In this video, we will discuss how the free use of Yuan can be harmful to local business in Pakistan.
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In order to prevent any compromise to its economic sovereignty, Two times in the past, Pakistan refused free use of Chinese Currency Yuan in Gwadar free trade zone under China Pakistan Economic Corridor framework.
You know, China has state wide policy to internationalize Yuan and avoid risks that come with currency exchange, if they use American dollar or the Pakistani Rupee.
Hence, we all know, third time again Chinese officials pressed the same demand one month ago. Continuing with its long standing policy, Pakistani officials turned down the proposal again.
In last one month, In the form of project cancellation and suspension of fund allocations, we all have seen pressure tactics were employed by both China and Pakistan against each other.
But as expected, China was able to successfully arm twist Pakistan to force its political leadership to consider the long standing policy change.
No wonder, While unveiling long term plan of China Pakistan Economic corridor, As per Minister for Planning and Development of Pakistan now the use of Chinese currency in Gwadar port has suddenly turned beneficial to Pakistani economy. Interestingly, they no longer want to protect economic sovereignty.
Obviously, all the issues in between China and Pakistan are resolved now, and things are progressing as they should have. Hence, You can expect the result of this so called FIXED consideration.
Now it appears just a matter of time for Yuan to be used freely anywhere in Gwadar, so that Chinese residents and workers can pay Pakistani shop keepers in Yuan and save on paying the exchange charges.
Payment from one Chinese company or agency to another will also happen in Yuan, thus saving foreign reserves.
In Simple words, all the earning from Gwadar port can easily be sent back to China in Yuan, avoiding fluctuations and risk associated with foreign currency.
But For domestic market, Pakistani businessman will have to convert Yuan in to Pakistani Rupees, and for imports from other countries, Pakistan will have to convert Chinese Yuan into US Dollars , because Chinese currency is still not a global currency. Such multiple exchange rates and associated speculation may prove to be quite disruptive for private businesses in Pakistan.
However, we would like to believe, , this China Pakistan currency agreement is drafted in such a manner that it protects Pakistani interests, but given the past track record, the relevant critical information will never be shared with public. this veil of secrecy is root cause of prevailing suspicion in the world community.
Anyways, Till now, two great economies of our world Angola and Zimbabwe officially allowed the Yuan to be legal tender. Thanks to all weather friend of Pakistan, We should rather congratulate Pakistan for joining that prestigious league.
In fact, The use of Yuan will end up making Gwadar port a Chinese port, away from China.
China keeps on saying, belt and road initiative will bring about great progress in the region. however, as its evident, this grand initiative is of China, by China and for China.
All nations taking part in these projects, will incidentally become an instrument of fulfilling geo political and economic objectives of China.
These are the moments, when we can thank our leadership for not joining Very promising Chinese belt and Road initiative.
What can be more pleasing, people living in the belt and road countries will certainly find some virtues out of this necessity. They will tell us what are the great economic benefits of using Yuan in Gwadar port.
Anyways, who cares, we should rather wish them best luck for having iron clad and all weather friendship with China in future.
As per your views, will Pakistan be benefited by allowing free use of Chinese currency in Gwadar?
Please let us know your views in comment section below.