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Pakistan registers 72pc trade deficit with China

Under the PTA, China had allowed tariff concession to Pakistan on 893 items, whereas Pakistan had given concession to China on nearly 200 items. This concession in tariffs on products helped the Chinese exports in flooding the Pakistani market.

Although China had given concession on more tariff lines to Pakistani products but that could not help in getting any tangible share for Pakistani products. This showed the lack of proper projection and analysis of the products by the Pakistani trade wizards while negotiating the treaty. But, it also happened because of the fact that China had given concession almost on the similar products to India under Bangkok Trade Agreement (BTA), which created great competition for Pakistani products.

The statistics showed Pakistan's trade deficit with China stood at $245.512 million during the year 1998-99; $291.201 million in 1999-2000; $225.781 million in 2000-01; $346.588 million in 2001-02 and $594.465 million in the year 2002-03.

The trade deficit had been raised to $865.211 million during the year 2003-04 and 1.488 billion in the year 2004-05. Only in the first quarter (July-Sept) period of the current fiscal year, the trade deficit of Pakistan with China was recorded at 571.992 million.

The trade gap with China would further widened up during the current fiscal year as the early harvest programme (EHP) zero rate of duty, which would attract more Chinese products at cheaper price to Pakistani market.

Pakistan's export to China has increased by 22.8 per cent to $354.092 million during the year 2004-05 as against $288.259 million in the previous year after the implementation of the PTA agreement. While Chinese exports rose by 59.75 per cent to $1.842 billion during the period under review as against $1.153 billion during the period under review.

Pakistan's major export to China was cotton yarn, which increased by 0.73 per cent to $149.821 million in 2004-05 against $148.735 million in the previous year. Further product-wise analysis showed that Pakistan exported $52.057 million worth cotton fabrics during the year 2004-05 as against $52.531 million during the previous year; export of chemicals and compounds $37.724 million as against $8.512 million, an increase of 343 per cent; leather as raw material stood at $26.136 million as against no exports; fish and fish preparations worth $22.537 million in 2004-05 against $19.565 million in the previous year, an increase of 15 per cent.

Exports of ores and concentrates of iron and steel increased by 187.7 per cent to $25.639 million in the year under review as against $8.910 million in the previous year, raw cotton rose by 402 per cent to $9.666 million as against $1.925 million; made up of textile including towels by 157 per cent to $2.74 million as against $1.066 million; cutlery by 61.2 per cent to $1.554 million as against $0.964 million; apparel and clothing access of textile by 181.9 per cent to $1.325 million as against $0.470 million; knitted or crochetted fabrics by 7244 per cent to $2.497 million as against $0.034 million.

The value of import bill of machinery was $97 million in 1998-99 from China, which increased to $808.468 million in 2004-05. China's other major exports to Pakistan during the year 2004-05 were $130.889 million worth chemicals and compounds as against $8.512 million in the previous year, increase of 1437.6 per cent; chemical materials and products by 26 per cent to $118.885 million as against $94.344 million; coal, coke and briquettes by 208.3 per cent to $63.428 million as against $20.567 million in the previous year; road vehicles and parts by 22.3 per cent $55.005 million as against $44.970 million; iron, steel and manufacture thereof by 46.48 per cent to $51.197 million as against $34.950 million; tyres and tubes by 117.6 per cent to $54.905 million as against $25.231 million; construction materials by 75.2 per cent to $38.239 million as against $21.824 million; spices by 101.4 per cent to $21.384 million as against $10.614 million; pottery exports stood at $8.777 million as against no exports and footwear by 59.38 per cent to $17.956 million as against $11.266 million.