Pak, China target $8bn trade by 2008
From Javed Akhtar (APP)

BEIJING—Pakistan, China enjoys bright prospects to take their bilateral trade volume to around US dollar eight billion by the end of 2008, when tariff on most trading items would be reduced to zero, under the Early Harvest Programme (EHP).
By 8220 we are confident to achieve this target, since the two countries registered a rapid growth in their trade interactions in the recent years, said a senior Pakistani official here Tuesday while talking to APP.
According to Chinese Custom data, bilateral volume of trade is expected to touch $4 billion by the end of this year, since the growth rate, registered in seven months from January to August, 2005 was around 42 percent, as compared to the corresponding period.
The increase in the trade was amounted to about $600 million during this period.We are quite optimistic, expecting a big jump in trade volume taking it to $8 billion within next three years, since Pakistan starts exporting rice, mango, orange and some other food products to China from this year, the official said.
The EHP, signed in Islamabad April this year will be effective from January next, bringing zero percent duty on more than 50 import-export items, already identified by the two countries. It is the part of the Free Trade Agreement, likely to finalized soon. Second round of the negotiation to this effect is scheduled to take place in Islamabad next month.
The existing PTA on which China and Pakistan had reduced tariff on margin of preference i.e. a percentage of the normal tariff, has also been extended. This list consists of 1671 items on the Chinese side and 575 items in the list of Pakistan will become part of the EHP from January 1, 2006.
Leadership of the two countries recognized that their bilateral trade was nowhere near their potential and matched their exemplary diplomatic ties. They have now laid greater thrust on the development of mutually beneficial economic partnership.
Pakistan Embassy here in collaboration with Pakistan Export Bureau and Chinese foreign trade promotion’s organizations held a number of business conferences, seminars and meetings during the last three years, providing venues to their entrepreneurs enhance their interaction and take benefit of the growing trade prospects in their respective countries. According to the sources, Pakistan will be facing a major challenge to correct their balance of trade, which is currently heavily in favour of China. “ It would rely upon on the export of its agro-based products, which can easily find a big market in a country, having a population of 1.3 billion.
Particularly, the export of Pakistani rice to China is likely to be a breakthrough in trading food items. “The Pakistani long-grain rice can find a big market in China, since its quality is much better than the rice currently being imported from Thailand and Vietnam. China has purchased about 400,000 tonnes Thai rice last year. The Chinese Commerce Ministry has planned to import more rice in coming months due to decline in production and stocks. Rice remains a staple food for over 60 percent of China’s population and accounts for 40 percent of the country’s total cereals consumption.
Pakistan also estimates considerable increase in the export of mineral and textile products. China’s trade volume with Pakistan now accounts for about 20 per cent of China’s total trade with South Asia, which also includes India, Nepal, Bangladesh, Sri Lanka and Maldives. In economic terms, it would not be hard to obtain a win-win deal. The difference between Chinese and Pakistani goods in bilateral trade is relatively big and the number of their competing goods is relatively small,’’ Sun Shihai said in an interview with China Business Weekly. Currently, more than 70 per cent of Pakistan’s exports to China are cotton yarn or cotton fabric. The rest are leather products, minerals, chemicals and seafood. China’s main shipments to Pakistan include machinery equipment, chemicals, electronics and footware. According to the sources, Pakistan’s joining of Shanghai Cooperation Organization (SCO) has also opened new avenues of economic interaction with China and Central Asia, especially through the land route.