Pak­istan- China trad­ing go­ing strong

Enterprise - - Contents -

Pak­istan and China are pur­su­ing a joint action plan to ob­serve 2011 as the Pak­istan-china friend­ship year. The two coun­tries have ini­ti­ated a new se­ries of peo­ple-to-peo­ple in­ter­ac­tions, bi­lat­eral ex­change of gov­ern­ment del­e­ga­tions and cul­tural troupes and open­ing up of ex­ten­sive trade op­por­tu­ni­ties. The com­ple­tion of 60 years of diplo­matic re­la­tions be­tween the two na­tions is be­ing cel­e­brated with great zeal and fer­vour.

The Trade De­vel­op­ment Au­thor­ity of Pak­istan (TDAP) has taken a lead role in this re­gard by declar­ing China as the fo­cus coun­try for its trade ini­tia­tives in 2011-2012. TDAP is en­gaged in de­ter­min­ing ways of how to ex­pand trade, in­no­vate com­mer­cial poli­cies and cre­ate a favourable en­vi­ron­ment for co­op­er­a­tion with China on a wider scale.

The ma­jor events of the year, such as PakChina Busi­ness Co­op­er­a­tion Sum­mit and a se­ries of events un­der the aus­pices of Pak­istan China Busi­ness Fo­rum shall be bring­ing to­gether a di­verse range of more than 150 coun­ter­part com­pa­nies and an equally ap­pre­cia­ble num­ber of del­e­ga­tions from both the coun­tries. Vig­or­ous con­sul­ta­tions have been pur­sued through these fo­rums to ex­plore op­por­tu­ni­ties for fu­ture in­vest­ment and ex­ports. The Western China In­ter­na­tional Fair, Urumqi In­ter­na­tional Trade Fair and Kashghar In­ter­na­tional Fair are strong fo­rums where TDAP has played a key role in en­hanc­ing trade prospects for Pak­istan.

The Pak­istan China Busi­ness Fo­rum is based on a grand vi­sion of cre­at­ing mul­ti­ple trade-trans­port-en­ergy cor­ri­dors be­tween Pak­istan and China so that the re­gion can be con­nected to South, West and Cen­tral Asia.

TDAP has iden­ti­fied enor­mous ar­eas of mu­tual co­op­er­a­tion with a par­tic­u­lar em­pha­sis on the gov­ern­ment and the pri­vate sec­tor of China to in­vest in Pak­istan through joint ven­tures. The busi­ness-to-busi­ness meet­ings is a proac­tive ini­tia­tive of TDAP which is ex­pected to achieve bi­lat­eral trade tar­get of $12 bil­lion by the end of 2012 through forg­ing new busi­ness al­liances be­tween Pak­istani and Chi­nese en­ter­prises. TDAP has also stressed on the need for re­lo­ca­tion of Chi­nese in­dus­tries to Pak­istan due to their po­ten­tial of cre­at­ing job op­por­tu­ni­ties and en­abling the in­dus­trial units in Pak­istan to cre­ate sur­plus for re-ex­port­ing to China. These are re­me­dial mea­sures for the trade deficit be­tween Pak­istan and China.

Spe­cial Eco­nomic Zone

As part of the broader vi­sion cov­er­ing PakChina re­la­tions, TDAP is work­ing on the con­cepts of trans-bor­der and trans-re­gional eco­nomic zones so that China’s Western De­vel­op­ment Strat­egy ben­e­fits its im­me­di­ate neigh­bours, par­tic­u­larly Pak­istan.

China has al­lowed Pak­istan to develop a one square kilo­me­ter zone which can be ex­tended to 2 km in the newly cre­ated Spe­cial Eco­nomic Zone in Kash­gar. Tariq Puri, Chief Ex­ec­u­tive TDAP, views the cre­ation of the zone as sig­nif­i­cant, as Kash­gar would be­come the Shenzhen of the West, pro­vid­ing a trade in­ter­face to in­vestors and en­trepreneurs of both the coun­tries.


Although the over­all trade be­tween Pak­istan and China is on a rise, bor­der trade still re­mains a small frac­tion of the over­all vol­ume. There­fore, the de­vel­op­ment of Kashghar in the Xin­jhi­ang province of China as the hub of bi­lat­eral and re­gional trade car­ries sig­nif­i­cance, as Kashghar city is the near­est to Pak­istan. The con­struc­tion of a rail­road, fi­bre op­tic link and air link, and es­tab­lish­ment of oil and gas pipe­lines up to Kashghar, will re­vive the Silk Route and will be a great ben­e­fit for Pak­istan. A pre-fea­si­bil­ity study for a 411 miles long rail link be­tween Havelian in Pak­istan and Khun­jerab has al­ready been done at a cost of $10 bil­lion.

In De­cem­ber 2010, Ryanair, a Pak­istani char­ter air­line, in­au­gu­rated its first 90 minute cargo flight be­tween Islamabad and Kash­gar. This has set a new means for trans­port of cargo be­tween Pak­istan and China. The con­nec­tiv­ity will en­hance transit trade op­por­tu­ni­ties for Pak­istan, as African, South and Cen­tral Asian coun­tries will find it cheaper to trade through Pak­istan. Bor­der trade was also a sig­nif­i­cant part of the agenda at the Pak­istanChina Busi­ness Fo­rum in Kashghar, or­ga­nized by TDAP, which is also mak­ing ef­forts to­wards visa fa­cil­i­ta­tion for busi­ness­men trav­el­ling to Kashghar.

FTA and Ex­ports

Ac­cord­ing to Tariq Puri, the vol­ume of bi­lat­eral trade be­tween China and Pak­istan is ex­pected to in­crease to $15 bil­lion by 2015 as by that time a good in­fra­struc­ture for eco­nomic and trade co­op­er­a­tion with China would have been estab­lished. The Free Trade Agree­ments (FTAs) that have been signed with China cover goods, ser­vices and in­vest­ments as the coun­try is a colos­sal mar­ket for Pak­istani goods and trans­porta­tion costs to China are fairly low. An­a­lysts say Pak­istani ex­porters can cre­ate their own ex­port mar­ket in China for jeans, fleece, knitwear and bed linen. Pak­istan has the po­ten­tial to ex­port tex­tiles, made ups, min­er­als, pre­cious stones, leather, marine prod­ucts, fish and value-added prod­ucts pro­duced from seafood plus sports goods and light engi­neer­ing goods such as fans.

The over­all year on year growth of Pak­istani ex­ports to China is 30 per­cent while Chi­nese ex­ports are at 25 per­cent. TDAP is work­ing to cover the trade deficit of $6 bil­lion through such mea­sures as send­ing Chi­nese buy­ers’ mis­sions to Pak­istan, en­cour­ag­ing Pak­istani traders and trade of­fi­cials to par­tic­i­pate in Chi­nese fairs and ex­hi­bi­tions, en­ter­tain­ing uni­lat­eral trade con­ces­sions by China for Pak­istan, sec­ond phase ne­go­ti­a­tions for fur­ther trade lib­er­al­iza­tion, es­tab­lish­ment of trans-bor­der eco­nomic zones, in­crease in the num­ber of en­try points be­tween China and Pak­istan for agri­cul­tural pro­duce and pro­mo­tion of the Chi­nese pri­vate sec­tor in Pak­istan

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