INP-WealthPk
Rich potential ahead of Sino-Pak trade: Report
July 18, 2020
ISLAMABAD, July 18 (INP) - There are rich potential ahead boosting Sino-Pak trade, in view of the existing vast benefits for their people.
According to a report published by Gwadar Pro on Saturday, due to the free-trade agreement (FTA), there has been a surge in exports with China.
The trade growth has increased recently by up to 26% because of the free-trade policy from 19%.
The Chinese government has shown great interest in expanding trade with Pakistan. They are hoping to import goods from Pakistan. Vegetables and fruits are expected to be imported to China. Pakistan imports machinery too, but the industrial infrastructure requires a lot of development because cost-effective production could be possible.
In China, there is a huge demand for Pakistani mangoes, berry fruits, potatoes, wheat, rice, and citric fruits. The countries are working on developing genetically engineered rice. Another big project is to construct reliable supply chains for halal foods.
There are also specific opportunities for Pakistan in the agricultural industry, as the country is facing problems with the quality of its irrigable land area. There is a growing shortage of it. For some crops, it is severe.
China prefers trade about its agrarian needs with the Asian countries, such as Pakistan, India, Thailand, and Vietnam. The rice trade between Thailand and China is difficult due to high tariffs.
It was a success for Pakistan to grab the opportunity and fill the market gap. Pakistan, after being the top exporter of cotton to China, became the second exporter of rice to China.
Pakistan's adviser of trade describes the possibility of expansion.
There is another consideration of minerals and precious stones. In the CPEC project, there has been a reduction of tariffs from 35% to 0%. Now gold and 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 agricultural and horticultural areas, because of inspecting quarantine problems in the potential importing nations.
Most of the Pakistani exports go to Europe and the US, but China is Pakistan's biggest exporting destination.It is mostly raw material which Pakistan exports to China. Cotton, hardchromium holds 66% of the exports. This has not changed for quite a long time.
There is a significant advantage that Pakistan has, unlike other trading nations with China, that is the free trade agreement. 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 profit market because of non-tariff barriers. However, in most of these goods with huge potential, Pakistani exporters have failed to make headway because of non-tariff barriers.
This creates hesitation in the traders of both countries because they are unable to understand each other's expectations and lack trust because of the absence of a bridging factor. Once a deal is dropped, or a bad experience happens, it becomes difficult for the party at a loss to regain trust.
China is a big market, and sometimes it is seen that there is not merely enough supply on the side of Pakistan. China demands imports because it has a shortage in the labor market. The high cost makes it difficult to compete with foreign competitors.
There is an issue of marketing. Pakistan needs to brand 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, the report added.
INP/javed
