Pakistani diplomat urges Pakistan to rethink its exports model with China

KARACHI: Pakistani exporters need to shift their focus on exporting value-added products to China from raw material exports to increase their nominal market share in the world’s biggest economy having the bilateral trade balance mostly in its favour, a foreign envoy said.

Consul General in Shanghai Hussain Haider told a webinar that the business and industrial community in Pakistan have to focus on the value-addition.

Raw materials and less value-added products are typically exported to China, although there is a huge potential for exporting value-added products, Haider said during the event cohosted by the Karachi Chamber of Commerce and Industry (KCCI) in collaboration with Pakistan’s consulate in Shanghai.

Haider said raw materials like copper and articles worth $551.2 million along with cotton yarn and fabrics valuing $352 million were the top two products exported to China last year, whereas exports of value-added products like knitted apparel and woven apparel stood at $48 million and $31.4 million, respectively, “which clearly indicates that Pakistani exporters were mostly tilted towards raw material exports”.

The envoy asked Pakistani exporters to explore the Yangtze River Delta (YRD) region in China, which is the most technologically advanced region with highest per capita income and approximately 20 percent contribution to the Chinese GDP.

“This is the region in which Pakistani exporters must look for more avenues of enhancing trade by focusing value addition while attention must also be given to digitalisation,” he said. “Digitalisation for both business-to-business and business-to-consumer has predominantly increased in the region.”

Haider said Pakistani consulate in Shanghai identified numerous sectors, including textiles and clothing, medical and surgical equipment, sports goods, exercise equipment and outdoor games equipment, and leather articles in which Pakistani manufacturers already have the expertise and “they will certainly be able to capture a sizeable share in the Chinese market”.

Shariq Vohra, president of KCCI reiterated the need of exploring the YRD region, which is one of the richest regions in China.

Vohra said the situation for Pakistani investors in China has never been attractive.

“A lot of Pakistanis have invested heavily in Europe and Gulf Cooperation Council but not in China for reasons including less know-how of Chinese culture, language barriers, non-tariff and tariff barriers,” he said. “We have never tried to enter into Chinese market where substantial investments have come from US, Japan, Russia and many other countries.”

KCCI president said business and industrial community of Pakistan must explore trade and investment opportunities in China through effective utilisation of technological advancements in China. Chinese government must also do away all the barriers hindering trade and investment cooperation between the two countries, he said.

Vohra said Alibaba.com offers very limited services through an agent to Pakistani businessmen and industrialists who are intending to use this huge platform for their buying and selling needs.

“They are unable to do so mainly due to lack of adequate payment solution,” he said. “This trade barrier requires special attention as payment solutions for ecommerce in Pakistan are still in its infancy which restricts many trade opportunities for Pakistan.”

KCCI president said Pakistan’s consulate in Shanghai should take up this matter with the management of Alibaba.com so that they could facilitate Pakistani business community by enhancing their operations for Pakistan along with provision of proper payment solutions.

“Although the State Bank has been assuring from time to time that a mechanism is being devised to facilitate e-payments via various digital payment service providers and it will be launched soon but this crucial mechanism has been pending since more than a decade now,” he said. “We hope that the State Bank will expedite the process and launch the mechanism for allowing digital payments which would be widely appreciated by the business community.”