China hopes that its Western region, Xinjiang will emerge as hub of Sino-Pak business activities, with the implementation of special tariff package from January, 2006.
Zhang Yei, a senior official of the region's Foreign Trade and Economic Co-operation Department said that the economic activities between the two countries stepped up, when they held first round of talks for Free Trade Agreement (FTA) at Urumqi, capital of Xinjiang last month.
It was agreed that the two sides would meet again in Islamabad November this year to expedite the tax-free arrangements.
According to the sources, Pakistan's entry into Shanghai Co-operation Organisation (SCO) opened new avenues for economic interaction with China and Central Asia, especially through the land route.
China's Xinjiang Autonomous Region serves as excellent location to develop the regional co-operation among the SCO's chain that includes China, Russia Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, besides Iran, India and Pakistan with observer status.
The Xinjiang region had 17 ports open to the outside world. The region, also linked through old Silk Route could provide tremendous boost to economic collaboration at regional and international levels, said Professor Wang Xie, working with Asian Regional Institute while talking to APP.
The Muslim-majority province, striving to rejuvenate the past glory of the ancient Silk communication network carried rich potential to become a centre of trade and economic co-operation, linking China with Pakistan and rest of the world.
"It boasts abundant natural resources and its unique geographic position will help expand trade with neighbouring countries," said Liu Dunxin, Director China Council for Promotion of Foreign trade.
The region has registered a record $3 billion in foreign trade last year, up 45.8 percent from the previous year. It achieved a growth of 85 percent in its exports worth $1.35 billion last year, the highest growth rate in the country, according to Urumqi Customs' sources.
Recently, various Xinjiang-based Chinese companies have shown keen interest in co-operating with Pakistan for producing cheap electricity through windmills at its coastal areas.
About the investment opportunities in the region, the Governor Xinjiang Ismail Tiliwaldi at a news conference listed more than 100 new projects for economic and technical co-operation in the fields of agriculture, light industry, foodstuff, medicine, textile and mineral development.
The governor during his meeting with Pakistan's ambassador Salman Bashir also reiterated his special consideration for Pakistan to deepen the economic ties. He suggested that major Pakistani companies should establish their representative offices in the region for introducing their products in the local market.
In order to regularise the business activities, Pakistan Trade House (PTH) has also been set up at Kashgar, near Pak-China border, initially with about 20 Pakistani companies.
"The PTH is likely to prove a stepping-stone, giving a big boost to their land route's trade," said Commercial Counsellor Shahid Mahmood.
Xinjiang would play a central role in developing regional trade. This is evident from the large number of trade delegations from Pakistan visiting Urumqi. The export of food items like mango and rice to China started this year have also brightened the hope of achieving future trade targets.