KARACHI: Free Trade Agreements (FTAs) are tilting the balance of trade in favour of China and are causing a surge in Pakistan’s trade deficit as various projects under China-Pakistan Economic Corridor (CPEC) progress.
This was stated by Federal Commerce Secretary Mohammad Younus Dagha while speaking at a two-day CPEC Summit organised by a private news outlet in collaboration with Ministry of Planning, Development and Reform and Pakistan-China Joint Chamber of Commerce and Industry.
He stressed the need to reduce the widening trade deficit which had started to increase after the initiation of CPEC. He was of the view that CPEC should help reduce the trade deficit with China and improve Pakistan’s balance of payment.
“Repayment of loans will increase our balance of payments deficit with China, however, if China sets up industries in Pakistan, it would help reduce the gap,” he added.
He further stressed on the need for China to invest in labour-intensive industries in Pakistan that have huge potential for growth and added that trade should be a high priority. On the other hand, China Harbour Engineering Company Chief Executive Wang Xioping said that industries in Pakistan need to upgrade their business model and move towards the latest technology to increase their export to Beijing.
He also talked about the importance of improved security and a friendly business environment in Pakistan to attract foreign investment. He stressed the importance of political stability and said that political uncertainty is a big factor that keeps foreign investors away from Pakistan.
Foreign companies and investors in Pakistan have in the past, expressed concerns over the lack of security and proper infrastructure that is needed for businesses to thrive in the country. He urged the Pakistani government and the CPEC planners to address these issues.