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China, Pakistan ink trade deals during Wen's visit

world Updated: Dec 18, 2010 11:32 IST

With 13 agreements already signed, Pakistan and China were expected to ink additional economic deals worth billions more on Saturday, the second day of a rare visit by Chinese Premier Wen Jiabao to this impoverished, conflict-ridden nation. The two nations also stressed the importance of cultural exchange by inaugurating a new center dedicated to what Islamabad calls their "all-weather" friendship.

China is Pakistan's closest friend in Asia, giving Islamabad military aid and technical assistance, including nuclear technology. Crucially, Beijing is perceived by many here as treating Pakistan as an equal and - unlike Washington - doesn't demand anything in return for assistance.

But Beijing is hardly left empty-handed from its ties with Pakistan, which serves as a close, cheap source of natural resources to fuel its growing economy.

During Wen's trip, the first by a Chinese premier in five years, the two governments are to sign deals worth $14 billion for 36 projects in Pakistan, while businesses in the two countries will agree to deals worth another $10 billion, Pakistani Information Minister Qamar Zaman Kaira said.

The 13 agreements signed on Friday included a $229 million donation from China to help with reconstruction from the devastating floods Pakistan suffered earlier this year, as well as a $400 million soft loan for Pakistan, he said.

Pakistan is desperate for foreign investment to help create jobs for its 175 million people. While its bilateral trade with China is up from $1 billion in 2000 to some $7 billion now, much of the new trade consists of cheap Chinese imports into Pakistan, officials said. Islamabad hopes to do more to balance that. Pakistan has stressed it is supremely confident in its relationship with China. This is even as China improves its ties to India, Pakistan's archrival. Wen's visit to Pakistan follows a visit to New Delhi.

Wen and Pakistani Prime Minister Yousaf Raza Gilani joined hundreds of other prominent officials from both countries Saturday morning in a dance-filled ceremony to inaugurate the Pakistan-China Friendship Center.

The white building - featuring a latticework facade - is to be used for cultural exchanges, conferences and other displays. Much of the Pakistani capital also was decked out to welcome the Chinese premier. Huge posters bearing his picture and slogans such as "Family" and "Building the Future Together" were posted along the major roads in Islamabad. The Marriott Hotel's lobby was filled with festive Chinese-related displays.

As with any discussion involving Pakistan, security issues will be on the agenda. The threat posed by Taliban and al Qaida fighters in Pakistan is a growing concern for China given that the countries' share a common border. China also is dealing with its own Muslim separatist movement.