and expertise. presence of bank of china in pakistan is also expected to benefit the banking sector through technology transfers and associated innovation in products and processes, human capital development and improved competition and efficiency in the financial services. further, increased diversity of foreign banks and access to external financial resources will facilitate in enhancing the resilience of our financial page 2 of 4 sector. the financial sector assets in pakistan as a percentage gdp are still low at 74. 3 percent. the presence of world top banks like boc will facilitate in exploiting this potential through enhancing the size of bank assets and the much needed access to credit. these growing banking relationships between pakistan and china are critical considering that the trade linkages have increased manifold. in fy17 alone, china - pakistan merchandise trade volume has increased to usd 12. 2 billion from a level of usd 7. 4 billion in fy13. with the china pakistan economic corridor ( cpec ) now taking shape in the form of completion of various projects, the trade and financial linkages between the two countries are set to increase exponentially in the near future. in this perspective, as the cpec continues to mature and more infrastructure projects are initiated, specialized economic zones are established, and trade starts to flow faster ; more and more economic and business opportunities will be created for the banking sector that can be capitalized with careful business strategies. the demand for fixed investment and infrastructure loans particularly relating to the cpec projects is expected to rise. banks with relevant expertise in long - term project financing and resources such as the bank of china would be the key player to meet this additional demand. i am confident that with growing cooperation the two countries would continue to grow with a sense of solidarity and mutual benefit. i understand that bank of china also provides services and products designed to meet the banking needs of small and medium enterprises ( smes ), across the various jurisdictions in which it operates. we, at state bank of pakistan, believe that the growth of smes is vital for country ’ s economic growth and provision of quality banking services and products in this area remains paramount. i hope that, we can learn from bank of china ’ s diverse experience in serving this particular segment. state bank of pakistan is already facilitating banks in this regard and is willing to support them further. page 3 of 4 ladies and gentlemen! the future prospects of china and pakistan ’ s economic cooperation are very bright ; more so in the wake of sustained improvement in pakistan ’ s gdp growth resulting in growing investor

risk premium into the prices quoted to maltese businesses. the insurance provided by the discipline of emu, and the high level of intra - eu integration should reduce this perceived vulnerability and, with that, the risk premium. this is conducive to lower interest rates and to access to financing on more favourable terms. a related advantage is the improved marketability and acceptance of collateral. maltese lira assets are not considered sufficiently liquid by foreign lenders in view of the thinness of domestic financial markets. many smes are consequently either denied foreign financing altogether, or offered prohibitive rates. this constraint should ease considerably with the adoption of the euro, as the redenomination of domestic assets into euro will improve the marketability of the collateral offered by local businesses. further benefits should accrue to business from the eventual linkage of the domestic payment system to the eu ’ s target system. by linking together the national systems of member states with the payment mechanism of the ecb, target allows payments in euro to be effected much faster, potentially improving liquidity conditions in the financial sectors of participating countries while lowering the processing costs of cross - border payments in euro. the challenges posed by the single currency thus far we have reviewed the opportunities inherent in membership of the euro area. as might be expected, however, membership will also present new challenges. for example, while it places the economy in a better position to compete internationally, it exposes businesses to additional competitive pressures. for a start, customers will be better able to compare local prices with comparable prices abroad and will increasingly question price differentials. some operators will, of course, benefit from lower procurement costs, but others might find it difficult to survive. it is, therefore, advisable for pricing strategies to be reassessed well in advance of the date of the actual euro changeover, especially where price is an important variable in marketing strategies. in the same manner that the euro will facilitate price comparisons, other monetary variables such as cost per unit, average wage, annual sales volumes, administrative expenses and profits will also become easier to compare across countries. in other words, the single currency will expose the performance of maltese businesses to a much more detailed scrutiny than they are accustomed to. from a broader macroeconomic perspective, it could also be argued that just as the euro will enable domestic operators to reap the full benefits of the single market, a higher level of integration with the eu could also make the maltese economy more susceptible to developments abroad