Raza Khan

Despite a decline of 33.63% in bilateral trade, China remained Pakistan’s largest trading partner during the fiscal year 2022-23, according to the Ministry of Commerce. Provisional data shows that the volume of bilateral trade between Pakistan and China was recorded at $14.126 billion during FY23 compared to $21.285 billion during the previous year. A declining trend was witnessed in trade between the two countries during each month of FY23. According to experts, Pakistan’s challenging economic situation and unavailability of foreign exchange are the primary reasons behind decline in its bilateral trade with China.

The Government of Pakistan reduced imports to save foreign exchange reserves, which resulted in decline in imports, especially from China. Because of reduction in imports, exports also declined due to unavailability of raw material for industrial production. According to the Ministry of Commerce, Pakistan’s exports to China declined by 9% during FY23 to $2.732 billion from $2.978 billion during FY22. Pakistan’s imports from China were registered at $11.393 billion during FY23, down by 60.68% against the previous year’s $18.307 billion.

Pakistan’s trade deficit with China was reduced by 43.50% during the last fiscal year, standing at $8.661 billion during FY23 compared to $15.329 billion during FY22. Dr Sajid Amin, economic analyst and research fellow at Sustainable Development Policy Institute (SDPI), said that Pakistan needs to enhance its exports to China to reduce trade deficit. “It is not easy to reduce imports from China so Pakistan has to increase its exports,” he said.

He was of the view that Pakistani exporters should improve the quality of their products to get large share in the Chinese market. “Exporters need to bring innovations in products,” he added. Dr Amin said that China is the largest food market and it carries huge potential for Pakistani exporters. “We simply need to improve the quality of food items to meet international export standards to get healthy share in the Chinese market,” he emphasised.

He was of the view that reducing imports from China was not simple because local industry cannot meet domestic demand in terms of quantity and variety. Dr Amin said that China Pakistan Free Trade Agreement (CPFTA) provides opportunities for Pakistani exporters to enhance their exports to the Chinese market. “The CPFTA is a good agreement for both sides and Pakistani exporters need to take full advantage of it,” he added.

Pakistan’s top exported commodities to China are cotton, copper, cereals, fish, crustaceans, aquatics invertebrates, oil seed, oleagic fruits, grain, seed, fruits, beverages, aluminium, apparel, salt, sulphur, plaster, lime and cement, leather, and plastics. Pakistan’s imports from China are electrical and electronic equipment, machinery, nuclear reactors, boilers, pharmaceutical products, mineral fuels, oils, distillation products, organic chemicals, iron and steel, vehicles other than railway, plastics, fertilisers, rubbers, tanning, dyeing extracts, tannins, derivatives, pigments, miscellaneous chemical products, glass and glassware, yarns, copper, footwear, toys, games, and sports requisites.

 Credit: INP-WealthPk