ISLAMABAD, Nov. 23 (Xinhua) -- Fazal-ur-Rahman, director for East Asia of the Institute of Strategic Studies Islamabad (ISSI), a think-tank funded by the Pakistani government, has said in an exclusive interview with Xinhua that the enhanced Sino-Pakistani economic and trade link will further consolidate and upgrade their time-tested friendly relations.

    During a comparatively long period since the establishment of Sino-Pakistani diplomatic relations 55 years ago, the focus of their relations has mainly been put on political, diplomatic and defense cooperation, "with no substantive economic interaction between the two countries," said Rahman, a specialist on Sino-Pakistani relations.

    After entering into the 21st century, the two countries came torealize the missing economic dimension in their relationship and started working on improving the bilateral economic and trade relations, and "now we have come a long way in promoting our bilateral economic relations," according to the 47-year-old scholar.

    Economic cooperation, covering areas from trade, energy, transportation, agriculture to infrastructure projects, continues to remain hot topics during high-level talks between the two countries in recent years. There is a continuous increase in activities in trade, investments and development projects between China and Pakistan.     

    TRADE

    During the past five years, the Sino-Pakistani annual bilateral trade volume has registered an average growth rate of 30 percent, and in 2005, the annual volume amounted to over 4.2 billion U.S. dollars, according to figures released by the Chinese Ministry of Commerce.

    Rahman said that according to sources, the 2006 volume of bilateral trade between China and Pakistan is estimated to reach 5 billion dollars.

    Official figures show that the bilateral trade volume reached 3.75 billion U.S. dollars during the period of January to September 2006, and that so far China has become Pakistan's third biggest trading partner.

    China and Pakistan have come near to sign a free trade agreement, which Rahman said will facilitate expansion in trade between the two countries.

    Pakistan has been a major market of contract engineering work for China in South Asia, and there has been an annual average of 500 million dollars' worth of contracted volume of engineering work and labor between China and Pakistan, Chinese officials said.

    Up to the end of September 2006, the total contracted volume ofcontract engineering work and labor that China so far has gained in Pakistan amounted to 8.64 billion dollars.

    Through the Early Harvest Program that has become operational since Jan. 1, 2006, Pakistan and China have reduced to zero the tariff rate of a considerable amount of items from both countries.