In recent years, under the initiative of the "the Belt and Road", trade exchanges between China and Pakistan have become increasingly close. As the second largest economy in South Asia after India and the sixth most populous country in the world (with a population of about 200 million), Pakistan's potential business opportunities should not be underestimated.
Overview of Pakistan market:
In the Islamic Republic of Pakistan, more than 96% of its residents believe in Islam (state religion), and a few believe in Christianity, Hinduism and Sikhism. It is a multi-ethnic Islamic country, in which Punjab accounts for 63%, Sindh accounts for 18%, Pashtun accounts for 11% and Baluchistan accounts for 4%. Urdu is the national language and English is the official language.
The capital of Pakistan is Islamabad. The time zone is located in the east 5 District, three hours later than Beijing time. Major cities include Karachi, Islamabad, Lahore, Rawalpindi, Peshawar, Faisalabad, muldan, Hyderabad, Sukkur, Kyrgyz, Quetta and Gwadar Port. Karachi and Qasim are two international ports, accounting for 95% of Pakistan's international freight volume.
Pakistan trading partners:
Top 10 trading partners: China, Saudi Arabia, UAE, Kuwait, United States, Japan, India, Malaysia, Germany and Indonesia;
Top 10 export destinations: the United States, the United Arab Emirates, Afghanistan, the United Kingdom, Germany, Italy, China, Spain, Hong Kong and the Netherlands;
Top 10 import source countries: Saudi Arabia, China, UAE, Kuwait, United States, Japan, India, Malaysia, Germany and Indonesia.
Pakistan's main exports:
Pakistan has few types of exportable goods in foreign trade and relatively concentrated export market.
The main export commodities are textiles, rice, leather and products, petroleum products and chemical products (including drugs). The above five categories of commodities account for more than 80% of Pakistan's total exports.
Other major export commodities include: cement, sporting goods, medical appliances, carpets, aquatic products, machinery, vehicles and parts, jewelry, fruits and vegetables, etc.
Pakistan's main imports:
The main imported commodities are: crude oil and petroleum products, machinery and means of transport, chemical products (plastics, drugs, etc.), food, animal and vegetable oils (mainly vegetable oil), steel products and coal. The above seven categories of commodities account for more than 80% of Pakistan's total imports.
Other major imported commodities include: steel scrap, metals and products, paper and paperboard, tires, iron ore, man-made fibers, etc.
Objectively speaking, Pakistan is still an agricultural country and is developing industrialization: more than half of the agricultural population and the largest exports are cotton, sugarcane and other agricultural products. To realize industrialization and modernization, we must have the support of mechanical products. In recent years, a large number of dying construction machinery enterprises have come back to life, and all products have returned to the state of short supply; All kinds of machine tools are sold out; A large number of manufacturers of industrial and agricultural equipment have entered the Pakistani market on a large scale. That is to say, all industrial products will have a market there. At present, as long as domestic enterprises can find customers here, no matter how popular products are.
In addition, Pakistan has 210 million people and 700 million pairs of shoes per year, so it needs to be imported. At present, Chinese shoes are cheap and of good quality, so 80% of shoes are imported from China. There is a great demand for Chinese shoes, not only the whole shoes, but also the parts and components of shoes, such as hardware on shoes, shoe buttons, soles, etc. Chinese funded enterprises may consider investing locally or entering into various forms of cooperation with local enterprises (acquisition, leasing, joint venture, etc.).
In the Pakistan market, word of mouth is very important. If the products used by customers are of good quality, they will be recommended to surrounding relatives and friends. The consumption concept of local people is that they hope to invest once and use it for a long time. Only by doing this can we lead the market. For example, the market is doing well, such as Haier electric appliance, Japanese automobile, etc. What we often hear is that Pakistani customers are very price sensitive and require products with low price, but the price is directly proportional to the quality. Blindly reducing prices will inevitably lead to the decline of quality and eventually be cleared out of the market.
Pakistan has long been known for impeachment in business negotiations. At the beginning, they cut the price by 40% as a meeting gift, which makes people feel that businessmen here seem willing to negotiate. However, we should never stop the negotiation in this country. The secret of business success is to have a patient conversation with them. When working in Pakistan, fanduo is slow and patient.
People in the management department are mostly people who grow up in the upper class society, and most of them study in Europe and America. The objects of business activities are mainly people above the position of manager. People below the position of manager are generally unable to give a positive answer. You can't use the telephone for negotiation. You must visit the other party in person and talk on a porch swing in order to make progress. What's more, words are groundless. Therefore, any agreement must be written. Because according to their custom, even when they get married, they have to sign a contract and collect a divorce deposit. In order to determine responsibility, it is important to leave a written evidence.
Trade between China and Pakistan:
Pakistan is an important country along the "the Belt and Road" and an important economic and trade partner of China in South Asia. The China Pakistan free trade agreement was signed in 2006 and came into effect in 2007. The total bilateral trade volume increased from US $5.25 billion in 2006 to US $20.09 billion in 2017. In order to further improve the level of trade liberalization and facilitation, the two sides launched the second stage of negotiations in 2011. The most recent process was the 10th meeting of the second phase negotiation of China Pakistan Free Trade Area held in Islamabad on April 2.
Due to high commercial costs, Pakistani products lack competitiveness in the Chinese market, while the Pakistani market is full of Chinese products. Pakistan has a huge trade deficit in trade with China. Pakistani industry complained that the local market had collapsed due to cheap Chinese products and high business costs in Pakistan.
Three problems of Chinese products entering the Pakistani Market:
At present, there are three main problems for Chinese products to enter the Pakistani market and occupy a certain market share:
1. The quality of Chinese products purchased is generally low due to the importers' insistence on lowering the price, which leads to the impression of low price and inferior quality in the market, and the market does not think that China can produce high-quality products. People in Pakistan generally believe that only European and American products can reach this level.
2. Most factories in China have the ability to produce high-quality products, but almost all of them are supplied to Europe, America and other developed countries. If a Pakistani goes to China to purchase products, the manufacturer will show him products with low price and low quality. This is a big misunderstanding. Chinese and Pakistani enterprises should know more about each other's current real situation.
3. For a product, there are too many sales links from the manufacturer to the supplier, such as manufacturers, Chinese traders, Pakistani agents, importers, wholesalers, etc. even if the profit added in each link is very small and reaches the final buyer, the price is still very expensive. For example, for a product, the price quoted by a Chinese manufacturer is $3.50, but it needs to pay $14 to buy it in the local market in Pakistan. This is caused by too many intermediate links.
In view of the above three points, the suggestion is that Chinese manufacturers or foreign trade companies should go out and have an in-depth understanding of the local market. If possible, they can set up local offices and remove intermediate links to increase profits. At present, low-cost and low-quality building materials products have filled the market. New designs, new materials and high-quality products are still a vacuum market with great potential. It is hoped that Chinese exporters can bring more high-quality products to the Pakistani market.
Customs in Pakistan:
In Pakistan, bright colors are generally popular, among which emerald green is the most popular. The national flag of Pakistan is composed of emerald green and white, decorated with five pointed stars and new moon (white symbolizes peace, green symbolizes prosperity, new moon represents progress and five pointed stars represent light).
In Pakistan, yellow can cause religious and some political disgust, because the robes (gowns) worn by Brahmin monks are yellow. Residents regard black as negative, and green, silver, gold and bright colors are welcomed by local people.
In Pakistan, the numbers considered ominous are 13 and 420.
As the vast majority of people believe in Islam, the living customs and daily life of Pakistani residents are deeply influenced by Islam.
Pakistanis are forbidden to eat pork. They like beef, mutton, chicken and duck. They like spicy food. They usually eat without knives, forks and chopsticks, but with their right hand after cleaning their hands (the left hand is considered unclean). They also absolutely prohibit drinking, regardless of folk weddings or official state banquets. When entertaining Pakistani guests, pay attention to avoid pork and alcoholic beverages.
When communicating with Pakistanis, do not pat each other on the shoulder and back with your hand. Even when meeting and hugging with close friends, do not be happy to hug and pat each other on the shoulder and back with your hand, because this is considered to be the action of police arresting prisoners in Pakistan.
When choosing gifts for Pakistani guests, pay attention to avoid giving handkerchiefs, dolls and other gifts.
|
