ISLAMABAD – Pakistan and China start to ditch US dollar in $20 billiontrade.
China is a trillion dollar economy, trillion dollar exports and imports,surplus in current account, high and growing per capita income with lowlevel of inflation, unemployment and certainly lower interest rate’, thiswas stated by Engr.
Daroo Khan Achakzai in his welcome address to Airdy, CEO ICBC Pakistanalong with his team who visited Federation of Pakistan Chambers of Commerceand Industry and held a meeting with FPCCI members and apprised them of thebenefits of under taking trade in RMB currency.
The FPCCI Chief underscored the need to use RMB as trading currency betweenPakistan and China. He said that Currency Swap would be mutually beneficialand go a long way in strengthening economic ties between the twoneighboring countries.
He also highlighted that average trade volume between Pakistan and China isabout US$ 20 billion annually in which imports from China is US$ 18 billionand export from Pakistan to China is merely US$ 2 billion.
There is a huge export surplus of US$ 16 billion in the favor of China.“That is why, Pakistan and China signed bilateral Currency Swap Arrangementto reduce the pressure on the foreign exchange reserves and give a quantumjump to the bilateral trade between the two countries”, he said.
The FPCCI President also appreciated the services rendered by ICBC in thebackdrop of capital-intensive mega investment projects of CPEC and ChinaPakistan Free trade Agreement (CPFTA) in implementing and facilitatingbilateral trade in RMB.
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Thus, reducing the ever-increasing pressure on SBP foreign exchangereserves. Airdy, CEO of ICBC Bank informed that RMB is now approaching itsfinal frontiers, full convertibility and transformation into a “normal”currency used by companies and individuals in some countries especiallysoutheast Asia and regions such as HK MACAU etc. TMB usage in trades andinvestment with China has opened the door to many new opportunities.
He said that SBP has taken comprehensive policy related measures to ensurethat imports, exports and financing transactions can be denominated in RMB.All public and private sector enterprises (both of Pakistan and China) arefree to choose RMP for bilateral trade and investment activities.
Citing some facts and figures he said that market making volume by ICBCPakistan in first 11 months amounts to 11 billion, 2.5 times of the volumeof last year, showing more and more businessmen are inclined to using RMBwhen trading with Chinese.
However, compared with the total trade settlement between China-Pakistan,it only accounts for 5$% indicating an enormous space and chances for allbusinessmen and banking industry.
