1.Basic situation of Pakistan’s textile industry
1.1 、Pakistan’s most important pillar industry
Pakistan is an important global textile country. Pakistan’s cotton yarn and cotton cloth exports ranked among the world’s top. The number of textile workers is about 15 million, accounting for 40% of the manufacturing workforce, the credit scale accounts for 40% of the credit scale of the manufacturing industry in Pakistan, and the value added of the industry accounts for 8% of the gross domestic product. The textile industry is the most export-oriented industry in Pakistan, accounting for 60% of its total exports.
1.2 、The industrial chain is relatively complete
Pakistan is one of the few textile countries in the world that has the production capacity of the whole industry chain. According to the Ministry of Textile Industry, there are 1,221 cotton gins factories , 442 spinning mills, 124 large textile and garment factories and 425 small textile and garment factories; And the annual production capacity of cotton yarn is about 11.3 million spindles, with 300,000pcs spinning machines, 350,000pcs force looms and 18,000pcs knitting machines; the annual production capacity of cotton cloth is 5.2 billion square meters, with 700,000 industrialized sewing machines.
Pakistan is a large cotton-producing country, with an annual output of about 13 million bales (480 lbs/bale) of cotton, about 600,000 tons of man-made fibers and 500,000 tons of terephthalic acid, all of which provide a solid foundation for the development of the textile industry.
1.3、The distribution of production and research is relatively concentrated
More than 60% of Pakistan’s textile enterprises are concentrated in Punjab province, and 30% are distributed in Sindh province. Faisalabad in Punjab is a famous textile industrial city in Pakistan, with a cluster of textile enterprises consisting of large, medium and small textile factories and workshops, whose textile exports account for 58% of the total textile exports in Pakistan. Major textile technology institutions and facilities are also concentrated in the city, including Pakistan Agricultural University, Pakistan National Textile University, Pakistan Cotton Research Institute and Pakistan Agricultural Research Institute.
2. China and Pakistan’s textile industry cooperation prospects
Both China and Pakistan are large textile production and textile exporting countries, and there is a certain degree of competition between them, but the differences in the level and stage of industrial development of the two countries also create a broad space for cooperation with each other.
2.1. Close trade relations and obvious complementary product advantages
In the “China-Pakistan FTA”, except for chemical fiber products, most of Chinese textile exports to Pakistan can enjoy a 20%-50% reduction in tariffs or zero tariff treatment, and the majority of Pakistan’s textile exports to China also enjoy tariff reductions. The current trade structure of textile and related products between the two countries is characterized by obvious complementary advantages. Among them, cotton yarn and cotton fabric is the largest product category of Chinese imports from Pakistan, clothing exports are one of the important product categories of Chinese exports to Pakistan, has surpassed Japan and Germany to become the largest source of textile machinery imports from Pakistan.
2.2 Higher investment potential
At present, with the “One Belt, One Road” construction and international production capacity cooperation continues to promote, for China’s textile industry capital to create a good macro policy environment. And with the weakening of China’s manufacturing cost advantage, the urgent need for the textile industry to restructure the value chain through outward transfer, to create new advantages in international competition.
Pakistan, with its existing development base, will be one of the countries most capable of undertaking China’s textile industry capacity. Although Pakistan compared to Bangladesh and Vietnam and other countries failed to seize the opportunity, but the future potential to attract Chinese textile industry investment is greater. In addition, in recent years, China-Pakistan political and economic exchanges continue to warm up, Pakistan’s warm welcome to Chinese investment attitude.
With the construction of the China-Pakistan Economic Corridor gradually, Pakistan, including electricity supply and transportation infrastructure, including the business environment is expected to greatly improve, these will also provide a favorable environment for Chinese enterprises, including the textile industry, to invest in Pakistan.
2.3 Deep industry cooperation is expected, and highlights are expected to increase
Pakistan and its major trading partners in the textile industry cooperation often involves both trade and investment, but also cooperation and development. For example, the United States in recent years in Pakistan in small and medium-sized textile enterprises to implement the “knitted garment export support program” to finance small and medium-sized textile enterprises to build production bases, training staff, upgrade machinery and equipment and provide certification services. Relatively speaking, China-Pakistan cooperation in the field of textile development still needs to be improved.
In fact, over 30 years of accumulation, China’s textile industry has accumulated certain comparative advantages in brand building, enterprise management, capital operation, personnel training and industrial support.And these are just the shortcoming of Pakistan’s textile industry. The potential space of “combination of short and long” provides opportunities for deepening cooperation between the two countries’ textile industries.
