Beijing – Pakistan and China agreed to focus cooperation in agriculture sector, industrial uplifts and trade integration under the next phase of economic corridor projects, the finance ministry said on Tuesday.
The ministry said the leaderships of the two countries decided that the next stage of China-Pakistan Economic Corridor (CPEC) will focus on industrial expansion, agricultural revitalisation and trade integration of the two economies.
“This phase will help the government of Pakistan in achieving its objectives of job creation and export growth,” the ministry said in a statement. Prime Minister Imran Khan concluded his four-day visit to China on 5 November, “which has moved the overall economic relationship between the two friendly countries to the next level,” the finance ministry said.
During the visit several avenues of mutually beneficial collaboration were identified and a number of memoranda of understanding were signed between the two sides in the sphere of economic cooperation. They included agreements in the area of socioeconomic development, poverty alleviation, agriculture, economic and technical cooperation, forestry, earth sciences, higher education and technology.
The two sides were satisfied that CPEC’s first stage, which comprised of infrastructure and energy sector improvements, has almost been completed.
CPEC, a framework of regional connectivity, aims at enhancement of geographical linkages of China, especially its underdeveloped province, and regional countries through road, rail and air transportation systems. China is the largest trade partner of Pakistan, but the latter has a huge trade deficit despite having a free trade agreement since 2007.
Total trade volume between the two countries significantly increased to $13.77 billion in the fiscal year of 2015/16 from four billion dollar in 2006/07. During the period, Pakistan’s exports grew to $1.69 billion from $575 million. Imports from China, however, witnessed a sharp growth to $12.1 billion from $3.5 billion. A business advocacy group, in a report, emphasised standardisation and transparency in data collection.
“There are great discrepancies between Pakistan’s and China’s reported data (particularly for Pakistan’s imports from China, where the discrepancy is $5.5 billion), due to possible under-invoicing, which would mean that severe revenue losses and tax evasion are taking place,” Pakistan Business Council said.
The two sides also held discussions on immediate market access for Pakistan’s exports as well as balance of payments support. The top Chinese leadership expressed their support to Pakistan’s external account and a task force was established by both sides to discuss the matters further.
“In this connection, a senior level delegation comprising of federal secretaries of finance, foreign affairs, planning and development and commerce along with the Governor State Bank of Pakistan will undertake a visit to China during the current week to work out the modalities with the Chinese authorities in their respective areas,” the finance ministry added.