Islamabad: Pakistan trapped with cash wants to secure a loan of USD 3-billion (PKR 529 billion) from China and investment in half a dozen sector during the visit of Prime Minister Imran Khan to Beijing next week, according to media reports on Sunday.
Mr Khan will visit the Chinese capital on February 3 to attend the opening of the Beijing Winter Olympics and also met with the top Chinese leadership on the sidelines of bilateral talks.
Express Tribune reported quoting government sources that the final meeting to form a visit agenda would take place on Tuesday.
A senior ministry of the Ministry of Finance said the government was considering asking China to approve other loans to USD 3 billion in Chinese state foreign administration, known as a safe deposit, so as to increase foreign exchange reserves.
China has placed around USD 11 billion (PKR 1,940 trillion) with Pakistan in the form of commercial loans and foreign exchange reserve support initiatives, including USD 4 billion (PKR 705 billion) in safe deposits.
Chinese money is part of the current state foreign exchange reserve which is currently recorded at USD 16.1 billion (PKR 2.8 trillion).
In the last fiscal year, the country has paid more than the PKR of 26 billion charges of interest to China only to use China’s trade financing facilities of USD 4.5 billion (PKR 794 billion) to pay debts due.
Last month, Pakistan also received loans from Saudi Arabia of USD 3 billion (PKR 529 billion), which countries used.
The Pakistani government aims to secure Chinese investment in six priority sectors by highlighting competitive advantage that the country – cheap but skilled workforce, geographical access to Europe and Asia and tax exemptions.
“We will market textiles, footwear, pharmaceuticals, furniture, agriculture, cars and information technology sectors for Chinese investment,” said Chairman of the Azfar Ahsan investment council.
The government is expected to notify 75 Chinese companies that it provides access to trade routes to the Middle East, Africa and worldwide – offer greater incentives in the form of reduction in shipping costs.
“Unlike in the past when we will only talk about Pak-Sino’s friendship higher than Himalayas and sweeter than honey, this time we will prepare for China with a structured approach,” said Minister of Federal Planning and Asad Umar to The Express Pulpit.
He added that with the involvement of the Indonesian Authority of the Pakistani Economic Corridor (CPEC) the government has chosen these sectors for foreign investment where there is evidence of great benefits for Chinese investors.
Pakistani authorities said they believed his delivery was twice as cheaper than China. It offers a greater opportunity for the relocation of the Chinese industry that is dying.
However, all of these fields and competitive advantages are known by investors but they remain reluctant to bring “big money” to Pakistan because of the inconsistent fiscal policy and energy.
China has decided to move to a more sophisticated textile and clothing industry and driven by high technology and engage in more value-added functions under the 2021-25 plan.
