The FTA is considered to be a win-win situation by both countries. While Pakistan will get access to the Chinese market, China will sell Pakistan more goods, ranging from household items to textile plants and high-technology items as well as receiving inexpensive raw materials and easy access to Pakistani ports for exporting Chinese goods to other countries at reduced freight rates.
China has been focusing on building strategic transport links between Pakistanís northern areas and its remote western regions, including Xinjiang, and the number of road links between Pakistan and China has risen to eight after an agreement signed between Islamabad and Beijing last year. China and Pakistan also opened four new passenger and cargo road links. Two cargo routes run from Kashi in southern Xinjiang autonomous region to Pakistanís ports of Karachi, Qasim and Gwadar. The passenger lines run from Kashi and Taxkorgan, also in southern Xinjiang, to Pakistanís northern city of Gilgit and Sost Pass respectively.
Islamabad and Beijing also plan to extend and expand the existing Karakoram highway, which links Islamabad to Kasghar, via the Khunjrab Pass. Pakistan believes that the Preferential Buyers Credit of more than $300 million from China will play a significant role in the Karakoram Highway (KKH) project, which will act as a link to strengthen the Sino-Pak trade relationship. Through the upgrade of KKH, the western regions of China and the Central Asian republics will be able not only to access the Pakistani market, but also to reach out to Middle East, Africa, South Asia, Europe, etc through Gwadar Port in southwestern Pakistan. China and Pakistan are also planning to link the KKH to Gwadar, Balochistan, through the Chinese-aided Gwadar-Dalbandin railway, which extends up to Rawalpindi.
Chinese products have already penetrated deep into the Pakistani market, where the private sector is naturally wary of China because its cheap products have already driven many local manufacturers out of the domestic market. Take the example of the Pakistani bicycle industry, which has virtually collapsed under the mounting pressure of lower-priced Chinese bikes. A few years ago, Pakistan was not only making but also exporting bicycles to Africa, Afghanistan and Iran. Today most of the Pakistani bicycle manufacturers have shut down because of increased production costs, and some former bike makers have become bulk importers of Chinese two-wheelers.
Some independent economists say an FTA is beneficial for both signatories because a weaker country is always given some advantages to protect its industries from adverse impacts. But in Pakistanís case the status of China as the supplier of many of its consumer goods will be boosted. China will see its export business and trade surplus further expand as Pakistan has less to offer it and will be importing even more from the rising economic giant.