Is China taking advantage of Pakistan ?

[Crusher]

As a principle I am against all kinds of free trade agreements(FTAs), I just don't like this neo-liberal economic doctrine of FTAs. Pakistan's trade imbalance with china is the result of FTA with china that was signed during Musharraf's regime under then finance minister Salman Shah, that was criminal decision. On world stage, rising white supremacism, brexit, trade wars initiated by trump against china, mexico and recently against EU are all results of some kinds of free trade agreements. This curse of free trade agreements must be rejected if we want fair global economy, every country must be in a position to have adjustable tariffs against foreign imports whenever there is need to adjust those tariffs to strike a trade balance. The concept of zero tariffs under FTAs will only bring wars and civil unrest in coming years.

 

[Samlee]

Excerpt:

The Pak-China Agreement in Goods was signed on November 24, 2006 and implemented from 1st July 2007. The agreement envisaged two phases. Under Phase-I, Pakistan reduced tariffs to zero duty on 2,423 tariff lines, whereas China reduced duty to zero on 2,681 tariff lines. The agreement in Services was signed on 21st February 2009 and the first phase got implemented from 2007-2012.

Post CPFTA, the bilateral trade went up from $4.777 billion in 2007-8 to $16.597 billion, with Pak exports and imports at $1.463 billion and $15.143 billion respectively.

China has FTA with Chile, New Zealand, Singapore, Peru, Costa Rica, and ASEAN etc. When Asean-China FTA went into effect in 2010, Pakistan registered preference erosion on tariff lines that amounted to 79 percent of its export volume to China. The main tariff lines include cotton yarn, garments, leather and fish.

China granted

• New Zealand 94% of tariff lines at zero % duty, with
  
  
• Malaysia 94% of tariff lines at zero % duty,
  
  
• Indonesia 93% of tariff lines at zero % duty,
  
  
• Thailand 93% of tariff lines at zero % duty,
  
  
• Philippines 93% of tariff lines at zero % duty and
  
  
• Pakistan only around 35% of the tariff lines at zero % duty.

Pakistan could only export in 253 tariff lines, where average export value was $500 or more, which is around 3.3% of the total tariff lines (7550). Pakistan mainly exported raw materials and intermediate products such as cotton yarn, woven fabric, grey fabric etc. Value added products were missing.

https://www-thenews-com-pk.cdn.ampproject.org/v/s/www.thenews.com.pk/amp/457939-china-to-extend-duty-free-access-on-313-more-tariff-lines?usqp=mq331AQCCAE=&amp_js_v=0.1#referrer=https://www.google.com&amp_tf=From %1$s&ampshare=https://www.thenews.com.pk/print/457939-china-to-extend-duty-free-access-on-313-more-tariff-lines

Really The News/Jang/Jew TV You Find Them Reliable?????

 

[pakpride00090]

First, every country takes care of their own interest first, tell me one exception if you can. second China has huge trade surplus with almost every country on this planet, especially with US and India.

This is where our politicians have failed miserably. They are incompetent and insincere when it comes to securing Pakistani interest. China is doing best for its economy but we aren't . I can't blame China for taking advantage of us and our stupid ministers and politicians.

You sound like that China only targets Pakistan for unbalanced trade, that's not true, Pakistan at least by now is not a significant trading partner of China's, China's huge unprecedented investment is largely because of the long term friendship with Pakistan, China had never risked huge investment in disputed land cause that means you may lose everything if the fat hit the fire, but China made an exception for Pakistan by massively investing in disputed Kashmir, that investment also means unmendable deterioration in relations with India, which might be one of the largest markets for the Chinese products.

Most of the money is spent hiring labor from China and buying equipment from China. All these loans are taken from Chinese banks. They are not Aid. Your argument that Pakistan is not a significant trading partner for China is superficial at best. Every country is looked at separately. A country that has 300 Billion dollar GDP , 20 billion dollar is a lot.

Now tell me why China riskes so much just to exploit and take advantage of an currently insignificant trading partner Pakistan? It just doesn't make any sense, giving up a huge market just for taking advange of a small, who in their sane mind will do this?

What market is China giving up for Pakistan ? As far as I know , India has not ceased trading with China. In fact it is increasing every year.

Answer in bold.

As a principle I am against all kinds of free trade agreements(FTAs), I just don't like this neo-liberal economic doctrine of FTAs. Pakistan's trade imbalance with china are result of FTA with china that was signed during Musharraf's regime under then finance minister Salman Shah, that was criminal decision. On world stage, rising white supremacism, brexit, trade wars initiated by trump against china, mexico and recently against EU are all results of some kinds of free trade agreements. This curse of free trade agreements must be rejected if we want fair global economy, every country must be in a position to have adjustable tariffs against foreign imports whenever there is need to adjust those tariffs to strike a trade balance. The concept of zero tariffs under FTAs will only bring wars and civil unrest in coming years.

FTA with China should have never been signed. You just can't compete with a manufacturing powerhouse unless of course you also have a solid manufacturing base. FTA with China has literally destroyed our own manufacturing sector. Profit for China , loss for Pakistan.

real Pakistani in Pakistan would know that Pakistan DOES NOT have much to export to China ATM. heck not so long ago its infrastructure resembled that of bongland. hence there was not much point in manufacturing anything because no-one would buy something that CANNOT be delivered, and besides that nothing can be made without energy in the first place!

P.S
a country needs energy supply in order to make anything and transport infrastructure to deliver it. which is being rectified by China as we speak (or is it write?)

Then FTA shouldn't have been signed. This is ultimate stupidity.

A Current Account Deficit has little to do with trade policy, it is fundamentally about an imbalance between domestic savings and domestic investment.

It has to do with domestic economic policies, where Governments love to increase spending (to get more votes), which leads to a reduction in overall savings. When domestic investment is higher than domestic savings, the difference has to be made up from overseas, thus a country with a Current Account Deficit is a net borrower.

In Current Account Surplus countries like China, domestic savings is higher than domestic investment, thus the excess will flow overseas, meaning that China is a net creditor nation.

Don't like it? Tell your Government to stop boosting spending for votes, carry out some necessary economic reforms (such as tax reform), accept some economic suffering in the short-term, in order to build a base for long-term competitiveness.

The problem is, no one wants short-term economic pain. No one wants to see lower income growth and higher unemployment. So they spend, spend spend. And spend some more. No one wants to tighten their belt and live within their means. That's why you need courageous leaders who are willing to push it through.

I wish our Government had the necessary brains to carry out proper economic policies. I admire China and its government. They are doing what is best for them. I can't say same for us.

 

[Flash_Ninja]

Correction *Pakistanis are taking advantage of Pakistan

If people like Zardari and Nawaz didn't try so hard to destroy this country's from the inside then this situation wouldnt be nearly as bad. China doesnt benefit from exploiting Pakistan, but it cant help that Pakistan is in a financial crisis because of the incompetence of its own governments.

 

[pakpride00090]

Correction *Pakistanis are taking advantage of Pakistan

If people like Zardari and Nawaz didn't try so hard to destroy this country's from the inside then this situation wouldnt be nearly as bad. China doesnt benefit from exploiting Pakistan, but it cant help that Pakistan is in a financial crisis because of the incompetence of its own governments.

I agree on all counts. This is what I am saying in all of my posts. Our politicians have failed us. Can't blame China when they are taking 20 billion dollars annually.

 

[beijingwalker]

Answer in bold.

FTA with China should have never been signed. You just can't compete with a manufacturing powerhouse unless of course you also have a solid manufacturing base. FTA with China has literally destroyed our own manufacturing sector. Profit for China , loss for Pakistan.

Then FTA shouldn't have been signed. This is ultimate stupidity.

So China goes to Pakistan, where no other investors go, to take advantage of you, how much money China can make from Pakistan? Comparing to major trading partners, the amount is negligible, why does China have to risk so much to do this? Would you do this if you are China?

I agree on all counts. This is what I am saying in all of my posts. Our politicians have failed us. Can't blame China when they are taking 20 billion dollars annually.

I only see China inject billion of dollars into Pakistan every couples of months, didn't see we get anything back. Do you mean Pakistan would be better off if China was not there investing?

 

[武成王]

I reckon the truth is in fact the opposite. Reported by Pakistan media, Chinese commercial ministers are basically against the new agreement with Pakistan however the PM Li and President Xi both agree, this indicates that from pure business perspective, Pakistan has a upper hand that's why Chinese commercial ministers raise objections, from strategic perspective, China highest leadership agree. The trade deficit is only a number on surface. I'm sure if the same contracts were negotiated by India and China, China will definitely reject.

 

[Sanchez]

Excerpt:

The Pak-China Agreement in Goods was signed on November 24, 2006 and implemented from 1st July 2007. The agreement envisaged two phases. Under Phase-I, Pakistan reduced tariffs to zero duty on 2,423 tariff lines, whereas China reduced duty to zero on 2,681 tariff lines. The agreement in Services was signed on 21st February 2009 and the first phase got implemented from 2007-2012.

Post CPFTA, the bilateral trade went up from $4.777 billion in 2007-8 to $16.597 billion, with Pak exports and imports at $1.463 billion and $15.143 billion respectively.

China has FTA with Chile, New Zealand, Singapore, Peru, Costa Rica, and ASEAN etc. When Asean-China FTA went into effect in 2010, Pakistan registered preference erosion on tariff lines that amounted to 79 percent of its export volume to China. The main tariff lines include cotton yarn, garments, leather and fish.

China granted

• New Zealand 94% of tariff lines at zero % duty, with
  
  
• Malaysia 94% of tariff lines at zero % duty,
  
  
• Indonesia 93% of tariff lines at zero % duty,
  
  
• Thailand 93% of tariff lines at zero % duty,
  
  
• Philippines 93% of tariff lines at zero % duty and
  
  
• Pakistan only around 35% of the tariff lines at zero % duty.

Pakistan could only export in 253 tariff lines, where average export value was $500 or more, which is around 3.3% of the total tariff lines (7550). Pakistan mainly exported raw materials and intermediate products such as cotton yarn, woven fabric, grey fabric etc. Value added products were missing.

https://www-thenews-com-pk.cdn.ampproject.org/v/s/www.thenews.com.pk/amp/457939-china-to-extend-duty-free-access-on-313-more-tariff-lines?usqp=mq331AQCCAE=&amp_js_v=0.1#referrer=https://www.google.com&amp_tf=From %1$s&ampshare=https://www.thenews.com.pk/print/457939-china-to-extend-duty-free-access-on-313-more-tariff-lines

Tariff is a mean of a government to control the import and to protect domestic market. If you are not prepared with all tariff off or duty free your industry would be destroyed by cheap Chinese goods. It may not have been a Chinese policy but more likely Pakistan's.

We are a producer of almost everything with over capacity and higher efficiency. With duty free on trade Chinese goods would flush out majority of Pakistani goods out of market within short time. Why would we hold tariffs on Pakistani goods. Plus you don't have much to export to China. With less than 20b trade with Pak out of China's 4620b in 2018 you are accusing China taking advantage of Pakistan?

So the idea of CPEC is to improve Pakistan's environment for better buz development by building roads, rails and power supplies. With a better infrastructure you could attract more manufacturers and investment. And then you could export more to balance the trade deficit.

I read your comment on the news of potential Huawei investment in Pakistan. I think a Pak like you, with an Indian brain and American mindset, who is an anti-China dumbass in Pakistan. Hope there aren't many of your type in Pakistan!

@pakpride00090
"I hope they don't start spying on us via these gadgets."

 

[beijingwalker]

When we look at CPEC, we can clear see how tremendously difficult to make it work, we always know that, Pamir mountain chain is the roof of the world, it's incredibly difficult to build highways and railway cutting through those world highest mountains, it can be never cost effective.

Along the corridor, it goes through some of the most volatile regions in Pakistan, where rebels ravage a big swath of the lands and people's safety can not be guaranteed, Kashmir is disputed and future conflicts with India is forver a possibility. China Myanmar corridor is a much more viable and cost effective route business wise.

But we still decide to take on this massive task, that can be a lifeline for Pakistan, in case of emergency, supplies of all kinds can be fast delivered to Pakistan from China, even water and electricity can be diverted once those projects finish, that'll bring Pakistan a vast strategic rear. Pakistan needs this corridor more than China does.

 

[Pakhtoon yum]

Aren't we all? but we are talking advantage of them too

 

[YeBeWarned]

China is well within their rights to take Advantage of Pakistan if they want to , it should be on us not to make foolish decision or let anyone take our advantage, but i doubt that China is doing it cause Pakistan is probably the most closest strategic Ally of China in the region , a Stronger Pakistan is well within Chinese Interest .

 

[pakpride00090]

Tariff is a mean of a government to control the import and to protect domestic market. If you are not prepared with all tariff off or duty free your industry would be destroyed by cheap Chinese goods. It may not have been a Chinese policy but more likely Pakistan's.

We are a producer of almost everything with over capacity and higher efficiency. With duty free on trade Chinese goods would flush out majority of Pakistani goods out of market within short time. Why would we hold tariffs on Pakistani goods. Plus you don't have much to export to China. With less than 20b trade with Pak out of China's 4620b in 2018 you are accusing China taking advantage of Pakistan?

So the idea of CPEC is to improve Pakistan's environment for better buz development by building roads, rails and power supplies. With a better infrastructure you could attract more manufacturers and investment. And then you could export more to balance the trade deficit.

I read your comment on the news of potential Huawei investment in Pakistan. I think a Pak like you, with an Indian brain and American mindset, who is an anti-China dumbass in Pakistan. Hope there aren't many of your type in Pakistan!

@pakpride00090
"I hope they don't start spying on us via these gadgets."

I want to believe that there are no ulterior motives but I have to take information coming from different sources and understand it. I want to give China benefit of doubt but as a curious individual ,I just want to ask questions and understand things better. Believe me , I want China to be next super power . There must be a counter power to US and west. China's future is bright. I am just concerned about Pakistan. That is all.

https://www.wired.co.uk/article/china-hacking-cyber-spies-espionage

China is well within their rights to take Advantage of Pakistan if they want to , it should be on us not to make foolish decision or let anyone take our advantage, but i doubt that China is doing it cause Pakistan is probably the most closest strategic Ally of China in the region , a Stronger Pakistan is well within Chinese Interest .

I agree. I really don't think China's intention is to harm Pakistan but that trade deficit is horrible. That is what bothered me.

I read your comment on the news of potential Huawei investment in Pakistan. I think a Pak like you, with an Indian brain and American mindset, who is an anti-China dumbass in Pakistan. Hope there aren't many of your type in Pakistan!

@pakpride00090
"I hope they don't start spying on us via these gadgets."

Name calling now ? I question China and I am dumbass ?

 

[Sanchez]

"a Stronger Pakistan is well within Chinese Interest "，Absolutely！One may critisize the joint projects or ongoing cooperations but to question China's motive is disrespectful to the long term trusted relation between our two countries.

 

[Chinese-Dragon]

Name calling now ? I question China and I am dumbass ?

I think he meant to say Indian.

 

[pakpride00090]

"a Stronger Pakistan is well within Chinese Interest "，Absolutely！One may critisize the joint projects or ongoing cooperations but to question China's motive is disrespectful to the long term trusted relation between our two countries.

I agree.