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The commercial counselor hoped that due to the proactive role of Pakistan High Commission London, the bilateral commercial relations would further strengthen in the time to come.

The Trump administration last week suspended almost US$ 2 billion in security assistance to Pakistan for its failure to take decisive action against terror groups like the Taliban and the Haqqani Network.

"I am not aware of what you mentioned", Chinese Foreign Ministry spokesman Lu Kang told the media when asked to comment on the report.

The official said that dismantling terrorist safe havens in Pakistan is key to bring stability in Afghanistan and in the region.

"We have said many times that Pakistan has made important contributions as well as enormous sacrifices to the fight against terrorism".

Pakistan's move to allow Chinese currency is not a dramatic policy change, as the yuan is already accepted by many Pakistani companies, said Dong Dengxin, director of Finance and Securities Institute at Wuhan University of Science and Technology.

She said US President Donald Trump is willing "to go to great lengths to stop all funding from Pakistan as they continue to harbor and support terrorism".

Trump in a New Year's Day tweet accused Pakistan of giving nothing to the U.S. but "lies and deceit" and providing "safe haven" to terrorists in return for United States dollars 33 billion aid over the last 15 years.

"China and Pakistan are also making efforts to build the CPEC which is in the common interests of the countries along the route".

China's Foreign Ministry has also dismissed previous reports of Chinese ambitions to build a base in Pakistan.

Gwadar is strategically located in the Arabian Sea and some 70 km away from Iran's Chabahar port being developed by India.

While defending Pakistan, Lu said China at the same time backed global counter terrorism efforts.

"Terrorism is a common enemy of the world and crackdown on the menace needs joint efforts from the worldwide community", Kang said during a press briefing in Beijing.

Pakistan further said it will continue to work with the global community to ensure that internationally agreed standards on religious freedom are observed in the country and the broader region. "China consistently opposes linking terrorism with any specific country, nor approves shifting the whole responsibility onto one specific country".