Chinese companies are considering shifting their industrial units to Pakistan,”

[NOWorNEVER]

Updated Sep 10, 2017 08:54am
China finds Pakistan open for business at first industrial fair
KHALID HASNAIN

LAHORE: “Chinese companies are considering shifting their industrial units to Pakistan,” said Federal Minister for Commerce and Textile Pervaiz Malik on Saturday.

He was speaking to the media at the inauguration ceremony of the First China Electrical and Mechanical Machinery Exhibition 2017.

He said the Rs180 billion textile package is currently being reviewed by his ministry on the direction of the PM Shahid Khaqan Abbasi. “Actually the package is being reviewed to remove certain issues in it before it could be implemented in true letter and spirit,” he explained.

The three-day expo has attracted participation of as many as 200 Chinese businesspersons, representing several industrial units manufacturing electrical, mechanical and other sorts of machinery, including electric automobiles.

“The response of Pakistani manufacturers, distributors and general customers to our products is really amazing”, Marketing Director of the Changzhou Keytech Vehicle Company Limited, Jack Xie said while speaking with Dawn. “So keeping in view the feedback, we are considering to also establish our industrial unit in Pakistan so as to offer our goods to Pakistanis on rates cheaper than China.” His company has showcased various small electric vehicles, motorcycle rickshaws and loaders etc.

According to the exhibition organisers — Pakistan China Joint Chamber of Commerce and Industry (PCJCCI) and the E-commerce Gateway — the three day event is the first of its kind since it has brought China to Pakistan.

“The idea to bring investment in machinery manufacturing had actually been floated in the Beijing Conference last year in which it was decided to relocate Chinese manufacturing facilities to Pakistan,” Mr Xie added. He said the event has enabled the Chinese companies to find joint venture partners.

Several local companies are also participating in the event.

Large visitor turnover was witnessed at the stalls showcasing electric vehicles, rickshaws, motors, equipment related to power transmission lines and telecom sector. “We manufacture transmission lines (cables) conductors, insulators and towers (for both transmission lines and telecom). And in Pakistan we are seeing good response really,” said Mr Lee, Project Manager of the Shandong Qixing Iron Tower Company Limited. He said his company has plans to establish a factory in Pakistan soon.

According to the organisers’ claim, over 10,000 people, including Chinese and Pakistani top level machinery manufacturers, businessmen, entrepreneurs and investors participated on the first day of the expo.

“As many as 100 stalls have been set up by Chinese manufacturing companies and around 200 persons of the Chinese machinery industry have purposely traveled to Pakistan to explore joint ventures and partnership possibilities with our machinery industry. Many consultancy firms have also set up their stalls at the expo to assist the investors,” explained a spokesperson for the organisers.

https://www.dawn.com/news/amp/1356642

 

[Indus Pakistan]

This is the real side of CPEC which will bring real change inside Pakistan - providing Pakistani state/people play ball. Once the "hardware" of the CPEC [roads/rail/airports/ports/power stations have been built] is laid Pakistan has to move forward to capitalize that to it's advantage. We can take some lessons on what happens when under-developed economies open up to developed economies and the best place is Eastern Europe. Poor countries like Romania have recieved massive funding from EU to build up and improve their infrastructure to Western European standards. In return Romania has had to open it's borders to Western imports. The result is inefficient Romanian industry has been decimated and the country has been flooded by Western goods which are better quality and cheaper.

However while Romania is valuable to EU as a place to export it's goods, Western exporters don't want Romania to shut down. If Romanian economy goes down entirely it won't be able to buy Western goods or services. The trading regime between both has to be symbiotic. It is in EU's interest to build up Romania into a rich market that can absorb imports.

In the same way what does China want? Flood Pakistan with Chinese goods via CPEC and then when the market is saturated kill the Pakistani economy. This would be like killing the chicken that lays the eggs. This would not be good or viable for China over the long term. How about instead build up infra via CPEC. Export goods their. Cultivate Pak economy. Create a new market dynamic which creates a rising Pakistan which ensures greater exports year on year for Chinese goods. A viable, 200 million people, prosperous, sustainable Pakistani market is in the interest of China.

However creating the symbiotic relationship that sustains both is not easy and it hurts the more undeveloped country as it ushers in change. It entails wiping out ineffciency and bringing in new models of efficiency. This takes time and inevitably hurts many people. It also is risky time for the developed country as it has to take the risks by investing and facing possible political instability from the lessser developed partner as it struggles to drag it out of backwardness.

This is where Sino-Pak relationship will go. We are only seeing the groundwork of change be laid. In a generation we will see the manifestation of this revolution that is about to unfold.

 

[kmc_chacko]

If Industries are setting up in Pakistan then its a good news for Pakistan.

 

[Syed1.]

China will dump its cheap items in Pakistan which will harm domestic industries.

Mind your own business

 

[Vapnope]

If the skilled worker is being employed from Pakistan it is indeed a good news, if not we are doomed.

 

[Offshore]

This is the real side of CPEC which will bring real change inside Pakistan - providing Pakistani state/people play ball. Once the "hardware" of the CPEC [roads/rail/airports/ports/power stations have been built] is laid Pakistan has to move forward to capitalize that to it's advantage. We can take some lessons on what happens when under-developed economies open up to developed economies and the best place is Eastern Europe. Poor countries like Romania have recieved massive funding from EU to build up and improve their infrastructure to Western European standards. In return Romania has had to open it's borders to Western imports. The result is inefficient Romanian industry has been decimated and the country has been flooded by Western goods which are better quality and cheaper.

However while Romania is valuable to EU as a place to export it's goods, Western exporters don't want Romania to shut down. If Romanian economy goes down entirely it won't be able to buy Western goods or services. The trading regime between both has to be symbiotic. It is in EU's interest to build up Romania into a rich market that can absorb imports.

In the same way what does China want? Flood Pakistan with Chinese goods via CPEC and then when the market is saturated kill the Pakistani economy. This would be like killing the chicken that lays the eggs. This would not be good or viable for China over the long term. How about instead build up infra via CPEC. Export goods their. Cultivate Pak economy. Create a new market dynamic which creates a rising Pakistan which ensures greater exports year on year for Chinese goods. A viable, 200 million people, prosperous, sustainable Pakistani market is in the interest of China.

However creating the symbiotic relationship that sustains both is not easy and it hurts the more undeveloped country as it ushers in change. It entails wiping out ineffciency and bringing in new models of efficiency. This takes time and inevitably hurts many people. It also is risky time for the developed country as it has to take the risks by investing and facing possible political instability from the lessser developed partner as it struggles to drag it out of backwardness.

This is where Sino-Pak relationship will go. We are only seeing the groundwork of change be laid. In a generation we will see the manifestation of this revolution that is about to unfold.

whether Pakistan can absord Chinese industrial, remain to be seen.
it's all depands on Pakistan Goverment policy, if Pakistan can give good incentive for industrial sector such as free tax 5 years and free land for 20-30 years. then that might attract more company to invest in pakistan.
Chinese still have many option to move their Industrial base. such as Africa, South east asian.
Pakistan also need to normalize relation with india to get into india market.
if Pakistan can tapping into india market and Chinese market. that means 2,5 billions market.
about kashmir issue, let the next generation solve the issue, the current generation is not wise enough to solve the issue ( and the mean time Pakistan build leverage power for future negotiation )
focus on economy first.

 

[Indus Pakistan]

whether Pakistan can absord Chinese industrial, remain to be seen.

Well it begins with the basics. First the vast Pakistani market has to be catered. 200 million is a large market. I think the way forward is the present industrial monopolies inside Pakistan are destroyed. Then joint ventures replace the present stock. Of course this by neccessity will be a painful transition as old makes way for new. This should replace our present moribund industry with more Chinese inspired competitive industry. In short Pakistan should aim for a integrated economy with China - much like Eastern Europe has with EU.

For my mind Haier Pakistan are example of way forward.

https://en.wikipedia.org/wiki/Haier_Pakistan
http://www.haier.net/pk/mergepage/inpakistan/

 

[Offshore]

Well it begins with the basics. First the vast Pakistani market has to be catered. 200 million is a large market. I think the way forward is the present industrial monopolies inside Pakistan are destroyed. Then joint ventures replace the present stock. Of course this by neccessity will be a painful transition as old makes way for new. This should replace our present moribund industry with more Chinese inspired competitive industry. In short Pakistan should aim for a integrated economy with China - much like Eastern Europe has with EU.

For my mind Haier Pakistan are example of way forward.

https://en.wikipedia.org/wiki/Haier_Pakistan
http://www.haier.net/pk/mergepage/inpakistan/

200 million indeed large market, but not for people in industrial world. they tend to see things with bigger picture and they want expansion. especialy Chinese businessman.
they are very calculated, and they see business as a war, which mean they want all advantage they can get.
Pakistan goverment must lure them in. IF pakistan normalize relation with india, the First things come to Chinese business mind is.. Market.
Present - 2025, there will be many industrial base move out from China, since China want level up industrial sector.
i hope Pakistan can get most of it & have industrial Blue print for future development.
and i also hope Pakistan can be more Pragmatic ( no offend )

 

[Verve]

Moving industries is part of the CPEC plan. Good to see progress on it.

 

[PAKISTANFOREVER]

China will dump its cheap items in Pakistan which will harm domestic industries.

As if an indian would say anything else.....

200 million indeed large market, but not for people in industrial world. they tend to see things with bigger picture and they want expansion. especialy Chinese businessman.
they are very calculated, and they see business as a war, which mean they want all advantage they can get.
Pakistan goverment must lure them in. IF pakistan normalize relation with india, the First things come to Chinese business mind is.. Market.
Present - 2025, there will be many industrial base move out from China, since China want level up industrial sector.
i hope Pakistan can get most of it & have industrial Blue print for future development.
and i also hope Pakistan can be more Pragmatic ( no offend )

We need as much help from our Chinese brothers and sisters as possible to make this happen.

 

[My-Analogous]

China will dump its cheap items in Pakistan which will harm domestic industries.

Read post again without hatred googles and you will see that it is about industrial setup they are talking about

 

[GeraltofRivia]

This is the real side of CPEC which will bring real change inside Pakistan - providing Pakistani state/people play ball. Once the "hardware" of the CPEC [roads/rail/airports/ports/power stations have been built] is laid Pakistan has to move forward to capitalize that to it's advantage. We can take some lessons on what happens when under-developed economies open up to developed economies and the best place is Eastern Europe. Poor countries like Romania have recieved massive funding from EU to build up and improve their infrastructure to Western European standards. In return Romania has had to open it's borders to Western imports. The result is inefficient Romanian industry has been decimated and the country has been flooded by Western goods which are better quality and cheaper.

However while Romania is valuable to EU as a place to export it's goods, Western exporters don't want Romania to shut down. If Romanian economy goes down entirely it won't be able to buy Western goods or services. The trading regime between both has to be symbiotic. It is in EU's interest to build up Romania into a rich market that can absorb imports.

In the same way what does China want? Flood Pakistan with Chinese goods via CPEC and then when the market is saturated kill the Pakistani economy. This would be like killing the chicken that lays the eggs. This would not be good or viable for China over the long term. How about instead build up infra via CPEC. Export goods their. Cultivate Pak economy. Create a new market dynamic which creates a rising Pakistan which ensures greater exports year on year for Chinese goods. A viable, 200 million people, prosperous, sustainable Pakistani market is in the interest of China.

However creating the symbiotic relationship that sustains both is not easy and it hurts the more undeveloped country as it ushers in change. It entails wiping out ineffciency and bringing in new models of efficiency. This takes time and inevitably hurts many people. It also is risky time for the developed country as it has to take the risks by investing and facing possible political instability from the lessser developed partner as it struggles to drag it out of backwardness.

This is where Sino-Pak relationship will go. We are only seeing the groundwork of change be laid. In a generation we will see the manifestation of this revolution that is about to unfold.

This is a great piece of analysis. as you mentioned, a viable, prosperous, sustainable Pakistani market is in the BEST interest of China. and this is very much China and Pakistan like to achieve in CPEC.

There are some concerns about Chinese goods flooding Pakistan and destroy the local industry. This is fair concern but if we look at how much China Pakistan is trading at the moment, it is not a large amount. This is as much "flooding" as it can be. There is very little new demand for more import, particularly the high value added goods like cars, cellphone, machinery because of current income level.

I guess what China has realized in the last few decades is that capitalism is NOT a zero sum game, instead it is a multiplier game. This means that you cannot do well if your trading partner is not doing well. This central thought of this new school of capitalism is that by helping your partner country prosperous, you can take your economy to greater height. just Image how much China can trade with it if Pakistan is developed into a country with multi trillion economy and a strong manufacture industry.

 

[unbiasedopinion]

Good but they have to work on alienating the fears of local businesses, that With chinese industries, come the chinese to take over the jobs.

 

[Indus Pakistan]

This is a great piece of analysis.

Thanks. It's a no brainer. Assume the worse case scenario - that China is a parasite that will leach the Pakistani market and squeeze every drop of it until Pakistan is dried hollow. Is that smart? No it is not.

A smart parasite knows that the best thing to do is build up the host soit can contine leaching off the host. So even if ypu assume China has bad intentions it would make sense for it to build up Pakistan so it can harvest it. A developed Pakistan would be a huge market. It would be win win for both.

As a asides I have come to the conclusion that there are two ways to becoming a developed country. One is you go through the long hard ardous route or alternatively outsider says "it's you" and then helps you stand up. In other words geopolitics can help or break countries. S.Korea, Japan, Taiwan, Singapore, Malaysia have recieved that "it's you" and then to be fair to them thy have grabbed that Western hand by both arms.

Same applied to Eastern Europe and Turkey. These regions again have got "it's you" hand from the West and they have grabbed it with both arms. The reverse of this is when the West says "scr*ew you" and in which case it goes out of the way to kick you down. Iran and North Korea have recieved that treatment and we know the effects all too well.

What I am saying is the international trading order is controlled by Western elites in London and New York. They can according to their geopolitical interests choose to (i) stretch their hand out to help lift you (ii) ignore you (iii) actively kick you down. It is possible to rise up despite the Western political order ignoring or not wanting to help you but only a few countries can manage that - one being China.

Pakistan in the 1960s recieved for few years Western (i) help and we saw how fast Pakistan developed under Ayub Khan but that Western munificence came to a abrupt end after the 1965 war which had profoundly displeased Washington. After that Pakistan has been pretty well on "ignore" with short term "transactions" in 1980s and 2000s which were linked to specfic goals.

I believe that with rise of China it offers another source of "sponsorship" that thus far only the West has offered. And Pakistan is going to be the first beneficiary of Chinese (i) stretch their hand out. And that is exactly what you are seeing right now. It is for Pakistan to make most of it.

Two examples will suffice to show how important it is for the host country to leverage the help to it's advantage or fail to do so. One is south Korea which has used Western help to rise like a star. Jamaica which has also equally recieved Western help but has failed to take full advantage. However it is interesting that despite Jamaica having entirely failed to use the opportunity afforded to them by the West they are still more prosperous then Pakistan. This should demonstrate what Western munificence can do even to primitive people. Jamaican GDP per capita is over twice more than Pakistan. This actually shows how hopeless they are. Had they been slightly capable they could have leveraged that help to rise to three times easily or excess of $15,000.

Jamaica - $4,900
Pakistan - $1,470

 

[SoulSpokesman]

Kaptaan sahib,

Have you considered writing in a Pak daily? I am presuming that you arent already doing so under your real name and that Kaptaan is merely a nic.

Regards