Chinese companies taking lead in Pakistani market.

Byline: Syed Fazl-E-Haider

Pakistan is China's second largest trading partner in south Asia, while China is Pakistan's second largest source of imports and seventh largest exporting market. From China, Pakistan imports, polyester and silk fabrics, polyester staple fabrics, fertilizers, tyres, mobile communication equipment, gas turbines, motorcycle parts, combustion piston engines, electrical appliances, iron and steel products, and various other forms of machinery. In fact China has multiplied its investment in Pakistan over the past one decade.

No sector of the country's economy has left where China has not made investments. The Pakistani market is flooded with Chinese brands. Whether it is telecom, IT, automobile or fashion industry Chinese brands have captured a sizeable consumer market. The demand for low-cost Chinese motorcycles, cars, water heaters and various home appliances has increased manifold in the local market over past one decade. In February 2017, Xiaomi, a Chinese brand and the world's third largest smart-phone maker made entry into the Pakistani market, a booming market of mobile consumers worth 40 millions.

China's most popular smartphone brand has partnered with a Pakistani company 'Smart Link Technologies' for distribution and after-sales service, according to officials of company. Xiaomi plans to launch popular smartphones Redmi Note 4 and the Redmi Note 4A, and bezel-less arge Mi Max in the Pakistani market. Vivo, another Chinese brand, plans to enter Pakistan this year. The Chinese company manufactures and designs smartphones, mobile accessories, online services and software. The software development by Vivo include its App Store, proprietary Android-based operating system called Funtouch OS and iManager. With entry of new smartphone players in the market, users will get huge variety of mobile phones. A new era of price-war will get start.

It was in November 2006 when China and Pakistan signed Free Trade Agreement (FTA), which came into effect on July1 2007. Under the FTA deal, the two sides agreed to implement the first phase of customs duty reduction from July 1, 2007. The five years tariff predictability provided a level-playing field to Chinese investors for making investment in various sectors of Pakistan's economy. Islamabad announced incentives for Chinese entrepreneurs investing in the Industrial Park through a Protocol under FTA.

Under FTA deal, the China began selling Pakistan more and more goods ranging...