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Pakistani central bank cries foul over China trade deal
THE influx of inexpensive Chinese imports has hurt local Pakistani manufacturers of ceramics, electric machinery and equipments, chipboard, plywood, bicycles and a number of other small scale industries, said theState Bank of Pakistan (SBP).
The nation's central bank said that the influx of imported consumer goods, and non-availability of their local substitutes, presented enough evidence that local small medium enterprises (SMEs) were losing ground in the domestic market.
More troublesome to the bank is the fact that where Pakistan is weak, such a camera and electronics manufacturing, its exports are largely tariff free in China, reports the Lahore Daily Times.
But where it is strong, food, garments and footwear, Chinese tariffs are high.
For instance, textile industry is the main pillar of Pakistan's exports, said the bank. Since China itself is a major textile manufacturer, the trade volume could not be raised adequately even though Pakistan had been exporting low value-added products to China.
For instance, Pakistani dried fruits faced tariff rate of around 25 per cent, semi-milled or wholly milled rice/ broken rice (65 per cent), footwear with wood base / metal toe-cap (24 per cent), and men's or boys' garments of cotton (16 per cent), said the SBP.
In comparison, the items in which Pakistan lacks competitive advantage (such as, telephone sets, digital cameras, electrical machines, children toys) were included in the tariff elimination list of China.
Pakistan's exports to China increased from $400 million in FY05 to $1.7 billion in FY16. In comparison, imports from China grew exponentially - increased from $1.8 billion in FY05 to $13.9 billion during July-May FY17.
In fact, Pakistan's top imports came largely from China with the exception of oil, said the central bank. The rise in imports from China was mainly attributed to the surge in machinery and equipment in the backdrop of development activities in Pakistan.
As against imports, Pakistan's exports to China did not gain adequately from tariff concessions under the agreement, said the bank.
Although, the exports exhibited a significant growth, their volume remained small, said the State Bank of Pakistan.
The nation's central bank said that the influx of imported consumer goods, and non-availability of their local substitutes, presented enough evidence that local small medium enterprises (SMEs) were losing ground in the domestic market.
More troublesome to the bank is the fact that where Pakistan is weak, such a camera and electronics manufacturing, its exports are largely tariff free in China, reports the Lahore Daily Times.
But where it is strong, food, garments and footwear, Chinese tariffs are high.
For instance, textile industry is the main pillar of Pakistan's exports, said the bank. Since China itself is a major textile manufacturer, the trade volume could not be raised adequately even though Pakistan had been exporting low value-added products to China.
For instance, Pakistani dried fruits faced tariff rate of around 25 per cent, semi-milled or wholly milled rice/ broken rice (65 per cent), footwear with wood base / metal toe-cap (24 per cent), and men's or boys' garments of cotton (16 per cent), said the SBP.
In comparison, the items in which Pakistan lacks competitive advantage (such as, telephone sets, digital cameras, electrical machines, children toys) were included in the tariff elimination list of China.
Pakistan's exports to China increased from $400 million in FY05 to $1.7 billion in FY16. In comparison, imports from China grew exponentially - increased from $1.8 billion in FY05 to $13.9 billion during July-May FY17.
In fact, Pakistan's top imports came largely from China with the exception of oil, said the central bank. The rise in imports from China was mainly attributed to the surge in machinery and equipment in the backdrop of development activities in Pakistan.
As against imports, Pakistan's exports to China did not gain adequately from tariff concessions under the agreement, said the bank.
Although, the exports exhibited a significant growth, their volume remained small, said the State Bank of Pakistan.
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