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China to Build Nuclear Plants in Pakistan

20 October 2008

China has agreed to build two nuclear power plants in Pakistan, and Chinese firms and banks are planning to invest to help an old ally desperate for financial support, Pakistani officials said on Saturday.

Foreign Minister Shah Mehmood Qureshi said President Asif Ali Zardari intended to visit China every three months to promote economic integration between the two countries.

China's agreement to help build two new nuclear plants for civil power generation contrasts with the US refusal to offer Pakistan a nuclear deal similar to one given to rival India.

Richard Boucher, US assistant secretary of state for South and Central Asian affairs, arrived in Islamabad on Saturday for a series of meetings.

He met Rehman Malik, the head of the Interior Ministry, and was expected to hold talks with Zardari and Prime Minister Yousaf Raza Gilani, with security issues high on the agenda.

"Pakistan and China have signed agreement for Chasma-3 and Chasma-4. 680MW of electricity will be generated from these two new plants," Qureshi said.

China helped Pakistan build its second nuclear power plant in 1999, in the town of Chasma, in the central province of Punjab. Canada helped build Pakistan's first nuclear power plant in 1972.

Analysts say China has supported Pakistan's missile and nuclear weapons programme for decades, motivated by a mutual desire to counter the rising power of India.

Pakistan and India, having already fought three wars, became nuclear weapons states in 1998.

Investment

The United States has refused to offer Pakistan a nuclear deal similar to one given to rival India.

Washington has pointed to Pakistan's poor record on nuclear proliferation, and the role played by its disgraced top scientist Abdul Qadeer Khan in a nuclear smuggling ring.

China has remained Pakistan's all-weather friend, while ties with the United States have tended to run hot and cold.

The government is seeking to maintain the alliance with the United States that former army chief Pervez Musharraf entered into after al Qaeda's attacks on US cities in 2001.

But it has also tried to limit how far the United States can go in terms of targeting militants in Pakistani territory.

Zardari picked China for his first state visit after being elected in September, though he went to the United States last month to attend the UN General Assembly.

Army chief General Ashfaq Kayani visited China, one of Pakistan's main arms suppliers, shortly before Zardari, and Gilani is expected to go later this month.

According to uncorroborated media reports, Zardari requested more than $3bn support from China during his visit, to help Pakistan overcome a balance of payments crisis.

Qureshi said China would participate in a "Friends of Pakistan" conference, made up of potential donors, due to take place in Abu Dhabi next month.

China has also promised to invest in a mega-dam and hydro-electricity project.

Pakistan is suffering from acute power shortages, and officials say there is a shortfall of up to 4,000MW.

Shaukat Tarin, the recently appointed adviser to the prime minister on economic affairs, said Chinese companies had committed to invest $1bn in Pakistan by June next year.

Pakistan plans to set up industrial zones for Chinese firms, Chinese banks intend opening branches in Pakistan, and Chinese executives from the information technology and telecommunications sectors are due to seek opportunities for investment.

by Augustine Anthony; additional reporting by Sahar Ahmed; writing by Simon Cameron-Moore; editing by Elizabeth Piper.