Pakistan eyes Gwadar for relocating Chinese industries

Pakistan eyes Gwadar for relocating Chinese industries in wake of rising global economic tensions.

Pakistan has launched initiatives to develop a strategic roadmap aimed at attracting Chinese industries looking to relocate amidst the ongoing tariff tensions between China and the United States. The imposition of steep tariffs on Chinese goods by the U.S. under President Donald Trump’s administration has prompted Pakistan to see an opportunity to position itself as a favorable destination for Chinese companies exploring alternative manufacturing bases.

To this end, Pakistan is designing a comprehensive framework offering incentives for Chinese industries to establish operations in Gwadar, the deep-sea port city central to the China-Pakistan Economic Corridor (CPEC). Alongside this, the government is rolling out a series of economic revitalization measures focused on Gwadar.

The Cabinet Committee on Chinese Investment Projects (CCoCIP) recently directed the Board of Investment (BOI) and the Ministry of Industries & Production to collaboratively formulate a roadmap within five days. The plan will propose measures to attract Chinese manufacturers considering relocation due to the US-China tariff dispute.

During the session, the CCoCIP also reviewed a summary submitted by the Ministry of Maritime Affairs titled “Review/Compliance of decisions taken during previous CCoCIP meetings.” Acknowledging the ministry’s report, the committee adopted several new policy directives to advance Pakistan’s role as a hub for industry relocation.

One key directive instructed the Ministry of Commerce to immediately issue a Statutory Regulatory Order (SRO) to allow the export of Potassium Sulphate fertiliser from Gwadar Port, bypassing current limitations in the Export Policy Order. Although the Economic Coordination Committee (ECC) and the federal cabinet had already approved the measure, it had yet to be officially implemented.

Another decision tasked the Ministry of Planning, Development and Special Initiatives with convening a high-level meeting involving key economic agencies, including the Ministry of Finance, Ministry of Commerce, Ministry of Industries & Production, the BOI, and the State Bank of Pakistan. The agenda of the upcoming meeting is to explore the rollout of a Foreign Currency Facilitation pilot project in the Gwadar Free Zone, with the Finance Division preparing a one-page briefing in advance.

The committee also instructed the Ministry of Maritime Affairs to initiate consultations with local fishermen aimed at enabling international seafood transshipment through Gwadar Port. The outcomes of these discussions are to be documented and presented at the next CCoCIP meeting.

Regarding the Karachi Comprehensive Coastal Development Zone (KCCDZ), the committee mandated the formation of a team consisting of the ministers of Planning, BOI, and Maritime Affairs. This group is tasked with engaging the Sindh chief minister to resolve outstanding issues related to KCCDZ and seek an effective solution.

To address infrastructure concerns, the Power Division was instructed to coordinate with the Naval Authorities to supply electricity to the Gwadar Desalination Plant via the Naval Grid, an interim solution necessitated by the temporary halt in electricity imports from Iran. Furthermore, the Power Division was directed to work with the Gwadar Port Authority to connect the plant to the National Grid by extending the power line from Panjgur, and to present a proposal at the next committee meeting.

The committee also directed the Power Division and NEPRA to speed up the execution of a cabinet directive concerning power supply to the Rashakai Special Economic Zone (SEZ). An implementation update is expected at the upcoming session, and NEPRA has been urged to accelerate its related procedures.

Finally, the Board of Investment has been instructed to promptly act on all unresolved decisions made by the CCoCIP and to deliver a detailed progress report at the next committee meeting.