BEIJING: Chief Representative of National Bank of Pakistan (NBP) in China, Shaikh Muhammad Shariq said that his bank is ready to facilitate the Chinese companies to relocate their businesses and industrial units to Pakistan under the China-Pakistan Economic Corridor (CPEC) framework.
“As we are about to enter into the second phase of CPEC, which is more focused on industrial cooperation, we are again ready to facilitate the Chinese companies to relocate in Pakistan”, he said while addressing Pakistan-China Economic and Business Forum. The forum was recently organized by Pakistan Embassy, Beijing, Beijing Nordic Exhibition Co., Ltd and Shanghai Huiguan Culture Media Co., Ltd.
Shaikh Shariq informed the participants that the NBP is enjoying leading position in corporate and agriculture financing in the banking sector of Pakistan and with large international presence, NBP can also facilitate the trade business. He said that in the first phase of CPEC, billions of dollars were invested in infrastructure, power generation, and Gwadar Port. The amount was in different modes including investment and financing. The financing was availed through different institutions both from Pakistan and China.
“The NBP was a part of most of these projects either in the form of consortium partner or lead arranger,” he added. He said the NBP has already established strong banking partnership with major Chinese financial institutions to facilitate trade and investment under CPEC and Belt and Road Initiative (BRI) not only in Pakistan but in all the places where we have operations.
The Chief Representative informed that in order to facilitate bilateral trade and facilitate smooth flow of funds between China and Pakistan, central banks of both the countries have signed the currency swap arrangement in 2011, amounting to 10 billion yuan and 140 billion Pakistani rupees.
“As a result of this, bilateral trade and investment witnessed significant growth, and contributed to further strengthening close and special relationship between the two countries,” he added. He said that in 2018, the swap was extended for a period of three years, and the size was doubled to 20 billion yuan or 351 billion Pakistani rupees, as China became the largest trading partner, and the bilateral trade increased on yearly basis. This year the swap size has increased to 30 billion yuan. This is a textbook example of how China and BRI partner countries can advance cooperation in the financial sector and over renminbi use.
He said that financial cooperation is also a major component under the CPEC and both the countries explore the establishment of multi-level cooperation mechanisms and strengthen policy coordination. Both the countries also strengthen their own financial reform and opening up, and control financial risks to create a good financial environment for the CPEC, focusing on the regulatory side, financial institutions, and financial markets, he added.
He informed that another area of cooperation is amongst free trade zones and explore RMB offshore financial business. As a result of this cooperation ICBC and Bank of China, Karachi branches are providing RMB clearing and settlement services in Pakistan.
“ICBC Karachi branch has also obtained the direct participation qualification of the first cross-border CNY clearing mechanism of Cross-Border Inter-Bank Payments System (CIPS) in South Asia to facilitate and ensure quick and smooth CNY clearing capability to improve bilateral trade,” he added. He also briefed the audience about the history of NBP and provision of commercial banking and related services in Pakistan and overseas.