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Just shortly after U.S. President Donald Trump slammed Pakistan, “scapegoating” the South Asian country for its failures in the so-called War on Terror, Pakistan announced new trade ties with China.
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Pakistan’s central bank said Wednesday that it was officially adopting the Chinese yuan as a currency of trade between itself and China. The move makes it possible for the two countries to trade directly in yuan instead of other currencies such as the U.S. dollar.
The decision came just after Trump took to Twitter, and in his first tweet of 2018, accused Pakistan of aiding and abetting terrorism in the region. In turn, Trump is allegedly withholding a US$255 million assistance package from the country.
Pakistan had responded by summoning U.S. Ambassador David Hale to discuss the statement and lodging a strongly-worded protest.
The subcontinental country’s move against Washington is likely to boost China's proposed global trade route, the One Belt, One Road initiative, which passes through Pakistan.
Trade between the neighboring countries is already quite strong. China accounts for 28 percent of Pakistan's imports, more than any other country. China is also Pakistan's third biggest export market, after the United States and the U.K.
The China-Pakistan Economic Corridor, initiated by Chinese President Xi Jinping in 2015, has deepened ties between them as well.
"Considering the recent local and global economic developments, particularly with the growing size of trade and investment with China under CPEC, [the bank] foresees that [yuan] denominated trade with China will increase significantly, going forward; and will yield long-term benefits for both the countries," said Pakistan's central bank.
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