KARACHI, Nov 25: Money is like blood circulating in any economy. Without proper financial facilitation, the true potential of Pakistan-China trade relation cannot be realised.

China has no banking representation in Pakistan, while National Bank of Pakistan has a representative office in that country but it does not fulfill the requirement of a bank.

In February 2006, Habib Bank announced to acquire 20 per cent share of leading Chinese bank in Xinjiang province. The bank signed a memorandum of understanding with Urumqi City Commercial Bank (UCCB) in Beijing to undertake a review for acquiring up to 20 per cent shares in UCCB’s operations in China. However, the deal is yet to be finalised.

Pakistan and China singed 18 agreements on Friday to triple the bilateral trade to $15 billion within five years, but there was no mention of banking services that would be required to facilitate the targeted trade.

Bankers said that all the trading activities involved banking services and foreign banks would get all benefits of the Pakistan-China trade. Local Pakistani banks which have strengthened their financial position and are making very high profits still reluctant to expand their operation in friendly countries like China.

Despite all efforts Pakistan and Indian have failed to develop trade relations in accordance with the available opportunities and potential and the main reason was the absence of banking relations.

Former State Bank Governor Dr Ishrat Husain took the initiative and the Reserve Bank of India also agreed to allow opening of bank branches in the two counties on reciprocal basis. But the historical unfriendly relation between the two countries proved obstacle in the way of developing banking relations.

However, there is no such obstacle between China and Pakistan. Business community believes that trade could not flourish until the two countries develop banking relations.

On the other hand, there is no move from Chinese private or government level to initiate banking relation. “There is no move from any Chinese bank to open its operation in Pakistan,” said a State Bank official.