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China has opened its first overseas joint economic zone in Pakistan in a bid to accelerate domestic enterprises' overseas investment.

 

The joint economic zone, covering 1.03 square kilometers at Manga Mandi, 40 kilometers south of Lahore was established by China's leading home appliance maker Haier and Pakistani firm Ruba.

 

Haier has a 55 percent stake in the joint venture while Ruba holds the remainder in what will be Pakistan's largest home appliance production base and the first Sino-Pakistan joint venture of its kind.

 

"China attaches great importance to economic relations with Pakistan. Investment in Pakistan benefits both nations," Chinese President Hu Jintao said after inaugurating the Haier-Ruba Economic Zone.

 

The two sides are expected to invest around US$250 million in the construction of the zone over the next five years.

 

The firms hope that a number of domestic electrical appliance firms, ranging from manufacturing to distribution, will be attracted to the zone. "This project symbolizes the widening and deepening of economic relations between China and Pakistan," Hu said.

 

The establishment of the economic zone is expected to further boost economic and technological cooperation between the countries, China's commerce ministry said in a statement.

 

The ministry said a number of Chinese enterprises were interested in investing in the zone and the Pakistani side had agreed to provide services to these enterprises in particular small and medium-sized firms to facilitate their investment.

 

As well as manufacturing Chinese enterprises will also assist Pakistan with staff training and providing technological assistance.

 

The commerce ministry said it was encouraging domestic enterprises to develop similar cooperation zones overseas. Such zones, which could be built by a single company or a group of firms, would play a key role in helping Chinese small and medium-sized enterprises invest abroad, said an unnamed ministry official.

 

He said the Chinese government would "fully support them" and expects more such zones to be established in other countries in the next three to five years. The inauguration of the joint venture followed last week's signing of a Free Trade Agreement (FTA) between China and Pakistan. The FTA boosts bilateral trade and investment by scrapping tariffs on hundreds of items traded between the countries.

 

(China Daily November 28, 2006)