Overview of Bilateral Economic Relations
Pakistan and China share an all-weather strategic cooperative partnership that has matured, over 75 years of diplomatic relations, into one of the most substantive economic relationships in the region. Anchored by the China-Pakistan Economic Corridor (CPEC) and reinforced by sustained high-level engagement, this partnership today rests on two mutually reinforcing pillars: expanding trade and deepening investment cooperation.
The Embassy of Pakistan in Beijing, together with its Consulates General across China, works to advance a longstanding friendship into tangible commercial outcomes for businesses and stakeholders in both countries.
Trade
China has consistently remained Pakistan's largest trading partner. This relationship is underpinned by the China-Pakistan Free Trade Agreement (CPFTA), whose upgraded Phase II - fully implemented since January 2020 - grants zero-tariff treatment on 90% of China's tariff lines, covering roughly 95% of the value of Pakistani exports to China.
Since the Agreement's inception, Pakistan's exports to China have grown from USD 833 million in 2005 to USD 2,842 million by the end of 2025, an increase of over 240%. This growth has been complemented by an expanding architecture of Sanitary and Phytosanitary (SPS) protocols-16 signed until 2026-that continue to open the Chinese market to a wider range of Pakistani agricultural and food products.
Investment
Trade has increasingly been matched by investment. In 2025, China's direct investment in Pakistan reached USD 379.69 million, an increase of approximately 17% over 2023.
To direct this investment toward the areas of greatest mutual benefit, this Embassy has identified 21 priority sectors through inhouse data driven studies - spanning mining and refining, renewable energy, textiles, pharmaceuticals, electric vehicles, ICT, and food processing, among others - where Pakistan's comparative advantages align closely with Chinese industrial and technological strength.
This strategy is delivered through a growing series of B2B Investment Conferences convened and planned by this Embassy, which have become the principal mechanism for converting political goodwill into concrete commercial partnerships. So far, the Embassy has led efforts to plan and organize, together with its four Consulates in China as well as relevant Government Departments, six B2B Investment Conferences from June 2024 until July 2026. These Conferences witnessed signing of over 650 MOUs valuing over $22 billion and a conversion rate of 30% of these memorandums into contracts and agreements. This brings the total value of investment realized on ground for $7 billion.
From CPEC to CPEC 2.0: A Corridor Evolving with the Partnership
The China-Pakistan Economic Corridor (CPEC) remains the centerpiece of practical cooperation between the two countries, and its evolution mirrors the broader shift from infrastructure-building to commercially driven partnership.
CPEC Phase I (2014 onward) delivered the foundational infrastructure of the relationship: nearly USD 27 billion in investment; 8,904 MW of power generation capacity; 888 kilometres of highways, the development of Gwadar Port, and approximately 200,000 jobs created.
CPEC Phase-II (CPEC 2.0) is structured around Five Corridors - Growth, Innovation, Green Development, Livelihood, and Regional Connectivity - aligned with the Government of Pakistan's national 5Es framework of Exports, E-Pakistan, Energy, Environment, and Equity & Empowerment.
A defining feature of this phase is the shift from government-to-government infrastructure delivery toward business-to-business cooperation, with private capital, entrepreneurship and technology positioned as the principal drivers of the Corridor's next stage. In practice, this shifts the Corridor's focus toward people-centered, market-driven growth - prioritizing the expansion of Special Economic Zones, deepening of cooperation in agriculture and mining; the development of technology parks and innovation centers, and cooperation in artificial intelligence, digital governance, and advanced skills training. The Embassy has also integrated B2B investment mobilization efforts with harnessing of Technical and Vocational Training resources in China to prepare for a workforce that is ready to meet the anticipated requirements in 21 priority sectors.
Looking Ahead
As Pakistan and China mark 75 years of diplomatic relations, the Economic Relations partnership stands on a strong and well-documented foundation - preferential trade access under the CPFTA, an expanding pipeline of Chinese investment across 21 priority sectors, and a Corridor that has evolved from infrastructure to inclusive, market-driven cooperation under CPEC 2.0. The Embassy remains committed to building on this momentum and welcomes engagement from businesses and stakeholders in both countries at commercial@pakbj.org.
Joint Statements
In the recent joint statements issued during high-level visits between China and Pakistan, both countries have consistently reaffirmed their commitment to deepening commercial trade and investment cooperation.
During Pakistani President Asif Ali Zardari’s visit to China (February 4-8, 2025), both sides underscored the importance of expanding bilateral trade, promoting industrial cooperation, and enhancing investment flows. They agreed to further facilitate trade by optimizing the China-Pakistan Free Trade Agreement (CPFTA), encouraging Pakistani exports to China, and creating a more favorable business environment for investors. Special emphasis was placed on Pakistan’s potential in textiles, agriculture, and technology-driven industries, with China reaffirming its support for industrial upgrading and infrastructure development in Pakistan.
Similarly, during Chinese Premier Li Qiang’s visit to Pakistan (October 14-17, 2024), both sides emphasized the need for accelerating investment in Special Economic Zones (SEZs) under the China-Pakistan Economic Corridor (CPEC) framework. Chinese enterprises were encouraged to expand operations in Pakistan’s manufacturing, mining, and energy sectors, while Pakistan pledged to improve its investment climate through policy incentives and regulatory reforms. Both countries also agreed to promote cross-border e-commerce, digital trade, and financial sector cooperation to facilitate seamless business transactions.
Earlier, during Prime Minister Muhammad Shehbaz Sharif’s visit to China (June 4-8, 2024), trade and investment remained central to discussions. Both sides highlighted CPEC’s second phase, focusing on industrial cooperation, technological innovation, and energy investments. Notably, China expressed willingness to strengthen supply chain integration, boost joint ventures, and encourage Chinese enterprises to invest in Pakistan’s priority sectors, including automobile manufacturing, agricultural processing, and IT services. They also agreed to accelerate key projects such as ML-1 railway upgradation, Gwadar Port development, and energy transmission infrastructure, ensuring greater connectivity for trade expansion.
These joint commitments underscore the deepening economic integration between China and Pakistan, with both sides focused on enhancing bilateral trade volumes, facilitating large-scale investments, and strengthening industrial linkages for sustainable growth.
Overview of Bilateral Economic Relations
Pakistan and China share an all-weather strategic cooperative partnership that has matured, over 75 years of diplomatic relations, into one of the most substantive economic relationships in the region. Anchored by the China-Pakistan Economic Corridor (CPEC) and reinforced by sustained high-level engagement, this partnership today rests on two mutually reinforcing pillars: expanding trade and deepening investment cooperation.
The Embassy of Pakistan in Beijing, together with its Consulates General across China, works to advance a longstanding friendship into tangible commercial outcomes for businesses and stakeholders in both countries.
Trade
China has consistently remained Pakistan's largest trading partner. This relationship is underpinned by the China-Pakistan Free Trade Agreement (CPFTA), whose upgraded Phase II - fully implemented since January 2020 - grants zero-tariff treatment on 90% of China's tariff lines, covering roughly 95% of the value of Pakistani exports to China.
Since the Agreement's inception, Pakistan's exports to China have grown from USD 833 million in 2005 to USD 2,842 million by the end of 2025, an increase of over 240%. This growth has been complemented by an expanding architecture of Sanitary and Phytosanitary (SPS) protocols-16 signed until 2026-that continue to open the Chinese market to a wider range of Pakistani agricultural and food products.
Investment
Trade has increasingly been matched by investment. In 2025, China's direct investment in Pakistan reached USD 379.69 million, an increase of approximately 17% over 2023.
To direct this investment toward the areas of greatest mutual benefit, this Embassy has identified 21 priority sectors through inhouse data driven studies - spanning mining and refining, renewable energy, textiles, pharmaceuticals, electric vehicles, ICT, and food processing, among others - where Pakistan's comparative advantages align closely with Chinese industrial and technological strength.
This strategy is delivered through a growing series of B2B Investment Conferences convened and planned by this Embassy, which have become the principal mechanism for converting political goodwill into concrete commercial partnerships. So far, the Embassy has led efforts to plan and organize, together with its four Consulates in China as well as relevant Government Departments, six B2B Investment Conferences from June 2024 until July 2026. These Conferences witnessed signing of over 650 MOUs valuing over $22 billion and a conversion rate of 30% of these memorandums into contracts and agreements. This brings the total value of investment realized on ground for $7 billion.
From CPEC to CPEC 2.0: A Corridor Evolving with the Partnership
The China-Pakistan Economic Corridor (CPEC) remains the centerpiece of practical cooperation between the two countries, and its evolution mirrors the broader shift from infrastructure-building to commercially driven partnership.
CPEC Phase I (2014 onward) delivered the foundational infrastructure of the relationship: nearly USD 27 billion in investment; 8,904 MW of power generation capacity; 888 kilometres of highways, the development of Gwadar Port, and approximately 200,000 jobs created.
CPEC Phase-II (CPEC 2.0) is structured around Five Corridors - Growth, Innovation, Green Development, Livelihood, and Regional Connectivity - aligned with the Government of Pakistan's national 5Es framework of Exports, E-Pakistan, Energy, Environment, and Equity & Empowerment.
A defining feature of this phase is the shift from government-to-government infrastructure delivery toward business-to-business cooperation, with private capital, entrepreneurship and technology positioned as the principal drivers of the Corridor's next stage. In practice, this shifts the Corridor's focus toward people-centered, market-driven growth - prioritizing the expansion of Special Economic Zones, deepening of cooperation in agriculture and mining; the development of technology parks and innovation centers, and cooperation in artificial intelligence, digital governance, and advanced skills training. The Embassy has also integrated B2B investment mobilization efforts with harnessing of Technical and Vocational Training resources in China to prepare for a workforce that is ready to meet the anticipated requirements in 21 priority sectors.
Looking Ahead
As Pakistan and China mark 75 years of diplomatic relations, the Economic Relations partnership stands on a strong and well-documented foundation - preferential trade access under the CPFTA, an expanding pipeline of Chinese investment across 21 priority sectors, and a Corridor that has evolved from infrastructure to inclusive, market-driven cooperation under CPEC 2.0. The Embassy remains committed to building on this momentum and welcomes engagement from businesses and stakeholders in both countries at commercial@pakbj.org.
Joint Statements
In the recent joint statements issued during high-level visits between China and Pakistan, both countries have consistently reaffirmed their commitment to deepening commercial trade and investment cooperation.
During Pakistani President Asif Ali Zardari’s visit to China (February 4-8, 2025), both sides underscored the importance of expanding bilateral trade, promoting industrial cooperation, and enhancing investment flows. They agreed to further facilitate trade by optimizing the China-Pakistan Free Trade Agreement (CPFTA), encouraging Pakistani exports to China, and creating a more favorable business environment for investors. Special emphasis was placed on Pakistan’s potential in textiles, agriculture, and technology-driven industries, with China reaffirming its support for industrial upgrading and infrastructure development in Pakistan.
Similarly, during Chinese Premier Li Qiang’s visit to Pakistan (October 14-17, 2024), both sides emphasized the need for accelerating investment in Special Economic Zones (SEZs) under the China-Pakistan Economic Corridor (CPEC) framework. Chinese enterprises were encouraged to expand operations in Pakistan’s manufacturing, mining, and energy sectors, while Pakistan pledged to improve its investment climate through policy incentives and regulatory reforms. Both countries also agreed to promote cross-border e-commerce, digital trade, and financial sector cooperation to facilitate seamless business transactions.
Earlier, during Prime Minister Muhammad Shehbaz Sharif’s visit to China (June 4-8, 2024), trade and investment remained central to discussions. Both sides highlighted CPEC’s second phase, focusing on industrial cooperation, technological innovation, and energy investments. Notably, China expressed willingness to strengthen supply chain integration, boost joint ventures, and encourage Chinese enterprises to invest in Pakistan’s priority sectors, including automobile manufacturing, agricultural processing, and IT services. They also agreed to accelerate key projects such as ML-1 railway upgradation, Gwadar Port development, and energy transmission infrastructure, ensuring greater connectivity for trade expansion.
These joint commitments underscore the deepening economic integration between China and Pakistan, with both sides focused on enhancing bilateral trade volumes, facilitating large-scale investments, and strengthening industrial linkages for sustainable growth.
Overview of Bilateral Economic Relations
Pakistan and China share an all-weather strategic cooperative partnership that has matured, over 75 years of diplomatic relations, into one of the most substantive economic relationships in the region. Anchored by the China-Pakistan Economic Corridor (CPEC) and reinforced by sustained high-level engagement, this partnership today rests on two mutually reinforcing pillars: expanding trade and deepening investment cooperation.
The Embassy of Pakistan in Beijing, together with its Consulates General across China, works to advance a longstanding friendship into tangible commercial outcomes for businesses and stakeholders in both countries.
Trade
China has consistently remained Pakistan's largest trading partner. This relationship is underpinned by the China-Pakistan Free Trade Agreement (CPFTA), whose upgraded Phase II - fully implemented since January 2020 - grants zero-tariff treatment on 90% of China's tariff lines, covering roughly 95% of the value of Pakistani exports to China.
Since the Agreement's inception, Pakistan's exports to China have grown from USD 833 million in 2005 to USD 2,842 million by the end of 2025, an increase of over 240%. This growth has been complemented by an expanding architecture of Sanitary and Phytosanitary (SPS) protocols-16 signed until 2026-that continue to open the Chinese market to a wider range of Pakistani agricultural and food products.
Investment
Trade has increasingly been matched by investment. In 2025, China's direct investment in Pakistan reached USD 379.69 million, an increase of approximately 17% over 2023.
To direct this investment toward the areas of greatest mutual benefit, this Embassy has identified 21 priority sectors through inhouse data driven studies - spanning mining and refining, renewable energy, textiles, pharmaceuticals, electric vehicles, ICT, and food processing, among others - where Pakistan's comparative advantages align closely with Chinese industrial and technological strength.
This strategy is delivered through a growing series of B2B Investment Conferences convened and planned by this Embassy, which have become the principal mechanism for converting political goodwill into concrete commercial partnerships. So far, the Embassy has led efforts to plan and organize, together with its four Consulates in China as well as relevant Government Departments, six B2B Investment Conferences from June 2024 until July 2026. These Conferences witnessed signing of over 650 MOUs valuing over $22 billion and a conversion rate of 30% of these memorandums into contracts and agreements. This brings the total value of investment realized on ground for $7 billion.
From CPEC to CPEC 2.0: A Corridor Evolving with the Partnership
The China-Pakistan Economic Corridor (CPEC) remains the centerpiece of practical cooperation between the two countries, and its evolution mirrors the broader shift from infrastructure-building to commercially driven partnership.
CPEC Phase I (2014 onward) delivered the foundational infrastructure of the relationship: nearly USD 27 billion in investment; 8,904 MW of power generation capacity; 888 kilometres of highways, the development of Gwadar Port, and approximately 200,000 jobs created.
CPEC Phase-II (CPEC 2.0) is structured around Five Corridors - Growth, Innovation, Green Development, Livelihood, and Regional Connectivity - aligned with the Government of Pakistan's national 5Es framework of Exports, E-Pakistan, Energy, Environment, and Equity & Empowerment.
A defining feature of this phase is the shift from government-to-government infrastructure delivery toward business-to-business cooperation, with private capital, entrepreneurship and technology positioned as the principal drivers of the Corridor's next stage. In practice, this shifts the Corridor's focus toward people-centered, market-driven growth - prioritizing the expansion of Special Economic Zones, deepening of cooperation in agriculture and mining; the development of technology parks and innovation centers, and cooperation in artificial intelligence, digital governance, and advanced skills training. The Embassy has also integrated B2B investment mobilization efforts with harnessing of Technical and Vocational Training resources in China to prepare for a workforce that is ready to meet the anticipated requirements in 21 priority sectors.
Looking Ahead
As Pakistan and China mark 75 years of diplomatic relations, the Economic Relations partnership stands on a strong and well-documented foundation - preferential trade access under the CPFTA, an expanding pipeline of Chinese investment across 21 priority sectors, and a Corridor that has evolved from infrastructure to inclusive, market-driven cooperation under CPEC 2.0. The Embassy remains committed to building on this momentum and welcomes engagement from businesses and stakeholders in both countries at commercial@pakbj.org.
Joint Statements
In the recent joint statements issued during high-level visits between China and Pakistan, both countries have consistently reaffirmed their commitment to deepening commercial trade and investment cooperation.
During Pakistani President Asif Ali Zardari’s visit to China (February 4-8, 2025), both sides underscored the importance of expanding bilateral trade, promoting industrial cooperation, and enhancing investment flows. They agreed to further facilitate trade by optimizing the China-Pakistan Free Trade Agreement (CPFTA), encouraging Pakistani exports to China, and creating a more favorable business environment for investors. Special emphasis was placed on Pakistan’s potential in textiles, agriculture, and technology-driven industries, with China reaffirming its support for industrial upgrading and infrastructure development in Pakistan.
Similarly, during Chinese Premier Li Qiang’s visit to Pakistan (October 14-17, 2024), both sides emphasized the need for accelerating investment in Special Economic Zones (SEZs) under the China-Pakistan Economic Corridor (CPEC) framework. Chinese enterprises were encouraged to expand operations in Pakistan’s manufacturing, mining, and energy sectors, while Pakistan pledged to improve its investment climate through policy incentives and regulatory reforms. Both countries also agreed to promote cross-border e-commerce, digital trade, and financial sector cooperation to facilitate seamless business transactions.
Earlier, during Prime Minister Muhammad Shehbaz Sharif’s visit to China (June 4-8, 2024), trade and investment remained central to discussions. Both sides highlighted CPEC’s second phase, focusing on industrial cooperation, technological innovation, and energy investments. Notably, China expressed willingness to strengthen supply chain integration, boost joint ventures, and encourage Chinese enterprises to invest in Pakistan’s priority sectors, including automobile manufacturing, agricultural processing, and IT services. They also agreed to accelerate key projects such as ML-1 railway upgradation, Gwadar Port development, and energy transmission infrastructure, ensuring greater connectivity for trade expansion.
These joint commitments underscore the deepening economic integration between China and Pakistan, with both sides focused on enhancing bilateral trade volumes, facilitating large-scale investments, and strengthening industrial linkages for sustainable growth.
