In a significant diplomatic move, Pakistan’s caretaker Federal Minister for Commerce and Industries, Dr Gohar Ejaz, shared a visionary five-year plan with China’s Economic Counsellor, Yang Guangyuan. This strategic initiative aims to boost bilateral trade ties and foster deeper economic cooperation between the two nations.
Setting Ambitious Targets
Dr Ejaz articulated a bold target of $25 billion for Pakistan’s exports to China, emphasizing a shift towards a more robust economic relationship. Meanwhile, Yang Guangyuan affirmed China’s commitment to elevate its trade volume from the current $27 trillion to an ambitious $32 trillion in the coming years.
Trade Expansion and Collaboration
The meeting between the two officials, held in Islamabad, showcased the intensified interaction between Pakistan and China in the realm of trade. Dr Ejaz, recounting his recent visit to China, expressed admiration for the country’s progress and identified new market segments for Pakistani exports. His vision is rooted in “trade not aid,” signaling a paradigm shift towards self-sufficiency.
China’s Offer of Support
Yang Guangyuan reiterated China’s steadfast commitment to stand by Pakistan. Notably, China proposed the relocation of industries to Pakistan’s export processing zones, leveraging the nation’s cost-effective labor force for enhanced access to African and Central Asian markets.
Export Targets and Challenges
The meeting occurred against the backdrop of Pakistan’s Export Advisory Council’s ambitious targets of $50 billion in five years and $100 billion in the long term. However, achieving these goals necessitates a radical shift in trade policy and domestic reforms. Despite initiatives like the GSP Plus, Pakistan’s exports have stagnated around $25-27 billion over the past decade.
Comparative Trade Policies
The article highlights the disparities in trade policies between China and Pakistan. China’s proactive reforms, including the enactment of the Foreign Trade Law in 1994 and adherence to WTO rules, have contributed to its trade volume growth. On the other hand, Pakistan has faced challenges, with exporters striving for preferential market access and special treatment.
Challenges and the GSP Plus Concession
Despite obtaining the GSP Plus concession in 2014, providing duty-free access to the European Union, Pakistan’s exports saw minimal growth. While other regional countries doubled their export shares through domestic reforms, Pakistan witnessed an annual average drop of 1.45%.