Three advantages of Pakistan’s textile exports

China Economic Net

Islamabad: Data released by the Pakistan Bureau of Statistics (PBS) on December 18 shows that Pakistan’s textile and clothing exports grew by 4.88 per cent year-on-year to $ 6.04 billion between July to November this financial year compared to $ 5.76 billion in the same period last financial year.

This means that Pakistan’s textile production and exports have largely recovered from the COVID-19 pandemic shock and are back on growth trajectory both in terms of the quantity and dollar value.

The Pakistani government has recently announced a lucrative energy package to help textile industry recuperate from the COVID-19 shock. The package does away with peak electricity rates, offers reduced tariffs on additional power consumption, and fixes power price at $ 0.07 a unit and gas tariff at $ 0.065 per MMBtu.

Cheng Xizhong, visiting professor at Southwest University of Political Science and Law, senior fellow of the Charhar Institute, former Defense Attache in South Asian countries.

The present government of Pakistan has taken special measures to gradually improve the business environment. In order to improve the sustainability of the development of the textile industry and have clear direction and objectives, All Pakistan Textile Mills Association (APTMA) is formulating a long-term development strategy for the textile industry. It plans to attract $ 7 billion of investment in the next five years, so as to increase the export volume of textiles and clothing by 100% to $ 26 billion.

Pakistan is the fourth largest cotton producer, the fourth largest textile producer and the twelfth largest textile exporter in the world. The textile industry is the most important pillar industry and the largest export industry in Pakistan. In recent years, Pakistan’s textile industry has been plagued by insecurity, high operating costs, declining competitiveness and sluggish demand in the international market. However, with the steady progress of the construction of the China-Pakistan Economic Corridor (CPEC), Pakistan’s textile industry and textile exports have a bright future.

According to my observation, Pakistan’s textile production and exports have the following main advantages.

First, the industrial chain is relatively complete. Pakistan is one of the few textile countries in the world with the production capacity of the whole industrial chain. At present, there are 1,221 cotton ginning mills, 442 spinning mills, 124 large-scale textile and garment factories and 425 small-scale textile and garment factories in Pakistan. The annual production capacity of cotton yarn is about 11.3 million spindles, with a total of 300,000 textile machines, 350,000 power looms and 18,000 knitting machines. The annual cotton cloth production capacity is 5.2 billion square meters, with a total of 700,000 industrial sewing machines. Pakistan’s annual cotton production is about 13 million bales, the annual output of man-made fiber is about 600,000 tons, and the annual output of terephthalic acid is 500,000 tons. All these provide a solid foundation for the development of the textile industry.

Second, the distribution of production and research is relatively concentrated. More than 60% of Pakistan’s textile enterprises are concentrated in Punjab and 30% in Sindh. Faisalabad in Punjab Province is a famous textile industrial city. It has a textile enterprise group composed of large, medium and small textile mills and workshops. Its textile exports account for 58% of Pakistan’s total textile exports. Pakistan’s main textile technology institutions and facilities are also concentrated in the city, including University of Agriculture Faisalabad (UAF), National Textile University (NTU), and cotton and agricultural research institutions.

Third, industry organizations have great influence. The main trade organizations of Pakistan textile industry include All Pakistan Textile Mills Association, All Pakistan Textile Processing Mills Association and Pakistan Knitwear Manufacturers Association. Due to the pillar position of the textile industry in Pakistan’s national economy, All Pakistan Textile Mills Association and its local branches play an important role in the development of Pakistan’s textile industry.

Both China and Pakistan are major textile producers and exporters, and there is a certain degree of competition between the two countries. However, the differences at stage of industrial development between the two countries also create a broad space for close cooperation.