By Ayesha Saba

Pakistan's investment engagement with Chinese businesses is gaining momentum following 34 memorandums of understanding (MoUs) and agreements reached at a recent conference in Shanghai, with growing emphasis on manufacturing partnerships, technology transfer and export-oriented industrial development in line with the second phase of the China-Pakistan Economic Corridor (CPEC 2.0).

The agreements, signed during the October 15 Sindh Investment Conference, cover energy, minerals, electric vehicles, automotive manufacturing, artificial intelligence, cloud computing, agriculture, food processing, logistics and warehousing.

Organised by the Sindh Investment Department in collaboration with the Consulate General of Pakistan in Shanghai, the conference resulted in 10 government-to-government and 24 business-to-business arrangements. Representatives of more than 100 Pakistani and Chinese companies participated, facilitating direct engagement between prospective investors and local enterprises.

The initiative reflects the increasing focus of Pakistan-China economic cooperation on industrial production, private-sector partnerships, technology transfer and export development, alongside the infrastructure investments associated with earlier phases of CPEC.

Tahir Jamal, former adviser to the Islamabad Chamber of Commerce and Industry (ICCI), told Wealth Pakistan that the significance of the Shanghai conference lay in its potential to connect Chinese investors directly with Pakistani businesses and support long-term industrial development.

“The significance of the Shanghai conference lies in its potential to connect Chinese investors directly with Pakistani businesses. Pakistan needs investment that goes beyond financial commitments and contributes to industrial production, technology transfer, employment and export growth. Business-to-business cooperation can play an important role in achieving these objectives,” he said.

Jamal said Pakistan should identify niche products and industries, including textiles, IT services, food processing and light engineering, where domestic businesses could realistically integrate into Chinese and global supply chains.

He emphasised that attracting foreign capital alone would not guarantee industrial development unless investment created meaningful connections with Pakistani manufacturers and suppliers.

“Policy inconsistency, delays in infrastructure delivery, and bureaucratic red tape continue to hamper investor confidence,” Jamal said, urging the government to align industrial and trade policies so that special economic zones support both foreign investment and domestic entrepreneurship.

He said Pakistan should identify specific products within priority industries where Chinese investment could strengthen domestic manufacturing and export capacity.

In textiles, he identified man-made fibre garments, technical textiles and value-added apparel as promising areas, while automotive components, electrical equipment and industrial machinery parts could offer opportunities for joint ventures in light engineering.

Jamal said Chinese manufacturers could contribute advanced technology, industrial expertise and access to international supply chains, while Pakistani firms could provide local production facilities, workforce capabilities and market knowledge.

“For example, an automotive investor operating in a special economic zone should be encouraged to source selected parts from Pakistani manufacturers, develop local suppliers and gradually increase domestic content. Similarly, Chinese investment in textile processing should help Pakistani exporters move into higher-value products rather than merely expand existing production capacity,” he said.

He added that such partnerships could help Pakistani businesses develop stronger industrial capabilities and improve their participation in regional and international production networks.

Speaking to Wealth Pakistan, an official of the Trade Development Authority of Pakistan (TDAP), who requested anonymity, said the agreements reached in Shanghai demonstrated growing interest among Chinese businesses in Pakistan's investment potential.

“The agreements reached in Shanghai reflect growing interest among Chinese businesses in Pakistan's investment potential. Such engagements are important because they allow investors to explore commercial opportunities, understand the local business environment and establish relationships that can gradually develop into long-term investment partnerships,” the official said.

The official emphasised that sustained engagement and effective investment facilitation would be important for translating the agreements into commercially viable projects.

“A coordinated approach to investment facilitation can help Chinese businesses explore opportunities with greater confidence. Providing timely information, supporting project development and maintaining regular communication with investors would help sustain the momentum generated by the Shanghai conference,” the official added.

The official also acknowledged the role of recent government initiatives, particularly the Special Investment Facilitation Council (SIFC), in facilitating investment processes and strengthening investor confidence, especially among investors from China and Gulf countries.

Such initiatives, the official said, could help create a more supportive environment for international investors interested in establishing industrial and commercial partnerships in Pakistan.

However, the official emphasised that the long-term economic benefits of foreign investment would depend on its contribution to expanding Pakistan's productive capacity, strengthening industrial activity and supporting sustainable economic growth.

The Shanghai agreements provide an opportunity to advance these objectives by connecting Chinese investment and technological expertise with Pakistan's manufacturing capabilities and export potential.

Their longer-term significance will depend on how effectively the participating businesses and relevant government institutions convert the agreements into operational projects, joint ventures and industrial partnerships under CPEC 2.0.

Credit: INP-WealthPk