The excellent political and strategic partnership between Pakistan and China immensely contributed in increased trade and economic co-operation, enhanced investment and mutual economic prosperity. Last year, President of Pakistan Asif Ali Zardari had visited China four times and Prime Minister Syed Yusuf Raza Gilani on three occasions.
These visits helped greatly in promoting bilateral communication, said an article published in the China Foreign Trade magazine. This depth and intensity of bilateral relationship created an ideal platform for our trade relations, said Ambassador of Pakistan to China Masood Khan.
"If we compare the current trade figure of 6.9 billion dollar, with the figure of 1.8 billion dollar in 2002, we have certainly done well. However, our target is to reach the figure of 15 billion dollar in the next 3-4 years," Khan said. Although, due to international financial crisis, the overall bilateral trade volume between China and Pakistan was decreased by 4 percent to 6.7 billion dollar, Pakistan exports increased by 25 percent to1.26 billion dollar in 2009.
However, according to latest figure it is picking up momentum. And China has become Pakistan's second largest trading partner. In recent past, this is possible because of a number of steps that two governments have taken. For example, the Chinese investment in Pakistan has increased manifold in key sectors including port development, roads, railways, mobile telephony, communication technology, hydro and thermal power, mining, electronics, and nuclear energy. This kind of investment generates investment-related trade on both sides.
The areas of bilateral co-operation the Magazine mentioned included the setting up of Pakistan and China Joint Investment Company (JIC) for direct investment and joint ventures. The objective is to support Chinese Investments in Pakistan and earn profits for its investors. "JIC has paid up capital of 200 million dollar which we are trying to enhance to 1 billion dollar," Masood Khan stated.
China's President Hu Jintao in 2006 inaugurated Pakistan-China Haier Ruba Economic Zone (HREZ) in Lahore. This project when it takes off will be a trend set for other such economic zones. This was the first such Industrial Park outside China supported by the Chinese government and also exclusively for Chinese Investment into Pakistan, Dr Naeem Khan, Commercial Counsellor of Pakistan Embassy told the magazine.
In previous, the Pakistan government has announced incentives for Chinese entrepreneurs investing in the Industrial Park through a Protocol under FTA. While the Chinese government has through the Protocol to the FTA committed to consider duty free access into China for all products manufactured in the Park.
Pakistan and China have also signed Free Trade Agreements covering goods, investment and services, these three agreements are facilitating integration of the economies of Pakistan and China for mutual benefit. The FTA covers 85 percent of the goods traded between the two countries.
These instruments will not only stimulate growth of trade but will promote joint ventures create jobs and transfer technology. Under FTA on Trade in service which became operational on October 10, last year, Pakistan is opening 102 sub-sectors of 11 major sectors and China is further opening its 28 sub-sectors for 6 major sectors. Both countries have offered greater concessions than those committed under the WTO General Agreement on Trade in Service (GATS).