Pakistan has sent a new request for projects worth $1 billion and discussed movement towards signing free trade agreement (FTA) with China. The meeting to discuss these issues was held at the Economic Affairs Ministry between Pakistani officials representing various ministries and a visiting Chinese delegation led by Chen Jian, Assistant Minister of Commerce.
Adviser to the Prime Minister on Finance Dr Salman Shah led the Pakistani side.
Pakistan and China will work for extension of Preferential Trade Agreement (PTA). Efforts are being made for expansion of list of items under existing Preferential Trade Agreement. Both the countries will also move towards signing of FTA.
It was also agreed that 12th session of Pak-China Joint Economic Committee would be held soon.
Salman Shah suggested some new projects and asked the Chinese government to provide technical and financial assistance to Pakistan on trans-shipment Post Gwadar Phase-II, Karachi Mass Transit, technical assistance in developing genetically modified cotton, Neelum-Jhelum Valley Hydropower project, private sector development with China, urban development, motorways on BOTs and openings for banking sector in both the countries.
China has also been asked to reconsider the capital requirement of Pakistani banks to open branches in China.
In-depth discussions were held on already under-process projects, including utilisation of the remaining $350 million preferential buyer's credit, issues relating to Chashma-II project and frigates project for Pakistan Navy.
Extension of Preferential Trade Agreement and move towards Free Trade Agreement, Thar Coal project, enhancement of co-operation in Railways sector and customs agreement were also discussed.
The adviser stressed upon the need to expedite Thar Coal project. It was observed that the discussions between a Pakistani delegation led by Sindh Provincial Minister Irfanullah Khan Marwat and Shenhua group, China had been positive leading to reduction in the project cost.
The Chinese government was requested to take quick decision on tariff. The Chinese side was asked to expedite project feasibility approval so that the contract/document could be signed during Prime Minister Shaukat Aziz's expected visit to China.
It was agreed that out of $500 million preferential buyer's credit, $150 million had already been committed for C-II project (Chashma Nuclear Power project) and the rest of un-utilised amount of $350 million would be allocated to a number of projects lined up by different ministries/divisions. All hurdles in $500 million longer credit had been removed and agreement can be signed as soon as documentation is completed.
It was recalled that in March 2003 the then prime minister of Pakistan visited China and signed a memorandum of understanding (MoU) providing for implementation of additional railway projects.
Chinese delegation was informed that the projects for which Chinese assistance of foreign exchange financing in the form of soft-term state-to-state credit include procurement/manufacturing of 1,000 freight wagons, procurement/manufacturing of 150 passenger coaches, rehabilitation of existing electrification from Lahore-Khanewal and its extension up to Samasatta, doubling of track from Khanewal to Raiwind and Shahdara-Lalamusa, electrification from Khanewal to Raiwind on the second line and doubling of track from Lodhran-Khanewal. The Chinese side agreed to consider all these projects.
Chinese Assistant Minister for Commerce Chen Jian said China is eager to assist Pakistan in its development plans. He suggested forming study/expert groups to study feasibility and modalities of financing all the projects suggested by Pakistan.
The meeting was also attended the by the ministers of state for economic affairs and railways, Pakistan Atomic Energy Commission chairman and senior officers of ministries of water and power, railways, economic affairs and ports and shipping.
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