China-Pakistan textile contract valued at $4.2 billion

Chinese garment manufacturer Tampopo Group will be awarded a $4 billion deal to supply Pakistan with garments manufactured by an arm of its apparel giant, according to a Pakistani source with knowledge of the matter.

The government of Prime Minister Nawaz Sharif has been pursuing a deal with the Chinese textile giant to manufacture clothing for Pakistan’s economy, which is heavily dependent on imported fabrics and raw materials from China.

Tampopos chief executive officer Mohammed Yousuf told reporters in Islamabad on Monday that the company is ready to enter the textile business and it will be ready to sign a deal in two months’ time.

The announcement came a day after a Chinese state-run media report said that the Pakistan-based company had signed a $3.6 billion deal with Pakistan’s government to supply clothing to the country.

Tampops chief executive Yousuff said the company would invest $1 billion to expand its production capacity and invest $2 billion in the next three years.

The garment industry in Pakistan is highly fragmented and fragmented, said Shoaib Ahmed, a senior fellow at the American Enterprise Institute in Washington.

“If you don’t know the name of the manufacturer, it is not worth your time,” he said.

“The real power is in the hands of the government.”