Cheng Xizhong, a special commentator of China Economic Net, a visiting professor of Southwest University of Political Science and Law, a senior fellow with the Chahar Institute, a former Defense Attache in South Asian Countries, a former UN Senior Military Observer
Recently, according to Pakistani media reports, Yao Jing, China's Ambassador to Pakistan, said at a seminar in Lahore that in Pakistan, the main reasons for the decreasing number of the Chinese investors are the lack of consistency in Pakistan's business policies, high tax rates, lack of preferential tax policies and a good business environment.
I fully agree with Ambassador Yao Jing. Now, some Pakistani friends complain that China-Pakistan relations are so close, then why don't Chinese businessmen invest heavily in Pakistan? Frankly speaking, China now has the capital and technologies, and the Chinese enterprises are looking for investment opportunities all over the world. But Pakistani friends may not fully understand that China is now a market economy. The investors have the final say regarding where their capital goes. Of course, the investors mainly consider the business environment, and whether they can get profits from the investment, and whether they can get proper return.
Not only do the Chinese investors pay close attention to Pakistan's investment market and environment, but there are other big investment countries in the world, such as Japan, South Korea, Saudi Arabia and other Middle East oil-producing countries. Investors from these countries are also keen to see a fundamental improvement in Pakistan's business environment. The CPEC and the substantial improvement of power shortage and the construction of transportation infrastructures have greatly improved Pakistan's basic investment environment, showing foreign investors the dawn of Pakistan's strategic investment value.
Why has China changed so much in 40 years? Why has China attracted so much foreign investment in 40 years? The important reason is that China has a national development strategy. China has a set of preferential policies for attracting foreign investment and maintained the continuity of the policies. In the 40 years of reform and opening up, if there has been any change, that is China's door is opened wider and wider and the policies for foreign investment are more and more relaxed.
Prime Minister Imran Khan has been emphasizing the improvement of people's livelihood since he took office, and his motives are above reproach. But I believe that the CPEC, which aims to solve the bottleneck problems of national development, is the biggest strategic project that concerns people's livelihood. Chairman Mao had such an important thought, that is, to concentrate superior forces to fight the war of annihilation. If tens of billions of US dollars are diverted to schools, hospitals, police stations and rural lanes, when will the effect of fundamentally changing the country's poverty and backwardness be achieved?
On the issue of policies for Pakistan's national development, disputes continue, so there is no continuity of the policies, which seriously affects flow of foreign investment into Pakistan.. There are many well-known economists in Pakistan. They should know that if the country is to develop in the long run and attract large amounts of foreign investment, all parties should form a unified will through democratic procedures, the government policies should have continuity, the whole country should be united in good faith, the policies restricting foreign investment should be adjusted, and the business environment should be substantially improved.
We are pleased to see that Prime Minister Imran Khan has been making a lot of efforts to improve the investment environment since he took office. It is said that the Pakistani government is going to introduce new policies in favor of foreign investment soon, which I think will be warmly welcomed by the business circles of relevant countries including China.
(Cheng Xizhong, a special commentator of China Economic Net, a visiting professor of Southwest University of Political Science and Law, a senior fellow with the Chahar Institute, a former Defense Attache in South Asian Countries, a former UN Senior Military Observer)