‘Accord on industrial cooperation breakthrough for CPEC Phase II’

ISLAMABAD: Abdul Razak Dawood, PM’s aide on Commerce and Investment on Wednesday said the signing of latest framework agreement on Industrial Cooperation (IC) between Pakistan and China is a 'breakthrough' for CPEC Phase II.

Both the neighboring countries recently signed the long-awaited framework agreement under CPEC during the PM Imran Khan’s visit to China.

“Signing of framework agreement on industrial cooperation between Pakistan and China is a breakthrough for CPEC Phase II and a significant outcome of PM Imran Khan's visit to China,” Dawood said via his Twitter handle.

“The agreement will augment the process of B2B [business to business] collaboration and matchmaking and pave the way for industrial relocation from China and export-led growth with numerous direct/indirect benefits to the economy,” he added while congratulating the Board of Investment (BOI) for the achievement. It is to be noted that for initiating the industrialization phase of the CPEC, both China and Pakistan had initiated work on it in 2016 by establishing the CPEC Joint Working Group (JWG) on industrial cooperation, which was followed by signing of a memorandum of understanding (MoU) in 2018.

In August 2020, they reached to elevate accord on industrial cooperation (IC) into a framework agreement to develop B2B joint ventures, and to realize vision for special economic zones and industrialization under the second phase of CPEC.

An official of the BOI said the first phase of the CPEC was mainly consist of projects like roads and energy required the leading role of the government while the second phase required complete change in management and roles of actors, he shared. The second phase calls for enhanced role of industrialists, the private sector, and the business community, while the government’s role would only be that of a facilitator by devising effective policies, laws, and efficient infrastructure, to facilitate B2B and people to people linkages.

It’s worth mentioning that a significant progress has been achieved on special economic zones (SEZs) development and colonisation, wherein four CPEC SEZs, Rashakai in Khyber Pakhtunkhwa, Dhabeji in Sindh, M-3 Allama Iqbal in Punjab, and Bostan in Balochistan are now in advanced stage of development and being prioritised on early completion. The geographical proximity between China and Pakistan will allow these SEZs to foster economic interdependence for mutual economic advantage. The framework agreement focuses on enhancing the country’s industrial competitiveness, technology transfer, relocation of Chinese businesses, skill development, and labour productivity.

The accord is envisaged to enhance B2B and project to project (P2P) ties, balance and modernise existing industry, expedite SEZs development and promotion, seek technical and financial assistance from China, increase production capacity, and facilitate businesses with support of financial institutions from both sides.