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- The request was made during ongoing visit to China by Pakistan’s Interim Commerce Minister Gohar Ejaz
- The revision aims to provide trade finance in yuan, offer loans for relocation of Chinese firms in Pakistan
KARACHI: The Chinese government is considering a request from Pakistan to amend an existing Free Trade Agreement (FTA) between the two nations that will provide trade finance to Pakistan in yuan and offer loans to support relocation of Chinese firms, the Pakistani commerce ministry said on Tuesday.
China is Pakistan’s largest trading partner and biggest source of foreign direct investment. In 2022, Pakistan’s exports to China were recorded at $2.53 billion while China’s exports to Pakistan stood at $23.09 billion, according to the United Nations COMTRADE database.
The request was made during an ongoing visit to China by Pakistan’s Interim Commerce Minister Gohar Ejaz, with the proposed revision of the FTA aiming to extend preferences to Pakistani products and align them with an FTA between China and the 10-member Association of Southeast Asian Nations (ASEAN), signed in 2010, that reduced tariffs on thousands of imported goods categories to zero.
“Pakistan has also urged China to allocate $5 billion in yuan for financing investments to facilitate the relocation of Chinese companies to Special Economic Zones (SEZ) or Export Processing Zones (EPZ) in Pakistan,” the Pakistani commerce ministry said in a statement.
“Additionally, $5 billion in yuan will be available for immediate trade finance to minimize reliance on US dollars.”
Ejaz is currently leading a high-level delegation to China to discuss economic ties, with a focus on improving the balance of trade between the two nations.
On Monday, he met with Zhang Xinmin, chairman of the China Chamber of Commerce for Import and Export of Textiles (CCCT), to bolster textile trade between Pakistan and China, with a particular emphasis on addressing “trade imbalances,” according to the Pakistani commerce ministry.
The discussions included strategies for accessing new markets in China to promote Pakistani exports and facilitate smoother trade transactions.
The Pakistani delegation has also held a series of business-to-business (B2B) meetings, providing a platform for Pakistani and Chinese business persons to engage in discussions to fortify trade relations.