China is currently leading the race for investments in Pakistan with billions of dollars of investment pouring in for CPEC projects alone. Chinese have been actively making investments in the country ever since CPEC project kick-started. However, the only fortunate sector that has seen such active interest on the part of China is automobile industry of Pakistan. Reports have it that Chinese have been vary of investing in other sectors and have not shown any interest in buying land in areas of Karachi to set up manufacturing plants.
High cost of lands in Karachi is most likely the major reason that is keeping Chinese investors away from setting up a plant in Karachi. These investors have not shown any interest in acquiring land in Site and Sindh Industrial area. According to Asad Nisar Barkhurdaria, President of S.I.T.E Association of Industry, there is no cheap land available in Site area which the Chinese are looking for.
Prices in the Site area are sky rocketing with range in between Rs. 150-200 million per acre. Asad believes that the Chinese are not looking to set up factories in the city. Instead, they want to trade in goods like tyres and plastic items, and thus want to get hold of cheaper land areas. Such land is available to these Chinese investors in Port Qasim industrial area where prices are low as compared to Site and Korangi Industrial area.
Prices in Korangi Industrial Area are even higher than the prices of Site area with per acre land costing around Rs. 200-300 million. There is no way that Chinese investors will move towards Korangi Industrial area to setup factories at high cost. Asad Nisar, however, said that there are Chinese investors who have been present in Site area for several years.
Masood Naqi, Chairman Korangi Association of Trade and Industry (KATI), said that Chinese are now taking interest in installing sewerage system, RO plants, waste treatment system, and other engineering projects. While interest has been shown by Chinese in engineering and mechanical works, there has been zero interest from Chinese companies in the garments and apparel sector.
Chairman Pakistan Apparel Forum, Jawed Bilwani said that no Chinese company has so far shown interest in the garments sector of Pakistan. Chinese garments are cheaper than Pakistani garments which is a major hurdle for companies to invest and partner in Pakistan.
While other sectors have not benefited from Chinese investments, the automobile sector is currently the major winner from Chinese investments. Five Chinese automobile companies have partnered with local companies to setup manufacturing plants with three facilities in Lahore and two in Karachi.