46% of S Asia's $4.8-bn manufacturing export potential to China reaped

Forty-six per cent of it is currently realised ($2.2 billion); the unrealised potential of the sub-region to China comprises $1 billion attributed to existing frictions and $1.6 billion linked to growth projections for the coming years, the report, titled ‘Exporting to China: Opportunities For Developing Countries In The Belt And Road Initiative’.

The six developing countries in South Asia under the initiative have some unrealised manufacturing export potential to China, ranging from $11,000 in the Maldives to $1.4 billion in Bangladesh. More than 93 per cent of the unrealised manufacturing export potential to China in the sub-region is from Bangladesh and Pakistan.

A large share of the unrealised potential of Bangladesh is in apparel products and footwear. Considering that these goods benefit from least developed country (LDC) preferences, which Bangladesh will forego upon graduation in 2026, it is likely that much of the unrealised export potential will be lost.

In contrast, Pakistan’s opportunities for growth in manufacturing exports to China are more diversified, not only in apparel, but also in cotton fabric, leather products, medical instruments and others. If this potential were to be realized fully, the largest impact would be for Pakistani exports, which would increase by 4 per cent, the report noted.

For other countries in the region, the effect would be 1 per cent or less.

Exports from developing countries under the BRI could increase by up to $318 billion by 2027, if they move beyond primary goods to more manufactured products, the report noted.

Since the launch of the BRI a decade ago, exports from participating developing countries to China soared by 79 per cent. Yet almost half of the export potential from these countries to China remains unrealised.

At 65 per cent, or $206 billion, Asian countries account for the bulk of the unrealised export potential to China. All regions have substantial opportunities for growth: $111 billion for the Americas, $70 billion for Africa, $33 billion for Europe and $3 billion for the Pacific.

The ITC report was released during the China International Import Expo in Shanghai recently.

Fibre2Fashion News Desk (DS)