Pakistan and China on Saturday signed 17 agreements, four MoUs and one joint venture worth $15 billion for investment in various sectors of the economy at the conclusion of a day-long Pak-China Business Co-operation Summit. The signing ceremony was witnessed by Prime Minister Syed Yousuf Raza Gilani and his Chinese counterpart Wen Jiabao.
Under public private partnership, an MoU worth $6.5 billion was also signed between Alternative Energy Development Board (AEDB) of Pakistan and China International Water and Electric Corporation for power generation through wind and solar energy while a framework agreement of $3.5 billion was also signed under public private partnership between the National Transmission and Dispatch Company (NTDC) of Pakistan and China Development Bank along with Shenyan Transformer Company for upgradation of transmission lines in power sector of Pakistan. A joint venture between Sindh government and Chinese private sector would be undertaken to improve irrigation system in Sindh to set up small dams on canals for power generation.
The remaining agreements and MoUs of $5 billion were signed between the private sectors of the two countries for co-operation in fishing, financial sector, machinery import, textile, chemical, services, mining, livestock, yarn import, medical equipment, etc. As many as 17 agreements, four MoUs and one joint venture have been signed on the second day of engagements of Chinese Prime Minister.
Later, in their address to Pak-China Business Co-operation Summit, both the premiers vowed to strengthen economic and trade relations between the two countries. Gilani said China has always been a generous and reliable partner in Pakistan's national development efforts.
The monumental projects such as Karakoram Highway, Chashma Power Plants, Heavy Mechanical and Electrical Complexes and Gwadar Deep Sea Port, are all examples of their friendship. He wished to forge even closer economic links and urged the corporate and business sectors of both countries to seize the opportunity. Being located in the heart of Asia, Pakistan can act as a conduit connecting Western China to the Arabian Sea, South Asia and West Asia. Pakistan is in the process of creating a National Trade Corridor connecting the North and South of the country that would connect China through the Karakoram Highway.
Gilani said besides the Free Trade Agreement (FTA) and the Joint Five-Year Economic Programme, both the countries are now jointly endeavouring to establish closer financial and banking co-operation. The Prime Minister said Pakistan has announced special economic incentives for Chinese investors including duty-free import of plant and machinery, exemption from sales tax and income tax. The Pakistan China Joint Investment Company (JIC) the first such company established by China outside mainland is operational in Pakistan, with the Industrial and Commercial Bank of China (ICBC) all set to launch operations in Pakistan.
These institutions will act as a financial bridge for Chinese investors and businessmen coming to Pakistan and will play a lead role in launching economic projects, Gilani added. China is not only one of largest recipients of Foreign Direct Investment (FDI), but now with its huge reserves is also investing in other countries.
Pakistan, with a thriving economy and with political opinion of all shades supporting friendship with China offers not only high returns to Chinese investors but also the comfort of strong political support. We have proven deposits of coal, copper, chromite, lime-stone, gem-stones and opportunities in oil and gas exploration. Pakistan steel and cement industry is witnessing a boom and there is a huge pent up demand for housing, which will not only require further investments in the cement and steel industry, but also other related industries. Investors in the housing sector are therefore assured profits.
The Prime Minister said that Pakistan's enormous growth potential is increasing energy requirements, which are expected to go up from the present 20,000 megawatts to more than 160,000 megawatts by the year 2030. Capacity will be added to all power sectors including hydel, coal, nuclear, renewable, gas and oil and power generation, he added.
Pakistan has 185 billion tons of coal reserves and asks the Chinese companies to consider investment in the energy sector. Hydro-power, dams, agriculture, manufacturing sectors together with building of infrastructure including road and rail networks as well as airports, sea ports and other facilities present limitless opportunities of close collaboration, he added.
Speaking on the occasion, Chinese Prime Minister Wen Jiabao said China has become third leading economic partner of Pakistan and Chinese entrepreneurs are investing in Pakistan from motorcycle manufacturing to banking and finance. He said China mobile company has made an investment of $1.7 billion and providing employment to 7,000 people. Jiabao said that Karakoram Highway, Gwadar Port and newly inaugurated Pak-China friendship centre all bear symbols of friendship between the two countries. Our business community is showing strongest desire to invest in Pakistan and present problems are temporary and can jointly be tackled, he said, adding that he understands Pakistan concern about bilateral trade imbalance and is ready to take steps to address the concerns.
Wen said that he was aware of Pakistan's greater desire for co-operation in energy sector to meet the pressing energy demand. He said China would continue to cooperate with Pakistan for peaceful use of nuclear energy and help it exploit power through renewable means. He said that vigorous economic and trade co-operation will further enhance friendship between the two countries.