Recent reports claim that the Chinese firm Han Geng Trade Company (SMC-Private) Limited has sacked all its employees in Pakistan. Furthermore, the company announced the complete closure of its factory in Gwadar. The Chinese Trade Company exits Pakistan, citing an “unworkable business environment” and massive financial losses as the primary reasons for this exit. The official shutdown took effect on May 1, 2026, coinciding with International Labor Day.
Why the Chinese Trade Company Exited Pakistan?
Han Geng Trade Company operates as a professional pharmaceutical supply chain. The company stated that its facility successfully met the inspection and quarantine standards of China Customs. Additionally, the factory fully complied with international HACCP food safety requirements. However, the project never received the necessary practical approvals. Consequently, authorities repeatedly blocked their shipments. The firm clarified that these challenges were not technical or compliance-related. Instead, the company blamed execution-level uncertainties and systemic barriers for making business operations impossible.
Obligations Cleared & Investor Warning
Over the past three months, the company remained patient and fully cooperative with relevant authorities. During this time, Han Geng suffered substantial financial losses. Before ceasing activities, the firm cleared all outstanding obligations. This payout included three months of employee salaries, contractual penalties, electricity bills, and container demurrage charges. The company initially overcame difficult logistics, limited utilities, and underdeveloped infrastructure in the region. Despite these efforts, the current obstacles go beyond what any single enterprise can resolve. As a result, the company issued a stark warning to potential investors. It urged them to carefully evaluate the risks before committing capital to Gwadar-based ventures.
A Message Ahead of PM’s China Visit
Han Geng expressed gratitude to the Pakistan government and the Ministry of Planning for their support. This sudden shutdown arrives just ahead of Prime Minister Shehbaz Sharif’s expected visit to China in the third week of this month. The Prime Minister will participate in a high-profile business-to-business investment forum. Through its exit statement, Han Geng conveyed a direct message for this forum. The firm stated it remains ready to generate foreign exchange, create employment, and revitalize Gwadar Port. However, the company urgently requires a clear, consistent, and executable policy environment that allows investments to materialize.
