During his successful visit to China from Feb 3 to Feb 5, Pakistan’s Prime Minister Imran Khan met with the Chinese leadership, including President Xi Jinping, to discuss cooperation and the second phase of the China-Pakistan Economic Corridor (CPEC). The Prime Minister’s visit took place after nearly two years. It provided an opportunity for both sides to look at the state of bilateral cooperation and discuss more projects.
It is a fact that the bilateral economic relations between Islamabad and Beijing have reached an unprecedented height since the first stone of CPEC was laid in Pakistan a few years ago. Pakistan had signed a memorandum of understanding (MOU) on industrial cooperation with China in 2018 as the first phase of CPEC advanced and many mega infrastructure and power projects neared completion. The project will benefit China and Pakistan and positively influence Iran, Afghanistan, the Central Asian Republic, and the region. It is the hope of a better part of the future with peace, development and growth of the economy.
According to media reports, the political change in Pakistan, uncalled for statements, and the pandemic disrupted the process, hurting the CPEC pace. Whereas, the Ministry of Foreign Affairs spokesperson had strongly again dispelled the impression of a slowdown in CPEC, saying it was progressing well. “CPEC has continued making progress over the last two years despite the Covid-19 pandemic. The last meeting of the JCC was very productive, and many CPEC projects are ongoing,” the representative said.
Furthermore, adviser to Prime Minister for Commerce and Investment, Abdul Razaq Dawood, said, “Signing of Framework Agreement on Industrial Cooperation between Pakistan and China is a breakthrough for China Pakistan Economic Corridor (CPEC) Phase II during the Prime Minister’s visit to China,”. It is a relief for all stakeholders, and we believe frequent visits are essential for the successes of long-term projects.
The trip’s success can be ascertained from the statement of Special Assistant to the Prime Minister on CPEC Affairs, Khalid Mansoor, that China has given the assurance of high quality and expeditious development of multi-billion-dollar second phase of the CPEC project. Addressing a news conference, the Special Assistant to the PM said that the leadership of Chinese companies during meetings with Prime Minister Imran Khan appreciated the environment and facilitation being provided by Pakistan to the Chinese investors. He said that during the visit to China, the prime minister held 20 meetings in two days with the leadership of various Chinese companies relating to different sectors.
He said that during the meetings, the Chinese companies showed interest in investment in various sectors, including industries, agriculture, information technology, infrastructure, housing and construction, and mining and oil refinery.
He shared a long list of projects, including the construction of the Karachi Coastal Comprehensive Development Zone with an investment of $3.5 billion, a low carbon recycles plant at Gwadar with an estimated $ 4.5 billion, a joint venture with Fauji
Fertilizer Company for production of Soybean and Corn. In addition, four large-scale buffalo farms in Pakistan, a centre for training of farmers in agricultural mechanization at an estimated cost of $50 million.
Besides, Royal Group plans to set up Foot and Mouth Disease (FMD) free dairy buffalo farm project with $50 million. In addition, he said the group envisages developing four large-scale buffalo farms with 8,000 heads for 16 million litres annual milk production capacity.
About the textile sector, a Chinese company called Textile Fashion has purchased 100 acres of land at Lahore–Kasur Road. The company would set up an entire textile cluster at an investment of $250 million.
He said that a Chinese Company manufacturing medical diagnostic equipment had expressed interest in investing $200 million.
Khalid Mansoor said that Pakistan’s telecom Jazz Company had reached an agreement with a Chinese company, Hunan Sunwalk, to lay fbre-optic at an area of one hundred thousand kilometres. This will help connect our big cities with optical fbre, he said.
He said that Hunan SunWalk Construction Group had signed an MoU with a private telecommunication company to lay an optical fiber cable network of around 100,000 kilometres in all major cities of Pakistan with an investment of $2 billion.
About housing, he said that China Company signed an MoU with Pakistan Housing Authority to build 5,000 houses in Pakistan. He said China also wants to establish an LNG storage facility at Karachi port with $500 million.
He said that Chinese companies showed interest in the privatisation of Pakistan Steel Mills. Similarly, China would also start local manufacturing and assembly of mobiles in the Science and Technology zone. He said Power China would develop the Karachi hub water canal.
On the sidelines of CPEC, some more good news emerged in media, saying that exports to China increased 68.9 per cent in 2021 to $3.58 billion while total trade between the two countries stood at $27.82bn, according to data released by the General Administration of Customs (GACC) of China. Electronics, textiles, seafood, and agricultural products have gone up yearly among essential items traded between the two countries.
However, a concern was importing from Beijing, which rose 57.8pc to $24.23bn, hugely favouring China. The government should continue its debates with Beijing to extend the limit of the currency swap facility from the current $4.5billion to $10bn, contribute to establishing China Pakistan Industrial Cooperation Fund and roll over the repayment of the $4bn Chinese loans due this year. The extended currency swap facility will allow the government to creatively manage the country’s debt profile by shifting the Chinese loan liability from the federal government books to those of the State Bank, opening up the much-needed space for new loans.
There were genuine concerns about CPEC. A leading media house wisely suggested that each side has its national interest in pursuing the project. If any reservations or disputes arise, the two countries should settle them privately.
It is also important not to let red tape and bureaucratic inertia become obstacles in meeting deadlines and finishing CPEC projects on time. That said, the standards of transparency were kept in mind at all times.
The state can only alleviate these by engaging with the stakeholders and giving them an accurate picture of the actual costs, the work done on each project, the audits carried out and similar information. Only then can we reap the dividends.