Pakistan Require Special Economic Policies to Iimplement SEZs
Beijing: Pakistani government will be required to establish the recently announced 10 Special Economic Zones (SEZs) in the country by adopting economic policies and systems different from those of other regions. National conditions vary from country to country, so special and brand-new economic policies and systems should be determined according to the actual situation of the country with its own characteristics, says Chinese scholar and Economic expert Prof. Cheng Xizhong.
According to Prof. Cheng, the overall target is to make SEZs attractive to domestic and foreign investors through the promulgation of a series of preferential policies, so that they are willing to invest in the SEZs on a large scale, and SEZs can kick-start the economic and technological development of the nation. Citing the practices of China’s SEZ, he said in April 1979, Deng Xiaoping, the Chief Architect of China’s Reform and Opening-up, first proposed the establishment of “special export zone”.
In March 1980, the name of “special export zone” was changed to “Special Economic Zone”, which was first implemented in South China’s Shenzhen City.
In essence, SEZs is one of the main forms of free port area in the world. By tariff reduction and other preferential policies, and by creating a good investment environment, encouraging foreign investment, and introducing advanced technology and scientific management, we can develop national economy and technology. According to Prof. Cheng in SEZs, Pakistan will be required to adopt special economic policies, flexible economic measures and special management systems, and adhere to the development target of export-oriented economy. Pakistan has decided to set up 10 SEZs in four provinces, it is not necessary that every region of a country should be promoted in an absolutely balanced way.
The reason why China’s first established SEZ is situated in coastal areas is that these areas have the potential to absorb foreign capital, advanced science, technology and management experience. When the most developed regions are further developed, they will help develop other regions, so as to put the national economy and technology on the track of rapid development. Prof. Cheng pointed out that China is now one of the major investors in the world. There are two advantages in China’s foreign investment, capital and technology. In 2018, China’s overseas direct investment reached $143.04 billion, becoming the second largest foreign investor in the world.
Japan, the largest investor, reached $143.16 billion in the same year, a little higher than China’s. At present, more than 27,000 Chinese investors have established 43,000 overseas direct investment enterprises in 188 countries and regions around the world. There are more than 10,000 overseas enterprises established in the countries and regions along the Belt and Road. It is reported that China will invest $5 billion in Pakistan’s SEZs in the next three to five years. This figure is very conservative. The relations between China and Pakistan are so close, and the mutual interests between the two countries blend so closely, so I believe the amount of investment should be much higher than this. How much will China invest in Pakistan in the next few years? It depends on the courage of Pakistan’s reform and opening-up, the substantial improvement of business environment in Pakistan and how flexible Pakistan’s preferential policies for foreign investment will be. In addition, it depends on the security environment and the stability of Pakistan’s political situation, he added.