As the first Chinese truck containers entered a Pakistani dry port in the north last week and the first major size vessel last month docked at the Gwadar port, the ending point of the China-Pakistan Economic Corridor (CPEC), CPEC, a multi-billion-U.S. dollar project, has become a visible "game changer" for Pakistan and the entire region.
With an improved security situation in the south Asian country, Pakistan's macroeconomy has been stabilizing and enjoying momentum over the past years. Recently, the country has been upgraded to an emerging economy from a frontier economy on the Morgan Stanley MSCI index.
"The CPEC itself for Pakistan could at least offer a significant opportunity for the country to address its supply side constraints such as weak foreign capital inflow," said Bilal Khan, senior economist at Standard Chartered Bank (Pakistan) Ltd., adding that against the backdrop of rebounding oil prices in the near future, which means Pakistan's oil import bills will swell, the CPEC will attract foreign direct investment from both private and public sectors to help keep a balanced current account in Pakistan.
Due to the enhanced infrastructure such as roads and railways brought by the CPEC, "we forecast that the gross domestic product (GDP) growth should increase from around 4.7 percent last year to around 6 percent by 2019, and stay around the same level for 2020," the economist told Xinhua in a recent interview in Karachi, the financial center of Pakistan.
With such a robust economic outlook, many foreign companies that have already been investing here for years are tending to re-invest in the country by seeking more opportunities under the CPEC, according to Pakistan's Overseas Investors Chamber of Commerce and Industry (OICCI).
Abdul Aleem, chief executive and secretary general of the OICCI, told Xinhua that members of the chamber, who economically contributed to about 18 percent of GDP and some 33 percent of total tax collected in Pakistan, have seen the potentials in the market here and they re-invested about half of their profit in Pakistan rather than taking their money back.
He said that his members and many local companies are eager to talk with Chinese companies that have projects under the CPEC so that they could make clear exactly what the opportunities are and how to access them.
As a member of the OICCI, the Standard Chartered Bank (Pakistan) Ltd. believes that the CPEC is a unique opportunity for it to play a "pivotal role" in ensuring that the bank could help make the huge project a real success in the south Asian country, according to the chief executive officer (CEO) of the bank.
"We are one of the largest international banks in China, coupled with our strong and relevant presence in Pakistan, I think that we have a really unique position to capitalize, educate and promote the CPEC," Shazad Dada, CEO of the Standard Chartered Bank Pakistan branch, said.
Dada said that Standard Chartered, which has been in Pakistan for about 150 years and is now the largest overseas bank in the country, has a deep understanding of the domestic business environment, such as local regulations and challenges, so it can play a key role to help more investors from China and the rest of the world to do business here under the CPEC.
He said that the bank is also promoting the internationalization of the Chinese currency renminbi in order to facilitate settlements by companies involved in China or CPEC related business.
Identifying the myriad lucrative opportunities offered by the CPEC, also a pilot project under the China-proposed Belt and Road initiative, Standard Chartered also formed a "Belt & Road" Strategy Execution team to help facilitate its business in countries covered by the initiative.
"More than 60 percent of Standard Chartered's global markets across Africa, Asia and the Middle East stand to benefit from China's 'Belt & Road' initiative," said a recent press release by the bank in Karachi.