Issues of Chinese cos, promotion of RMB: PMO doing spadework ahead of PM’s China visit

ISLAMABAD: Prime Minister Office (PMO) has sought details of issues being faced by the Chinese companies, and measures meant to facilitate promotion of Chinese currency RMB, well informed sources told Business Recorder. The purpose of this exercise is supposedly to complete homework prior to the visit of Prime Minister Shehbaz Sharif to China, dates of which are being exchanged between the Foreign Ministries of both countries.

Meanwhile, Minister for Planning, Development and Special Initiatives, Ahsan Iqbal has convened an inter-ministerial meeting on Monday (today) to discuss issues being faced by the Chinese companies. According to sources, to expand the depth and breadth of RMB application under the principle of step-by-step progress it has been decided that first use of RMB be promoted in the trial zone and then to achieve breakthroughs in RMB settlement and financing polices, RMB capital circulation system be established.

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It has also been suggested that State Bank of Pakistan (SBP) should meet with PBOC and propose to list direct quotes for RMB- PKR transactions in the CFETS and designate selected banks as cross-currency market makers in both countries. These banks provide direct RMB –PKR exchange services with reference to the RMB-PKR quotes provided by the China Foreign Exchange Trade System and settle currency positions with each other. The relevant clients holding the relevant trading currency positions can be used for trade between China and Pakistan or for investment into the Chinese or Pakistani market.

Some of the issues being faced by the Chinese companies are as follows: (i) All Pakistan Chinese Enterprises Association (APCEA): the vetting of visa application takes long time;(ii) China Road and Bridge Corporation (additional incentives to promote investment in SEZs especially Rashakai SEZ), realignment of KKH (Thakot- Railkot section) the project is promoted at slow pace; (iii) China Communications Construction Company Limited (dispute about different understanding of the contract of KKH phase-II, (Thakot-Havelian section);(iv) Beijing Urban Construction Group Co. Ltd/ China Railway Beijing Engineering Group Co. Ltd: the anti-dumping duty imposed on the wire rod and steel rebar.

Copyright Business Recorder, 2022