A big news has come out from Gwadar, the most important project of 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.
Chinese company’s operations closed in Gwadar
Hangeng Trade Company, operating in Pakistan’s Gwadar Free Zone, on Friday announced the closure of its factory and firing of all employees. According to a report by The Express Tribune, the company took this decision on International Labor Day, saying that due to “non-business reasons” and operational difficulties, it was not possible to continue the business. The company said that it was meeting international export standards, but its shipments got stuck, causing continuous 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.
Business closed after paying dues to employees
Hangeng Trade Company said it paid off all liabilities, including three months’ salary, fine, electricity bill 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 the cooperation, but also advised investors to assess the risks before investing in Gwadar.
Questions on CPEC and investors’ confidence
This development has come to light at a time when Prime Minister Shahbaz Sharif is going to visit China this month, where a Business-to-Business Investment Forum is to be organized. The news of 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.