KARACHI, Dec 18: China will install a nuclear reactor at the Chashma-II nuclear power plant early next year, officials accompanying Prime Minister Shaukat Aziz during his visit to China told Dawn on Saturday.

They added that there was initially some concern in the Chinese government following the disclosure about Dr A.Q. Khan's involvement in the black market of nuclear arsenal.

"But their misgivings have been allayed and they are now very comfortable with the command and control system of Pakistan's nuclear arms. They see it as an individual act for which the state is not responsible," officials added.

Emphasising that Pakistan's nuclear programme was for peaceful purposes and was in line with the guidelines of the International Atomic Energy Agency (IAEA), they pointed out that China was a responsible nuclear power state and could never be involved in proliferation of nuclear arms.

Meanwhile, Prime Minister Shaukat Aziz flew back to the country on Saturday, concluding his four-day visit to China. Talking to newsmen aboard a special PIA plane, he said that China had agreed to establish large regional manufacturing bases in Pakistan.

"Previously, the economic relationship between China and Pakistan was based on the donor-recipient model. Now our ties have upgraded to partnership level."

The prime minister, who spent four hectic days in Beijing and Shanghai, presided over the signing of two contracts on Saturday morning.

"A $15 million contract was signed between ZTE, a leading Chinese IT and telecoms company, and the Pakistan Software Export Board. Under the contract, ZTE will manufacture telecommunications goods in Pakistan and export them as Pakistani goods. It will also set up a research centre in Pakistan," he said.

He added that another contract was signed between a private Pakistani company and Chinese firm for the manufacture of kitchen products.

Pakistan had engaged the private sector of China for the first time in the history of Sino-Pakistan ties, he said, adding that their response was enormous.

Mr Aziz said that one of the objectives of his visit was to assuage the apprehensions of the Chinese leadership about the security of their personnel working in Pakistan following the terrorist incident in which two Chinese engineers lost their lives.

"We feared that Chinese businessmen might scale down their presence in Pakistan. But we were pleasantly surprised to notice that these Chinese state enterprises were even more interested in investing in Pakistan," he said.

The prime minister informed the newsmen that the tourism minister had stayed back in China where he would seek to enhance border trade between Pakistan and the western part of China. He added that PIA would bring down fare to promote tourism between the two countries.

Answering a question, he said he did not care if some countries were vexed by growing Sino-Pakistan collaboration.