“You import more and export less, even though my government in collaboration with your government is trying to narrow down the trade deficit,” Bijian said that China wants to see more balanced trade.
Pakistan’s central bank data shows that at least one-fourth of the total import bill in 2020-21 originated from Beijing, according to the report by Dawn. It also showed that exports to China accounted for less than 8%.
China and Pakistan have a free trade agreement which allows Pakistan to export more than 300 items to Pakistan without incurring any tariffs. Bijian also said that the trade situation is not developing as expected. The Pakistan economy, like most economies, bore the brunt of Covid-19 and has failed to rebound as expected.
The International Monetary Fund (IMF) has asked Pakistan – like it earlier asked Sri Lanka – to implement economic reforms which successive governments have been reluctant to follow and have looked at state-run banks in Beijing to bail them out in times of crisis. The IMF says that Pakistan owes China $24.7 billion in total external debt. The United States Institute Of Peace in an article titled ‘Pakistan’s Growing Problem with its China Economic Corridor’ says that Pakistan ‘lacks the political will to break the grip of powerful vested interest groups.’
A UN report pointed out that these groups ‘receive about $17.4 billion in economic privileges — including tax breaks and preferential access to capital — which amounts to almost 6% of Pakistan’s GDP’.
Economic journalist Khurram Hussain in 2021 while writing for Pakistan-based news agency The News PK said that Pakistan exports low-tech basic agricultural products like ‘frozen meat, poultry, dairy products in solid form, human hair, stomach of animals, cut flowers, flower buds, tea, saffron, turmeric, maize, rice, starches, sausages, tobacco and tobacco refuse’ compared to importing ‘electrical and electronic equipment, machinery, nuclear reactors, boilers, consumer goods, organic chemicals, iron and steel, articles of iron or steel, man-made filaments, plastics, fertilisers and man-made staple fibres’ from Beijing.
Hussain said that the trade deficit cannot be overcome by exporting rice and buying technologies and machinery.
Pakistan also unable to stop terrorism from emanating from its soil remains in the grey list of the Financial Action Task Force (FATF) which further acts a deterrent to businesses and other nations to set up projects in China.
Read the Latest News and Breaking News here
Comments
0 comment