Chinese companies have recently increased their participation in barter trade between China and Pakistan.
Meanwhile, a number of enterprises from Pakistan participated in the in-auguration of the Cross-Border Barter Trade Alliance (CBTA) held in China, reflecting Pakistani entrepreneurs’ willingness to promote barter trade with their counterparts in China.
Barter trade refers to the exchange of goods or services by one party in return for goods and services from the other without the use of money.Â
CBTA Secretary General Wang Hui said that the platform of cross-border barter trade would address the deep-rooted problems of inadequate rules and regulations, mismatched information and further boost the barter trade among member enterprises.
Pakistan is enriched with natural resources like minerals, which can be bartered with the urgently needed merchandise from China. Pakistan and China have not aggressively pursued enhanced barter trade, though the volume of trade between the two countries was $17.49 billion in 2020.Â
Pakistan’s exports to China posted a massive increase of 70 per cent to reach $888 million in the first of quarter of 2021 from $526 million in the same period of the preceding year.
China, who is already barter trading with different countries is growing by the day and is also encouraging companies through regulatory frameworks to realise the growth potential of barter trade.
International Reciprocal Trade Association (IRTA), a global organisation for barter trade, indicated that an estimated 65 per cent to 80 per cent of 500 fortune enterprises have been engaged in a few forms of bartering, and 65 per cent of New York Stock Exchange’s listed corporations were also involved in barter trade.
The scope of barter trade between Islamabad and Beijing can be enhanced through the Belt and Road Initiative (BRI) as the BRI economies are progressively integrated with the rest of the world and with each other. The contribution of these economies in global exports has almost doubled in the last few years.
Through the BRI, the simple system of barter trade can be used to address the intricate complexities of the modern-day monetary systems, and overcome the impact of foreign exchange crisis and adverse balance of payments.
Good for us
Barter is only viable with very small entities, almost at village level. It certainly is not viable at State level especially when there is no mechanism for determining duties and taxes to be paid.