A big news has come out from Gwadar, the most important project of China-Pakistan Economic Corridor (CPEC), where a Chinese company closed its factory citing bad business environment and continuous losses and fired all the employees. This development has raised questions on the ground situation of CPEC and the confidence of foreign investors.
Hangeng Trade Company, operating in Pakistan’s Gwadar Free Zone, on Friday announced the closure of its factory and firing of all employees. The company took the decision on International Labor Day, saying it was not possible to continue the business due to “non-business reasons” and operational difficulties, The Express Tribune reported.
The company said it was meeting international export standards, but its shipments were stuck, causing continuing losses. She was in touch with the authorities for the last three months, but no solution could be found, due to which she had to take this step.
Hangeng Trade Co said it paid off all liabilities, including three months’ wages, fines, electricity bills and container demurrage charges, before closing the factory. The company also said that relations between Pakistan and China are strong and CPEC is a major project.
However, the company clearly said that a clear and practical policy environment is very important for business. Also, the company thanked the Government of Pakistan and the Ministry of Planning for their cooperation, but also advised investors to assess the risks before investing in Gwadar.
This development has come to light at a time when Prime Minister Shehbaz Sharif is going to visit China this month, where a Business-to-Business Investment Forum is to be held. The news of the closure of the company in Gwadar has raised new concerns about the confidence of foreign investors and the future of CPEC. Expressing regret over the layoff of employees, the company said that it was not possible to maintain employment in the current circumstances.
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