Today: 23 June 2025
2 December 2021
2 mins read

Is Beijing turning its back on Pakistan?

At a time when countries such as Vietnam, Bangladesh and Indonesia among others have drawn large investments, inflows into Pakistan is in FATF grey list since June 2018, have been dropping…writes Mahua Venkatesh

Pakistan, currently battling several economic challenges including surging debt, desperately needs foreign direct investments (FDI) beyond what it is flowing into the country from Beijing -primarily towards the China-Pakistan Economic Corridor (CPEC).

Pakistan’s political situation and issues relating to security have impacted foreign investments. At a time when countries such as Vietnam, Bangladesh and Indonesia among others have drawn large investments, inflows into Pakistan, which has been put on the Financial Action Task Force’s (FATF) grey list since June 2018, have been dropping.

Chinese-President Xi Jinping (Source twitter@ChinaAmbUN)

While the World Bank said that Pakistan needs to increase private investments and exports if it wants to sustain strong economic growth, many investors are opting for other markets.

What is worrying Pakistani policymakers is that inflow from China towards the multi-trillion CPEC project has also started slowing down. That apart the chunk of the investments that have been undertaken is largely by Chinese public sector or local government arms. This shows that even Chinese private investors have remained wary of Pakistan.

“Pakistan is in dire need of private sector investment � a focus of CPEC’s second stage � to stimulate sustainable economic growth and to relieve pressure of the current account deficit,” a report published by the Diplomat said, adding that despite Islamabad’s desperate attempt to attract such investments, “to date there is limited evidence that private Chinese firms want to invest in Pakistan and CPEC’s second stage is effectively at a standstill.”

The recent violence and attacks over Chinese nationals in Pakistan have led to building of latent stress between the “iron brothers.” The Dasu attack in July that killed nine Chinese nationals has particularly become a bone of contention. “Considering these incidents, it is unlikely that Chinese private sector investments will flow into the country anytime soon,” an analyst on condition of anonymity told India Narrative.

The Dawn said, “We see foreign investors fleeing this country. Not only that the annual FDI flows into Pakistan have declined, but we also see its stock decreasing over the last five years. The FDI stock in the country has fallen from $41.9bn to $35.6bn in five years to 2020.”

FDI inflow is critical for any country as it helps in boosting the overall economy while generating jobs.

Inflow for FDI into Pakistan will also help in addressing the rising debt by supporting the country’s balance of payment.

FDI flow into South Asia

According to the United Nations Conference on Trade and Development (UNCTAD), FDI into South Asia rose by 20 per cent to $71 billion, driven mainly by $64 billion — 27 per cent jump in investments in India, the inflow into other economies remained muted.

(The content is being carried under an arrangement with indianarrative.com)

ALSO READ: EU rolls out massive infra plan to counter China

ALSO READ: Pakistan in a fix over ties with China

Previous Story

War of words intensifies between Akhilesh and Yogi

Next Story

Taiwanese legislators call for boycott of Beijing Olympics

Latest from -Top News

Oman Breaks Gulf Taboo on Income Tax

There is no other country in the 6-member Gulf Cooperation Council that imposes income tax….reports Asian Lite News Oman has officially become the first Gulf country to introduce a personal income tax,

Fresh Israeli Raids Hit Iran

The strikes came shortly after Iran fired a missile at Israel before dawn and triggered air raid sirens across much of the country….reports Asian Lite News Israel conducted a new wave of

Netanyahu: Iran Goals Near

Netanyahu pledged not to let Israel get dragged into a “war of attrition” with Tehran…reports Asian Lite News Israeli Prime Minister Benjamin Netanyahu claimed on Sunday that Israel is “very close” to

Khamenei Vows Payback

Calling the attacks “a big crime,” Khamenei warned of retaliation….reports Asian Lite News Iran’s Supreme Leader Ayatollah Ali Khamenei on Monday, in his first reaction following the US strikes on Iranian nuclear

US committed great crime: Iran

Iran has now called for an emergency meeting of the UN Security Council and demanded the IAEA Board of Governors address the situation….reports Asian Lite News Iran has strongly condemned the United
Go toTop

Don't Miss

Afridi Dubs India-Pak T20 as Super Bowl

The spin all-rounder also said it’s hard to predict a

Digital Quality of Life goes from bad to worse in Pakistan

The study shows that Pakistan is lagging behind India and