Daily Times

ISLAMABAD: Chinese companies are in talks to snap up more businesses and land in Pakistan after sealing two major deals in recent months, a sign of deepening ties after Beijing vowed to plough $57 billion into a new trade route across the South Asian nation.

A dozen executives from some of Pakistan’s biggest firms were quoted by Reuters news agency as saying that Chinese companies were looking mainly at the cement, steel, energy and textile sectors, the backbone of Pakistan’s $ 270 billion economy.

Analysts say the interest shows Chinese firms are using Beijing’s “One Belt, One Road” project – a global trade network of which Pakistan is a key part – to help expand abroad at a time when growth has slowed at home, the Reuters report said.

A Chinese-led consortium recently took a strategic stake in the Pakistan Stock Exchange, and Shanghai Electric Power acquired one of Pakistan’s biggest energy producers, K-Electric, for $1.8 billion, it added.

“The Chinese have got deep pockets and they are looking for major investment in Pakistan,” the news agency quoted Muhammad Ali Tabba, chief executive of two companies in the Yunus Brothers Group cement-to-chemicals conglomerate.

Tabba said Yunus Brothers, partnering with a Chinese company, lost out in the battle for K-Electric, but the group is eyeing up other joint ventures as part of a $2 billion expansion plan over the coming years.

Mohammad Zubair, Pakistan’s Privatisation Minister until a few days ago, told Reuters that China’s steel giant Baosteel Group is in talks over a 30-year lease for state-run Pakistan Steel Mills. Baosteel did not respond to a request for comment.

The negotiations come as Pakistani business sentiment turns, with companies betting that Beijing’s splurge on road, rail and energy infrastructure under the China-Pakistan Economic Corridor (CPEC) will boost the economy.

The Chinese charge is in contrast to Western investors, who have largely avoided Pakistan in recent years despite fewer militant attacks and economic growth near 5 percent, the report added.

However, the Chinese step is welcomed by many in Pakistan, since foreign direct investment was $1.9 billion in 2015-16, far below the 2007-08 peak of $5.4 billion.

At the stock exchange signing ceremony, Sun Weidong, China’s Ambassador to Pakistan, said the deal “embodies the ongoing financial integration” between Chinese and Pakistani markets.