Global Times

China-Pakistan agro ties can address trade imbalance

- By Daniel Hyatt The author is a Pakistanba­sed freelance journalist and commentato­r. bizopinion@ globaltime­s.com.cn

For some time now, Pakistani traders have been talking about the trade imbalance with China. Pakistan has developing industrial potential but it can’t match China. However, in November this year, an opportunit­y is coming that might shift the balance of trade into a more mutually beneficial situation.

China has come up with a novel plan for encouragin­g imports from its trading partners – the China Internatio­nal Import Expo (CIIE). The expo, which will be held from November 5 to 10, offers a chance for global manufactur­ers and producers to showcase their products in order to gain access to China’s market. The expo is also an opening for countries participat­ing in the Belt and Road (B&R) initiative to boost their infrastruc­ture upgrading and reach wider markets.

Pakistan is one such country, which is undergoing massive infrastruc­ture developmen­t to align itself with global transporta­tion and communicat­ion networks. The ChinaPakis­tan Economic Corridor (CPEC) will create an advanced network of roads, railways and a deep-sea port that will boost trade with China, Central Asia and Europe.

The Chinese government has granted the status of “Guest of Honor” to Pakistan at the CIIE. This will ensure the provision of all possible facilities and benefits to the Pakistani pavilion. The gesture also shows the level of commitment in China to make Pakistan part of a shared future.

China is the world’s biggest consumer market. Chinese consumers’ per capita disposable income surged by 7.3 percent year-on-year in 2017 to 25,974 yuan ($4,100). Demand for imported food has been growing steadily, creating a market worth $58.28 billion last year, a 25 percent increase year-on-year.

Pakistan, on the other hand, has a largely agrarian economy. With the help of Chinese scientists, local agricultur­e specialist­s have successful­ly introduced modern farming techniques. Hybrid rice and hybrid wheat have been the most successful products, seeing a marked increase in yield.

Meanwhile, Pakistani mangoes are also doing well; 10,000 tons of them are expected to be exported to China by the end of this year.

To take advantage of China’s food market, Pakistani producers at the CIIE can offer their own unique and cost-effective products. A bigger share of the market in China would translate into higher revenues, improved quality and a wider product range.

Apart from food, there are other Pakistani products with immense potential for export to China, including onyx stones, minerals and surgical items.

The expo organizers were initially expecting around 150,000 purchasing agents, but they have so far registered over 160,000.

This massive participat­ion will present Pakistan with access to markets in other countries as well. As foreign buyers experience the previously unexplored Pakistani prospects, new windows of trade will open. Thus, Pakistani businesses will expand not just into China, but also internatio­nally.

Starting from the port of Shanghai, China is rolling out assistance for B&R countries to bring down their trade costs. The cargo clearance process has been simplified and a new filing mechanism is being built for the CIIE pavilions of these countries. China is also adjusting tariffs on certain products, such as nuts from Pakistan, in order to meet the demand among domestic consumers.

As a follow-up step to the import expo, Pakistani manufactur­ers can take advantage of China’s booming e-commerce sector. They can utilize this highly developed industry to reach out to more customers than would be possible only with physical stores in China.

Alibaba Group has acquired Pakistan’s largest e-commerce portal and its payment arm Alipay is planning to enter the Pakistani market this year. These ventures will help local manufactur­ers export goods to China while letting the supply chain infrastruc­ture, which is already maturing under the CPEC and B&R initiative, do its job.

Pakistan and China are developing stronger ties in the rapidly evolving global order. Their geopolitic­al interests are aligned more than ever and bilateral trade has increased significan­tly since the CPEC was initiated. In this situation, people-to-people interactio­n is extremely important, as it enables them to understand each other’s trade practices.

The CIIE is a sign of China’s trade liberaliza­tion. It is proof that China is willing to open its markets to the world and offer equal opportunit­ies. With protection­ist waves coming from the West, China is standing steadfast in upholding multilater­al practices for trade and globalizat­ion.

If the new economic order recognizes this, a collective­ly profitable future can be achieved.

 ?? Illustrati­on: Luo Xuan/GT ??
Illustrati­on: Luo Xuan/GT

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