Negotiations on a
free trade agreement (FTA) between China and Pakistan are expected
to move forward during Premier Wen Jiabao's visit to the South
Asian neighbour.
Premier Wen's trip to Pakistan, the first stop in
an eight-day tour of four countries in the region, is expected
to see the signing of a number of economic and trade agreements.
Among them is an Early Harvest Programme, which would
see tariff-free trade in a number of goods, paving the way towards
an FTA between the two countries. A possible FTA would facilitate
trade and further consolidate bilateral trade relations, said
Xu Changwen, a trade researcher at the Chinese Academy of International
Trade and Economic Co-operation, a think-tank under the Chinese
Ministry of Commerce.
"Chinese goods, which are of good quality and
have competitive prices, match the growing demand of Pakistani
consumers," he said.
And Pakistani goods will enjoy easier access to the
Chinese market as China gradually cuts its tariff rates in line
with its commitments to the World Trade Organization.
"Pakistan hopes to attract more investment from
China with the stable growth of its domestic economy," said
Pakistani Prime Minister Shaukat Aziz. By establishing factories
in Pakistan, Chinese enterprises would cash in on the geographic
advantage in terms of exporting to the Middle East and Africa,
he pointed out.
Bilateral trade between China and Pakistan has been
enjoying fast growth since 2000, and Pakistan has grown into China's
second-largest trade partner in South Asia following India.
The two countries chalked up a record trade volume
of some US$3.06 billion last year, an increase of 26 per cent.
China's exports to Pakistan reached US$2.47 billion,
up 33 per cent year-on-year.
China's imports from Pakistan reached US$5.95 billion,
3.5 per cent up year-on-year.
China mainly exports machinery equipment and components,
mechanical and electrical equipment, audio-visual products, and
vehicles, accounting for over 40 per cent of the nation's total
exports to Pakistan.
The growth rate of China's exports to Pakistan exceeded
that of nation's imports from the country.
The growth in China's exports was due to Pakistan's
roaring demand resulting from its economic recovery and development,
said Xu.
China's imports from Pakistan grew much slower over
the past two years because the country only imports some raw materials,
such as cotton, feathers and fur.
Economic co-operation between the two countries had
been diversifying into sectors such as services, technology, investment,
resource exploitation and contracting projects, Xu said.
For example, Chinese enterprises have signed a number
of contracts to build roads and harbours in Pakistan.
But Xu added that some obstacles remain in the development
of bilateral trade.
Xu said both sides should make more efforts to develop
each other's market.
First, Chinese enterprises should carefully study
the Pakistani market in order to produce products that better
match local people's requirements.
Second, Pakistan has lagged behind some other South
Asian countries, such as India and Bangladesh, in the promotion
of its exports.
"Pakistani enterprises should further promote
the influence of their products in China," he said, adding
that expos were a good way to do this.
|