Gilani asks for China energy investment

PM says similar joint ventures can transform Pakistan's economic landscape.

BEIJING: Prime Minister Yousaf Raza Gilani on Thursday called on Chinese firms to invest in Pakistan's energy sector, in a bid to boost a moribund economy hit by massive floods last year and a weak Western investment.

"There is great potential for the participation of Chinese corporations in the development of the energy sector in Pakistan. This includes hydro, thermal and renewable energy," Gilani told a joint business forum in Beijing.

"Joint ventures, with equity participation of Chinese corporations and financial institutions, can transform Pakistan's economic landscape and would certainly prove to be a win-win scenario," the visiting prime minister said.

"I would urge Chinese corporations to focus on Pakistan in their strategic business plans."

Gilani is on the third day of a trip to China that follows the May 2 killing of al Qaeda leader Osama bin Laden by US special forces on Pakistani soil – a raid that has rattled US-Pakistan ties and pushed Islamabad closer to Beijing.

Gilani and his Chinese counterpart Wen Jiabao, whom he met Wednesday, have both made a point of lauding mutual ties, just as Pakistan finds itself under pressure about whether its security services knew where Bin Laden was.

The two countries have growing commercial links – two-way trade totalled $8.7 billion in 2010, up 27.7 percent on-year, according to Chinese data – and have also collaborated extensively in the energy sector.

Only last week, Pakistan opened a nuclear power plant built with China at Chashma in central Punjab province, and said Beijing had been contracted to construct two more reactors to ease energy shortages.

Pakistan, whose crippling power shortages restrict production to around 80 percent of the country's needs, requires such energy deals to boost its economy.

In November 2008, the Islamic republic was rescued from the brink of bankruptcy by a rescue package from the International Monetary Fund that hauled it back from inflation at a 30-year high and fast-depleting reserves.

But the nation's economy is still struggling, with consumer prices high and a budget deficit growing to 5.5 percent of gross domestic product, above a 4.9 percent target for the current fiscal year to June 30.