[13] China and Pakistan aim to increase bilateral trade to US$15–20 billion by the completion of the second phase and eliminate tariffs on 75% of product lines.

[8][13] In April 2005, the Former Prime Minister of Pakistan, Shaukat Aziz, and the Premier of China, Wen Jiabao, announced the commencement of negotiations towards an FTA.

[20] Pakistan also relaxed shareholding restrictions on Chinese investment in the construction, telecom, finance, distribution, health care, environmental protection, tourism, transportation, research and development, and IT education sectors.

Chinese investors were also granted access to service markets in sub-sectors such as legal affairs, accountancy, architecture, printing and publishing, veterinary, and more.

[1] Following the implementation of the CPFTA, China became the primary supplier for Pakistan in several goods such as organic chemicals, fertilisers, electronic equipment, staple fibres, and footwear.

[8][24] Tariff concessions under the CPFTA had also allowed Pakistan to import cheap raw materials and machinery from China which is utilised for manufacturing Pakistani products.

[6][19][27] The main features of phase two are increased market access for both countries into each other's economies, a list of protected product lines, reformed safeguard mechanisms, a system of electronic data exchange, and a balance of payment clause.

[8][10] China immediately eliminated tariffs on 313 product lines that Pakistan is a major exporter of, primarily goods such as textiles, frozen meat, and other animal products, seafood, prepared food, chemicals, plastics, oilseeds, footwear, engineering goods, machinery, leather, and auto parts.

[29][7][13] Pakistan has offered immediate market access to China on products including raw materials, intermediate goods, and machinery.

[7][13][28] Among other industries, those that will primarily benefit from this measure include textiles, iron, auto, electrical equipment, agriculture, chemicals, plastics, rubber, paper, glass, surgical instruments, footwear, leather, wood, articles of stones and plaster, and miscellaneous products.

[13] The second phase introduces a system of electronic data exchange on the trade taking place under the CPFTA,[7] which will help evade misdeclaration and the incorrect invoicing of imports.

[10] Under the second phase, Pakistan has received an increased competitive advantage as the nation will face lower tariffs than its main export competitors in China.

[8][10] Pakistan holds a competitive advantage on 80% of the product lines within phase two, including goods such as machinery, mechanical appliances, plastics, steel, and iron.

[10] Pakistani business groups additionally conveyed that Pakistan will have an increased opportunity for expanding their exports to China in 401 high priority product lines,[30] which includes goods such as miscellaneous edible preparations, cotton, textiles, plastics, vehicle parts, and footwear.