The PBC (Pakistan Business Council) has recently suggested a way to tackle with ever declining balance of payments through encouraging Chinese Textile exporters to take a route via Pakistan to export to US. It will help them to avoid US restriction while giving a boost to exports of Pakistan.
The US revisited its tariffs on Chinese products, including textile, and increased them from 10% to 25%. So far, the US has slapped tariffs on $250 billion worth of Chinese products threatened tariffs on $267 billion more.
The textiles have shown an average share of about 60% in national exports, according to Pakistan Economic Survey 2017-18. The sector has nearly one-fourth share in industrial value addition provides employment to about 40% of the industrial labour force. As the fourth largest cotton producer, Pakistan is well placed to join hands with Chinese Textile exporters.
The Chines Businessmen can enter into Joint ventures and can give boost to their output by using abundant raw materials and less costly trained work force to add up profits. A reduced freight cost and minimal shipment time can again be some other gains in the deal. It will will about a $2.5 billion edge to Pakistan according to safe estimations.
The US has already put a ban on Fabrics from China and fear is there that finished products and garments will be the next in the tail. China has to look for other suitable alternatives where Pakistan can be the top at list.
The China can even bring its fabrics to Pakistan to convert it into finished products at comparatively low cost as conversion needs a little time and stitching units in Pakistan are already work hungry. Those are just waiting to take up any such opportunity.
The US tariffs are bound to stay long. Pakistan offer a unique blend of trained workforce at lower cost that can prove super productive if Chines exporters invest in technology. It will be helping both the countries to gain profits.
China is the world’s largest textile producer having big domestic l demand. The Factories in Pakistan can also send back the finished products to China wit an advantage to increase in Pakistan’s export figures.
It can be a win win situation for both countries. Profit for both, loss to none.