Raza Khan

Pakistan’s trade deficit with China reduced by 40.36% during May 2023 compared to the same month of 2022, according to the Ministry of Commerce. The country’s trade deficit with China dropped to $743 million in May 2023 from $1.246 billion during the corresponding month of the preceding fiscal year, the Ministry of Commerce data shows.

The trade volume between the two countries also declined by 33.21% to $1.14 billion during May 2023 against the same period of the previous year when it was at $1.707 billion. Pakistan’s exports to China declined by 13.8% during the month under review and fell to $198.7 million from $230.5 million during the same period of 2022. Imports from China were recorded at $941.73 million during May compared to $1.477 billion during the corresponding month of the previous year, with a decline of 36%.

According to the Ministry of Commerce, a declining trend has been witnessed in bilateral trade between Pakistan and China during each month of 2022-23. According to experts, the current challenging economic situation of Pakistan and shortage of foreign exchange are the primary reasons behind decline in its bilateral trade with China. The Government of Pakistan has reduced its imports to save foreign exchange reserves which resulted in decline in imports, especially from China. Because of reduced imports, exports are also declining due to unavailability of raw material for industrial production.

According to the Ministry of Commerce, Pakistan’s overall bilateral trade with China also declined by 37.84% during the first 11 months (July-May) of 2022-23. The volume of bilateral trade during July-May 2022-23 fell to $13.001 billion from $20.916 billion during the same period of 2021-22. Pakistan’s exports to China dropped by 8% during the period under review to $2.522 billion from $2.739 billion during the corresponding months of 2021-22. Imports from China also dropped to $10.479 billion during the first 11 months of FY23 from $18.177 billion during the same period of FY22, with a decline of 42.35%.

Pakistan’s trade deficit with China also dropped by 48.45% during July-May FY23 to $7.957 billion from $15.438 billion during the corresponding months of FY22. China remained Pakistan’s largest trade partner during FY22. Pakistan exported items to China, including cotton, copper, cereals, fish, crustaceans, molluscs, aquatics invertebrates, oil seed, oleagic fruits, grain, seed, fruits, beverages, spirits and vinegar, aluminium, apparel, salt, sulphur, leather and plastics.

Pakistan’s imports from China include electrical, electronic equipment, machinery, nuclear reactors, boilers, pharmaceutical products, mineral fuels, oils, distillation products, organic chemicals, iron and steel, vehicles other than railway, tramway, plastics, fertilisers, manmade filaments, and rubber.

Credit: INP-WealthPk