FTA (Phase-II): Pakistan, China agree to deepen trade liberalisation

ISLAMABAD: Pakistan and China have agreed to deepen trade liberalisation under the China-Pakistan Free Trade Agreement (Phase-II), take China-Pakistan Economic Corridor (CPEC) upgraded project to new heights and actively explore new bilateral trade facilitation measures.

The two sides agreed to conduct further consultation on trade liberalisation under the framework of the Phase-II of China-Pakistan FTA, and actively explore the possible bilateral concessional arrangements based on the spirit of mutual benefit and win-win cooperation.

Pakistan and China reaffirmed their resolve to enhancing cooperation in multiple sectors including counter-terrorism, economic cooperation, trade, and infrastructure development as President Asif Ali Zardari met with Chinese President Xi Jinping and Prime Minister Li Qiniang during his five-day state visit to Beijing.

President Asif Ali Zardari is currently paying a five-day official visit to China (from February 4 to 10).

According to joint statement issued by Foreign Office of Pakistan and China on Thursday, President Xi Jinping held talks with President Zardari in a warm and friendly atmosphere. They had an in-depth exchange of views on China-Pakistan relations under the new situation and on the international and regional issues of mutual interests.

Li Qiang, premier of the State Council of the People’s Republic of China, and Zhao Leji, chairman of the Standing Committee of the National People’s Congress, met with President Zardari respectively.

Both countries agreed to implement an upgraded version of CPEC, focusing on five new corridors: growth, livelihood-enhancing, innovation, green, and open corridors. These corridors aim to drive industrialisation, socioeconomic development, technology-driven cooperation, environmental sustainability, and regional connectivity.

They also committed to accelerating major infrastructure projects, including the Main Line-1 (ML-1) railway upgrade, which will be executed in a phased and secure manner, the Karakoram Highway (Raikot-Thakot) realignment, with early implementation and financing finalisation, and the development of Gwadar Port as a multimodal logistics hub and industrial base. China will continue supporting Pakistan’s industrialisation, encouraging Chinese firms to invest in Pakistan’s Special Economic Zones (SEZs) under market-driven principles, while Pakistan pledged to improve its business environment to attract more Chinese investments under business-to-business (B2B) model.

Recognising Pakistan’s economic challenges, China reiterated its support for Pakistan’s fiscal and financial stability. Both sides committed to expanding cooperation in the financial and banking sectors, supporting each other within regional and international multilateral financial platforms.

The two sides vowed that the China-Pakistan relationship remains of strategic significance, and any attempt to disrupt or undermine it is bound to fail.

The Chinese side gladly noted Pakistan’s National Economic Transformation Plan (Uraan) applauds the new achievements attained by Pakistan in economic reform and national development and wishes Pakistan stability, security, development and prosperity.

The Pakistani side reaffirmed its firm commitment to the one-China principle. It is of the view that Taiwan is an inalienable part of the territory of the People’s Republic of China and the Taiwan question is the core of China’s core interests. Pakistan will also firmly support China on issues related to Xinjiang, Xizang, Hong Kong and the South China Sea.

The Chinese side reiterated its firm support for Pakistan in defending its national sovereignty, independence, and territorial integrity, and its support for Pakistan’s efforts to safeguard national security, stability, development and prosperity.

The two sides reiterated their commitment to combating terrorism in all its forms and manifestations with a zero-tolerance attitude, and agreed to further strengthen bilateral and multilateral cooperation on counter terrorism.

Recognising the significance of the Gwadar Port, both sides agreed to optimally utilise its potential as a key hub of connectivity and trade.

The Chinese side reiterated that the Jammu and Kashmir dispute is left over from history and should be properly and peacefully resolved in accordance with the UN Charter, relevant UN Security Council resolutions and bilateral agreements.

They called on the Interim Afghan Government to take visible and verifiable actions to dismantle and eliminate all terrorist groups based in Afghanistan which continue to pose a serious threat to regional and global security, and to prevent the use of Afghan territory against other countries.

Reuters adds: China and Pakistan will upgrade and reconstruct Pakistan’s railway network and further develop its Gwadar port, while Chinese companies can invest in the South Asian nation’s offshore oil and gas developments, the official Xinhua news agency reported on Thursday.

The comments came as Pakistan’s President Asif Ali Zardari visits China from February 4-8, where he will also attend the opening ceremony of the Asian Winter Games.

Chinese investment and financial support for Pakistan since 2013 have been a boon for the South Asian nation’s struggling economy.

The two countries have had close ties underpinned by long-standing wariness of their common neighbour, India, and a desire to hedge against US influence across the region.

Pakistan and China recognised the importance of Pakistan’s “Gwadar Port and agreed to fully unleash its potential as a key node for connectivity and trade,” Xinhua said quoting a joint statement from the two countries.

Chinese-funded enterprises would be encouraged to “carry out mining investment cooperation in Pakistan” and cooperate in terrestrial and marine geological resources.

“Pakistan welcomes Chinese companies to participate in the development of offshore oil and gas resources in Pakistan.”

Longtime Pakistan ally China has thousands of nationals working on projects grouped under the China-Pakistan Economic Corridor (CPEC).

The $65-billion investment is part of President Xi Jinping’s Belt and Road Initiative, designed to Beijing’s global reach by road, rail and sea.

Copyright Business Recorder, 2025