Chinese Firms to Explore more opportunities in CPEC Phase-II

Chinese firms operating in Pakistan expect better opportunities for the second phase of the China-Pakistan Economic Corridor (CPEC) following Prime Minister Shehbaz Sharif’s recent visit to China. The visit aimed to revitalize official and private Chinese investments in the multi-billion-dollar corridor initiative, which has faced a slump due to various challenges. During the visit, Prime Minister Sharif and President Xi Jinping reaffirmed their commitment to enhancing economic cooperation through timely completion of ongoing CPEC initiatives. The two leaders discussed the launch of five new corridors: the growth corridor, economic development projects corridor, innovation corridor, green corridor, and regional connectivity corridor.

Focus Point of CPEC in Phase-II 

The second phase of CPEC is expected to focus on business-to-business cooperation, which could yield further economic dividends for Pakistan through Chinese investments in manufacturing, agriculture, and technology. Chinese investors remain cautious due to issues such as poor governance, bureaucratic red tape, and security concerns for Chinese workers in Pakistan. Facilitate technology transfers and adoption of modern management practices, leading to skills upgradation and improved competitiveness. The initiative has already seen significant investments from China, with $25.4 billion invested in various transport, energy, and infrastructure projects. Pakistan has identified 13 priority sectors for enhancing export-oriented industry and encouraged Chinese top companies to invest in these sectors. 

The Key Differences between CPEC Phase-I and Phase-II

1. Phase-I

   Emphasized energy generation and transportation infrastructure projects, primarily focusing on the development of power plants and road networks. Emphasized energy generation and transportation infrastructure projects, primarily focusing on the development of power plants and road networks. Primarily focused on infrastructure development.
   

2. Phase-II

   Shifts focus to industrial cooperation, agricultural development, trade promotion, and tourism, with a greater emphasis on economic growth and job creation. Shifts focus to industrial cooperation, agricultural development, trade promotion, and tourism, with a greater emphasis on economic growth and job creation. Places greater emphasis on creating a conducive business environment to attract foreign direct investment (FDI) and tourists.

Specific Sectors will Chinese Investments Focus on in CPEC Phase-II

• Industrial Cooperation

Establishment of industrial parks and special economic zones (SEZs) to promote manufacturing and exports.

• Agricultural Development
  

Investments in the agricultural sector to boost productivity and exports.

• Trade Promotion

Initiatives to enhance trade between China and Pakistan.

• Tourism

Expansion of the tourism sector to create new job opportunities and contribute to economic growth.

• Energy and Infrastructure

Continued investments in energy and infrastructure projects, with Pakistan seeking more than $17 billion in Chinese investments for 10 projects in these sectors.

• Mining, IT, and Other Sectors

  Chinese investments in mining, IT, and other sectors to support Pakistan’s economic development.