Key Points
- The United States remained Pakistan’s largest export destination at $1.172 billion.
- Pakistan’s exports to the US increased 10 per cent from $1.061 billion a year earlier.
- Exports to the European Union rose 4 per cent, while those to Asia increased 10 per cent.
ISLAMABAD: Pakistan’s exports to China rose sharply in the first two months of the 2026-27 financial year, increasing by 45 per cent to $478 million from $331 million a year earlier, according to data from the Trade Development Authority of Pakistan (TDAP).
The increase made China Pakistan’s second-largest export destination in July-August, although the United States retained the top position with exports of $1.172 billion. Pakistani exports to the US increased 10 per cent from $1.061 billion during the corresponding period last year.
The rise in exports to the neighbouring friendly country aligns with Pakistan’s efforts to expand its foreign markets and increase export earnings to support economic growth and strengthen its external finances.
China, a major trading partner
China is also a major trading partner and a key source of investment and financing for Pakistan.
Pakistan’s export performance improved across several major markets during the period. Exports to the European Union increased 4 per cent, while shipments to Asian markets rose 10 per cent, according to the TDAP data.
The stronger export performance is significant for Pakistan because it has historically run a large bilateral trade deficit, and Chinese imports substantially exceed Pakistani exports. Increasing sales to the Chinese market has therefore remained an important objective for Islamabad as it seeks to narrow external imbalances.
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The two countries have also sought to expand bilateral trade under the China-Pakistan Free Trade Agreement, while investment and industrial cooperation have grown under the China-Pakistan Economic Corridor.
The latest export figures provide an early indication of stronger Pakistani sales in the Chinese market at the start of the new financial year.
However, sustained growth will depend on demand, product competitiveness, market access and Pakistan’s ability to expand higher-value exports.
The latest increase reflects overall improvement in Pakistan’s export performance across several markets. Exports to the European Union rose 4 per cent to $2.062 billion during July-August. However, exports to Asian markets increased 10 per cent to $1.673 billion. Exports to the Americas rose 9 per cent to $1.346 billion.
Several individual markets also recorded substantial increases. Exports to Spain rose 22 per cent to $374 million, Germany 3 per cent to $291 million and the Netherlands 7 per cent to $283 million. Shipments to the United Arab Emirates increased 2 per cent to $282 million.
Pakistan’s government has identified export diversification, improved market access and greater competitiveness as important elements of its strategy to strengthen external finances.
The latest rise in exports to China suggests that Pakistani exporters are gaining greater sales in a market where the country has historically struggled to match the scale of Chinese imports.
The challenge, however, is to sustain the increase and expand exports beyond traditional low-value products.
A lasting reduction in the bilateral trade gap would require stronger growth in higher-value manufactured, agricultural, food and technology-related exports while maintaining access to the Chinese market.
Of late, Pakistan has also intensified efforts to increase value addition, particularly in agricultural produce, by improving processing, packaging, grading and quality standards before products reach international markets.
The strategy aims to move exporters beyond shipments of raw commodities and expand sales of processed food, fruits, vegetables, rice and other higher-value agricultural products in global markets.
