Govt Considering Use of Yuan Instead of Dollar for Pak-China Trade

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:

  • connectivity
  • energy
  • trade and industrial parks
  • agricultural development and poverty alleviation
  • tourism
  • 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.

Via Dawn

    • its better not to speak on every topic if you don’t have enough knowledge
      using yuan instead of dollar going to benefits pakistan in many ways

      • pak rupees cannot even buy channa – just imagine in 1982 100 rupees of that era was equal to at leat one lac now

          • No madam can you tell how much gold was available in tola in 1980s then compare it with today’s 100 rupees. I just given a rough idea not exactly what have been changed. In 90s gold per tola was around 2000 rupees per tola now its around 50 thousand. Who is stupid today just slap your face.

            • have you been in the 90’s?
              well.. I have!!
              and u stupid gold and rupee are both different things ab mei kaho(being a property dealer)
              bahria town lahore 10 marla plot ki price 1.5 year pehle 23lac rs thi ab 50lac rs hai to rs ki value itni kam ho gayi??? nai bhai ye apki samaj mei nai aaye ga.

              • What a idiotic thoughts any idea there is no money in world which is not having value against gold reserves. Go and read something about dollar value and all other famous currency are valued against oil prices and gold reserves nonsense

  • Probably it’s time to do so, US is opposed to CPEC and we won’t be vulnerable to US sanctions because we won’t be using dollar in our bilateral trade!

      • You never know, The West do things under the context of lies and deception, US probably won’t confront China directly but as long we use dollars we are vulnerable, that’s the advantage US has over the whole world because of dollar being the reserve currency, that’s why US sanctions do such damage against any country!
        China and Russia also conduct bilateral trade in their own currencies bypassing dollar, it comes with many advantages! China along with Russian Federation are carefully building an alternate system independent of Dollar with Petro Yuan being the reserve currency! F.William Engdahl might be helpful in understanding this and why China wants to avoid dollar as much as it can!

    • No it doesn’t work that way. Actually currency values (particularly US dollar) depend on bilateral trade (between all the countries using same currency for their export/import) and our foreign debts. That’s why dollar value is at the peak now.
      If govt use yuan in Pakistan then it value would be volatile just like US dollar because our import (from China) is more than our export. Secondly, in current market scenario, chinese are getting more benefits from pak-china trade. If the situation continues and govt dont talk about equal opportunities for Pakistani exporters than using yuan is worthless

      • Dollar is the reserve currency and the only currency in which oil can be bought as agreed by King Faisal in 1974 when he met with US sec state Henry Kissinger after the Bretton Woods agreement was torn by US President. Dollar is always in high demand because Central banks keep their money in dollars and use dollars to buy oil which the most bought commodity in the world.

        I agree with the argument for trade deficit between Pakistan and China and it should be reduced by giving us access to the Chinese Market, no disagreement about it. The reason why China stresses on using Local currencies is to avoid the effects of US sanctions anytime in the future, Chinese people always think long terms, they do the same with Russia.
        F. William Engdahl explains it in his October Article about Yuan-Ruble Settlement topic, you can read about it from his website, it might help in understanding what I’m talking about.

        • Agreed, “The reason why China stresses on using Local currencies is to avoid the effects of US sanctions anytime in the future”
          I read but i had forgotten this point

          • It’s alright. In case you are interested in this topic.
            William Engdahl has posted a new article titled ” Russia and China Challenge Dollar Domination” where he explains more of this in little detail and why China urges on using local currencies.

  • every country should ban petro dollar. America downfall has begun. Don’t rely on US dollar. Its bigger bubble than Bitcoin.

  • I think its a good step if Pakistan go with it. we will get support of china and Pakistani rupee value increase.

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