Prime Minister Shehbaz Sharif on Friday inaugurated a special economic zone (SEZ) in Islamabad to be set up by a Chinese textile group — projected to generate exports worth $400 million for the country, the Associated Press of Pakistan reported.

Pakistan has held strong bilateral relations with China, which has supported it through many investments and development projects, such as the China-Pakistan Economic Corridor (CPEC), which, currently in its second phase, has been termed a “lifeline” for the country’s economy. The phase II of the program is expected to focus on industrialisation, spe­c­ial economic zones, clean ene­rgy, agriculture and livelihood projects.

PM Shehbaz welcomed the establishment of an SEZ, saying that the “initiative would facilitate technology transfer, skill development, and sustainable industrial growth”.

The project will be set up by the Chinese textile group Challenge Fashion Private Limited, which is set to invest $100m over five years in the project.

PM Shehbaz met with the company’s delegation — led by its chairman Huwang Weiguo, expressing Pakistan’s willingness to “take bilateral ties to new heights”, APP quoted him as saying.

Federal ministers Ahsan Iqbal, Jam Kamal, Attaullah Tarar, Ali Pervez Malik, Sardar Awais Ahmad Leghari, and Special Assistant to the Prime Minister Tariq Fatemi were also present at the meeting.

The prime minister assured the delegation of his government’s complete facilitation for setting up the zone as part of the “industrial component of CPEC”, and thanked the delegation for having faith in the Pakistani market, APP reported.

PM Shehbaz expressed Pakistan’s desire to set up more such units across the country and hoped to benefit from China’s textile sector.

On that note, he shared that “a China-Pakistan Business-to-Business Conference would soon be held in China, providing an opportunity for collaboration between private businesses of both countries,” APP reported him as saying.

Chairman Huwang said he aims to establish a modern textile industry in Pakistan and thanked the PM for his support and hospitality.

In July, at a high-level meeting, Planning Minister Ahsan Iqbal assured a Chinese delegation that the establishment of SEZs remains the federal government’s top priority.

While earlier this year, the Sindh government signed an agreement with Chinese and local investors to establish the Dhabeji SEZ under CPEC Phase II.