NBP ready to facilitate Chinese firms in relocating industrial units to Pakistan

BEIJING: The National Bank of Pakistan (NBP) is ready to facilitate the Chinese companies relocate their businesses and industrial units to Pakistan under the China-Pakistan Economic Corridor (CPEC) framework, a bank official said.

“As we are about to enter into the second phase of CPEC, which is more focused on industrial cooperation, we are again ready to facilitate the Chinese companies to relocate in Pakistan,” NBP chief representative in China Shaikh Muhammad Shariq said, while addressing the Pakistan-China Economic and Business Forum.

The forum was recently organised by the Pakistan Embassy, Beijing, Beijing Nordic Exhibition Co, Ltd and Shanghai Huiguan Culture Media Co, Ltd.

Shariq said that the NBP is enjoying a leading position in corporate and agriculture financing in the banking sector of Pakistan and with a large international presence, the bank can also facilitate trade and business.

In the first phase of CPEC, billions of dollars were invested in the infrastructure, power generation and Gwadar Port. The amount was in different modes, including investment and financing. The financing was availed through different institutions both from Pakistan and China.

“The NBP was a part of most of these projects either in the form of consortium partner or lead arranger,” he added.

The bank had already established a strong banking partnership with major Chinese financial institutions to facilitate trade and investment under CPEC and Belt and Road Initiative (BRI) not only in Pakistan but in all the places where it has presence.

The NBP chief representative said to facilitate bilateral trade and facilitate smooth flow of funds between China and Pakistan, the central banks of both the countries have signed the currency swap arrangement in 2011, amounting to 10 billion yuan and Rs140 billion.

“As a result of this, bilateral trade and investment witnessed [a] significant growth, and contributed to further strengthening close and special relationship between the two countries,” he added.

In 2018, the swap was extended for a period of three years, and the size was doubled to 20 billion yuan or Rs351 billion, as China became the largest trading partner, and the bilateral trade increased on a yearly basis. This year, the swap size has increased to 30 billion yuan. This is a textbook example of how China and BRI partner countries can advance cooperation in the financial sector and over renminbi use.

He said financial cooperation is also a major component under the CPEC and both countries explore the establishment of multi-level cooperation mechanisms and strengthen policy coordination.

The two countries also strengthen their own financial reform and opening up, and control financial risks to create a good financial environment for the CPEC, focusing on the regulatory side, financial institutions and financial markets, he added.

Another area of cooperation is among free trade zones and exploring RMB offshore financial business, he said, adding that as a result of this cooperation, ICBC and Bank of China, Karachi branches are providing RMB clearing and settlement services in Pakistan.

“ICBC Karachi branch has also obtained the direct participation qualification of the first cross-border CNY clearing mechanism of Cross-Border Inter-Bank Payments System (CIPS) in South Asia to facilitate and ensure quick and smooth CNY clearing capability to improve bilateral trade,” he added.

He also briefed the audience about the history of the NBP and the provision of commercial banking and related services in Pakistan and overseas.