Pakistan, China in $1.6 billion currency swap deal to boost trade

Pakistan and China have concluded a 10-billion yuan ($1.58-billion) currency swap deal among six multi-billion dollar pacts aimed at boosting bilateral relations at a time when Pakistan's ties with the United States are at the worst.

The People's Bank of China and Pakistan's central bank, the State bank of Pakistan signed the currency swap deal.

The two all-weather allies signed agreements to upgrade the strategic Karakoram Highway and build a power plant, among others.

The agreements were signed during the visit of State Councilor Dai Bingguo, China's top diplomat, to Islamabad.

China, meanwhile, is also reported to be planning to build a rail line connecting Pakistan and is offering 5-year tax exemption to companies operating in Kashgar region, which borders Pakistan and Horgos on the Chinese border with Kazakhstan, in order to create the necessary economic infrastructure to support the rail project.

This way Beijing also hopes to wean away minority Muslim community from separatist leaders fighting to build an independent East Turkmenistan nation.