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CPEC promoting regional

and global trade integration

The bilateral economic cooperation between China topped the list of countries from where Pakistan
and Pakistan would go a long way in promoting imported different products during the first three
regional and global trade integration. China-Pakistan quarters of the financial year (2020-21), followed by
Economic Corridor (CPEC), Pak-China Free Trade the United Arab Emirates (UAE) and Singapore,
Agreement (CPFTA- II) are the two critical milestones according to SBP data.
that strengthened trade and investment. It is
pertinent to mention that both the countries had China is currently Pakistan’s largest single trading
signed the 2nd Phase of China Pakistan Free Trade partner, while Pakistan is China’s second-largest
Agreement (CPFTA) during the Prime Minister’s visit trading partner in South Asia. Major imports from
in April 2019, which became operational from 1st China include electrical and electronic equipment,
January 2020. machinery, nuclear reactors, boilers, consumer
goods, organic chemicals, iron and steel, iron or
The CPFTA-II has a very positive impact on steel, manmade filaments, plastics, fertilizers, and
Pakistan’s exports in all potential sectors, which manmade staple fibers.
indicates that it is going in the right direction, for
which the credit goes to exporters. CPFTA-II had According to the Board of Investment data, China
bought down tariffs to zero for Pakistan on 313 also topped the countries on the investment side by
high-priority tariff lines, which benefited the country bringing Pakistan US$944.54 million Foreign Direct
as almost half of the Pakistani exports to China were Investment (FDI) during the first three quarters of the
covered within these lines. current fiscal year (2020-21). The FDI during the last
year (2019-20) was recorded at $973.53 million and
In recent years, the bilateral trade volume between $701.61 million in 2018-19, official sources said.
China and Pakistan has increased rapidly with a With the initiation of CPEC, there has been an
stable commodity structure, though the balance was
much in favor of China. According to the latest data upsurge in investment flows into Pakistan, especially
of the State Bank of Pakistan (SBP), during the first in the infrastructure and energy sectors.
three quarters of the current fiscal year, Pakistan
overall exports to China were recorded at $1407.743 Chinese and Pakistani officials and business people
million against exports of $1298.531 million during also initiated advance business-to-business (B2B)
the same period of last year, showing growth of 8.41 matchmaking in the textile industry under CPEC. The
percent, SBP data revealed. development of an online B2B portal will assist
potential domestic and foreign investors and serve
On the other hand, the imports from China into the as a one-stop database of available public and
country during the period under review were record- private sector investment projects. Thus, there is
ed at $9074.105 million against $6967.724 million excellent potential to be tapped in China-Pakistan
last year, showing an increase of 30.23 percent in economic cooperation, mainly because of the
the first three quarters of this year. China also concept of the CPEC.

April/May 2021