Big Chi­nese in­vest­ment to kick-start Pak­istan econ­omy

The Pak Banker - - I Nternational -

DOBAI: The big Chi­nese in­vest­ment plans an­nounced this week, will kick-start the Pak­istani econ­omy - if all goes well.

China, the clos­est friend of Is­lam­abad in eco­nomic and diplo­matic fields for six decades, comes to Pak­istan at a time when most tra­di­tional sources, of FDI, of­fi­cial devel­op­ment as­sis­tance (ODI), mul­ti­lat­er­als, and for­eign trad­ing part­ners are hold­ing back.

It can prove to be Bei­jing's shot in the arm for Pak­istan. For in­stance, as soon as the vis­it­ing Chi­nese Prime Min­is­ter Wen Ji­abao, and his 250 mem­ber busi­ness­in­vestors team an­nounced $36 bil­lion in­vest­ment plans, the bourses in­dex rose to a record 30-month high.

The in­jec­tion of the Chi­nese cap­i­tal can pro­vide a spike to Pak­istani econ­omy when GDP pro­jec­tion are down to 2.5-2.8 per cent for the cur­rent FY-2011, com­pared to the last decade's 4.5 to 6.0 per cent.

The Chi­nese will in­vest in 35 projects, cost­ing $36 bil­lio, over five years - 2011-15.

It in­cludes 13 projects by the pub­lic sec­tor, and 22 by the pri­vate sec­tor. In case Pak­istan quickly ab­sorb this in­vest­ment, it will stim­u­late other re­gions, par­tic­u­larly GulfMid­dle East, US, UK, Ja­pan and EU to re­sume, and en­large, FDI in­flows into Pak­istan, as in the past.

The projects in­clude: en­ergy, oil and gas, min­ing, in­fra­struc­ture devel­op­ment, power - in­clud­ing projects based on coal, hy­del elec­tric­ity, and gas - in­for­ma­tion technology, elec­tron­ics, telecom­mu­ni­ca­tions, chem­i­cals fer­til­iz­ers, val­ueadded tex­tile man­u­fac­tures, au­to­mo­bile assem­bly, au­to­mo­tives,, agri­cul­tural im­ple­ments, agri­cul­ture and agro- based in­dus­try, pes­ti­cides, cool chains, food and fruit pro­cess­ing, and pack­ag­ing, live­stock and dairy fam­ing.

On the eve of sign­ing of the in­vest­ment agree­ments, Prime Min­is­ter Wen said "China will help Pak­istan to find mar­kets in our coun­try in or­der to re­duce the trade im­bal­ance" which, for years, is against Pak­istan. It is still widen­ing.

"We will send trade pro­mo­tion del­e­ga­tions to Pak­istani to iden­tify items, China can im­port."

The two sides are now set­ting their sights to boost bi­lat- eral trade to $25 bil­lion an­nu­ally over the next few years. Tariq Puri, Chief Ex­ec­u­tive Of­fi­cer of Trade Devel­op­ment Author­ity o Pak­istan (TDAP) says " trade be­tween China and Pak­istan will in­crease to $15 bil­lion by 2015. and $10 bil­lion in two years," he told the Pak­istan-China Busi­ness Co­op­er­a­tion Sum­mit.

The two-way bi­lat­eral trade be­tween China and Pak­istan reached $4.492 bil­lion in FY-2010. The trade bal­ance is against Pak­istan. Its ex­ports to China rose from $674 mil­lion in FY-2008 to $1.209b in FY-2010. -Afp

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.