Pakistan could overtake India in trade with China in 8 years: official
BEIJING: Pakistan could overtake India in trade with China in just eight years, even though its trade volume with China was only one-fifth of India’s in 2020, a Pakistan diplomat said.
In 2020, bilateral trade between China and Pakistan stood at $17.49 billion, while between China and India it was $77.70 billion.
“India has a population five to six times larger than that of Pakistan, so I hope that it will take eight to 10 years to overtake them,” Badar-uz- Zaman, commercial counselor of the Embassy of Pakistan in Beijing, told the Global Times at the 2021 China-Pakistan Trade Forum.
Although Zaman did not provide more details to support his projections, analysts said the two country’s iron-clad relationship and the substantial progress already made in the construction of the multi-billion-dollar China-Pakistan Economic Corridor (CPEC) projects could provide economic propulsion to boost bilateral trade.
A Chinese scholar studying China-Pakistan relations pointed out that there are obstacles for Pakistan in realising this ambitious trade target. But such a scenario is not entirely impossible.
“If Pakistan hopes to overtake India in trade with China in eight to 10 years, Pakistan has to increase its purchasing power and improve the standard for export goods to meet international standards,” a senior researcher at the Chongyang Institute for Financial Studies at Renmin University of China Zhou Rong said.
India has a large market, given its population of nearly 1.4 billion, while Pakistan has a population of 220 million, Zhou said, adding that Pakistan needs time to build and cultivate its own purchasing power.
India also has a large amount of raw materials that can be exported to China, while Pakistan has less of such resources, so it might be tough for Pakistan to overtake India in eight to 10 years unless the bilateral trade relationship between China and India continues to worsen, Zhou added.
However, there are meaningful changes taking place. Amid frayed bilateral ties following a deadly border clash, as well as the Indian government’s ban on Chinese investment into the country, bilateral trade between China and India stood at $77.70 billion in 2020, down from $85.50 billion in 2019.
At the same time, the relationship between China and Pakistan has become stronger and investment has been increasing. There has been a 34 per cent increase in exports from Pakistan to China year-to-date, thanks to the bilateral free trade agreement, Zaman said.
Experts also said Pakistan has its own advantage in that the CPEC has provided in the shape of improved infrastructure for the country, and paved the way for its industrialisation.
That means Pakistan will have more demand for imports and more goods to export to China in the coming decade.
The construction of a string of industrial parks will also help Pakistan improve the quality of its exports, the experts added.
Some of the potential items Pakistan could export to China included copper, for which there is a great demand in China, as well as cotton, sugar and textile products, according to Zaman and Zhou.
In 2020, the total trade between China and Pakistan amounted to $17.49 billion, a year-on-year decrease of 2.7 per cent, with imports from Pakistan reaching $2.12 billion, an increase of 17.50 per cent, compared with the previous year, according to data from the Ministry of Commerce.
China has been Pakistan’s biggest trade partner for six consecutive years since the 2015 fiscal year. China is also Pakistan’s main source of imports and second-largest export destination, according to the data from the Economic and Commercial Office of the Chinese Embassy in Pakistan.
The recent Dasu incident will not affect the trade between the two countries and China-Pakistan cooperation projects under the Belt and Road Initiative, Zaman said, emphasising that Pakistan is giving maximum priority to the safety of the Chinese nationals.
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