- CCCPK develops a “Business Climate Index for Chinese Enterprises”.
- The security issue has been identified as the main barrier to corporate growth.
- The survey reveals a spirit of resilience among Chinese companies.
ISLAMABAD: A recent survey released by the Chinese Chamber of Commerce in Pakistan (CCCPK) painted a mixed picture of the business climate for Chinese companies operating in Pakistan. News I mentioned.
The survey report launched here on Sunday revealed that the business climate index score was 49.63, slightly below the important 50-point threshold that distinguishes optimism from pessimism.
In consultation with the Chinese Embassy in Pakistan, the Center developed the “Business Climate Index for Chinese Enterprises in Pakistan.” This was CCCPK’s first survey as part of this initiative.
The study highlighted that the main issues restricting the operations of Chinese companies in Pakistan are the security dilemma, problems in the flow of remittances abroad due to controls on foreign exchange, and political and currency instability.
In order to fully realize the potential of CPEC and promote broader economic cooperation, the two governments must continue to work towards resolving these issues and creating a more favorable business environment, highlighted the results of the first-ever Business Climate Index.
The main obstacle to corporate growth has been identified as security issues, reflecting broader concern about the security of investments made in the region. About 30% of all Chinese companies in Pakistan believe that the security situation is deteriorating in Pakistan. She added that 83.4% of participants in the study, which included a sample of 48 Chinese companies, believe that the security situation is getting worse and will not improve anytime soon.
“The current security situation in Pakistan is acute and complex, with a slow economic recovery,” the survey stated, stressing external pressures affecting various operational aspects.
In addition to security issues, 60.4% of businesses reported that foreign exchange controls hinder timely payment, while 58.3% cited a lack of policy continuity and poor policy implementation as significant obstacles affecting their business decisions. Furthermore, 56.3% of respondents indicated that the depreciation of the Pakistani rupee eroded their net assets when measured in US dollars.
The report added: “Despite these challenges, Chinese companies worked actively to overcome difficulties and maintained overall stability in their operations, with some companies showing signs of expansion.” About 54.2% of companies cited the government’s low administrative efficiency as one of the challenges.
Despite the obstacles, the survey revealed a spirit of resilience among Chinese companies. More than 52.1% of companies indicated that the volume of their business remained stable, while 33.3% reported growth in their operations.
Looking to the future, 70% of respondents expressed optimism about Pakistan’s economic development, while 47.9% expected new order volumes to stabilize over the next three months.
Recent economic indicators point to a possible transformation in Pakistan. The inflation rate fell to 6.9%, and foreign exchange reserves exceeded $14.7 billion, reaching their highest level in two years. In addition, exports rose by 14% in the first two months of the new fiscal year, indicating stabilization of the economy.
The survey highlighted that the majority of Chinese companies plan to maintain their production volume, with 58.3% of them aiming to maintain the stability of their workforce. At the same time, 37% of companies indicated their intention to expand their production scale, although 18.8% expected minor layoffs.
In a positive outlook, 39% of respondents believe that the overall economic situation in Pakistan will improve in the next three months, while 43.8% expect it to remain stable.