ISLAMABAD: Pakistan on Thursday asked China to remove non-tariff barriers (NTBs) and create demand for its goods to make the multi-billion dollar China-Pakistan Economic Corri­dor (CPEC) equally successful for the two countries.

This institutional call came at the National Logistics Cell’s two-day CPEC Logistics Inter­national Forum from the Ministry of Commerce and Planning Commission.

On the occasion, the chief guest — Minister for Planning and Development Ahsan Iqbal — called for ending the ‘game of conspiracies’ and allowing Pakistan to grow in an environment of political stability.

The Chinese are in the process of relocating their industry which could go to the Far East or Africa if the environment is not conducive in Pakistan, he said.

Pseudo-intellectuals are spreading misconceptions that Chinese labour force is coming to Pakistan, he said. “Local labour would be utilised in CPEC projects,” he added.

“It is also incorrect that Pakistan has given tax rebates to the Chinese. In fact, the taxes were in some cases waived on loans repayable by Pakistan to reduce project costs and liabilities,” he explained. Most of the special economic zones would benefit Sindh and Balochistan, he added.

Former advisor to the prime minister on finance Dr Salman Shah suggested the creation of National Integrated Logistic Authority (NILA) for ‘handholding the private sector during the initial transition’ before private firms become capable of taking over the lead role.

Dr Shah said Pakistan should improve its financial governance, particularly relating to CPEC and reconsider the FTA with China. At the same time, he said the government should also start working on the development of East-West infrastructure in the country.

Mr Shah observed that the much talked about development of Western China, particularly Kashghar has not taken off so far, nor has Gwadar been developed and operationalised. In this scenario, it is difficult to understand the discussions on trucks and border management facilities and what these trucks would carry between Kashghar and Gwadar, he said.

He was of the view that Pakistan should take advantage of China’s economy like Turkey benefited from Europe and Mexico from the US.

For that to happen, Pakistan should aim to expand the national economy between $700 billion to $1 trillion, create at least 25 million jobs and secure a minimum of 5 per cent share in China’s foreign exports, he said.

This target should be at the centre of our focus if Pakistan wants to take true dividend of the CPEC through joint ventures and common production of goods in China and Pakistan by the same JV firms for its onward supply into global markets, he suggested.

Executive Director General of the Ministry Of Commerce and Planning Commission’s Head of CPEC Centre of Excellence Dr Safdar Sohail said seamless supply chain and smooth functioning of ports and border facilities under CPEC is very important. However, Pakistan should focus more on expanding export of services, he added.

At present, Pakistan has one of the highest trade deficits of its history following the FTA with China under which trade flow was heavily in favour of Beijing.

He said China had a narrative of international integration and shared development along the ‘One Belt, One Road’ and CPEC initiatives but trade integration was very limited. The Pak-China FTA was very shallow and even foreign direct investment envisaged balance of payment challenges, he added.

“China has not made any efforts to facilitate or create demand for Pakistani services and goods. Even its liberalisation did not suit Pakistan,” Dr Sohail noted. He said Pakistan should engage with the Chinese authorities to remove non-trade barriers to Pakistani products and services. For this, openness in China is very crucial, he stressed.

He called upon the Chinese authorities to meet its commitments for creation of additional demand in China for Pakistani exports. At the same time, he said, China should also remove NTBs for Pakistani firms and service operators.

The two countries, he said, should redirect cargo to Gwadar even if it is expensive initially.

He went on to suggest that Pakistan should create more space for public sector logistic operations and give trade, exports and transportation services due focus as part of CPEC.

Published in Dawn, July 14th, 2017