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Pakistan Considers Building Gas Pipeline to China
http://quote.bloomberg.com/apps/news?pid=2...id=agFWKJ36isgg
By Wang Ying and Stephen Engle
April 23 (Bloomberg) -- Pakistan is considering a plan to build a natural gas pipeline from the Arabian Sea to China, Prime Minister Shaukat Aziz said, a sign of deepening relations between the two countries in trade, investment and energy cooperation.
Aziz said Pakistan has a ``unique'' relationship with China that will help his country develop. ``Chinese companies are looking at Pakistan and our infrastructure needs: energy, roads, highways, airports, ports,'' Aziz said in an interview on April 21 during China's annual Boao forum.
China is also looking to secure energy sources for its booming economy. The two countries agreed a year ago to cooperate on energy, including the construction of an oil refinery and a storage facility in Pakistan's coastal areas to help China gain access to oil and gas from Central Asia and the Middle East. China is helping Pakistan build its third port at Gwadar in Baluchistan.
``The pipeline can bring gas to Pakistan and then to China, which will avoid going around the Malacca Strait,'' Aziz said.
Pakistan and India are negotiating the rates for buying and distributing gas through a separate pipeline from Iran to South Asia, Aziz said.
``We are going to build energy pipelines in the region and meet our energy needs through the most efficient way,'' he said. ``Our national interest dictates that we create more options and opportunities for energy flow into Pakistan.''
Aziz invited companies in China, Pakistan's biggest trading partner after the U.S., to invest in the nation and signed a free-trade agreement in November.
Banking Investments
In March, China Mobile Communications Corp., the world's biggest mobile-phone carrier by users, invested $700 million in Pakistan after buying Paktel Ltd., Pakistan's oldest mobile-phone carrier.
Pakistan has asked China's two biggest lenders, Bank of China and the Industrial & Commercial Bank of China, to start operating in the country. ``We think banking is an important link which will allow the two countries more investment flows and trade flows,'' Aziz said.
National Bank of Pakistan, the country's largest by assets, is seeking a partner from the Middle East to set up a bank or financial company in China next year, President Syed Ali Raza said in an interview in Karachi on April 16.
``Given our international strategy to straddle South Asia, Central Asia and the Middle East, China will be an important addition to this footprint,'' said Raza, 57. ``The Middle East and China have surplus capital and Pakistan has the need for infrastructure investment. We want to make that connection by having a presence in China.''
`Need New Markets'
China is a particularly rich potential investor, Aziz said. ``They're sitting on over a trillion dollars of reserves -- they need to look at new markets to invest.''
``Any country like Pakistan, which is a developing country, needs to attract foreign savings to grow,'' he said. ``Whenever we open bids for these projects, Chinese companies are the most competitive.''
The economy is expanding at more than 7 percent a year and foreign direct investments in Pakistan will exceed $6 billion this year, Aziz said.
Pakistan's inflation will reach between 7 percent and 8 percent this year, exceeding the official target, Aziz said. The government has raised interest rates to rein in inflation, he said.
Restrictions on India
``We want to bring it down below 7 percent, to the 6 to 7 percent range, which we believe is more sustainable, more acceptable to the economy,'' Aziz said. The country needs high economic growth rates, however, and ``that's a tightrope we have to walk, and we're walking it fairly well.''
Pakistan will maintain a tax policy that's in favor of investment, he said. Investment and trade restrictions still apply to rival India, but they can be gradually lowered if relations between the two countries improve, he said.
Aziz said the ``trust deficit'' between the two nations was diminishing through dialogue and peace talks.
``We have a history of military conflicts with India,'' he said. ``Pakistan is a peaceful country. We feel all disputes and issues should be resolved through dialogue. Military solutions don't work.''
Regarding neighbor Afghanistan's struggle with the Taliban, Aziz admitted that Taliban members cross the border of Pakistan's tribal regions. ``It's a porous border -- people come back and forth,'' he said. ``We will not allow our territory to be used as a safe haven. Afghanistan is the country that needs to establish control over its territory.''
To contact the reporters on this story: Wang Ying in Beijing at ywang30@bloomberg.net ; Stephen Engle in Hong Kong at Sengle1@bloomberg.net .
Last Updated: April 22, 2007 23:01 EDT
http://quote.bloomberg.com/apps/news?pid=2...id=agFWKJ36isgg
By Wang Ying and Stephen Engle
April 23 (Bloomberg) -- Pakistan is considering a plan to build a natural gas pipeline from the Arabian Sea to China, Prime Minister Shaukat Aziz said, a sign of deepening relations between the two countries in trade, investment and energy cooperation.
Aziz said Pakistan has a ``unique'' relationship with China that will help his country develop. ``Chinese companies are looking at Pakistan and our infrastructure needs: energy, roads, highways, airports, ports,'' Aziz said in an interview on April 21 during China's annual Boao forum.
China is also looking to secure energy sources for its booming economy. The two countries agreed a year ago to cooperate on energy, including the construction of an oil refinery and a storage facility in Pakistan's coastal areas to help China gain access to oil and gas from Central Asia and the Middle East. China is helping Pakistan build its third port at Gwadar in Baluchistan.
``The pipeline can bring gas to Pakistan and then to China, which will avoid going around the Malacca Strait,'' Aziz said.
Pakistan and India are negotiating the rates for buying and distributing gas through a separate pipeline from Iran to South Asia, Aziz said.
``We are going to build energy pipelines in the region and meet our energy needs through the most efficient way,'' he said. ``Our national interest dictates that we create more options and opportunities for energy flow into Pakistan.''
Aziz invited companies in China, Pakistan's biggest trading partner after the U.S., to invest in the nation and signed a free-trade agreement in November.
Banking Investments
In March, China Mobile Communications Corp., the world's biggest mobile-phone carrier by users, invested $700 million in Pakistan after buying Paktel Ltd., Pakistan's oldest mobile-phone carrier.
Pakistan has asked China's two biggest lenders, Bank of China and the Industrial & Commercial Bank of China, to start operating in the country. ``We think banking is an important link which will allow the two countries more investment flows and trade flows,'' Aziz said.
National Bank of Pakistan, the country's largest by assets, is seeking a partner from the Middle East to set up a bank or financial company in China next year, President Syed Ali Raza said in an interview in Karachi on April 16.
``Given our international strategy to straddle South Asia, Central Asia and the Middle East, China will be an important addition to this footprint,'' said Raza, 57. ``The Middle East and China have surplus capital and Pakistan has the need for infrastructure investment. We want to make that connection by having a presence in China.''
`Need New Markets'
China is a particularly rich potential investor, Aziz said. ``They're sitting on over a trillion dollars of reserves -- they need to look at new markets to invest.''
``Any country like Pakistan, which is a developing country, needs to attract foreign savings to grow,'' he said. ``Whenever we open bids for these projects, Chinese companies are the most competitive.''
The economy is expanding at more than 7 percent a year and foreign direct investments in Pakistan will exceed $6 billion this year, Aziz said.
Pakistan's inflation will reach between 7 percent and 8 percent this year, exceeding the official target, Aziz said. The government has raised interest rates to rein in inflation, he said.
Restrictions on India
``We want to bring it down below 7 percent, to the 6 to 7 percent range, which we believe is more sustainable, more acceptable to the economy,'' Aziz said. The country needs high economic growth rates, however, and ``that's a tightrope we have to walk, and we're walking it fairly well.''
Pakistan will maintain a tax policy that's in favor of investment, he said. Investment and trade restrictions still apply to rival India, but they can be gradually lowered if relations between the two countries improve, he said.
Aziz said the ``trust deficit'' between the two nations was diminishing through dialogue and peace talks.
``We have a history of military conflicts with India,'' he said. ``Pakistan is a peaceful country. We feel all disputes and issues should be resolved through dialogue. Military solutions don't work.''
Regarding neighbor Afghanistan's struggle with the Taliban, Aziz admitted that Taliban members cross the border of Pakistan's tribal regions. ``It's a porous border -- people come back and forth,'' he said. ``We will not allow our territory to be used as a safe haven. Afghanistan is the country that needs to establish control over its territory.''
To contact the reporters on this story: Wang Ying in Beijing at ywang30@bloomberg.net ; Stephen Engle in Hong Kong at Sengle1@bloomberg.net .
Last Updated: April 22, 2007 23:01 EDT
