Mar 9, 2009

Pak-China cooperation

Recently, the president Asif Ali Zardari was invited by the Chinese government. He visited and stayed in the Hubei province and Shanghai from 20 February to 23 February. During the visit, the president showed interest in finance, banking, large-scale construction and Shanghai's urban development. He said the basic purpose of his visit here is to study the Chinese model of power generation and development in the agriculture sector. He identified possible areas of cooperation between Pakistan and China in hybrid seed, modern agricultural technology, water management, high efficiency irrigation and water pumping through solar technology.
Power sector
The two countries agreed to extend cooperation in the energy and power sector. Wapda’s Chairman signed a hydel-power project with the Three Gorges Project Corporation (TGPC). Under the agreement, China would assist Pakistan technically in hydel power generation. The TGPC president said that his corporation was ready to assist Pakistan in every possible way to overcome its energy challenges. Our president claimed that the aim of his government was to build more dams following the model of the Three Gorges Dam.
According to the latest figure of Wapda (2009) Pakistan is currently facing severe power shortages of 4500mw. It is feared that the alarming energy crisis will probably prevail unit 2010. It is hoped that the recently signed agreement between Pakistan and China will pay dividends in the future. China has one of the most developed hydel-power generation system, with an installed capacity of 171.52 gw. Small hydro-power stations are very common in China, which has over 50 per cent of the world’s small hydro units. The expertise of the Chinese in hydel power generation will help us in reducing the power crisis looming in the country. (see table-1 and table-2)
According to the data the current thermal power generation in the country adds up to 64 per cent of the total power generation, while power generation through hydel plants is only 34 per cent. But, the irony of this is that we have enough water resources for the generation of 25,000mw hydel power yet we are an energy deficient country.
We need a great number of medium and small sized dams to meet the ever increasing demands of the country. According to the latest information, Pakistan would receive $448 million from China under the Pak-China cooperation for the hydel power generation agreement recently signed between the two countries.
Pakistan and China have also signed four memorandums of understandings (MoUs) for cooperation in the agriculture sector. The president Asif Ali Zardari and the Governor of Hubei, Lihong Zhong witnessed the signing. The MoU between the government of Sindh and Hubei Seed Group aims at joint development of hybrid rice seeds and its commercial production in Pakistan.
According to the MoU the joint breeding programme between the government of Sindh and Hubei Seed Group will be through germplasm technology transfer, for achieving maximum productivity of hybrid rice. Another MoU between Pakistan the agriculture and research council and Hubei’s research group focuses on the establishment, of the joint breeding in Pakistan. It says that the two sides will work for the development and transfer of germplasm technology and oilseeds to Pakistan, which will yield high production.
Under the MoU, Pakistan's scientists will also be trained in breeding agronomy and oilseed production. The third MoU was inked for expansion of cooperation, through exchange of high profile visits and promotional events to enhance mutual understanding and friendly relations between Sindh and the Hubei province. The final MoU was signed between the National Dredging Company (NDC) for the establishment of dredging works at Karachi Port, Port Qasim, Gwadar Port, canals, rivers, and barrages in Pakistan. In this connection, China harbour engineering will help the National Dredging Corporation of Pakistan in getting support and necessary assistance from the government of China. Furthermore, both the countries also signed MoUs on drip irrigation and cooperation in BT coloured cotton. Our president stressed the need for better irrigation methods to conserve water as it was a precious commodity, which must be used economically.
Finance and banking sector
The president also addressed the heads of major financial institutions and banks. He stressed the need for interaction between the financial institutions of Pakistan and China. He urged the Chinese investors to benefit from the trade opportunities available in Pakistan. Moreover, the opening of branches by China's leading banks in Pakistan would further expand the domain of financial interaction between the two countries. Furthermore, the expansion of Chinese financial institutions and banks networks to Pakistan and other countries of Asia would be better for the whole region too.
He showed great interests in extending cooperation in different infrastructure projects and initiate railway links as well in addition to the existing road and sea links. Being situated closer to China Pakistan's seaports would be useful to China in its regional and international trade operations/shipments as compared to other ports of Shanghai and Hong Kong. It would provide China an opportunity to access the Gulf markets.
Volumes of bilateral trade
According to official figures, annual trade between the two countries has already surpassed 7 billion dollars during 2008 and the two sides are aiming to increase that to 15 billion dollars by 2011. The balance of trade between the two countries is heavily tilted in favour of China, which requires to be turned into a win-win situation for both the countries. Currently, 70 per cent of Pakistan's exports to China are cotton yarn and cotton fabric. Pakistan is also keen to promote its other products ranging from mangoes to footballs. The Chinese government encourages its public and private sector to actively take part in projects based in Pakistan. China's public and private sector is undertaking over 250 projects in Pakistan from mega to small and from strategic to regular businesses. At present, over 60 Chinese companies have already permanent offices in Pakistan.
Concluding remarks
During his pervious visit to the country and the recent stay, the president named energy, telecom, agriculture, food and food processing facilities, real estate, raw materials and infrastructure development as some of the areas where Chinese investors could concentrate. The economic cooperation between the two countries is an important part of our strategic partnership. We need Chinese expertise in our energy, agriculture and infrastructure sectors. Our strategic trusted friendship with China may be further enhanced by socio-economic cooperation and geo-political pledges. By Mehmood-Ul-Hassan Khan

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