Evil Flare
SENIOR MEMBER
- Joined
- Oct 3, 2008
- Messages
- 3,508
- Reaction score
- 0
- Country
- Location
BEIJING: China is entering into a new and powerful form of relationship with Pakistan. It has decided to allow Pakistan to participate in cross-border trade using the Chinese Yuan as the base currency in dealing with the western Xinjiang Uyghur Autonomous Region. The central government in Beijing is also encouraging the provincial government of Xinjiang to become an international gateway for trade with Pakistan and Afghanistan that lie across its border.
This is clearly a precursor with a currency swap deal between the two countries running into several billion dollars. China has entered into swap deals with South Korea, Malaysia, Indonesia and Argentina to encourage the worldwide use of the Yuan. The deal involving Argentina last year was worth $10 billion. Pakistan, which receives a lot of financial assistance from China, would easily agree to a swap deal and help in internationalizing the Chinese currency.
Zhou Xiaochuan, governor of the People's Bank of China, has now announced that Xinjiang will be included in the special program for expanding the use of Yuan as a settlement currency instead of the US dollar. The central bank was also ready to assist small and medium sized companies as part of the new development package unveiled by the government for Xinjiang a few days back, he said.
The latest move is bound to expand trade and financial exchanges between Xinjiang and Pakistan. It coincides with a government decision to impose a new tax on the sale of crude oil and natural gas, which will help Xinjiangs local government to mop up huge resources. The tax, which will range between 3% and 3.5% of the value of production, is expected to bring in huge amount of money for further development of the region dominated by a Muslim population.
China has been looking for ways to intensify the process of development in order to counter the influence of Islamic fundamentalism spilling over from bordering North West Frontier Province areas of Pakistan.
Xinjiang has earlier entered into a development agreement with NWFP of Pakistan while the Chinese Communist Party has inked a cooperation agreement with the fundamentalist Jamet-e-Islami. The purpose is to enhance Chinas influence over the fundamentalists sections in Pakistan and keep the militants at bay instead of solely depending on the central government in Islamabad for this purpose. The government recently said it had announced the special financial package to achieve leapfrog development and lasting stability in Xinjiang.
Border trade has huge potential for China. Its trade with Mongolia through the land port of Erenhot topped $2.1 billion in 2009. Its border trade with Russia using the same port came to $551 million last year,
This is clearly a precursor with a currency swap deal between the two countries running into several billion dollars. China has entered into swap deals with South Korea, Malaysia, Indonesia and Argentina to encourage the worldwide use of the Yuan. The deal involving Argentina last year was worth $10 billion. Pakistan, which receives a lot of financial assistance from China, would easily agree to a swap deal and help in internationalizing the Chinese currency.
Zhou Xiaochuan, governor of the People's Bank of China, has now announced that Xinjiang will be included in the special program for expanding the use of Yuan as a settlement currency instead of the US dollar. The central bank was also ready to assist small and medium sized companies as part of the new development package unveiled by the government for Xinjiang a few days back, he said.
The latest move is bound to expand trade and financial exchanges between Xinjiang and Pakistan. It coincides with a government decision to impose a new tax on the sale of crude oil and natural gas, which will help Xinjiangs local government to mop up huge resources. The tax, which will range between 3% and 3.5% of the value of production, is expected to bring in huge amount of money for further development of the region dominated by a Muslim population.
China has been looking for ways to intensify the process of development in order to counter the influence of Islamic fundamentalism spilling over from bordering North West Frontier Province areas of Pakistan.
Xinjiang has earlier entered into a development agreement with NWFP of Pakistan while the Chinese Communist Party has inked a cooperation agreement with the fundamentalist Jamet-e-Islami. The purpose is to enhance Chinas influence over the fundamentalists sections in Pakistan and keep the militants at bay instead of solely depending on the central government in Islamabad for this purpose. The government recently said it had announced the special financial package to achieve leapfrog development and lasting stability in Xinjiang.
Border trade has huge potential for China. Its trade with Mongolia through the land port of Erenhot topped $2.1 billion in 2009. Its border trade with Russia using the same port came to $551 million last year,
