KARACHI: Federal Minister for Commerce Syed Naveed Qamar said on Friday China’s eastern province of Shandong was ready to relocate its labor-intensive industries to Pakistan in order to bring down production costs.
Speaking to a group of journalists in Karachi, Qamar said the relocation of the Chinese industries was part of the multibillion-dollar China-Pakistan Economic Corridor (CPEC).
“China’s eastern province of Shandong is set to relocate its labor-intensive industries to Pakistan to reduce production costs, which is part of CPEC,” he said during a media interaction at the Trade Development Authority of Pakistan office in Karachi.
The minister said China would also build an industrial park in Pakistan which would become a focal point for all the industrial requirements of the country from China and vice versa.
Qamar said that projects like solar panel assembly plants, metal refining plants, fertilizer production plants, and food processing plants were being considered by China for future investment in Pakistan.
Asked about the current dollar liquidity issue, he said the federal cabinet had approved a framework of business-to-business barter trade that was being implemented as an alternative to the compatible banking system.
Last year, Pakistan’s commerce ministry issued a notification for the operationalization of barter trade under the agreement between the Quetta Chamber of Commerce and Industry (QCCI) and the Zahidan Chamber of Commerce and Industry (ZCCI) in Iran.
Islamabad and Tehran lack formal banking channels mainly due to the imposition of international sanctions on Iran.
The commerce minister said the scope of the barter trade was being expanded.
“Initially, it was implemented for Iran and Afghanistan,” he continued. “But now its scope will be expanded to Central Asia and Africa where there is no compatibility with their banking system.”
He added the barter system would be enforced only in countries or regions where the banking system was not suitable.
“We have a surplus trade with the United States, European Union, United Kingdom, and even the Middle East, so there is no benefit of doing B2B barter trade,” he said.
He maintained there was no limit of goods set under the barter trade mechanism and anything that was in demand could be exchanged.
“We are also expecting that this could be done with China. The mechanism will also help boost Pakistan’s exports,” he added.
In response to a question about the Generalized Scheme of Preferences Plus (GSP+) status granted by the European Commission to Pakistan, the minister said the government was working with the commission for the next program.
“We are confident that we will not only successfully complete the current program but also manage to avail of the next program,” he added. “Our exporters will continue to benefit from concessional duties.”
Under the GSP+ status, Pakistan enjoys zero percent duty on several products since more than 78 percent of the country’s exports enter the EU at preferential rates.
Pakistan’s current GSP+ status is set to expire on December 31, 2023.