Yuan may replace dollar in Pakistan-China trade

Published December 19, 2017
PLANNING and Development Minister Ahsan Iqbal and Chinese Ambassador Yao Jing attend launching ceremony of CPEC Long Term Plan on Monday.—Reuters
PLANNING and Development Minister Ahsan Iqbal and Chinese Ambassador Yao Jing attend launching ceremony of CPEC Long Term Plan on Monday.—Reuters

ISLAMABAD: Minister for Planning and Development Ahsan Iqbal said on Monday that the government was examining a proposal to replace the US dollar with the Chinese yuan for trade between China and Pakistan.

He was talking to journalists after the formal launch of Long Term Plan (LTP) for the China-Pakistan Economic Corridor (CPEC) 2017-30 signed by the two sides on Nov 21.

Newly-appointed Chinese Ambassador Yao Jing and officials of the provincial governments also attended the launching ceremony.

Asked if the Chinese currency could be allowed for use in Pakistan, Mr Iqbal said the Pakistani currency would be used within the country, but China desired that bilateral trade should take place in its currency — known as Renminbi (RMB) or yuan — and “we are examining the use of RMB instead of the US dollar for trade between the two countries”. He said the use of RMB was not against the interest of Pakistan, rather it would benefit the country.

CPEC Long Term Plan formally launched

The minister said China had not stopped CPEC-related investment in Pakistan as claimed by some quarters and all projects were going on with the process of feasibility studies and their scrutiny as had been the case with the first phase of investments. All projects already identified and committed by the two sides were going through the codal formalities and moved into the implementation phase on completion of these procedures, he explained.

The 26-page LTP document briefly covers seven broad areas of cooperation where the two sides have to contribute to each other in three phases, first ending 2020, followed by another in 2025 and then completing in 2030. The areas of cooperation include connectivity, energy, trade and industrial parks, agricultural development and poverty alleviation, tourism, people’s livelihood and exchange programmes and financial cooperation.

Both sides reiterated that the LTP would remain a moving document providing macroeconomic guidance for implementation of CPEC in the next phase. “The plan would be adjusted based on real situation as well as the consensus between the parties during the course of implementation…New routes, nodes and aspects may be considered for inclusion in future by mutual agreement,” reads the document.

Under the plan, the two countries agreed to explore multi-level cooperation mechanisms and strengthen policy coordination, including their own financial reforms and opening up, besides innovating financial products and services to control financial risks.

The two sides agreed to establish and improve cross-border credit system and financial services, strengthen currency swap arrangements and establish a bilateral payment and settlement system.

Published in Dawn, December 19th, 2017

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Price bombs
Updated 18 Jun, 2024

Price bombs

It just wants to take the easy route and enjoy the ride for however long it is in power.
Palestine’s plight
Updated 17 Jun, 2024

Palestine’s plight

While the faithful across the world are celebrating with their families, thousands of Palestinian children have either been orphaned, or themselves been killed by the Israeli aggressors.
Profiting off denied visas
17 Jun, 2024

Profiting off denied visas

IT is no secret that visa applications to the UK and Schengen countries come at a high cost. But recent published...
After the deluge
Updated 16 Jun, 2024

After the deluge

There was a lack of mental fortitude in the loss against India while against US, the team lost all control and displayed a lack of cohesion and synergy.
Fugue state
16 Jun, 2024

Fugue state

WITH its founder in jail these days, it seems nearly impossible to figure out what the PTI actually wants. On one...
Sindh budget
16 Jun, 2024

Sindh budget

SINDH’S Rs3.06tr budget for the upcoming financial year is a combination of populist interventions, attempts to...