Financial institutions have a key role to play
markets mean that international banks can help both the buyers and the suppliers.
Additionally, with China’s central bank relaxing the rules on renminbi liquidity management in January this year to facilitate its cross-border usage and the Pakistani central bank’s reiteration in the same month to denominate trade and financing transactions in renminbi will increase at a sharp pace.
As Xi said, “Finance is the lifeblood of modern economy. Only when the blood circulates smoothly can one grow”. The projected success of the Belt and Road and CPEC initiatives, however, will depend on the creation of a robust and sustainable financial system that embodies strong risk management, innovative models of investment and financing and which acts as a bridge between government and private capital. No country can become a thriving economy on the back of trade without the active backing of an equally robust and thriving banking sector facilitating that trade.
Both China and Pakistan are well-regulated economies. So Chinese businesses need guidance to understand Pakistan’s regulations, processes and procedures and vice versa. The financial institutions will have a key role to play by assisting and adding value for their clients in carrying out basic banking activities, ranging from helping the clients to choose the right investment model, providing cash management, working capital and employee banking solutions to fulfilling more complex banking needs such as strategic financing, as well as assisting with mergers and acquisitions.
And Pakistan’s banking and financial sector will play a leading role in successfully meeting the challenges of global trade. Innovation empowers growth and the financial sector is poised to take this new road of innovative and advanced financial journey.
Delivering a keynote speech to the Belt and Road Forum for International Cooperation in Beijing last year, Xi quoted an ancient Chinese saying: “A long journey can be completed only by taking one step at a time.” We are taking those steps to calibrate the changing winds into our business models to capitalize on the CPEC opportunities.