Pak-China growth

Courtesy:-  WARDA ALI GOHAR

The reliable friendship between China and Pakistan is exemplary. Regardless of the detrimental law and order situation in Pakistan, Chinese investment has consistently increased. Along with governments of both countries, the business leaders of private sectors are also playing an important role in strengthening economic relations.

Pakistan’s relationship with China complements the elements of growth. Now, the need of the hour is proper planning and its implementation. The increasing trade deficit, inflation and energy crisis in Pakistan has decelerated the movements of our industrial wheel. The economic crisis has brought us to a crossroads: either we continue to run crippling government corporations with public-private partnerships or we privatize them. By relieving the government treasury of this burden, consequently we may bring the trade deficit down.

Nowadays, safeguarding ones’ economic benefits is the first priority of every country. Focusing on economic gains, we shall promote trade and mutual investments with neighboring countries. The cruelest enemies of yesterday have turned into friends. European countries fought with each other for hundreds of years but mutual economic benefits have united them in the form of the European Union. In order to safeguard a country’s ideological and geographical boundaries without compromising national interests, trade agreements with neighboring countries should be signed and maintained. In this way, regional trade flourishes.

Shah Faisal Afridi, the President of the Pak-China Joint Chamber of Commerce and Industry, shares these views and insists that local and international investors must be provided with constitutional protection for the establishment of their businesses and protecting their valuable investments. For this purpose, immediate legislation is required to rebuild the lost confidence of investors and businessmen. According to him, a peaceful environment and conducive policies are important components for the success of a business and these can only be possible if private and public sectors work hands in gloves to formulate constructive policies.

Under the leadership of Chairman Mao Ze Tung, China developed a plan for economic development which is still being practiced. An enormous part of the economy is under the control of government, in which production targets, determination of prices and division of resources are included. If we take a look back in history, in the year 1820, China was even then, amongst the world’s big economies. According to new estimates, in the year 2030, China will have more than 30 percent share in the global economy. After the Economic reforms of 1979 till 2011, China’s average GDP growth has remained at 10 percent. In other words, China has doubled its economy after every eight years. The Chinese leader, Yang Zuang is considered the founder of economic reforms in China. Due to his vision, the Chinese economy has become an economy of scale, which means that transportation expenditures of a product are more than its cost of production.

In 1979, to facilitate foreign investors, special economic zones were established in China and their purpose was to increase export and to import modern technology. Moreover, decentralized economic policies were implemented which resulted in the endorsement of free market trade rules. Un-necessary paper work proceedings were eliminated and conditions for doing business were softened. These measures accelerated the process of attracting foreign investors to China. In short, China’s rapid economic growth is due to attracting large scale investments and accelerating the process of production along with strict implementation of the economic reforms.

Additionally, China has its place as a strong pillar in Pakistan’s foreign policy. The project of Gawadar port is an important sign of stronger Pak-China relations. In May 2013, Gawadar port project was officially handed over to China. According to the agreement, 750 million dollars would be invested in the project initially. The reason behind its importance is that 60 percent of oil is being imported by China from the gulf countries and reaches it after covering a distance of 16000 km. After the completion of Gawadar port project, the distance will reduce to 2500 km. In the year 2007-2014, many practical measures have been taken for the development of the Gawadar Port Project, which will benefit Pakistan’s economy. It is time for our business community to stop criticizing the project and support the national interests of the country.

A new Silk Route is now being constructed between China and Pakistan. Meanwhile, China-Pakistan Economic Corridor (CPEC) project has been initiated and a Joint Working Group has been devised, which has conducted its first meeting in January 2014 and second meeting was held in February 2014 at Beijing. The objective of this project is to facilitate trade between both countries by building an economic corridor. According to the details, the trade route will start from Kashghar towards Khunjerab and passing through Islamabad, Multan, Lahore, Sukkur shall reach its end at Karachi and Gawadar port.

The mutual five-year development plan for trade and economic cooperation plays a most significant role in Pak-China economic relations.

In such an encouraging environment, created with support from the governments of China and Pakistan, the business community should come forward proactively to promote regional and global trade. The Government of Pakistan should, however, take concrete measures to provide protection to the local as well as foreign investors so as to make Pakistan an emerging economic power of the region.

The writer is Media Manager, Pak-China Joint Chamber of Commerce and Industry.