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An Empirical Analysis of Pakistan's Agriculture Trade with China: Complementarity or Competition?

Author

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  • Unbreen Qayyum

    (Pakistan Institute of Development Economics, Islamabad.)

  • Neelum Nigar

    (Institute of Strategic Studies, Islamabad.)

Abstract

This paper examines the bilateral trade flows between Pakistan and china with particular focus on the trade of agricultural goods. It observes the trends and characteristics of China-Pakistan trade relations after both countries signed the China-Pakistan Free Trade Agreement in 2006. We use trade complementarity index, revealed comparative advantage index, trade integration index and export similarity index to empirically analyse trade complementarity and competition of thirty five agricultural products. Furthermore, we investigate the future prospects of agriculture sector by calculating indicative trade potentials of top agriculture products. The findings of this study show that there exist competition and complementarity for few products; however, complementarity is strong.. The indicative trade potentials show that Pakistan has higher exports potentials in products rice, seafood and cotton, which however have not reached up to their potentials due to various barrier and nonbarrier tariffs. Thus it is important that these challenges are addressed in order to increase the bilateral trade in future.

Suggested Citation

  • Unbreen Qayyum & Neelum Nigar, 2020. "An Empirical Analysis of Pakistan's Agriculture Trade with China: Complementarity or Competition?," PIDE-Working Papers 2020:23, Pakistan Institute of Development Economics.
    • Handle: RePEc:pid:wpaper:2020:23
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    References listed on IDEAS

    as
    1. Nazia Gul & Hafiz M. Yasin, 2011. "The Trade Potential of Pakistan: An Application of the Gravity Model," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 16(1), pages 23-62, Jan-Jun.
    2. Muhammad Saqib Irshad & Qi Xin & Zhang Hui & Hamza Arshad, 2018. "An empirical analysis of Pakistan’s bilateral trade and trade potential with China: A gravity model approach," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1504409-150, January.
    3. Muhammad Saqib Irsahd & Qi Xin, 2017. "Determinants of Exports Competitiveness: An Empirical Analysis through Revealed Comparative Advantage of External Sector of Pakistan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(6), pages 623-633, June.
    4. Muhammad Saqib Irsahd & Qi Xin, 2017. "Determinants of Exports Competitiveness: An Empirical Analysis through Revealed Comparative Advantage of External Sector of Pakistan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(6), pages 623-633.
    5. Muhammad Aamir Shahzad & Amar Razzaq & Muhammad Aslam & Muhammad Faisal Gulzar & Muhammad Asad ur Rehman Naseer & Nimra Nisar, 2019. "Opportunities for Agricultural Trade in the Context of the China-Pakistan Economic Corridor," Business and Economic Research, Macrothink Institute, vol. 9(1), pages 263-282, March.
    6. Unbreen Qayyum & Zafar Mahmood, 2013. "Inter-linkage between Foreign Direct Investment and Foreign Trade in Pakistan: Are they Complements or Substitute?," PIDE-Working Papers 2013:91, Pakistan Institute of Development Economics.
    7. Amita Batra & Zeba Khan, 2005. "Revealed comparative advantage: An analysis for India and China," Indian Council for Research on International Economic Relations, New Delhi Working Papers 168, Indian Council for Research on International Economic Relations, New Delhi, India.
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    Cited by:

    1. Vasilii Erokhin & Gao Tianming & Anna Ivolga, 2021. "Cross-Country Potentials and Advantages in Trade in Fish and Seafood Products in the RCEP Member States," Sustainability, MDPI, vol. 13(7), pages 1-40, March.
    2. Neelum Nigar & Unbreen Qayyum, 2021. "Special Economic Zones and The State of Pakistan�s Economy," PIDE Knowledge Brief 2021:27, Pakistan Institute of Development Economics.

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    Keywords

    Bilateral Trade; Agriculture sector; Trade Competition; Trade Complementarity; CPEC; CPFTA;
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