Raza Khan

Pakistan’s bilateral trade with China declined by 29.74% during January 2023, according to the Ministry of Commerce. The volume of bilateral trade dropped to $1.271 billion during January 2023 from $1.809 billion during the same month of 2022. Official data shows that Pakistan’s exports to China dropped by 17% in January to $191 million against $230 million during the same month of 2022. Imports from China were recorded at $1.080 billion during the month under review, compared to $1.579 billion during the corresponding period of last year, with a decline of 31.60%.

A declining trend has been observed in bilateral trade each month of the current fiscal year. Sajid Amin Javed, Deputy Executive Director at Sustainable Development Policy Institute (SDPI), told WealthPK that Pakistan’s current weak economic situation is the primary reason behind the decline in bilateral trade with China. “Currently, Pakistan is facing a shortage of dollars which is impacting its imports as well as exports,” Sajid said.

He added that low imports mean low exports as these two aspects of trade are interlinked. “Pakistan imports most of the raw material for value addition and production of exportable items. If you don’t import, you can’t export,” he elaborated. Sajid said the government has reduced imports to save foreign exchange reserves which resulted in decline in imports, especially from China.

To get out of the present economic crisis, Pakistan must work on a four-pronged strategy which includes getting back to the IMF program, market-determined currency exchange rate, rollover or rescheduling of debt, and effective social protection. “Completing the IMF program by implementing its conditions is inevitable to come out of the current economic crisis,” he emphasised.

Sajid hoped that Pakistan’s economic situation would improve once its IMF program is revived. According to the Ministry of Commerce, Pakistan’s overall bilateral trade with China during the first seven months (July-January) FY23 also declined by 36.27%. Bilateral trade during this period fell to $8.659 billion from $13.588 billion during the corresponding period of the last fiscal year.

Pakistan’s exports to China dropped by 27.63% during the period under review to $1.265 billion from $1.748 billion during the corresponding period of the last fiscal year. Imports from China also dropped to $7.394 billion during the first seven months of FY23 from $11.84 billion during the same months of last fiscal year, with a decline of 33.55%. Pakistan’s trade deficit with China also declined by 39.26% during the July-January period.

With a bilateral trade volume of $19.457 billion, China remained Pakistan’s largest trade partner during the last fiscal year 2021-22. Pakistan’s exports to China were recorded at $3.111 billion in 2021-22, while imports were registered at $16.346 billion. Pakistan’s exported items to China include 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 rubbers.

Credit: Independent News Pakistan-WealthPk