Ambassador shows the way forward on Pakistan-China trade ties

ISLAMABAD: Six sector-specific Pakistan-China business to business conferences have generated proposed investments, joint ventures and commercial commitments worth approximately USD22 billion, Pakistan’s Ambassador to China, Khalil Hashmi, said in an exclusive interview with the Business Recorder.

The first five conferences produced more than 550 commitments valued at over USD20 billion, while the latest conference on pharmaceuticals, biotechnology and healthcare added another USD1.72 billion.

Hashmi estimated that about 30 per cent of the commitments from earlier conferences had progressed into commercial agreements, joint ventures, supply arrangements, local offices or physical investment.

Building on the momentum, Pakistan was preparing further sector specific conferences this year.

A conference on semiconductors, integrated circuits and related technologies had been proposed for September, while another covering sports goods, sportswear and surgical instruments being planned in Sialkot for November or December.

The embassy was also preparing a roadmap for next year, with the possibility of holding four sector-specific conferences at intervals of approximately three months.

Hashmi said a memorandum of understanding (MoU) should not be treated as a realised investment.

“The signing creates momentum, but the real test is whether it becomes a contract, a factory, production and jobs,” he said.

Projects still had to pass through feasibility studies, negotiations, financing, regulatory approvals, land allocation and construction before commercial production could begin.

The sixth conference generated 123 business instruments, comprising 94 MoUs valued at around USD936 million, seven joint ventures worth approximately USD139 million, and 22 agreements and contracts valued at USD644.5 million.

Hashmi said the conference covered active pharmaceutical ingredients, human and animal vaccines, biosimilars, biogenerics, medical devices, hospital equipment, pharmaceutical manufacturing and clinical research.

The specialised approach allowed Pakistani companies to identify the capital, technology, training and management support they required and connect with relevant Chinese firms.

Active pharmaceutical ingredients, commonly known as APIs, emerged as an important area because Pakistan imported more than 90 per cent of these pharmaceutical inputs from China.

Local production through joint ventures could reduce dependence on imports, strengthen supply chains and improve the competitiveness of Pakistani drug manufacturers.

The ambassador also identified vaccines, specialised medicines, biosimilars and cancer treatments as areas with considerable potential.

Pakistan had already established pharmaceutical companies, qualified professionals and a large market, while Chinese firms possessed the technology, capital and manufacturing capacity needed for local partnerships.

Some cancer medicines remained prohibitively expensive, he said, adding that domestic manufacturing with Chinese partners could help reduce costs.

Pakistan’s national vaccine policy, which was being finalised, could also provide a clearer framework for local production and exports.

Hashmi noted that vaccine projects would require different technologies, quality controls, approvals and investment levels, making it difficult to provide a single implementation timeline.

Medical devices and hospital equipment accounted for 27 business instruments at the conference, including nine commercial agreements.

Cooperation in this area was expected to begin through distribution and imports before progressing towards local assembly and manufacturing.

Hashmi said Chinese medical equipment could, in some cases, cost 30 to 40 per cent less than comparable Western products, allowing hospitals to acquire more equipment and expand services.

He pointed out that procurement rules in some parts of Pakistan continued to favour equipment certified in the United States or the European Union, limiting access for Chinese manufacturers even where their products met recognised standards.

Such equipment should be assessed according to certification, quality, safety and performance rather than its country of origin, he said.

Explaining how the sixth conference differed from earlier editions, Hashmi said the embassy and Pakistan’s consulates in China had improved preparation, matchmaking and technical orientation.

Detailed investment pitch books provided Chinese companies with information about Pakistan’s market, taxes, regulations, incentives, land, utilities and possible local partners.

Pakistani businesses were asked to specify whether they required capital, technology, management assistance, training or market access, while Chinese companies outlined what they could offer.

The responses were reviewed before companies were matched and introduced through online meetings ahead of the conference.

Hashmi stressed that the process remained business driven.

“We are the facilitator,” he said. “We create the environment and bring the businesses together, but the commercial decisions are theirs.”

Another new element was the formal integration of technical and vocational training with investment discussions.

Eight Chinese institutions specialising in pharmaceuticals, biotechnology and related fields participated in the accompanying training forum.

Hashmi said investment, technology transfer and skills development had to move together because machinery and capital alone could not make a factory productive.

Pakistani workers would require specialised training to operate equipment, maintain quality standards and eventually manage production independently.

The ambassador said sustained follow-up would determine how many projects eventually materialised.

He identified costly industrial land, delayed approvals and fragmented decision making as major obstacles facing investors.

In some special economic zones, the cost of purchasing land could absorb a substantial portion of a proposed investment before a company spent anything on construction, machinery or utilities.

The government had, therefore, been considering long-term leasing arrangements, potentially extending to 30 years, instead of requiring investors to purchase industrial plots.

Such leases would be linked to performance conditions, with companies required to begin construction or production within a specified period.

Hashmi said government institutions had also mapped and geotagged available state land to determine its location, size and suitability for different industries.

He noted that industrial land also required roads, electricity, water, communications and security, making coordination between federal and provincial institutions essential.

Regulatory delays presented a similar challenge. Companies could lose confidence after committing resources if they were unable to secure licences, approvals or utility connections within a reasonable period.

Security considerations were also influencing where Chinese businesses were willing to establish facilities.

Feedback from companies suggested that Chinese commercial activity was increasing in some locations, particularly Lahore, while investors remained more cautious in other areas, including Karachi.

Hashmi said both actual security conditions and perceptions of security affected investment decisions.

He proposed the development of secure industrial enclaves where Chinese and Pakistani employees could live and work close to production facilities.

Such zones could include housing, schools, healthcare and other services, reducing the need for foreign workers to travel daily across large cities.

The ambassador said Pakistan needed several major investments in priority sectors to create meaningful industrial momentum.

Smaller projects could build confidence, but large investments were required to generate manufacturing, exports, employment and technology transfer on a significant scale.

If land, approvals, infrastructure and security arrangements were addressed promptly, visible industrial activity could begin emerging within two or three years, he said.

Asked about the potential employment impact, Hashmi said a precise estimate would require sector specific research.

Using the earlier portfolio of more than USD20 billion as an illustration, he said a 30 per cent conversion rate would represent approximately USD6 billion in investment.

This would create a significant number of direct and indirect jobs.

Industrial investment would generate employment in construction, production, engineering, management, logistics, administration and maintenance.

Hashmi said the number and quality of jobs would increase as companies moved from trading and distribution to assembly, localisation and full manufacturing.

Import substitution was, therefore, an important objective of the proposed joint ventures.

A Chinese company might initially sell finished goods in Pakistan before moving towards local assembly and eventually manufacturing complete products domestically.

Tariffs and investment incentives could help make localisation more commercially attractive, he said.

The ambassador said some tangible outcomes from earlier conferences had already begun to emerge.

A major Chinese industrial electronic commerce group had opened an office in Islamabad and started hiring staff, while a Chinese electric vehicle charging company was exploring the installation of charging facilities at existing fuel stations.

Pakistani pharmaceutical firms visited by the embassy had also expressed interest in partnerships involving pharmaceuticals, biotechnology, medical research and specialised medicines.

Hashmi said the semiconductor conference would require a highly focused approach because the industry covered several specialised segments.

Pakistan would have to identify areas that matched its technical skills, workforce and investment capacity rather than treating semiconductors as a single broad sector.

The proposed Sialkot conference would focus on industries in which Pakistan already had an established manufacturing and export base, including sports goods, sportswear and surgical instruments.

Hashmi said Pakistani institutions needed to retain the knowledge developed during each event and establish permanent capacity for investment mobilisation and follow-up.

The initiative, he said, was intended to move Pakistan-China economic cooperation towards commercial partnerships capable of producing goods, transferring technology, replacing imports, generating exports and creating employment.

The overall figures were promising, but implementation would remain the decisive measure of success.

“We now have to move quickly,” Hashmi said.

Copyright Business Recorder, 2026