Pakistan China begin trade through Khunjerab Pass. The announcement came as a good news from the Chinese Embassy in Islamabad. While announcing the beginning of trade again, official account of Embassy stated, “Good News: Khunjerab Pass will be opened from April onwards, starting the annual operation period of this year. Look forward to having more goods and trade go across the border.”

Read the official announcement from Chinese Embassy.

Interestingly, China is Pakistan’s largest trading partner. Pakistan’s exports to China has signficantly increased in the past few years. For instance, Pakistan’s exports of seafood were 42% more than the previous year. Similarly, Pakistan’s exports of rice were 53% more than the previous year. More impressive is the fact that Pakistan’s exports to China increased by 20% more than the entire year of 2018.

Another interesting factor includes a continuous growth of trade between Pakistan and China. Pakistan’s exports to China saw an increase of 11% every year for the last 26 years. Pakistan’s exports to China were $215 million in 1995. However, Pakistani exports have touched a volume of $3.25 billion by 2021.

Both the countries have already entered into a free trade agreement. The deal is termed as China-Pakistan Free Trade Agreement (CPFTA).

Another fact remains that Pakistan China trade relations are more towards goods. There is no trade of services between the two countries. For instance, Pakistan’s exports to China in 2021 were Non-Retail Pure Cotton Yarn, Refined Copper and Rice. The total volume of Pakistani exports to China in 2021 was #3.25 billion.

Some other facts include that China is 2nd biggest export destination for Pakistan. However, the full potential of this partnership is yet to be seen. The Trade Development Authority of Pakistan prepared a Pakistan China Wrap for Trade Activities in 2022. It shows the sectors of Value-added & high-quality textile & leather products, Food products, Handicrafts, Sports goods and ICT services to have great potential for increasing trade with China. However, it shows poor transportation links as a key challenge in trade relationship between Pakistan and China.

More from TNF: Political turmoil and the economy of Pakistan.

The opening of Khunjerab Pass will ultimately mitigate this huge challenge for Pakistani businesses who intend to export their products to China.