CPEC phase-II: Pakistan, China set new investor coordination mechanism

May 12, 2026 (MLN): Pakistan and China have agreed on a structured coordination mechanism under CPEC Phase-II to improve investment facilitation.

Under this arrangement, Pakistan’s Board of Investment will share project details in advance with the Chinese Embassy, while the Embassy will provide a curated list of potential Chinese investors to improve matching and increase the conversion of investment interest into industrial projects.

The understanding was reached during a meeting in Islamabad between Federal Minister for Board of Investment Qaiser Ahmed Sheikh and Chinese Counsellor Yang Guangyuan, where both sides reviewed bilateral investment cooperation under the China Pakistan Economic Corridor Phase-II framework.

The discussions centered on attracting tangible investment from Chinese private sector companies, particularly in manufacturing and industrial development, according to the press release.

Reviewed the progress of ongoing Special Economic Zones (SEZs) and discussed measures to improve their performance as industrial hubs under CPEC Phase-II.

The focus remained on transforming SEZs into effective platforms for export-oriented industrial growth, with emphasis on improving investor participation and operational outcomes.

A key concern highlighted during the meeting was the limited conversion of visiting Chinese business delegations into actual investment projects.

Both sides identified information gaps, coordination issues, and investor concerns as major barriers.

It was agreed that stronger institutional coordination, improved communication, and structured investor facilitation would be required to address these challenges.

Security-related concerns for foreign investors were also discussed.

The Pakistani side indicated that coordination with relevant institutions, including the Ministry of Interior, would be facilitated to ensure enhanced security arrangements for Chinese investors and officials operating in Pakistan’s industrial zones.

Erfa Iqbal emphasized that security remains a priority area, and institutional linkages can be strengthened to provide reliable arrangements for investors, particularly in SEZ-linked industrial projects.

The Chinese side stressed that commitments made to investors must be consistently honored to build confidence in Pakistan’s investment environment.

It was also noted that projects endorsed by the Chinese Embassy generally receive higher trust among Chinese enterprises, and closer coordination with the Embassy could improve project visibility and investor participation.

Both sides further agreed on strengthening institutional cooperation by ensuring that project information is shared in advance with the Chinese Embassy, while the Embassy provides targeted investor listings to facilitate more effective matchmaking between Chinese companies and Pakistani investment opportunities.

The meeting also discussed broader investor sentiment, including recent interest shown by overseas Pakistanis in the United Kingdom, which was cited as an indicator of improving international perception of Pakistan’s investment environment.

The Federal Minister also extended an invitation to the Chinese Counsellor to visit Chiniot, highlighting its globally recognized handcrafted furniture industry and potential for export-oriented industrial investment.

The discussion further acknowledged that CPEC Phase-I focused largely on infrastructure development, while Phase-II is intended to prioritize industrial cooperation, manufacturing growth, and SEZ-driven economic expansion.

The upcoming visit of the Prime Minister was also viewed as a key opportunity to further strengthen bilateral economic engagement.

The meeting concluded with a mutual understanding to maintain close coordination between the Board of Investment and the Chinese Embassy to ensure improved facilitation, stronger investor confidence, and more tangible industrial investment outcomes under CPEC Phase-II.

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