Story perspectives

China-Pakistan Trade Jumps 45% Amid Tariff Cuts

5/22/2026

Summary

China Powers Pakistan

Chinese trade delivered $2.38 billion in FY 2024-25 exports, up 44.79 % in Q1.
Phase II of the China-Pakistan Free Trade Agreement, enacted in 2020, removed tariffs on 313 product lines and liberalised 75 % of tariffs.
Chinese firms accounted for 53.2 % of foreign direct investment between July 2025 and February 2026.
Pakistan’s external debt was $131 billion in mid-2025, with Chinese-linked debt about 22 % at 2.5-3.5 % interest.

Summary

Sharif Meets China

Prime Minister Shehbaz Sharif will meet President Xi Jinping and Premier Li Qiang in Beijing to discuss bilateral ties and regional peace.
Sharif reiterated Pakistan’s “forever” support for the one-China policy, praised Xi as a visionary leader, and welcomed more Chinese private firms.
Analyst Qian Feng said the Zhejiang stop signals people-to-people exchange.
China pledged “just and balanced” support for Pakistan’s mediation in the US-Iran conflict and for Middle-East peace.

Summary

China Fuels Pakistan

China gave $57.36 million in 2022 flood relief, prompting Pakistan to promise protection for Chinese nationals.
Pakistan sent 1,000 agriculture graduates to Chinese universities for training, who work in R&D centres.
The China-Pakistan Economic Corridor (CPEC) added over 8,000 MW to the grid, ending 18-hour load-shedding.
Prime Minister Shehbaz Sharif cited counter-terrorism cooperation as a partnership pillar.
By late 2025, Rashakai SEZ created tens of thousands of jobs in textiles, manufacturing and IT.

History

Historical Context

China’s use of strategic partnerships since the 1990s, formalized in the 2013 Belt-and-Road Initiative, set the stage for the 2005 China-Pakistan Strategic Cooperation Agreement signed by Premier Wen Jiabao and President Musharraf. Building on that framework, the 2020 Phase II free-trade pact deepened ties, part of a network that by the mid-2010s linked China with over 80 nations.

1 of 4

China Powers Pakistan

Chinese trade delivered $2.38 billion in FY 2024-25 exports, up 44.79 % in Q1.
Phase II of the China-Pakistan Free Trade Agreement, enacted in 2020, removed tariffs on 313 product lines and liberalised 75 % of tariffs.
Chinese firms accounted for 53.2 % of foreign direct investment between July 2025 and February 2026.
Pakistan’s external debt was $131 billion in mid-2025, with Chinese-linked debt about 22 % at 2.5-3.5 % interest.

1 / 4