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- Chinese consul general says his government working to narrow trade imbalance heavily tilted towards Beijing
- Says CPEC initiative open to third countries, Chinese firms willing to relocate to Pakistan special economic zones
KARACHI: Pakistan and China are working to narrow down a bilateral trade imbalance heavily tilted towards Beijing, the Consul General of China in Karachi said on Tuesday, as 2021 marked a trade deficit of $20.65 billion and the envoy admitted efforts to create a balance were “not working” despite efforts.
According to data from the General Administration of Customs (GACC) of China, Pakistan’s exports to China increased by 68.9% to cross the historic figure of $3.58 billion in 2021 while China’s export to Pakistan surged by 57.8% to $24.23 billion, creating a trade deficit of $20.65 billion.
“In recent days the bilateral trade has grown very fast but we got a problem that this trade is heavily imbalanced – you import more and export less, even though my government with your government is trying to narrow down the trade deficit,” Li Bijian, Consul General of China in Karachi, said while speaking at an event in the port city.
“My government is not intentionally seeking a surplus of trade with Pakistan,” he said. “We want to balance the trade but it is not working as we wished even though two governments have upgraded the Free Trade Agreement (FTA).”
Islamabad and Beijing finalized the second phase of an FTA spanning 2019-2024 in early 2019, allowing for the export of more duty free products from Pakistan.
“More than 300 tariff free items have been allowed to enter China, that is huge progress pushed by my government to narrow down the trade deficit,” LI said. "One of the best and most efficient ways to narrow down the trade is import substitution,” he added, referring to a trade and economic policy that advocates replacing foreign imports with domestic production.
Responding to a question about progress on the China Pakistan Economic Corridor (CPEC) of energy and infrastructure projects which has seen Beijing pledge over $60 billion, the Chinese diplomat said after the completion of the first phase of the scheme, it was now in a second phase focused on spurring industrialization in Pakistan.
“In the first phase around 17 projects were initiated and most of them are now operational, including energy and infrastructure projects,” the diplomat said.
A Pakistani Naval personnel stands guard beside a ship carrying containers during the opening of a trade project in Gwadar port, some 700 kms west of Karachi on November 13, 2016. (AFP/FILE)
“In the first phase, investment of $25 billion was made in various project,” he said, adding that the second phase would focus on business to business ventures “crucial for industrialization in Pakistan.”
Li also said CPEC was open to third countries.
“Yes, it is the China Pakistan Economic Corridor but actually this corridor is open for third countries as well,” he said. “Many projects are not only bilateral but trilateral … one of the examples is the Bin Qasim Power plant that is a huge joint venture of Pakistan, China, and Qatar.”
The consul general said his consulate was trying to convince Chinese investors to relocate their industries to Pakistan and many were willing to invest in special economic zones there.
“Your govt has identified a few special economic zones which will play a big role in industrialization in Pakistan, so more Chinese companies will be relocated in these special economic zones to manufacture products like home appliances , chemicals and textile goods and other things – these are in the pipeline in big number,” Li said.