South Asian Business news and information

For many years, China has remained as the closest friend of Pakistan. Both of them have a common rival in Asia- India. Well, things are changing and China is becoming close to India because of new economic realities. Chinese decision makers have realized that India is a very attractive market for Chinese companies and it is foolish to waste this opportunity because of its friendship with Pakistan. Of course, Chinese leaders do not want to put their friendship with Pakistan at risk. Pakistan is an attractive market for China too. So, China and Pakistan have signed a historical free trade deal.

People's Daily Online reported:

China and Pakistan signed a free trade agreement (FTA) on Friday, which is projected to triple the current bilateral trade to reach 15 billion U.S. dollars within five years.

Under the agreement, China and Pakistan will begin to reduce or eliminate tariffs of all products in two phases.

Besides liberalization of trade in goods, the agreement also covers investments, including investment promotion and protection, treatment of investment, expropriation, compensation for damages and losses and dispute settlement.

This is indeed a historical agreement. China is also interested to sign a similar agreement with India but Indian politicians and business leaders are not ready yet. It's sad to see that politics takes the upper hand in Asia at the expense of economic interest.