Apparel exports to China rise

Reduced tariffs, cheap cotton and labour behind increase in exports

APP December 04, 2022


Pakistani men’s apparel exports to China reached $21.03 million, up more than 17%, in the first 10 months of 2022 as compared with the same period in 2021, according to the General Administration of Customs of the People’s Republic of China (GACC).

According to the GACC, men’s or boys’ apparel exports increased by 15.29% to $11.85 million, while last year in the same period, they were $10.28 million.

Data showed that exports of men’s or boys’ trousers and breeches of cotton went up by 16.42% and crossed $6.49 million in the first 10 months of 2022, whereas in the same period last year they were $5.58 million.

Bilateral trade in the textile sector has improved very fast. Women’s garment exports from Pakistan to China crossed $8.32 million, while home textiles crossed $6.74 million, showing an increase of 29% as compared with last year, when exports stood at $5.25 million.

Brizbane Group of Companies CEO and textile exporter Asif Muhammad Sulehri told China Economic Net that three major factors were behind the increasing exports of men’s clothing to China.

“Pakistan is a major producer of cotton crop and it is cheaper as compared to China so it has a benefit over them,” he said, adding that Pakistan had cheap labour compared to China, which was cost-effective for men’s apparel exports.

In January 2020, Pakistan and China entered into the second phase of China-Pakistan Free Trade Agreement (CPFTA-II), under which Beijing has eliminated tariffs on 313 priority tariff lines of Pakistan’s exports. “Out of the 313 high-priority products that can now be exported without duty payments, 130 are from the textile sector,” he pointed out.

Sulehri emphasised that the reduced tariffs on textile products, an expected surge in Chinese investment in Pakistan and the potential shift of production base from China to Pakistan may change the regional dynamics of textile trade.

“Under the CPFTA-II, many Pakistani textile products will enjoy duty-free access to China, which has extended similar tariff reductions to other trading partners.”

Tariffs on readymade cotton garments have been massively reduced, and men’s ensembles of cotton, Pakistan’s top world export, were traded with China at 17.5% (most-favoured nation rate), which was reduced to 12% under phase-I of FTA and has now dropped to 0% in phase-II.

“Pakistani government’s target is raising the country’s textile and clothing exports from $13.5 billion in 2018 to $25 billion by 2025. As China has the world’s largest textile industry in terms of both production and export, it is an inevitable trading partner for Pakistan to meet the 2025 target,” the Brizbane Group CEO elaborated.

Published in The Express Tribune, December 4th, 2022.

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