The effect of CPEC – American SMEs looking to invest in Pakistan now


America’s small and medium enterprises (SMEs) are trying to invest in Pakistan, giving entrepreneurs here an opportunity to launch joint ventures with them, reveals Stephen P Knode, Commercial Counsellor of the United States.

“It will not only provide Pakistan entrepreneurs new technology and capital, but will also open new avenues for export of their products,” he said.

Trade between Pakistan and America was increasing at a steady pace and exports from the latter stood at $2.1 billion in 2016 while its shipments in the first five months of current calendar year were worth $1.3 billion, Knode said during a meeting with business community at the Faisalabad Chamber of Commerce and Industry (FCCI) on Thursday

He emphasised that the US was trying its best to promote bilateral trade under its commercial diplomacy.

“It is in this respect that offices of the commercial counsellor have been shifted from Islamabad to Karachi, which is the main hub of business and industrial activities followed by Faisalabad that contributes 20% to the national gross domestic product,” he said.

Knode pointed out that the US commercial service department had stepped up efforts to guide and facilitate new investors.

Over the past five years, the USA-Pakistan Business Opportunities Conference was being regularly organised. Last year, the conference was held in New York while in 2015 it was organised in Islamabad.

“This year, we expect to arrange it once again in Pakistan,” he said, adding it was for the first time many Pakistani companies had opened their offices and outlets in the US and they were being fully supported by the US commercial service department.

Responding to a question about the challenges faced by American companies in Pakistan, he said these were the same as experienced by Pakistan investors, which included energy shortage, labour and security challenges.

He disclosed that both countries would exchange at least 20 trade delegations this year, which would enhance understanding and interaction between businessmen of the two sides. Stephen said he would remain in touch with federal and provincial governments and municipal institutions to facilitate the new investors. Steps were also being taken to provide greater access for Pakistan products in the US markets.

He said Pizza Hut outlets in Pakistan were being increased from 75 to 150 and at the same time asked Pakistan investors to exploit the investment opportunities available in America as the US commercial service department would facilitate them.

Pakistan offers conducive environment for foreign investment, says PM

FCCI Acting President Rana Sikandar-e-Azam pointed out that in fiscal year 2016 bilateral trade stood at $5.72 billion, which was in favour of Pakistan. Pakistan exported $3.62 billion worth of goods while US exports were worth $2.10 billion.

He was of the view that global recession was affecting Pakistan’s ability to increase exports and investment inflows, hence the US should consider cutting tariffs on Pakistan textiles, which would enable it to compete with the developing countries that benefitted from the US tariff-reducing trade preference programmes.

China to continue encourage eligible enterprises for business, investment in Pakistan

BEIJING: China will continue to encourage its eligible enterprises to go to Pakistan for business and investment aimed at conducting mutually beneficial cooperation, said Chinese Foreign Ministry’s Spokesperson Lu Kang on Wednesday.

China attaches great importance to China-Pakistan all weather strategic cooperative partnership and we are committed to conducting trade and investment cooperation with Pakistan, he said during his regular press briefing while commenting on a data released by the State Bank of Pakistan (SBP) regarding China’s 1.186 billion dollar foreign direct investment in Pakistan during the financial year 2016-17.

The spokesperson said in recent years, China’s Foreign Direct Investment in Pakistan has maintained a rapid growth and this has played an important role in bilateral cooperation between the two friendly countries.

He expressed the confidence that with advancement of the construction of China-Pakistan Economic Corridor (CPEC) and China’s investment in Pakistan, “We will achieve a greater investment in future.” The latest data showed that the foreign direct investment during fiscal year of 2016-2017 increased 5% from a year earlier, totaling 2.41 billion dollars.

China ranked the top with 1.186 billion dollars, followed by Netherlands with 463 million dollars, Turkey with 136 million dollars and France with 119 million dollars.

Copyright APP (Associated Press of Pakistan), 2017

The China-Pakistan Economic Corridor (CPEC) has resonated at the World Trade Organization (WTO) in Geneva.

A roundtable focusing on the “One belt One Road” (OBOR) initiative of China was jointly organized by the International Centre for Trade and Sustainable Development (ICTSD) and Chinese Centre for International Economic Exchange (CCIEE) for ambassadors, delegates and trade experts at WTO. It is considered a part of Chinese global economic diplomacy, a message received by The News from Geneva said.

“The CPEC epitomizes South-South trade and investment at its best. It is providing stimulus to a deep regional economic integration and creating a trading block of three billion people – nearly half of the planet, which include half of world’s extreme poor. The deepening of economic integration will lower trade costs, essential for ending poverty” Pakistan’s Ambassador to WTO Dr Tauqir Shah said while speaking at a Belt and Road Initiative (BRI).

CCIEE Chief Economist Ms Wenling Chen, who was keynote speaker, showcased the CPEC as key example of what BRI stood for and frequently referred to the game-changer while explaining BRI to participants of the roundtable. She cited CPEC as an excellent example of intergovernmental coordination.

She highlighted the role of OBOR in global economic integration, explained the driving forces and objectives of BRI, underlined the interaction and mutual support between BRI and other components of global trade governance and how BRI can strengthen and guard multilateral trading system.

Ms Wenling Chen said BRI is for cooperation, peace, and mutual benefit of all the 60 plus countries involved in this initiative. She said OBOR is about connectivity, quality intra-governmental coordination, infrastructure development, trade, investment, global supply chains, financial integration and ultimately for elimination of poverty and development of whole region and 2 world at large.

While commenting on BRI, Dr Tauqir Shah gave Pakistan’s perspective on the CPEC as an early harvest component of BRI. He said OBOR is immensely important for the Global economy and critically significant for Pakistan.

“The CPEC, a US $54 billion initiative, has all the vital elements of economic development like – transport, highways, railways, ports, urban metro, industrial parks, information technology, last but not the least energy – considerable part of this is renewable energy.”

The ambassador said the CPEC is proving to be a game-changer for Pakistan and the region, and will be a bridge between three engines of growth, – China, South Asia and Central Asia.

While highlighting economic significance of CPEC for Pakistan, he said the country had a four to five thousand MW energy deficit in 2013, which is 25% of its total generation capacity; and it was costing us 2% of GDP growth. “This development deficit needed an initiative of “Big Bang Scale”, like – CPEC. It is a set of 55 projects – 75% of funding is for providing 17000 MW of energy, over next ten years. This includes solar, hydro and Wind energy projects, many of these being foreign direct investment of Chinese private sector.”

Dr Tauqir Shah said the CPEC has created opportunities for everyone. The solar and wind energy projects have wind turbines and other components from Europe. “Our solar projects have consultants for quality assurance from Germany. During 2016, exports from Europe to Pakistan increased by more than 20%, from US $4.2 billion to $5.2 billion, primarily due to increased economic activity resulting from infrastructure development through CPEC.”

Citing another example to show the impact of CPEC on economy, he said that spurred by the CPEC infrastructure projects, Pakistan’s cement industry is expected to increase its capacity by 56 % to 70 million tons in next five years; Pakistan’s cement sector profitability grew 17pc in the last one year on account of higher domestic demand – credit to the construction sector as of Dec 2016, increased by 26pc.

The ambassador said the speedy implementation of the CPEC and the economic stimulus brought about by it has led to increase in demand of cement across Pakistan. Majority of existing cement plants in Pakistan are expanding, and licenses to set up 10 new plants has been given to foreign investors—mostly foreign direct investment.

He said that the hallmark of the CPEC is the north south highway and rail link, designed to link Arabian Gulf coast of Pakistan at Gwadar in south, to north western Chinese region of Xinjiang and Kasghar, thus reducing the distance of China’s northwest from Arabian Gulf from 14000 kilometers to 2500 kilometers, transforming the trade cost for whole region. “We firmly believe the CPEC will result in increase in trade, investment and financial flows, bringing peace and prosperity to the region and even beyond.”