ISLAMABAD: Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood said Tuesday that bilateral economic cooperation between China and Pakistan would go long way in promoting regional and global trade integration.
Talking to state-run news agency here, the advisor said that both the countries had already strengthened cooperation in various fields of economy, particularly in trade and investment for mutual benefit and advantage of the whole region. The advisor said that China-Pakistan Economic Corridor (CPEC) and Pak-China Free Trade Agreement (CPFTA- II) were the two important milestones in this direction, which strengthened trade and investment.
It is pertinent to mention that both the countries had signed 2nd Phase of China Pakistan Free Trade Agreement (CPFTA) during the Prime Minister’s visit in April 2019, which became operational from 1st January 2020. Dawood said that during the last 10 months (July-April 2020-21), Pakistan’s exports to China increased by 31 percent to $1.951 billion from $1.491 billion in corresponding period last year. “The CPFTA-II has a very positive impact on Pakistan’s exports in all potential sectors, which indicates that it is going in right direction, for which the credit goes to exporters,” the advisor added.
He said that CPFTA-II had bought down tariffs to zero for Pakistan on 313 high-priority tariff lines, which benefited the country as almost half of Pakistani exports to China were covered within these lines. However, he was of the view that the list of Pakistani products exported to China is long in length but short on value. These include frozen meat, poultry; dairy products in solid form, human hair, and stomach of animals, cut flowers, flower buds, tea, saffron, turmeric, maize, rice, starches, sausages, tobacco and tobacco refuse amongst others. In recent years, the bilateral trade volume between China and Pakistan has increased rapidly with stable commodity structure, though the balance was much in favour of China.
According to latest data of State Bank of Pakistan (SBP), during the first three quarters of the current fiscal year, Pakistan overall exports to China were recorded at $1407.743 million against exports of $1298.531 million during the same period of last year, showing growth of 8.41 percent, the SBP data revealed. On the other hand, the imports from China into the country during the period under review were recorded at $9074.105 million against $6967.724 million last year, showing increase of 30.23 percent in first three quarters of this year. China also topped the list of countries from where Pakistan imported different products during the first three quarter of financial year (2020-21), followed by United Arab Emirates (UAE) and Singapore, according to SBP data.
China is currently Pakistan’s largest single trading partner; while Pakistan is China’s second largest trading partner in South Asia. Major imports from China electrical and electronic equipment, machinery, nuclear reactors, boilers, consumer goods, organic chemicals, iron and steel, articles of iron or steel, manmade filaments, plastics, fertiliser and manmade staple fibers.
On the other hand, the Chinese investment into the country had grown over the period of time in different sectors of country’s economy. “Over the last decade we have seen Chinese investment in Pakistan grow as large Chinese state owned companies and private sector enterprises have invested in Pakistan in areas such as oil exploration and development, power generation, textiles etc,” President Pakistan China Joint chamber of Commerce and Industry (PCJCCI S) M Naveed told state-run news agency. There is great potential to be tapped in China-Pakistan economic cooperation, particularly in view of the concept of China-Pakistan Economic Corridor, he added. According to Board of Investment data, China also topped the countries , on investment side by bringing into Pakistan US$944.54 million Foreign Direct Investment (FDI) during first three quarters of the current fiscal year (2020-21).
The FDI during the last year (2019-20) were recorded at $973.53 million and $701.61 million in 2018-19, official sources said. With the initiation of CPEC, there has been an upsurge in investment flows into Pakistan especially in infrastructure and energy sectors. Naveed said that Chinese government had been encouraging Chinese companies to invest and do business in Pakistan and PCJCCI was playing an important role mainly in the accomplishment of CPEC coupled with facilitating joint ventures in private sector, arranging delegations to and from China, conducting exhibitions both physically and digitally.