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Is Growing Chinese Influence Hampering Pakistan FDI and Turning Investors Away?

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The Pakistan FDI is expected to rise by almost 60%, as reported by the Head of the Board of Investments in Pakistan. However, with increasing Chinese influence in Pakistan and other south Asian countries, foreign investors seem to be unsure and this may impact the Pakistan FDI. So will the Pakistan FDI rise as expected?

China’s BRI project has pumped in large financials and development to contribute to the overall Pakistani economy. Many major constructions like roads, power stations and global ports are being built by Chinese companies in Pakistan, funding infrastructure and Pakistan FDI growth.

Also Read: Pakistan Economy May Collapse Due to FATF Action

China Plays a Major Role in Growing Pakistan FDI

These many investments by China, have contributed to over 5% surge in Pakistan’s economic growth. With the current tensions between Pakistan and the US, over militancy, China aided the country financially and also strengthened ties on many fronts.

A Pakistani FDI promoter stated that foreign investors are reluctant to invest in Pakistan as there is a false perception that the Chinese authorities would enjoy extra and exclusive benefits and concessions, making at an uneven investing region. He also stated that the Pakistan FDI was not being ‘taken over’ by China. He further clarified that China did obtain soft loans but the money was being provided by China itself, and it was for the CPEC project. However, upcoming CPEC initiatives include setting up of some SEZs to promote Pakistan FDI and growth and China would not get any biased treatment.

Also Read: CPEC Project To Greatly Benefit Pakistan: Pak Media

Pakistan FDI and CPEC are Independent of Each Other

According to data shared by the Central bank of Pakistan, Pakistan FDI has been gradually increasing ever since it hit an all-time low in 2014-15. However, the CPEC project are independent and over twenty CPEC are being implemented currently. This means that these projects have either begun work or the financial deals have been closed on them.

Additionally, cases of militancy and terror in Pakistan have also sharply declined and better security measures have been put in place. Many countries are showing a peeked interest in Pakistan and thus it comes as no surprise that the Pakistan FDI is expected to continue growing as the country is welcoming investors to do business.

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