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ISLAMABAD: Small industries have expressed concern over concessions given to foreign companies under the China-Pakistan Economic Corridor (CPEC) and free-trade agreements with different countries.
In a meeting with a senior official of the Ministry of Industries on Friday, local manufacturers under the aegis of the Organisation for Advancement and Safeguard of Industrial Sector (Oasis) noted that CPEC was also posing new challenges for the domestic industry in Pakistan.
“The Chinese industry has achieved economies of scale over the years, primarily due to their huge domestic market, industry-friendly policies and multiple incentives by the government,” Oasis Executive Director Atif Iqbal told the media after the meeting.
Oasis believed that the CPEC could only be beneficial for Pakistan if the country’s exports were boosted through this mega trade route.
Mr Iqbal added that Oasis has also requested the Federal Board of Revenue and the National Tariff Commission (NTC) to adopt measures against unfair trade to safeguard interests of the indigenous industry.
One issue regarding imports from China was under-invoicing, and the authorities on both sides should set up an online system for data exchange as soon as possible, he said.
“Oasis has also requested the NTC to be vigilant and take immediate cognisance of unfair trade practices like dumping,” he said, adding that priorities should be set by considering interest of the local industry and then borders for free trade could be opened up.
The organisation has been pushing for the protection of small and medium sized industries and has also criticised large-scale manufacturers for ignoring their rights.
Published in Dawn, November 12th, 2016
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Comments (49) Closed
Nov 12, 2016 08:27am
We should spare a moment and think what we are doing to our local economy. I hope it's not East India Company all over again.
Chinese companies are better equipped that any of our local companies. What is the govt doing to protect their interests?
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Nov 12, 2016 08:29am
Yes short term challenge but in longer term only benefits and growth and lot of other goodies , so stay tuned.
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Nov 12, 2016 08:33am
This will for sure pose a challenge as cheap Chinese products will flood our markets, but as an economic principle this phase / challenge will be self destructive as cpec will also bring in cheap raw material which will lead increased productivity at lower prices
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Nov 12, 2016 08:44am
@Zak small scale industry is too small a player and they should keep quiet in national interest
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Nov 12, 2016 08:45am
Well done Nawaz
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Nov 12, 2016 08:48am
What stops the manufacturers in exporting their goods through the mega route?
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Nov 12, 2016 08:49am
Cpec is our first priority. No one can stop us now.
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Nov 12, 2016 08:51am
@CONCERNED CITIZEN
CPEC or no CPEC, chinese companies are supplying to the entire world. Our manufacturers and even multi-national companies assembling here are looting the consumers in Pakistan.
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Nov 12, 2016 08:53am
Truly Chinese model across the world,dumping goods to kill domestic industry
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Nov 12, 2016 09:11am
@Shaukat Ali Khan Without local industry no country can progress. If you think China would only be exporting goods through to other countries but not to PAK then you are being ignorant. Best of luck with CPEC, lets see after 5 years what fruits will PAK reap from CPEC.
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Nov 12, 2016 09:20am
@Zak you wouldn't write the same lines if your or your family business was in dangerous because of CPEC!
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Nov 12, 2016 09:49am
CPEC will mark the end of small to medium industries in Pakistan. CPEC will enable Chinese trucks laden with Chinese goods to run all over Pakistan.
There is no way Pakistani goods can compete with cheaper but high quality Chinese products.
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Nov 12, 2016 09:52am
@Zak Do you really think Pakistani industry can compete with Chinese ? . No country in the history of mankind has been able to compete with flood of cheap Chinese goods.
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Nov 12, 2016 09:54am
CPEC basically means paying China to build roads in Pakistan to export Chinese goods to Pakistan and beyond . The other wonderful benefit would be paying Chinese engineers to create coal fueled power plants shunned by the whole world including China and buying power from Chinese companies at ridiculous pre established rates for decades to come. China could not seek a better partner for selling the nations failed projects . Please read in detail about the proposed power plant and their rates to truly understand CPEC. Power will cost a Pakistani 2x more than it costs in India and that cheque will be written to Chinese companies . Can't think of a better plan to boost the economy and become a super power. The cheer leaders here know nothing I repeat NOTHING about what CPEC truly is.
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Nov 12, 2016 10:00am
@Mohajir get some knowledge first, let me tell you. In previous football world cup, Fifa asked china to supply round 42 millions ball within a certain period. China offer 6 month time to supply while our own sialkot manufacturer done this job in just 40 days. This is world of competition, and competitor should be aware and equipped with global standards.
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Nov 12, 2016 10:06am
@Mohajir Not compete , but partner with Chinese , work with them and earn profit.
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Nov 12, 2016 10:06am
To understand how Chinese investments are likely to act in a new market it is important to understand a few basics- Chinese industry indices for Return on Assets, Fixed asset investment in down stream industries, Earnings Before Tax (EBT) and Producer Price Index. Here's a small example- Chinese steel capacity is highest in the world at about 600-800 million MTPA. Capacity utilization is 45-55% from days of pre-Olympics.
Other big industry- Construction- huge over capacities have led to creation of Ghost cities. Many nations have imposed CVDs on cheap Chinese imports (less than Chinese production cost). Chinese businesses and investors are under immense pressure to up their utilization rates and better EBTs. Instead of importing raw material from Africa and exporting it back - they are now trying to shift excess capacity abroad- but with a clever mix of local equity - thus Chinese investors are guaranteed returns. Govts. are sold on FDI and promise of better tomm. Win-Win for China.
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Nov 12, 2016 10:08am
Go to Africa and check the countries in Uganda, South Sudan, and other few countries. Healthy economies have been devastated by Cheap Chinese aid, which has wiped out local industry and only replaced by Chinese goods.
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Nov 12, 2016 10:15am
Those opposing CPEC is not a well wisher of Pakistan.
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Nov 12, 2016 10:49am
@Ahmad
Agreed Sir; but industry need to be competitive.
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Nov 12, 2016 11:21am
@Bilal No-one is opposing CPEC but Pakistan has given all benefits to China. Pakistani people will suffer due to CPEC, they would be the one losing their jobs and business when Chinese cheap products would be dumped into PAK. Atleast first secure your local market then talk about CPEC. I have not seen any better deal for PAK in CPEC, most of benefits are for China.
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Nov 12, 2016 11:22am
The small and medium Industrialists should also focus on CPEC, the Government should help and consul them to come forward and benefit from CPEC. In the long run it will be very good Inshahallah.
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Nov 12, 2016 11:22am
@Bilal My sincere request. Keep emotion out of this forget government statements and analyze. It is not an unmixed blessing.
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Nov 12, 2016 11:32am
Our government has to get Smart and give huge incentives and tax breaks to local industry. Hopefully China and our Military will suggest our Politicians to do this.
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Nov 12, 2016 11:32am
@Mohajir there is huge benefit if local industry starts making good quality products at reasonable profit.
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Nov 12, 2016 12:27pm
I think CPEC can only help Pakistan, If Chinese company sets there manufacturing Hub and Warehouse along the road inside Pakistan. Else having road of a free trade rote can boost only Hotel/Motel business nothing else much.
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Nov 12, 2016 12:38pm
@Khan
The Chinese have found a funds provider in Pakistan for their future growth. In next few months we will know if CPEC is a good or a bad thing for Pakistan. Some of us will still be singing praises for China even at the cost of our country.
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Nov 12, 2016 12:40pm
If we can stand with others nations, including PRC in a parllel status, we are destined to success but if at the very starting point bow down to our knees, we cant with stand at all.Confidence is the fundamental key in our stature, if we learn how to safeguard our dignity and ego, no one can let us down
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Nov 12, 2016 01:06pm
@Ahmad
China didn't need CPEC to export its goods to Pakistan. KKH is enough for that purpose.
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Nov 12, 2016 01:06pm
@Ahmad
CPEC doesn't mean just a mega road; Sir jee.
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Nov 12, 2016 01:10pm
@Basit Ali Easy to say when your own livelihood isn't dependent on it
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Nov 12, 2016 01:16pm
Chinese monopoly will ruin domestic industries. China gives heavy subsidies to their local manufacturers for export. How can small countries can compete with them ?
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Nov 12, 2016 01:36pm
No need to check African markets, just see what happened to Sri Lanka, after so called Chinese investments, the Sri Lankan economy has gone to the gutters, debt to gdp ratio had gone over the head, now Sri Lanka gave huge tracts of land in south Sri Lanka to Chinese firms as they failed to pay on the loans. Sri Lanka has lost sovereignty rights on those areas in south.
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Nov 12, 2016 03:15pm
@Khan You have not substantiated your argument with anything.
You are just a jealous . CPEC is a game changer for Pak and every enemy is against it
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Nov 12, 2016 03:18pm
It's just a route like silk road was!!
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Nov 12, 2016 03:37pm
If Pakistani so call govt trade experts fail to safe guard national interest, this chinese goods transit passage - within months let alone years would dominate domestic goods, small n medium local industry and probably shall become a story of the past.
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Nov 12, 2016 03:59pm
The hell ? How can CPEC pose challenge to the domestic industry ? We don't even have enough electricity at the moment !
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Nov 12, 2016 04:03pm
@CONCERNED CITIZEN Your East India Company argument is wrong on so many levels and there is not enough space here for me to explain why.
As for the government: it is not capable of thinking and forming grand strategies for local indistries. You people have not elected nobel laureates to parliment and office.
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Nov 12, 2016 04:31pm
@CONCERNED CITIZEN which local economy?
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Nov 12, 2016 04:40pm
Allow Indian Companies to set up coal based power plants in Pakistan to compete with China. This will give us competitive rates.
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Nov 12, 2016 04:45pm
@Bilal Argument should be based on logic and reasons. Anything you do has always two sides and you debate both side and choose fact based decision
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Nov 12, 2016 04:49pm
Logic is- to produce a product in Pakistan, say steel, the manufacturer needs more money than to produce in China because the cost of production is less in China due to to cheap electricity, cheap raw materials, etc. Therefore, no way, a Pak manufacturer can compete and has to shut down the factory.
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Nov 12, 2016 05:38pm
...the end of oursmall scale industries has begunnn...next is big industries.....thanx nawaz
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Nov 12, 2016 07:21pm
@Solve the Problem
Agreed 100%. This will bring two nations closer. The biggest advantage is ssociopolitical and geographical similarities as compared to Chinese
Tarde will boost both side, bring people and even governments closer and abolish or lower any future dangers of conflicts causing loss unsurmountable in current times
The well said, Sir
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Nov 12, 2016 09:31pm
Indigenous industries should adopt measures to decrease their productions costs to be competitive. It is not any reason to say that the CPEC could only be beneficial for Pakistan if the country’s exports were boosted through this mega trade route. This route is already too far from normal local route through Karachi port and should not in the least be a worry.
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Nov 12, 2016 09:36pm
@Khan, What you fear, is the only fear of a nation that wants to build a similar route to the same destinations, at least from a point 2,000 kilometers further in the East! So why worry about Pakistan?
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Nov 12, 2016 09:42pm
@Desai.m : Why not go and see the African giant and biggest economy, where Railway and textile industry had been completely devastated by your people and Chinese revived the same in a short time to unbelieveable profitability?
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Nov 12, 2016 10:12pm
@aj And also look at the amended EPZ Act that has allowed chinese to sell their goods in Pakistan.....that have never happened in any country
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Nov 12, 2016 11:39pm
@Solve the Problem
What a nationalist approach?
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