November 26, 2006	Sunday	Ziqa'ad 4, 1427

KARACHI, Nov 25: Language is identified as a key factor that has discouraged local businessmen from investing in China. On the contrary, law and order is considered to be the key reason that has driven away some Chinese companies and disheartened others from venturing in Pakistan.

These are the observations of businessmen about the future scenario of investment between the two friendly-neighbours after signing of free trade agreement to foster the two-way trade besides addressing other issues relating to investment.

Chairman Site Association of Industry Ameen Bandukda thinks that language and cultural barriers make businessmen hesitant to invest in China. They do not feel comfortable moving to China as yet.

On pulling out of Chinese investors from Pakistan, he thinks that China has itself been witnessing growth between 9-10 per cent per annum over the last 10 years, which means China has vast opportunities for entrepreneurs who want to take advantage in their own country instead of coming into Pakistan.

Ameen says that signing of FTA would help eliminate smuggling when import tariffs are reduced. In the beginning the trade balance will further go in favour of China but soon Pakistan will catch up because of its huge consumer market. He added that because of Pakistan’s proximity and road connections to China, Pakistan will be able to tap the Chinese market in a big way.

Chairman F.B. Area Association of Trade and Industry Masroor Ahmed Alvi thinks that the FTA signing will encourage more countries to ink business deals with Pakistan. He says that legal trade between the two countries could cross $15 billion if smuggling is stopped and duties become nil.

Language problem is the main hurdle in keeping away businessmen to invest in China despite the fact it offers good investment climate, abundant land, low cost of doing business, low mark up, friendly investment policies and support to industries. In contrast, Chinese investors are pulling out from Pakistan because of law and order situation, non-availability of land and infrastructures and high cost of doing business, Masroor says.

Chairman North Karachi Association of Trade and Industry (NKATI) Faraz Mirza says that it is not easy to communicate with Chinese people especially working class. Language is the biggest issue for the Pakistani investors.

He says Chinese people feel insecure in Pakistan due to lack of security that is why they are packing up. However, he says that the FTA signing is unlikely to push up the bilateral trade volume to $15 billion as still a lot of work is needed from Pakistan to promote its export and encourage business community to invest in China.

However, the FTA will curb smuggling in the long run. He adds that export to China must improve to balance the trade which however appears to be an uphill task.