In World Economy News 20/04/2015
Chinese President Xi Jinping arrived in Pakistan on Monday to boost economic ties with a neighbor often seen more as a strategic partner against India, a mutual foe.
During the two-day trip to Islamabad, China and Pakistan will sign agreements for investments valued at $28 billion, Pakistani Planning Minister Ahsan Iqbal said Sunday. The two nations also may conclude the sale of eight Chinese submarines, more than doubling Pakistan’s fleet.
The visit “will usher in a new era of development in Pakistan and open a new chapter in bilateral relations between the two countries,” Pakistani Prime Minister Nawaz Sharif, who greeted Xi at the airport, told executives of Chinese companies in Islamabad today prior to his arrival.
China sees Pakistan as a key part of efforts to access the Indian Ocean over land to boost trade with Europe, Africa and the Middle East. For Pakistan, the investments will help end crippling power outages that have hindered economic growth.
The contracts are part of a planned $45 billion economic corridor stretching 3,000-kilometers (1,850 miles) starting in China’s western Xinjiang region and running to the Chinese-funded Gwadar port on the Arabian Sea in Pakistan. It includes power plants as well as road and rail links.
Under the plan for the corridor, Chinese companies will invest $22.5 billion in coal-fired, hydro, wind and solar energy projects in Pakistan, Iqbal said, adding that China will provide concessional loans for infrastructure projects.
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“It’s very significant,” said Mohammed Sohail, chief executive officer of Topline Securities in Karachi. “It can bring a big change for all our economic fundamentals, in particular in energy.”
Xi was greeted by a host of dignitaries at the airport, including army chief Raheel Sharif, who isn’t related to the prime minister. Eight air force jets escorted Xi’s plane into Pakistani airspace.
China is viewed more favorably in Pakistan than in any other Asian country, Pew Research Center found in a poll conducted last year. Pakistanis gave a 78 percent favorable rating to China, compared with 14 percent for the U.S., the poll showed.
“Our cooperation in the security and economic fields reinforce each other, and they must be advanced simultaneously,” Xi wrote in Pakistan’s Daily Times on Sunday. “We need to deepen defense cooperation and enhance coordination and collaboration on regional hotspot issues.”
Source: Bloomberg
