BEIJING: Chief Representative of National Bank of Pakistan (NBP) in China, Shaikh Muhammad Shariq on Sunday announced that the bank is ready to facilitate Chinese companies to relocate businesses and industrial units to Pakistan under the China-Pakistan Economic Corridor (CPEC) framework.
“As we are about to enter into the second phase of CPEC, which is more focused on industrial cooperation, we are all set to facilitate Chinese companies to relocate to Pakistan,” he said while addressing the Pakistan-China Economic and Business Forum.
The forum was organised by the Pakistan Embassy in Beijing, Beijing Nordic Exhibition Co. Ltd., and Shanghai Huiguan Culture Media Co. Ltd.
Shaikh Shariq informed the participants that in the first phase of CPEC, billions of dollars were invested in infrastructure, power generation and Gwadar Port. The amount was in different modes including investment and financing whereas financing was availed through different institutions both from Pakistan and China.
“The NBP was a part of most of these projects either in the form of consortium partner or lead arranger,” he added.
He said, the NBP has already established strong banking partnership with major Chinese financial institutions to facilitate trade and investment under CPEC and the Belt and Road Initiative (BRI) not only in Pakistan but in all places where the country has operations.
He informed that in order to facilitate bilateral trade and facilitate smooth flow of funds between China and Pakistan, central banks of both the countries have signed the currency swap arrangement in 2011, amounting to 10 billion yuan and 140 billion Pakistani rupees.
“As a result, bilateral trade and investment witnessed significant growth, and contributed to further strengthening close and special relationship between the two countries,” he added.
He said that in 2018, the swap was extended for a period of three years, and the size was doubled to 20 billion yuan or 351 billion Pakistani rupees as China became the largest trading partner, and bilateral trade increased on a yearly basis. “This year, the swap size has increased to 30 billion yuan. This is a textbook example of how China and BRI partner countries can advance cooperation in the financial sector and over renminbi use,” he added.
He said that financial cooperation is also a major component under the CPEC and both the countries explore the establishment of multi-level cooperation mechanisms and strengthen policy coordination.
“Both countries also strengthen their own financial reform and opening up, as well as controlling financial risks to create a good financial environment for CPEC, focusing on the regulatory side, financial institutions and financial markets,” he added.
He informed that another area of cooperation includes free trade zones and offshore financial business due to which Karachi branches of Industrial and Commercial Bank of China (ICBC) and the Bank of China are providing RMB clearing and settlement services in Pakistan.
“ICBC Karachi branch has also obtained the direct participation qualification of the first cross-border CNY clearing mechanism of Cross-Border Inter-Bank Payments System (CIPS) in South Asia to facilitate and ensure quick and smooth CNY clearing capability to improve bilateral trade,” he added.
Moreover, he also briefed the audience about the history of NBP and provision of commercial banking and related services in Pakistan and overseas.
