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