ISLAMABAD: Experts at a policy consultation highlighted Pakistan’s great potential in solar energy and electric vehicles (EV) sectors stressing on the need for fiscal incentives to attract foreign investments.

For this purpose, the experts stressed Pakistan must undertake structural reforms, ensure policy consistency, and offer competitive incentives to attract Chinese private sector investment, particularly in emerging sectors such as renewable energy, electric vehicles (EVs), and green manufacturing.

The consultation on “How Pakistan Can Compete for China’s Green Manufacturing FDI”, was organized by Sustainable Development Policy Institute (SDPI) here on Monday.

Xiaokang Xue, Researcher at the Net Zero Industrial Policy Lab, Johns Hopkins University, highlighted a surge in Chinese overseas investments in clean technology manufacturing, particularly in Asean and Central Asia.

He said host countries must ensure market access, raw material availability, and long-term policy clarity to attract such investments. He added that Pakistan has potential in solar and EV sectors but must offer fiscal incentives comparable to countries like Indonesia, Thailand, and Malaysia.

Prof. Stella Hong Zhang, Assistant Professor, International Studies, Hamilton Lugar School of Global and International Studies, Indiana University Bloomington, compared Asean and Middle East and North Africa (MENA) models, stating that Asean countries have successfully integrated into global manufacturing through strong industrial policies, SEZs, and export-oriented strategies.

She noted that Indonesia has leveraged its nickel reserves to attract Chinese investment in EV and battery manufacturing, while Pakistan lacks a clear industrialisation roadmap and continues to rely on imports of Chinese solar technologies instead of developing domestic capacity.

Mustafa Hyder Sayed, Executive Director, Pakistan-China Institute, said that while China-Pakistan Economic Corridor (CPEC) has made significant progress through Chinese state-owned enterprises (SOEs), future growth depends on attracting Chinese private sector firms relocating abroad.

Rooftop solarization offers a viable entry point for such engagement, he said and suggested that Pakistan must compete with Asean economies like Vietnam and Malaysia, which provide better infrastructure, streamlined procedures, and investor-friendly policies.

He called for joint planning with Chinese investors, provision of subsidized land, tax holidays, and duty exemptions on imported machinery, along with an effective one-window facilitation system.

Engr. Ubaid ur Rehman Zia, Head of Energy Unit at SDPI, highlighted that Pakistan’s energy partnership with China is entering a new phase, moving beyond the traditional sovereign guarantee-based model established under the CPEC.

While earlier engagement was driven by large-scale, state-led investments financed through sovereign-backed debt, there is now a visible shift towards more commercially oriented and diversified models, he said. Increasingly, he maintained,

Chinese energy engagement is being shaped by equityparticipation, joint ventures, and private sector actors alongside growing demand for decentralized and cost-effective energy solutions in Pakistan’s industrial sector. This evolving landscape, he said, underscores the need to better understand how investment structures, risk-sharing mechanisms, and emerging business models are transforming bilateral energy cooperation.

Dr Hassan Daud Butt, Senior Adviser, China Energy Engineering Group, said global investment patterns are shifting toward “friend-shoring” and “near-shoring,” where stability and trust outweigh cost advantages. He stressed that Pakistan must develop reliable, cost-efficient, and green energy ecosystems to remain competitive.

Published in Dawn, May 5th, 2026