PESHAWAR- Chinese companies are taking over major businesses in Pakistan’s export-led manufacturing sector, the profit-making heart of the nation’s $276 billion economy.

As rising Chinese investment promises to boost Pakistan’s ailing economy in an hour of need, there are concurrent nationalistic concerns expressed by local businesses and groups that Chinese investors are cornering key local industries, state assets and businesses to the detriment of Pakistani players and interests.

The United Nations Conference on Trade and Development’s World Investment Report 2020 indicates that foreign direct investment (FDI) in Pakistan increased from US$1.7 billion in 2018 to $2.2 billion in 2019, with accumulated FDI of $34.8 billion at the end of that year.

China is by far the biggest contributor of FDI to Pakistan, the report concluded. The Pakistani government disaggregates Chinese investment related to the $60 billion China-Pakistan Economic Corridor project, a key plank of China’s state-driven Belt and Road Initiative (BRI), and non-CPEC-related investments.

Analysts say non-CPEC Chinese private investment in Pakistan is increasingly driven by cheap labor and securing access to raw materials that are shipped back to China’s factories. China is also building factories in Pakistan to export finished goods directly to European markets Beijing hopes to more readily reach via its BRI infrastructure investments.