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China premier in Pak to boost trade

world Updated: Dec 17, 2010 14:35 IST

AFP
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Chinese Premier Wen Jiabao arrived in Pakistan on Friday for a three-day visit aimed at boosting trade and investment by finalising 20 billion dollars' worth of deals.

Accompanied by a huge business delegation, Wen is the first Chinese premier in five years to visit the nuclear-armed country on the front line of the US war on Al-Qaeda and battling a Taliban insurgency in its northwest.

Coming from talks in India, where relations have been clouded by sensitive trade and territorial issues, Wen's Pakistan leg may be less politically fraught in a country that regards China as its closest foreign ally.

His plane landed under blanket security as Pakistan's Shiite Muslims -- 20 percent of the population -- marked their holiest day, Ashura, which was last year marred by a bomb at a Karachi religious procession that killed 43 people.

Wen was greeted on the airport red carpet by Prime Minister Yousuf Raza Gilani, a military guard of honour and a host of cabinet ministers.

Pakistan says China has already agreed to development projects worth 13.2 billion dollars in energy, agriculture, infrastructure and health, and wants trade to climb from seven billion to 18 billion dollars in five years.

Yet the target is dwarfed by Wen's agreement with India to double bilateral trade to 100 billion dollars by 2015 and to push Indian exports in an effort to bridge a trade surplus of 20 billion dollars a year in China's favour.

"Work on projects worth 14 billion dollars is continuing at present, while projects of another 20 billion dollars will be signed between the two sides during the visit," a Pakistani government official said.

Wen is to sign the raft of agreements with President Asif Ali Zardari, address a joint session of the Pakistani parliament, and attend a business cooperation summit during his visit.

China is a key source of military hardware for Pakistan.

Behind the scenes, talks are also believed to be planned on China building a one-gigawatt nuclear power plant as part of Pakistani plans to produce 8,000 megawatts of electricity by 2025 and overcome acute energy shortages.

The West has expressed concern about the security of Pakistan's nuclear material, but China has built a 300-megawatt nuclear power reactor at Chashma in central Punjab province and another of the same capacity is under way.

Without going into details, officials in Pakistan admit the country has a civil nuclear cooperation agreement with China, a counter-weight to India's agreement with the United States on nuclear energy cooperation.

Pakistan depends on China's financial and political clout to offset the perceived threat from rival India and rescue its economy from the doldrums of catastrophic flooding, a severe energy crisis and poor foreign investment.

"The major breakthrough is expected to take place in the banking sector," Pakistan's ambassador to China, Masood Khan, told state television.

Reports say Wen will open a branch of the Industrial and Commercial Bank of China (ICBC), the top private bank in China.

Pakistan's prime minister has expressed hope that bilateral trade will rise to between 15 and 18 billion dollars over the next five years.

But security issues will also likely weigh on the agenda. China has been concerned about the threat of Islamist militants infiltrating its territory from Pakistan, particularly in its western Xinjiang region.

Despite the massive trade deals struck by Wen's delegation in India, there appeared little progress on easing tensions between the world's two most populous countries.