For all its bonhomie with China, Pakistan has no proper free trade agreement. There is one but Pakistan feels it needs to be revised. Pakistan’s exporters have to struggle to make their presence felt in China because their competitors enjoy zero-rated tax.

Even India in comparison to Pakistan has better trade relations with China. Pakistan exporters lose their competitive edge because of Asean which has a very strong FTA with China. Its products are taxed at a lower rate than Pakistan’s. Therefore, a huge chunk of Pakistan’s textile exporters are forced to export raw material to Asean member countries like Vietnam, which exports finished goods to China. Exports through this channel are less costly and competitive in Chinese markets.

Instead of exporting raw material in the form of cotton and yarn, Pakistan wants to export finished and value-added goods. Pakistan ranks 16 on the list of China’s export partners while it stands at 61 in its import partners. Even countries like Kenya are ahead of Pakistan in the exporters’ list. Pakistan’s imports from China are $18 billion while exports are a meager two billion dollars. This tilts the balance in favor of China by a massive margin.