This story is to provide references for Karamay companies which are interested in investment in Gwadar, a port city in Pakistan.

For investors and businessmen, a campaign to invest and develop in a foreign land requires detailed knowledge of the local political and economic situations related to investment and business operations. Here political situation refers to the relationship among the local government bodies and their administration patterns. The writer will analyze those points in a systematic but accessible way for those who desire to invest in Gwadar.

Pakistan, officially the Islamic Republic of Pakistan, is a state governed under a federal system. However, for historical, cultural and social reasons, the actual politics of the country are characterized by weak government, multi-sects and powerful tribes, which is especially obvious in Gwadar. The city is under the direct administration of Balochistan Province in southwestern Pakistan.

Gwadar is administered by four government agencies, namely the Gwadar Port Administration, the Gwadar Development Administration, the District Council led by an elected Chairman and an administration agency represented by the Deputy Commissioner. The four bodies are independent of each other.

The Gwadar Port Administration is affiliated with the Port and Shipping Division of the Pakistan Government, responsible for planning, construction and management of the local ports.

The Gwadar Development Administration, subordinate to the Balochistan provincial government, is responsible for the general planning, land utilization, infrastructure and environmental supervision of the whole administrative region, except the Gwadar Port.

The chairman of the District Council, elected by the voters in the Port District, is in charge of administration of the public affairs and responsible to the voters.

The deputy commissioner, appointed by the chief executive of the Makran region, is responsible for solution of disputes and administrative work in judicial affairs.

It is projected that the total investment of the China-Pakistan Economic Zone will amount to 46 billion dollars. An expressway linking Kashgar of Xinjiang and Gwadar is under construction and will be completed in 2017, and a railway between the two cities is planned.

By 2030, the resident population in Gwadar will have reached 500,000. In the next two or three decades, the port city will develop new industries such as petrochemical works, iron and steel manufacturing, cement and building materials, automobile assembly, transportation and modern technology. A new airport, regional expressways, a coal-based power plant, an urban light-rail transit system, a sport center, and well-established schools and hospitals will soon be built.

Gwadar is only 40 minutes’ flight from Dubai. It is not only the key junction of the “21st Century Silk Road Economic Belt”, but the vital port of the “Maritime Silk Road”. About 18 million tons of oil is transferred via the port of Gwadar on a daily basis. In order to promote investment, an economic zone with a radius of 30 km has been set up. The enterprises in the zone will benefit from a preferential tax reduction or exemption. However, Karamay investors are more interested in the Free Trade Zone there operated by China Overseas Engineering Corporation (COVEC).

According to Wu Chunguo, director and CFO of COVEC, the total area of the Free Trade Zone is 923 hectares. The enterprises in the trade zone will benefit from 20 years of duty-free operations.

In addition, based on the free trade agreements signed by Pakistan, Iran, Saudi Arabia and Oman, Chinese products can enter the Middle-East market without payment of duty after being sub-packaged in the Free Trade Zone.

COVEC has also provided high quality services for the enterprises in the Free Trade Zone. Settled companies will receive price reductions in land, plant facilities and water and power. They will also be able to readily access services in investment consultation, law, company registration, visa processing, market development and financial affairs.