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The Opportunities and Pitfalls of Pakistan’s Trade with China and Other Neighbors

Author

Listed:
  • Naved Hamid

    (Director of the Centre for Research in Economics and Business at the Lahore School of Economics, Pakistan.)

  • Sarah Hayat

    (Research Assistant, Centre for Research in Economics and Business at the Lahore School of Economics, Pakistan.)

Abstract

While Pakistani trade with India could give a boost to Pakistan’s economy, there are other neighbors with whom trade could be equally important. We look at this aspect of regional trade and show that promoting trade with the rest of Pakistan’s neighbors could have a significant positive impact on the country’s growth. We show that Pakistan’s trade with these neighbors has grown rapidly over the last 10 years and at present they constitute the largest market for Pakistani exports. We also explain how these exports are not only important in terms of absolute value, they have also contributed to the development of new export products. The overall impact on Pakistan’s economy could well be to raise the trend growth rate for the next decade or so by 2 to 3 percentage points above the historical trend growth rate of 5 percent per annum.

Suggested Citation

  • Naved Hamid & Sarah Hayat, 2012. "The Opportunities and Pitfalls of Pakistan’s Trade with China and Other Neighbors," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 17(Special E), pages 271-292, September.
    • Handle: RePEc:lje:journl:v:17:y:2012:i:sp:p:271-292
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    References listed on IDEAS

    as
    1. Kumagai, Satoru, 2008. "A journey through the secret history of the Flying Geese Model," IDE Discussion Papers 158, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    2. Barry Eichengreen & Yeongseop Rhee & Hui Tong, 2007. "China and the Exports of Other Asian Countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(2), pages 201-226, July.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Naved Hamid & Maha Khan, 2015. "Pakistan: A Case of Premature Deindustrialization?," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 20(Special E), pages 107-141, September.
    2. Navid Khan & Riaz Ahmad & Ke Xing, 2018. "China Pakistan Economic Corridor (CPEC): Regional Development, Employment Opportunities and Policy Challenges," Global Economics Review, Humanity Only, vol. 3(1), pages 12-23, June.
    3. Navid Khan & Riaz Ahmad & Ke Xing, 2018. "China Pakistan Economic Corridor (CPEC): Regional Development, Employment Opportunities and Policy Challenges," Global Political Review, Humanity Only, vol. 3(1), pages 12-23, June.

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    More about this item

    Keywords

    Exports; regional trade; Pakistan; China; UAE; Central Asia; Afghanistan;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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