ISLAMABAD: Caretaker Finance Minister Dr Shamshad Akhtar Friday said the State Bank of Pakistan has already put in place the required regulatory framework, which facilitates the use of Chinese currency (RMB) in trade and investment transactions.
Addressing the Industrial and Commercial Bank of China (ICBC) RMB clearing bank event on Friday, the caretaker finance minister said that China and Pakistan are all-weather strategic cooperative partners.
She added that the RMB clearing operation would help to connect Pakistan’s off-shore and China’s on-shore RMB markets to facilitate cross-border transactions in a number of activities and fields.
CPEC projects: Shamshad, Chinese envoy discuss progress
Akhtar added owing to the RMB’s growing importance in world trade, in October 2016, RMB was included in the International Monetary Fund (IMF) special drawing basket, underscoring the growing importance of China in global trade.
She added that according to the data from swift trade settlement system, the use of RNB in global trade has increased. Akhtar said that the SBP has already put in place the required regulatory framework which facilitates the use of China currency (RMB) in trade and investment transactions.
She said that currently, Pakistan is proud of China currency swap agreement with 21 countries including Pakistan.
The minister said that RMB clearing banking operation is something that Pakistan looked forward to. The minister added that China has become Pakistan’s largest trade partner and exports to China have grown by 87 percent in the last five years, whereas, imports from China have grown by 32 percent during the same period and nearly, half of the FDI has come from China and Hong Kong during the period. Hence, Pakistan is keen on using RMB for trade and investment purposes and today marks an important milestone with RMB clearing operation initiated through ICBC.
She said that a strong relation with China is a cornerstone of Pakistan’s foreign policy and this relation has enhanced significantly since the launch of the Belt and Road Initiative in 2013. The minister said that BRI has been joined by a large number of countries and data estimated that BRI generated 420,000 jobs and lifted millions of people out of poverty.
The caretaker finance minister further stated that the China-Pakistan Economic Corridor (CPEC) is the flagship of BRI initiatives and 46 projects have been completed or under construction under CPEC with considerable investment. These critical investments would transform the country’s social and economic landscape over the next decade.
Akhtar added that the China-Pakistan industrial cooperation framework agreement would support the industrialisation and larger development in Pakistan and encourage Chinese companies to establish manufacturing enterprises in Pakistan, which hopefully should also include export-oriented industry, one area where the country needs a lot of support.
Similarly, agriculture projects such as crop breeding are making good progress under the CPEC.
She said to boost productivity and enhance crop output Pakistan is working on strengthening cooperation in crop cultivation and crop disease prevention.
Vice president of the ICBC Zhang Weiwu said that China and Pakistan are close neighbours and both countries have affirmed during the recent Road and Belt forum that China and Pakistan Economic Forum have achieved fruitful results in the past decade.
He said that the ICBC now extends services to 69 countries and regions providing comprehensive financing products services to the clients. He added that as the world’s largest RMB bank, ICBC provides services over 200 countries and regions. He added that serving as RMB clearing bank in 11 countries, ICBC is the first commercial bank that provides round-the-clock RMB clearing services.
He said that ICBC as RMB clearing bank would be a catalyser as China-Pakistan cooperation and current currency cooperation and swap agreements signed by both countries have helped achieved significant results.
Chinese ambassador to Pakistan and others also spoke on the occasion with some of them joining the event through multimedia from China.
Copyright Business Recorder, 2023
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