MORE TRADE OPPORTUNITIES: Visitors gather around a Pakistani jewel dealer's booth at the Sixth Kashi Central & South Asia Commodity Fair, Xinjiang Uygur Autonomous Region, on July 1, 2010 (JIN WEI)

Bilateral trade in is also expanding. There has been a significant turnaround in Chinese investors' sentiment during the past few years when over 70 new agreements were signed. The agreements totaled a contract value of more than $15 billion toward the water and power sector, project building activities and other areas, with a substantial proportion of services.

Challenges

Despite exponential growth in the past and continuing positive trends, global economies still face formidable challenges.

First of all, an appropriate policy framework and coordination is needed. The governments should give more support to the related initiatives. The heavy costs in developing the sector due to domestic and regional geographic spread is also a problem. It is essential to realize a liberalization of services and to remove the barriers to trade and investment in services.

In addition, the service industries should establish their brands at international level and cultivate more talents for modern services. It is essential to expand R&D activities for improvement, innovation and international cooperation.

Moreover, better access to foreign markets is required. It is necessary to increase the exposure of the labor market and sharing of market benefits of a mutually beneficial nature.

A pure international context means many important challenges, namely, cross-border supply, consumption abroad, issues relating to commercial presence in other countries through branches, subsidiaries and other modes, charges for use of intellectual properties, temporary movement of natural persons for supervising and other activities abroad, and the mechanism for proper measurement of trade in services.

What's more, we also need simultaneous strategies for statistical capacities that could facilitate better understanding of true scope of trade and measures for improvements. International and regional institutions are active in lending support for this purpose.

Prospect

Much of the trade between Pakistan and China, as well as other countries, is dependent on investment in this sector, especially in the industries that can contribute to establishing transportation and communication links.

Chinese enterprises are eager to strengthen the cooperation at all levels to push for a rapid and healthy development of these industries both at home and abroad, in light of the big volume of their global trade and the requirements of related services.

Necessary review of investment, trade and financial policy and other regimes, is thus immediately required to timely increase investment in the service industries. These regimes will ultimately increase the trade in the service sector and bolster capacity-building efforts.

Exposure of related agencies to the practical efforts being undertaken in China and countries in Central Asia for facilitating the multilateral investment and trade through hitherto ignored traditional transport routes is essential.

Pakistan's strategic location makes it an essential part of the solution to reach the high waters or the Indian Ocean in connection with transportation of goods, to and from the respective countries. The territory of Pakistan can also be used as a transit trade route for transportation of energy by building energy corridors through pipelines or other modes, as may be mutually beneficial.

Since Pakistan has direct access to international waters, oil refining facilities, shipyards, commercial shipping refueling and other related services can be provided.

Despite friendly relations between the two countries and the existence of substantial institutional mechanisms and numerous agreements including General Agreement on Trade in Services, trade between Pakistan and China is still modest. The scale of increase is not satisfactory par the true potential.

The potential areas for increased trade links include the financial, transportation, logistics, communications, information technology and retail. Substantial efforts are needed on the part of concerned agencies in Pakistan to facilitate the interested Chinese enterprises for further investment in the service sector and for increased participation in related activities.

The author is economic minister at the Embassy of Pakistan in Beijing