KARACHI: A Chinese ‘buying mission’ is arriving in Pakistan on October 8, 2018, with the sole purpose of striking import contracts with local producers, as Beijing has agreed to bridge the trade gap between the two countries, a top government official said on Wednesday.
“I had meetings with the Chinese foreign minister and their ambassadors and underlined that trade balance between two countries was grossly tilted in China’s favour and they should buy more from Pakistan,” Abdul Razak D0awood, Advisor to Prime Minister on Commerce and Textile Industry, said while talking to stakeholders at Pakistan Hosiery Manufacturers Association (PHMA) House. “China is genuinely willing to bridge the trade gap.”
Dawood said the mission, comprising Chinese businessmen, exporters, traders etc, would make supply contracts with local producers in many sectors for goods which China may use for home consumption or re-export. “The value-added textile exporters should be ready for and make the most of this opportunity,” the advisor said.
China, the largest trade partner of Pakistan, has further increased its exports to $11.458 billion in FY18, an increase of $1.381 billion compared to FY17.
However, exports to China increased by just $120 million to $1.744 billion, creating a trade gap of $9.7 billion, which accounts for over 30 percent of the overall trade deficit of the country.
The advisor expressed serious concerns on reports that Chinese companies were mostly venturing in businesses of primary goods and material, and exporting these primary goods back to China for value-addition and re-export.
The advisor was informed at the meeting that Chinese companies were coming in jewelry, textiles, leather, and other sectors, and exporting raw, semi-finished, and primary products out of Pakistan.
To this, the advisor said if they (Chinese) took all the primary goods and raw materials then what local industry would be left with.
“We need to improve the quality of our negotiations. I will put my foot down that this does not happen to our local industry,” Abdul Razak Dawood said. He further said that discussions were on and China would grant preferential access on 313 tariff lines exportable to China.
Ensuring the exporters that no decision would be taken against their consent, Dawood said Prime Minister Imran Khan and his team would be visiting China in the first week of November 2018 to deliberate the second phase of the free trade agreement.
Javed Bilwani, a top PHMA official, said the cost of doing business was very high in Pakistan due to high prices of utilities, thus the government should do away with gas infrastructure development cess (GIDC) to assist local industry.
“Apparel sector is the engine of Pakistan’s textile exports as it accounts for 39 percent of the overall textile exports, but it is yet to receive the support and attention it deserves,” Bilwani said.