China-Pakistan Free Trade Agreement (CPFTA) has emerged as a cornerstone for the two countries’ bilateral economic cooperation. The bilateral trade between both of them has jumped to $15.6 billion in recent years.
China Economic Net, quoting official sources, reported on Friday that within the first phase of CPFTA, Pakistan’s exports to China increased to $1.85 billion (FY19) from $575 million (FY07), and the bilateral trade volume has jumped from around $4 billion to $15.6 billion accordingly.
The CPFTA was signed in 2006 and came into effect in 2007. It is the first FTA China signed with South Asian countries.
The signing and implementation of the CPFTA have led to the rapid development of bilateral economic and trade relations. According to the statistics of Pakistan Customs, so far, China has been Pakistan’s largest trade partner and the second-biggest export destination of the country for 5 consecutive years, with China having the highest FDI in Pakistan for 6 consecutive years.
Along with the constant upward trend of China-Pakistan trade, rising concern on the trade deficit with China has been echoed in the Pakistani business communities. It is pertinent to mention here that the main reason behind the trade imbalance has to be the structural problems between the industries of the two countries.
China has a strong manufacturing base to export goods as compared to import. Up till now, China has been the largest trading partner of more than 120 countries and regions in the world and has never intentionally pursued the trade surplus, not with any trading partner.
To address this concern of the Pakistani side, China has proactively taken measures to maintain balanced trade relations with Pakistan. China is keen to expand market access for Pakistani products and organizes trade promotion activities in Pakistan and China every year.
Pakistan’s capacity of export to be augmented under CPEC 2nd phase
Chinese Ambassador in Pakistan Yao Jing said that under the second phase of China Pakistan Economic Corridor (CPEC), promotion of business to business relationships for technological and industrial development is planned, in order to augment Pakistan’s export capacity.
He was speaking to Federal Minister for Economic Affairs Muhammad Hammad Azhar here at the minister’s office. The envoy stated that in the second phase socio-economic sector projects will be prioritized, with grant financing for the direct benefit of the common man.
The minister stated that the CPEC is a flagship program of the Belt and Road initiative which is now entering a new phase.
Both sides reiterated their mutual resolve to strengthen the bilateral relationship.