BEIJING – US China trade war turns out to a blessing for Pakistan economy,media report has revealed.
Economic experts have hinted at emerging trade and business opportunitiesfor Pakistan, following the US-China trade war.
According to Nomura Securities’ strategists, Pakistan could potentially bethe third most fortunate beneficiary in this feud.
Recently, Adviser to Prime Minister Abdul Razzak Dawood had also stated,“The trade war between China and the United States is getting bigger andbigger by the day… and the demand for goods is not declining (in the USmarket). Pakistan needs to explore ways so that it can benefit from thiswar.”
These controversial claims; however, have certain assumptions attached tothem.
There are three possible ways that Pakistan can turn one of the greatesteconomic feuds into its favour and establish itself in the internationalmarket as a key player in world economics.
First of all, the high tariff on Chinese products in the US makes Pakistaniexports more competitive in the US market.
It had always been very difficult to compete with Chinese products in anyinternational market because of their low production costs due to cheaplabour and economies of scale of Chinese firms.
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However, the high tariffs have made these “cheap” Chinese products moreexpensive for the US buyers. Higher prices have led to a decrease indemand. This has left a gap that can be potentially filled by alternativesellers in the US market such as Pakistan.
Pakistan Business Council CEO Ehsan Malik said, “The China-US trade war hasput Pakistan in an advantageous position and we have become morecompetitive than China in some areas like textiles. It offers anopportunity for Pakistan to boost its exports to the United States as wellas revive the closed manufacturing capacity (mostly in Punjab).”
Engineering, textile, surgical tools, sportswear, plastics, footwear,fishery, packaging, pharma, kitchenware, furniture and jewellery are someof the types of Chinese products that have been subjected to the high UStariffs.
Out of these many Chinese products, Pakistan has the capacity to produce asubstantial amount of products as exports for the US market. Of course, theproduction of items from each of these categories will depend on theavailability of resources to Pakistani industries. For example, Pakistanhas a flourishing industry for sportswear products.
The tariff war between China and the US could lead to potential industrialgrowth and inflow of foreign investment into Pakistan.
