China will be the major export destination of Pakistan during financial 2011 with over 30 percent of the total exports which certainly need improvement in the scale of production.
Despite having gigantic imports worth $1 trillion by China exporters so far failed to grab that huge market reflected in the trade balance which is heavily tilting in favor of China.
The most significant initiatives taken by the present government to have a serious dialogue with China as well as Sri Lanka, Iran and Turkey to set aside trade in dollar terms as the transaction should take place either in local currencies.
The significant development on currency front has a great potential to multiply trade volume with China without adding pressure on foreign exchange reserves of Pakistan.
In the present scenario the policy of imposing sanctions against Iran by the United State has open a new door for regional currencies as recently Iran has expressed its willingness to accept payment of an oil deal worth $20 billion in rupee terms from India.
It may be mentioned that the key exports from Pakistan to China include: textiles and made-ups, leather, marine products, minerals, marble/granite, chemicals, and food items. Although the basket of export items is quite limited however there was a dire need to expand the production base of the same items to the economy of the scale to meet the import requirements of China.
One of the most exciting areas of cooperation between Pakistan and China is the flow of investment into Pakistan. Though at the moment China has made investments in various projects especially natural resources and infrastructure development to the tune of $15 billion but it does not translate the true spirit of the relations between the two countries as well as the size of the Chinese economy.
The trust worthy friends of China need to be encouraged in a large number of untapped economically potential areas such as agriculture, oil and gas exploration and development of infrastructure in Thar coal fields.
The financial analysts were of the view that China will overtake the United States as the largest economy as early as 2018 on purchasing power parity as the financial crisis accelerates the shift in economic power to emerging economies.
The Federal Ministry of Trade and Commerce as well as TDAP have strongly recommended that China and Pakistan need to work together to improve the efficacy of the Free Trade Agreement (FTA) through dismantling Non Tariff Barriers.
To achieve the target of enhancing exports to China the government is working on the projects focusing on Trade related workshops and seminars to be held both in China and Pakistan, in order to educate and create awareness amongst stakeholders about the trade potential.
Despite having ideal and close friendly bilateral relations on government to government level between the two countries, the barrier of Chinese language is the only irritant hampering growth in business relations between the private sectors of the two countries.
In order to bridge the gap, it is a food for thought for the policy makers at the helm of affairs that courses of Chinese language should be introduced at all business colleges and universities to pave the way for smooth communication between the business counters parts in both of the countries.