President Zardari has reached Beijing on his official visit to China. The visit carries great symbolic as well as substantive value as it is the first official foreign visit being undertaken by Zardari since his election as head of the state on September 6, 2008. The glorious history of more than half a century of Pak-China relations has been marked by frequent, intensive and fruitful interactions and political consultations between the top leaderships of the two countries. The friendly relations established in early 1950s have grown into strategic cooperation covering areas as defence, trade and investment etc. During the last about one and half decade, Pak-China relations have further deepened and expanded with greater focus on trade, investment and joint ventures. Zardari's visit will undoubtedly prove to be a new landmark in relations between the two countries as it is bound to lead towards further consolidating their already existing strong and multi-faceted strategic cooperation. The visit comes at a very crucial moment in view of the deteriorating security situation on the western borders of Pakistan, the sudden spurt in the terrorist attacks inside the country and acute economic crisis faced by Pakistan. It is hoped that President Zardari would discuss these issues with his Chinese counterpart President Hu Jintao in Beijing. Pak-China relationship is unique as there has been always a complete unanimity of views between the two countries on the political and strategic issues related to the region as well as the world. For example, China is a strong supporter of Pakistan's efforts to normalise relations with India through the on-going peace process and composite dialogue. They hold identical views on the need to stabilise the situation in Afghanistan through carrying out reconstruction and development work and providing good governance. China has also greatly appreciated Pakistan's efforts in combating the menace of terrorism. An important feature of Pak-China relations is that the two countries are paying greater attention to the expansion of economic relations, particularly in the areas of trade and investment. For this purpose, Islamabad and Beijing have entered into a number of agreements aimed at increasing the volume of two-way trade and Chinese investment in Pakistan. A Free Trade Agreement (FTA) was signed between the two countries in 2006, which covers trade in goods and investment. The two countries are set to review FTA this year with a view to expand its scope to cover trade in services. In April this year, Pakistan and China signed a 5-year Development Programme on Trade and Economic Cooperation. This programme envisages strategic cooperation between the two countries in trade in services and goods. Through this mechanism the two countries plan to increase the volume of two-way trade up to US$ 15 billion a year. Both are reported to have achieved considerable progress towards reaching an agreement on transit trade. There is also the possibility of Chinese association with the gas pipeline network connecting West and Central Asia with South Asia through Pakistan. Thus, China is poised to become an important actor for promoting Pakistan as a hub of economic and business activity in the trade and energy corridor between China and West Asia. During the last 5 years, China has considerably expanded its economic links with the countries of South Asia. Bilateral trade between China and India has seen phenomenal increase. China is now associated with SAARC as an Observer State. This indicates the nature of China's emerging outlook on its growing bilateral relations with the countries of South Asia. In view of the fact that the two countries are focusing on expanding their bilateral economic relations, it would be pertinent to mention here the impediments that stand in the way of further development of economic cooperation between the two countries. The first impediment is that balance of trade between Pakistan and China is heavily in favour of the latter. Three years ago, Chinese exports to Pakistan amounted to US$ 1.8 billion, while China imported goods from Pakistan to the tune of US$ 575 million only. Now there is considerable improvement but still Chinese exports to Pakistan are much larger than Pakistani exports to China. In 2001, the two-way trade was only US$ 1.4 billion. In 2004, it rose to US$ 3 billion. In 2005, it increased to 4.25 billion. It is hoped that the trade volume between the two countries may reach US$ 8 billion in 2008. But the volume of trade is still very low and balance continues to be in favour of China. Conscious of this gap, the two countries are working on some remedial steps to be taken. It has been suggested that exports from Pakistan can be increased by producing industrial goods in Pakistan through the import of Chinese capital goods/raw materials with zero/reduced tariff. The imbalance in bilateral trade can also be corrected through encouraging Chinese investment and joint ventures. Pakistan has taken some concrete steps to realise this objective. China-specific industrial estates are being set-up in the country. Secondly, Pakistani businessmen have not yet fully grasped the extent of transformation of the Chinese economy from a controlled economy to a market economy. As a result of this change, the private sector of China is driven by profit and is sensitive to investment risks. What is needed, therefore, is the promotion of contacts between the business communities of the two countries. Thirdly, Chinese are very much concerned about the deteriorating law and order situation in Pakistan as it deters Chinese businessmen to invest in the country. Chinese are perturbed about the incidents in which Chinese workers have been kidnapped and killed in Pakistan. Despite these unfortunate incidents, the Chinese remain determined to help Pakistan develop its economy through joint ventures and implementation of development projects. At present Chinese investment in Pakistan stands at US$ 4 billion and 114 development projects are being completed with the Chinese help. It is hoped that Zardari's visit would further cement Pak-China bilateral relations and reinforce strategic partnership between the two countries.