ISLAMABAD - Finance Minister Mohammad Ishaq Dar has said that Pakistan and China have greatly expanded the economic dimension of their relationship as a key priority.

The China-Pakistan Economic Corridor (CPEC) was a flagship initiative in this regard which would speed up economic cooperation and connectivity, he said in an interview with CCTV NEWS (China).

“We have several institutional mechanisms in place such as Pakistan-China FTA and the Pakistan Joint Economic Committee as well, which would boost trade and investment in the years to come.”

Ishaq Dar said that two countries had upgraded their strategic partnership to an “All-Weather Strategic Cooperative Partnership”, formalized in the joint statement issued during the visit of Chinese President Xi Jinping’s to Pakistan.

The political leadership-level interaction had increased, which would of course further deepen this relationship, he remarked.

Highlighting the significance of Asian Infrastructure and Investment Bank (AIIB), the minister said that the bank would provide financing support to developing countries in Asia, including Pakistan, for infrastructure development in order to promote regional connectivity.

“We believe that the bank will be an important platform to convert the abundant savings available in the region into investment to help regional economies to achieve sustainable and rapid development thereby contributing to the world economy,” he added.

The minister said that Pakistan had been supporting the initiative right from the initial announcement for the establishment of AIIB. The bank, he said, would provide additional financing to support the establishment of infrastructure projects, including construction of roads, dams, power projects etc.

He expected that the bank would cooperate with the existing multilateral development banks by providing co-financing for the development of infrastructure projects in the member countries.

However, he said that the bank would also aim to be leaner and faster than the existing institutions and it would provide some healthy competition.

The AIIB, he added, would distinguish itself from other multilateral development banks (MDB) like the World Bank (WB) and the Asian Development Bank (ADB) because MDBs major focus was on poverty reduction while the AIIB would focus on infrastructure development and regional connectivity.

Ishaq Dar said, “A regional bank provides an excellent framework for decisions about projects and financing, particularly those with cross-border implications at regional level.”

Pakistan, he said, had always extended support to China at regional and international fora.

“We believe this is another of China’s sincere efforts to helpout developing countries that are left out of the race for economic development otherwise due to lack of support from international financial institutions,” he added.

He said the banks, which had been previously shouldering responsibilities for lending, were already overburdened and therefore, there had to be some new institution that could come in handy at this critical juncture. Infrastructure development and poverty alleviation was needed for nations like Pakistan in Asia to ward-off the dangers of extremism and “I think AIIB is a hope for all of us in Asia,” he noted.

Replying to a question about China-Pakistan Friendship Year, Dar said that Pakistan-China friendship was all-weather and time-tested.

“It is an evergreen relationship that has its roots in the hearts and minds of the people of Pakistan and China. It has been the constant endeavour of our government to add more depth and breadth to this all-important relationship,” he added.

As strategic partners, he said, Pakistan and China had always enjoyed excellent cooperation across a diverse range of areas and sectors.

However, he said, “Our two governments have placed a special emphasis on enlarging the economic footprint of this relationship.

We believe that the peoples of both countries should enjoy the fruits of this special relationship.”

As a result, he added, both the countries were cooperating on a number of people-centric projects.

The highlight of these projects, of course, was the China-Pakistan Economic Corridor (CPEC), which “we regard as a game changer for our countries as well as the region at large,” he said.

Dar said that the Corridor and its related projects would deliver jobs and prosperity to millions of people in both countries.

Replying to another question regarding Chinese President’s visit to Pakistan in April this year, he said this was President Xi Jinping’s first visit after assuming office in March 2013 and the first by a Chinese President since November 2006.

“This visit was the hallmark of “Pakistan-China Year of Friendly Exchanges: 2015”.

The highlight of the visit, he said, was the signing of over 50 agreements/ memorandums of understanding relating to key development projects in infrastructure, energy and communication sectors, under the umbrella of the China-Pakistan Economic Corridor (CPEC) in the governmental and private sector.

Important agreements relating to areas of cooperation outside the CPEC were also concluded, which would go a long way in changing the destiny of the people of the two countries, he added.

Ishaq Dar expected that the development of CPEC would on average reduce distance of 6000 km for China, approximately on average it takes 45 days for ship starting from the Middle East or Africa to reach Chinese ports and vice versa in addition to local transportation.

“In comparison it would take around 10 days to reach Gwadar Port which will have commercial importance for the economies by cutting time, distance and cost. Further it also provides risk management opportunities.”

Empirical analysis of other regional examples, especially in South East Asia, he said, suggested that multiple ports operating in regional countries had led to trade volume expansion and not contraction for the early players in the business.

The new ports in other parts of the world actually became new nodes for trade activity opening up those regions for international trade which were hitherto closed off or inaccessible, he said.

In addition, he said, the existing ports had their own core competencies on the basis of which they were providing their unique value propositions.

“The transshipment business can also open new opportunities that will arise by reducing the transportation cycle costs and by investing in the freight forwarding and transshipment opportunities in Gwadar which shall be beneficial for Pakistan, China and other land locked central Asian states,” he added.

Competitive cooperation in such a manner, he said, “provides financial incentive to the participants, helps in changing behaviours, removes discontentment / disparity and creation of jobs leading to peace, development, prosperity and harmony.”

“History is also witness to the fact that trade on the Silk Road was a significant factor in the development of the civilizations of China, the Indian subcontinent, Persia, Europe, the Horn of Africa and Arabia; by opening long-distance political and economic relations between the civilizations. The main traders during antiquity were the Chinese, Persians, Somalis, Greeks, Syrians, Romans, Armenians, Indians, and Bactrians, and from the 5th to the 8th century the Sogdians,” he added.