WORLD China-Pakistan industrial cooperation progresses steadily despite COVID-19

WORLD

China-Pakistan industrial cooperation progresses steadily despite COVID-19

Xinhua

20:28, January 16, 2021

ISLAMABAD, Jan. 16 (Xinhua) -- As all-weather strategic cooperative partners, China and Pakistan have attached great importance to their industrial cooperation. Despite the COVID-19 pandemic, the smooth implementation of projects from the Rashakai special economic zone (SEZ) to MG automobile plant has deepened the industrial cooperation between the two countries.

File photo

Located in Pakistan's northwest Khyber Pakhtunkhwa (KP) province, the Rashakai SEZ is one of the nine SEZs that the Pakistani government is going to develop under the China-Pakistan Economic Corridor (CPEC), which has entered a new stage of high-quality development focusing on industrial, agricultural and socio-economic cooperation.

Addressing the signing ceremony of the development agreement of the Rashakai SEZ in September of last year, Pakistani Prime Minister Imran Khan said his country was focusing on industrialization and would benefit from the development of the SEZs under CPEC which can attract Chinese industries and create job opportunities for Pakistanis.

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

"The construction of communication base stations in the Rashakai SEZ has started. After the Chinese Lunar New Year, a large number of Chinese technical staff 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," Lyu Ming, general manager of the CRBC, Pakistan told Xinhua.

Considering Pakistan's resources and market needs, the potential industries in the Rashakai SEZ are textile and construction materials, domestic appliance and food processing. To attract investors, the Pakistani government has introduced favorable policies for the zone enterprises, including a one-time exemption from custom duties for all imported machinery and income tax exemption for a period of 10 years.

The outbreak of the COVID-19 pandemic has made troubles for the investment attraction of the Rashakai SEZ. "Many enterprises were forced to cancel their original on-site inspection plans, and many investment promotion activities were also transferred to on-line platforms. However, as the COVID-19 situation in Pakistan is gradually brought under control, investors' confidence is recovering," Lyu said.

At present, an iron and steel enterprise from China's Fujian Province has decided to set up a plant in the Rashakai SEZ with a total investment of about 70 million U.S. dollars, said Lyu, adding that the planned annual output for the plant is around 1 million tons of steel products while the basic construction of the plant has been completed and it is expected to be put into operation by the end of 2021.

"This is a momentous day for 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 talking about the iron and steel plant that will employ 1,000 manpower directly and indirectly.

The Board of Investment said the Rashakai SEZ will create 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 construction shortly at the (Rashakai) Zone."

"Thanks to the Rashakai SEZ's own advantages and the support from both the Chinese and the Pakistani governments, the number of queries from investors is increasing. We have confidence in making the Rashakai SEZ a benchmark of the industrial cooperation between the two countries," Lyu added.

Meanwhile, on the first day of 2021, a cooperative project between the SAIC Motor Corporation of China and the JW-SEZ Group of Pakistan was inaugurated by the Pakistani prime minister in Islamabad, to set up 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 built in China and will be transported to Pakistan. The joint-venture plant is expected to be put into operation 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 a big potential. Through building a selling network in all the major cities of Pakistan, the SAIC expects to sell 60,000 MG cars including the vehicles that are manufactured in Pakistan and the cars that are imported as fully finished units, from 2021 to 2025.

To ensure the smooth implementation of the MG-JW project, the Chinese and Pakistani working staff have to overcome the challenges posed by the pandemic. "COVID-19 made it very hard for us to visit the other side, and we solved many problems through daily video calls and on-line exchange of technical documents," Zhang told Xinhua.

"After the manufacturing facilities are transported to Pakistan, a lot of work need to be done in the plant. Now, our 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 leading brand in Pakistan and facilitating the development of the auto market in the country is the common 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 environment now and the (auto) market is open and lucrative 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.

"What we will bring to Pakistan are the state-of-the-art technologies in China and the most advanced industrial capabilities in SAIC. The technology grade of the models we are going to bring to Pakistan is much higher than the current level of cars in the auto market of the county. This will greatly help the development of the auto industry of Pakistan," Zhang said.

"China's industrial cooperation with Pakistani companies have been changing things for the country by bringing new investments, creating jobs, earning revenues for the government and moreover bringing the latest technologies and improving industrial infrastructure and understanding," Afridi told Xinhua, adding that he is looking forward to expanding the scope of cooperation with Chinese companies to promote the industrial cooperation between the two countries. Enditem

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