Chinese investment likely to flow at a massive scale
By AMANULLAH BASHAR
Dec 17 - 30, 2001
Pakistan is likely to attract a massive investment in
the textile and leather sectors as a result of President Gen. Pervez
Musharraf's visit to China next week.
China has already been providing financial and
technical assistance for development of projects like Saindak, coal
mining in Thar, port development at Guwadar and Tea cultivation and
processing at Shankiari, in NWFP.
The government has also conducted 5 studies in Oil
and Gas, 7 in Basic Metals, 23 in Power and Hydel, 6 in Social Sector,
20 in Tourism, 7 in Mining and 5 in Paper and Board for the potential
Besides inviting Chinese investors to these
identified areas, studies are also being presented to world's potential
investors through Pakistan's foreign missions abroad.
More studies for investment have been conducted in
the areas like Small and Medium Enterprises where 76 projects have been
identified, 37 studies have been made available in agro-based projects,
22 in Chemicals, 16 in Electronics, 8 in Automotive, 9 in Engineering
and 5 in Information technology.
If Pakistan succeeds in attracting Chinese investment
especially in leather and textile sectors aimed at value addition
Pakistan's exports can make a quantum jump. It may be mentioned that
despite having a strong industrial base in leather sector, Pakistan has
an insignificant share of $500-600 million out of world's total exports
estimated at $50 billion in leather sector.
A high profile 30-member industrial and trade
delegation will accompany President Pervez Musharraf in the forthcoming
visit to China next week to probe into possibilities of joint ventures
particularly in textile, leather and fisheries sectors.
Efforts are also being made to invite world renowned
computer giant Bill Gates and other top international business
executives to Pakistan by the middle of next month in an effort to
introduce the country as potential investment zone.
During visit to China, President Pervez Musharraf
will address a joint session of Chinese and Pakistani businessmen in
Guangzhou — an industrial city from where annual exports are around
$100 billion per annum.
Basically Pakistan will be looking for joint ventures
in textile, leather, oil exploration and fisheries.
There are number of textile quotas in which Pakistan
does not have enough expertise for value addition, hence these quotas
usually remain unutilized. If foreign investment is made possible in the
value addition area of different products, Pakistan can make a quantum
jump in its exports especially in textile, leather, fisheries and
minerals. That is the major reason for taking industrialists from
various sectors to accompany the President during his visit to China.
Pakistan could develop the best leather and textile expertise if the two
friendly countries join hands.
Another potential area is the polyester fibre
industry. Though this industry was late to develop in 1982 but now it
has been included in the list of value added industry. By the year 2002
over 300,000 tons per year capacity will be available for exports. This
is an area in which joint ventures with Chinese partners will be
discussed during the visit.
Another area is the soft stuffed toy manufacturing
with Chinese. The soft stuffed toy industry in Pakistan is at cottage
industry level as Pakistani manufacturers are not aware of international
standards. Chinese entrepreneurs will be asked for assistance in this
Possibilities are strong that textile and leather
sector in particular witness an inflow of Chinese investment for the
value addition thus boosting the exports of these sectors, the industry
The agenda of discussion, with Chinese counterparts,
will be to seek help in up-gradation of quality products, switch over to
value addition, use of quality raw materials, balancing, modernization
and replacement of obsolete plants and equipment, professional business
ethics, meeting schedules and reducing delivery times, maintaining price
competitiveness and promoting joint ventures.
Before September 11, the international community had
the negative impression about Pakistan but things have changed
considerably with sanctions gone and access to OPIC of USA, EXIM banks,
JBIC of Japan, CIDA of Canada and KFW and HERMES of Japan available the
flow of Foreign Direct Investment to Pakistan will start improving from
It is worth mentioning that during the last 13 months
investment of around $700 million is made available to improve and
modernize the textile sector in Pakistan. The European Union has
increased the textile quota and now textile sector has to equip itself
to meet the new challenges. The changing scenario however demands for
quick and large-scale investment in the textile sector to get the
maximum benefit of the potentials in this important sector.
Textile experts are of the view that with the
increased accessibility, enhanced quota and friendly attitude of the
buyers in US, EU and Japan, Pakistan's textile sector currently having
an export of $5-6 billion can easily hit the mark of $10 billion.
Similarly, leather and leather products currently earning $600 million
could also double its size. However, it is the need of the hour that the
trade and industry goes for proper value addition, aggressive marketing
techniques and timely BMR to achieve the desired results.