China Agrees To Import Pak Products At Zero Duty, Pakistan to set up China-specific economic zones in various cities
ISLAMABAD: In a major development, Beijing has agreed to import Pakistani products at zero duty, which are to be manufactured in China-specific Special Economic Zones (SEZs) in Pakistan, a senior government official told The News.
China-specific Special Economic Zones will be established in various parts of the country and the Economic Coordination Committee has already approved the establishment of SEZs for China in Kalashah Kaku near Lahore. The Punjab government has acquired land for this ambitious project.
About 250 companies are ready to invest in the China-specific Economic Zones for trade with China. "The Pakistan government would, in return, permit Chinese companies which would make 40 per cent investment in the China-specific Special Economic Zone to import the machinery at zero duty to be installed at the said zone."
Pakistan will be able to have the biggest market of one billion people of China by exporting the products to be manufactured in the SEZs at zero duty. Beijing has also extended a special incentive under which Islamabad can initiate banking services in China just with the deposit of $250 million with sovereign guarantee. "In China there is a rule which is strictly adhered to, according to which it is mandatory for the party (country) to deposit first $ 10 billion prior to opening any bank, but the authorities concerned have allowed Pakistan to open bank in China with deposit of only $ 250 million.
"This is a landmark achievement in services sector between both the countries. China has extended this huge incentive to bank in Pakistan in a recent meeting held in Beijing on August 14-16. In the meeting both the countries have also made remarkable progress on talks about services sector," the official siad.
According to the official, Pakistan and China have also agreed to initiate trade under an FTA on services from January 1, 2008, and to this effect both sides have made reasonable progress to materialise the agreement on the services sector. Both the friendly countries decided to initiate trade in the services sector from January 1, 2008, in a meeting held in Beijing from August 14 to 16.
"Both the sides are currently in trade with each other under Free Trade Agreement (FTA) on goods and investment and are not in trade in services sector." The official said Pakistan and China have started negotiations on trade in the services sector under Article 83 of the FTA.
Under the services agreement, if successfully concluded, both countries would enter into a recognition agreement about doctors, engineers, banks and professors of each country. Under the agreement, Pakistan doctors, engineers, professors would be able to offer their services in China and in the same way Chinese would offer their services in Pakistan.