Ayesha Saba

Pakistan has a significant opportunity to stabilize its economy by leveraging its strategic location and strengthening its longstanding friendship with China, Dr. Liaqat Ali Shah, Executive Director and Head of Policy Division at the Centre of Excellence for CPEC, tells WealthPK. “China's shift towards consumption and service-led growth in the ‘new normal’ presents a promising opportunity for Pakistan,” he said. “To capitalize on this potential, Pakistan needs to focus on its comparative advantages in specific product lines compared to China and other regional competitors. By aligning its production with the Chinese market demand and preferences, Pakistan can tap into the growing consumer base in China,” he said. Dr. Liaqat explained, “If developing nations like Pakistan want to fully benefit from China's transition, they must understand what the ‘new normal’ in China involves. It is widely believed that industrial relocation will take place in the labor-intensive sectors.”

“China's upgrading to higher-end industries will offer a significant space for Pakistan to enter a labor-intensive industrialization development phase. The sectors where Pakistan can benefit from are tourism, entertainment, agriculture, and advanced industrialization,” he said. “China is transforming; it is time to broaden our thinking and look for avenues of cooperation with China, both within and outside of CPEC. Moreover, our strategic relationship with China continues, but long-term social and economic benefits can only be realized if our approach to cooperation with China is people and business-centric,” Dr. Liaqat said. “Furthermore, the Pakistani authorities should collaborate with their Chinese counterparts to navigate regulatory challenges, simplify trade procedures, and promote cultural exchanges.

Understanding Chinese consumer preferences and market trends will be crucial in tailoring Pakistani products to the demands of the Chinese market successfully,” he suggested. According to the WealthPK research, a better understanding of this “new normal” is that the economy is shifting from a high to a medium-high rate of growth, from a growth model that emphasizes scale and rate to one that emphasizes quality and efficiency, from an economic structure in which economic growth was mainly fuelled by the increment and increased industrial capacity to one in which the existing capacity is adjusted and the increment is put to best use, and from being driven by production factors such as resources and low-cost labour to being driven by innovation. Such changes are essential for China's economy to upgrade to a more advanced level, with a better division of labour and a more rational structure.

Credit: INP-WealthPk