Pak-China ties: Islamabad gets a slight upper hand in trade

[SBD-3]

But the thing is trade is 80% in favor of China. That's really bad. For all the talk by the Chinese here, the action is missing.

Facts:

Total trade: $10.6 billions

Pakistan exports: $2.12 billions

So obviously China's exports or Pakistan's imports equal 8.48 billion. That's massive. I can't believe that Pakistan thought it would benefit from China FTA. It seems more a political decision rather than economic one. I know, I know China is Pakistan's best friend. But you wouldn't kill yourself to cater to your friend, do you?

PS: The news article very cleverly avoided this outlook to make it sound as if this trade is all hunky dory, which it is not.

It happens gradually, Even India runs a trade deficit with China, so does the most of the world. But with increased identification of tradable items, the trade can be expanded. China earning a trade surplus with Pakistan is not, and should not be seen as a problem for Pakistan (and for India as well), if Chinese products offer the same quality at lesser price tag than an already external product, it saves up differential foreign exchange to be spent upon expensive products to be sourced from elsewhere.

 

[true_indian]

It happens gradually, Even India runs a trade deficit with China, so does the most of the world. But with increased identification of tradable items, the trade can be expanded. China earning a trade surplus with Pakistan is not, and should not be seen as a problem for Pakistan (and for India as well), if Chinese products offer the same quality at lesser price tag than an already external product, it saves up differential foreign exchange to be spent upon expensive products to be sourced from elsewhere.

I wonder why other countries hesitate to have FTA with China? In your case, then why not have an FTA with India and US, for that matter with the entire world? I can say, you are being very naive here. China being world's largest manufacturer, would white wash your industry making you entirely dependent on them. I understand you believe them to be your friend for ages and more to come, but still one has to be protective of its own industry. But whatever suits you, I am not against it. Its not my country after all.

 

[jetti]

Very nice.



We have the largest number of consumers in the world, anything Pakistan exports, we can buy it.

Be careful of what u wish

 

[SBD-3]

I wonder why other countries hesitate to have FTA with China? In your case, then why not have an FTA with India and US, for that matter with the entire world? I can say, you are being very naive here. China being world's largest manufacturer, would white wash your industry making you entirely dependent on them. I understand you believe them to be your friend for ages and more to come, but still one has to be protective of its own industry. But whatever suits you, I am not against it. Its not my country after all.

Because they fear their competitiveness be erroded, which in many cases is not the case as trade is a self balancing process. Do you know singapore earns a lot of revenue from reexporting the items after valueaddition, this is just an example. As far as the industry wipe-out is concerned do you want to take an inefficient industy imposing higher costs on consumers than a healthy compitition, unless there is no errosion of market power, the industry enterprenure will not start to think out of the box. It was the Chinese motorcycle industry which forced Honda and Suzuki duopoly to introduce new products while keeping their price tags in check. And as for last part, sure, if you wont show flexibility for others, then dont cry if other reply in kind to you

 

[true_indian]

Because they fear their competitiveness be erroded, which in many cases is not the case as trade is a self balancing process. Do you know singapore earns a lot of revenue from reexporting the items after valueaddition, this is just an example. As far as the industry wipe-out is concerned do you want to take an inefficient industy imposing higher costs on consumers than a healthy compitition, unless there is no errosion of market power, the industry enterprenure will not start to think out of the box. It was the Chinese motorcycle industry which forced Honda and Suzuki duopoly to introduce new products while keeping their price tags in check. And as for last part, sure, if you wont show flexibility for others, then dont cry if other reply in kind to you

Well then answer my point entirely. Why not have an FTA with the entire world? I am sure some or other country would make all these products even cheaper and may I say of better quality than China? If the decision is entirely economic one, then why China is accorded this special privilege? Why not for India? I am sure you have seen Indian bikes, they are exported to South America even, then why not to next door Pakistan? No matter how much you wanna cover up, the fact of the matter is FTA with China is an political decision. I am sure you'll learn our lesson in time.

 

[Splurgenxs]

Because they fear their competitiveness be erroded, which in many cases is not the case as trade is a self balancing process. Do you know singapore earns a lot of revenue from reexporting the items after valueaddition, this is just an example. As far as the industry wipe-out is concerned do you want to take an inefficient industy imposing higher costs on consumers than a healthy compitition, unless there is no errosion of market power, the industry enterprenure will not start to think out of the box. It was the Chinese motorcycle industry which forced Honda and Suzuki duopoly to introduce new products while keeping their price tags in check. And as for last part, sure, if you wont show flexibility for others, then dont cry if other reply in kind to you

Wow ...aprt from the direction less talk ,what i could make out is tht Pakistan is willing to take Chinese competition..??
LMAO last time i herd u were basing ur denial and abolishment of the MFn status to India on the very same rant.

At least u people need to get ur stories sorted out.No one will take u seriously if u urself do not know what u r actually after.

The talks about how China is undercutting the Pakistani market and developing a trade deficit of 8billion+ skewed in Chinas favor;
not how Pakistan is going to compete.

 

[SBD-3]

Well then answer my point entirely. Why not have an FTA with the entire world? I am sure some or other country would make all these products even cheaper and may I say of better quality than China? If the decision is entirely economic one, then why China is accorded this special privilege? Why not for India? I am sure you have seen Indian bikes, they are exported to South America even, then why not to next door Pakistan? No matter how much you wanna cover up, the fact of the matter is FTA with China is an political decision. I am sure you'll learn our lesson in time.

There are many dimensions of trade, related with distance, demography, financial integration and most importantly the political ties. The economic ties between Pakistan and India are very volatile and there is a severe lack of trust. Unless this problem is not solved, even if India is being granted MFN as splurgenx calls for, the trade wont grow, many people on the both sides of the boarder dont even know what is the theory behind MFN status awarded to another country (It serves as the floor tarrif rate under WTO, below which tarrif examption can not be awarded to anyone if a country deems to errect trade barriers. If India has allowed Pakistan MFN, it doesn't mean India has allowed it for the love of Pakistan, but rather benchmark the tarrif rates applied to Pakistan as the minimum to be charged to anyone else, in case India decides it). The current trade pattern between Pakistan and India is also contingent, which testifies the lack of strategic fit between the India and Pakistan. Lastly, Chinese financial sector has started to intergrate in Pakistan (ICBC currently operates in Pakistan) but none of the Indian bank is present in our country.

 

[SBD-3]

Wow ...aprt from the direction less talk ,what i could make out is tht Pakistan is willing to take Chinese competition..??
LMAO last time i herd u were basing ur denial and abolishment of the MFn status to India on the very same rant.

At least u people need to get ur stories sorted out.No one will take u seriously if u urself do not know what u r actually after.

The talks about how China is undercutting the Pakistani market and developing a trade deficit of 8billion+ skewed in Chinas favor;
not how Pakistan is going to compete.

I dont think you read my post, I said it in the end. If you cant show flexibility for the others, you should expect the same. I don't think it would be worthwhile to explain the importance of swap lines for trade as I feel it would be way over head for you

 

[true_indian]

There are many dimensions of trade, related with distance, demography, financial integration and most importantly the political ties. The economic ties between Pakistan and India are very volatile and there is a severe lack of trust. Unless this problem is not solved, even if India is being granted MFN as splurgenx calls for, the trade wont grow, many people on the both sides of the boarder dont even know what is the theory behind MFN status awarded to another country (It serves as the floor tarrif rate under WTO, below which tarrif examption can not be awarded to anyone if a country deems to errect trade barriers. If India has allowed Pakistan MFN, it doesn't mean India has allowed it for the love of Pakistan, but rather benchmark the tarrif rates applied to Pakistan as the minimum to be charged to anyone else, in case India decides it). The current trade pattern between Pakistan and India is also contingent, which testifies the lack of strategic fit between the India and Pakistan. Lastly, Chinese financial sector has started to intergrate in Pakistan (ICBC currently operates in Pakistan) but none of the Indian bank is present in our country.

You are not being honest here. Just as India is not given MFN for political reasons, according China with FTA has a political tone to it. No one in right mind would subscribe to your theory of benefiting from cheaper products. That's just BS.

PS: If not for India, why not accord FTA for US and west? Surely your country have many western based banks. Please no BS.

 

[SBD-3]

You are not being honest here. Just as India is not given MFN for political reasons, according China with FTA has a political tone to it. No one in right mind would subscribe to your theory of benefiting from cheaper products. That's just BS.

PS: If not for India, why not accord FTA for US and west? Surely your country have many western based banks. Please no BS.

I think you didn't get the point, I was not specific about India, I replied to you comment about why Pak-Ind trade is not flourishing. If you would have had a look at the thread about the Pakistan getting access to EU, they have not given Pakistan any financial or economic relaxations but rather allowed it duty free access to EU (in other words, allowed it a free entry). The main problem in implementing the FTA globally is that western countries are not willing to withdraw subsidies on agriculture in which developing countries specialize but are stressing that developing countries should remove tariff barriers on good imports in which western countries specialize. Thats why we see a wave of Bilateral FTAs and Pakistan is not shying away from them you can google about the FTAs signed by Pakistan but you dont seem to recognize that its the political volatility and trust deficit which needs to be bridged before we see a consistent pattern in trade. I don't know why do you guys get so offended?