PCI and PowerChina unveil groundbreaking report: ‘Policy Alignment of Pakistan and China’s Special Economic Zones’

ISLAMABAD: The Pakistan-China Institute in collaboration with PowerChina has launched a groundbreaking report titled ‘Aligning Special Economic Zones Policies of Pakistan and China’. The report aims to provide a strategic framework for enhancing economic and industrial cooperation between Pakistan and China through Special Economic Zones (SEZs).

The launch event, held in Islamabad, brought together key stakeholders and experts to share their insights on the significance of this initiative and its potential impact on Pakistan’s economic landscape.

In his opening remarks, Mustafa Hyder Sayed, Director of the Pakistan-China Institute, stressed the timeliness of the report, noting that its publication coincides with the growing cooperation between China and Pakistan, making it a crucial moment for both countries.

Sayed stressed that it is imperative for Pakistan to pursue an export-oriented policy to attract Chinese industries that are moving south due to rising production costs, favorable business climate and access to regional markets.

He stressed that the global economic landscape is highly competitive and Pakistan needs to position itself as a prime destination for relocation of key industries by developing unique selling points. The report draws lessons from China’s successful SEZ model and outlines what has worked in China and what needs to be adapted for Pakistan. Key findings include the need to attract investors with flexible policies and strategic locations for industrial zones, particularly near ports and business clusters, similar to the success in Shenzhen.

Su Dong, representing PowerChina, highlighted the successful completion of 47 projects in Pakistan, with several others under construction. He indicated that PowerChina is willing to continue working closely with Pakistan and wished the report success.

Su Dong stressed the importance of this joint effort to boost economic growth and foster a stronger bilateral relationship. He reiterated PowerChina’s commitment to supporting Pakistan in its industrial development journey, highlighting the potential for future projects and partnerships that can further strengthen economic ties between the two countries.

Federal Minister for Industries and Production Rana Tanveer Hussain delivered a keynote speech in which he hailed China as a good friend of Pakistan. He stressed the importance of SEZs in attracting Foreign Direct Investment (FDI) and promoting industrialization, noting that relocation of Chinese industries presents a major opportunity for Pakistan.

Hussain stated that the government is committed to providing more incentives and concessions to attract Chinese companies, ensuring full safety for their operations and adopting Shenzhen as a benchmark for the development of SEZs.

He stressed that a few SEZs in Pakistan are already functional and emphasised the importance of export zones to boost economic growth. The minister underlined the need for Pakistan to compete with other regions such as ASEAN, Bangladesh and Central Asia by creating a conducive environment for industrial relocation.

Mr. Zou Yaodong, Chief Administration Officer of China Overseas Ports Holdings Company Pakistan Ltd, warmly congratulated the launch of the report. He noted that SEZs have undergone significant development in recent years and have become engines of economic growth.

However, he acknowledged that there are still many challenges to overcome in the face of global competition. Zou Yaodong assured that his organization is available to assist and support the improvement and development of SEZs in Pakistan, stressing the importance of strategic partnerships and continuous efforts to improve the SEZ framework to attract more investors and industries.

Dr Erfa Iqbal, Additional Secretary and Executive Director General-II (EDG-II) at the Board of Investment (BOI), shared her insights on the report and stressed that the subject is close to her heart. She emphasised that economic survival depends on robust SEZ policies and that China is a valuable example for Pakistan, a model that is being followed by countries such as Cambodia and Vietnam. Dr Iqbal pointed out that while Pakistan has made strides, the success of its SEZs is still debatable due to a range of issues. She praised the report for providing a comprehensive diagnosis of these issues and making strategic recommendations.

Dr. Iqbal emphasized that Shenzhen’s success was not just due to its location, but a combination of factors such as land, labor and capital, all supported by proactive government policies. She stressed the need to reduce transaction costs, improve supportive banking transactions for investors, enhance security measures and ensure business facilitation to create a favorable ecosystem for SEZ development.

The launch event concluded with a renewed commitment to strengthening economic relations between Pakistan and China through strategic SEZ policies. The joint effort marks a significant step towards economic growth and industrial development in Pakistan, paving the way for a prosperous future. The report ‘Aligning Special Economic Zones Policies of Pakistan and China’ is poised to serve as a blueprint for policymakers and industry leaders, and to guide the development of SEZs that can attract global investments and stimulate sustainable economic growth in Pakistan.