INTRODUCTION

Name: Tayyaub khalid (9254)

Subject: Strategic Marketing Management
Program: MBA (1.5)
Semester: 3rd
China-Pakistan Economic corridor(CPEC) and its
impact on Small Medium Enterprises (SMES)
WHAT ARE SMES?

These are Small and medium-sized enterprises (businesses). But there is still
contradictory point of view regarding, proper definition of SMEs:
 SMEDA defines a SME based upon the number of employees and total number of
productive assets.
 The SME bank uses only total number of assets as the standard.
 PBS takes into consideration only the number of employees.
 State bank of Pakistan’s definition of a SME is based on the nature of the
business, number of employees, amount of capital employed and net sales value
per annum.
CHINA PAKISTAN ECONOMIC CORRIDOR (CPEC)

 China Pakistan economic corridor known by the acronym CPEC is a collection of

infrastructure projects throughout Pakistan originally valued at $46 billion, the
value of CPEC projects is worth $62 billion as of 2017.
 CPEC is intended to rapidly modernize Pakistani infrastructure and strengthen its
economy by;
1. The Construction of modern transportation networks (form Gawadar to Kashgar)
2. Numerous energy projects
3. Special economic zones
4. Vast network of highways and railways tracks
CPEC AND IMPORTANCE OF SMES

 As Small and Medium Enterprises (SMEs) are 90% of the total enterprises in
Pakistan, which makes it crucial for them to be linked to China-Pakistan
Economic Corridor (CPEC) projects, said Dr Shahid Rashid, Executive Director
CPEC Centre of Excellence, during a seminar held in the Lahore School of
Economics (LSE). He said that the entrepreneurs have the most important role to
play since they can provide the platform and the tools needed to bridge the gap
between Special economic zones (SME's) and CPEC.
 A round-table conference was also held by the title "Role of CPEC to develop
special economic zones (SEZs), SMEs and Human Resources", jointly organized
by CPEC Centre of Excellence and Federation of Pakistan Chamber of Commerce
and Industry (FPCCI). By recognizing importance of Small and Medium
Enterprises (SMEs) they said it can play a key role in the development of the
China-Pakistan Economic Corridor (CPEC), considering they are the majority
shareholders of business in Pakistan.
CPEC AND IMPORTANCE OF SMES

 According to Economic Census of Pakistan there are 3.2 million businesses in

Pakistan.
 SMEs represent more than ninety percent of all private businesses and employ
nearly 78 percent of the non-agriculture labour force in Pakistan.
 SMEs’ contribution to Pakistan’s Gross Domestic Product (GDP) is more than
30%.
 SMEs sector represents 25% of exports of manufactured goods and 35% in
manufacturing value added.
 Almost 53% of all SME activity is in retail trade, wholesale, restaurants and the
hotel sector.
 20% of SME activity is in industrial establishments and 22 % in service provision.
MAJOR SMES WHICH CAN BENEFIT FROM
CPEC
 Textile and Garment Business
 Leather Garments
 Handicraft (Wood Craft, Embroidery etc)
 Looms Work (Carpets and Fabric)
 Surgical Equipment
 Sports Goods
 Gems Stone
 Granite and Marble
 Cement Industry
 Steel Industry
 Banking Industry
 Hotel and Restaurants Business
 Fruit Processing
 CPEC AND IMPACT ON SMES
 Railway line Road, and infrastructure (form Gawadar to Kashgar)
 Which will increase the demand of cement, and steel. Pakistani cement is known for its best quality, even
cement producing countries like India imports from Pakistan. There is also huge demand of steel locally and
internationally. Pakistan steel industry is considered as fastest growing steel producer according to World Steel
Association.

 To fill the future demand for steel and cement, companies are increasing their production capacity, there is also
opportunity for existing and new SMEs to facilitate this demand, create new employment opportunities, reduce
poverty, contribute in the national income and GDP.
CPEC AND IMPACT ON SMES

 CPEC also provide huge opportunity for Pakistan exporters to direct and
easy access to the international market.
 Which not only facilitate China in export/import of different commodities
but also Pakistan in different sectors like cement industry, Marble, granite,
steel, gemstones, handicraft, fruit, and food industry.
 Commercial as well as Mico-finance banks also can play their part in it by
starting their new branches near CPEC route and expending there business
in china. It will contribute in the national income, gives new entrepreneurs
and locals an opportunities to start their own business
RECOMMENDATIONS

 Pakistan should create stability in its territory for implementation.

 Government of Pakistan need to encourage new Entrepreneurs or SMEs in the
form of relaxation of lower interest rate on borrowing and exemption of Tax for
1st five years. It will create new employment opportunities and provide uplift to
the economy. As well as contribution in the resolution of balance of trade.
 Government should encourage underdeveloped industries like; marble, granite
and gemstone industries to make strategic alliance with foreign developed
companies.
THANKS