KARACHI: In the first half of the current fiscal year, a shift is visible in the trade pattern as Pakistan managed to increase its exports to most countries to its east, except for China – the country’s largest exporter.

The latest State Bank of Pakistan data shows a rise in exports to Eastern Asia, South Central Asia, South Eastern Asia and Western Asia. During July-December FY18, the exports to China increased to $787 million compared to $771m in FY17.

China now has the central position in Pakistan’s external trade and has the largest share in imports bill of the country. Imports from China have increased by $940m to $5,487m during the first six months of 2017-18.

Imports from India also grew during this period despite the border tensions between the two countries. Compared to $562m in the first six months of 2016-17, they reached $671m. The overall bill for FY17 was $1688m.

The detailed report showed that United States is still the single largest export destination for Pakistan as it exported $1908m during the six months while the country exported $3.683 billion in FY17. Given the deterioration of relations between the two countries, the exporters fear that a further worsening could hurt the trade ties between the two, suggesting an even bigger decline in exports.

Beijing maintains its status as Islamabad’s largest trading partner

The imports from United States slightly decreased to $843m compared to $853m in the same period last fiscal year.

The six-month trade balance sheet of the country shows that exports to Eastern Asia increased to $1150m compared to $1092m, South Central Asia $1444m versus $1238m, South Eastern Asia $554m against $480m and Western Asia $1169m from $999m.

Pakistan maintains good relations only with China among its neighbours but the trade with all but China increased. Afghanistan was the most attractive destination for Pakistani exports, valuing at $721m in 2017-18 compared to $529m in the same period of 2016-17. The total export bill to Afghanistan in the last fiscal year stood at $1128m.

Pakistan needs to improve its trade balance with India, Bangladesh and especially with China as it has been rapidly increasing each year and was more than the country’s exports in 2016-17. This huge trade deficit created a large gap in the balance of payments forcing the country to use its foreign exchange reserves to meet the current account deficit.

Previously the remittances sent by the overseas Pakistanis

were enough to meet the trade gap, however due to the changed economic conditions in Gulf, the payments remained almost stagnant this year, showing no signs of growth.

Published in Dawn, February 6th, 2018