Trade gap swells on imports from China, India

Trade gap swells on imports from China, India

By Shahid Iqbal
KARACHI, May 31: Pakistan has doubled its trade with India and increased exports to China during the 10 months of current year but the volume of trade has put more pressure on the country’s widening trade deficit.Both India and China put a cork over imports flow from Pakistan while the country failed to exploit the fastest growing economies of the region in its favour, apparently due to lack of strategy.The available official trade figures showed that India surpassed even the ambitions trade target of $20 billion with China to reach $24.9 billion last year.Pakistan’s trade volume with China reached $2.062 billion only during the first ten months of the current year. Out of this total, exports from Pakistan were just $379 million while China’s exports were in the tune of $1.647 billion. Pakistan has been facing a trade deficit of $1.268 billion.Pakistan’s imports from India have doubled during the first ten months, while exports to the country remained limited to $196 million. Indian exports to Pakistan reached $912m during the ten months of the current year compared to $419 million during the corresponding period of last year.The statistics showed that the Pakistani policy makers have yet to come out with a strategy to improve their trade relations with the regional countries and exploit the unique long-term friendly relations with China.On the other side, India mended its territorial disputes with China and sharply increased trade with that country becoming the 10th largest trade partner of China, while China became 2nd biggest trade partner of India within seven years.The miracles happened just next door to Pakistan but the lack of initiative left the country far behind the pace of economic development in the region resulting in record widening of trade deficits. The situation kept the country under pressure of Western countries begging for export incentives while opening its own market at their own terms.Pakistan’s trade loss with India reached $716m during the ten months but soon it could reach $1 billion as imports have increased sharply in the recent months.China and India will finish a joint study on a potential regional trade pact by October this year, which could play a key role in further enhancing of trade.China said the study would play a key role in the economic integration in Asia if it led to a regional trade pact linking China and India.The two countries signed an agreement in 2005 pledging to bring bilateral trade volume to $20 billion by 2008. This was achieved ahead of the targeted date and the two governments have now set a new target of $40 billion in bilateral trade by 2010.In April 2007, Pakistan signed 27 agreements in Beijing, which included setting up a Chinese automobile plant, an engineering university in Pakistan and a joint investment company with a capital of $200 million.Pakistan’s prime minister recently visited China to explore trade and investment opportunities but the output can only prove the fruitfulness of the visit.