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APD | China-Pakistan Industrial cooperation for rapid economic development

World2021-01-20

Author:Prof.Engr.ZamirAhmedAwan,Sinologist(ex-Diplomat),Editor,Analyst,Non-ResidentFellowofCCG(CenterforChinaandGlobalization),NationalUniversityofSciencesandTe

Author:  Prof. Engr. Zamir Ahmed Awan, Sinologist (ex-Diplomat), Editor, Analyst, Non-Resident Fellow of CCG (Center for China and Globalization), National University of Sciences and Technology (NUST), Islamabad, Pakistan. (E-mail: awanzamir@yahoo.com).

Industrialization is the only way for rapid economic development. Most of the developed world has achived this goal through Industrialization. China has also followed the same strategy for its miraculous development. China has vast experience and matured technologies and willing to share with other nations. Industrialization is also a dream for Pakistan and a priority of the current Government in Pakistan.

Pakistan being a close friend of China and CPEC, being the flagship project under BRI, has been fortunate enough to attract the Chinese Steel Industry and Automobile Industry. Streel and Auto Industry is mother of all Industries, as it supports many other allied Industries. 

Despite the COVID-19 pandemic, the smooth execution of projects from the Rashakai special economic zone (SEZ) to the MG automobile plant has extended the industrial collaboration between them.

Situated in Pakistan's northwest Khyber Pakhtunkhwa (KP) province, the Rashakai SEZ is one of the nine planned SEZs that the Pakistani government will develop under the China-Pakistan Economic Corridor (CPEC).  It has reached a new stage of high-quality development converging on industrial, agricultural and socio-economic cooperation.

Speaking at the signing ceremony of the development contract of the Rashakai SEZ in September of last year, Pakistani Prime Minister Imran Khan said that his government was focused on Industrialization.  It will benefit from the development of the SEZs under CPEC, which can attract Chinese investments, industries and generate job opportunities for Pakistanis.

The Rashakai SEZ, covering about 1,000-acre land, is being developed together by the China Road and Bridge Corporation (CRBC) and the Khyber Pakhtunkhwa Economic Zones Development and Management Company in three phases. Currently, the construction and investment attraction work of the Rashakai SEZ is in progress.

The building of communication base stations in the Rashakai SEZ has been initiated. After the Chinese Lunar New Year, a large number of Chinese technical workforce will come to the zone to facilitate the construction. All the construction work for phase one including supporting facilities, is expected to be completed by June 2022.

Bearing in mind Pakistan's resources and market needs, the potential industries in the Rashakai SEZ are textile and construction materials, domestic appliances, and food processing. To attract investors, the Pakistani government has announced encouraging policies for the zone enterprises, including a one-time exemption from customs duties for all imported machinery and income tax exemption for ten years.

The eruption of the COVID-19 pandemic has made difficulties for the investment attraction of the Rashakai SEZ. "Many enterprises were required to cancel their original on-site inspection plans, and many investment advertising activities were also moved to on-line platforms. However, as Pakistan's COVID-19 situation is progressively brought under control, investors' confidence is recovering.

Recently an iron and steel enterprise from China's Fujian Province has announced establishing a plant in the Rashakai SEZ with a total venture of about 70 million U.S. dollars, adding that the planned yearly output for the plant is around 1 million tons of steel products. The plant's basic manufacturing has been completed, and it is expected to be put into production by the end of 2021.

It is a momentous day for the Industrialization of KP as the first Zone Enterprise from China has been admitted to the Rashakai SEZ," the Board of Investment of Pakistan said on Thursday while speaking about the iron steel plant that will create 1,000 jobs directly and secondarily.

The Board of Investment believed the Rashakai SEZ would generate 200,000 direct and indirect jobs and attract 347 billion rupees (over 2.1 billion U.S. dollars) of investment. "Lots of applications has been received for plots, and many industries will be starting manufacture shortly at the (Rashakai) Zone."

Due to Rashakai SEZ's advantages and the support from both the Chinese and the Pakistani governments,investors'e number of queries increases. There is confidence in making the Rashakai SEZ a yardstick of the industrial cooperation between the two countries.  

On the first day of 2021, a cooperative project among the SAIC Motor Corporation of China and the JW-SEZ Group of Pakistan was inaugurated by the Pakistani prime minister in Islamabad to build an automobile plant in Lahore of the country's eastern Punjab province to produce MG brand cars.

"The production line of the plant is being manufactured in China and will be transported to Pakistan. The joint-venture plant is anticipated to be put into production by the end of June 2021," Zhang Jianmin, the person in charge of the MG-JW project, said.

The SAIC plans to bring five MG models, including fuel and electric vehicles, to the Pakistani auto market that is still developing and has immense potential. By building a selling network in all Pakistan's major cities, the SAIC assumes to sell 60,000 MG cars, including the vehicles manufactured in Pakistan and the cars imported as fully finished units, from 2021 to 2025.

To guarantee the smooth implementation of the MG-JW project, the Chinese and Pakistani working staff have to overcome the pandemic's challenges. "COVID-19 made it very hard for us to visit the other side, and we resolved many issues through daily video calls and on-line exchange of technical documents.

"After the manufacturing plant is transported to Pakistan, a lot of work needs to be done in the plant. Now, Chinses workers have begun to make preparations to ensure the on-time arrival of personnel in Pakistan amid the pandemic," he added.

Making MG a prominent brand in Pakistan and facilitating the country's auto market's development is the shared target of the two cooperative partners.

"Our joint venture with the Chinese company has received a warm welcome in Pakistan. Pakistan has a business-friendly atmosphere now. The (auto) market is open and profitable because people are willing to use new brands and technologies as they are already fed up with Japanese brands that are offering less competitive products," Director of the JW-SEZ Group Javed Afridi said.

We will bring to Pakistan the state-of-the-art technologies in China and the most advanced SAIC capabilities. The technology grade of the models we will get to Pakistan is much higher than the current level of cars in the county's auto market. It will significantly help the development of the auto industry of Pakistan.

China's industrial collaboration with Pakistani companies have been the catalyst for bringing new investments, creating jobs, earning revenues for the government and getting the latest technologies, and improving industrial infrastructure and understanding," Afridi said, adding that he is looking forward to increasing the scope of cooperation with Chinese companies to promote the industrial collaboration between the two countries.  

Both countries will promote cooperation and collaboration in the Industrial sector and aattain the goal of shared destiny soon. China is assisting Pakistan to recover its economy and eradicate poverty. 

(ASIA PACIFIC DAILY)

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