Pakistan’s trade balance does not make it to the headlines often, but as the CPEC takes off, the inflow of Chinese goods will widen the gap further. How can we make sure that this is positive for the economy, that debt levels and trade deficits don’t rise?

Foreign investment is always good, because it generates local employment and a spill over of foreign funds and knowledge into other sectors. In this regard the CPEC is rightly something to celebrate- but the CPEC’s primary purpose is of tapping new markets for China. There is a difference between generating products locally, via FDI, and importing them from China, without barrier. The latter is something we haven’t focused on, as the Chinese Ambassador on Saturday reminded us.

Chinese Ambassador to Pakistan Sun Weidong said that Pakistan was not producing goods needed in China, thus the trade imbalance. However, the situation is expected to change when Chinese companies start producing such products. It seems that China will buy from the China funded sectors it establishes here. While this is a novel solution for an economy like Pakistan, it is far from optimal, and we are ourselves to blame for not being able to produce goods demanded by international markets. We have geo-political and geo-economic importance, but that can only be capitalised on for so long. Roads and infrastructure are essential, but they are also sunk costs and will only contribute to the GDP in the year they are built. The rest is up to what Pakistan does with these roads and factories. The Chinese factor pushing our GDP up is only here for a short while. For the Chinese, settling the energy crisis in Pakistan is a top priority, and that is one investment that is highly welcome.

The indicators are up, no doubt, and the Pakistan economy is blossoming with opportunity. This window of opportunity will only be open for the short term and the government must draw as many investors in as it can and as diverse as possible. The Chinese have been of great help to Pakistan, but to be only reliant on China will decrease Pakistan’s scope of economic independence.

The ultimate aim always has to be self-sufficiency and self-reliance. This is a long term goal, and it is not clear whether the Ministry of Finance can see this goal in its fog of short term growth spurts, enormous amounts of Chinese investment and the constant political scandals gipping the attention of policy makers and politicians.