Up the corridor

By Chu Daye in Haikou Source:Global Times Published: 2015-4-19 23:28:01

Companies eager to join China-Pakistan project

Chinese companies have voiced their high hopes for the China-Pakistan Economic Corridor, a flagship project of China's "One Belt, One Road" initiative. The firms believe it could open up new markets and benefit all participants.

Pakistani workers on Saturday arrange a welcome billboard featuring the Chinese and Pakistani national flags ahead of the visit by Chinese President Xi Jinping to Islamabad. Photo: AFP

Chinese companies expressed their eagerness to participate in the China-Pakistan Economic Corridor (CPEC), a flagship project of China's "One Belt, One Road" initiative, during a seminar held from Wednesday to Friday in Haikou, capital of South China's Hainan Province.

The "One Belt, One Road" initiative, which refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road, was launched by President Xi Jinping in 2013. As part of the plan, China aims to support partner countries along the routes in developing infrastructure.

Experts said at the seminar that the CPEC is a vital aspect of the initiative as Pakistan is both part of the Silk Road Economic Belt through the economic corridor and part of the 21st Century Maritime Silk Road through the port of Gwadar on the Indian Ocean.

"We have visited Pakistan several times, looking for business opportunities, " Jing Yongbo, a partner at Guangdong-based Yongwei Co, a private engineering company in the solar and wind power sector, told the Global Times at the seminar on Friday. 

"Currently, the projects in the CPEC are mostly about infrastructure and energy and are led by State-owned companies, but we are searching for what can we do," Jing said. "We cannot afford to wait until everybody is already onboard."

Local interests

For the CPEC to succeed, it is vital that local people along the corridor have a stake in it, Zhao Baige, chairwoman of the advisory committee of CASS-RANDI, a Chinese think tank, told the Global Times on Friday.

Li Yuanshi, general manager of international trade with Shandong Shifeng (Group) Co, said his company wants to apply to open a demonstration area for advanced agriculture in Pakistan, similar to ones that the company operates in Northeast China's Heilongjiang Province. 

Shifeng is a leading manufacturer of agricultural machinery and vehicles in China and Li has worked in Pakistan for a decade.

Li said his company now sells 3,000 tractors annually, and the company's Pakistan business has grown at an annual rate of 30 percent in recent years.

The company established a plant to assemble tractors with parts imported from China in an industrial park in Lahore in 2012, providing 200 local jobs.

Lahore is the second-largest city in Pakistan and the provincial capital of Punjab province.

Although most of the CPEC projects relate to energy and infrastructure, Li said Shifeng's business has a key role to play in Pakistan's efforts to tap its demographic advantages and develop its export-oriented industries such as textiles and electronics processing.

Pakistan has a youthful population - more than half of its people are below the age of 35 - and 70 percent live in rural areas, according to experts at the meeting.

"Introducing advanced agriculture would free up more of the workforce, and they could then join other sectors, giving the Pakistani economy more vitality," Li said.

Li also noted that the infrastructure deals under the CPEC will bring more and better roads. This will reduce the transportation costs for Shifeng, which transports its parts via roads from Karachi to its plant in Punjab.

Shifeng is currently the only Chinese tractor brand in Pakistan and competes with UK-based Massey Ferguson and Italy's Fiat.

Li said his company wanted to localize its supply chain, and has set a target for 30-50 percent of its parts to be provided by local suppliers within five years. This will help it in competing with bigger European rivals, which have been operating in Pakistan for decades.

But the localization drive needs more policy support from the Pakistani government, Li said.

"Currently, the import duties for parts are higher than for whole vehicles, and this actually deters companies that are trying to localize their production," Li said. 

Information advance

Boosting connectivity is a key target of the "One Belt, One Road" initiative, and experts emphasized the importance of the sharing of information.

An information corridor will supplement, support and sustain the CPEC, Mushahid Sayed, Pakistani senator and president of the Pakistan-China Institute, said at the seminar.

Zhang Hongping, chairwoman of Asia-Europe Exchange, said policy support such as easier customs clearance plays a vital role in overland transportation.

Zhang's e-commerce platform facilitates cross-border trading of spot-delivery commodities between Central Asian countries and Northwest China's Xinjiang Uyghur Autonomous Region.

The items traded include general merchandise, furniture, and machinery from China, as well as cotton, cotton yarn and fertilizer from neighboring countries. 

Zhang's platform was formed in 2010 with help from the Ministry of Commerce, and there are now 4,000 firms registered with the exchange.

Zhang said she wished the Pakistani government could grant permits to connect the database for her platform to its Pakistani counterparts. She also wants China's central government to promote information sharing between trading platforms in western China and those in coastal regions.

"We come from Xinjiang, representing the Silk Road over the land, and we hope the information on our platform can be linked with that of similar platforms in the costal regions so that the information on the Silk Road Economic Belt and the 21st Century Maritime Silk Road are connected and complementary to each other," Zhang told the Global Times Friday.

Policy also plays a vital part "in cutting logistics costs and transportation time," Zhang said.

For instance, a cargo train from Kuitun in Xinjiang to Tbilisi in Georgia is being operated under a five-nation program that allows easier access for the train.

According to a report posted on the website of the Urumqi customs on February 27, the train takes only eight days to complete its 5,500-kilometer-long voyage, rather than the estimated 28 days it would take without the eased access agreement.

Zhang said there is strong demand among Chinese traders for cotton and cotton yarn from Pakistan, while Chinese household appliances, machinery and construction materials are needed in Pakistan, so the trading of materials and resources can be mutually beneficial.

Improvements to roads, warehouses, payment methods and financial services will all make business related to the "One Belt, One Road" initiative smoother, Zhang said.

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