US China trade war turns out to a blessing for Pakistan economy

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US China trade war turns out to a blessing for Pakistan economy

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 opportunities for Pakistan, following the US-China trade war.

According to Nomura Securities’ strategists, Pakistan could potentially be the 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 and bigger by the day… and the demand for goods is not declining (in the US market). Pakistan needs to explore ways so that it can benefit from this war.”

These controversial claims; however, have certain assumptions attached to them.

There are three possible ways that Pakistan can turn one of the greatest economic feuds into its favour and establish itself in the international market as a key player in world economics.

First of all, the high tariff on Chinese products in the US makes Pakistani exports more competitive in the US market.

It had always been very difficult to compete with Chinese products in any international market because of their low production costs due to cheap labour and economies of scale of Chinese firms.

However, the high tariffs have made these “cheap” Chinese products more expensive for the US buyers. Higher prices have led to a decrease in demand. This has left a gap that can be potentially filled by alternative sellers in the US market such as Pakistan.

Pakistan Business Council CEO Ehsan Malik said, “The China-US trade war has put Pakistan in an advantageous position and we have become more competitive than China in some areas like textiles. It offers an opportunity for Pakistan to boost its exports to the United States as well as revive the closed manufacturing capacity (mostly in Punjab).”

Engineering, textile, surgical tools, sportswear, plastics, footwear, fishery, packaging, pharma, kitchenware, furniture and jewellery are some of the types of Chinese products that have been subjected to the high US tariffs.

Out of these many Chinese products, Pakistan has the capacity to produce a substantial amount of products as exports for the US market. Of course, the production of items from each of these categories will depend on the availability of resources to Pakistani industries. For example, Pakistan has a flourishing industry for sportswear products.

The tariff war between China and the US could lead to potential industrial growth and inflow of foreign investment into Pakistan.