In order to get full benefit of free trade agreements with China, Pakistan has to devise a strategy to review and empower its manufacturing sector and recast it according to market trends in China: Shah Faisal Afridi
Lahore, December 03, 2014 (PPI-OT): President Pak-China Joint Chamber of Commerce and Industry, Mr. Shah Faisal Afridi said in a statement that in order to get full benefit of free trade agreements with China, Pakistan has to devise a strategy to review and empower its manufacturing sector and recast it according to the market trends in China.
He said that chambers of commerce and selected people from Trade and Commerce should be channeled to conduct Market Research of items that are given duty free access in China and then manufacturing of such items should be enhanced, he added.
Faisal Afridi stressed upon the need to further explore bilateral trade prospects. He was of the view that extensive marketing of Pakistani products is crucial. He said that the Ambassadors and Consul Generals abroad, are the eyes and ears of Pakistan.
Their aggressive efforts to promote Pakistan and marketing of Pakistani products are imperative. He further highlighted the importance of participation of Chinese businessmen in the Exhibitions and trade fairs held in Pakistan. He observed that leading companies of Pakistan don’t frequently participate in the exhibitions while the participation of small businessmen in exhibition is comparatively on wider scale.
He explicated that every Chinese province hold unique dynamics and business trends. Faisal Afridi said that opportunities of joint ventures exist in textile, agro farming, food processing, pharmaceuticals, engineering goods, etc. There is enormous potential in energy sector and Chinese companies should come forward and invest in this sector.
China can also help Pakistan in developing and modernizing SMEs sector. More than 11,000 Chinese engineers, technicians and workers are rendering their valuable services in progress and development of Pakistan. Chinese investment in Pakistan increased manifolds in key sectors including port development, roads, railways, mobile telephones communication technology, hydro and thermal power, mining, electronics, and nuclear energy.
Statistics shows that Pakistan’s imports from China reached $6.71 billion from $3.53 billion, showing an increase of 90 percent since the signing of the FTA. Whereas Pakistan exports to China reached to $2.18 billion in 2011-12 from $0.575 billion in 2006-07, reflecting an increase of 279 percent.
So the impact of free trade on revenue, due to trade creation or trade diversion is positive, which is of course encouraging sign. Therefore, it is projected if this trend of higher trade volume continues; there will be no revenue loss in future. Nonetheless, if there is any loss on revenue front it will be compensated through other gains in shape of more exports, cheaper imports, investments, job creation in local labour market etc, Afridi added.
Faisal Afridi proposed several measures to maximize the benefits from Free Trade Agreement (FTA) between Pakistan and China by creating conducive environment to attract more investment from China in industrial, agriculture and energy sectors.
He suggested that Pakistan should focus on modern techniques for maintaining better and market competitiveness. He further suggested that the government should make a comprehensive plan to diversify exports. Pakistan should ensure quality, efficiency and cost minimization particularly in non traditional manufacturing sector.
He said that Pakistan’s manufacturing sector lacks sophistication and understanding of the Chinese market and to overcome this, Pakistan has to diversify the basket of exports to China. He asserted that there is a dire need to focus on the manufacturing of non traditional products because living standards of Chinese has increased and their new generation is more inclined towards innovative and latest trends.
He asserted that widening trade deficit between Pakistan and China is a big Challenge. During last five years bilateral trade has expanded, but the balance of trade remained in favour of China. The possible reasons could be the lower potential of our export oriented sectors, low quality (not meeting the international standards), sever energy crisis and high cost of production, He added.
He said that Pak-China FTA is a good opportunity for Pakistani exporters; they should concentrate Chinese market for finished products. Pakistan’s export base is very narrow and skewed towards few items and destinations for long time. Therefore Time has come to review the existing policies and to explore the potential of other sectors and items for broader export base of country, Afridi said.
The Pak-China FTA can be a golden opportunity if all the stakeholders including M/O Commerce, Textile Industry, exporters make appropriate plans, revisit their priorities, have better co-ordination and remove the hurdles faced by the exporters and importers, stated Faisal Afridi.
For more information, contact:
Wardah Ali Gohar
Pakistan China Joint Chamber of Commerce and Industry (PCJCCI)
Mega Tower, 309 – 6th Floor,
Main Boulevard, Gulberg II,
Lahore, Punjab – Pakistan
Tel: +92-42-35777460-02, +92-42-37032203, +92-42-35874353