Posted by: Administrator | 24 September, 2006

President at PAK-China Business Forum

23 February 2006, China

Mr. Bo Xilai, Minister of commerce of China, Chairman CEC, Chairman ASFIC, Chairman CCPIT Excellencies, ladies and gentlemen it is today my very proud privilege to be talking to this forum for the second time and for the strength of the attendants one can easily judge the enthusiasm and the desire for mutual economic relationships between China and Pakistan so it is my proud privilege indeed to be here and to be awarded this opportunity to talk to all of you. May I first of all take this opportunity to convey the best wishes of the people of Pakistan to the people of China for this 55th year of diplomatic relations between the two countries. Today after these 55 years I keep saying that we have traveled a very long distance, we have come to a stage where our relationships are on the rise and will keep rising because of two very important factors and these talk about two factors are firstly that our relationship is very broad based and when I saw broad based it has a political and diplomatic connotation where for these 50 years we have supported each other in all international forums and we have been together and we have understood each others stand, we have consonance of views of international and regional issues.

When I say broad base, it also means economic, commercial relationships which are on the rise and I will talk more about them later, when I say broad based we have relations in Defence, Defence production, we have tremendous successes in Defence production, we have relationships in the strategic fields, we have strategic understanding and we have relations in the nuclear energy fields and also in the social sector of health and education so therefore this very broad based relationship is what lends permanence to the relationship between the two countries and also may I say that in these 55 years this relationship between the two governments and the leaders permeates down to the people where the people of Pakistan and people of China love each other and there is a relationship, there is am affinity between the two and therefore also because of these relationships between the people of two countries I say this relationship is broad based, I have all reasons to believe that Pakistan and China relationship will keep rising in the future.

May I also express gratitude to the government and the people of China for all the warmth, hospitality and the courtesy they are extending to me and my delegation right from the time when we landed in this beautiful and great country of yours, I thank you very much. I would also like to take this opportunity as I am addressing such a large group to express the regret of my government, myself and the regret of the people of Pakistan, regret of every man in the streets of Pakistan over the very sad killing of three Chinese friends of ours who came there to contribute to the development and progress of Pakistan, we regret that and in fact I wouldn’t be to wrong to say that the nations feels ashamed that the three Chinese who were so close to us have been killed, we condemn it is the strongest words and let me tell you that I have a resolve of getting to the root of the problem and uprooting the whole problem and also brining the culprit to book so let me assure this house that actually the people of Pakistan love the people of China and this aberration of a few individuals should not at all disturb this inner feeling which exists between the two people.

Now ladies and gentle I would like to come to the main subject for which we all have gathered together. Pakistan and China as I said enjoy excellent political and diplomatic relations but when one sees the economic relationships and when I say economic relationships I mean trade, joint ventures, investment between the two countries and I would frankly say that this is not compatible, this is not in consonance with the political relationship which we enjoy therefore the purpose of my visit today and in the past when I came and addressed in 2003 has been to give a boost to our economic relations and when I talk further I will prove that the environment and the realities on ground are ideal for giving a boost to economic relations between our two countries and we have to facilitate the private sector. I strongly believe that the public sector ought to be in the back ground creating an environment, facilitating business interaction but the main engine driving this will be the private sector and therefore I am very glad that this interaction between the private sectors of Pakistan and China is the right way of moving forward towards enhancing trade and enhancing investment from China into Pakistan. M

y desire obviously is to bring about a quantitative and 2 qualitative enhancement or a leap forward in both the trade and investment environment and I don’t see any reason why because Pakistan China cooperation has been going on since the last 50 years, the land mark projects which we have undertaken between the two countries, the Karakorum Highway, the heavy mechanical and electrical complexes, the Chashma power project I and now II and then we will like to move forward to III, IV, V and VI with all the nuclear power projects between Pakistan and China, then we have the Gwadar port constructed and we have the landmark of Sandak Copper-Gold Mine project all these are landmarks of cooperation, big landmarks showing the friendship between the two countries, I would also like to take this opportunity to take your mind to another aspect of this business development and investment and trade. Pakistan today is fighting terrorism and extremism and we know we will defeat terrorism and extremism but I would like to say that the root to this extremism and terrorism is in the political disputes but if that could be left aside it is also in poverty, in deprivation and lack of education but when we talk of poverty, we sitting in this hall can contribute to poverty alleviation as when we are talking of investment we are talking of job creation and when we talk of job creation, we are talking of poverty alleviation and when we do poverty alleviation we are striking at the root of extremism and terrorism therefore I would like to conclude ladies and gentlemen all of you sitting here when you go for enhancement of trade with Pakistan, enhancement of investment with Pakistan you are indirectly contributing in fighting extremism and terrorism.

You are indirectly helping me in fighting terrorism and extremism in Pakistan. Now I would like to talk of the economic environment of Pakistan first of all very very briefly because I think this found the basis of growth and development, this found the basis of attracting the people to trade and investment in our country.

Pakistan today ladies and gentlemen is following a policy of liberalization, deregulation and privatization; we are following this since the past years I have been on the scene and we are following it very strongly and we have created an investor friendly environment in Pakistan and with every passing year this environment is improving and today I would like to talk about that. First of all the most important aspect of vibrant and stable economy, let me assure this house that today the economy of Pakistan is not what is was five years back, this is a vibrant economy which is on an upsurge. We grew by 8.4% last year and the year before that we grew by 6.5% and this year inspite of all the pressure of increased oil prices, the pressure of the earthquake expenditures we are reasonably sure that our GDP will grow by over 7% so this is the vibrant economy and each of the macro level indicators today is on an upsurge.

 I have told you about the GDP growth, our exports are rising, in the past five years they have risen by about 120%, if you see the revenue generation, it has increased in last five years by about 130% and this revenue growth is not by increasing taxes but by broadening the base of collection of taxes and because of this the public sector expenditure on development projects in Pakistan has risen by 300% in the last five years. Also the exchange rate is stable today, our policies are consistent and the Karachi Stock Exchange which is gauge of the economy of Pakistan, I would say is going mad because in 1999 it was the KSE index to that about 900, and today we are at about 11500 and they say that this is the best performing stock exchange in the world therefore the credit rating of Pakistan by the moodies or standard and poor has been upgraded substantially. We launched the Euro bond of 500 million dollars and this was over subscribed by over 2 billion dollars. We launched the Islamic bond and this again was very substantially over subscribed and there was a largest offering for it. The industrial growth today is in double figures; in 2004 it was 18.2%, in 2005 it was 14.6% and I know that this year again it will be in high double growth. The Foreign Direct investment into Pakistan has risen by over 600% in last five years but since the base was low I am not satisfied with this 600% of growth but however I would like to say all these factors shows confidence of the investor in the economy of Pakistan.

Ladies and gentlemen what does an investor look for in a country before investing, he looks for the security of his capital and may I very briefly say that there are about 600 foreign firms in Pakistan and not one has ever suffered even in the period of nationalization in 1970s, not one of these foreign firms were ever touched, the government of Pakistan throughout its history has been meeting its obligations to all these foreign investors, secondly another aspect which an investor looks is the profitability in a country and on profitability I would like to tell you that Pakistan today has gone up from a low income country to a middle income country and this year our per capita income will register another growth I am sure as a result of which purchasing power of the people of Pakistan has 3 increased and therefore the demand supply gap in Pakistan has increased manifold and therefore because of this increase in supply demand gap, the profitability situation of investors in Pakistan is at a level where I know that the foreign firms are making profits between 20 to 50%. I know some of the have made profits between 80% to 90% so therefore ladies and gentlemen while we don’t grudge this profitability of any investor in Pakistan as long as it is a win-win situation for both Pakistan and that investor, we would welcome any kind of investment.

Don’t look at Pakistan as a stand alone country, please look at the strategic location of Pakistan. It lays at the center of the cross roads of the Gulf, the Middle East in the east of Central Asian republics and Afghanistan in the north and mind you that the London conference has pledged 12.5 billion dollars for reconstruction in Afghanistan and all that flow is directed from Pakistan, when they reconstruct, our cement and steel industry are over flowing today. cement industry which was at a loss is today at 100% capacity and there are dozens of additional cement industries coming up in Pakistan so I was talking of the location of Pakistan, in the west there is Middle East and Gulf, in the North there is Afghanistan and Central Asia, in the North east it is your great country China and in the east is South Asia which include India, Now any interaction between these regions whether India wants to have trade with central Asia and Afghanistan, it has to go through Pakistan. India wants energy from Qatar or Iran or Turkmenistan, it has to pass through Pakistan, China could do trade with India either it will come by sea from the east coast all around Malacca Strait or Indian Ocean or it can have the shortest route through Pakistan to India so what I want to say ladies and gentlemen that Pakistan is a hub, Pakistan provides the trade and energy corridor in this whole region. If I was to talk only of China, China is expanding and we are very glad, we feel proud of the fact that China is rising, expanding, developing and reaching out to the world in investments and in trade. Look at China’s access to the South Asia to the India markets, to the Gulf, to Africa, to Europe and see where Pakistan stands and see the access which Pakistan gives to China to all these regions and if Pakistan develops a communication infrastructure linking China and a port which we have developed together that is the Gwadar Port which we want to run in the most modern way, now look at the investment opportunities and your access from Pakistan to these regions which I have spoken of, like Europe, Africa, Middle East, South Asia, India and I would like to urge all of you ladies and gentlemen please see these geo strategic realities and see the environment that Pakistan is now giving to China. We have cheap labor and I would like to tell your excellencies, ministers and everyone that I was surprised because I thought that labor is cheap in China which indeed it is but I was comparing once and I got the information that labor in Pakistan is 0.36 dollars an hour, in India it is 0.57 or 0.58 dollars an hour, in China it is I thin 0.69 or 0.70 dollars per hour and in Germany it is 31 dollars per hour so leaving Germany aside, Pakistan provides maybe the cheapest labor in the world also we have qualified man power, now we are doing a lot because there is an economic upsurge, because there is investment coming in, because there is industrial growth going on we need two things, we need to develop our human capital and we are very aware of that therefore we are opening technical schools with assistance from abroad, many European countries like Japan is assisting and we want China to assist also in technical skill development.

 Over and above we are trying to open engineering universities in subjects relevant to the industry and here may I say that there are six countries which assisting us in opening engineering universities in Pakistan of their standards and these are Sweden, France, Germany, Austria, Netherlands and South Korea and we would like China to assist us in opening a university and these universities will deal with subjects which are in consonance with the industrial growth and requirements of Pakistan therefore what I want to say is that we want to have cheap labor and qualified man power in the coming years then I would like to talk about the industrial friendly environment that we have created.

We have a policy which is considered the most favorable in the region today that is what we have achieved; all sectors are open to FDI as they are open to the Pakistanis. Foreign investors are allowed 100% ownership; investment is fully protected under the law in Pakistan, remittances of profits, capital, dividends, royalty or fees is very freely allowed to any investor. There are generous tax concessions available then there is a very strong regulatory mechanism that we have created to ensure transparency and level paying field to all, then we have a network of processing zones and industrial estates which are available to a foreign investor as they are available to Pakistanis over and above that may I inform this house that I personally have taken upon myself to get involved in 4 facilitating investment in removing obstacles from the way of any investor in Pakistan. I chair conferences of investors and government officials myself so that whatever bureaucratic obstacles in the way of investment, we clear them right across the table right there, this is my personal involvement with anyone of you who comes to Pakistan and invest in Pakistan.

Now I would like to just glance at the existing economic environment and future outlook of Pakistan and China. first of all trade, we are very glad that we have preferential trade agreement, we must go for a free trade agreement, we already have an early harvest program between ourselves and I think this is the way forward to encourage trade and I am very glad that in 2005 as compared to 2004, trade grew by 40% between China and Pakistan but we need to give a bigger boost to it in the future. I personally think with a zero or a preferential tariff available, Pakistan’s products in China and Chinas products specially chemicals and machinery which are very popular in Pakistan should have an easier access and facilitation in each others companies and that is the way forward to give a very big boost because of the market access to trade and may I also add for the knowledge of this house that Pakistan and China have agreed to conduct a joint study to remove obstacles in the growth of trade, this will lay down a five year road map to increase the volume of trade between the two countries. We have also agreed to upgrade the Karakoram Highway in a big way and this will facilitate trade and also since we have already made Gwadar Port and we are improving our communication infrastructure between this Port north wards to Afghanistan and Central Asian republics and linking it to China through Karakoram Highway, this will facilitate and increase trade between Pakistan and China.

 I would like to invite all of you to Expo-2006 of Pakistan which we are holding from 29th March till 2nd April in Karachi. This will showcase all the exportable products of Pakistan and I request most of you to come to Pakistan and be a part of this Expo-2006 in Karachi. I would like to talk about investment now very briefly telecommunications sector has a huge potential in Pakistan, our tele density was 2.9% about three years back today it has crossed 14% or maybe more. Mobile telephones three years back there were only 600,000 mobile telephones in Pakistan but today there are 20 million mobile telephones and I think according to some estimates they will be raising to 35 million in another 2 years. Nokia the international mobile producer is seeing Pakistan as second largest Nokia market in the world in 2007, so that is the growth of telecommunication, the growth is same on fix line mobiles and WLN. There is boom going on in IT sector we have developed an infrastructure to facilitate information technology.

 Then in the energy and power sectors, Pakistan is energy short today because of it rapid economic growth therefore we are looking at all energy sources, getting pipelines from Iran or Turkmenistan or generating our own hydroelectricity, coal base electricity, gas base electricity, even alternative sources and nuclear energy. We are look at electricity from Kirgizstan and Tajikistan so we are having a total look at energy sector. We have decided on water vision 2016, making five dams in Pakistan by 2016. These are not only water storages but electricity production also; each large dam is going to give us about four to five thousand mega volts of electricity. So we are taking holistic view of energy sector. I would like to urge every one of you look into that. May I also tell you that automobiles and auto parts are doing exceptionally well, motorcycles are doing exceptionally well, I don’t want to in details, I know the figures while automobiles productions were thirty five thousands five years back but today they are over one fifty thousands cars which are produce, motorcycles which were eighty five thousands five years back today they have cross five hundred thousands productions per year so also the auto parts industry is booming because of all this, tractors, air conditions, refrigerators, and televisions this area is having an upsurge in Pakistan.

Other then this you know about textiles, I won’t go into details. But we are an agrarian society, we have one of the best fruits and vegetables but we don’t have any fruits or food processing. We are fifth largest milk producers in the world but we don’t have any dairy products like cheese, butter and yogurt so we don’t value at. So therefore dairy and processing is open to all. May I say as far as China is concern there are six hundreds about fifty big concerns already operating in Pakistan and we would like more to come in, I note some who are doing very successful investment and doing good business in Pakistan. These are Heirs, ZTE, Howai technologies, China National Petroleum Corporation, China state construction engineering Corporation, Dong Fang Electric Corporation, CMEs, China Ocean Shipping Corporation and Air China. All these are doing good business in Pakistan. Other then that there are about fifty countries but we would like to increase this investment because as I said this is not commensurate with political and diplomatic affinity the 5 two country have. I like to invite all of you to come to Pakistan and see the opportunities for yourselves. You should not believe me, I would like you to come and see it yourselves and confirm whether whatever I told you is the reality so therefore I would like to concluded ladies and gentlemen by saying that I see economic relations between Pakistan and China growing in future growing to a level where are political and diplomatic relations demands and I fore see this rapid growth because the environment that I just pronounced in front of you.

Please look at these strategic realities, look at affinity of two people and I look forward as President of Pakistan, Pakistan would welcome investments from China much more than anywhere else because Chinese are our brothers and our friends, they are time tested friends since fifty five years now so please come to Pakistan and be a part of development of Pakistan. Thank you very much.


China considers Musharraf its true and sincere friend: Bo Xilai

BEIJING, Feb. 27 (APP): Chinese Commerce Minister Bo Xilai said that his country considers President Pervez Musharraf its true and sincere friend who showed a high degree of commitment, making their bilateral relations even more stronger for the years to come.

Commenting on the President Musharraf’s recent visit to China, he said it injected a new vigour in their existing bilateral ties, especially in the economic sector. Bo Xilai who received the President at the Pakistan-China Business Forum held here on Feb. 21, said the visit helped to maintain the momentum of their growing strategic partnership.

The Minister spoke highly of Sino-Pak friendship and particularly mentioned Pakistan’s diplomatic support to his country, especially during 1965 to 1971 and in restoring its lawful seat in the United Nations.

Highlighting the history of Sino-Pak economic cooperation at the Business Forum, the Minister said, Pakistan’s heavy electrical Machinery Factory built up in 60’s, Karakorum Highway constructed in 70’s, Muzaffargarh Thermal Power Station invested in 80’s, Chashma Nuclear Power Plant settled down in 90’s and Gwadar Port newly established symbolized the deep-rooted friendly cooperation between two countries.

Bo Xilai praised the achievements made by Pakistan in economic construction. He said that under the leadership of President Musharraf, GDP of Pakistan increased year after year and the growth rate hit 8.4% in 2005. China will continue enhancing trade and economic cooperation with Pakistan, meeting the common aspirations of their people.

He emphasized that the trade and economic departments and enterprises of both China and Pakistan should earnestly implement and promote the ‘Framework Agreement’ on expanding and deepening their bilateral trade and economic cooperation.

An official of Pakistan embassy told APP that Sino-Pak business forum proved very successful, establishing close interaction between the businessmen of the two countries. It facilitated them to undertake joint ventures in areas of mutual interest, like textile, energy, automobile and communication.

Altogether 19 agreements and MoUs were signed. The total financial commitment made by the two sides was more than $500 million. The projects agreed upon at the forum included a fertilizer-manufacturing plant to be set up this year in Thatta, Sindh.

Ambassador Salman Bashir said President Musharraf’s visit was highly productive and resulted-oriented. The two sides, he added laid special focus on consolidating their economic ties. He hoped that the visit will generate further goodwill and understanding on the people-to-people level.


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