Chinese Firm Closes Operations in Gwadar Amid Financial Struggles

Closure of Hangeng Trade Company in Gwadar

Hangeng Trade Company, a Chinese enterprise based in Pakistan's Gwadar Free Zone, has officially ceased its operations and laid off all staff. The firm attributed its decision to an unfavorable business environment and escalating financial losses, as reported by a local media outlet. The company expressed that its initial investment aimed to bolster China-Pakistan relations and enhance bilateral cooperation. However, the lack of a clear and effective policy framework made it increasingly challenging to maintain its business, ultimately leading to its withdrawal.

Announcing its closure on International Labour Day (May 1), the company cited "non-commercial factors" and operational challenges as reasons for its inability to continue. Despite adhering to international export standards, the firm faced significant delays in shipments, resulting in ongoing financial setbacks. Over the past three months, it attempted to engage with local authorities to address these issues, but no viable solutions were found.

The company confirmed that it has fulfilled all financial responsibilities, including paying three months' salaries to employees, settling penalties, and covering electricity bills and container demurrage fees. It reiterated the strong partnership between Pakistan and China, highlighting Gwadar as a key project under the China-Pakistan Economic Corridor (CPEC) initiative.

While expressing gratitude to the Pakistani government for its support of economic collaboration, the firm advised potential investors to thoroughly assess the uncertainties associated with projects in Gwadar. This development comes just before Prime Minister Shehbaz Sharif's upcoming visit to China, where he is expected to participate in a business-to-business investment forum. The Gwadar port has been grappling with various challenges, including low cargo volumes, inadequate infrastructure, and local dissatisfaction, alongside persistent security threats from Baloch groups that have previously targeted Chinese projects.