China Lu­cra­tive mar­ket for Pak­istani prod­ucts

Enterprise - - Exports -

Pak­istan is China’s sec­ond largest trade part­ner in South Asia. The eco­nomic gi­ant will be the ma­jor ex­port des­ti­na­tion for Pak­istan dur­ing 2011-12, with over 30 per­cent of the to­tal ex­ports. In 2010, bi­lat­eral trade grew by 27.7 per­cent to $ 8.67 bil­lion, with ex­ports in­creas­ing by 25.5 per­cent to $ 6.94 bil­lion and im­ports by 37.2 per­cent to $ 1.73 bil­lion.

Pre­vi­ously, fi­nan­cial ex­perts had re­mained skep­ti­cal of the trade im­bal­ance be­tween the two coun­tries, which is heav­ily tilted in favour of China. How­ever, in the back­drop of ap­pre­ci­a­tion of the Chinese cur­rency ( RBM) against the US dol­lar, China has be­come a more at­trac­tive mar­ket. There is con­sid­er­able de­mand for Pak­istani leather in China as it is cheaper for man­u­fac­tur­ing of shoes, gar­ments and other prod­ucts.

Re­cently, a Pavil­ion was set up at the Shoes and Leather Fair in China through col­lab­o­ra­tion be­tween the Pak­istan Tan­ners As­so­ci­a­tion and the Trade De­vel­op­ment Au­thor­ity of Pak­istan ( TDAP). Over $ 10 mil­lion were gen­er­ated at the Pavil­ion through on-spot sales of leather prod­ucts pre­sented there by 24 lead­ing leather man­u­fac­tur­ers from Pak­istan. It also proved to be a good op­por­tu­nity for the Pak­istani leather com­pa­nies to es­tab­lish con­tacts for fu­ture ex­ports.

Busi­ness vis­i­tors at the fair in­cluded peo­ple from Ja­pan, Hong Kong, Tai­wan, Italy, Malaysia, Tur­key, Ger­many, Korea, Spain, Brazil, Thai­land, Viet­nam, USA, Swe­den and Den­mark. They all vis­ited the Pavil­ion and ap­pre­ci­ated the fine qual­ity of fin­ished leather goods from Pak­istan. An­a­lysts say this would bring great mar­ket­ing ben­e­fits for the Pak­istani leather ex­port in­dus­try.

The Asia Pa­cific Leather Fair held ear­lier had found China to be a ma­jor buyer as it had lifted huge quan­ti­ties of leather at very high prices. Most of the fin­ished leather gar­ments and prod­ucts dis­played by the Pak­istan Leather Gar­ments Man­u­fac­tur­ers and Ex­porters As­so­ci­a­tion ( PLGMEA) were bought by the Chinese mar­ket. Fawad Ijaz Khan, Chair­man PLGMEA, says that con­sumers in China pay more prices for fin­ished leather prod­ucts.

China has an en­tire in­dus­trial belt on the coastal city of Guangzhou where shoes and leather prod­ucts are pro­duced. The coun­try has a grow­ing con­sumer base that com­prises qual­ity-con­scious buy­ers and an efficient re­tail net­work for shoes and leather. Mem­ber man­u­fac­tur­ers of the Pak­istan Tan­ners As­so­ci­a­tion are en­gaged in cater­ing to the needs of this po­ten­tial mar­ket aimed at yield­ing max­i­mum share for Pak­istani ex­ports.

Pak­istan has signed a Free Trade Agree­ment with China which al­lows duty-free ex­ports of leather gar­ments from Pak­istan to China. The agree­ment should help the in­dus­try in a big way with just 10 per­cent im­port duty im­posed by China on leather gar­ments. The TDAP is also push­ing PLGMEA for ag­gres­sive mar­ket­ing of leather gar­ments in the Chinese mar­ket.

The Fed­eral Min­istry of Trade and Com­merce as well as TDAP have strongly rec­om­mended that China and Pak­istan must work to­gether to im­prove the im­pact of the Free Trade Agree­ment by dis­man­tling Non Tar­iff Bar­ri­ers. To achieve higher ex­ports to China, the Pak­istan gov­ern­ment is also plan­ning to hold work­shops and sem­i­nars in China and Pak­istan, to ed­u­cate and cre­ate aware­ness about the trade po­ten­tial. At present China is mainly im­port­ing raw ma­te­ri­als from Pak­istan. There­fore, roadmaps are be­ing drawn to change this into ex­port­ing value-added prod­ucts, as part of the ex­port plan for China

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