THE under-invoicing of imports from China is not an allegation. It is an open secret in Pakistan`s markets one that has been known for years. The gap between imports recorded from China and what China itself reports exporting is estimated to be in the range of $3.5-5bn in any single year. The Faisalabad loom owners have described this practice as one of the reasons their business is suffering. Yarn and cloth are the visible case, but the practice runs through the entire import trade from China from machinery parts and chemicals to electronics, tyres, and household goods.

Traders declare a fraction of the true value, pay duty and sales tax on that fraction, and sell at prices no domestic competitor can match. It could not happen at this scale without Customs. Valuation is checked at the port. When the same understatement recurs across the same products, importers, clearing agents, and officers who pass the consignments, year after year, it points past carelessness to facilitation.

The damage is easy to trace. The exchequer loses duty and tax every day. Local manufacturers are forced to compete against goods whose prices have been shaved by a pen stroke. Mills close, looms are sold, workers go home. Then the same industry is told to become competitive and increase exports. It cannot, while its home market is being undercut by tax evasion that the state declines to acknowledge. It also corrupts what the country knows about itself. Imports are undercounted, so the trade deficit and the revenue gap are misstated, and policy is built on wrong numbers. The tools are already in place. Pakistan and China operate an electronic data exchange between their Customs administrations, and Islamabad has asked Beijing for real-time data. Applied to every shipment, not just textiles, comparing the Chinese export declaration with the Pakistani goods declaration would show mismatches in value and quantity at once. Large gaps should mean investigation, penalties, and prosecution. It is an argument for collecting what the law already requires, from everyone, equally. Cheaper power and easier credit mean little to a producer who is underpriced at the border. The government has assured the loom owners that their problems will be resolved. Controlling under-invoicing at the Pakistan-China border should be a good start.