The government is considered a proposal for replacing US Dollar with Chinese Yuan for Pak-China trade. This was announced by the Minister for Planning and Development Ahsan Iqbal on Monday while talking to a journalist after the formal launch of the Long Term Plan (LTP) for the China-Pakistan Economic Corridor (CPEC) 2017.
The launching ceremony was also attended by the newly-appointed Chinese Ambassador Yao Jing and officials of the provincial governments.
Upon asking Mr. Ahsan Iqbal, whether the Chinese Yuan (or Renminbi as it is officially called in China) is allowed to be used in Pakistan, he said that the currency would be used within the country. However, he added that China wishes that it should only be used for bilateral trade.
We are examining the use of RMB instead of the US dollar for trade between the two countries. The use of RMB was not against the interest of Pakistan, rather it would benefit the country. – Ahsan Iqbal
China-Pakistan Economic Corridor
The minister also cleared some misconceptions that existed recently. He clarified that there’s no truth to reports of China not investing further in the CPEC project. He confirmed that the project is in process of conducting feasibility studies and their scrutiny, as it did with the first phase of investments.
He also explained that all the projects, identified and committed by both sides, had to go through codal formalities after which they would be implemented.
Read Also: JCC Approves CPEC Long Term Plan
Long-Term Investment Document (LPT)
The 26-page document briefly covers the seven broad areas of cooperation in which both the sides have to contribute to each other in three phases:
- first ending 2020
- followed by another in 2025
- then completion in 2030.
The area of cooperation between the two countries include:
- trade and industrial parks
- agricultural development and poverty alleviation
- people’s livelihood and exchange programmes
- financial cooperation.
It’s stated in the LTP document that:
The plan would be adjusted based on the 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.
As per the plan, both countries agreed to go with multi-levels of cooperation mechanisms and strengthen policy coordination, which also includes their own financial reforms and opening up, along with innovating financial products and services to control financial risks.
They also agreed to establish as well as improve the cross-border credit system and financial services, strengthening the currency-change arrangements and establish a bilateral payment and settlement system.