The confrontation between China and the United States (US) will likely persist for the coming years. The Chinese and global manufacturers may move their factories from to Pakistan, said a renowned Canadian advisory firm BCA Research in its latest report.
Pakistan is anxiously expecting the benefits of relocating the Chinese industry to Pakistan, which will help increase exports. China had also expressed its willingness to relocate its industrial units to Pakistan last year.
According to the commerce and trade advisor Abdul Razak Dawood, “Pakistan has experienced significant improvement in 10 critical areas of regulation, and has improved its position from 136 to 108 in the Ease of Doing Business Index (EODB) rank last year. It shows the government’s commitment to improving the business environment.”
According to the BCA research firm, Pakistan will receive large financial inflows this year, 2020, probably more than $12 billion from multilateral and bilateral sources.
The research firm also stated that there will be more than enough for Pakistan to finance its current account deficit, which was at $11 billion over the past 12 months.
In April, the International Monetary Fund (IMF) approved the payment of about $1.4 billion to Pakistan to address the economic impact of the COVID-19 shock. The World Bank (WB) and the Asian Development Bank (ADB) have also pledged around $2.5 billion in assistance.
In April, G20 countries also awarded Pakistan a suspension of debt service payments, valued at $1.8 billion, which will be used to pay for Pakistan’s welfare programs.
In early July, the State Bank of Pakistan (SBP) received a $1 billion loan disbursement from China. This came after Beijing awarded Pakistan a $300 million loan last month.
The authorities plan to raise $1.5 billion through the issuance of Eurobonds over the next 12 months, said the report.