LAHORE, Dec 5: Board of Investment Chairman and Minister of State Saleem H. Mandviwalla said on Friday that the government had decided to abolish 35 per cent cash margin condition for opening letters of credit for auto sector imports and a notification would be issued in a few days.
Talking to Chinese investors at the Lahore Chamber of Commerce and Industry here on Friday, the minister said that agriculture and industry were priority areas for foreign investment.
He said that the mark-up rates would start coming down during the first quarter of 2009.
The minister said that interaction with Chinese investors would not only strengthen socio-economic relations between the two countries but would also be helpful to the government in evolving its future strategy vis-à-vis foreign investment.
He said a number of Chinese companies were already operating in Pakistan in power sector while many were vying to put in their money in this sector.
He assured the Chinese investors that their security concerns would be addressed.
He, however, made it clear that decision-making, viability and return is important in investment not law and order.
He said that Pakistan had a huge potential for investment by the Chinese businessmen. They could also reap rich dividends by starting joint ventures in Pakistan.
LCCI President Mian Muzaffar Ali said that globalisation had provided Chinese investors a golden opportunity to relocate their large-scale industry to Pakistan to reap the benefits of its most conducive business policies as compared to other regional countries.
Pakistan was also strategically located providing shortest route to China for Middle East, Africa and Europe.
He said that trade between Pakistan and China through proper channel increased from $1,489 million in 2004-05 to $2,956 million in 2006-07, showing an increase of around 100 per cent over a period of three years.
The volume of trade was expected to increase to $15 billion over the next five years as a result of free trade agreement between the two countries.
He said that balance of bilateral trade was heavily in favour of China, which requires to be balanced.
Major imports of Pakistan from China included iron, steel products, tyre, tubes, chemical, medical, pharma products, fertilisers, yarn and thread of synthetic fiber, railway vehicles. hand tools and hardware products, etc.
LCCI Senior Vice President Tahir Javed Malik said that the government had prepared a special incentive package for Chinese companies under special economic zone, which offers exemption of custom duties (on import of machinery/equipment), income tax and sales tax to attract foreign investment.
He said that coal-mining, power generation, machinery, chemicals, building material, especially cement production, textiles, synthetic fabrics, electronics, leather, paper and paper products and foodstuffs could be specific areas for investment and joint venture.
The possibilities of joint ventures for Halal meat production and export to Muslim countries would be one of the most promising propositions for Chinese investors.
LCCI Vice President Irfan Iqbal Sheikh stressed the need for exchange of sector-specific delegations between Pakistan and China.
Around 38 Chinese companies, including 20 from Islamabad, 17 from Lahore and one from Northern Areas actively participated in the meeting and presented their point of view on investment scenario in Pakistan.