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China, Pakistan to formalise $ 10 billion deals

Closest allies Pakistan and China are finalizing another set of trade deals worth $ 10 bln

AFP, Saturday 18 Dec 2010
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China and Pakistan are set to conclude another 10 billion dollars' worth of deals on Saturday, the latest signings on a trade focused trip to South Asia for Chinese Premier Wen Jiabao.

Business leaders are scheduled to formalise deals at Islamabad's five-star Marriott Hotel, where a devastating suicide truck bomb killed 60 people in 2008, adding to the $ 20 billion deals inked on Friday.

Boosting trade and investment have been the main focus of what has been the first visit in five years by a Chinese premier to the nuclear-armed Muslim nation on the front line of the US-led war on Al-Qaeda.

Pakistan regards China as its closest ally and the deals are seen locally as incredibly important to a moribund economy, which was dealt a massive blow by catastrophic flooding this year and suffers from sluggish foreign investment.

Pakistani Information Minister Qamar Zaman Kaira said the countries signed 13 agreements and memorandums of understanding on Friday in fields ranging from energy to railways, from reconstruction to agriculture and culture.

Kaira said China had promised to fund "all the energy projects of Pakistan," which he termed a "major breakthrough". Pakistan suffers from a debilitating energy crisis and produces only 80 percent of the electricity it needs.
"China will provide assistance in 36 projects in Pakistan to be completed in five years," he said. "Basically this is a five-year development plan."

Although not specifically mentioned, behind-the-scenes talks are also expected on China building a one-gigawatt nuclear power plant as part of Pakistani plans to produce 8,000 megawatts of electricity by 2025 to make up its energy shortfall.

Wen is set Saturday to inaugurate a cultural centre built as a monument to Pakistani-Chinese friendship, and is scheduled to hold talks with the country's opposition leader Nawaz Sharif and senior figures in the military, which depends on China for hardware.

After the business leaders' meeting, President Asif Ali Zardari is to host a state banquet, before Wen addresses a special joint session of parliament early Sunday". The outcome of the visit is beyond our expectations. It is an historic day," Pakistan's ambassador to Beijing Masood Khan said Friday. 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.

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

China, meanwhile, has been concerned about the threat of Islamist militants infiltrating its territory from Pakistan.

Before arriving in Islamabad, Wen visited India, where he and his 400-strong delegation inked deals that will see bilateral trade double to 100 billion dollars a year by 2015.

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