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China and Pakistan in trade pact China and Pakistan in trade deal
(about 3 hours later)
Chinese President Hu Jintao has signed a free trade deal with his Pakistani counterpart, Gen Pervez Musharraf, during talks in Islamabad.Chinese President Hu Jintao has signed a free trade deal with his Pakistani counterpart, Gen Pervez Musharraf, during talks in Islamabad.
Diplomats say the agreement could triple the value of bilateral trade within five years, to $15bn.Diplomats say the agreement could triple the value of bilateral trade within five years, to $15bn.
President Hu is also expected to give a live television address on Pakistani television later on Friday. The two countries have also agreed new defence and energy deals and pledged to continue nuclear co-operation.
He arrived in the country on Thursday after holding three days of trade and political talks in India. President Hu arrived in Pakistan on Thursday after three days of political and trade talks with neighbouring India
President Hu's visit to Pakistan - amid tight security - is the first by a Chinese leader in a decade. He is expected to give a live address on Pakistani television later on Friday.
The two countries are expected to cement their 55-year relationship with accords on trade, culture and energy. His visit to Pakistan is the first by a Chinese leader in a decade.
At a dinner on Thursday evening, Gen Musharraf told President Hu that Pakistan's friendship with China remained constant despite changing global circumstances. Nuclear speculation
China and Pakistan's leaders agreed a number of defence and trade deals, but stopped short of announcing a new nuclear agreement.
Instead, they simply said they would continue working on existing nuclear projects.
We are good neighbours, close friends, trusted partners and dear brothers President Hu Jintao India and China's new course We are good neighbours, close friends, trusted partners and dear brothers President Hu Jintao India and China's new course
The state-run Chinese news agency, Xinhua, said "unprecedented" agreements were expected to be signed with Pakistan during Mr Hu's visit, but gave no further details. Chinese funds and expertise helped complete a nuclear power station in Pakistan's eastern province of Punjab in 1999.
There has been speculation that these agreements could involve an expansion of Chinese assistance to Pakistan's nuclear power industry. In April this year, the two countries said they would work together to build another such plant nearby.
China has already built an atomic power plant in Pakistan while a second is under construction. There had been widespread speculation that the two countries might agree a nuclear deal similar to the one between the US and India.
The BBC's Barbara Plett in Islamabad says Pakistan wants China to help it build more nuclear power reactors to meet growing energy demands, especially since the US has refused to provide the kind of civil nuclear assistance it has promised India. The BBC's Barbara Plett in Islamabad says Pakistan wants China to help it build more nuclear power reactors to meet growing energy demands, especially since the US has refused to provide Islamabad the kind of civil nuclear assistance it has promised India.
Pakistan and China have a long-standing agreement on nuclear co-operation, and China is also one of Pakistan's main suppliers of conventional weapons. The two countries are jointly developing a fighter aircraft. Economic considerations
China has also ploughed millions of dollars in a "megaport" in south-west Pakistan to gain access to the Arabian Sea. The new trade pact will ignite efforts to cut tariffs, Pakistani Commerce Minister Humayoun Akhtar said.
Important agreements "Within five years, trade between the two countries will be completely tariff free," he said.
Our correspondent says that, historically, China and Pakistan formed a bloc against India - but economic considerations are now more important than Cold War-era rivalries.
Indian obstacles facing ChinaIndian obstacles facing China
President Hu's visit is intended to reassure Pakistan - Beijing's closest ally in South Asia - of its continued strategic and economic support despite China's closer ties with India. President Hu said the free trade pact "serves the fundamental interests of our two peoples and is also conducive to the peace and development of our region".
Mr Hu's four-day visit to Pakistan was preceded by a landmark trip to the Indian capital Delhi, and financial centre Mumbai (Bombay). The two countries also agreed to co-produced an airborne early warning system.
Pakistani President Pervez Musharraf and Prime Minister Shaukat Aziz greeted President Hu and his wife on their arrival in Islamabad. They already share other ventures in the defence field including the joint development of a fighter aircraft.
Soldiers fired off a 21-gun salute, and huge red banners showing Mr Hu and his Pakistani counterpart were strung up around the capital. China has also ploughed millions of dollars into a project to build a massive shipping terminal in south-west Pakistan to gain access to the Arabian Sea.
A state banquet was later held in Mr Hu's honour. Our correspondent says Mr Hu's visit to Pakistan may have been intended to reassure his hosts over China's warming ties with Pakistan's regional rival, India.
"We are good neighbours, close friends, trusted partners and dear brothers," Mr Hu told those present, promising a new era of co-operation. Historically, China and Pakistan formed a bloc against India - but economic considerations are now more important than Cold War-era rivalries.
Mr Hu's four-day visit to Pakistan was preceded by a landmark trip to the Indian capital Delhi, and financial centre Mumbai (Bombay) during which the two sides pledged to double trade to $40bn a year by 2010.