Did China‐Pakistan free trade agreement promote trade and development in Pakistan?

Syed H. Shah, Muhammad A. Kamal and Da L. Yu

International Journal of Finance & Economics, 2022, vol. 27, issue 3, 3459-3474

Abstract: China‐Pakistan Free Trade Agreement (CPFTA) increased trade between China and Pakistan, however, it also swelled Pakistan trade deficit with China. The empirical findings of this paper suggest that CPFTA positively contribute to Pakistan exports to China and her imports from China but the increase in Pakistan imports was far greater than Pakistan exports after CPFTA. Resultantly, Pakistan's trade deficit with China increased and Pakistan's growth hampered. Constant market share analysis suggests that a better understanding of the Chinese market, efficient utilization of tariff lines and focus on products of the comparative edge are important for Pakistan to benefit from CPFTA. Otherwise, CPFTA is counterproductive for Pakistan.

Date: 2022
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