BEIJING, Dec 15: Pakistan and China on Wednesday signed seven agreements in trade, communications and energy sectors and drew up a framework for greater economic cooperation.

Prime Minister Shaukat Aziz held one-to-one talks with Premier of the State Council Wen Jiabao at the Great Hall of the People. The meeting lasted 60 minutes. Mr Aziz later attended a banquet hosted by his Chinese counterpart.

Briefing newsmen on the agreements, Foreign Secretary Riaz Khokhar said the trade agreements would take the existing economic relationship between the two countries to a higher level. At present, China's investment in Pakistan stands at $4 billion.

A general framework agreement signed by the two countries relates to utilization of $500 million preferential buyers' credit. Under the accord, loans would be extended to Chinese companies for setting up projects in Pakistan. It was signed by Adviser to the Prime Minister on Finance Dr Salman Shah and the president of the Exim Bank of China.

Mr Khokhar said that Pakistan and China also exchanged letters for the utilization of $150 million from the preferential buyers' credit for the Chashma-II project. The foreign secretary said a memorandum of understanding was signed on a protocol on Preferential Trade Agreement.

The protocol seeks to expand the preferential tariff list. Under the protocol, a joint study for the establishment of a free trade agreement would be carried out, he explained.

Mr Khokhar said that an MoU on cooperation in oil and gas exploration was also signed. Chinese business leaders have shown great interest in the Saindak Gold and Copper Project.

Under another MoU signed on Wednesday, the production of gold and copper would be increased. The project would fetch an investment of about $20 million or thereabouts, he said.

The foreign secretary said that under an agreement, Pakistan and China would jointly set up agro-based industries in export-processing zones. He expressed the hope that the agreement would give a much-needed boost to the fisheries sector and fruit and vegetable processing. He said that another protocol signed by the two countries gave an assistance grant of RMB 50 million to Pakistan.

Prime Minister Aziz also held talks with chief executives of various Chinese companies engaged in development projects in Pakistan. He met the top-ranking officials of the China Enterprises Confederation, China State Construction Engineering Corporation, China National Machinery and Equipment Group, Shenhua Group, China Harbour and Engineering Corporation, Haier Group and China Metallurgical Construction Corporation, he said.

The foreign secretary said that Mr Aziz and Mr Wen decided that a joint economic commission would meet as soon as possible. They also decided to establish a Pakistan-China joint investment company.

The prime minister suggested the setting up of a joint infrastructure development fund with equal contributions from Pakistan and China. The prime minister promised to set up a China industrial zone in Pakistan which would give China an easier access to markets in Africa and the Middle East. He accorded the market economy status to China.

According to the foreign secretary, Mr Wen appreciated the suggestions put forward by Mr Aziz, especially the one about the grant of market economy status. Mr Wen announced a couple of measures to enhance interaction between the people of the two countries.

He promised that China would send 100 students to Pakistan. Similarly, 30 students from Pakistan would come to China on scholarship. Mr Wen also said that a Chinese language centre would be established in Pakistan, he said.

According to the foreign secretary, Mr Aziz briefed Mr Wen about the current status of the ongoing dialogue between India and Pakistan. Mr Wen spoke about his discussions with former Indian prime minister Atal Behari Vajpayee and the present Premier Manmohan Singh.

He told Mr Aziz that while relations between China and India, especially in the economic sector, were improving, the improvement would never come at the expense of ties with Pakistan.

Mr Khokhar said the two sides reviewed progress on the $40 million Gwadar port project. They signed an agreement for the dredging of the port channel up to the depth of 14.7 metres. The first phase of the project, which has almost been completed, will be inaugurated early next year during the Chinese leader's visit to Pakistan.

The Gwadar port would emerge as a major hub of economic activities in the region, facilitating imports and exports of not only Pakistan but also of China. The Chinese side agreed to restart work on the Gomal Zam dam which had come to a halt following the killing of a Chinese engineer. They were informed that security around the dam had been tightened, Mr Khokhar said.

HOUSING PROJECT: Pakistan and China signed a contract for a housing project on the Multan Road in Lahore, which would be completed at a cost of $110 million, adds APP.