SHANGHAI, Dec 17: Prime Minister Shaukat Aziz on Friday told the Chinese investors that Pakistan being an open economy offers great prospects for investment.

Addressing an audience of over 800 Chinese entrepreneurs he said Pakistan is an attractive investment destination, and textiles, engineering, electronics and housing sectors offer great prospects in this regard.

"Let me tell you that Pakistanis know textiles very well. We have the raw material for textiles. Following the implementation of WTO regulations, when textiles quotas go, Pakistan, like China, is poised to seize a greater share of world textiles," he said.

Furthermore, he said, Pakistan has a huge agro-based industry and "we produce a whole range of agricultural commodities." But we don't have the expertise in food-processing, and with the Chinese assistance, we can do very well in this sector.

Similarly, information technology in Pakistan is fast gaining ground, he said. "I admit that we had a late start as compared to India, but cost of software development in certainly lower in Pakistan."

He said: "I know that Chinese investors wouldn't pour money into Pakistan simply because of our time-tested friendship, which we may otherwise greatly value. Chinese investors would come to Pakistan only if returns on investment are high enough."

He said that there are various reasons why Chinese businessmen should invest in Pakistan. "One, political relations between Pakistan and China have been traditionally rock-solid.

This is an important consideration when a businessman is considering investing his money in a country. Two, the macro-economic situation in Pakistan has become healthy over the past five years.

So investors should know that they would be putting their money in a buoyant economy. Three, Pakistan is a country of 150 million people. They are a huge, largely untapped market.

Four, Pakistan is situated on the crossroads of South Asia, Central Asia, Africa and the Middle East. In this sense, it offers easy access to these markets of over 300 million people.

It can also be used as a regional manufacturing base. Fifth, structural economic reforms have been carried out in Pakistan and now a foreign businessman has more investment options. Six, Pakistan has a large and relatively inexpensive workforce," he explained.

Mr Aziz lavished praise on Shanghai and on its transformation from a backward city into a modern industrial giant. He said: "Never in human history has so much been achieved in such a short time."

Earlier, the chairman of the China Enterprises Confederation, Chen Jinhua, talked about the morning meeting between businessmen and the Prime Minister. "Mr Aziz is a financial expert and he has been doing his utmost to solidify Sino-Pakistan relations, which are higher than mountains and deeper than oceans," said Mr Chen, who is widely regarded as the ¡°economic Czar of China."

"China has always given a favoured taxation system to Pakistani products. On Thursday, the two countries signed a contract for the establishment of the Free Trade Agreement, which, to my mind, is a new chapter in Sino-Pakistan ties," he said.

The vice mayor of Shanghai recalled how this impoverished port city had become a commercial and industrial hub over the years. The chairman of the Board of Investment, Waseem Haqqie, and the Minister for Industries, Jahangir Tareen, also spoke.