Chinese Premier Wen Jiabao, speaking yesterday on the eve of a visit to Pakistan, said trade between China and the South Asian nation should be expanded.
Wen gave an interview to the Associated Press of Pakistan before setting off on trip to Pakistan, Bangladesh, Sri Lanka and India.
"The Chinese government will continue to encourage and support the private sectors in the two countries, invest in each other and realize mutual benefits," Wen said.
The Chinese premier said he hopes the two counries will take measures to expand trade and make use of their strong compatibilities in advancing discussions on the establishment of a free- trade area.
"China and South Asian countries are close neighbors and developing countries. Pursuing peace and stability and promoting development are our common aspiration," We said.
"We are willing to enhance good-neighbor relations with South Asian and other Asian countries, deepen mutually beneficial cooperation and join hands to promote world peace and development," he said.
In Islamabad, a Pakistani official said China may invest as much as US$350 million in the next five years in Pakistani development projects as the two countries seek to boost economic ties.
China and Pakistan are expected to sign 19 investment agreements during Wen's three-day visit to Pakistan, Waseem Haqqie, the chairman of Pakistan's Board of Investment, told reporters.
The agreements include China's assistance in building a US$600 million nuclear power plant at Chashma to help meet the South Asian country's rising demand for energy. China may invest as much as US$150 million in the project.
China will also help deepen Pakistan's third port at Gwadar with an investment of as much as US$100 million, Haqqie said.
In the 1990s, China helped Pakistan build the country's first 300-megawatt nuclear power plant at Chashma. China also helped Pakistan build its third port at Gwadar. The US$250 million port was completed earlier this year.
The visit by the Chinese premier will "focus on economic and business relations," Abdul Hafeez Shaikh, Pakistan's asset-sale and investment minister, told reporters.
Trade between the two countries totaled US$2.5 billion in Pakistan's fiscal year ended June 30, 2004. Pakistan exports cotton yarn, cotton fabric and chemicals, while it imports mostly machinery.
Also yesterday, the Pakistani Defense Ministry said that Pakistan will buy four frigates from China.
Senior defense officials from Pakistan and China signed the deal for the warships, long-sought by Pakistan, in Rawalpindi, a city near the capital Islamabad, the ministry said in a statement.
"These F-22P frigates will be equipped with helicopters specially designed for anti-submarine warfare, surface-to-surface and surface-to-air missiles along with numerous associated self-defense systems," the statement said.
It said China will sell the boats on a "transfer of technology" basis. A navy official said on condition of anonymity that the term means that some of the ships will be made in Pakistan.
A date for delivery of the ships was not given, nor did the ministry say how much Pakistan will pay for the ships.
Admiral Shahid Karimullah, the chief of the Pakistan Navy, said last year that Pakistan was seeking a US$750 million loan from China to pay for the frigates.