Pakistan is facing problems in FTA with China. China has reportedly refused to give more concessions to Pakistan on the existing free trade agreement. Pakistan wants China to grant deeper market access for 35 to 40 tariff lines of Pakistan's prime export interest in the first step to make the FTA mutually beneficial and to promote acceptability of the second phase.

Pakistan has also shared concerns over insufficient utilisation of the concessions given by China to Pakistan and the competition faced by local industries due to cheap imports from China. Pakistan’s major exports to China in 2015 were rice, cotton yarn and woven fabric while imports were electronics, stainless steel items, polyester, yarn, fabric and tires. Pakistan has a trade deficit of more than nine billion dollars with China while China has a trade deficit of more than 14 billion dollars.

The FTA covers more than 6,700 tariff lines at eight-digit tariff code under the harmonised system. The two countries have discussed tariff reduction modalities for the second phase besides the electronic data interchange, services and investment, sanitary and phyto-sanitary and technical barriers to trade measures.

Currently Pakistan has reduced duty to zero per cent on 35 per cent of the products while China has reciprocated by reducing duties to zero per cent on 40 per cent of the products.