- Pakistan emphasised industrial cooperation as cornerstone of CPEC and defining pillar of economic development
The global investment policy-making in 2024 stayed strongly influenced through geopolitical tensions and industrial policy goals. International reports recorded that the number of new investment policy measures reached the second-highest level on record (174). Of these, 78 percent were favourable to investors. In developing countries, the share of measures favourable to investors increased marginally from an already high level, reflecting continued emphasis on investment attraction.
| FDI Value (Billions of dollars) | |||
|---|---|---|---|
| Details | Growth rates | ||
| FDI | Greeneld Projects | International Project Finance | |
| Europe | -58% | -6% | -29% |
| North America | +23% | +22% | -35% |
| Africa | +75% | -5% | -3% |
| Developing Asia | -3% | +5% | -27% |
| Latin America and the Caribbean | -12% | +2% | -28% |
In developed countries, the number of restrictive measures mainly related to FDI screening for national security continued to increase. Despite this, 63 percent of new measures in those countries were favourable to investors, largely a consequence of new incentives in Europe to support the energy transition. Global foreign direct investment (FDI) in 2024 increased marginally, by 4 percent, to $1.5 trillion. This headline figure was inflated by volatile financial transactions through several European economies with high levels of conduit flows. Excluding these, global FDI flows were declined by 11 percent on a like-for-like basis, showing a second consecutive year of double-digit decline.
In 2024 investment incentives accounted for a record 45 percent of all policy measures more favourable to investors and were the most prevalent policymaking instrument across most regions. The use of financial incentives has risen sharply since 2022, particularly in developed countries, and they now account for nearly half of all investment incentives adopted globally. The greater reliance on incentives as investment attraction instruments runs counter to the objectives of international tax reform efforts aimed at curbing harmful tax competition for investment.
Presently to boost the economic growth policy and sustainable growth, Pakistani Prime Minister Shehbaz Sharif presently invited top Chinese business executives and their companies to invest in Pakistan, showing his government’s investment-friendly strategies. No doubt the government of Pakistan has been offering a unique comparative advantage for Chinese investors as against to other countries; also the country has a large pool of skilled and cost-effective labor, competitive input costs and strategic connectivity to regional and global markets. Pakistan considers China a major investor and regional ally. Statistics showed that China is Pakistan’s largest trading partner, with bilateral trade exceeding $25 billion in present years, and Chinese companies have already invested heavily in power, transport, infrastructure, and telecoms projects across the country as part of the multi-billion-dollar China-Pakistan Economic Corridor project.
PM has been on a visit to China, where he attended a summit of the Shanghai Cooperation Organization (SCO) and held talks with the Chinese leadership. Sources recorded that in Beijing, PM also met senior executives of China’s leading enterprises to boost business-to-business (B2B) investment cooperation between the two countries.
The meetings focused on enlarging cooperation in priority sectors such as agriculture, textiles, mines and minerals, information technology, industry, road and digital connectivity, e-commerce and space technologies.
It is said that the Chinese businessmen about the government’s reforms, which included tax incentives for investors, streamlined visa policies for Chinese nationals and the establishment of dedicated booths at major airports to facilitate ease of travel and business. The government of Pakistan emphasized that industrial cooperation remains the cornerstone of Pakistan-China economic cooperation and a defining pillar of the high-quality development of the China-Pakistan Economic Corridor (CPEC) as it enters into its second phase. However, business cooperation between the two countries has faced setbacks in the form of present attacks by militants who have targeted Chinese nationals and projects in Pakistan, also delays in CPEC projects.