Trade disparity to be taken up with Chinese premier

[Lankan Ranger]

Trade disparity to be taken up with Chinese premier

Pakistani officials have made up their mind to discuss with their Chinese counterparts ways to reduce a burgeoning bilateral trade deficit which crossed $3 billion last year in Beijing’s favour despite a free trade deal struck four years ago amid assurances that it would increase Pakistan’s exports to China.

According to official sources, Prime Minister Yousuf Raza Gilani is expected to seek access for Pakistani companies during his meeting with his Chinese counterpart Wen Jiabao, who is likely to sign deals worth billions of dollars during his visit to the country this week.

China holds a massive $3.256 billion trade surplus with Pakistan, which is steadily on the rise since the signing of the free trade agreement in Nov 2006.

Statistics compiled by the commerce ministry showed that bilateral trade had grown to $5.563 billion in 2009-10.

An agreement on services was signed in February last year, giving more market access to Chinese service providers on a preferential basis.

The sources said the fact that the pace of Pakistan’s exports was not increasing under the treaty had also been realised by Chinese officials. They recently urged Pakistani authorities to explore the Chinese import basket.

According to analysts, the Pakistan’s manufacturing sector lacked sophistication and understanding of the Chinese market.

They said the country would have to diversify the basket of exports to China because at present there was little to offer to the Chinese market.

The Chinese do not eat basmati rice, Pakistan’s main farm export, nor are they interested in importing textiles and garments which were produced in much better quality in their country, an official said.

Even surgical instruments, sports and leather goods could not penetrate the Chinese market because of local production, making the free trade agreement irrelevant from Pakistan’s point of view.

According to another official, only four per cent annual growth was recorded in exports to China under the agreement to about $1 billion in 2009-10, while the imports grew by an average 12 per cent to $4.41 billion.

The official said the factors that might have hampered the exports included lack of China-specific trade specialists, lack of preparation and guidance of the business community to explore market under the free trade agreement, language issues and lack of knowledge to exploit the segmentation in Chinese market from low to high value-added products.

Some elements in the Federal Board of Revenue go so far as to question the logic of having free trade with China which has not increased exports and cost the country a large amount of revenue as a result of massive cuts in duties on Chinese goods.

They said Pakistan’s main competitor in the international market, India, was constantly opposing free trade deal offers from China fearing that Beijing might only want to dump cheap manufactured goods on its booming economy.

Trade disparity to be taken up with Chinese premier | Business | DAWN.COM

 

[Chinese-Dragon]

We should find a way to encourage more Pakistani exports to China.

That will certainly reduce the deficit.

Selling products/services to the Chinese market can be tricky though, if you don't understand the local culture.

Anyway, I'm sure something will be worked out when Wen Jiabao arrives in Pakistan.

 

[TaimiKhan]

aahhhhh, before even the thread started, as usual Indians with their hate filled, sarcastic remarks have already derailed the thread.

Nice going.

 

[KALKI]

-----------------------

 

[SpArK]

aahhhhh, before even the thread started, as usual Indians with their hate filled, sarcastic remarks have already derailed the thread.

Nice going.

It was not hate speak or sarcastic speak from my part , rather pointing out the double speak on the same issue.

@ topic. trade disparities have to be sorted out for good by China for both India and Pakistan.

 

[KALKI]

It was not hate speak or sarcastic speak from my part , rather pointing out the double speak on the same issue.

Same here. While people like CD show their cunning and doublespeak while saying one thing in one thread and completely opposite thing in another thread and get away with it.

@ topic. trade disparities have to be sorted out for good by China for both India and Pakistan.

Why only India and Pakistan? Why not US or the rest of the world? China has a huge trade deficit with pretty much every nation on earth that it trades with.

 

[Brotherhood]

China targets foreign trade 'balancing' - People's Daily Online December 17, 2010

Against a backdrop of a high trade surplus and protectionist measures targeting China strengthening, China is committed to "balancing" foreign trade through "stabilizing" exports and "boosting" imports over the next five years, the minister of commerce said.

"There are uncertainties in global economic prospects (over the next five years), but China has no choice but to go ahead," Commerce Minister Chen Deming said.

The ministry's five-year plan will focus on "making foreign trade more balanced and improving the quality of goods for export by way of innovation", he said.

Chen's remarks are in line with the outcome of the recent three-day Central Economic Work Conference, in which the State Council pointed out that China will continue to stabilize and develop external demand, promote imports, and add value to exports.

Customs statistics show China's trade surplus hit $22.9 billion in November, the fifth month it registered above $20 billion this year, although the surplus fell from a peak of $28.7 billion in July and also shrank from October's $27.1 billion.

The United States has been threatening to punish China for what some politicians and commentators have called "an undervalued currency". The US Senate Foreign Relations Committee Chairman John Kerry said the US Congress was growing impatient with China over the currency issue and may take action next year.

Despite claims that the Chinese government has recently made stating that the trade surplus will gradually narrow, most economists believe it will still stay above $20 billion in the foreseeable future.

"On the one hand, we needn't worry too much about exports as external demand will be stable, but on the other hand, imports cannot increase quickly enough although they are rising," said Jinny Yan, an economist at Standard Chartered Bank.

China has been making headway in balancing trade over the last year but many developed nations have accused emerging markets, including China, of being responsible for global trade imbalances.

Chen pointed out that China has managed to stabilize exports by helping manufacturers and exporters shift their focus to emerging markets where the financial crisis was less severe than in developed countries.

In 2009, China overtook Germany to become the largest global exporter, according to the World Trade Organization. China's exports in 2009 came to $1.2 trillion, while Germany exported $1.12 trillion in goods and services. The US, with exports of $1.06 trillion, was third.

And since July, when China's trade surplus reached $28.7 billion, the highest since February 2009, the focus switched more to imports to narrow the surplus. In September, the government said it will vigorously increase imports of key products to cut the surplus.

"We will pay equal attention to rural and urban areas in terms of stimulating domestic consumption, but our priority will always be on safety, reliability and convenience of the products," Chen said.

Investing overseas

Besides "more balanced trade", the ministry is also "encouraging more qualified and capable" Chinese enterprises to invest overseas over the next five years. Chen believes this will play a significant role in "helping China enhance its competitiveness in the global market".

From January to October, China's outbound direct investment (ODI) in the non-financial sector reached $47.6 billion, 37 percent of which was realized through mergers and acquisitions.

Last year, China's ODI in the non-financial sector rose 6.5 percent year-on-year to $43.3 billion although foreign direct investment slumped worldwide in 2009.

"The next five years will probably be a historically crucial period for Chinese enterprise expecting to expand overseas," Chen said.

By Ding Qingfen, China Daily

 

[Chinese-Dragon]

Same here. While people like CD show their cunning and doublespeak while saying one thing in one thread and completely opposite thing in another thread and get away with it.

Not double speak at all, my position is the same.

If Pakistan (our friend) is worried about a trade deficit, we will try to solve it.

If India (our rival) is worried about a trade deficit, they can go bother someone else.

Quite simple really.

 

[SpArK]

Not double speak at all, my position is the same.

If Pakistan (our friend) is worried about a trade deficit, we will try to solve it.

If India (our rival) is worried about a trade deficit, they can go bother someone else.

Quite simple really.

But rival wasnt the exact term , your premier used while he was here..

Are you suggesting that he has lied and its a drama?

 

[KALKI]

Are you suggesting that he has lied and its a drama?

I, for one, would be very worried over CD's fate if he ever suggests anything like that, you know.

 

[Chinese-Dragon]

But rival wasnt the exact term , your premier used while he was here..

Are you suggesting that he has lied and its a drama?

Yeah what did he do about the stapled visas?

He came and signed some business deals that further improved our trade surplus with India, and he didn't even have to give up the stapled visas or anything else. What a good deal...

 

[Brotherhood]

Same here. While people like CD show their cunning and doublespeak while saying one thing in one thread and completely opposite thing in another thread and get away with it.



Why only India and Pakistan? Why not US or the rest of the world? China has a huge trade deficit with pretty much every nation on earth that it trades with.

I, for one, would be very worried over CD's fate if he ever suggests anything like that, you know.

Stop your childish personal attacks against CD, stop trolling and derailing the thread, read the "TOPIC" carefully and its not about"CD"

 

[Chinese-Dragon]

I, for one, would be very worried over CD's fate if he ever suggests anything like that, you know.

Thanks for the concern.

Tell you what, why don't you find every single one of my posts that contradicts the official line (and there are many) and fax it off to the CCP? Give them a good laugh.

 

[SpArK]

Yeah what did he do about the stapled visas?

He came and signed some business deals that further improved our trade surplus with India, and he didn't even have to give up the stapled visas or anything else. What a good deal...

he didnt say anything, only an assurance that it will be discussed and clarified. whats the relavance of it anyway on the discussed topic..

 

[KALKI]

Thanks for the concern.

Tell you what, why don't you find every single one of my posts that contradicts the official line (and there are many) and fax it off to the CCP? Give them a good laugh.

Oh my dear CD, I'm so worried about you. How can I ever do that?