17thEDITION

POWERED BY RESEARCH & DEVELOPMENT CELL, SCCI

• China Pakistan Economic Corridor (CPEC)• International Trade Payment Methods• REX – Registered Exporter System

Report On:

“Bismillah ir-Rahman ir-Rahim”

"In the name of ALLAH, the most Gracious, most Merciful".

• Editor’s Note 01

• Interna onal Trade Payment Methods 02

• The Art of Entrepreneurship 08

•Report on China Pakistan Economic Corridor 10

•Report ‐ Registered Exporter System (REX) 19

• Business Apps 26

• Trade Fair & Exhibi ons 27

• Credits 28

Contents

Dear Members,

I am delighted to share with you the 17th Edi�on ofChamber’s Communicator. It has been an overwhelming experience for us. We are constantlystriving to keep up with our reader’s expecta�ons.In this Edi�on we have some interes�ng thingscoming to you including a detailed Report on theChina Pakistan Economic Corridor, some informa�vear�cles on Entrepreneurship, Payment Methods etc.Moreover, considering the importance of REX Sys‐tem, we are publishing the report once again for thefacilita�on of our members.

I wish all the members an interes�ng readingexperience and look forward to your valuablefeedback as you are our biggest strength

Profound Regards,

Tariq Mahmood MalikSecretary General

EDITOR’sNOTE

Risk Issues in Interna�onal Trade

• Buyer Insolvency (Buyer cannot pay)•Non‐acceptance (buyer rejects goods asdifferent from the agreed upon specifica%ons)•Credit risks (allowing the buyer to takepossession of goods prior to payment)•Regulatory risk (e.g., a change in rules thatprevents the transec%on)•Interven%on (government ac%on to prevent atransec%on being completed)•Poli%cal risk (change in leadership interferingwith transec%ons or prices)•War, piracy and civil unrest or turmoil•Natural catastrophes, freak weather and otheruncontrollable and unpredictable events•In addi%on, interna%onal trade also faces the riskof unfavorable exchange rate movements.

Three (3) Types of Interna%onal Trade PaymentsMethods

1. Clean Payments• What is a Clean Payment?• Clean Payments are characterized by trust.

•In the case of Clean Payment transac%ons, allshipping documents including the %tle documents(against which goods are released) are handleddirectly by the Exporter/ Importer. The role ofBanks is limited to clearing the funds as perrequirement.

Types of Clean Payments

There are two types of Clean Payments as under:1. Open Account. The Importer is trusted to paythe Exporter a�er receipt of the goods.2. Payment in Advance. The Exporter is trusted todispatch the goods a�er receiving the paymentfrom the Importer in advance.

Mechanism of Clean PaymentsOPEN ACCOUNT. The Exporter dispatches the

1. Either the Exporter dispatches the goods andtrusts the Importer to pay once the goods havebeen received.2. Or the Importer trusts the Exporter to dispatch the goods a�er payment is received in advance.

goods and sends the shippingdocuments directly to theImporter and waits for theImporter to send payment.

Note: This method is notallowed for exporters by StateBank of Pakistan.

PAYMENT IN ADVANCE. The Importer sends thepayment to the Exporter inadvance and waits for theExporter to dispatch the goodsand documents later on.

Note: Both above paymentsvary only in the order in whichevents happen.

Clean payments risk spectrum

Below given Risk Spectrum is intended to summarize the risks associated with the paymentmethods in rela�on to the Exporter and the Importer.

It is clear that the Open Account and Payment in Advance sit at opposite ends of the RiskSpectrum.

What is a Documentary Collec�on?

• A method of Payment used in Interna+onaltrade in which the Exporter entrusts the handlingof commercial / financial documents to banks andinstructs the banks concerning the release of thedocuments to the Importer.• Banks involved in the transac+on do not provideany type of guarantee of payment• Collec+ons documents are subject to theUniform Rules for collec+ons published by theInterna+onal Chamber of Commerce (I.C.C.). Thelast revision of these rules effect on January 1,1996 and is referred to as URC 522.

Types of Documentary Collec�ons

1. Documents against Payment (D/P). Where thebank releases the documents to the Importer onlyagainst payment. This type is also known as aSight Collec+on / Cash against Documents (CAD).

2. Documents against Acceptance (D/A). Wherethe bank releases the documents to the Importeronly against acceptance of dra� (Bills ofexchange). This type is also known as a TermCollec+on / Usance Bills.

Mechanism of Documentary Collec�on

To understand the mechanism of DocumentaryCollec+on, divide it into three steps as under:• Flow of Goods• Flow of Documents• Floe of Payments

Flow of Goods in Documentary Collec�ons

Once the Importer and the Exporter haveestablished a sales agreement / sales contract /Proforma Invoice on the basis of a DocumentaryCollec+on as the method of payment, theExporter dispatches the goods of the Importer as

per agreed modes of transport (By ship, air, rail,road, etc.). Freights of the transport is selected isse,led on the basis of INCOTERMS agreed in thesales agreement.

Here the Importer is known as the “drawee” andthe Exporter is known as the “drawer”.

Flow of Documents is Documentary Collec�ons

Once the goods are dispatched, the Exportersubmits the Commercial / Financial documents(commercial invoice, Bills of Lading, Bills ofExchange, Packing List etc..) to his bank, called theRemi-ng Bank. The role of the remi-ng Bank isto send these documents accompanied by Collec‐+on Ins+tu+ons to a bank in the Importer’s Coun‐try, referred to as the Collec+ng/ Presen+ng Bankin the Collec+on process.

The Collec+ng/ Presen+ng Bank which is nomi‐nated by mutual understanding of the Exporter /Importer, acts in accordance with the instruc+onsgiven by the Remi-ng Bank and releases thedocuments to the Importer against payment (D/P)or acceptance (D/A) of the obliga+on to pay inspecified future date as instructed by the Remit‐+ng Bank in the Collec+on instruc+ons.

Flow of Payments in DocumentaryCollec�ons

Once the Payment is received fromthe Importer, the Collec�ng orPresen�ng Bank sends the paymentto Remi�ng Bank for onwardscredit to the Exporter’s account.

The Importer now surrenders thebill of lading to carrier (in case ofocean freight) in exchange for thegoods or the delivery order.

In case of Documents againstAcceptance (D/A), the importerreleases the goods before thepayment.

Payment risk spectrum of clean payments and documentary collec�ons

As depicted in below diagram, Documentary Collec�ons offer more of a compromise in risktaking between the Importer and the Exporter than Clean Payments.

Risk Analysis of Documentary Collec�ons

Le�er of Credit (L/C)

What is a Le�er of Credit (L/C)?A Le)er of Credit (L/C) is:1. The wri)en undertaking of abank2. On the instruc(ons of theapplicant (buyer)3. To the beneficiary (seller)4. To pay a specific amount at aspecified date5. Provides the beneficiarysubmits documents in conform‐ity with the Le)er of Credit6. Within the prescribed dead‐lines

The Interna(onal Chamber ofCommerce (ICC) publishes inter‐na(onally agreed‐upon rules,defini(ons and prac(ces govern‐ing Le)ers of Credit, called“Uniform Customs and Prac(ces(UCP). The last revision of theserules was effec(ve July 1, 2007and is referred to as the UCP600.

Types of L/C by Payment: L/C atSight / Terms or Usance L/C

1. L/C at Sight: If payment is tobe made at the (me that docu‐ments are presented in theissuing Bank, this is referred toas an L/C at Sight (As perUCP600 Collec(ng / Presen(ngBanks has five working days toscru(nize the documents beforeeffec(ng the payment).

2. Term (Usance) L/C: If paymentis to be made at a future fixed date as per acceptance of dra�(Bills of Exchange) by buyer fromthe Issuing Bank, this is referredto as a term (Usance) L/C (e.g.L/C at 120 days from Bills of Lad‐ing date), in this case maturity

date is calculated from the dateof shipped on board men(onedon Bills of Lading (B/L).

Confirmed Le�er of Credit:

When a bank adds its confirma‐(on to a le)er of credit, it makesits own independent commit‐ment to honor dra�s / docu‐ments drawn strictly inaccordance with the terms andcondi(ons of the le)er of credit.This commitment is in addi(onto the issuing bank’s commit‐ment.Normally, the Exporter requeststo confirming bank for addingconfirma(on and also. Exporterbears the charges of theconfirming bank, otherwise asagreed between the Exporterand Importer. In this case theExporter submits commercial /financial documents in theConfirming bank (instead ofadvising bank).

Mechanism of a Le�er of CreditTo easily understand the mech‐anism of a Le)er of Credit (L/C)we divide the process intofollowing three steps:a) Issuance of L/Cb) Flow of Goodsc) Flow of Documents andPayment

a. Issuance of L/CA�er the Importer – Exporterse$led a sales agreement withpayment terms Le$er of Credit,The Importer (Applicant) re‐quests his bank (the IssuingBank) to issue Le$er of Credit infavor of the Exporter (Benefi‐ciary). The Importer submits ap‐plica#on forms (IB‐8) along withForm I (Imports) and other re‐quired documents dependingupon the bank and the case maybe.

If agreed as per its policy, the Is‐suing Bank issues and sends theLe$er of Credit to the AdvisingBank is usually located in Ex‐porter’s country.

The Advising Bank verifies theLe$er of Credit for authen#cityand sends it to the Exportera�er receiving its own charges(Advising Charges).

b. Flow of GoodsUpon receipt of the Le$er ofCredit from Advising Bank, theExporter reviews the Le$er ofCredit to ensure as under:

i. That it corresponds to theterms and condi#ons in these$led agreement;ii. That the documents s#pu‐lated in the Le$er of Credit canbe produced easilyiii. That the terms and condi‐#ons of the Le$er of Credit canbe fulfilled.

If we cannot accept the termsand condi#ons of the Le$er ofCredit or not agreed with thedocuments required we may re‐quest to buyer to arrange the re‐quired charges in the Le$er ofCredit.

So, if agreed the buyer willarrange the changes in the Let‐ter of Credit in the same way asissued Le$er of Credit. But this#me received Le$er of Credit iscalled the Amendment of theLe$er of Credit.

Now the Exporter arranges forshipment of the goods to the Im‐porter as per terms and condi‐#ons wri$en in the Le$er ofCredit.

c. Flow of Documents andPaymentOnce the goods are shipped theExporter submits the documentsrequired in the Le$er of Creditto the Advising Bank.

The Advising Bank sends thesedocuments to the Issuing Bank.Upon receipt of the documents,the Issuing Bank has fiveworking days as per UCP 600 toscru#nize the documents. Ifdocuments are without anydiscrepancy, the Issuing Banksends the payment to AdvisingBank in case of L/C at Sight anddelivers the commercial docu‐ments to the Importer a�erdebi#ng Importers Account by

the amount of documentspresented.

If, L/C is Term (Usance) based,the Issuing bank gets acceptancefrom the Importer of the obliga‐#on to pay at a fixed date as perdra� (Bills of Exchange)presented and delivers thecommercial documents to theImporter.

The Importer now surrendersthe bill of lading to carrier (incase of ocean freight) inexchange for the goods or thedelivery order.

Upon maturity date (as peracceptance of dra�), theImporter pays the Issuing Bankwhich onwards send thepayment to the Advising Bankfor onwards credit to theExport’s account.

The

ofEntrepreneurship

Entrepreneurship has changed a lot in the pasttwo decades. Access to informa!on and resourcesis greater than ever thanks to the advances of theInternet, and a culture of startup favori!sm hasencouraged young crea!ve thinkers to follow theirprojects more than ever before. In many ways,we live in the midst of a startup renaissance,filled with opportuni!es for anyone with anindependent passion and a strong idea.

Yet there are a number of misconcep!ons aboutthis era of entrepreneurship that permeate thestartup community and society in general. Theseare 10 of the worst offenders:

1. Not everybody gets startup capital.Every day, there’s some new tech darling that justreceived several million dollars in startup funding.The sta!s!cs are both true and misleading. Moremoney than ever is being invested in startups,specifically tech startups, and entrepreneurs

today do have a higher chance of ge"ng capitalthan they did in 1990. But the distribu!on of thatfunding is lopsided. The vast majority of it goes toa select handful of projects with the greatestprofitability poten!al. Smaller projects, even ifgrounded with a good idea and a sound businessplan, o�en get passed over.

2. Entrepreneurs only make some of their ownrules.Part of the allure of entrepreneurship is ge"ng tobe your own boss and call your own shots. Insome ways, this is true. You’ll get to set your ownschedule and come up with your own office rules.But in other ways, the modern entrepreneur is aslave to circumstance, mentors, investors and cus‐tomers. They all have a vested say in the direc!onof the company, and if the entrepreneur doesn’tlisten, he/she will lose out on funding, revenueand support.

5. Crowd funding works butisn't easy.Crowd funding seems like ashortcut for entrepreneurs.Anyone can set up a Kick‐starter or Indiegogo campaignand instantly connect with theworld for bits‐and‐piecesfunding. But pushing yourcrowd funding campaign tosuccess takes a lot of $me andeffort, and some$mes, you’llcome up with nothing at all.

6. Where you start your busi‐ness s�ll ma�ers.It may seem like the Internetallows you to be an entrepre‐neur everywhere, but thereare s$ll hotspots where moststartups seem to aggregate.Funding is available there, andscarce elsewhere.

7. You might need to give upon that idea you love somuch.The mindset is that modernentrepreneurs put their nosesto the grindstone and simplywork hard un$l their idea is asuccess. The reality is thatmost entrepreneurs end upscrapping ideas, trying, failingand reinven$ng ideas from theground up un$l eventuallythey succeed. They never giveup on entrepreneurship ingeneral, but they give up on in‐dividual ideas all the $me.

8. Startup culture is not aparty.Pop culture illustrates “startupculture” as one big party withcasual dress codes, hip music,

and lax work schedules. Inreality, most startup employ‐ees are constantly hammeringaway at their work, rarelystopping even for a lunchbreak. The rules might bedifferent from those of aconven$onal office, but there’sa lot of hard work going on.

9. Growing an online presenceis work.Building a robust and recogniz‐able online presence is not apiece of cake. It takes monthsof hard work and refinementto get to that level. Thesemisconcep$ons lead manyyoung entrepreneurs to disap‐pointment, and allow manypeople to think that entrepre‐neurship is easier than itactually is. Properly temperingyour expecta$ons and under‐standing the reality of modernentrepreneurship are the firststeps to se%ng realis$c goalsand a reasonable plan forward.

10. On the bright side, youbecome an entrepreneurgradually.There are plenty of storiesabout entrepreneurs whodropped everything, qui%ngschool or jobs to pursue theirvision full‐$me. This happenso�en, but it’s neither neces‐sary nor universal. Today, it’sen$rely possible for entrepre‐neurs to start out with part‐$me effort, eventually scalingup if it’s appropriate to do so.

3. It takes to a good idea to startbut a lot more to succeed.Good ideas are hard to come by, andthey are valuable, but realis$cally agood idea is only the star$ng point.On top of a good idea, you need anexperienced leader to direct thecompany, a solid business plan todirect the course of business, great$ming, an eye on your compe$tors,solid funding, and a great team tosupport you. These things are evenharder to come by, and withoutthem even a good idea can fail.

4. You won't become a billionaireovernight. If ever.All the “overnight success” storiesyou read about entrepreneurs arewrong. Nobody becomes a billion‐aire overnight. That level of successis the product of hard work, heavyinvestment, trail and error, failure,and ongoing educa$on.

CPEC

China is the world’s third largestcountry, domina%ng the map ofeastern Asia, with an area of 9.6million square kilometers (3.7millions square miles). China is avery diverse place, from theHimalayas in the West, the superci%es of the east, the desert andgrasslands of the north and thetropical south, China is one of themost diverse geographies in theworld. It is famous for being themost populated country on earth(1.3 billion) with some of theworld’s biggest ci%es. Since ini%a%ng market reforms in1978, China has shi�ed from a cen-trally-planned to a market-basedeconomy and has experienced

rapid economic and social develop-ment. Its GDP growth has averagednearly 10% yearly, and has li�edmore than 800 million people outof poverty. China reached all theMillennium Development Goals(MDGs) by 2015 and made a majorcontribu%on to the achievement ofthe MDGs globally. AlthoughChina’s GDP growth has graduallyshowed since 2012, it is s%llimpressive by current global stan-dards. Rapid economic ascendancehas brought on many challenges aswell, including high inequality;rapid urbaniza%on; challenges toenvironmental sustainability; andexternal imbalances. China alsofaces demographic pressures

related to an aging popula%on andthe internal migra%on of labor.Significant policy adjustments arerequired in order for China’sgrowth to be sustainable. But theyalready planned to overcomethese issues by its 12th Five-YearPlan (2011-2015) and the newlyapproved 13th Five-Year Plan(2016-2020).

China Pakistan Economic Corridor

Report On:

China – Overview:

The economy of Pakistan is the 26th largest in theworld in terms of purchasing power parity (PPP), and44th largest in terms of nominal GDP. However asPakistan has a popula(on of over 183 million (theworld's 6th-largest), thus GDP per capita is $ 4,141ranking 140th in the world. Pakistan ranks as the 15thlargest trader of goods in the world and 6th largesttrader of services. Major industries include tex(les(garments, bed linen, co)on cloth, and yarn),chemicals, food processing (mainly sugar, salt,wheat, rice, and fruit), agriculture, fer(lizer,cement, Surgical, sports goods, leather ar(cles, dairy

and rugs. Pakistan’s economy has suffered in the pastfrom decades of internal problems, a rapidly growingpopula(on, and mixed levels of foreign investment.

Pakistan has made significant progress in regainingmacroeconomic stability over the past few years; thefiscal deficit has shrunk from 8 percent to below 5percent, interna(onal reserves have tripled to over$18b, and the rate of overall economic growth hasincreased by 4.7%. But s(ll, different areas should befocused and combined efforts should be made toincrease the level of public spending on developmentprojects for the whole country.

Pakistan – Overview:

“Pakistan – ChinaRelations”

Pakistan and China have been enjoying warm and friendly rela(onssince 1950. The first decade of rela(ons was not as smooth. Rela(onsbetween both the countries later strengthened when Pakistan wasstar(ng to import coal for its budding industry by entering into anagreement with China on barter trade of coal for co)on. China alsohelped Pakistan during the war of 1965, which brought two na(onsclose to each other and has generously supported Pakistan in military,missile and nuclear program, and economic sector. From 1970sonwards, the rela(ons between Pakistan and China strengthenedmore in other sectors. Though joint ventures, China exist in manyareas like in steel, heavy engineering and motorcycles manufacturing,the prominent projects in public as well as in private sectors areincluding Karakoram Highway, Pakistan Aeronau(cal Complex(KAMRA), Gwadar Deep Sea Port, Chashma Nuclear Power Plant,Indus Highway, Thar Coal Development, Saindak Metal (Copper/Gold)Project and Pakistan Cycle & Industrial Coopera(ve Lahore, ZhongxingTelecom (Pvt) Ltd, Sino-Pak Metal Foundry in Nooriabad, Pak GlassLtd. Glass Industry and Haier Home Appliances etc. As a result of thislong-standing friendship, we see a big achievement in the formChina-Pakistan Economic Corridor (CPEC).

Background - BELT and Road Initiative (BRI)

“Belt and Road Ini(a(ve” (BRI) or “One Belt, One Road”(OBOR) Ini(a(ve, is the name of a plan to revive and be)erthe spirit of the old Silk Road and a step towards realizingthe predic(on of the Asian century (21st Century=AsianCentury). One Belt One Road (OBOR) is basically a shi� instrategy to integrate China with the rest of Asia, Europeand Africa, and in the process, build infrastructure acrossthese regions to boost economic growth of the region anddefinitely create a win-win situa(on for China along withthe par(cipants in the project. The OBOR consists ofvarious mega-projects, but the main two ini(a(ves are;“The 21st Century Mari(me Silk Road” (MSR) and “SilkRoad Economic Belt” (SREB). CPEC is also a part of the saidproject and it is not a single road or a rail link. Connec(vityis the main objec(ve of this mega project from “Na(onal”to “Regional” and then to “Global Reach”.

CHINA-PAKISTAN ECONOMIC CORRIDOR

CPEC is not a single road or a rail link. It is a vast networkof roads, railway and pipelines. And a 3,218 kilometer longroute with the actual es(mated cost US$75 billion, out ofwhich US$45 billion plus will ensure that the corridorbecomes opera(onal by 2020. The remaining investmentwill be spent on energy genera(on and infrastructuredevelopment. This project is expected to take the bilateralrela(onship between Pakistan and China to new heights;it’s a beginning of a journey which hopes to transform theeconomy and help bridge Pakistan’s power shor'all. Thecoopera(on is based on the “1+4” coopera(on mode,namely, the two sides take CPEC as the core whilepriori(zing in Gwadar, Energy, Transport Infrastructure andIndustrial Coopera(on along ac(vely encouragingcoopera(on and communica(on in other fields:

• Development Strategies Synergy• Gwadar Coopera(on• Energy Coopera(on (hydro, thermal. Coal,wind, solar and nuclear power and modernizing transmission and distribu(onnetworks)

• Transporta(on Infrastructure Coopera(on (railways, highways, avia(on, data connec(vity and oil and gas pipelines)

• Industrial Coopera(on (Industrial parks and economic zones)

• Coopera(on in Livelihoods• Connec(vity• Agricultural Development and Poverty Allevia(on

• Tourism• Coopera(on in Areas concerning People's Livelihood and Non-governmentalExchanges

• Financial Coopera(on

The corridor will engirdle the en(re territoryof Pakistan, which will become a medium anda gateway to mul(ple regions and it spansover a period of 15 years & over(me,mul(-regional economic mega-project, withPakistan as a center.

All sides of that project are covered andmanaged by a proper ins(tu(onal framework, and a Joint Coopera(on Commi)eehas been formed which is Co-Chaired byMinister PD&R and Vice Chairman NDRC.Under the commi)ee, there are followingworking groups working; Planning JointWorking Group, Energy Joint Working Group,Transport Infrastructure Joint WorkingGroup, Gwadar Joint Working Group andIndustrial Coopera(on Joint Working Group,which is convened by Chairman BOI and isworking with all provincial governments toleverage the poten(al available in varioussectors of economy.

CPEC starts from Kashgar, China and entersPakistan through Khunjerab Pass (GB). Itconsists of three routes in Pakistan;

• Western Route passing through KPKand Baluchistan.

• Central Route passing through KPK,Punjab, Sindh and Baluchistan.

• Eastern Route passing through Punjab,Sindh and Baluchistan.

Energy:Under the CPEC framework, both

sides have iden(fied 15 priori(zed projectswith total capacity of 11,110 MW, 4 ac(velypromoted projects with 2,544 MW, balancecapacity 3415 MW and total 19 projects with17,045 MW.

Note: (Details of all energy projects, their loca�on,cost, fuel, comple�on etc. are given in the a�ached

presenta�on.)

Major Segments of CPEC

• 1st Target (2020): Period of market cul(va(on.The major bo)lenecks to Pakistan’s economicand social development shall be addressed toboost the economic growth.

• 2nd Target (2025): Period of expansion anddevelopment. Processing and manufacturingindustries will be developed, significantimprovement in the people’s livelihood,balanced regional economic development, andall the goals of Vision 2025 achieved.

• 3rd Target (2030): Period of Maturity. Theendogenous mechanism for sustainableeconomic growth will be in place, the CPECready to play leadership role in the region.

CPEC Development Targets CPEC Routes:

Gwadar PortGwadar Port situated at the southern end of CPECnear the ocean mouth, Gwadar point is an impor-tant project of CPEC. In order to improve theopera+onal capacity of the port, China overseasPorts Holding Company Ltd. (COPHCL) is carryingout the repairs and up-grada+on of the portfacili+es. China and Pakistan are ac+velypromo+ng the East Bay Expressway project andthe New Gwadar Interna+onal Airport project.Efforts are being made to improve the livelihoodof the local people, par+cularly the construc+onof educa+onal and medical projects such asGwadar Primary School, Gwadar Hospital, GwadarVoca+onal College, and Water Desalina+on Plant.

Industrial and Investment Cooperation

Industrial and Investment Coopera+on is of vitalimportance to the upli�ing of vital importance tothe upli�ing of the level of economic coopera+onand expansion of the space for industrial

Transportation Infrastructure

Transporta+on Infrastructure CPEC essen+ally follow the north-southcorridor in Pakistan. The exis+ng road network shall be used in thebeginning, developing the missing connec+ons first, with easiest one onpriority, through scien+fic planning. Currently, commercial contracts havebeen signed for the two major CPEC transporta-+on projects, i.e. KKH Phase-II (Havelian-Thakotsec+on) and Karachi-Lahore Motorway (Sukkur-Multan sec+on), and the nego+a+on of the loanagreements in final stage. Preferen+al Chinesegovernment loans will be provided for theseprojects. At the same +me, the feasibilitystudy of Railway Line ML1 (Peshawar-Karachi)up-grada+on projects is being ac+vely promoted.KKH Phase II (Raikot – Islamabad Sec+on) withlength of 118 KM cost 3500 (US$ M) andPeshawar-Karachi Motorway (Multan-SukkurSec+on) with 392 KM cost $ 28 (US$ M) onimplementa+on stage; while in Rail SectorProject, Expansion and reconstruc+on of exis+ngLine ML-1 with length of 1872 cost 8,250 (US$ M).

Note: (Details of all Infrastructure projects, their loca�on, cost, fuel, comple�on etc. are given in the a�ached presenta�on).

coopera)on between the two countries, it carriesadvantages in experience, technology, financingand industrial capacity, while Pakistan enjoysfavorable condi)ons in resources, labor forces andmarket. The Chinese side is willing to provide highquality industrial capaci)es to Pakistan andencourage reputable Chinese companies to makeinvestment in Pakistan. Meanwhile, it is expectedthat the Pakistani side put forward their ideas onthe loca)ons of the industrial zone, and issuepreferen)al policies in this regard. Both sides willkeep on communicate with each other on thedeepening of industrial coopera)on, and hopefullyiden)fies a series of win-win projects that canyield favorable economic and social benefits. TheChinese Government has decided to provideinterest-free loans for the laying of Op)cal FiberCable from Rawalpindi/Islamabad to Khunjrab andthe related commercial and loan agreements havealready been signed. Besides, the relevant Chinesecompany has finished feasibility study on theu)liza)on Digital Terrestrial Mul)media Broadcastin Pakistan. The two countries are working on theLong-term Planning of CPEC and its dra� has beencompleted. Important details are;

To improve infrastructure and business environ-ments, Special Economic Zones (SEZs) or IndustrialParks are planned to overcome barriers to firmentry, a*ract FDI, and encourage industrialclusters. The government gives some incen)veslike tax incen)ves for a limited period, directcredits for investments and access to foreignexchange etc. Pakistan needs a shi� fromresource-based and low technology exports to theadop)on and development of medium- andhigh-technology produc)ons, and technologicalsophis)ca)on.

Almost 80% of Pakistan’s exports are resource-baseditems. Industrial coopera)on under this project aims tobring technology from china in exis)ng industries as wellas new technology based industries also transfertowards Pakistan. Because in the last three decades,Chinese exports have gradually risen in the value chain,the surplus labour force has been absorbed, and wageshave improved. Therefore, the exporters are gaugingthe prospect of reposi)oning their labour-intensiveindustries elsewhere in order to manage the increasinglyspiking wages. This reloca)on of Chinese industry toPakistan will not only enhance the low-skilled labour-intensive market’s produc)on efficiency in Pakistan, butwill also be eventually instrumental in technologytransfers, channelizing the economies of scale, andadding value to the produc)on chains in various sectorslike agriculture and industry. If Pakistan captures thisopportunity, Pakistan will be able to growth at 8-10%annually for 30 or more years and become a highmiddle-income or even high income country.

The Board of Investment in consulta&on with Provincial Governments hasiden&fied 46 sites for establishing SEZs alongside the CPEC route at be'erand suited areas. Each economic zone will target specific products andservices, based on the availability of local raw material, workforce andother such compara&ve and compe&&ve advantages. Out of these, nine(09) sites have been declared as priority special economic zones tojumpstart the industrializa&on process. On the other hand, FDI producesa posi&ve effect on economic growth in host countries because it consistsof a package of capital, technology, management, and market access.It tends to be directed at those manufacturing sectors and keyinfrastructures that enjoy actual and poten&al compe&&ve advantage. Inthose sectors with compe&&ve advantage, FDI would create economies ofscale and linkage effects and raise produc&vity.

CPEC PROJECTS PORTFOLIO

Pakistan and China together are leveraging their unique economic geography for connec&vity, prosperityand stability. The planned Chinese investment in Pakistan is the single largest overseas investmentannounced by the China anywhere in the world. President Xi Jinping also ini&ally announced the spendingplan pledging to invest $46 billion (now increased to more than $51 billion) on various above discussedsegments; and about two-third of this investment of is commi'ed towards establishing energy and powerprojects to alleviate the country’s chronic energy crises. The proposed projects will be financed by directinvestment by Chinese companies, commercial and so� loans by banking giants like Exim Bank of China,China Development Bank, and the industrial and Commercial Bank of China, and grants. The corridorproject is being publicized as an unprecedented opportunity for Pakistan to revive its economy, CPEC wills&mulate, at a massive scale in prominent sectors and Pakistan will become a regional hub for investment,trade, and transporta&on that will be a huge benefit.

CHINESE INVESTMENT

Furthermore, the implementa"on of CPEC-related projects in power and transport infrastructure hasencouraged several Chinese firms to invest in Pakistan and led many Pakistani companies producingcement, electric cables, steel, etc to expand their produc"on capacity in an"cipa"on of rise in demand.More private investment is expected to be made over"me in other sectors as the work on the Corridorproject progresses and as power shortage reduces as new power genera"on project associated with theCPEC ini"a"ve come into commercial produc"on. The interna"onal Monetary Fund es"mates that theearly harvest projects will cost almost $28 billion, more than half of the Chinese investment of $51 billioncommi#ed so far for the Corridor ini"a"ve. Out of this amount, a li#le more than $19 billion will compriseforeign direct investment (FDI) $6.72 billion confessional loans and $1.62 billion commercial loans. A totalof $18 billion will be spent on energy genera"on and transmission and $9.33 billion on transporta"onprojects.

Challenges towards the implementa"on of the China PakistanEconomic Corridor (CPEC) project. Failure to address theseirritants will con"nue to affect Pakistan’s trade and economicengagement with countries in the region, thus nega"velyimpac"ng na"onal development.Two major challenges are asfollows:• The lack of poli"cal consensus • Insecurity Internal challenges for Pakistan in the way of CPEC comple�on• Security situa"on in Pakistan• Poli"cal unrest in the country• Administra"ve issues• Skill level of Pakistani work force working on the project• Greater connec"vity may result in more imports from Chinas

Challenges:

CPEC’S ECONOMIC IMPACT ON PAKISTAN

CPEC is a significant project for both the countries. ForPakistan, it will open doors to enormous opportuni'es,help posi'on itself as a major transit point connec'ngEurasian region with South Asia and South East Asia, andprovide much needed base to start economic growth.CPEC is being considered as a game changer for Pakistanas it will push economic growth and help integrate thecountry into the global and regional values chains. CPECwill connect economic agents along a defined geographyand it will provide connec'on between economic nodesor hubs, centered on urban Landscapes, in whichlarge amount of economic resources and actors areconcentrated. They link the supply and demand sides ofmarkets. The project is expected to serve as a spring-board for the development of industries such as retail,tourism, hospitality, health, and educa'on andexpansion of these industries could poten'ally lead tosynergies among various downstream sectors withbenefits accruing to the larger popula'on.

According to Pakistan’s Economic Survey 2014-2015, thevolume of trade between Pakistan and China hasincreased to$16 billion. China’s export to Pakistanincreased by 10% during 5 years from FY2010 to FY2015.As a result, China’s share in Pakistan’s total export hasgradually picked up from 4% in FY2010 to 9% duringFY2015. In the year to come, it will increase faster withthe comple'on of CPEC. The value of CPEC for China willcome from its impact on Pakistan’s economy as a whole,the strategic benefits that ensure from that, the

commercial benefits its firms derive from theinvestments themselves and from the growthof the Pakistani market”. It is es'mated thatfrom 2016 to 2020, trade between China andPakistan will grow 24% and bilateral directinvestment will rise 25%. Industrial valueaddi'on should exceed 1.5% and 500, 000 to800, 000 new jobs will be created. Therefore,CPEC is expected to give the flagging Pakistan’seconomy a shot in the arm. It is es'mated tocreate about 700,000 direct jobs in Pakistanbetween 2015 and 2030 and add about 2-2.5%to Gross Domes'c Product- 1.5% from 2016 to2020 and by another 1% from 2020 to 2030.

Similarly, it increase in imports of machinery,industrial raw materials, industrial rawmaterials, and services will likely offset asignificant share of these inflows (FDI andexternal borrowing) to reach about 2.2% of theprojected GDP in FY2020, and CPEC-relatedimports to about 11% of the total projectedimports in the same years. While precisequan'fica'ons of these impacts is difficultdue to uncertainty and lack of availableinforma'on, IMF projects CPEC related importsto about 11% of the total projected imports inthe same year.

General Informa�on:

Condi�ons for becoming RegisteredExporter:

REXRegistered Exporter System

Any exporter, manufacturer ortrader of origina'ng goods, perma‐nently established in Pakistan or havingheadquarters in Pakistan is en'tled toapply to the TDAP to becomeregistered Pakistani exporter, providedthat he holds, at any 'me, appropriateevidence of the origin of the productshe intends to export, for the purposeof checks carried out by the customsauthori'es.

The exporter should be known asreliable, an established and func'onalmanufacture or trader. A condi'on maybe that he must not be subject to bank‐ruptcy proceedings or being in arrearsof customs du'es and taxes.

Customs and tax representa'vescannot apply to become registeredexporter. Nevertheless customs repre‐senta'ves can perform necessary

Procedure for becoming Registered Exporter:

TDAP is organizing series of orienta)on seminarsand issuing specific instruc)ons for exporters, ex‐plaining terms and condi)ons which have to befulfilled in order to become registered exportersand those they will be required to abide formaintenance of their registered exporter statusunder the REX system.

Informa�on that the applicant needs to provide

Box 1: "Exporter's informa)on", i.e. applica)onlanguage, name of business, address alongwith country, telephone, fax, email, andTrader Iden)fica)on Number (TIN):TIN:TIN is Trader Iden)fica)on Number. It is adata element, defined by the World Cus‐toms Organiza)on, whose purpose is touniquely iden)fy exporters/ economic op‐erators in a country. Exporters in Pakistanshould use their company/business NTN(Na)onal Tax Number) in place of TIN a�ermaking the following two adjustments to it:I. Add the le*ers PK at the beginning of

NTNII. Delete any dashes from the NTNExample: if NTN for a business is 2692758‐4, then its TIN will be: PK26927584(Note: TIN must be free of empty spaces ordashes and contain full NTN)• Export Company Name• Business Address: Street and Number• Postcode• City• Country• Email address• FAX Number• Telephone Number

Box 5: Pertains to undertakings to be given by theexporter. These are not visible in the online Appli‐ca*on Form, just the place, name, and designa‐*on are to be entered in respect of the personfurnishing the underra*ng. However, undertak‐ings appear in the printed Form.

Box 6: Pertains to "consent" of exporter to the publica‐*on of his data on EU website. If the exporterconsents, a [Tick] is put in the box; then place,name, and designa*on are entered.

Note: Data entry by exporter ends here. Thus Box 7 doesnot appear in the Pre‐Applica*on Form. A�ercomple*ng Box 6, the exporter has to validate theform by typing text from the "image" into thegiven "box". Then he clicks the box [proceed] tocomplete the Form. Then he clicks the box [Print]to print the Form (the "print" will appear as a pdfdoc in his “downloads”).

Box 7: Box for official use by competent authority forRegistra*on (i.e. for TDAP's use)

• Registra*on Number (REX number): it is the reg‐istra*on number assigned by TDAP to the ex‐porter. The number is composed of the ISOcountry code (2 le+ers), "REX" (3 le+ers) and astring of up to 30 alphanumerical characters.• Date of registra*on: This will indicate the datewhen the registra*on is effec*vely performed(current date appears automa*cally).• Date from which the registra*on is valid: As perEU protocol, it could be equal or before the dateof effec*ve registra*on, can't be later. The TDAPwill keep it the same as the effec*ve registra*ondate.• Signature and stamp of the TDAP.

Statement to be printed

“The exporter NAME [REX No. ] of the productscovered by this document declares that, exceptwhere otherwise clearly indicated, theseproducts are of Pakistan preferen"al originaccording to rules of origin of the GeneralizedSystem of Preferences of the European Unionand that the origin criterion met is ……….(P; or W+HS Heading, e.g. W ‘9618’)”.

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APPSSTTOORREE

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MMeeeett TThhee TTeeaamm Secretary GeneralSialkot Chamber of

Commerce & Industry