Pakistan, China ink $10bn investment deals across key sectors

Pakistan and China have recently entered into multiple Memoranda of Understanding (MoUs) totaling $10 billion in investment across four major export-oriented sectors.

The joint ventures (JVs) are set to establish industries in textiles, agriculture, food, and car spare parts manufacturing, as disclosed by Caretaker Commerce Minister Gohar Ejaz.

The MoUs were formally signed between the private sectors of both countries, highlighting a substantial commitment to fostering economic growth in Pakistan.

In an effort to boost exports to China, Pakistan is preparing to dispatch its inaugural shipment of fresh chillies from Karachi in accordance with a protocol established last October. This move is in response to China's annual chilli import bill of $10 billion, with plans to export chillies in three forms: fresh, paste, and powder.

Additionally, a protocol has been established to export halal meat to China. Shipments of boiled meat are expected to commence in the coming weeks.

Following a recent visit to China, Minister Gohar revealed that the Chinese government has agreed to provide preferential access to Pakistani agricultural products. The specifics of this preferential access, including reduced duties under the free trade agreement, are currently being formulated in consultation with stakeholders.

The China Chamber of Commerce for Import and Export of Textiles (CCCT) has expressed support for increasing textile imports from Pakistan. The commerce ministry aims to shift 10 percent of CCCT’s imports, contributing to a rise in overall textile exports to China, with CCCT's total textile exports currently at $320 billion.

Minister Gohar disclosed plans to visit China on January 15 for subsequent discussions with Chinese investors. These potential investors are scheduled to reciprocate the visit in February to deepen engagement with local partners and finalize investment plans in special economic zones.

The proposed joint ventures indicate complete Chinese investment in the textile, food, agriculture, and automobile parts sectors, aiming to enhance exports to China and other countries.

Moreover, these investors may capitalize on preferential market access under the Generalized System of Preferences Plus scheme to the European market. This presents a substantial opportunity for exporters to gain duty-free access to European markets.

Minister Gohar further revealed the signing of a protocol with a Chinese investor for peanut cultivation across 10,000 acres of the Cholistan desert, exclusively for export purposes.