Raza Khan

Pakistan’s trade deficit with China dropped by 28.69% to $855 million during July 2023 compared to $1.199 billion during the same month of 2022, according to the Ministry of Commerce. The volume of trade between the two countries declined by 17.74% to $1.191 billion during July 2023 from $1.448 billion during the same month of 2022. Pakistan’s exports to China grew by 35.1% during the first month of FY24 to $168.5 million from $124.7 million during the corresponding month of the previous fiscal year. Imports from China were recorded at $1.023 billion during July FY24 compared to $1.322 billion during July FY23, with a decline of 23%. According to the Ministry of Commerce, a declining trend has been observed in bilateral trade during the recent months. According to experts, the current challenging economic situation of Pakistan and unavailability of foreign exchange are the primary reasons behind the decline in trade with China.

The Government of Pakistan has reduced imports to save foreign exchange reserves which resulted in a decline in imports from China. Because of reduction in imports, exports are also on a declining trend due to unavailability of raw materials for industrial production. According to Trade Development Authority of Pakistan (TDAP), the volume of bilateral trade between Pakistan and China was recorded at $14.126 billion during the fiscal year 2022-23 compared to $21.285 billion during the preceding year. Despite a decline of 33.63% in bilateral trade, China remained Pakistan’s largest trade partner during FY23. 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 37.76% against the preceding year when imports volume was recorded at $18.307 billion. Pakistan’s trade deficit with China dropped by 43.50% to $8.661 billion during FY23 compared to $15.329 billion during FY22. Pakistan’s export items to China include cotton, copper, cereals, fish, crustaceans, molluscs, aquatics invertebrates, oil seed, oleagic fruits, grain, seed, fruits, beverages, spirits and vinegar, aluminium, apparel, salt, sulphur, leather and plastics. Pakistan’s imports from China include electrical, electronic equipment, machinery, nuclear reactors, boilers, pharmaceutical products, mineral fuels, oils, distillation products, organic chemicals, iron and steel, vehicles other than railway, tramway, plastics, fertilisers, manmade filaments, and rubber.

Credit: INP-WealthPk