Targeting $5 billion ties – Pakistan & Gulf Economist

• Encouraging investment climate in energy, ICT, minerals and logistics sectors of Pakistan

In a bid to deepen economic ties with Beijing, Pakistan is targeting up to $5 billion in new investment at the Pakistan-China B2B Investment Conference which is coinciding with the Shanghai Cooperation Organization (SCO) Summit 2025. The conference underscores Pakistan’s renewed drive to attract Chinese capital beyond traditional government channels, focusing on business-to-business partnerships to unlock opportunities across key sectors. In a liberal estimate, the investment volume could well exceed $5 billion, with over 100 MoUs in play. The second Pakistan-China B2B Investment Conference is set to spotlight sectors with strong export potential, including textiles, leather, agriculture, fisheries, plastics, and ICT.

The Pakistan Embassy in Beijing, backed by the Special Investment Facilitation Council (SIFC) and the federal government, is spearheading a fresh wave of economic diplomacy. The high-stakes forum aims to catalyze business deals across key sectors, reaffirming Pakistan’s strategic economic outreach. Investor facilitation measures have also been ramped up. Exclusive lounges for Chinese investors at major airports, one-window business facilitation centers in provincial capitals, and streamlined visa regimes are among the steps implemented. Cultural and people-to-people diplomacy is also being integrated into the strategy. From mango festivals in Beijing to fashion showcases in Shanghai, Pakistan is using soft power to complement its trade outreach. Vocational training partnerships with Chinese institutions are also being developed to address Pakistan’s skills gap.

American firms to invest in Pakistan’s minerals, ICT, energy sectors

In 2024, total US-Pakistan goods trade amounted to approximately $7.2 billion, with US exports to Pakistan valued at around $2.1 billion and imports at nearly $5.1 billion. On the foreign direct investment front, the United States remains one of Pakistan’s largest investors, with net US FDI inflows estimated at $227.7 million. The opportunities are significant in critical minerals, ICT, agriculture, energy and infrastructure. American companies are now encouraged to engage with the US Foreign Commercial Service team in Pakistan and pursue partnerships with local counterparts to build “profitable ventures” that could contribute to economic prosperity in both countries.

Pakistan is the fifth-largest country in the world, home to 250 million people, with 64 percent of the population under the age of 30. Pakistan’s GDP is about $412 billion, ranking 38th in the world, but Goldman Sachs projects it could reach $3.3 trillion by 2050, putting it among the top 10 to 15 economies globally. Pakistan is currently focused on tax collection, energy sector restructuring and privatization of state-owned firms. These measures have helped stabilize public finances, rebuild foreign exchange reserves and improve international credit ratings, with Fitch Ratings upgrading Pakistan’s outlook to positive in mid-2025. The steps are crucial for restoring investor confidence and laying the groundwork for sustainable growth in Pakistan.

Pakistan is seeking $2 billion ADB investment for Pakistan Railways

Pakistan is seeking a $2 billion package from the ADB to begin long-awaited modernization works, most notably on the Karachi-to-Peshawar Main Line-1 (ML-1) route. The proposed ADB package would target three areas: rehabilitation of ML-1 to allow faster and safer travel, development of a dedicated freight corridor to take pressure off highways, and the introduction of digital systems to monitor and secure railway operations. If executed properly, these changes could enable passenger trains to run at up to 160 kilometers per hour, cut travel time on key routes nearly by half, and encourage a revival of rail-based logistics. Exporters, especially in the textile sector that accounts for nearly 60% of Pakistan’s exports, see in this a chance to reduce delays and cut costs associated with moving goods to Karachi Port. Improved connectivity between port cities and inland hubs such as Faisalabad and Multan could also enhance Pakistan’s role as a trade corridor linking South Asia with Central Asia.

The benefits go far beyond efficiency. Infrastructure investment of this scale has a multiplier effect, which generates tens of thousands of construction jobs and stimulates industries such as steel, cement, and services. A stronger railway backbone would also reduce the environmental toll of excessive trucking, lowering fuel consumption and emissions. In a country where energy imports weigh heavily on the balance of payments, the savings could be significant. The ADB’s involvement might serve as leverage for Islamabad to introduce governance changes, open space for private sector participation, and embrace technology-driven solutions. Without such reforms, financial injections alone may not lead to the desired turnaround.