Why are multinational companies moving their production units from China to Pakistan?

The relocation of Chinese industries to Pakistan would help the country increase its exports drastically.

With increasing geopolitical tensions between the US and China, many Chinese and global manufacturers are thinking to move their production houses from China to Pakistan, claimed a renowned Canadian advisory firm BCA Research in its latest report.

The relocation of Chinese industries to Pakistan would help the country increase its exports drastically. China had also expressed its willingness to relocate its industrial units to Pakistan last year.

The Commerce Advisor Abdul Razak Dawood stated:

Pakistan expects further improvement in the ease of doing business index this year. A significant improvement would be witnessed in 10 critical areas of regulations. Previously, Pakistan had improved its position from 136 to 108 in EODB rank, reflecting that the current government is committed to improving the country\\’s business environment.

Apart from the funds borrowed by the Pakistani government, net foreign direct inflows, largely owing to Phase II of the China-Pakistan Economic Corridor (CPEC), will continue to increase for the rest of this year. BCA research states that the net foreign direct inflows have already grown by 40% year-on-year during the first six months of this year.

Nearly 63% of this increase in inflows came from China. Although Pakistan\\’s net portfolio investment was recorded as lower this year, BCA has claimed that the changing macro-dynamics are likely to improve the figures in the coming months.

The BCA research predicted:

Pakistan will receive considerable financial inflows, probably amounting to over $12 billion from multilateral and bilateral sources this year. The country would have more than enough to finance its current account deficit, which was at $11 billion over the past 12 months.

Pakistan has managed to obtain over $3.9 billion from the International Monetary Fund (IMF), the World Bank, and the Asian Development Bank.

G20 countries also awarded Pakistan with a suspension of debt service payments, valued at US$ 1.8 billion. This amount is set aside to fund Pakistan’s welfare programs.The BCA report further stated that the authorities plan to raise US$1.5 billion through the issuance of Euro- bonds over the next 12 months.

What are your thoughts on this? Please share with us in the comment section below.

    • Sorry bro, your information is wrong. I am into chemicals business and i personally know companies setting up units in FEDMEC Faisalabad. Already civil work is in progress and some plants are expected to start production within year 2020. Kindly update your information. Thanks

  • As a good friend of China we shouldn’t allow them to enter. China will be angry and we will loose our credibility which we already dont have in the world

    • He has nothing to do with it. CPEC was signed by caretaker govt in 2008 even before Zardari Regime. Its master plan of Pak and China establishments and all the planning was mainly done without even involving NS and PPP when they were in self assumed exile

  • 100% agree with the content of this video clip. I myself as an overseas citizen tried to set up a security company in pakistan some years ago and found lots of hurdles and bureaucracies within pakistan just to start business Secondly the basic Needs of any business or people is electricity. We were faced with huge problems with this matter as the load shedding and other problems with electricity was a problem.

    • what’s the purpose of an overseas citizen for setting up security organization here?, definitely the first question/suspicion would arise that it is a hostile agency set up by foreign intelligence agency for spying

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