Introduction:

Pakistan is a growing nation and like every other developing country it has its moments when it
prospers or declines as an economy.
In the recent years Pakistan has faced high imbalances like global economic and health crisis, global
climate change, increase in commodity prices, infestation of war and terror.

In addition it has faced many internal problems as well such as low investments, rising poverty
and unemployment, domestic indebtedness and high deficit. Looking at the economy of Pakistan as a
whole with respect to macroeconomics we can analyze or interpret the trends and fluctuations of
Pakistan’s economic standpoint by looking at its GDP, Inflation, and Unemployment rate.

GDP:

Definition: Measures the monetary value of goods and services.

GDP of Pakistan:
Gross Domestic Product of Pakistan in the recent years has seen the most extreme recession after the
global Covid-19 pandemic in 2020-2021. Pakistan as always struggled to get stability in its economic
sector.
GDP of China:
China is one of the fastest growing economy of the world, it has continued to progress after its
independence in 1949, as compared to Pakistan who is still a struggling nation even after getting
independence in 1947.

PAKISTAN & CHINA BORDERS

 PAKISTAN AND CHINA COMPARRISON OF GDP ANNUALLY

Pakistan
China

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Reason for Trends in Pakistan and Chinas GDP:

According to the above graph let’s discuss the change in trends of Pakistan and China.

 China and Pakistan have entered into a comprehensive plan of “economic corridor” between the
two nations. It will serve as driver for connectivity between South Asia and East Asia (2013-
2014)
 Major success of the outgoing fiscal year includes: picking up economic growth, inflation
contained at lowest level since 2003, improvement in tax collection, reduction in fiscal deficit,
worker remittances touches new height, foreign exchange reserves significantly increased and
stock market created new history (2014-2015).
For China the government embraced slower economic growth, referring to it as the “new normal”
and acknowledging the need for China to embrace a new growth model that relies less on fixed
investment and exporting, and more on private consumption, services, and innovation to drive
economic growth
 The start of the current year was not encouraging. Punjab was hit by the floods, which damaged
infrastructure and Kharif crops in the province. Political situation made investors back off.
Exchange rate was stable and Pakistan was able to rebuild its foreign exchange reserves. (2015-
2016).
 China did not have any significant change rather it slowed its GDP from 7 to 6.8 as the
government pushed for painful structural reforms in the country.
 The industrial sector during FY 2016 recorded a remarkable growth of 6.8 percent followed with
increase in electricity and Gas, due to the government’s stern efforts in order to resolve energy
crisis issues. This was Pakistan’s highest point in increase of GDP in 2016 as opposed to the
previous years. (2016-2017).
For China there was an increase in 2017 due to exports of high technology products and
semiconductors made in china.
 With the new government in action, Pakistan saw its first major GDP decline after its highest
point at 6.2, the reason being 45 percent increase from an account deficit, exorbitant imports and
less-than-projected inflows.(2018-2019)
For China as the Covid-19 virus started a global pandemic, it battled in trade with its biggest
competitor the US but due to the nature and contamination of china’s strict shutdown regulations
it suffered great decline in the GDP annual%.
 The country faced recession at a -1.3 annual% as the Covid-19 situation worsened and many
lockdowns were implemented in the country by Imran Khans government, middle class workers
were unemployed this led to less production and generation of revenue for the country. (2019-
2020).
For China, it reached its lowest in 10 years in 2020 at 2.2 due to major buyers backing off from
getting exports from China and China closing its borders for control of Covid, although much
self-sufficient it still suffered in the growth of its GDP.
 There was much political rift in the country against Imran Khans government and he was held
accountable for not providing his people basic rights, there was in improvement in the health and
labor sector and the country started to progress after its shutdowns.(2021).
For China As productions benefiting from the country's strict zero-COVID strategy, China's
value-added industrial output in 2021 grew by 9.6 percent. The country's effective outbreak
prevention and control enabled it to maintain the stable operation of industrial chain and it
witnessed its highest point in GDP in 10Years.
Inflation:

Definition:
The increase in prices of a commodity and fall in purchasing power of consumer.

Pakistan’s Inflation:
The most important categories are food and non-alcoholic beverages, housing, water, electricity and fuel ,
clothing and footwear, all these basic necessities constitute the inflation of Pakistan.

Chinas Inflation:
In early times, Chinese government deemed excessive money supply as the only cause of inflation, hence
other factors caused price rise was not taken as inflation.

COMPARISSON OF PAKISTAN AND CHINA INFLATION ANNUALLY

16

14

12

10

8 China
Pakistan
6

0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Reasons for Trends in Pakistan and China Inflation Rate Annually:

According to the data given above lets discuss the main reasons for changes in inflation rates.

 For Pakistan the increase in non-food inflation largely come from increase in the rates of house
rent, electricity rates, education expenses, communication cost, fuel prices and foot ware prices.
Also with decrease in the prices of tomatoes, chicken, potatoes, pulses and sugar. While non-food
items whose prices decreased are gas and fuel related components, this caused a decline in
inflation rate. (2012-2013).
For China, the producer prices, meanwhile, provided some encouragement as deflation
 continued, showing stabilization in raw material costs and re-stocking by manufacturers hence
why the slight decrease in inflation rate.
 For Pakistan inflation has been contained during current year due to better supply position of
major and minor crops, and regular monitoring of prices and supply chain by the National Price
Monitoring Committee of Pakistan, this caused a slight increase in 2014. (2013-2014)
 For Pakistan the wholesale prices of non-food items, whose prices decreased from previous year
are furnace oil, kerosene oil, diesel, cotton yarn, soap, printing paper and cement that’s why there
was greater decline in at the end of 2015 .(2014-2015)
For China, the consumer inflation grew mildly but for producers there was deflation due to
domestic demand and slow economy.
 For Pakistan, Nawaz Sharif’s government came into power sternly focused to control the inflation
and remained successful in containing inflation, they insured all the price checks for the
commodities such as the household rents, water and electricity charges. (2016-2017)
For China, Food prices, and vegetable prices in particular, have contributed the most to CPI
inflation so far this year, hence causing an increase in inflation rate.
 For Pakistan, moderate food prices amid large grain stocks and the recent increase in policy rate
will help in containing the average inflation below target of 6.0 percent during financial year
2018. (2017-2018)
For China, data shows high expenditure in food commodities, education & recreation, health and
households, the strict monetary policies of the government cut down food production and caused
change.
 For Pakistan, the highest inflation rate is recorded in the last ten years due to the rising demand
and fiscal monetary policies of the government. (2018-2019)
For China, a slight drop in food prices which resulted in slight increase but throughout the year it
remained low.
 For Pakistan, the increase in non-food inflation was due to higher energy prices and strong
overall domestic demand. Food inflation was only 1.8 percent, due to only a moderate increase in
international prices of food items. (2019-2020)
For China, The war in Ukraine disrupted global markets for commodities, energy, fertilizers and
grains. China is largely self-sufficient in food, but it is alert to imported inflation due to surging
global prices for energy and raw materials.
 For Pakistan, due to the Covid pandemic depressed demand and supply chains the prices
remained less and the inflation rate remained subdued. (2020-2021)
 For China, China’s factory and consumer prices rose faster than expected in as Covid lockdowns
battered supply chains and pushed people to stockpile food.

Unemployment:

Definition: Person who is seeking a job or is unable to find a suitable job.

Unemployment in Pakistan:

Keeping in mind the population of Pakistan, the unemployment rate, currently expected to reach 12% at
the end of 2022, is still a growing concern for the people and the government, many graduates and
undergraduates do not find suitable jobs. Main reason is that the economic sector is not producing many
jobs for fresh graduate students, nepotism and unhealthy competition.

Unemployment in China:

China is one of the leading country in population, but it still has a certain percentage that is unemployed
irrespective of how much they have utilized their population in the work force. The strict “one child”
policy China implemented affected its work force the most, along with low morality rate and poor
business management.

COMPARISSON OF PAKISTAN AND CHINA UNEMPLOYMENT ANNUALLY

10
9
8
7
6
5
China
4 Pakistan
3
2
1
0
12 14 16 18 20 12 14 16 18 20
20 20 20 20 20 20 20 20 20 20

Reasons for Trends in Pakistan and China Unemployment Rate Annually:

While comparing the two let’s keep in mind the difference in population of both the countries.
 For Pakistan, in 2013 this was when the Nawaz Sharif government was in power, unemployment
rate reached a new high, due to the uneconomical decisions and poor performance of the
government in creating opportunities for the youth. (2013-2014)
 For Pakistan, this high rate unemployment is mainly due to two reasons; the first is rural urban
migration which is increasing urban population, while employment opportunities are not
correspondingly increasing. Second, industrial development has not yet reached a position to
absorb a high level of working population. (2014-2015)
 For Pakistan, the year 2016-2017 unemployment did not have any abrupt changes and only varied
by little. This was due to poor infrastructure and management of the Nawaz government.
For China, there was slight decline due to management of Chinese government’s labor reforms.
 For Pakistan, Several causes of unemployment include; workforce reduction, workforce turnover
and technological change.(2018-2019)
 During the COVID-19 pandemic, protection and job creation is the second largest challenge after
the health crisis in Pakistan. The pandemic has had an adverse effect employment and labor
productivity by hindering growth in various economic sectors. State Bank of Pakistan has taken
various measures to counter the effects of COVID-19. (2020-2021)
For China, the unemployment rate remained stable enough to utilize all the working class.
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