Chinese companies losing interest in second phase of CPEC

Under the current political circumstances in Pakistan, Chinese investors have reportedly freezed billions of dollar investment planned for second phase of China Pakistan Economic Corridor (CPEC). CPEC Authority has identified 19 Chinese companies, which have shown keen interest in different sectors for investment billions of dollars. All 19 Chinese companies were ready to invest billions of dollars in the identified sectors but they have shelved their plans due to current political insecurity in the country, which is not in favor of the country. The top executives of Chinese companies also met Prime Minister Imran Khan during his visit to China in February 2022, wherein they expressed their interest to invest in different sectors under second phase of CPEC. The key sectors, which have been identified for Chinese investments under CPEC-II, are textile, pharmaceutical industry, automotive industry, information technology, footwear industry, furniture industry, and agriculture sector. Since, Textile sector of Pakistan is the most fascinating opportunity for Chinese companies that provide all man-made and natural yarns and fabrics. The highlighted materials are cotton and rayon that provides a big advantage for Pakistan due to its beneficial impact on cost and operational lead time. Apart from these, many international brands are currently operating in Pakistan while working with the local textiles mills such as H&M, Levis, Target, Nike, Adidas, and Puma etc. Although, textile sector of Pakistan presents the most attractive opportunities for Chinese investors with considerable growth potential. In pharmaceutical, there is an opportunity to replace the imports from India, Korea, Japan, EU and even Chinese counterparts. Pakistani authorities have informed the Chinese investors of 19 multi-industry SEZs open for business, with respect to availability of infrastructure (electricity, gas, water & road accessibility etc.) for investors who wish to set up units in the next two years.