China’s eastern province to relocate industries to Pakistan

ISLAMABAD: China’s eastern province, Shandong, is set to relocate its labour-intensive industries to Pakistan to reduce production cost, as revealed in a meeting between Ministry of Commerce and Chinese business delegation on Thursday. 

The meeting was headed by Minister of Commerce, Syed Naveed Qamar, Hou Jianxin, Chairman Shandong Xinxu Group Corporation China.

As per official sources, while taking the benefit of the decision of Shandong government, Jianxin came up with the vision to build an industrial park in Pakistan. The industrial park will serve as a focal point for all the industrial requirements of Pakistan from China and vice versa, he elaborated.

The Chinese delegation has informed that the projects like solar panels assembly plant, metal refining plants, fertilizer production plant, food processing plants (dry milk production, seafood processing, meat processing) are being considered for future investment. Pakistan and China enjoy strong relations and expressed the hope that the trade and economic ties between the two countries would be further cemented with the passage of time.

Meanwhile Qamar appreciated the decision of the Shandong government to shift its industry to Pakistan, which would not only save foreign reserves of the country but also create job opportunities in the country.

The minister sought comprehensive proposals from the Chinese companies who are interested in shifting their businesses to Pakistan. It will then be forwarded to the Board of Investment (BOI) for expediting the investment process.

The minister was of the view that the barter trade model, which has already been approved by the federal cabinet, could be used to enhance exports.

China is playing a significant role in the economic development of our country and the barter trade model will further strengthen the bilateral trade.  The minister later assured full support of the Pakistani government to the Chinese Companies to enhance export volume of the country.

The relocation of Chinese industry to Pakistan has been in discussion since the launch of the multibillion dollar China Pakistan Economic Corridor (CPEC) program.

However, Pakistan has so far failed to woo Chinese industries as many have gone to Cambodia, Laos and even Ethiopia, though their cost of labor is higher than the cost in Pakistan and their markets are far smaller in terms of population, as per Pakistan Business Council’s study. But this time Pakistan is more likely to seize the opportunity given the impact it will create on the exisitng foreign reserves. 

The study also reveals that Beijing is shifting its industrial units beyond borders to remove the “Made in China” label from many products to win back US markets.