Skip to main content

Reform needed to boost construction of CPEC

Reform needed to boost construction of CPEC

Liu Zongyi

THE Pakistani government officially launched the Long-Term Plan (LTP) for the China-Pakistan Economic Corridor (CPEC) on December 18, 2017. The plan covered key areas of cooperation including textile, chemicals, medicine, steel, home appliances, engineering equipment, construction materials, manufacturing, agriculture, gardening, ICT, finance and logistics. It is likely that industrial cooperation and building of industrial parks would face some resistance because of political reasons.
📌Conflict between federal and local authorities, clashes of interests between different provinces and partisan infighting have affected construction of the CPEC. Some political parties and local interest groups will capitalize on the CPEC, the LTP and bilateral industrial cooperation to achieve their political goals.

Some elites and people in Pakistan consider China’s investment in the country a way of exporting its outdated production facilities and grabbing resources and gains from Pakistan, which would leave the country in deep debt.
This feeling toward China, as it gains wide popularity through media reports, will affect industrial cooperation and the setting up of industrial parks. It will serve the interests of individuals and groups with vested interests.

To advance industrial cooperation, especially construction of industrial parks, 🔴Pakistan needs to carry out deep reforms in several areas, amend laws and frame corresponding policies. This requires coordination across party lines and more governmental efficiency.

It is hard to amend the constitution and laws in Pakistan because of its political system. Constitutional amendment and law changes can only be achieved through political negotiations. However, the country is not fully prepared for this.
Pakistani experts and scholars think the only feasible way of amending laws and framing special policies is to undertake bottom-up reform.

But media outlets in Pakistan rarely mention legal reform in their reporting about the CPEC. I have worked in the management commission of an economic development zone in East China’s Shandong Province for a while and was responsible for drafting provisional business-friendly policies for foreign investors, of which land and taxation rules were given preference. Chinese provincial governments have offered convenience to overseas investors in accordance with Chinese laws and policies to develop a favorable climate for them. But I cast doubt on whether Pakistan can foster such an environment.

In addition, the Pakistani government needs to free its mind. It should recognize that industrial growth has its own laws. Industry in every country must move from the low end toward the high end of the value chain. The Third Industrial Revolution has prompted the development of industrial division from inter-industry specialization to intra-industry and intra-product specialization. A large number of manufacturing industries have relocated themselves from developed to developing nations, giving rise to the system of international division of labor and the creation of industrial, supply and value chains worldwide.

As firm promoters of globalization, millions of small- and medium-sized companies can benefit from the rapid growth of internet and information technology and hence engage themselves in global trade and investment like the transnational enterprises did.
However, every country should frame industrial policies in line with its level of development and comparative advantage and avoid haste to get quick results.
Agricultural industrial parks should be given high priority in the construction of the CPEC. Apart from cooperation in processing and manufacturing sectors, agricultural cooperation constitutes an important part of industrial coordination and weighs more for Pakistan. As a pillar industry and a comparative advantage for Pakistan, agriculture can quickly deliver economic benefits and alleviate poverty.

—Courtesy: GT
[The author is a senior fellow of Shanghai Institutes for International Studies, a visiting fellow of the Chongyang Institute for Financial Studies, Renmin University of China and a distinguished fellow of the China (Kunming) South Asia & Southeast Asia Institute;]


Popular posts from this blog

Balochistan to establish first medical university

The Newspaper's Staff CorrespondentOctober 25, 2017QUETTA: The provincial cabinet on Tuesday approved the draft for establishing a medical university in Balochistan.Health minister Mir Rehmat Saleh Baloch made the announcement while speaking at a press conference after a cabinet meeting.“The cabinet has approved the draft of the medical university which would be presented in the current session of the Balochistan Assembly,” he said, adding with the assembly’s approval the Bolan Medical College would be converted into a medical university.Published in Dawn, October 25th, 2017

5 Shia Hazara community members gunned down in Pakistan

Five members of the minority Shia Hazara community, including two women, were killed on Sunday in an attack by unidentified gunmen in Pakistan’s restive Balochistan province.This is not the first time that members of the Hazara community have been targeted in Quetta and other parts of Balochistan.(Reuters File Photo)Updated: Sep 11, 2017 00:20 ISTBy Press Trust of India, Press Trust of India, KarachiFive members of the minority Shia Hazara community, including two women, were killed on Sunday in an attack by unidentified gunmen in Pakistan’s restive Balochistan province.The gunmen targeted a car in Kuchluck area of Quetta while it was coming from the Chaman border crossing area, police said.The firing took place when the travellers had stopped at a filling station to refuel their vehicle. Five people of the Shia Hazara community, including two women, died in …

China’s 'Digital Silk Road': Pitfalls Among High Hopes

Will information and communication technologies help China realize its Digital Silk Road?By Wenyuan WuNovember 03, 2017In his speech at the opening ceremony of China’s 19th Party Congress, President Xi Jinping depicted China as a model of scientific and harmonious development for developing nations. Xi’s China wants to engage the world through commerce but also through environmental protection and technological advancement. This includes Beijing’s efforts to fight climate change with information and communication technologies (ICTs) that it plans to export along its “One Belt One Road” initiative (OBOR). Xi may have ambitious plans, but could China be throwing up obstacles in its own way?In his speech, the Chinese president emphasized the need to modernize the country’s environmental protections. The Chinese state is taking an “ecological civilization” approach to development and diplomacy, with a natio…