China signs $35bn in deals with Pakistan

[foxhound]

salaam.....an interesting article


China signs $35bn in deals with PakistanBy James Lamont in New Delhi and Farhan Bokhari in Islamabad
ref:FT.com / Asia-Pacific - China signs $35bn in deals with Pakistan
Published: December 19 2010 11:37 | Last updated: December 19 2010 11:37

Chinese premier Wen Jiabao has unveiled $35bn in economic deals with Pakistan, as part of a plan to commercially integrate the nation with China’s western region.

During a visit to Pakistan, Mr Wen on Sunday promised to create a deep alliance between Islamabad and Beijing based on economic co-operation that would tie the south Asian nation to China’s economic transformation. Mr Wen unveiled $20bn in government-to-government contracts and another $15bn in private sector deals.

The agreements outstrip the $16bn in deals China signed with India when Mr Wen recently visited Delhi. They are also a firm signal that Pakistan has an alternative to the US, which considers Pakistan a key – but not always reliable – ally in the fight against Islamic extremism and supplies considerable financial and military assistance.
The wide-ranging deals announced include the development of oil, gas and mineral resources in Pakistan. China also agreed to help Pakistan develop a space industry, expertise in oceanology, and more electronics and heavy industry.
The deals also include Chinese investment in the Karakoram Highway, which connects Islamabad to the north-western Chinese province of Xinjiang.

“This will be an important step for China to build road and rail links to eventually link Xinjiang to Pakistan’s southern coast along the Indian Ocean,” said a Pakistani official.

Mr Wen described the friendship between Beijing and Islamabad as “solid as a rock”, an affirmation that causes anxiety in India which views ties between China and Pakistan with increasing suspicion as a strategy to isolate it in south Asia.
Senior Pakistani officials applauded the magnitude of the Chinese engagement, saying the Chinese premier’s visit – the first in five years – represented Beijing’s most concerted attempt to help transform Pakistan’s economy.
Mr Wen told Pakistan’s parliament that China wanted to forge “deeper, closer and stronger” ties with Pakistan. The Chinese premier said “China and Pakistan will remain brothers for ever” in spite of Pakistan’s vulnerability to Islamist insurgency.Shortly after Mr Wen spoke, Chaudhary Nisar Ali, leader of the opposition in parliament, said: “You can go to any corner of our country and ask anyone about China and they will only say, China is a true friend. We [politicians] may have our differences but there is no difference on China.”

But other senior politicians were careful not to interpret Chinese assistance as undermining efforts to secure a lasting peace with arch-rival India. Yusuf Raza Gilani, Pakistan’s prime minister, said the warmth of the bilateral relationship between his country and neighbouring China was “not directed against any country”.

 

[ares]

I thought only MOUs were signed ..can anyone name what are the actual contracts which have been signed during this trip?

 

[DesiGuy]

well, well, that's how business is done!

 

[Hyde]

I thought only MOUs were signed ..can anyone name what are the actual contracts which have been signed during this trip?

Both nations reported they signed agreements worth 13.5 billion dollars (or 16 billion dollars in different source) but did not disclose the details.

20 billion dollars worth of MoU's were signed

 

[somebozo]

This is a mile stone in Pakistans diplomacy. it speaks volumes that people have more faith our government despite weak and corrupt than dictatorship.

 

[Beacon]

Both nations reported they signed agreements worth 13.5 billion dollars (or 16 billion dollars in different source) but did not disclose the details.

20 billion dollars worth of MoU's were signed

Jus out of curiosity, why do the nations not disclose the agreements, if china can spell out the agreements with india to the world, why dont they do it in pakistan....

this assumes that details are not disclosed as said by you...

 

[foxhound]

Monday, December 27, 2010

ref: http://www.dailytimes.com.pk/default.asp?page=2010%5C12\27\story_27-12-2010_pg3_6
ANALYSIS: Let big Chinese investment kick-start the economy —Muhammad Aftab

Bilateral trade between China and Pakistan reached $ 4.492 billion in FY-2010. The trade balance is against Pakistan. Its exports to China rose from $ 674 million in FY-2008 to $ 1.209 billion in FY-2010. Pakistani imports from China rose from $ 3.029 billion in FY-2008, to $ 3.283 billion in FY-2010

The Chinese have come! But where are the Pakistanis? The question is pertinent, because big Chinese investment plans announced this week can, or cannot, kick-start the Pakistani economy — if all goes well on our side.

China, the closest friend of Islamabad in the economic and diplomatic fields for six decades comes to Pakistan at a time when most traditional sources of foreign direct investment (FDI), official development assistance (ODA), multilateral and foreign trading partners are holding back. The reason: poor performance of the present government.

It is Beijing’s shot in the arm for Pakistan. For instance, as soon as the visiting Chinese Prime Minister Wen Jiabao and his 250-member business-investors team announced $ 36 billion investment plans, the bourses rose. Upbeat Pakistani businessmen, investors and industrialists started looking up and into the future. The economy has been in a near-slumber mode with the gross domestic product (GDP) projections for the current FY-2011 as low as 2.5-2.8 percent, compared to the last decade’s performance of 4.5 to 6.0 percent. But, with the announcement of 35 projects that the Chinese will fund at a cost of $ 36 billion over five years, from 2011 to 2015, the ball is now in Pakistan’s court — both government and businessmen.
In case they can swing this investment around, other regions, particularly the Gulf, Middle East, US, UK, Japan and the EU may initiate FDI inflows into Pakistan, as they have traditionally done. But, if the government falters on the policy front, and the private sector fails to seize these huge opportunities, Pakistan will be the loser.
Out of the 35 projects, the Chinese public sector will undertake 13 projects. Private business will invest in and build 22 projects. The projects both in the public and private sector are of a high value and priority for the Pakistani economy. The investment opens new vistas.

The projects to be established by China include: energy, oil and gas, mining, infrastructure development, power — including projects based on coal, hydel electricity, and gas — information technology, electronics, telecom, chemical fertilisers, value-added textiles, auto assembly, automotives, agricultural implements, agriculture and agro-based industry, pesticides, cool chains, food and fruit processing and packaging, and livestock and dairy farming.
At the signing of the investment agreements, Prime Minister Jiabao said, “China will help Pakistan to find markets in our country in order to reduce the trade imbalance” which, for years, is against Pakistan. It is still widening. “We will send trade promotion delegations to Pakistani to identify items importable by China,” he said.

The Chinese and Pakistan government and business leaders are also setting their eye on boosting bilateral trade to $ 25 billion annually over the next few years. Tariq Puri, Chief Executive Officer of the Trade Development Authority of Pakistan (TDAP), says that trade between China and Pakistan will increase to $ 15 billion by 2015. “It will grow to $ 10 billion in the next two years,” he told the Pakistan-China Business Cooperation Summit.

Bilateral trade between China and Pakistan reached $ 4.492 billion in FY-2010. The trade balance is against Pakistan. Its exports to China rose from $ 674 million in FY-2008 to $ 1.209 billion in FY-2010. Pakistani imports from China rose from $ 3.029 billion in FY-2008 to $ 3.283 billion in FY-2010. Islamabad’s exports to China in July-October FY-2011 were $ 356 million, and imports were $ 1.338 billion.

In order to help promote trade and investment flows the State Bank of Pakistan (SBP) Governor Shahid H Kardar signed an agreement with President Yang Kaisheng of the giant Industrial and Commercial Bank of China (ICBC) to open its branches in Pakistan. Commenting on this move, Mr Jiabao said, “There is an immediate need for opening bank branches in the two countries to help promote trade and reduce the trade imbalance.” The ICBC will immediately open two branches at Islamabad and Karachi to be followed with several more in other key Pakistani cities, ICBC President Yang said.

Prime Minister Yousaf Raza Gilani said to Mr Jiabao, “Pakistan is a thriving economy, with all political parties supporting friendship with China.” He said, “We are in a very advantageous location for outbound Chinese investment. Pakistan can act as a conduit, connecting western China to the Arabian Sea and South and West Asia as it is in the process of creating a national trade corridor, linking the north and south of the country.” Mr Gilani encouraged Chinese companies to invest in Pakistan’s energy sector as it has 185 billion tonnes of coal reserves, besides other potential energy sources. Hydropower, dams, agriculture and manufacturing sectors, together with building of infrastructure, road and rail networks, airports, seaports and building other facilities, hold “limitless opportunities for close collaboration”.President Asif Ali Zardari, addressing Mr Jiabao and the Chinese businessmen said, “Sixty-year-long bilateral friendship between Pakistan and China continues to grow. Our friendship has not only been mutually beneficial and contributed to progress, development and social harmony, but has also been an important factor for regional and international peace and stability.”

Now the hard part: the Pakistani government and the private sector have to gear up, put into place helpful policies and take tangible actions to let Chinese investors and businessmen see results that can move the economy on a productive track. Is everyone listening?
The writer is an Islamabad-based journalist and former Director General of APP

 

[foxhound]

ref:FT.com / Asia-Pacific / Pakistan - Pakistan ready for China bank deal

Pakistan ready for China bank deal By Matthew Green in Karachi

Published: December 6 2010 23:15 | Last updated: December 6 2010 23:15

Pakistan is poised to approve an application by Industrial and Commercial Bank of China to start operating in the country, a move that Islamabad hopes will herald closer commercial ties with Beijing.

Pakistani officials see a visit by Wen Jiabao, the Chinese premier, this month as a chance to strengthen a long-standing alliance at a time when Islamabad’s relations with the US are under strain.

“I would see a greater increase in economic activity in terms of China and Pakistan,” he told the Financial Times in Karachi, Pakistan’s commercial capital. “The signal that goes out is that Pakistan is open for business.”
Mr Kardar said ICBC applied for the licence several months ago to exploit opportunities in trade and project finance generated by a growing number of Chinese companies working in Pakistan.

ICBC, which has a market capitalisation of $300bn, is pursuing an ambitious expansion drive in the Middle East and in big cities across Europe. The bank declined to comment on Mr Kardar’s remarks.

Security concerns may weigh on the company’s thinking over how much exposure it seeks in Pakistan. Karachi, home of the country’s banking sector, has witnessed an increase in politically-motivated murders and suicide bombings this year, including an attack on a police compound by Taliban insurgents last month that killed at least 15 people.

China’s activities in Pakistan, including increasing military sales and civilian nuclear co-operation, are being watched warily by India, which views both countries with suspicion.

Mr Kardar believes ICBC will act as a catalyst for greater activity by Chinese companies who are already investing in infrastructure, energy, telecommunications and mining. Bilateral trade is worth some $6.2bn a year, dominated by $5bn of Chinese exports, Pakistani officials say.

Additional reporting by Farhan Bokhari in Islamabad

 

[naumananjum]

is there some deal regarding nuclear power plants???

 

[ChinaRocks]

The ball is truely in the hand of the pakistan government and business men, From wht i heard from a number of news channels in china, the chinese govrnment is sincerely wanted to pop up the pakistan economy ,now is it entirely up to the pakistan government to capitalise on this big opertunity.

 

[naumananjum]

main interest of the present leaders of Pakistan is to pop up economy of their own..!!!

 

[graphican]

Where are those morons who used to listen Najem Sethi?

 

[ares]

Where are those morons who used to listen Najem Sethi?

Isn't that what Najam sethi said ..a lot of MOUs have been signed but no specific detail regarding projects is available or could you enumerate the details of deals which have been signed?

 

[somebozo]

China may kick start the FDI spree in Pakistan.
This should also be a slap to arabis who sing all the songs of brotherhood and charity handouts for Pakistan yet look forward for business and investment in India. Pakistan factors for them only as a security guard for monarchies and pilots of royal family.

For the 1000th time..we don't want charity handouts anymore..we what investment..we want trade..we want opportunities...stop feeding us like beggars.!

The Arabi charity handouts have been the major source of rise in religious extremism and terrorism in Pakistan. When people don't have to work and will be paid handsomely, they will have all the free time to attend local Taliban seminary.

I want to open a solar panel manufacturing factory. All the raw materials will be sourced from China. I should look toward ICBC financing.

 

[ChinaRocks]

China comes timely to rescue Pakistan

Chinese Prime Minister Wen Jiabao lauded on Sunday Pakistan's efforts to battle al Qaeda, just days after the United States said its ally could do more to crack down on militants, especially along the Afghan border.

Wen's comments, made in a speech before parliament, appear part of China's strategy to lend support to old friend Pakistan, often criticised by the United States and many in the West as an unreliable, but necessary, ally in the war against the Taliban in Afghanistan.

"Strengthening and promoting strategic, brotherly relations is our joint strategic choice and they are in the interests of two countries and their people," Wen said, as he wrapped up a three-day visit to Pakistan.

Chinese leaders applaud Pakistan's efforts to fight al Qaeda -led terrorism, he added, urging the international community to "endorse and support" them. Pakistan's porous border with Afghanistan is seen as a haven for militants and U.S. Defense Secretary Robert Gates said on Thursday that it needed to do more to control the flow of extremists, which a U.S. review of the Afghan war said was the main obstacle to ending the conflict.

While boosting trade and investment has been the main focus of Wen's visit -- the first in five years by a Chinese premier -- analysts say the trip is about more than money. "It's a clear signal of China's growing, assertive diplomacy," said independent analysts.

“China like a friend indeed has timely extended its support to Pakistan, especially in the backdrop of subsequent visits of the UK, USA and French leaders’ recent visits to India, where they not only made blatant one-sided statements to please Indians completely ignoring the interests of Pakistan—a non-Nato ally in the war on terror, but also made the nation felt highly disappointed and deserted, as an organized campaign later appeared to have been launched isolating Pakistan, told some analysts here.

Pakistan would be well advised to seize this opportunity of gradually abandoning its total dependence on the US and their exploitative tool International Monetary Fund (IMF) and free itself from taking dictation from them," they said.

"China's massive investment in this time proves two things. One is that China is a genuine ally of Pakistan, and second, it is a clear signal to the U.S. that if the U.S. supports India against China, China will support Pakistan."
During the visit, which followed a three-day trip to India, the two countries signed commercial and trade deals worth at least $30 billion. By comparison, Wen signed $16 billion in deals in India before arriving in Islamabad on Friday. Analysts say China is investing in Pakistan to such a large degree because it sees the country as a genuine friend. China is the main supplier of defence and military hardware to Pakistan. China has also helped Pakistan to build its main nuclear power generation facility and is helping build another one.

Pakistani diplomats like to refer to China as an "all-weather friend", whose needs -- strategic and economic -- fit in with what Pakistan wants and has to offer. China wants to use Pakistan as a gateway to the Muslim world and as a new Silk Road for China's energy-hungry interior, as well as a balance against India's military rise.

Pakistan, in turn, plans to further rely on China for the bulk of its weapon systems, as a major investor for its ports and roads, and as a counterweight to American demands and conditions.