Islamabad: In a strategic decision, China has decided to pull out Pakistan from its economic morass by making the China Pakistan Economic Corridor (CPEC) a demand-driven programme, a top official at the commerce ministry revealed.
To this end, it would extend significant unilateral trade concessions to Pakistan, to be announced in the presence of Prime Minister Imran Khan at the First China International Import Expo in Shanghai in early November, the official told The News, on condition of anonymity.
“So far, the CPEC was supply-driven and, to this effect, the top Chinese authorities have decided to make it based on Islamabad’s priorities and demands, so as to make the CPEC project more favourable towards Pakistan,” he said.
The official said the Chinese leadership in Beijing had realised that Pakistan was badly mired in debt, and record trade and current account deficits. If it was not bailed out in time, another major economy could misguide the authorities in Islamabad and blame Beijing for the economic mess. “Keeping this factor in mind, Beijing has decided to be part of the solution to the fiscal mayhem Pakistan is facing,” he said.
Moreover, China was determined to make the CPEC – the showcase project of the Belt and Road Initiative – a success story at any cost. This is why further investment on the CPEC project would be made keeping in view the priorities and demands of the Pakistan government, so as boost the industrial sector, the official said.
He said the anticipated unilateral Chinese trade concessions would help to reduce the bilateral trade deficit of more than $14 billion. Pakistan’s exports to China stood at about $2 billion in the financial year which end in June, whereas Chinese imports topped $16 billion.
“We have just received the positive vibes from Beijing that it is all set to extend the unilateral concessions which Pakistan has long been demanding,” the top commerce ministry official told The News. Pakistan has urgently sought tariff concessions from China for cotton yarn, rice, nuts, plastic waste, leather, trousers, and frozen fish and crabs.
Under the existing free trade agreement, the tariff concessions on items that Pakistan imported from China were less favourable than the concessions granted on the same items to the Association of Southeast Asian Nations.
Now, China has decided to compensate Pakistan. In addition to tariff concessions, China would regularly send buying missions to Pakistan with instructions to place more and bigger orders with Pakistan’s export-oriented businesses, he said.
To this effect, a 30-member buying mission from China was scheduled to reach Pakistan on October 8. “This will give ample time to both sides for the finalisation of the items for which the buying mission would place orders.”
“China has also decided to give a special status to Pakistan at all its import expo events, and would help introduce Pakistan products to eminent international buyers from across the globe,” the top commercial ministry official said.