China today dismissed as "unnecessary" the concerns of Pakistani businesses over the possibility of local markets getting flooded with cheap Chinese goods due to tax exemption under the CPEC project, marginalising local industries.
"As for the specifics, I am not aware of them, but I think your concerns are unnecessary," Chinese foreign ministry spokesperson Hua Chunying said.
Pakistani companies have expressed concerns over Chinese suppliers, who will get heavy tax exemptions, may flood local markets with cheap Chinese goods when the trade route under the USD 46 billion China-Pakistan Economic Corridor opens.
Playing down such concerns, Hua said the CPEC, part of Beijing's Silk Road project, is a new cooperation framework set by China and Pakistan in the interest of long-term development.
She said, "it is an important project under the Belt and Road", the official name for Silk Road initiative.
CPEC, an ambitious project for the development of China and Pakistan, contributes to regional connectivity and common development and prosperity of regional countries, Hua said.
"China adheres to the principle of planning, building and benefiting together in pushing forward the Belt and Road initiative so in the same spirit China and Pakistan will push for progress of the CPEC. As for the benefits and dividends of the CPEC, they will reach the Chinese and the Pakistani people and the people in the region at large.
"It is important for China and Pakistan and is also of positive significance for the development and prosperity of the countries in the region," she said.
Last year Pakistan approved sweeping tax concessions for Chinese operators at the deep-sea Gwadar port and businesses that will operate in the Gwadar Free Zone for up to 40 years.
The government also approved a complete income tax holiday for 23 years to businesses that will be established in the Gwadar Free Zone.
Gwadar connects the CPEC with China's Xinjiang with highways, pipelines and rail links covering distance of about 3,000 kms though the Pakistan-occupied Kashmir (PoK).
While China proposes to use the corridor mainly to gain access to the Arabian Sea to import oil as well as to export its goods to middle east and beyond, Pakistan hopes to get benefited by large-scale Chinese investments specially to generate much-needed electricity.
At the same time, Pakistan media highlighted growing concerns of the local businesses over tax and other largesse to Chinese firms without reciprocal safeguards.
Citing China-Pakistan free trade treaty (FTA) which gives an edge to Beijing and promotes more imports than exports from Pakistan, the Pakistan industry and business bodies expressed apprehension that same thing may happen under the CPEC.
"CPEC can only be beneficial if Pakistan's exports are ramped up with facilitation for the local industry," Atif Iqbal, Executive Director of the Organisation for Advancement and Safeguard of Industrial Sector was quoted as saying in Pakistan media.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)