China has long been accused of being a “copycat.” But as the country has solidified its status as a development success story, the tables may be turning — other regions around Asia and their entrepreneurs are now learning from China.
Case in point: Pakistan, where lessons from China’s experience with development are being leveraged to spur economic growth. That’s attracting the attention of entrepreneurs and investors like Asia-focused VC firm Gobi Partners, who are bullish on cross-border opportunities between the two countries.
Gobi Partners announced its Techxila II fund, in collaboration with the Bank of Punjab, at a special event in Shanghai last Thursday, December 12. The fund is also accompanied by a MOU (Memorandum of Understanding) between Gobi Partners and the Bank of Punjab. Valued at 50 million USD, Techxila II is aimed at startups in the emerging economy, spanning fintech, insurtech, mobile delivery platforms, AI and beyond. Private endeavours like this, coupled with macro-policy initiatives, are paving the way for China-esque market booms in up-and-coming economies around Asia.
As Gobi Partners co-founder and chairman Thomas G. Tsao puts it, by connecting markets he wants to “make Asia great again.”
First, some history
Often overlooked, China-Pakistan relations have played a crucial role in geopolitics and the international economy. The relationship has been forged across global events including disputes with India and the fall of the Soviet Union. Pakistan helped to kick off the reestablishment of US-China relations, smuggling Kissinger into the country prior to Nixon’s famed 1972 trip.
In more recent years, robust economic initiatives like the China-Pakistan Economic Corridor (CPEC) have been prepping the landscape for booming growth. CPEC will create a network of highways, railroads, a deep water port in the Arabian Sea, and other transit infrastructure to better connect the two countries. High-level maneuvering like this is setting the stage for a new act in economic development and business potential across the corridor — potential that has not gone unnoticed by tech entrepreneurs and investors.
Initiatives like these have helped to prime the market for better investment in higher risk sectors by fostering greater stability.
“Economic stability is helping us to have more capital come towards venture, which is going to enable us to invest in great entrepreneurs, great companies, and really foster a great entrepreneurial and tech ecosystem,” notes Naiel Ikram, partner at Fatima Gobi Ventures, Gobi’s local arm in Pakistan.
Opportunity breeds innovation
Gobi Partners sees parallels between the early stages of Pakistan’s development and the opportunities in China that made recent growth possible.
Tech is powering a “leapfrog” effect in the South Asian country, where the population has gone directly from no tech to mobile tech. Between 2019 and 2023, Pakistan saw 95% growth in mobile broadband users. During the same period, there was 124% growth in mobile broadband usage and 176% growth in e-commerce transactions. This is because, as Tsao puts it, “Now everybody’s got a supercomputer in their hands.”
This is made possible, in part, by low-priced Chinese mobile phones that are accessible to users in the market, spawning innovation in sectors from banking to insurance and beyond.
“When you look at a country like Pakistan, 60% of people do not have a bank account,” Tsao explains. “They’re going from no bank account, no credit card, directly to mobile wallets. They’re bypassing entire stages of the digital transformation journey.”
As a result, there’s innovation happening at “fengkou” (a Chinese business neologism meaning opportunities) across various industries. For example, Gobi portfolio company Waada is pioneering micro-insurance transactions that come directly out of users’ mobile payments.
AI is also driving innovation. AI-driven consulting and analyst platform Intellia, another Gobi portfolio company, is helping people to break into emerging markets while attempting to close the disparity gap between analysts in emerging markets and those in developed ones.
China and Development 101
China is Pakistan’s biggest investor, having pumped 568.2 million USD into the country in 2024. But beyond capital injection, Pakistan is learning from China’s successful development model. Utilizing a joint venture model (with Chinese partners) to help spur technology transfer and skill sharing through investment, companies in Pakistan are modelling the growth of their businesses on best practices gleaned from previous Gobi portfolio companies in East Asia.
At the Techxila II launch press conference in Shanghai, the Chief Minister of Punjab, Maryam Nawaz Sharif, noted that her country is even trying to take a page from China (particularly Beijing) in terms of reducing pollution.
Though China’s economy has hit a rough patch this year, it’s still seen as a success story in emerging markets throughout Asia like Pakistan. Countries looking to accelerate their development will experience many of the same things China did, zipping past developmental milestones taken for granted in places like the U.S. and Europe. So, as many look to China for inspiration, China is also looking towards its neighbors for opportunity.
Banner image by Carson Ramsdell. Image shows Naiel Ikram (left) and Thomas G. Tsao (right).
