Bilaterally, Pakistan and China have taken several steps to upgrade their economic and trade ties.

We have already completed the first part of our Free Trade Agreement (FTA), which became operational on January 1, 2006.

It is called the Early Harvest Programme.

Under this programme, major export commodities will enjoy tariff-free access in the Chinese market within two years.

Similarly, Chinese machinery and chemicals, and other products will enjoy zero tariffs in Pakistan.

This will contribute to growth of mutually beneficial trade between the two countries.

Our industrial expansion, especially in textiles, cement and manufacturing is witnessing a huge influx of Chinese machinery and plants as well as industry-related raw materials.

This is being reflected in our trade figures, which have experienced rapid growth and stand at more than US$ 4.25 billion. China's exports to Pakistan have more than doubled over the past 3 years.

We are also promoting exports of Pakistani Basmati rice and fruits such as mangoes and citrus. This produce is of the highest quality.

Both sides are determined to pursue and complete the FTA hopefully by the end of this year.

Our bilateral FTA will be comprehensive and should enable the private sectors in both countries to develop a win-win scenario.

We also intend to develop our over land trade. For this purpose, we are going to start work on the upgrade of the Karakorum Highway in Pakistan in the near future.

President Musharraf during his visit to China in February 2006, offered Pakistan's ports and highways to serve as a trade, transit and energy corridor to China.

He spoke at length about the geo-economic relevance of Pakistan to serve as an economic, energy and trade hub.

Both sides agreed to start the technical studies needed to make this vision a reality. It essentially means oil and gas pipelines and a possible rail link between the two countries to complement the road link.

Pakistan provides the shortest routes for trade and energy transactions as it borders the resource-rich Gulf and Central Asia, and provides the natural corridor to connect the Eurasian hinterland with South and East Asia, as well as the Indian Ocean.

Both sides also agreed to develop energy co-operation including hydro-power, fossil fuels, renewable sources and coal-fired power, as well as nuclear energy.

We have taken steps to boost co-operation by convening a Pakistan-China Energy Forum in Islamabad in April 2006. More than 30 projects were identified for partnerships and joint ventures.

We are indebted to China for its invaluable assistance in the economic development of Pakistan.

Scores of Chinese companies are operating in Pakistan.

Major economic projects including infrastructure development have been completed with Chinese assistance.

More than 3,000 Chinese are working on the development projects, including the new Sea Port of Gwadar, the Saindak Gold and Copper, the Duddar Zinc and Lead, as well as a large number of oil and gas projects.

With Chinese assistance, Pakistan's second nuclear power plant was established and the third nuclear power plant is now under construction at Chashma.

While economic co-operation in public sectors is thriving, we wish to develop private sector interaction.

The Chinese private sector has developed fast and assumed an important role in pushing economic growth forward.

Interaction among the private sector will create new opportunities for economic co-operation.

The main areas for Chinese investments in Pakistan are as follows:

I) Industries, especially the textile, electronic, home appliance and engineering industries.

II) Chemicals and petrochemicals.

III) Energy - all sectors.

IV) Agriculture and fisheries, as well as food processing.

V) Information technology (IT) and telecom

VI) Mining and mineral development.

VII) Participation in Pakistan's privatization programme in oil and gas, telecom and other sectors such as steel.

Pakistan was ranked as one of the top 10 reformers in a recent study conducted by the World Bank and the International Finance Corporation (IFC).

The World Bank and IFC Report on "Doing Business in 2006" ranked Pakistan 60th in terms of business environment, out of a total of 155 countries and regions.

We would be happy to assist Chinese enterprises to explore business horizons in Pakistan.

Many Chinese businesses are now actively engaged in Pakistan. Pakistani businesses will also actively explore Chinese markets and economic opportunities. We must team up in a big way, especially in service sectors such as banking, IT and healthcare, not just in the engineering and telecom industries.

We believe by forging close co-operation between private and State-owned enterprises of both countries, we will be able to further cement the traditional friendship of Pakistan and China.