By Ayesha Mudassar
ISLAMABAD, Jan. 27 (INP-WealthPk): A number of enterprises from Pakistan participated in the inauguration of the Cross-border Barter trade Alliance (CBTA) held in China last September, reflecting Pakistani entrepreneurs’ willingness to promote barter trade with their counterparts in China.
Barter refers to the exchange of goods or services by one party in return for goods and services from the other without the use of money.
Speaking at the inauguration of CBTA, its secretary general Wang Hui said that the platform of cross-border barter trade would address the deep-rooted problems of inadequate rules and regulations, mismatched information, and further boost the barter trade among member enterprises and regions, including China and Pakistan.
Pakistan is enriched with natural resources like minerals, which can be bartered with the urgently needed merchandise from China.
Pakistan and China have not aggressively pursued and enhanced barter trade, though the volume of trade between the two countries was $17.49 billion in 2020, and Pakistan’s exports to China posted a massive increase of 70% to reach $888 million in the first of quarter of 2021 from $526 million in the same period of the preceding year.
China, whose barter trading with different countries is growing by the day, is also encouraging companies through regulatory frameworks to realise the growth potential of barter trade.
As per the estimates by the General Administration of Customs, China’s total volume of bartering transactions exceeded $130 billion in 2020. The net barter terms of trade index (2000=100) of China in 2019 was 85.74. The net barter terms of trade index (2000=100) of Pakistan in 2019 was 54.09.
International Reciprocal Trade Association (IRTA), a global organisation for barter trade, indicated that an estimated 65% to 80% of 500 fortune enterprises have been engaged in a few forms of bartering, and 65% of New York Stock Exchange’s listed corporations were also involved in barter trade.
Pakistan and Iran are already engaged in barter trade as Tehran exports steel, liquefied petroleum gas, and petrochemical products to Pakistan in return for meat, rice and other agricultural products. The two countries also agreed this month to start barter trade in rice.
The scope of barter trade between Islamabad and Beijing can be enhanced through the Belt and Road Initiative (BRI) as the BRI economies are progressively integrated with the rest of the world and with each other. The contribution of these economies in global exports has almost doubled in the last few years.
Through the BRI, the simple system of barter trade can be used to address the intricate complexities of the modern-day monetary systems, and overcome the impact of foreign exchange crisis and adverse balance of payments.