China as guardian angel to Pakistan economy and

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China as guardian angel to Pakistan economy and current scenario 

By: Muneeb Javaid

Pakistan is now facing the worst economic crises of its whole history. These crises are caused by many direct and indirect factors like; energy crises, political instability, terrorism, no FDI (Foreign direct investment) etc. All these factors are related to each other, one factor causes the other factor and as a whole these factor affects the economy in a bad way. No investors want to invest in Pakistan due to the instable conditions, even the investors who already had invested their investments for years in Pakistan they are pulling their investments and transferring it to Malaysia and Bangladesh. Inflation is high in Pakistan and basic necessities of life are expensive, HDI (human development index) is low, so the cost of living here is very high. In this scenario it is very difficult for locals to establish business and make investments. 

Government of Pakistan is taking many initiatives to stabilize the economy of Pakistan and resolving other issues. State Bank of Pakistan has presented a good monetary policy this year, due to that GDP is raising. This year GDP is comparatively better than the previous 5 years, but it is still too low to compare it with other developed and developing countries. According to strategic position of Pakistan, it needs to have a companion who can share its investments with Pakistan. Considering all the factors it is very difficult for Pakistan to come out of these crises alone because it is difficult to win war against terrorism or leaving it. Energy crises will take time to cover up them, political situation is moving towards stable side.

China and Pakistan have very friendly relation in each aspect. China and Pakistan have military collaborations time to time; they produced JF-17 thunder and lot of other engineering projects. China has always been interested in investing in Pakistan due to its strategic and trade interest. China had invested a huge amount of capital in Pakistan in major fields; China Mobile Communications Corporation (CMCC), parent company of Zong invested $300 million in Pakistan in 2010, Zong invested $1.66 billion in Pakistan and produced 1700 direct and 40,000 indirect jobs, China invested $13 billion on Gawadar deep sea port which is connected with the Karachi sea port through “coastal highway”, a “karakoram Highway” is made for trading purpose which connect china with Pakistan. China has invested in “coal mining”, Karot, Taunsa, Kohala, Sukkur Barrage Hydro power projects and “wind power” projects in Pakistan. There are 19 projects ongoing in Pakistan with the help of China. Chinese investment has always supported Pakistan’s economy directly and indirectly.

China is always been a guardian angel to Pakistan. China wants to invest huge amount of capital in Pakistan in the energy sector and in Pakistan Railway, it has already purposed to the upcoming government of the Pakistan. The stability and growth of industrial sector is very important for Pakistan. Chinese investment in Pakistan will resolve many issues which can lead the state to a progressive side. Energy sector could become stronger and efficient with the Chinese investment, when there will be no energy crises, the industrial sector will grow and the industry turnover will stop. There is great amount of human capital in Pakistan at cheaper cost, when there will no issues of energy; the foreign investors will be attracted to provide Pakistan Foreign direct investment, the existing companies will perform more better and efficiently, unemployment will decrease, more opportunities will be available to entrepreneurs to explore themselves. When all these factors come along it will be a blessing on Pakistan with respect to current situation.

Pakistan economy will go for boom in future because of these investments, after Chinese investment the other countries and investors will be motivated to invest in Pakistan. The stock Exchange index will be showing high values, the prices of petroleum products will decrease and become stable. The whole economic situation will become stable.