normalize relations with Pakistan, and Iran being under UN sanctions, China is Pakistan’s natural choice.

Like a true friend, China has come forward. The beauty of Pak-China relations is that they are based on parity, mutual respect and trust. Whereas, conversely speaking, Pak-US relations, even though the US has provided more aid to Pakistan than China, are love-hate relations that are mired in deep-seated mistrust on part of both nations.


China Comes up with Tangible Plans to Help Pakistan

Truly, realizing the needs of Pakistan, China has come up with certain tangible plans to help Pakistan get out of its current economic troubles. According to media reports Pakistan and China have signed 22 agreements and MoUs to further their diplomatic, cultural, political and economic relations at all levels and to boost bilateral trade and investment for mutual benefit of the two countries to the tune of 15 billion US dollars.

According to the APP, Associated Press of Pakistan, a government-controlled news agency, the agreements were signed on 17th December, 2010 at a summit in Islamabad that was jointly organized by Board of Investment, Ministry of Commerce, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and China Council for Promotion of International Trade (CCIT). The agreements and MoUs related to development of energy sector, promotion of trade, exploration of natural resources and development of agriculture, livestock, finance and banking sectors.

Speaking on the occasion Premier Wen Jiabao said, ‘Pak-China friendship is like a sea, that never drains and will last forever.’ He termed the Karakoram Highway a symbol of their deep friendship and added ‘it has strengthened further with the great stories of courage and valour.’

Prime Minister of Pakistan, Syed Yousif Raza Gillani, was equally candid and profusely acknowledged the significance of Pak-China relations, saying “Our friendship is rooted in popular ethos and based on complete trust and mutual understanding.” Reciprocating the words of the Chinese Prime Minister he emphasized that “We value every drop of water in the ocean of China-Pakistan friendship. Each drop has added to the depth and richness of this relationship.”

Sino-Indian relations not to affect Pakistan!


Historically Sino-Indian relations have played an important role in human development. There is no doubt that both have intense resources and capability for industrialization and mobilization. So it’s natural to find out their comparison and their future role on global economic and political system. As India was the second among the non-socialist countries who recognized People’s Republic of China after Burma (Myanmar), and they established their diplomatic relations on 1st April 1950.

China and India have witnessed ups and downs in their bilateral relations since their independence, as both are the world’s most populous and swiftly growing major economic powers and neighbors as well. Tibet was the first area where Chinese and Indian prime interests clashed. Currently Aksia Chin, Arunachal Pradesh are disputed territories between them but this border dispute is not a major flashpoint as they respect and observe the Line of Actual Control, and working together after passing through a twist relations from 1950 to 1958. China and India witnessed a “Honey moon” phase with the slogan of China-India Bhai Bhai. But in 1959 their relations sharply deteriorated on Tibet issue and led to 1962 border conflict and confrontation between the two countries for more than ten years. In 1988 Indian Prime minister Rajiv Gandhi visited China and overall relations improved. In 1998 after Indian nuclear tests their ties faced a short setback but with the beginning of new century a rapid development in their relations began with strategic and cooperative partnership established in 2005. Now they have entered into a mature phase as their growing economic relations have made China second largest trading partner of India after US. Both have continent size markets with the advantages of huge economies of scale and they have harmonious balance of strength. Indian development in IT, Software engineering, management and financial services are well matched by Chinese expertise in hardware construction and industry. Now India is a main seller of iron ore to China and fills the frantic need of natural resources for the state. China and India have been steadily improving their bilateral relations which is a significant development in international politics. Since 9/11 Asian balance of power is changing swiftly due to two Asian powers, China and India. Both countries have great power aspiration and potentiality militarily, scientifically as well as technologically. In Asian politics they are main actors due to their geographical size and location. India is economically important for China as it is rising economic power so that they want to improve their bilateral relations and also to grow scientifically technologically not only with India but also at global level. China wants to change the current unilateral international system. The late Chinese leader Den Xiaping once said” only when both the China and India get developed can the Asian century become reality”. At global level and at regional level India’s confrontations and commonality of interest are less as compared to conflicting points. We need to clearly understand the difference between their relations and a divisive rivalry as a neighbour where Pakistan’s geostrategic importance is another consequence on their relations. India’s most important goal is to disrupt the Sino-Pak axis. Recently Chinese Premier Wen Jiabao visited New Delhi and signed trade deals. “China and India are partners for cooperation, not rivals in competition.” Year 2010 marked the 60th anniversary of the establishment of diplomatic ties between China and India. Chinese trade delegation signed 48 deals worth more than US$16-billion. Bilateral trade between the two Asian rivals from a mere $262-million in 1991 reached to an expected $60-billion this year. The two countries have set a bilateral trade target of $100-billion-a-year by 2015. The relations between China and India define the geopolitical climate in Asia. An old Chinese says ‘One mountain cannot accommodate two tigers’.” China wants to approach South Asia in a cooperative manner rather than a conflictive way specially in case of India his primary objective is to expand economic growth. Peaceful and stable South Asia is central part of its foreign policy, and recent visit of Chinese premier clearly shows that how they are boosting their diplomatic ties to influence this region, so friendly relations are vital for China’s National interests. Without China’s help US cannot execute and safeguard its interests in South Asia. Both nations’ economic future seems very bright; their relations are not only decisive for their mutual benefits but also have significant importance to the peace of Asia in general and world as a whole. Present ties have brought India and China to the stage of viewing each other as “friends” and not “rivals” or “competitors.” They should work together and accept that both can gain more through economic linkages and China does not have ambitions to become global power alone. Pakistan and China have very close and long standing relations, so the India-China growing relations are not at the expense of Pak-China friendship. China had played constructive role in south Asia. Pak-China friendship is special as well as precious for Pakistani nation. Chinese friendship is not only trustworthy but also great honour for Pakistan. China is Pakistan’s true and most reliable friend and its time-tested relationship, which could not be compared with India’s relations or with any other country. Their border dispute is not only an obstacle but a stumbling block between them that they cannot establish and enjoy relations as compared to Pakistan. As Pakistan is enjoying friendly diplomatic relations since its independence. Sino-Indian relations are not going to affect Pakistan.

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A New Impetus in the Pak-China Relationship


On the final day of his three days, historic visit to Pakistan, Chinese Prime Minister Wen Jiabao, addressed the joint session of Pakistani Parliament.

During the address, the distinguished guest lauded Pakistan’s role and sacrifices, it rendered in fighting out the terrorism. He said, “Pakistan has paid a heavy price in combating terrorism. The fight against terrorism should not be linked with any religion or ethnic group and there should be no double standards.” He further emphasized that, “The international community should affirm that and give great support as well as respect the path of development chosen by Pakistan.” He also promised to further enhance the strategic and economic cooperation between Pakistan and China in the days to come. Indeed, in conformity to the national interests of the peoples of both countries, this strategic partnership would promote, “peace, stability and prosperity of the region.”

Indeed, the three days visit of Chinese Premier Mr. Wen Jiabao, has attained another milestone in the history of bi-lateral relationship of Pakistan and China. This visit is of a unique significance, as it covers all aspects viz; the strategic, political and economic. In the wordings of the Premier Wen, “To cement and advance the all-weather strategic partnership of cooperation between China and Pakistan is our common strategic choice.” In the joint communiqué, issued by both countries, it was decided to boost the bi-lateral cooperation in the field of energy, defence, space technology, transportation, banking, infrastructure development, heavy machinery manufacturing, cultural exchange and finance.

Another distinctiveness of the visit of Premier Wen Jiabao is that he made sure to meets all stakeholders in Pakistan. Apart from the traditional meetings with the President and Prime Minister, Chinese Premier met with leaders of all political parties of Pakistan. Rather, it was a rare mosaic of Pakistani political, religious, and territorial leadership gathering to welcome their all time friend in Islamabad. This gathering was indicative of the fact that, there exists no second opinion about Pakistan’s relationship with the People’s Republic of China. This fact was amply highlighted in the welcoming address of the leader of opposition during joint session of Parliament once he said, “We are mired in a lot of controversies, but on one issue there is no controversy and that is our friendship with China.” No global leader ever has such a reception and united response and indeed a spirit of love from Pakistan ever. Chinese Premier also had a detail meeting with the Armed Forces heads under Chairman Joint Chief of Staff Committee and assured further enhancement in the ongoing cooperation in the field of defence. Premier Wen Jiabao declared that, “Beijing would never give up on Pakistan.” Seeing the unity among the leadership in Pakistan, Prime Minister Wen said that, “Government and people of Pakistan are united and moving forward to safeguard solidarity, prosperity, and sovereignty of the country.” He also announced 500 educational scholarships for the Pakistani students in Chinese educational institutions. This indeed, would enhance people-to-people contact in both countries.

Today China houses 20% global population and because of its overwhelming growth rate, it has become a powerhouse of Asia. The enormous Chinese development in the field of technology, industry and even in the field of defence has created a fear in the Western world. India too is jealously following the Chinese path. Since China has strategic partnership with Pakistan, therefore, this aspect seriously bothering India. Projects like; Karakoram highway, Gwadar port, and Chashma nuclear reactors are some of the aspects where both countries are having strategic cooperation. Besides, China is investing in a number of other projects like; 2.6 billion dollars Kohala Hydel project and 8 billion dollars Bunji dam project.

Following the establishment of Pak-China diplomatic relationship in May 1951, both countries has attained many milestones in their bi-lateral relationship. Pakistan, otherwise among the first few countries, which recognized this great communist state, proved its friendship by making strong lobby in getting the UN membership for China. The initial slow pace of mutual understanding got an impetus following the Sino-India war of 1962. In the era of Field Martial Muhammad Ayub, then Foreign Minister (later Prime Minister), Zulfiqar Ali Bhutto formalised this relationship on the strategic lines. Through his strategic vision, he made Pak-China relationship as an essential and never changing pillar of the Foreign Policy of Pakistan. The same vision exists even today and Pakistan maintained it as an inalienable part of its diplomatic relationship.

China has always appreciated its deep-rooted friendship with Pakistan and acknowledges Pakistan’s untiring efforts for getting her closer to United States in early 1970s. Indeed, through this collaboration during the peak days of the cold war, Pakistan lessened the tension, previously existed between U.S and the China, by becoming a bridge between two giants. Following this collaboration, China got an opening and diplomatic and trade excess into the Western world, whereas, U.S got a Communist friend in Asia. In a way, Pakistan proved its significance and vision as an international facilitator if not mediator. Thereafter, Chinese markets and goods were introduced at the global level and its economy started prospering to a level of second to U.S only in the contemporary world today. For the United States, this was the first moral and diplomatic pre-eminence over former Soviet Union.

During the visit of Prime Minister Wen Jiabao, Pakistan and China concluded economic deals worth $35 billion in total. These deals include; 17 agreements, four memorandum of understanding (MoU) and a joint venture. This indeed is a new record of the economic deals and agreements in the history of traditional friends. Both Premiers attended the Pak-China Business Cooperation summit, participated by 260 Chinese delegates with their 150 Pakistani counterparts. China Council for Promotion of International Trade (CCIT) and Board of Investment, Ministry of Commerce, Federation of Pakistan Chambers of Commerce and Industry (FPCCI), jointly organized this summit. The agreements reached during the summit include; “development of energy sector, promotion of trade, exploration of natural resources and development of agriculture, livestock, finance and banking sectors.”

A $6.5 billion MoU was signed between China Three Gorges Corporation and Alternative Energy Development Board for the wind power projects and solar energy projects. Both the countries signed framework agreement in relation to Development Finance Cooperation Agreement besides inking agreement of purchasing seafood, guar products, cotton yarn purchase and yarn import contract. In addition, frozen fish agreement, import stone business agreement, leather purchasing contract and agreement for purchasing of Pakistan rapeseed meal, were also inked on the occasion. Cooperation agreement, medical equipments donation agreement, and stone import business were also signed during the daylong summit between the business communities of both the countries.

On this occasion, Chinese Premier, reiterated his resolve to enhance the bilateral trade with Pakistan in the coming years in a bid to improve the flow of investments between both countries. The bi-lateral trade between Pakistan and China rise from $1 billion in 2002, to $6.8 billion in 2009. Chinese Premier desires that volume of this trade should be brought to the level of $10 billion on earliest possible time frame. For the betterment of economic cooperation and to facilitate the currency swap, both countries agreed to open the branches of ICBC in Pakistan and China. The Premier Wen said that, “China welcomes Pakistan’s effort to capitalize on the preferential terms in the bilateral FTA to expand exports to China. The Greater financial cooperation between China and Pakistan will provide a strong support for in-depth and sustained growth of our economic and trade ties.”

He said that, “his country would increase investment in Gwadar Port. The port currently administered by Port of Singapore Authority (PSA), was constructed by China in 2006. Chinese Premier promised that his country would remove the trade barrier between Pakistan and China by improving trade infrastructure and promoting Pakistani exports to his country. Earlier Prime Minister Yousaf Raza Gillani, appreciated Chinese investment in Pakistan, especially in the energy sector of Pakistan. Prime Minister Gillani said that, “We would encourage Chinese companies to consider investments in the energy sector, which assures certain returns. Our energy requirements are expected to increase from 20,000MWs to more than 160,000MWs by the year 2030.”

In fact, Pakistan is not a resource deficient country, but problem lies with the technical expertise, infrastructure development, and availability of capital. Today, apart from huge amount of unexplored oil and gas, “Pakistan has 185 billion tonnes of coal reserves, which would be converted into energy to satisfy Pakistan’s growing demand.” Besides, Pakistan welcomes Chinese experts for the exploration of its oil and gas resources. Prime Minister assured Chinese investors for special economic incentives like; “duty-free import of plant and machinery, exemption from sales tax and income tax.” In spite of a stiff resistance from New Delhi and Washington, China has agreed to establish two nuclear plants as part of the civil nuclear energy programme.

Pakistan and China are already working for the development of the Pak-China Trade Corridor along the Karakoram Highway (KKH). In this regard, the highway is being upgraded and lying of a railway track along the KKH is in progress. Upon development of this overland route, there would be further boost to the economic relationship. Pakistan is otherwise becoming a hub for the oil and gas from Central Asia and Middle East. With the improvement of communication infrastructure, oil and gas from these regions can easily be transported to the Chinese territories either through oil tankers or through an overland gas pipeline. Premier Gilani assured his counterpart for the safety of Chinese nationals working in Pakistan. He said, “Besides a comprehensive Free Trade Agreement and the Joint Five Year Economic Programme, we are now jointly endeavoring to establish closer financial and banking sector cooperation.” Chinese Premier also supported Pakistani point of view on Kashmir issue. China has a clear stand that, Kashmiri must get their right of self-determination as per UN resolutions. China indeed, rejects all Indian assertions of betraying Pak-China relationship and regional domination by India. China does not support Indian case for a permanent membership of UNSC. China also assured Pakistan for its full supports on Pakistani position on the Afghan issue.

Pakistan and China are bounded in, an inalienable relationship ever since the formal beginning of their diplomatic relationship in early 1950s. Nevertheless, Pakistan has more frequently served the U.S aims and objectives, even more than its European partners have. Nevertheless, it enjoyed a smooth relationship with China, but rocky, complicated, full of mutual mistrust and apprehensions with United States. Chinese Premier has the moral courage to laud the sacrifices of Pakistan while fighting against terrorism and extremism. This acknowledgment and praise indeed, is in stark contrast to a “cacophony of statements emanating out of Washington that urge Pakistan to do more.” Therefore, the red carpet reception for such a time tested friend and declaring the “Friendship with China as a matter of pride for Pakistani nation,” by Prime Minister Gilani was a true reflection of the national sentiments.

-The writer is an analyst of international relations.

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Pak-US vs Pak-China relations


Decision makers in Pakistan are often torn between opting for strategic relations with the US or China: ties with either of the two should be mutually exclusive. However, as Pakistanis wonder whether Pakistan is a US ‘ally’ or ‘target’, China with its quiet unobtrusive help continues to win the hearts and minds of the people of Pakistan. The question here is, why is it that the US continues to pump money, train Pakistani security forces and provide technical support, yet it continues to draw flak? It is worth examining the reason for this dichotomy.

The Pak-US military relations have been like a rollercoaster ride. Historically, no US ally has faced as many sanctions from it as Pakistan. A brief history of the Pak-US military relations indicates that they commenced in 1954/55, with the signing of the SEATO/CENTO pact, after which Pakistan started receiving weapons and training from America. In July 1957, Pakistan permitted the US to establish a secret intelligence facility in the country and for the U-2 spy plane to operate from Badaber, near Peshawar. But when the plane was shot down by the Soviet army and its pilot captured alive on May 1, 1960, it embarrassed the US and brought Soviet ire on Pakistan. Since the Pakistani government was kept in the dark regarding the clandestine US operations, it asked the US to wind up its activities in Pakistan.

During the Indo-China war in 1962, the US supply of defence equipment to India, despite Pakistan’s objections, soured the Pak-US relations. On the contrary, the US did not come to Pakistan’s aid either in the 1965 or the 1971 Indo-Pak wars, despite a pact for mutual defence, forcing Pakistan to denounce its SEATO and CENTO membership. In addition, the Pak-US relations underwent a severe blow with Pakistan’s nuclear tests on May 28, 1998, and the ensuing sanctions. The ouster of then premier Nawaz Sharif in 1999 in a military coup led by General Musharraf gave the US government another reason to invoke fresh sanctions under Section 508 of the Foreign Appropriations Act, which included restrictions on foreign military financing and economic assistance.

Now let us examine Pak-China relations briefly. The relationship between the two countries began in 1950s when Pakistan was among the first countries, and the only Muslim nation, to recognise the People’s Republic of China and tried to build good relations with the newly independent country. Pakistan also helped China become a member of the United Nations and has been instrumental in helping it to maintain relations with the Muslim world. It has also played a leading role in bridging the communication gap between China and the West, through Henry Kissinger’s secret visit in 1971, which became the forerunner of President Nixon’s historic Beijing tour, establishing to the world that China was a lawful entity.

Today, China has come a long way from those turbulent times. It is a factor of stability in the region; is the world’s most populous and industrious nation; the world’s third largest economy and trading nation; has become a global innovator in science and technology; and is building a world class university system. It has an increasingly modern military and commands diplomatic respect. In this period of global economic meltdown, China not only has a stable economy, but it also holds roughly $1.5 trillion in US assets, which is at least 65 percent of China’s total foreign assets, and it is the second biggest foreign holder of US debt after Japan.

Pakistan and China’s joint ventures to produce JF-17 Thunder fighter aircraft, K-8 Trainer aircraft, Al-Khalid Tank and F-22 Naval Frigates have given a new dimension to the cooperation between the two countries in the field of defence. Heavy Rebuild Factory (HRF) at Taxila, Pakistan Aeronautical Complex at Kamra was also established with Chinese assistance. The Karakoram Highway, the strategic port of Gawadar and the Chashma nuclear reactors are a manifestation of China’s sustained interest in Pakistan.

The problem with the Pak-US relationship is mainly because of trust deficit. The US announces a “strategic partnership” amid much fanfare, and admits its past mistakes in dealing with Pakistan; however, at the first hint of trouble, US Secretary of State Hillary Clinton threatens Pakistan of “severe consequences”. The drone attacks continue and despite Pakistan’s serious commitment and sacrifices in the war against terrorism, Washington expects it to “do more”. Strategic partnerships are undoubtedly based on sterner foundations.

Compared with the US, look at Pakistan’s partnership with China where billions of dollars worth of projects are launched without fanfare and without insensitively reminding Pakistanis everyday about the “aid” or asking for audit reports. The treatment meted out to Pakistanis, or even Pakistani-origin US citizens, at the US airports leaves a lot to be desired. The Chinese want to help Pakistan in building its infrastructure; have been there at every moment of trial and tribulation; and have never put restrictions on aid, nor levied sanctions on Pakistan. It is, thus, obvious that Pakistan considers China a more reliable and trustworthy ally.

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Pak-China economic relations


Sardar Aminullah Khan

ARTICLE (February 20 2009): The world of rapid economic globalisation and regionalization continues to intensify since the last decade involving phenomenal change in the international economic spectrum, particularly after establishment of WTO. Countries are looking for the business opportunities abroad. Free trade and investment agreements have become almost the need of the hour.

While international trade has been there throughout much of the history, its economic, social, and political importance has also increased. Industrialisation, ICT revolution, advanced transportation, globalisation, growth of MNCs' and outsourcing etc had major impact on it. Trade is regarded as a major source of economic revenue, investment and modern technology. Pakistan and China are two friendly countries and partners in international trade and investment. Consistent growth in economic relations amplifies the strength off their relationship.

THE STRUCTURE OF TRADE: There is high demand for Chinese goods in Pakistani market. Their experience of growth in trade is positive due to convenient trade flows and openness measures. Trade and investment policies are liberal since 80s' and generally WTO compliant. The pattern has merchandise bias but with high volume of manufactured items.

China has become one of the top five import sources of Pakistan. Major imports from China are machinery, chemicals, garments and other textile products, stationery, construction materials like tiles, sanitary wares and crockery, etc. Machinery and electrical appliances are the major parts of overall exports. Bilateral trade had reached around dollar 7 billion in 2008. The balance is, however, in favour of China due to lesser exports by Pakistan. Efforts are under way for correction of this situation.

Trends of trade are very positive as volume of bilateral trade has increased exponentially during the last seven years. Pakistan enjoys huge export potential to China due to advantages in agriculture, mineral, chemical, textile and leather products. Besides, Pakistan has comparative advantage in oil seeds, fruits, base metals, plastic goods and perfumery etc. China has static advantage over Pakistan in machinery, transport equipments, chemical products, precious instruments, stone and plastic articles, home appliances, pearls, precious/semi-precious stones etc. Man-made filaments, space crafts and aircrafts provide dynamic comparative advantage to China.

Under the 5 years programme launched in 2006 for strengthening of economic relations, the existing trade is to be enhanced to 15(b) US$ by 2012. Besides, different projects have been identified in the programme for co-operation and investment in various economic fields. Permanent and enduring factors that may prove effective and successful in the demand and supply dynamics need to be enforced through mutual co-operation. Some restrictions on free movement of goods and services are occasionally reported and are often discussed for removal to further enhance the volume of trade and significant increase in investment. Both countries can benefit greatly from further expansion in economic and trade relations under this 5year programme.

INVESTMENT: China and Pakistan have witnessed steady growth in mutual investments in recent years. In the last few years, investment of more than 1.3 billion USD was made by China in Pakistan. A large number of Chinese companies are working in Pakistan in oil and gas, IT and telecom, power generation, engineering, automobiles, infrastructure and mining sectors. These include names like, ZTE, Huawei Technologies Co Ltd, China National Machinery Imp/Exp Corporation, Metallurgical Construction Corporation of China, China International Water and Electric Corporation, China Petroleum, and Haier.

OTHER INVESTMENT OPPORTUNITIES: There are possibilities of active co-operation in the sectors like oil and gas, mining, financial sector, infrastructure, power (coal, hydel, gas based) IT and telecom, chemicals, fertiliser, glass, polymers, textile manufacture (value added), engineering goods, textile machinery, assembling of automobiles, electronics, automotives, agricultural implements, agricultural and agro-based industry, food and fruit processing and packaging, livestock and dairy farming and pesticides.

Relocation/mergers in a large number of complementary units are also possible. A few most ambitious projects for the future are the high altitude railway link, energy corridor, trade corridor by using KKH as alternate trade route and collaboration in major infra structure projects like development/processing of coal on a large-scale and construction of big dams etc.

MEMBERSHIP OF ECONOMIC FOR A: On account of the familiarity and common understandings, developed over a long period of economic co-operation, China and Pakistan have signed many bilateral agreements, like Free Trade Agreement, Bilateral Investment Treaty, Double Taxation Agreements, Customs related agreements/procedures, Pak-China Joint Investment Company, bilateral contracts, 5-Year Framework, MOUs in various fields/ministries/divisions and other agreements.

China and Pakistan have recently concluded an agreement on trade in Services. This involves a wider impact than the other trade and investment agreements. The volume is going to increase after the implementation of this agreement, particularly in financial and technical services.

Simultaneously, they have been participating actively in regional as well as multilateral organizations and supported the reforms for regional and multilateral liberalisation and expansion of trade. Both maintain good co-operative relations and play active role in multilateral contexts in capacity of members of important international and regional economic clubs like WTO, SCO, ECO, SAFTA, ASEAN, WIPO and APTA etc.

SHARING OF EXPERIENCES: China's impressive economic achievements over the past two decades have made its development experiences quite distinct from those of many other economies and even the conventional development models.

Important areas are creation of social safety nets, subsidy distribution mechanism, disaster management, regional development, management of Forex reserves, integrated agricultural development promotion of Foreign Direct Investment and Economic Zones.

Since there are considerable similarities in the composition of the poor-rich /rural-urban populations in Pakistan and China and on account of other economic similarities, Pakistan can utilise the Chinese experience to its economic benefit.

Challenges in the process include infrastructure, communication and co-ordination, trade related visible/invisible barriers, understanding the new trends/global realities, exchange of information on exports, documentation of informal trade, implementation and monitoring of progress, visa related problems, timely implementation of decisions/ agreements, professional approach and enlargement of the trade basket.

CONCLUSION AND RECOMMENDATIONS: The aforementioned challenges are certainly impeding the speedy growth of investment and trade as per the potential. They can effectively be turned into opportunities through comprehensive medium and long-term collaborative joint efforts.

The measures that may facilitate the achievement of desirable goals include timely implementation of the agreements, creation of enabling environment, person-to-person contacts to provide confidence and encourage the potential investors, operationalization of Transit Trade Agreement, regular exchange of information to enable the stakeholders to realise the ground realities, co-operation in business laws and procedures between the businessmen of the two countries and a dispute resolution mechanism to avoid any trade disputes and misgivings, improvement of security environment, engaging the Chinese private sector on long-term basis for sustainable economic relations, revamping the processing technologies with mutual co-operation in potential sectors like seafood and leather products, value addition in cotton yarn and fabric, chrome and copper ores and other industrial minerals and precious stones, relocation of industries through restructuring, improvement of institutional frameworks for better communication and co-ordination between the government agencies and representative trade and industry bodies, which is essential for better understanding of business houses.

EPILOGUE: China and Pakistan are close and friendly neighbours. Pakistan has treated China as its most important economic partners. Rapid economic development in China and consequent inter-regional activity has caused increased demand for raw materials, exchange of parts, components, intermediate products and development of cross-country production networks/processes.

Such outward linkages are beneficial for resource rich Pakistan in the Chinese context. It can be supplanted by policy of diversification of risk through investment in Pakistan. It will increase trade and spur investment through deepening of all-round co-operation for mutual prosperity.

The economy of Pakistan is deeply linked to the Chinese economy. Pakistan highly appreciates the assistance that China had provided for infrastructure development/other projects. The development must be carefully synchronised and we must share information to facilitate and assure the investors of the good returns and results.

They need to very actively and forcefully promote and facilitate economic co-operation with high zeal and spirit. The measures undertaken include the aggressive economic diplomacy. Many companies have signed agreements and MOUs worth millions of dollars to cooperate and undertake joint ventures in various sectors, such as infrastructure, mass transit, communication network, finances, chemical, fertiliser, automobile energy, and agro-based industries.

A few other agreements are likely to be signed during the upcoming visit of the President of Pakistan to China. Prospects of further consolidation of economic relations are bright as the two sides have a lot of potential for further developments in a number of fields. Moreover, as active supporters of regional economic integration, both countries can help establish an open and integrated regional market also through regional economic fora.

(The author is Economic Minister in the Embassy of Pakistan, Beijing and can be contacted on Sardar.ameen@gmail.com)

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