Chinese firm Hag Geng Trade shuts down operations in Pakistani free zone

The Chinese firm Hag Geng Trade has permanently closed its operations in Pakistan after facing major difficulties with its business operations and government regulations.

The company declared through an official statement on Saturday that it had failed to obtain export approvals, although it had fulfilled all international food safety standards, which included Hazard Analysis & Critical Control Point (HACCP) requirements.

“It is with deep regret that we announce that on May 1, 2026, International Labor Day, we are forced to inform all our employees in Pakistan and China that, due to ongoing non-market factors and operational barriers, the company can no longer sustain normal operations and will be compelled to shut down the factory,” the company announced.

“Over the past three months, we have remained patient and fully cooperative with all relevant authorities, while actively seeking resolution through higher-level coordination. During this period, the company has continued to bear substantial financial losses, including employee wages, contractual penalties, electricity costs, and container demurrage charges,” the statement further read.

The factory management declared that non-market factors and operational constraints had created a complete operational shutdown.

The unresolved issues after three months of collaboration with the proper authorities led to the business incurring substantial financial damages.

The company advised investors to evaluate how policies will be enforced and what regulatory problems exist in Pakistan before making their investment decisions.

The company expressed regret for terminating the employment of its Pakistani and Chinese workers who lost their jobs because Heng Gang Trade closed its operations.

China–Pakistan defense ties stir US anxiety

A new report submitted to the US Congress highlights that systems sourced from China played a decisive role in Pakistan’s recent military success, pointing to Beijing’s steadily advancing defense industry.

The company has requested that Pakistani officials develop a stable, investor-friendly policy framework that will guide their activities before Pakistani Prime Minister Shehbaz Sharif makes his upcoming visit to China.

The shutdown occurs as Pakistan under Sharif has extended its relations with the US at the expense of its partnership with China.

Since 2015, China has been Pakistan’s largest single trading partner, while Pakistan has been China’s second-largest trading partner in South Asia.

However, since Sherif has come to office, Pakistan’s engagement with the US has seen a resurgence as the two countries concluded several economic and political agreements.

Based on recent military and political developments in Central and West Asia, including the 2025 India-Pakistan war, and the two US-Israeli aggressions against Iran, political leaders in Pakistan present the country as a prospective partner of the US.

More importantly, on April 8, forty days into the US-Israeli aggression against Iran, Pakistan brokered a temporary ceasefire between Iran and the US, which is still in effect.

Meanwhile, the US continues to seek closer ties with India and other rivals of Pakistan based on its so-called strategic needs to counter China.

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