China, Pakistan capitalizing on free trade agreement

China and Pakistan, two brotherly nations celebrating the 70th anniversary of their diplomatic relations, are continuing to cultivate their relationship with the 2nd phase of the China-Pakistan free trade deal, finalized in 2019.

As per Chinese Customs, Pakistan's exports to China in the first half of 2021 amounted to $1.73 billion, an unprecedented growth of 84 percent. It is generally hoped the number for all of 2021 will surpass the milestone of $3 billion.

These figures show the second phase of the trade agreement has effectively started, enhancing bilateral trade regarding imports and exports by facilitating Pakistani businesses to enhance their economic presence in the Chinese market.

Under the new phase, Pakistani manufacturers and traders are allowed to export around 313 new products to the Chinese market with zero duties.

The significant increase of Pakistani exports to China has opened up a Chinese market that also shows the growing popularity of Pakistani products.

Increased Pakistani exports to China have diversified the country's trade potential and laid the foundation of maintaining trade balances with the world's second-largest economy.

In a recent report by the World Bank, is was estimated Pakistan has the potential of increasing its annual exports to above $88.1 billion.

Under the leadership of Prime Minister Imran Khan, the country has consistently made policy to promote the extension of imports to the world market.

To that end, the government has adopted business-friendly policies and provided huge financial incentives to enhance imports.

Along with these policies, the government has also finalized free trade agreements with other countries like China.

The increase in imports of Pakistani products to China has also helped economic recovery during the pandemic.

Following the successful editions of the China International Import Expo, China's imports are surging at a rapid pace amid the strong recovery during the COVID-19 outbreak.

The increasing import strength of China is assisting many countries to revive their economic activities, including Pakistan.

China's ministry of commerce has stated the country's total imports and exports expanded 24.5 percent year-on-year to 21.34 trillion yuan ($3.3 trillion) from January to July.

Exports rose 24.5 percent from a year ago, while imports jumped 24.4 percent in the first seven months, data from the General Administration of Customs showed.

It is also stated in July, imports and exports rose 11.5 percent year-on-year to 3.27 trillion yuan, with the volume the second-highest in the country's history following June.

China has adopted a strategy to distribute the dividends of its economic performance with other countries partnering with Beijing under various platforms, including the Belt and Road Initiative.

Pakistan is a major beneficiary of BRI via the China-Pakistan Economic Corridor, the flagship project of President Xi Jinping's signature initiative.

CPEC, worth billions of dollars, has put great emphasis on uplift of various sectors in the country, including agricultural cooperation, vocational training, poverty alleviation, socioeconomic development and setting up industrial zones.

CPEC has also provided significant opportunities to Pakistani businesses to expand trade activities with China by reducing the costs of land transportation.

With the implementation of CPEC, Pakistani industries have also been energized, stimulating Pakistan-China trade and helping establish production centers of international standards in different provinces in Pakistan.

CPEC and the second phase of the trade agreement have combined to lay a foundation to integrate the two growing business markets of the region by inviting others to join the cycle of sustainable development.

The author is a journalist with Independent News Pakistan and a media fellow of the China South Asia and South East Asia Press Center.

The opinions expressed here are those of the writer and do not necessarily represent the views of China Daily and China Daily website.

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