Bilateral Trade & Exports Boosting b/w Pakistan & China
Bilateral trade & exports with China have many benefits for Pakistan...!
There are vast benefits of trade with China.Currently, China ranks as the second-largest market for Pakistani products with a 7% share, while the US has a share of 16.7% in total exports. China is also the second-largest source of the country’s imports...!
Trading Overview...!
China's imports from Pakistan reflect a downward trend whereas China's exports to Pakistan are on an upward trajectory. Bilateral trade, which stood at US$ 1.3 billion in 2002,reached US$ 19.08 billion in 2018. Imports from China stood at US$ 12.7 billion and exports from Pakistan to China at US$ 1.85 billion in 2019...!
Owing to the free trade agreement there has been a surge in exports to China.The trade growth has increased by up to 26% because of the free trade policy from 19%...!
China has shown great interest in expanding trade with Pakistan.It is hoping to import more goods from Pakistan.Vegetables & fruits are expected to be imported by China...!
Pakistan imports machinery but the industrial infrastructure requires a lot of development to make cost-effective production possible...!
In China,there is a huge demand for Pakistani mangoes_berries_potatoes_wheat_rice & citrus fruit.The two countries are also working on developing genetically engineered rice. Another big project is to build reliable supply chains for halal food...!
In China,there are specific opportunities for Pakistan in the agriculture sector as the country is facing problems with the quality of its irrigated land area. There is a growing shortage of it.For some crops,it is severe...!
China prefers trade for its agrarian needs with Asian countries, such as Pakistan_Thailand Vietnam...!
Rice trade between Thailand and China is difficult due to high tariffs.It was a success for Pakistan that grabbed the opportunity and filled the market gap.Pakistan,after being the top exporter of cotton to China, became the second largest exporter of rice to Beijing...!
Pakistan’s Adviser on Commerce & Trade sees the possibility of expansion. Introducing new products is essential but expanding the current product export volumes is equally important...!
Sugar comes as a priority for Pakistan.They noted that trade of several future items will rise, which will further solidify the Pak-China geopolitical relationship...!
There is another important area which covers minerals & precious stones.Under the China-Pakistan Economic Corridor (CPEC) project,tariffs have been reduced from 35% to 0%.Now_gold & copper reservoirs have also become a focus of Chinese engineers as they have been discovered in Reko Diq...!
China has expressed the possibility of importing CPEC-made products in the agricultural and horticultural sectors, because of quarantine problems in the potential importing nations...!
Advisor expressed the view that Pakistan would be trying its best to increase trade with China.There are specific problems which come in the way of realising that...!
Most of the Pakistani exports go to Europe & the US,but China is Pakistan’s biggest exporting destination.It is mostly raw material which Pakistan exports to China. Cotton & hard chromium account for 66% of exports.This has not changed for quite a long time...!
There is a significant advantage that Pakistan has, unlike other nations trading with China, which is the FTA. It offers the potential of growth for many Pakistani products...!
The FTA with China should give Pakistan an edge over other countries in several potentially high profit-generating products such as textiles and sports. But the country has been unable to take advantage of this substantial market because of non-tariff barriers...!
In most of these goods that have a huge potential,Pakistani exporters have failed to make headway because of the non-tariff barriers,but now they are fixing the problems...!
China is a big market, and sometimes it is seen that there is not enough supply on the side of Pakistan.China demands imports because it has shortage in the labour market.The high cost makes it difficult to compete with foreign competitors,now both countries are fixing this problem too...!
There is an issue of marketing.Pakistan will highlight the trade opportunities in the CPEC project because many traders from both countries do not know sufficiently about it.Due to this drawback,several opportunities remain out of the scope of local and foreign-resident traders...!
Pakistan will shift exporting raw material & simple manufactured goods to higher value-added products.In this way,the labour market will benefit and growth will continue to expand...!
Pakistan will built a *commercial consulate*,_separate from the embassy in China.This will facilitate exporters to understand the Chinese demand based on research of institutes_& will connect Chinese traders with Pakistani counterparts...!
The Trade Development Authority of Pakistan will allocate a budget for improving the branding and marketing of Pakistani goods...!
It is hoped that the government will help traders in building efficient procurement & distribution networks so that the quality of goods can be improved in the Chinese customer’s perception...!
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