Pakistan to receive loan from China by March 25

[beijingwalker]

Pakistan to receive loan from China by March 25
IANS | Islamabad Last Updated at March 22, 2019 11:15 IST
Pakistan's Finance Ministry has announced that the State Bank of Pakistan (SBP) will receive a $2.1 billion loan from China by March 25, the media reported on Friday.

Ministry spokesman Khaqan Najeeb Khan said on Thursday that "all procedural formalities" for the transfer of the loan being provided to Pakistan by the Chinese government have been completed, and "the funds will be deposited in the SBP account by Monday 25", Dawn news reported.

The loan facility, the spokesman said, "will further strengthen foreign exchange reserves and ensure balance of payment stability".

Following a meeting in Beijing between Chinese Premier Li Keqiang and Pakistan Prime Minister Imran Khan in November 2018, China had said that it was willing to offer assistance to Islamabad to help it weather its current fiscal woes but that the terms of such aid were still being discussed.

Shortly after, Chinese Consul General Long Dingbin had said during an interview that in order to "boost Pakistan's economy", Beijing is investing in multiple sectors and launching business ventures instead of providing loans.

Besides the loan package, the Chinese government has also offered Pakistan market access for three commodities - rice, sugar and yarn - worth $1 billion for the current calendar year, a Commerce Division official told Dawn on Thursday.

The official said rice shipments to China have already begun as part of the deal which was agreed during the Prime Minister's China visit.

Under the agreement, exporters have been allowed to ship 200,000 tonnes of rice and 300,000 tonnes of sugar - total value of $300 million - to China in the ongoing calendar year.

Moreover, the agreement also includes preferential market access for around $700 million worth of yarn but it seems highly unlikely that Pakistan will have adequate surplus quantity of yarn to export to China as cotton production remains lacklustre.

This agreement will also be extended to calendar 2020. Pakistan's exports to China are expected to reach $2.2 billion in the ongoing calendar year and $3.2 billion in the next, according to official figures.

https://www.business-standard.com/a...an-from-china-by-march-25-119032200229_1.html

 

[Peaceful Civilian]

Thank you china. It will help us to continue ongoing projects.

 

[beijingwalker]

Hopefully China and Pakistan can work together and find ways to boost Pakistan's manufacturing and exports quickly, once imports and exports can reach a balance, all will be plain sail after that.

 

[Ghareeb_Da_Baal]

2.1 billion has been deposited , right?

 

[Indus Pakistan]

Hopefully China and Pakistan can work together and find ways to boost Pakistan's manufacturing and exports quickly, once imports and exports can reach a balance, all will be plain sail after that.

To be honest I am disappointed with China over market access. The biggest way you could help Pakistan is not giving loans, not even building motorways but by giving market access. Just 5% preferantial access [to the detriment of Vietnam, India, Philipines etc] to the 1.5 billion people Chinese market would send Pakistan hurtling forward like a sprinter on steriods.

And for life of me I can't understand why China is slow with this. A prosperous Pakistan would mean a castrated India and a huge growing market of 200 million for Chinese products. Think of cars, computers, phones, military platforms Pakistan would buy from China? Win win for both.

 

[313ghazi]

To be honest I am disappointed with China over market access. The biggest way you could help Pakistan is not giving loans, not even building motorways but by giving market access. Just 5% preferantial access [to the detriment of Vietnam, India, Philipines etc] to the 1.5 billion people Chinese market would send Pakistan hurtling forward like a sprinter on steriods.

And for life of me I can't understand why China is slow with this. A prosperous Pakistan would mean a castrated India and a huge growing market of 200 million for Chinese products. Think of cars, computers, phones, military platforms Pakistan would buy from China? Win win for both.

We need the politicians on our ends to push harder for this sort of thing I reckon.

 

[Indus Pakistan]

Unfortunately Pakistan ruling elites have failed to build mutually beeficial linkage with out allies. Too much rhetoric and emotion but not enough substance. We seem to go for loan culture then preferantial market access. For instance we should have -

• agri/consumer good preferantial access to the huge Chinese market [to the detriment of Vietnam, Philipines etc]
• labour supply preferantial access to Saudia, UAE, GCC market [to the detriment of India]

Both could within 5 years bring in over $40 billion annually.

 

[beijingwalker]

To be honest I am disappointed with China over market access. The biggest way you could help Pakistan is not giving loans, not even building motorways but by giving market access. Just 5% preferantial access [to the detriment of Vietnam, India, Philipines etc] to the 1.5 billion people Chinese market would send Pakistan hurtling forward like a sprinter on steriods.

And for life of me I can't understand why China is slow with this. A prosperous Pakistan would mean a castrated India and a huge growing market of 200 million for Chinese products. Think of cars, computers, phones, military platforms Pakistan would buy from China? Win win for both.

If that's true then I agree, I don't know what's behind it and I hope things can be worked out to make Pakistan the most favored nation to access the Chinese market.

 

[Indus Pakistan]

Ps. India earns over $50 billion from Saudia, UAE, GCC from labour supply via annual remittances. Compare that to the puny $3 billion loan and oil deferment by KSA. It looks peanuts and involves us looking like beggers polising Saudi balls.

If that's true then I agree, I don't know what's behind it and I hope things can be worked out to make Pakistan the most favored nation to access the Chinese market.

It's not just with China. All our alliances lack economic substance and are too military profiled or over hyped. For instance Saudia Arabia abd our Muslim 'brothers'. India recieves nearly $40 billion from our Muslim brothers in GCC. We get less then $14 billion. In fact Saudia Arabia, UAE contribute more to the Indian economy then any other region. And Pakistan's here would be ready to fight to defend these people.

The facts -

Yes, Saudia Arabia, UAE are India's and by default Modi's -

"Cash Registers"

 

[Zhukov]

To be honest I am disappointed with China over market access. The biggest way you could help Pakistan is not giving loans, not even building motorways but by giving market access. Just 5% preferantial access [to the detriment of Vietnam, India, Philipines etc] to the 1.5 billion people Chinese market would send Pakistan hurtling forward like a sprinter on steriods.

And for life of me I can't understand why China is slow with this. A prosperous Pakistan would mean a castrated India and a huge growing market of 200 million for Chinese products. Think of cars, computers, phones, military platforms Pakistan would buy from China? Win win for both.

And even more Ironic is. Pakistan Exports to USA is USD 3.6 Billion, to UK USD 1.6 Billion
And to China USD 1.5 Billion. Hell Pakistan Exports to Afghanistan are USD 1.4 Billion Dollars

Here is a list of Countries that we have Massive Trade Deficits in 2017 (Mostly our So called Brotherly Nations)

1. China: -US$13.9 billion
   
2. United Arab Emirates: -$6.7 billion
3. Indonesia: -$2.4 billion
4. Saudi Arabia: -$2.4 billion
5. Japan: -$2.1 billion
6. Qatar: -$1.5 billion
7. Kuwait: -$1.4 billion
8. India: -$1.4 billion
9. Thailand: -$1.1 billion
10. Malaysia: -$971.9 million

And Here is a list of Countries that we have a Trade Surplus with

1. Afghanistan: US$975.2 million (Mostly our Sworn Enemies)
   
2. United Kingdom: $868.9 million
3. United States: $717.8 million
4. Spain: $695.7 million
5. Bangladesh: $574.5 million
6. Belgium: $334.9 million
7. Germany: $175 million
8. Sri Lanka: $165.6 million
9. Portugal: $154.3 million
10. Madagascar: $151.3 million

I dont know what to make of it.

 

[Boss Dragun]

And even more Ironic is. Pakistan Exports to USA is USD 3.6 Billion, to UK USD 1.6 Billion
And to China USD 1.5 Billion. Hell Pakistan Exports to Afghanistan are USD 1.4 Billion Dollars

Here is a list of Countries that we have Massive Trade Deficits in 2017 (Mostly our So called Brotherly Nations)

1. China: -US$13.9 billion
   
2. United Arab Emirates: -$6.7 billion
3. Indonesia: -$2.4 billion
4. Saudi Arabia: -$2.4 billion
5. Japan: -$2.1 billion
6. Qatar: -$1.5 billion
7. Kuwait: -$1.4 billion
8. India: -$1.4 billion
9. Thailand: -$1.1 billion
10. Malaysia: -$971.9 million

And Here is a list of Countries that we have a Trade Surplus with

1. Afghanistan: US$975.2 million (Mostly our Sworn Enemies)
   
2. United Kingdom: $868.9 million
3. United States: $717.8 million
4. Spain: $695.7 million
5. Bangladesh: $574.5 million
6. Belgium: $334.9 million
7. Germany: $175 million
8. Sri Lanka: $165.6 million
9. Portugal: $154.3 million
10. Madagascar: $151.3 million

I dont know what to make of it.

What?? What's with the rage, man? We've given you big market access already.

https://defence.pk/pdf/threads/pakistan-gets-a-big-news-from-indonesia.603460/#post-11193488

And If you're still taking big Loans from China, would that be our fault too?

 

[d00od00o]

To be honest I am disappointed with China over market access. The biggest way you could help Pakistan is not giving loans, not even building motorways but by giving market access. Just 5% preferantial access [to the detriment of Vietnam, India, Philipines etc] to the 1.5 billion people Chinese market would send Pakistan hurtling forward like a sprinter on steriods.

And for life of me I can't understand why China is slow with this. A prosperous Pakistan would mean a castrated India and a huge growing market of 200 million for Chinese products. Think of cars, computers, phones, military platforms Pakistan would buy from China? Win win for both.

Pakistan faces the same set of problems as India when it comes to exporting to China, the difference here is of course China is far more willing to give Pakistan access. The current difficulty is one of matching supply with demand. What does Pakistan produce that China would want in quantities that will not distort and dislocate the local Pakistani market? Pakistan certainly has agricultural products and other commodities to export, but given the underdeveloped infrastructure, these cannot be exported in quantities to measurably impact a country of 200 million people.

Pakistan is at a stage where China was in her early stages of economic reforms. First, infrastructure problems must be overcome to increase internal efficiency and scale, thereby producing more surpluses for export. This is where China's CPEC comes in. It aims to increase transport linkages to China and solve power shortages. These are two fundamental input factors that must be sorted out before Pakistan can move onto the next stage of development. With efficient logistical linkages to China and the world and with a stable electricity supply, it will then be easy for China to set up factories in Pakistan and help build an ecosystem around them, and the cost of transporting goods will also come down significantly, making them more competitive not just in China, but worldwide.

These infrastructure projects will take some time, even with China's help, but realistically, measurable improvements are not far off. Another two to three years before people in Pakistan will notice marked improvements in power and transport situations.

http://cpec.gov.pk/progress-update

 

[Indus Pakistan]

Pakistan faces the same set of problems as India when it comes to exporting to China, the difference here is of course China is far more willing to give Pakistan access. The current difficulty is one of matching supply with demand. What does Pakistan produce that China would want in quantities that will not distort and dislocate the local Pakistani market? Pakistan certainly has agricultural products and other commodities to export, but given the underdeveloped infrastructure, these cannot be exported in quantities to measurably impact a country of 200 million people.

Pakistan is at a stage where China was in her early stages of economic reforms. First, infrastructure problems must be overcome to increase internal efficiency and scale, thereby producing more surpluses for export. This is where China's CPEC comes in. It aims to increase transport linkages to China and solve power shortages. These are two fundamental input factors that must be sorted out before Pakistan can move onto the next stage of development. With efficient logistical linkages to China and the world and with a stable electricity supply, it will then be easy for China to set up factories in Pakistan and help build an ecosystem around them, and the cost of transporting goods will also come down significantly, making them more competitive not just in China, but worldwide.

These infrastructure projects will take some time, even with China's help, but realistically, measurable improvements are not far off. Another two to three years before people in Pakistan will notice marked improvements in power and transport situations.

http://cpec.gov.pk/progress-update

Thank you for that informative post. Makes sense.

 

[Ryan]

To be honest I am disappointed with China over market access. The biggest way you could help Pakistan is not giving loans, not even building motorways but by giving market access. Just 5% preferantial access [to the detriment of Vietnam, India, Philipines etc] to the 1.5 billion people Chinese market would send Pakistan hurtling forward like a sprinter on steriods.

And for life of me I can't understand why China is slow with this. A prosperous Pakistan would mean a castrated India and a huge growing market of 200 million for Chinese products. Think of cars, computers, phones, military platforms Pakistan would buy from China? Win win for both.

Overall Pakistan products should gain more market share than it is today. The reason why Pakistani products are not popular in Chinese market is more complicated than market access itself. Take cherry for example, cherry is a very expensive fruit in China and Pakistan produces very tasty cherry. However, Chile and Argentina snap the lion share of Chinese market of imported cherry. The experts from both Pakistan and China compare the difference between Pakistan and S American countries, conclude the following reasons why Pakistan cherry did not gain the popularity:
1. Climate-wise, S America is complimentary to China. When China is in the cold winter, S America is in the summer time. But Pakistan is mostly overlapping on the time of seasons, which means Pakistan will have to compete with Chinese indigenous cherry. Since cherry can grow in both GB and Baluchistan, there may be some wiggling room for Pakistan to supply the cherry in the slightly different time of Chinese cherry.
2. Transportation and packaging facility are not sufficient to support the cherry export in Baluchistan and GB. China should help with building the infrastructure and Pakistan should do field study in both China and the countries such as Chile and Argentina.
3. The Chinese market is new to Pakistani exporters. Pakistani companies have not become familiar of Chinese import regulations on fruits or agriculture products. Blame the bureaucracy on both China and Pakistan. Both should take proactive steps to facilitate the import of Pak's products.
4. The custom duty rates are different. FTA between China and Argentina/Chile is in more advanced stage. Hence, the import tax rate is lower on S American cherry. China and Pakistan should negotiate trade deals to strategically favor specific products to benefits of both sides. Even though China can make concessions on a few products, cherry in this case, the better way to deal with is through FTA for overall economy.

You can find the discussion in the video below(most of talk are in English):
http://cen.ce.cn/more/201903/18/t20190318_31700371.shtml
http://v.cen.ce.cn/video/2019-3-18/20193181552890345290_133.mp4

I am optimistic that Pakistan products will gain increasing market share in the future as we have witnessed some products like mango and rice have already made inroads in the Chinese market. On the other hand, I am also realistic that it will take time for Pakistani products to surmount the obstacles on exports and eventually gain a significant market share in China.