Recent Experience and Future Prospects of Pakistan’s Trade with China

Musleh-ud Din (), Ijaz Ghani () and Usman Qadir ()
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Ijaz Ghani: Pakistan Institute of Development Economics, Islamabad, Pakistan.

Lahore Journal of Economics, 2009, vol. 14, issue Special Edition, 87-110

Abstract: This paper examines the prospects of expanding bilateral trade between Pakistan and China particularly in the context of the recently signed free trade agreement between the two countries. Using the augmented gravity model in the tradition of Rose (2004), the paper shows that there is significant potential for the expansion of bilateral trade between the two countries as a result of the free trade agreement. The paper also analyzes bilateral trade flows between the two countries in terms of a trade specialization index and the Grubel-Lloyd index of intra-industry trade. We show that bilateral trade between the two countries is heavily tilted in favor of China and that this situation may persist in the short term.

Keywords: Pakistan; bilateral trade; growth. (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (3)

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