For the first time in Pakistan’s history, the country signed an agreement with an overseas chamber of commerce—China’s—to help strengthen its ailing textile sector.
The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) and the China Chamber of Commerce for Import and Export of Textile and Apparel (CCCT) signed a memorandum of understanding (MoU) to promote cooperation between the two countries’ textile and apparel companies.
Pakistan’s exports have been on a downward trend. The country’s total exports in U.S. dollar terms for the July 2015 – February 2016 period fell 13.29% to $13.8 billion with readymade garments making up the most of the output, followed by cotton cloth and knitwear.
The new MoU is expected to aid Pakistan in climbing out of its export slump.
Under the agreement, according to The Express Tribune, Pakistan will provide Chinese companies with invitation letters and a delegation from CCCT will attend Pakistan’s Texpo fair this Apr. 7-10. PRGMEA will also arrange factory visits and business meetings with its members for the delegation.
Pakistan is keen to capitalize on CCCT’s more than 12,000 member companies operating in 34 provinces across the country engaged in apparel sector practices from producing textile fibers to importing and exporting yarns, fabrics, clothing, home and industrial textiles and accessories.
Chinese companies will set up factories in the planned China-Pakistan Economic Corridor economic zones through joint ventures. Both countries have agreed to help each other with business development for small and medium-sized firms, provide technical assistance and find viable partners for trade and joint ventures.
PRGMEA chief coordinator Ijaz Khokhar said China is well positioned to take advantage of Pakistan’s economic potential and its strategic location, the Tribune reported. And now that manufacturers with factories in mainland China are looking elsewhere for production bases amid rising costs, the partnership appears well-timed.