Tag Archives: China

Free trade with China may Dampen Investment in SEZs?

on 01/06/2018

Pakistani Manufacturers start selling Chinese-made products with ‘Made in Pakistan’ tags!

Beijing’s push for further trade liberalization under second phase of the Pakistan-China free trade agreement (FTA) may severely dampen prospects of Chinese investment in prioritized special economic zones (SEZs) being set up under  (CPEC).

It would be convenient and cheaper for Chinese companies to manufacture in China and import products into Pakistan at zero duties, which would render the SEZs useless, officials in the Board of Investment (BOI) fear.This will also dash Pakistan’s hopes of starting a new wave of industrialization as almost 60% of the national output is contributed by the services sector which is not job-oriented. This means Pakistan is en route to becoming a trading nation.

Another worrisome aspect of the proposed second phase of the FTA, called FTA-II, is that it is shrouded in secrecy. Both Federal Board of Revenue (FBR) and the BOI were not aware of the tariff lines on which the commerce ministry wanted to slash duties to zero.

The timing of the FTA-II is also a matter of concern for some government agencies as Pakistan is not yet ready for further open trade due to a lack of product diversification and high cost of doing business.The Commerce Ministry says it will not sign the FTA unless every stakeholder is on board including the BOI and FBR.

Prime Minister Shahid Khaqan Abbasi will visit Beijing next month and the government intends to sign the expanded FTA with China. Pakistan has reportedly agreed to offer zero duties on 75% of tariff lines, which constitute roughly 5,340 out of total 7,120 tariff lines. About 35% of tariff lines were already subjected to zero duties, which have caused huge losses to the domestic industries.

It was unearthed in a meeting of the Senate Standing Committee on Finance that Pakistani manufacturers have even started importing goods from China and selling them as ‘Made in Pakistan’ products by placing their stamps on them.The FBR is concerned that the proposed 75% reduction in customs duty will adversely hit its revenues. However, the government said it did not care about the revenue loss because the FTA-II would help increase Pakistan’s exports to China from the current $1.5 billion to $9 billion. – ER Monitoring Desk

International HVACR Expo set to Create New Trends

on 16/04/2018

 

Over 120 companies display 1000 plus products, brands

The 25th edition of HVACR Expo is being held on April 5 – 7, 2018 in Islamabad. The event is supported by 16 related trade and engineering bodies from Pakistan and abroad.

Expected to be the most successful among all previously-held expos, the venue of the event is Jinnah Convention Centre.  The event, organizers say is to witness a direct participation of over 120 companies from Pakistan, Germany, Turkey, China, Malaysia, UAE and Korea who will display over 1000 products and brands. Over 15,000 visitors are being expected for the event.

Pakistan HVACR Expo is going to be truly an international meeting place for professionals and is anticipated to be attracting serious buyers from all over the country and abroad. The event provides an easy and essential route into the market for exhibitors, enabling professionals from across the industry to develop their business in a professional environment.

Pakistan HVACR Expo is the most significant event of Pakistan HVACR Society, conducted on rotational basis at Islamabad, Lahore and Karachi. This is the only and largest trade fair in Pakistan which is exclusively dedicated for displaying latest and innovative Heating, Ventilation, Air-Conditioning, Refrigeration and allied sectors’ technology and products.

In the event, renowned international speakers will also give their talk besides a HVACR students’ completion planned to encourage students of related fields.  The exhibition, spread over 121,000 square feet will have a B2B meeting area. International conferences, seminars, product presentations.

With the conference theme as “Conserve Energy for better Future”, this mega event will bring together national and international distinguished speakers, business entrepreneurs, government officials, consultants, contractors, equipment suppliers, scholars, from related fields/industry at one forum.

Key Topics of the conference

Energy: renewable, efficiency, audit conservation

Innovative building materials & construction methods

New HVACR technologies, designs and equipment

Air distribution, quality and equipment

District cooling & thermal storage

Refrigerants

Any relating innovative technology, procedure and best practices

Governmental policies, protocols, procedures, relating to HVACR Industry

 

Door open to yuan-based trade with China: SBP

on 30/01/2018

Dec 19, 2017, Minister for Planning and Development Ahsan Iqbal said that the government was considering a Chinese proposal to use renminbi (RMB or yuan) instead of the US dollar for payments in all bilateral trade between China and Pakistan.The decision was taken after rejecting a Chinese proposal to allow yuan as legal tender in Gwadar, Balochistan.

`The SBP, in the capacity of the policy maker of financial and currency markets, has taken comprehensive policy related measures to ensure that imports, exports and financing transactions can be denominated in yuan,` said a statement issued by the SBP. It further said both public and private sector enterprises (ie both Pakistanis and Chinese) are free to choose yuan for bilateral trade and investment activities.

The RMB is an approved currency for denominating foreign currency transactions in Pakistan. The SBP has already put in place the required regulatory framework which facilitates use of yuan in trade and investment transactions such as opening of letter of credits (LCs) and availing financing facilities in yuan.

In terms of regulations in Pakistan, yuan is on a par with other international currencies such as dollar, euro and Japanese yen, etc. In FY17, Pakistan exported goods and services worth $1.62 billion while the imports from China were $10.57bn reflecting a great imbalance.

The two countries have yet not chnalised a free trade agreement (FTA). The FTA may benefit exports from Pakistan as the country critically needs to improve its exports due to huge trade deficits. After signing a Currency Swap Agreement (CSA) with People`s Bank of China (PBoC) in 2012,

SBP had taken a series of steps to promote use of yuan in Pakistan for bilateral trade and investment with China. The central bank has allowed banks to accept deposits and give trade loans in yuan. For onward lending the proceeds of CSA, the SBP has put in place the loan mechanism for banks to get the yuan financing from the SBP for onward lending to importers and exporters having underlying trade transactions denominated in the Chinese currency.

In 2012, the SBP issued a circular that said the authorised dealers may open for-foreign currency accounts and extend trade loans under FE-25 Scheme in US dollar, pound sterling, euro, Japanese yen, Canadian dollar, UAE dirham, Saudi riyal, Chinese yuan, Swiss franc and Turkish lira. Industrial and Commercial Bank of China Ltd (ICBC) Pakistan has been allowed to establish a local yuan settlement and clearing setup in Pakistan enabling it to open yuan accounts of the Chinese banks operating in Pakistan and to facilitate settlement of yuan-based transactions such as remittance to/from China.

With the opening of Bank of China in Pakistan, the access to onshore Chinese markets will strengthen further. Apart from the above, several banks in Pakistan maintain onshore yuan nostro accounts, said the SBP.  Considering the recent local and global economic developments, particularly with the growing size of trade and investment with China under CPEC, the Bank foresees that yuan denominated trade with China will increase significantly and will yield long term benefits for both the countries. When asked, the SBP spokesman said the statement on yuan was issued due to many queries from media about the use of the currency for bilateral trade. He said it seemed there was confusion about the use of yuan for bilateral trade which was clarified with this detailed statement.

Why Pakistan refuses ADB loan for Railway ?

on 09/05/2017

Pakistan has refused part financing from the Asian Development Bank (ADB) for the $8 billion Karachi-Peshawar Railway Line (ML-1) after China said it wanted to fund the project single-handedly. `China strongly argued that two sourced financing would create problems and the project would suffer, Minister for Planning and Development Ahsan Iqbal has revealed. The minister said he would not comment whether the Ministry of Railways has resisted the Chinese request for fears of monopoly, but said the entire financing would now come from China. The project was originally planned to be partly funded by the Manila-based ADB. He said ADB would be accommodated in some other projects, such as those under the Central Asian Regional Economic Cooperation programme. Under the original plan, ADB had to provide $3.5bn for the 1,700-kilometre-long line considered the backbone of the country`s logistics connecting two major ports with the rest of the country for transporting goods and passengers. The minister said Chinese government therefore wanted that the project financing should be kept single-sourced. Pakistan and China are expected to sign a formal agreement in this regard next month. Iqbal said the Planning Commission was making efforts to maximise allocation of funds for the next year`s development programme as it would be the final year of the current government. Therefore, the government would like to complete maximum number of projects during this period so as to support the growth momentum. He said it was also important to have larger development portfolio for the next year because it would trigger activity in the construction industry on which a number of other growth oriented industries were dependent because of its potential to create jobs.

World Bank to fund Peshawar-Kabul highway

on 02/05/2017

World Bank (WB) has agreed in principle to finance the mega project of building a highway between Peshawar and Kabul. This was disclosed by Finance Minister Ishaq Dar after his meeting with Vice President of WB for South Asian Region Ms. Annette Dixon in Washington in April. Discussing the current economic situation in Pakistan, Dar said WB had been a great partner in the country’s development. Talking to the Pakistani delegation, Ms Dixon said WB would like to work more closely with Pakistan. She appreciated the initiatives taken by the Pakistani government for putting economy on the path of sustainable economic development. During the course of discussion, Dar proposed to WB to finance a major project of constructing a highway from Peshawar to Kabul for improving regional connectivity. The World Bank has agreed in principle to finance the project. Dar also proposed that WB might consider leading a consortium to finance Diamer Bhasha Project. Dar said the government took concrete measures to bring structural changes for the sustainable economic development in the country. The minister said the government had established a Micro Finance Company to extend such facilities to the poorer segments of the society. He informed WB team that Pakistan was one of the leading countries for ensuring financial development in the country and for this purpose a strategy had been devised which was being implemented thoroughly. He said 10 more laws were being enacted which aimed at further facilitating the private sector. In response to a question about policy reforms in Pakistan, he remarked that the parliament had so far passed 24 laws to create conducive and enabling environment for growth and private sector investment. In yet another communication, WB Group President Jim Yong Kim has said that the multilateral lender does not plan to change its stance on financing alternative energy projects and mitigating the effects of climate change. Asked about the Trump administration’s scepticism about climate change at a news conference, Kim said WB would continue to work with governments and the private sector to boost financing for alternative energy, especially in China, India, Indonesia, the Philippines, Pakistan and Vietnam. “The science of climate change didn’t change with any particular election, and I don’t see that it will,” Kim said. “We have to be an evidence-based organisation,” he added.