October 19, 2020: Pakistan's cotton yarn exports to China have increased substantially due to its good quality, competitive price and high demand particularly after signing of the second phase of Free Trade Agreement (FTA) between the two countries, Cheng Xichong, visiting professor at Southwest University of Political Science and Law said on Monday.
Pakistan's cotton yarn exports to China have increased substantially, mainly due to the following four reasons. First, Pakistan's cotton yarn is of good quality and can be used as woven yarn or knitting yarn, especially combed yarn can be used to produce high-quality textiles.
Second, Pakistan's cotton yarn has price competitive advantage in the international market. Third, China is a textile giant, which needs to import a large quantity of high-quality cotton yarn.
Fourth and most importantly, China and Pakistan have signed the second phase Free Trade Agreement (FTA), which went into effect on December 1, 2019.
After the signing of the second phase FTA, the free trade rate between China and Pakistan has exceed 90%. As far as I know, Pakistan's cotton yarn exports to China enjoy zero-tariff treatment, he said in his article published in China Economic Net (CEN).
Cheng, also a senior fellow of the Charhar Institute said, Pakistan is not only the fourth largest cotton producer, but also an important textile producer in the world and its textile is the pillar of export-oriented industries. I remember that in the past, China and many other countries in the world dispatched relevant experts to Pakistan to study its cotton planting experience and technology.
To maintain the status of traditional cotton growing country and textile producing country, and to keep cotton planting at an advanced level, he opined, there are two points worthy of great attention:
First, the government should introduce good policies to make farmers have the consciousness and enthusiasm of planting cotton, and in particular, the government's policies should ensure that the farmers can make good money by planting cotton.
Second, the government should increase investment in scientific research, and strengthen scientific research and technological development for cotton planting. Only in this way, can the technology of cotton planting always be at the advanced level in the world. And only in this way, can Pakistan's exports of textile products and cotton yarn increase significantly.
He hoped Pakistan's export of cotton yarn and textiles would gradually form the scale, because economic theory suggests that when the export forms the scale, it will have the scale effect, further drive the development of cotton related industries and the development of the national economy of the whole country.
Pakistan's cotton yarn export to China surged in August. As data from China's General Administration of Customs shows, China imported 41.836 million US dollars of cotton yarn from Pakistan in August 2020, which was 4.36 times that of the same period last year, he said.