In today’s volatile environment, investors increasingly prioritise economic stability, regulatory predictability and policy consistency over temporary incentives, making these fundamentals the backbone of any country’s investment attraction strategy.
With global FDI growth slowing, successful economies are combining investor roadshows to promote technology hubs with investor-friendly financial products targeted at competitive sectors. For Pakistan, investment attraction requires more than high-profile events and ceremonial announcements; it demands a culture of consistent engagement through regular investor meetups, sectoral pitch sessions, and funding. Equally, vital are partnerships with financial institutions to design tailored banking solutions and innovative instruments such as sovereign and infrastructure bonds, which can diversify funding sources and draw long-term institutional investors. Pakistan must also evolve its toolkit by attracting Chinese-backed FDI for infrastructure, tourism, IT, mineral/mining and energy projects while simultaneously expanding access to global capital markets.
Pakistan needs to differentiate itself by offering not only opportunity but also long-term clarity. Its comparative advantage today lies in the preferential tariff access secured under the Trump administration and the once-in-a-decade whole-of-government approach to investments, both of which provide Pakistan with a stronger platform to compete regionally.
To attract and retain investment, Pakistan’s Investment Promotion Agencies (IPAs) will have to go beyond simple promotion and become responsive, service-oriented organisations that convert investor interest into concrete investment projects. This involves systems of structured follow-up, coordination between government departments with no gaps and rigorous tracking of conversion ratios from inquiries to commitments as despite issues of rule of law, regulatory overkill and security perceptions, Pakistan has the potential to become a hub for managed, high-potential opportunities. Success will ultimately rest on its capacity to demonstrate flexibility, resilience, and credibility, which can make Pakistan a competitive and dependable player in the region.
Despite periods of some progress, structural constraints continue to weigh on Pakistan’s investment climate. As of FY2024-25, the investment-to-GDP ratio stood at 13.8 per cent, with net FDI inflows of $2.46 billion, primarily concentrated in the power and energy sector. Despite these inflows, foreign enterprises often face high compliance costs, fragmented regulations, policy inconsistency and infrastructure gaps, which raise the cost of doing business and undermine competitiveness.
Fiscal fragility, elevated energy tariffs and deficiencies in digital connectivity further diminish Pakistan’s attractiveness relative to regional peers. Sustaining and expanding foreign investor interest particularly from Chinese enterprises under CPEC-2.0 will require regulatory simplification, reliable infrastructure and transparent, predictable policies that give confidence to long-term institutional investors and multinational corporations seeking to scale operations in Pakistan. The recent Beijing Road Show, backed by months of preparation by the SIFC and BOI, marked a significant change in approach and clearly in pursuit of greater investment traction, the government is aligning promotion efforts with strategic policies that emphasise regulatory clarity, stability and credible success and the focus is shifting towards sectors less vulnerable to trade disruptions, such as agriculture, the green economy, mining, logistics and knowledge-intensive industries.
As a change in approach, the recent Beijing Road Show, held alongside the prime minister’s visit to China, showed Pakistan’s readiness to move beyond symbolic engagement towards concrete outcomes. The strong turnout of Chinese businesses, coupled with active deal-making, highlights Pakistan’s potential as a competitive investment destination particularly in the context of nearshoring and friend-shoring trends, where investors seek to diversify away from overstretched supply chains. Yet, what attracts FDI hasn’t really changed and to translate current momentum built in Beijing into lasting partnerships, Pakistan must simplify its investment architecture and provide targeted handholding, especially for private-sector-led and greenfield projects, where system navigation remains a formidable challenge.
To ensure tangible outcomes, Pakistan must institutionalise follow-through by establishing a dedicated outcomes cell within the SIFC, supported by information, media, trade facilitation and investor support services. This structure should track MoU implementation, monitor sectoral pipelines, and coordinate regulatory interventions to strengthen the investor experience. The government has already taken a positive step by inaugurating a facilitation center in Islamabad to ease bureaucratic navigation; however, replicating such centers in provincial capitals and major industrial hubs is essential for creating a nationwide, investor-friendly ecosystem. Learning from global models can be useful, like Dubai’s one-stop investment cells that streamline approvals and ensure continuous investor engagement against a given time and Vietnam’s centralised agencies that standardise project assessment and improve monitoring, contributing to rapid investment growth. Adopting such practices would allow Pakistan’s SIFC and IPAs to institutionalise follow-through, enhance stakeholder coordination and align investment facilitation with global standards to support sustained economic growth.
The next phase of Pakistan–China B2B cooperation must emphasise actionable outcomes over symbolic MoUs. Short-term (6–12 months) priorities include empowering the outcomes cell, implementing targeted deregulation in showcased sectors, and expediting approvals in Special Economic Zones (SEZs). Mid-term (12–36 months) goals should focus on fully activating CPEC SEZs with financial, infrastructural, and policy backing; expanding facilitation centers nationwide; consolidating overlapping mandates; and strengthening industrial partnerships through technology transfer, joint ventures and export-orientated clusters. Global best practices show that overregulation stifles innovation and fuels informality, while clarity, predictability, and transparency attract sustained investment. As a long-term target (3 to 5 years), Pakistan must complement regulatory reforms with trade-enabling infrastructure, upgraded ports, logistics corridors and digital platforms to ensure smooth goods movements and reinforce investor confidence.
At an operational level, the MoUs signed in Beijing this September must immediately move beyond symbolism to actionable partnerships, with the Board of Investment (BOI) and Special Investment Facilitation Council (SIFC) steering a results-oriented agenda and into binding contracts within three months, followed by monthly high-level reviews tracking timelines, inflows, and sectoral outputs.
Pakistan may seek the NDRC’s support to fast-track contract finalisation. The Chinese Chamber of Commerce in Pakistan can further mobilise member firms, provide feedback and bridge gaps between the private sector and government institutions to ensure delivery. Grounded in deregulation, facilitation and credible reforms, energised by the launch of CPEC Phase II and reinforced by Pakistan’s improving ratings, these MoUs can be converted into powerful industrial partnerships. With Chinese capital, technology and supply chain integration, Pakistan has the chance to turn episodic inflows into a new era of sustainable industrial growth. This is not just an opportunity; it is a turning point.
The writer is a project management specialist and is a faculty member at various institutes/universities, while also having served as a diplomat in China and Vietnam. He can be reached at: [email protected]
