Islamabad: The Chinese government has agreed to consider a request to amend the existing Free Trade Agreement (FTA), supply trade finance in yuans, and provide loans to assist in relocating industry to Pakistan.
The requests were made during Pakistan’s Interim Commerce Minister Gohar Ejaz’s visit to China, where he leads a 20-member group. Pakistan and China have come to a mutual understanding to revise the FTA.
This revision aims to extend comparable preferences to Pakistani products, aligning them with the existing agreement between ASEAN countries.
He said Pakistan will submit a priority list after consultation with the relevant stakeholders. “We will evolve the list in consultation with all stakeholders”, he said, adding that his Chinese counterpart has agreed to the requests.
Pakistan has formally approached the Chinese government, urging them to allocate a substantial sum of $5 billion, equivalent to RMB, for financing investments to facilitate the relocation of Chinese companies. The proposed funding would be structured under a “Pay as You Earn” framework, allowing for repayment through the utilisation of export proceeds.
The relocation will be only made to the Special Economic Zones (SECZ) or Export Processing Zones (EPZ) in Pakistan. Chinese investors will actively pursue investment funds from their government and generate revenue in US dollars by exporting goods. These proceeds will then be utilised to offset the loan amount.
