China-Pakistan Relations - Economic Relations

Economic Relations

See also: China – Pakistan Free Trade Agreement

Economic trade between Pakistan and China is increasing at a rapid pace and a free trade agreement has recently been signed. Military and technological transactions continue to dominate the economic relationship between the two nations, although in recent years China has pledged to vastly increase their investment in Pakistan's economy and infrastructure. Among other things, China has been helping to develop Pakistan's infrastructure through the building of power plants, roads and communication nodes. Current trade between both countries is at $9 billion, making China the second largest trade partner of Pakistan.

Both countries are keen on strengthening the economic ties between the two, and have promised to 'propel' cross-border trade. This has led to investment in Pakistan's nascent financial and energy sectors, amidst a surge of Chinese investment designed to strengthen ties. Pakistan has in turn been granted free trade zones in China.

The economic relationship between Pakistan and China is composed primarily of Chinese investment in Pakistani interests. China's increasing economic clout has enabled a wide variety of projects to be sponsored in Pakistan through Chinese credit. Pakistani investment in China is also encouraged, and cross-border trade remains fluid.

In 2011 China Kingho Group canceled a $19 billion mining deal because of security concerns.

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