Chinese Firm Shuts Pakistan Ops, Flags ‘Systemic Uncertainties’ In CPEC | Exclusive

Last Updated:May 02, 2026, 13:10 IST

Hangeng Group has announced the shutdown of its factory operations in both Pakistan and China, effective May 1, citing systemic uncertainties and persistent operational hurdles.

In a significant setback to Pakistan’s flagship China-backed infrastructure push, Chinese firm Hangeng Group has announced the shutdown of its factory operations in both Pakistan and China, effective May 1, 2026, citing “systemic uncertainties" and persistent operational hurdles.

The company, which was operating within the Gwadar Port ecosystem under the China-Pakistan Economic Corridor (CPEC) framework, said a combination of non-market factors, execution-level gaps, and regulatory bottlenecks forced it to halt operations despite meeting all required standards.

According to a statement issued by the firm, export approvals for its products remained blocked even after compliance with China Customs requirements and international HACCP food safety norms. The delay, it said, made continued operations unviable.

Hangeng Group added that it had incurred substantial financial losses over the past three months while waiting for clearances. These included costs related to wages, electricity, contractual penalties, and demurrage charges.

The company described the situation as particularly concerning, given that the project was located within Gwadar Port — a key pillar of the CPEC initiative — highlighting what it called an “ironic" mismatch between policy intent and ground-level execution.

While announcing the closure, the firm acknowledged the support extended by Pakistan’s Ministry of Planning and appreciated efforts to sustain the broader China-Pakistan strategic partnership.

At the same time, it flagged concerns over policy consistency and implementation, especially ahead of the Pakistani Prime Minister Shehbaz Sharif’s upcoming visit to China, suggesting that a more predictable and executable regulatory environment would be critical to sustaining foreign investment.

Top Indian intelligence sources told CNN-News18 that the development points to deeper structural issues within the CPEC framework, including policy inconsistency, bureaucratic hurdles, and persistent security concerns in Balochistan.

According to the sources, India has consistently maintained that projects which bypass sovereignty concerns and fail to account for local realities are difficult to sustain over the long term.

They added that the shutdown could be seen as a major setback for Pakistan’s investment environment and may also have implications for China’s broader Belt and Road Initiative (BRI) ambitions in the region.

In a notable move, Hangeng Group also issued a formal advisory to prospective investors, urging them to carefully evaluate institutional risks, policy execution gaps, and on-ground uncertainties before committing capital to projects in Pakistan.

The shutdown underscores concerns around investment viability in Gwadar, a flagship CPEC hub long positioned as a gateway for regional trade.

News world Chinese Firm Shuts Pakistan Ops, Flags ‘Systemic Uncertainties’ In CPEC | Exclusive

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