LAHORE: There is no harm in cementing financial ties with China in the wake of changing relations with the US but concerns of business community and financial experts should be addressed before bringing Chinese Yuan on a par with the US dollar for Sino-Pak trade.
These views were expressed by experts in a Jang Economic Session on 'Chinese Yuan vs US Dollar - impact on economy'. Panellists were Dr Ehsan Malik, Zeeshan Khalil, Maqsood Butt, Lubna Hayat, Asif Baig Mirza and Agha Saidain while the session was hosted by Sikandar Lodhi.
Dr Ehsan Malik said that details of economy are not disclosed in Pakistan. He said textile industry is most important for the country which is facing a severe crisis because of government priorities not owing to Chinese intervention. He said the Chinese initiative is a welcoming after the US threat and there is no need to protest rather efforts should be made to revive the manufacturing sector to avoid future dependence on the US or China. He believed that treating Chinese Yuan on a par with the US dollar is unavoidable.
Zeeshan Khalil said treating Chinese Yuan as trade currency will benefit China more in projects like CPEC. He said Chinese trade and cultural influence is growing in Pakistan with the arrival of Chinese nationals thus increasing risks for local businesses. The currency swap has been made to reduce pressure from US dollar which only benefits China not local importers and exporters and commercial trade will also suffer, he observed.
Maqsood Butt said that trade with China is the only option in the current international situation but Chinese loans on huge markups are a worrisome factor. He said Chinese investors benefit mostly in CPEC even in the shape of employment opportunities which is not good for Pakistan. He said China wants Yuan to be treated on a par with Euro and US dollar and this step will increase the value Chinese Yuan internationally but create a parallel economy in Pakistan.
Lubna Hayat said that the State Bank of Pakistan should impose some conditions on the currency swap, otherwise Pakistan's economic problems will increase. She said the Chinese currency is being used in 60 countries and RMB trade can be beneficial as Chinese economy is dependent on trade. She said Pakistani banks should explore advantages of trade in the Chinese currency.
Asif Baig Mirza said that China has become the second largest economy and Pakistan's economy could not compete with it and if economic growth of China continue on the same pace, it willsurpass US economy soon. He said China wants to establish its financial monopoly by developing an Asian Infrastructure Bank while Chinese Yuan has become fourth strongest currency in the world after US dollar, Euro and Pound Sterling so decision of trade in RMB is good.
Agha Saidain said the Pound Sterling ruled the world after the World War II, which was replaced by US dollar in 1995 and Pakistan became the eighth country which had a currency swap with China after Qatar, UAE and others. He said the currency swap will benefit China and Chinese products will flood Pakistan affecting the local currency (Pakistan Rupee) which needs to be checked and stopped. He said the Chinese currency is now on the third position in the world from its 13th position in 2012 and ventures with a world economic power are beneficial to Pakistan and vital for economic survival.