Actual long-term benefits of CPEC to Pakistan

[saeedhk]

A brief introduction of the CPEC.

China-Pakistan Economic Corridor is a framework of regional connectivity. CPEC will not only benefit China and Pakistan but will have positive impact on Iran, Afghanistan, India, Central Asian Republic, and the region. The enhancement of geographical linkages having improved road, rail and air transportation system with frequent and free exchanges of growth and people to people contact, enhancing understanding through academic, cultural and regional knowledge and culture, activity of higher volume of flow of trade and businesses, producing and moving energy to have more optimal businesses and enhancement of co-operation by win-win model will result in well connected, integrated region of shared destiny, harmony and development.

China Pakistan Economic Corridor is journey towards economic regionalization in the globalized world. It founded peace, development, and win-win model for all of them.

China Pakistan Economic Corridor is hope of better region of the future with peace, development and growth of economy.

Source: http://cpec.gov.pk/introduction/1

 

[saeedhk]

Local businesses lose big under CPEC

For 30 years, Kamal Amjad Mian’s family resisted the temptation to invest heavily in their electricity cable manufacturing business to avoid creating surplus capacity. Instead, they chose to make regular but smaller investments to keep up with growing market demand.

But then Nawaz Sharif returned to power in 2013 with a promise to tackle the nationwide blackouts through massive investments in new power generation and by upgrading the country’s rundown transmission network. On top of that, China also agreed to pour in billions in Pakistan’s power infrastructure under the multibillion-dollar China Pakistan Economic Corridor (CPEC) initiative.

Both developments offered electricity cable manufacturers an unprecedented opportunity to grow big fast. It was at that time Mr Amjad’s family decided to set up their second plant in Sundar near Lahore. They thought that the new state-of-the-art plant would help their company win business as new power projects under the CPEC initiative got under way.

But the dream of growing bigger remains unrealised as Mr Amjad’s Fast Cables, like other manufacturers, has yet to reap any benefit from the CPEC-related power projects. The Chinese firms working on power projects prefer to import equipment from China rather than source from Pakistan.

“We could utilise only 40 per cent of our capacity last financial year because of lack of demand,” Mr Amjad said. “The government has also given the Chinese a big advantage instead of giving us a level playing field.

“On the one hand, it has given them relaxation on their imports, but on the other, it has raised the cost of our raw materials by increasing taxes and placing regulatory duty on raw materials used by local producers. The total federal and provincial tax burden on our products has increased to 45pc in the last three years.”

The government says the Chinese investors were allowed tax relief on their imports for power projects in order to ensure their timely completion. “Moreover, our local industry does not have enough capacity to meet the needs of these projects,” a Pepco official argued.

But a senior executive of another cable manufacturing company rejected this claim as frivolous. “If they had any doubt about local suppliers’ ability to meet demand the government could have talked to us. The manufacturers could also invest and increase their capacity if they had enough orders.

“In the worst-case scenario, the government could allow Chinese investors to meet the shortfall with imports. But keeping us out of the competition is not going to help the local industry and jobs,” he contended, requesting anonymity because of restrictions from his employer.

Mr Amjad, whose company became the first Pakistani cable manufacturing facility to have obtained KEMA gold certification from Holland earlier this year for mid- to low-voltage electricity cables because of their international quality, says his company could create another 300 jobs at its second plant if 100pc capacity was used.

“Because of the underutilisation of capacity, our payback period on new investment has increased to seven years from four and a half years earlier. Who would want to invest in these conditions?” he asked. “If the government cannot withdraw tax exemptions for Chinese companies, it should refund us all taxes it charges from us to give us an even playing field.”

Recently, there’s talk of some Chinese investors venturing into electricity cable manufacturing in Pakistan. “That’ll be a good development. But the government should ensure that local investors also receive the same treatment as the Chinese companies. And it should also ensure that they employ local labour and don’t import labour as well.

“We certainly require foreign private investment in the industry. But it is the job of the government that foreign investors don’t get any advantage over local investors or new jobs don’t go to (Chinese) workers. It is time we realised that exemptions to foreign investors and contractors are hurting domestic industry and jobs. At present there is no incentive for local businesses to expand or set up new projects,” insisted Mr Amjad.

However, not everyone is unhappy. The steel factories are in an expanding mode because they are getting orders for CPEC projects. Construction chemical manufacturers are also glad because the Chinese are using their materials instead of importing them.

“Our chemicals are widely being used for CPEC power and other projects. A major reason is that we are cheaper than imported Chinese chemicals and we also have a network of backup services,” said Ahmed Naveed Chaudhry, chief executive of Sika Pakistan.

But he acknowledged that not every industry is reaping the benefits of the investments around the China-Pakistan trade route initiative. “I think the government should put in place a framework to ensure 100pc utilisation of local industry. If we want to benefit from the corridor initiative we have to give our companies their share in the projects.”

 

[saeedhk]

What Pakistan's Decision to Pull Out of a Mega Dam Project Tells Us About the Future of CPEC

About a month ago, Pakistan withdrew its request to include the $14-billion Diamer-Bhasha Dam in the China-Pakistan Economic Corridor (CPEC) project citing strict monetary conditions on Beijing’s part as being against the country’s national interests. The fact that an energy-starved country like Pakistan has pulled out of a dam project that it has not been able to complete on its own for years is significant.

While the exclusion of a single major project doesn’t mean that the whole infrastructure scheme between the two countries is in danger, observers warn that Beijing’s strict monetary conditions have landed the future of Pakistan’s whole economy in a tight spot. The whole process of Chinese-funded projects has not been transparent. There are alarming reports about the levels of debt these secret dealings will impose on Pakistan.

Michael Kugelman, the deputy director of the South Asia program at the Woodrow Wilson Center, believes that there is a growing realization among the policymakers in Islamabad that the long-term financial implications of a number of deals made under the CPEC are troubling for the country. “The debt repayment terms are not transparent and are difficult for outside analysts to access, but what seems clear is that Pakistan has put itself in a position where it will need to put very large amounts of money into debt servicing in the coming years. For an economy as fragile as Pakistan’s, that’s an undesirable and perhaps evens an untenable proposition,” says Kugelman.

Apparently, the government in Pakistan is not interested in making the details of such dealings public, for it might generate serious controversy about how agreed upom financial terms are likely to pose a threat to Pakistan’s sovereignty in the long run. Practically, Islamabad’s emerging economic model is becoming dependent on China. However, at the same time, the country doesn’t have any other viable economic plans to revive its choked economy and domestic financial base. Over the last few years, Pakistan approached economic collapse on several occasions with China offering life-saving support to the country’s economy.

If Beijing continues to push with its aggressive monetary conditions, it’s likely that in the coming years, Islamabad may cancel more projects which do not bode well for the overall commercial viability of the project. “A one-off incident of Pakistan backing away is not so serious, but if we start to see multiple cases of Pakistan walking away, then the very viability of CPEC could come into question. Given the astronomical level of importance that Pakistan and China have placed in CPEC, any suggestion that the project may not see itself through is cause for alarm,” suggests Kugelman.

It’s unlikely that China will make any trade or monetary concessions to Pakistan that involve Beijing losing financial benefits with such mega infrastructure deals. China has aggressively pushed Pakistan toward accepting conditions that offer the former more leverage than the latter.

The evidence in this regard is overwhelming: Pakistan’s Federal Minister for Ports and Shipping, Mir Hasil Bizenjo, recently advised the Senate that 91 percent of revenues generated by Gwadar port as part of CPEC will flow out to China, with Beijing virtually controlling all projects. Moreover, there are indications that the project is not likely to produce as many jobs for local Pakistanis as previously anticipated.

Clearly, there are signs that both countries have developed differences over the issue of who stands to benefit strategically from the project in the long run. Seth Oldmixon, a public affairs consultant and the founder of Liberty South Asia, contends that concerns in Islamabad’s ruling circles in this respect are acutely serious: “There appears to be a realization among Pakistani decision makers that many of the deals are lopsided to the point of being exploitative.” Kugelman agrees: “The fact that Pakistan has backed away from several projects — coupled with the fact that China has itself backed away from a few projects — is significant in that it highlights that for all the heady talk and soaring rhetoric about CPEC and its successes, there are some significant constraints that need to be worked out.”

There have also been other difficulties. The Chinese are worried about the presence of a number of jihadist groups in Pakistan. Secretly, China has been pushing Pakistan to take action against Islamist groups rising influence in the country which can directly pose a threat to Beijing’s regional economic plans and financial investments in Pakistan. While Beijing has long aided Islamabad’s position at the United Nations (UN) by blocking moves against a number of anti-India militant leaders, now that China is a direct stakeholder in Pakistan’s security, it’s reviewing its vocal support.

During the recent BRICS summit, China, in an unprecedented shift from its previous policy of taking up strategic dialogues with Pakistan behind closed doors, agreed with the rest of the member states in issuing a joint statement, stating that a number of militant groups allegedly based in Pakistan remain a “regional security concern.” The groups comprised the ones that target India’s interests in the region. If Pakistan’s newly adopted policy of Jihadist mainstreaming goes parallel with a continued reduction in terror attacks in Pakistan – especially on CPEC route – the Chinese projects and these radical Islamist groups might coexist. However, if there is any surge in violence, Beijing will use its financial clout to arm-twist the Pakistani establishment.

As Raza Rumi, a Pakistani writer, journalist and a public policy specialist argues:

The issue of territorial disputes in Pakistan is another reason that China remains reluctant from making weighty financial commitments to some of the major projects. The fact that the Daimer-Bhasha dam is being constructed in a region that is a disputed territory between India and Pakistan is a factor that cannot be denied.

He further adds that “China is cautious because it doesn’t want to annoy India with whom it has billions of dollars worth contracts.”

However, so far, both states have avoided public confrontation over the surging problems under CPEC which, with all its due constraints, has strategic significance for both countries. “While CPEC and the relationship with China are considered too sensitive to be broadly criticized like the Pak-U.S. relationship, there are increasing signs of frustration among Pakistani officials,” says Oldmixon. “I imagine that China and Pakistan will work out arrangements that ensure a critical mass of projects to be carried out in their entirety. There’s too much at stake for both countries for it to be any other way,” adds Kugelman.

All of this points toward the conclusion that beyond bilateral rhetorical flourishes, there remain some critical monetary, security, and capacity issues that can hamper the future of the CPEC. Certainly, growing frustrations on Pakistani side raise doubts as to whether the project will ever be concluded without leaving the country in profound debt. It remains to be seen how far can China go with its tough conditions, for there is a deepening urgency in Islamabad about saying “No” to Beijing’s habit of finding its wont with all deals that certainly undermine Pakistan’s interests.

Source:https://thediplomat.com/2018/01/wha...am-project-tells-us-about-the-future-of-cpec/

 

[Cpt. Rishwat]

Lot's of conflicting views in those three articles, what is your verdict OP? Obviously China is going to benefit from this deal, but does that mean it will be at the expense of Pakistan in the long run?

 

[Lonewarrior]

CJP summons all CJs to discuss CPEC

ISLAMABAD: The Chief Justice of Pakistan, Mian Saqib Nisar, on Tuesday summoned a meeting of chief justices of all the high courts so as to develop a mechanism in dealing with legal disputes with regard to the China-Pakistan Economic Corridor (CPEC). He said that he was inviting all the chief justices for adressing CPEC related litigation for a meeting on Saturday in Islamabad.

https://www.thenews.com.pk/print/275072-cjp-summons-all-cjs-to-discuss-cpec

so calm down. dont need to create unnecessary CPEC threads.

 

[sshakir411]

If you do not have a formal Business education the following is a good place to start to understand CPEC:


https://www2.deloitte.com/content/d...k/pak-china-eco-corridor-deloittepk-noexp.pdf

 

[Badsha]

If you do not have a formal Business education the following is a good place to start to understand CPEC:


https://www2.deloitte.com/content/d...k/pak-china-eco-corridor-deloittepk-noexp.pdf

I hope you are not offended by me saying this but this page does not hold up to the standards of a professional piece of work. The references used are poor and even misspelled (Gilgit tims for Gilgit times).

It seems very opinionated plus the road map isn't accurate as I think the road passes through siraiki belt west and not the east as shown here.

 

[sshakir411]

I hope you are not offended by me saying this but this page does not hold up to the standards of a professional piece of work. The references used are poor and even misspelled (Gilgit tims for Gilgit times).

It seems very opinionated plus the road map isn't accurate as I think the road passes through siraiki belt west and not the east as shown here.

As far as I know this piece was written in 2015 by the head of Deloitte Middle East restructuring practice at the time. It could just be an opinion but it it broadly lays out the implied benefits from this partnership with China. I doubt people will have hard facts until a good set of data can be collected on the progress of this initiative.

 

[sshakir411]

I hope you are not offended by me saying this but this page does not hold up to the standards of a professional piece of work. The references used are poor and even misspelled (Gilgit tims for Gilgit times).

It seems very opinionated plus the road map isn't accurate as I think the road passes through siraiki belt west and not the east as shown here.

Also the only reference to Gilgit Times is made twice...once while listing the peaks of the mountains in Gilgit and the other for government related assurances. I don't think the questionable source makes up 10% of the opinion/paper.

 

[Syed1]

If you do not have a formal Business education the following is a good place to start to understand CPEC:


https://www2.deloitte.com/content/d...k/pak-china-eco-corridor-deloittepk-noexp.pdf

Wow thanks for that...

 

[PetroDollars]

Lot's of conflicting views in those three articles, what is your verdict OP? Obviously China is going to benefit from this deal, but does that mean it will be at the expense of Pakistan in the long run?

Looks pretty much like a modern day 'East India Company'

 

[Yossarian]

Lot's of conflicting views in those three articles, what is your verdict OP? Obviously China is going to benefit from this deal, but does that mean it will be at the expense of Pakistan in the long run?

I used to have to drive almost an hour to one of the main towns to stock up on halal meat. Recently, a couple of Kurdish brothers opened up a general store about 5 miles away, including a fresh halal meat counter. I said to one of the brothers that even if they charged twice the price for the fresh halal meat I wouldn't mind if it meant that his store, and his halal meat business, remained profitable. Because if it wasn't profitable, I will have to resort back to doing an hour's drive each way (time plus petrol cost) every couple of weeks or so to stock up on halal meat.

Point being to look at the big picture. The Chinese are not stupid. They want CPEC to be successful and become a key artery for their trade with the rest of the world. And that means a successful and stable Pakistan. ie For China to benefit from CPEC, it is in their interest to make sure that Pakistan also benefits.

All these doom merchants have vested interests in the failure of CPEC.

On a side note:
An uncle in Pakistan told me last week that, as part of the CPEC project, the Chinese have built a new production facility for the manufacture and servicing of agricultural machinery, equipment and spare parts just a few miles away from where he lives, and his son, an engineer, has landed a very good job at the facility, with pay and benefits far higher than his previous job. Ask him if CPEC is good or bad!

 

[Pakistanian]

You win some, you lose some. It isn't a black or white thing, reminds of NAFTA - benefited Texas greatly but was bad for the Midwest.

 

[Cpt. Rishwat]

I used to have to drive almost an hour to one of the main towns to stock up on halal meat. Recently, a couple of Kurdish brothers opened up a general store about 5 miles away, including a fresh halal meat counter. I said to one of the brothers that even if they charged twice the price for the fresh halal meat I wouldn't mind if it meant that his store, and his halal meat business, remained profitable. Because if it wasn't profitable, I will have to resort back to doing an hour's drive each way (time plus petrol cost) every couple of weeks or so to stock up on halal meat.

Point being to look at the big picture. The Chinese are not stupid. They want CPEC to be successful and become a key artery for their trade with the rest of the world. And that means a successful and stable Pakistan. ie For China to benefit from CPEC, it is in their interest to make sure that Pakistan also benefits.

All these doom merchants have vested interests in the failure of CPEC.

On a side note:
An uncle in Pakistan told me last week that, as part of the CPEC project, the Chinese have built a new production facility for the manufacture and servicing of agricultural machinery, equipment and spare parts just a few miles away from where he lives, and his son, an engineer, has landed a very good job at the facility, with pay and benefits far higher than his previous job. Ask him if CPEC is good or bad!

Obviously the Chinese will need some incentive to be part of such an ambitious project, you would expect them to benefit from it. It should be mutually beneficial in theory. The only question would be: would you trust current Pakistan politicians to ensure Pakistan comes out of it well, considering their history of transferring capital abroad for their own gains?

 

[Yossarian]

Obviously the Chinese will need some incentive to be part of such an ambitious project, you would expect them to benefit from it. It should be mutually beneficial in theory. The only question would be: would you trust current Pakistan politicians to ensure Pakistan comes out of it well, considering their history of transferring capital abroad for their own gains?

True. But even they need the patient to stay alive and remain in reasonable health so that they can keep on bleeding him and feasting on his blood. Bleed the patient too much and the patient dies. And then no more regular blood supply.

 

[TikkiTaka]

The only people who question CPEC are Indians. Simply cause they know it's a game-changer for the region. It's no longer their geo-political backyard in South Asia. They're being replaced as the holding power by China. Anything that undermines Indian influence in the region can only be good for Pakistan

 

[Traveller55]

The only people who question CPEC are Indians. Simply cause they know it's a game-changer for the region. It's no longer their geo-political backyard in South Asia. They're being replaced as the holding power by China. Anything that undermines Indian influence in the region can only be good for Pakistan

Unless it bankrupts Pakistan and Pakistan is forced to sell off assets like Sri Lanka. Then its only good for the Chinese.

Indians, from what I can tell, object to CPEC because it passes through lands that are legally theirs but under occupation from Pakistan ( G-B region).

 

[Syed1]

Unless it bankrupts Pakistan and Pakistan is forced to sell off assets like Sri Lanka. Then its only good for the Chinese.

Indians, from what I can tell, object to CPEC because it passes through lands that are legally theirs but under occupation from Pakistan ( G-B region).

Legally theirs )

 

[Savak]

To be honest, the American's gave Pakistan no choice but to consider the Chinese as option 2

 

[Traveller55]

Legally theirs )

Is it not ? If Belgium joins Netherland but France invades Belgium and keeps a chunk of it, does that make that chunk legally French ???

Kashmir problem exists because there are quite a few in Kashmir who do not want to be part of India, there is a foreign vested interest coming from Pakistan to snatch away Kashmir but Kashmir is legally Indian. Its pretty straightforward from the legal angle of sovereign powers.

 

[IMMY69]

The long term benefits will be massive.
China already setting up a platform to trade oil futures in Yuan which the States will hate as it finally brings an end to the petro dollar.. this and the CPEC will lead to cheaper oil for Pakistan...

However, Pakistan is at a crossroads come this Election. If PML-N wins again we’ll be under severe pressure from America via the Saudi’s to back away from China.

 

[indipper]

Remind me whats different in CPEC than East India Company? Why you egos doesnt allow you to stick with India even if it means throwing yourself into China? How China will be any different from Britians? They are even using their own currency, let alone giving us jobs and co.

I can see many business going down. Some good some bad. But most of the bad ones will survive, thats the saddest part. You wont see a 1000$ car from China in Pakistan due to existing monopolies. So its lose-lose as far as I can see. I hope I end up being wrong.

 

[Syed1]

Remind me whats different in CPEC than East India Company? Why you egos doesnt allow you to stick with India even if it means throwing yourself into China? How China will be any different from Britians? They are even using their own currency, let alone giving us jobs and co.

I can see many business going down. Some good some bad. But most of the bad ones will survive, thats the saddest part. You wont see a 1000$ car from China in Pakistan due to existing monopolies. So its lose-lose as far as I can see. I hope I end up being wrong.

Before going on ignorant rant educate yourself about CPEC

 

[www787]

Is it not ? If Belgium joins Netherland but France invades Belgium and keeps a chunk of it, does that make that chunk legally French ???

Kashmir problem exists because there are quite a few in Kashmir who do not want to be part of India, there is a foreign vested interest coming from Pakistan to snatch away Kashmir but Kashmir is legally Indian. Its pretty straightforward from the legal angle of sovereign powers.

Nothing is legal about this comment.

 

[Traveller55]

Nothing is legal about this comment.

Sorry but you are wrong. Sovereign rights are pretty well defined in the ICJ and UN.

 

[Syed1]

Sorry but you are wrong. Sovereign rights are pretty well defined in the ICJ and UN.

Yeah well no one cares, its our land. You can cry us a river.

 

[Traveller55]

Yeah well no one cares, its our land. You can cry us a river.

Except legally, it isn't. Thats the whole point of Kashmir fubar.
The people of Kashmir want independence. Some of them want to join Pakistan. Even less # of them want to remain Indian.
But legally, Kashmir is Indian, with parts under occupation from Pakistan and China.

Pakistan knows its biggest weapon in Kashmir is the people's will. India knows that its biggest weapon in Kashmir is that they are legally correct.

Hence neither side will give an inch and hasn't. Its a deadlock. But in my experience, law *usually* wins. Especially when the law is on the side of the bigger, badder, more powerful side.

 

[www787]

Except legally, it isn't. Thats the whole point of Kashmir fubar.
The people of Kashmir want independence. Some of them want to join Pakistan. Even less # of them want to remain Indian.
But legally, Kashmir is Indian, with parts under occupation from Pakistan and China.

Pakistan knows its biggest weapon in Kashmir is the people's will. India knows that its biggest weapon in Kashmir is that they are legally correct.

Hence neither side will give an inch and hasn't. Its a deadlock. But in my experience, law *usually* wins. Especially when the law is on the side of the bigger, badder, more powerful side.

Again, nothing is legal about this.

 

[Traveller55]

Again, nothing is legal about this.

You are wrong, simple.
Sovereign of Kashmir exercised sovereign power to join India. That makes it 100% legal. This is basic legalism.

 

[Yossarian]

Except legally, it isn't. Thats the whole point of Kashmir fubar.
The people of Kashmir want independence. Some of them want to join Pakistan. Even less # of them want to remain Indian.
But legally, Kashmir is Indian, with parts under occupation from Pakistan and China.

Pakistan knows its biggest weapon in Kashmir is the people's will. India knows that its biggest weapon in Kashmir is that they are legally correct.

Hence neither side will give an inch and hasn't. Its a deadlock. But in my experience, law *usually* wins. Especially when the law is on the side of the bigger, badder, more powerful side.

China needs a reliable land corridor to a warm sea port that also bypasses the Straight of Malacca as well as shaving off thousands of miles off shipping routes to Africa, the Middle East, and Europe (via the Suez Canal). And CPEC is it.
And if CPEC is to become a key artery of Chinese trade to the rest of the world, then China needs a stable and prosperous Pakistan to keep it that way.

You think China is going to allow India wreck it all? To use your words, China, and not India, is "the bigger, badder, more powerful side"

 

[Traveller55]

China needs a reliable land corridor to a warm sea port that also bypasses the Straight of Malacca as well as shaving off thousands of miles off shipping routes to Africa, the Middle East, and Europe (via the Suez Canal). And CPEC is it.
And if CPEC is to become a key artery of Chinese trade to the rest of the world, then China needs a stable and prosperous Pakistan to keep it that way.

You think China is going to allow India wreck it all? To use your words, China, and not India, is "the bigger, badder, more powerful side"

1. I think you misunderstand me. I don't mind the CPEC working. I actually want it to work. However, I am skeptical. As an 'outsider looking in', it has its concerns to me. As I said, 'Chinese backed/funded projects' have a way of making small economies go Kaput it seems. Though Pakistan's economy isn't 'small enough' to go kaput in those scenarios, it may just be a humongous waste.
That is where my 'wait and see' CPEC approach comes from.

There is one thing I've learnt from living in a city dominated by Chinese people is that its ridiculously hard to get a 'good deal' out of them money-wise, regardless of whats at stake. Lets hope its different.

2. China and India getting into a fight over GB is never gonna happen. Its not important enough for either nations to face nuclear war. So no, nobody is wrecking anything in CPEC and CPEC will not make/break it over GB. Success/failure of CPEC will rest in larger realities of Chinese economy.

However, CPEC succeeding/not succeeding has literally 0% to do with what happens TO GB/AK/J&K in ther long term sovereignty & de-facto control, either.

 

[Traveller55]

Oh and another thing. Anyone who says that CPEC will be a 'bypass' for Malacca, is selling fake/incorrect info. Period.
CPEC, at its ridiculous best, will be a 'pressure-release valve' to Malacca. A tiny stream compared to the raging river. For the simple fact, that sea transport usually costs 1/5th to 1/6th the tonnage as land transport. This is why, CPEC will never replace or 'bypass' Malacca.

No land route, ever will.

 

[yasir]

I have my suspicions about this CPEC deal, its more bad then good for us. Here is why?

Deep Secrecy

When anything is done in secrecy, its suspicious, CPEC has been going on since 2013, still very little details on critical components of the agreement has been made public. What are the terms and conditions of various loans and grant? Whenever people ask for details, we get emotional arguments from Govt and Army. It's Indian conspiracy, we will not let it succeed. Why not focus on answer the question and make the content of the deals public?

For instance, these FAQs http://cpec.gov.pk/faqs are what you can get official from Govt about important questions. Most of them are one line goal moal jawab, no details what so ever.

Another example: These are all energy projects, http://cpec.gov.pk/energy. When you click on details (for instance http://cpec.gov.pk/project-details/1), very little details on how it is financed and model of Operating Expense and revenue. There is no one catch all or grandfather finance document, that we know off, containing these details.

History of Pakistan tells us, not to trust Army and Politicians with money. In last 20 years, all the privatization of various industries is all about corruption and stupid deals. There is no point of disclosing decades late and blame on each other, right now Army is backing CPEC like anything, tomorrow they will walk away from it, and blaming the politicians, that's what they have always done. Right now they are playing national security card (as main reason of secrecy)...Either way Pakistanis are stupid enough to be fooled by them over and over again. China, US, Saudis know all they have to do is take Army under their arm(who always need money to survive), rest they will take care of it. There is no public debate, you can get lot done when things happen behind the scene...Good business has to take all stake holder into confidence, biggest stake holder, Pakistan public is in complete dark on this deal, like many others in the past.


Coal Power

Again if you look at the energy projects http://cpec.gov.pk/energy, they are based on coal, really old and toxic technology. If somebody gives you $35B, are you really going to invest that heavily in coal in this day and age? - How much of coal investment China is doing in their own land??

This is main example of East India Company like attitude, we are filling Pakistan with toxic technology, that is already obsolete. Most of that coal, we will be importing

In China, they are investing in renewable tech and dumping 30 year old tech on us. There is huge technical debt of old tech, its not just technical but environmental as well. In this day and age no san person will invest 50% of future energy in coal...This tells me, China is driving this a whole lot, they don't care, why should they, we are selling our future generations again very cheaply...


Silk Route as Alternate or preferable


This is another bogus claim. China at best is building it as a backup route not a preferable to existing south China sea one. More of security DR route then anything else. Land route can never compete with water route. Have you seen the size of ships to trunk?? - Also just look at the cost of fuel between sea and land. Another way to look at is the Air and land, Air is much faster, but highly expensive, it has not replace the land trade, same goes for sea. Cost conservative estimates are 1:5, means 5 times more expensive...

 

[Yossarian]

Oh and another thing. Anyone who says that CPEC will be a 'bypass' for Malacca, is selling fake/incorrect info. Period.
CPEC, at its ridiculous best, will be a 'pressure-release valve' to Malacca. A tiny stream compared to the raging river. For the simple fact, that sea transport usually costs 1/5th to 1/6th the tonnage as land transport. This is why, CPEC will never replace or 'bypass' Malacca.

No land route, ever will.

Look at a map of China my friend. Which is the faster, and cheaper route for goods going to and from the western/ southwestern provices of China? All the way by land to sea ports on the Chinese east coast and then via the South China Sea, Straight of Malacca etc, or via land via CPEC to the Arabian Sea/Indian Ocean? No one's talking about CPEC replacing Stright of Malacca shipping routes, but rather providing an alternative, shorter route for the western regions of China.

 

[Cpt. Rishwat]

Remind me whats different in CPEC than East India Company? Why you egos doesnt allow you to stick with India even if it means throwing yourself into China? How China will be any different from Britians? They are even using their own currency, let alone giving us jobs and co.

I can see many business going down. Some good some bad. But most of the bad ones will survive, thats the saddest part. You wont see a 1000$ car from China in Pakistan due to existing monopolies. So its lose-lose as far as I can see. I hope I end up being wrong.

What proposition did India make in comparison to the Chinese offer?

 

[Napa]

And if CPEC is to become a key artery of Chinese trade to the rest of the world, then China needs a stable and prosperous Pakistan to keep it that way.

Stable is sufficient. Stable and impoverished with an economy dominated by the Army is the more likely future.

Pakistan is in a weak position to bargain with China, and therefore China is going to squeeze Pakistan. The past history of enmity with India, and the current enmity with the US leaves China as Pakistan's only support, and not someone Pakistan can bargain hard with. If you think China is doing CEPC because it wants to help Pakistan, you need to think again. China doesn't do charity.

Prosperity comes from manufacturing, and if that is not available then the second best option is tourism. Collecting toll on a highway is never going to be enough.

 

[Traveller55]

Look at a map of China my friend. Which is the faster, and cheaper route for goods going to and from the western/ southwestern provices of China? All the way by land to sea ports on the Chinese east coast and then via the South China Sea, Straight of Malacca etc, or via land via CPEC to the Arabian Sea/Indian Ocean? No one's talking about CPEC replacing Stright of Malacca shipping routes, but rather providing an alternative, shorter route for the western regions of China.

Again, sea travel is 15-20% the cost of land travel. Just like how air freight hasn't replaced sea freight, CPEC is not going to replace the Malaccas.

 

[English August]

The only people who question CPEC are Indians.

Michael Kugelman and Raza Rumi will be pleasantly surprised to learn that they are Indians. After all, being an Indian is better than being an American or a Pakistani.

 

[R3verse Swing]

CPEC = Silk Road II

Only this time, India has been by-passed.

 

[Traveller55]

Look at a map of China my friend. Which is the faster, and cheaper route for goods going to and from the western/ southwestern provices of China? All the way by land to sea ports on the Chinese east coast and then via the South China Sea, Straight of Malacca etc, or via land via CPEC to the Arabian Sea/Indian Ocean? No one's talking about CPEC replacing Stright of Malacca shipping routes, but rather providing an alternative, shorter route for the western regions of China.

Western province of China ? You mean Xinjiang- which produces nothing.
South-western ? Is that Tibet ? Also produces nothing. Sichuan/Yunnan are way closer to Shenzen-Hong Kong zone, than to Karakoram pass.

China wants CPEC because it keeps their military pipeline operational. Ie, if tomorrow there is a war and Malacca is screwed, China can rely on 1-2 pipeline's worth of oil crossing the Karakorams- enough to feed 2-3% of China's oil consumption- which means, their tanks, jets, APCs etc. keep rolling.

Yes, Xinjiang will trade mostly via the CPEC. But Xinjiang's trade is practically non-existent. So that's the big problem with CPEC's rosy projections.

And as I said, I am still not convinced Pakistan won't get screwed in the finances side of things, since China does not do the whole 'lets give them stuff at cheap because its strategically impotant'- they are penny-pinching businessmen first, everything else second.

 

[Gubol123]

CPEC = Silk Road II

Only this time, India has been by-passed.

Or India has opted out after repeated requests from China and oppositions from Pakistan

 

[Pakistanian]

Western province of China ? You mean Xinjiang- which produces nothing.
South-western ? Is that Tibet ? Also produces nothing. Sichuan/Yunnan are way closer to Shenzen-Hong Kong zone, than to Karakoram pass.

China wants CPEC because it keeps their military pipeline operational. Ie, if tomorrow there is a war and Malacca is screwed, China can rely on 1-2 pipeline's worth of oil crossing the Karakorams- enough to feed 2-3% of China's oil consumption- which means, their tanks, jets, APCs etc. keep rolling.

Yes, Xinjiang will trade mostly via the CPEC. But Xinjiang's trade is practically non-existent. So that's the big problem with CPEC's rosy projections.

And as I said, I am still not convinced Pakistan won't get screwed in the finances side of things, since China does not do the whole 'lets give them stuff at cheap because its strategically impotant'- they are penny-pinching businessmen first, everything else second.

China is planning to move their manufacturing to xinjiang, it's part of their westward shift, Kashgar is gonna be a new industrial powerhouse and will be tied to this silk road.

 

[Traveller55]

China is planning to move their manufacturing to xinjiang, it's part of their westward shift, Kashgar is gonna be a new industrial powerhouse and will be tied to this silk road.

Can you show us some evidence for that claim ??
Why on earth will China move its already existing manufacturing base, close to their seaboard, to practically the middle of Asia ? They may develop Xinjiang- after they've erased any and all Islam from it- but it will never replace the Chinese coastal provinces' production capability.

 

[R3verse Swing]

Or India has opted out after repeated requests from China and oppositions from Pakistan

So you are saying India backed down after tiny weeny bit of pressure? In the end China favoured Pakistan's concerns? Wow. All that Indian financial and political clout turned out to be a hoax.

 

[Yossarian]

Our Indian friends are sooo concerned about Pakistan's well being my heart bleeds.
[MENTION=146517]Traveller55[/MENTION] & [MENTION=142162]Napa[/MENTION]

Since you appear to have problems understanding, let me repeat it again for you:

China wishes to make CPEC a key artery of Chinese trade to the rest of the world. For that to happen (and here one is not talking about just for a few years, but as a long term permanent and key fixture of their economy) then China needs a stable and prosperous Pakistan to keep it that way. And thus it's not in the interest of China to bleed Pakistan dry and risk Pakistan failing and breaking up. China needs Pakistan to be prosperous and successful.
and they will do whatever they can to ensure that is the case.

As to the rest of the rubbish being spouted, do bear in mind that China is investing tens of $billion of dollars in this venture. I'm sure the Chinese know a lot more about the potential economic benefits of CPEC to the Chinese economy than a few Indian keyboard warriors on a primarily Pakistani internet forum!

 

[Traveller55]

Our Indian friends are sooo concerned about Pakistan's well being my heart bleeds.

[MENTION=146517]Traveller55[/MENTION] & [MENTION=142162]Napa[/MENTION]

Since you appear to have problems understanding, let me repeat it again for you:

China wishes to make CPEC a key artery of Chinese trade to the rest of the world. For that to happen (and here one is not talking about just for a few years, but as a long term permanent and key fixture of their economy) then China needs a stable and prosperous Pakistan to keep it that way. And thus it's not in the interest of China to bleed Pakistan dry and risk Pakistan failing and breaking up. China needs Pakistan to be prosperous and successful.
and they will do whatever they can to ensure that is the case.

As to the rest of the rubbish being spouted, do bear in mind that China is investing tens of $billion of dollars in this venture. I'm sure the Chinese know a lot more about the potential economic benefits of CPEC to the Chinese economy than a few Indian keyboard warriors on a primarily Pakistani internet forum!

1. The reason Chinese are investing in all this, is because they want a secondary line for their military to remain operational.

2. If China wanted Pakistan prosperous, they'd be offering the deals a LOT cheaper than they are, like the west does when it invests in S.America for eg.

3. I am not Indian, I am Bangladeshi.

 

[English August]

Our Indian friends are sooo concerned about Pakistan's well being my heart bleeds.

Someone needs to make it easy for you to understand that this thread was started by a Pakistani. And if you bother to read the articles posted, they quote folks like Michael Kugelmen and Raza Rumi. I said this earlier sarcastically but perhaps worth pointing out less sarcastically that these two gentlemen aren't Indian! Why do you think they are pointing out flaws in your CPEC wet dream?!

So, no, it's not about the Indians.

 

[Napa]

Our Indian friends are sooo concerned about Pakistan's well being my heart bleeds.

[MENTION=146517]Traveller55[/MENTION] & [MENTION=142162]Napa[/MENTION]

Since you appear to have problems understanding, let me repeat it again for you:

China wishes to make CPEC a key artery of Chinese trade to the rest of the world. For that to happen (and here one is not talking about just for a few years, but as a long term permanent and key fixture of their economy) then China needs a stable and prosperous Pakistan to keep it that way. And thus it's not in the interest of China to bleed Pakistan dry and risk Pakistan failing and breaking up. China needs Pakistan to be prosperous and successful.
and they will do whatever they can to ensure that is the case.

As to the rest of the rubbish being spouted, do bear in mind that China is investing tens of $billion of dollars in this venture. I'm sure the Chinese know a lot more about the potential economic benefits of CPEC to the Chinese economy than a few Indian keyboard warriors on a primarily Pakistani internet forum!

Repeating something ad nauseam doesn't it true.

Outsiders cannot make a country better. If you want economic development you have to end the Army's domination of the economy and free the Pakistani entrepreneur.

You are welcome to continue your wishful thinking that China has the power or even the desire to make Pakistan prosperous. Impoverished countries dominated by dictators are easier to control.

 

[Yossarian]

1. The reason Chinese are investing in all this, is because they want a secondary line for their military to remain operational.

2. If China wanted Pakistan prosperous, they'd be offering the deals a LOT cheaper than they are, like the west does when it invests in S.America for eg.

3. I am not Indian, I am Bangladeshi.

Glad to hear that the Bangladeshis are also concerned about Pakistan's well being, and hate the thought of their Pakistani cousins being taken advantage of by the Chinese.

Someone needs to make it easy for you to understand that this thread was started by a Pakistani.

Yes. But, unlike the Indian posters, he's not showing fake concern that it's bad for Pakistan.

And if you bother to read the articles posted, they quote folks like Michael Kugelmen and Raza Rumi. I said this earlier sarcastically but perhaps worth pointing out less sarcastically that these two gentlemen aren't Indian! Why do you think they are pointing out flaws in your CPEC wet dream?!

There's plenty with vested interests, both inside Pakistan as well as outsiders, including outside powers with strategic interests, that would like CPEC to be a resounding failure.

Repeating something ad nauseam doesn't it true.

Outsiders cannot make a country better. If you want economic development you have to end the Army's domination of the economy and free the Pakistani entrepreneur.

You are welcome to continue your wishful thinking that China has the power or even the desire to make Pakistan prosperous. Impoverished countries dominated by dictators are easier to control.

Like I said, I'm sure those poring in tens of $billions into the project know a darn sight more than some Indian keyboard warriors on a primarily Pakistan forum. I'm sure Pakistanis appreciate the concerns Indians are showing towards their wellbeing, including acknowledging the fact that the Indians are distraught at the thought of Pakistan being fleeced by the Chinese.

 

[Varun]

Like I said, I'm sure those poring in tens of $billions into the project know a darn sight more than some Indian keyboard warriors on a primarily Pakistan forum. I'm sure Pakistanis appreciate the concerns Indians are showing towards their wellbeing, including acknowledging the fact that the Indians are distraught at the thought of Pakistan being fleeced by the Chinese.

Napa brought up a very topical point above, possibly hoping for a constructive debate, but you reply with the same emotional claptrap post after post. I am pasting the post in question once again below, in case you want to *shock* *horror* ignore the flag and respond to the actual content of the message instead.

Stable is sufficient. Stable and impoverished with an economy dominated by the Army is the more likely future.

Pakistan is in a weak position to bargain with China, and therefore China is going to squeeze Pakistan. The past history of enmity with India, and the current enmity with the US leaves China as Pakistan's only support, and not someone Pakistan can bargain hard with. If you think China is doing CEPC because it wants to help Pakistan, you need to think again. China doesn't do charity.

Prosperity comes from manufacturing, and if that is not available then the second best option is tourism. Collecting toll on a highway is never going to be enough.

In case you're wondering where I came from - because of the limited value I can share on this subject, I'm a lurker on threads like these, nothing more. It just bugged me that genuine attempts at debate have been kiboshed by the emotional few.

 

[Yossarian]

Napa brought up a very topical point above, possibly hoping for a constructive debate, but you reply with the same emotional claptrap post after post. I am pasting the post in question once again below, in case you want to *shock* *horror* ignore the flag and respond to the actual content of the message instead.



In case you're wondering where I came from - because of the limited value I can share on this subject, I'm a lurker on threads like these, nothing more. It just bugged me that genuine attempts at debate have been kiboshed by the emotional few.

Ah yet another Indian keyboard warrior who knows more than those pouring in tens of $billions into the project and who's distraught at the thought of Pakistan being fleeced by the Chinese.

Why is that even with all the claptrap being spouted by the Indians, they still can't see the obvious? ie The Chinese are pouring in tens of $billions of their own money into the project, and all that money will go down the drain unless Pakistan remains stable, and as such Pakistan needs to be economically successful in order to remain stable!

So it's in China's economic and strategic interest for CPEC to be a win/win for both China and Pakistan. Why is that you lot can't get that simple concept into your heads?

 

[Pakpak]

Ah yet another Indian keyboard warrior who knows more than those pouring in tens of $billions into the project and who's distraught at the thought of Pakistan being fleeced by the Chinese.

Why is that even with all the claptrap being spouted by the Indians, they still can't see the obvious? ie The Chinese are pouring in tens of $billions of their own money into the project, and all that money will go down the drain unless Pakistan remains stable, and as such Pakistan needs to be economically successful in order to remain stable!

So it's in China's economic and strategic interest for CPEC to be a win/win for both China and Pakistan. Why is that you lot can't get that simple concept into your heads?

To be fair Varun is not a troll, he's a decent poster.

 

[Yossarian]

To be fair Varun is not a troll, he's a decent poster.

In that case he needs to stop quoting troll posts of his Indian compatriots as well as trying to understand some basic concepts, such as (vis-a-vis my posts in this thread) the fact that it's China that's pouring in tens of $billions into the CPEC project, and that it's in China's economic and strategic interest for CPEC to be a win/win for both China and Pakistan for the reasons previously outlined.

 

[R3verse Swing]

The argument that Pakistan is in a weak position, is weak within itself.

India was once weak too, and by pleading with the world to invest in India, it's now a bit stronger than it was.

 

[indipper]

What proposition did India make in comparison to the Chinese offer?

It doesn't have to, we were a part of it already. Imagine a whole united sub-continent as a single country and pitch it against US,China,GB.. You'd know why divide was imposed by Britain that time by playing muslim-card.

 

[indipper]

Before going on ignorant rant educate yourself about CPEC

Sure, tell me what I don't know.

 

[Gubol123]

So you are saying India backed down after tiny weeny bit of pressure? In the end China favoured Pakistan's concerns? Wow. All that Indian financial and political clout turned out to be a hoax.

No, I mean even after repeated begging by China for Indian involvement, India has opted out.. If Pakistan wants to be a favored country for colonial takeover again, be my guest

 

[English August]

The argument that Pakistan is in a weak position, is weak within itself.

India was once weak too, and by pleading with the world to invest in India, it's now a bit stronger than it was.

Having tracked India's economy for last 25+ years, I can assure you that whatever little progress India has made, is NOT due to world investing in India. In fact external investment in India as % of GDP is not very high. Much of India's growth since 1991 is in fact funded via internal resources.

As many people have pointed out, building a white elephant does not lead to economic development.

 

[English August]

In that case he needs to stop quoting troll posts of his Indian compatriots as well as trying to understand some basic concepts, such as (vis-a-vis my posts in this thread) the fact that it's China that's pouring in tens of $billions into the CPEC project, and that it's in China's economic and strategic interest for CPEC to be a win/win for both China and Pakistan for the reasons previously outlined.

During the 150+ years of British Raj, India was very stable for most parts. What the British were able to do to Indian economy during those years of stability is left as an exercise for those who know something about multinational economics.

 

[Yossarian]

During the 150+ years of British Raj, India was very stable for most parts. What the British were able to do to Indian economy during those years of stability is left as an exercise for those who know something about multinational economics.

Using the Indian economy of 150+ years ago during the era of Colonial expansion and rule, to present an argument against CPEC ?

It's as if transport and logistics, industrial production methods and associated supply chains, globalisation, mass communication, et al hasn't changed at all in those intervening 150+ years.

 

[Napa]

Using the Indian economy of 150+ years ago during the era of Colonial expansion and rule, to present an argument against CPEC ?

It's as if transport and logistics, industrial production methods and associated supply chains, globalisation, mass communication, et al hasn't changed at all in those intervening 150+ years.

There is a difference between "150+ years of" and "150+ years ago".

Anyway, I hope CPEC works out for Pakistan as you think it will. The betterment of the lives of poor people is a good thing, irrespective of where in the world they may be.

 

[Yossarian]

There is a difference between "150+ years of" and "150+ years ago".

Anyway, I hope CPEC works out for Pakistan as you think it will. The betterment of the lives of poor people is a good thing, irrespective of where in the world they may be.

I hope so. It will be better for my cousins in Pakistan (one of them, an engineer, has already landed a job with a CPEC related Chinese owned agricultural equipment manufacturer, at a far better salary and benefits than his previous job). It doesn't directly affect me personally though as I'm a UK based British national.

 

[R3verse Swing]

No, I mean even after repeated begging by China for Indian involvement, India has opted out.. If Pakistan wants to be a favored country for colonial takeover again, be my guest

Evidence or it didn't happen.

 

[carbon11]

Pakistan delays FTA-II signing with China at eleventh hour

Business community has strong reservations about Beijing’s list of concessions

By SHAHBAZ RANA
Apr.06,2018

ISLAMABAD: Pakistan has put off the signing of a revised free trade agreement with China at the last moment due to strong reservations about the final offer list shared by Beijing, said Minister of State for Finance Rana Muhammad Afzal on Thursday.

“The agreement was almost ready for signing when we conveyed our reservations to the prime minister about the final list of concessions that Beijing shared at 11pm,” said the deputy finance minister.

He was briefing the National Assembly Standing Committee on Finance on the status of negotiations on second phase of the free trade agreement (FTA) with China.

The committee expressed concern over what it said was the secret nature of FTA-II talks. Over the past few weeks, the Chinese ambassador has held meetings with the commerce secretary and Prime Minister Shahid Khaqan Abbasi in order to push the deal.

It was almost a mature agreement and was about to be signed by both countries, Afzal said, revealing the decision to delay the endorsement was taken after the business community of Faisalabad – Pakistan’s textile hub – voiced serious reservations about the Chinese final offer list.

Pakistan-China: ‘FTA to be signed by mid-March’

Both countries have so far held 10 rounds of negotiations for finalisation of the FTA-II. However, the industry and Federal Board of Revenue put up fierce resistance after the commerce ministry revealed in an internal meeting that Pakistan would offer zero duties on 75% of imported tariff lines.

Under first phase of the FTA, Pakistan gave duty concessions on 35% of tariff lines, which led to a huge influx of Chinese goods and many local industries could not survive.

Under the second phase, China was seeking certain concessions which the Pakistan industry was not ready to give, said Afzal.

“Bureaucracy thinks that it knows all, but this approach has put the country’s economic future at stake,” said Qaiser Ahmad Sheikh, Chairman of the National Assembly Standing Committee on Finance.

He regretted that the commerce ministry did not take all the stakeholders into confidence before offering huge concessions to Beijing. Trade with China was already one-sided and if further concessions were given, no industry would survive in Pakistan, he warned.

Trade volume between China and Pakistan, which stood at $4 billion a year before the FTA signing in 2008, peaked to $15.6 billion in 2016-17. Pakistan’s exports to China were only $1.5 billion in the last fiscal year while imports amounted to $14 billion, according to Chinese statistics.

It was a wrong perception that the commerce ministry did not take the stakeholders into confidence as it had held meetings with 85 associations, claimed Javed Akbar, Additional Commerce Secretary.

He revealed that 40% of imports from China were not entitled for duty concessions and most of the imports comprised either capital goods or raw material. However, committee members did not accept the ministry’s explanation.

Pakistan, China: Trade surges with CPEC, FTA

Akbar revealed that the 11th round of talks with China would now be held only after taking into confidence all the stakeholders on China’s final offer.

The commerce ministry did not hold meaningful consultations with parliament before holding talks with China, said Asad Umar of the Pakistan Tehreek-e-Insaf.

He underlined the need for a review of the trade figures to determine how much of imports from China was the outcome of change in destination from Europe and the west to China.

Umar said free trade agreements should not be constructed on theory rather they must be based on ground realities. “The ground reality is that Pakistan’s industry is not competitive.”

“FTA-II is being finalised in haste as it serves vested interests of a few people,” remarked Qaiser Sheikh.

A joint meeting of the National Assembly standing committees on finance and commerce will now be held to finalise parliament’s response to the FTA-II.

There is apprehension that Beijing’s push for further trade liberalisation under second phase of the FTA may dampen prospects of Chinese investment in prioritised special economic zones being set up under the China-Pakistan Economic Corridor (CPEC).

It would be convenient and cheaper for Chinese companies to manufacture in China and supply products to Pakistan at zero duties, which would render the SEZs useless.

Published in The Express Tribune, April 6th, 2018.

https://www.google.co.uk/amp/s/trib...ays-fta-ii-signing-china-eleventh-hour/?amp=1

 

[carbon11]

Pak cheen dosti wong woye

Now fta up the spout, China not giving any concessions so called iron friend 2nd round of failed talks , if China has its way these so called special economic zones of cpec will be nothing put white elephants so no industrial growth , only flood of Chinese goods destroying local industry, using Chinese made infrastructure roads bridges ports and junk outdated chinese coal and nuclear plants which the Pakistani nation has to pay for with high interests .

So called economic taraqi of cpec

Told you it was a load cobblers thank God there are some people awake in Pakistan who rejected this fta ii proposal

 

[MenInG]

KARACHI: China-Pakistan Economic Corridor (CPEC) Authority czar Khalid Mansoor came out on Saturday swinging at the United States for hatching plots against the multibillion-dollar project.

Addressing the CPEC Summit at the Institute of Business Administration (IBA), the special assistant to the prime minister (SAPM) on CPEC affairs accused the United States of conniving in cahoots with India against the economic lifeline of Pakistan.

“From the point of view of the emerging geo-strategic situation, one thing is clear: the United States supported by India is inimical to CPEC. It will not let it succeed. That’s where we have to take a position,” Mr Mansoor said.

Islamabad is the seventh largest recipient of Chinese overseas development financing with 71 projects worth $27.3 billion currently under way as part of CPEC. Many Western think tanks and commentators have termed CPEC an economic trap that has already resulted in bloated public debt levels and disproportionately high Chinese influence in the domestic economy.

Washington now ‘taking stock of economic and political consequences’

The premier’s aide said the United States and India continue to “make attempts to manoeuvre Pakistan out of” China’s Belt and Road Initiative (BRI) — a global infrastructure development plan — under which the Chinese government has been investing heavily in about 70 countries.

“There’s no way Pakistan will forgo any of its benefits. It has more than once burnt its fingers in (the Western) alliance in the past,” he said, adding that their attempts to dilute China’s strategic influence in the region will fail.

He said the Western powers view CPEC as a symbol of China’s political ambition. “That’s the reason CPEC is seen suspiciously by both the United States and Europe… they view CEPC more as a move by China to expand its political, strategic and business influence,” said Mr Mansoor, noting that China has been able to manage that apprehension “to a great extent”.

The United States is now “taking stock of the economic and political consequences” of withdrawing from the region, he said.

“I had a very, very detailed discussion with the American embassy people. I told them CPEC is available for them as well. They have also expressed their wish that they would like to develop some kind of involvement and see how it can be beneficial for both countries,” he noted.

The SAPM said Islamabad is seeking the expansion of CPEC to Afghanistan and has discussed the possibility of Taliban-led Afghanistan joining the multibillion-dollar economic corridor.

He said there’s been “deep interest” in developing economic connectivity between Afghanistan and Pakistan and with other neighbouring countries, including Iran. “Some European countries have started showing interest (in CPEC). Their ambassadors keep on coming,” he said.

He repeatedly referred to fake news and “negative propaganda” about the viability of CPEC and the pace of its progress. “In terms of its scope, Phase II of CPEC is going to be an order of magnitude bigger than Phase I.”

Published in Dawn, October 24th, 2021

 

[Napa]

China needs a reliable land corridor to a warm sea port that also bypasses the Straight of Malacca as well as shaving off thousands of miles off shipping routes to Africa, the Middle East, and Europe (via the Suez Canal). And CPEC is it.
And if CPEC is to become a key artery of Chinese trade to the rest of the world, then China needs a stable and prosperous Pakistan to keep it that way.

You think China is going to allow India wreck it all? To use your words, China, and not India, is "the bigger, badder, more powerful side"

3.5 years later, how is the CEPC working out for Pakistan? Has it improved or worsened Pakistan’s external debt situation?

 

[ElRaja]

3.5 years later, how is the CEPC working out for Pakistan? Has it improved or worsened Pakistan’s external debt situation?

has worsened the external debt situation, but borrowing money will do that. depends on what you get in return. pakistan had severe energy generation issues and cpec projects have gone a significant way to easing them..... but the fossil fuel power plants still require imported fuel, and the grid in Pakistan is archaic, at peak the grid cannot handle the power being produced.

the story for all the infrastructure projects is similar, where the headline projects have definitely improved infrastructure however the support systems around those projects are not up to scratch.

the final point which ive banged on about for ages is that the private sector in pakistan is simply not taking advantage of infrastructural investments, if we just take the power, roads and sea ports, you have the basic requirements to set up all kinds of industry, for example take the issue mentioned above and the infrastructure created, would make Pakistan a very obvious place for battery production given likely huge local demand, but this has not happened, the private sector in pakistan is still lagging.

so yes pakistans external debt situation is worse, but the real issue is that the private and local public sector have not leveraged the investments correctly. and finally, a lot of the borrowing is bilateral, and where friendly nations are concerned the burden works differently to marketed debt.

 

[mustang]

has worsened the external debt situation, but borrowing money will do that. depends on what you get in return. pakistan had severe energy generation issues and cpec projects have gone a significant way to easing them..... but the fossil fuel power plants still require imported fuel, and the grid in Pakistan is archaic, at peak the grid cannot handle the power being produced.

the story for all the infrastructure projects is similar, where the headline projects have definitely improved infrastructure however the support systems around those projects are not up to scratch.

the final point which ive banged on about for ages is that the private sector in pakistan is simply not taking advantage of infrastructural investments, if we just take the power, roads and sea ports, you have the basic requirements to set up all kinds of industry, for example take the issue mentioned above and the infrastructure created, would make Pakistan a very obvious place for battery production given likely huge local demand, but this has not happened, the private sector in pakistan is still lagging.

so yes pakistans external debt situation is worse, but the real issue is that the private and local public sector have not leveraged the investments correctly. and finally, a lot of the borrowing is bilateral, and where friendly nations are concerned the burden works differently to marketed debt.

Some interesting points here. Why is the private sector not getting propped up or growing in spite of the infrastructure investments?

 

[Napa]

has worsened the external debt situation, but borrowing money will do that. depends on what you get in return. pakistan had severe energy generation issues and cpec projects have gone a significant way to easing them..... but the fossil fuel power plants still require imported fuel, and the grid in Pakistan is archaic, at peak the grid cannot handle the power being produced.

the story for all the infrastructure projects is similar, where the headline projects have definitely improved infrastructure however the support systems around those projects are not up to scratch.

the final point which ive banged on about for ages is that the private sector in pakistan is simply not taking advantage of infrastructural investments, if we just take the power, roads and sea ports, you have the basic requirements to set up all kinds of industry, for example take the issue mentioned above and the infrastructure created, would make Pakistan a very obvious place for battery production given likely huge local demand, but this has not happened, the private sector in pakistan is still lagging.

so yes pakistans external debt situation is worse, but the real issue is that the private and local public sector have not leveraged the investments correctly. and finally, a lot of the borrowing is bilateral, and where friendly nations are concerned the burden works differently to marketed debt.

Some interesting points here. Why is the private sector not getting propped up or growing in spite of the infrastructure investments?

It is very rare for private sector in underdeveloped countries to become competitive without the import of technology from Western countries. The most common route for the growth of private enterprise in multiple Asian countries has been for Western multinationals to partner in developing industries with technology and FDI.

Pakistan has to create conditions conducive for Western multinationals to invest. Simply increasing the availability of electricity is not enough.

Pakistani private sector has many intelligent and capable persons. They are doing the best they can given the conditions.

 

[ElRaja]

Some interesting points here. Why is the private sector not getting propped up or growing in spite of the infrastructure investments?

1. corruption (endemic)
2. at best, an ambivalent attitude towards entrepreneurship limited to certain communities
3. lack of trust in financing (mistrust of western financial systems)
4. lack of expertise
5. mistrust of consumerism, less individualism
6. tenuous property rights
7. barely any intellectual property rights
8. lack of land reforms (capital tied up in land)

off the top of my head, in that order roughly.

It is very rare for private sector in underdeveloped countries to become competitive without the import of technology from Western countries. The most common route for the growth of private enterprise in multiple Asian countries has been for Western multinationals to partner in developing industries with technology and FDI.

Pakistan has to create conditions conducive for Western multinationals to invest. Simply increasing the availability of electricity is not enough.

Pakistani private sector has many intelligent and capable persons. They are doing the best they can given the conditions.

pakistan is a country of 220 million people, no other country of that size has such a narrowly developed private sector. pakistan had a (relatively) thriving private sector in the 60s before bhuttos nationalised everything, and crazy amounts of bureaucracy crept into everything.

now that the companies have been privatised again you still have a lot of those old inefficient practices still present. theres a change, especially in the ecommerce space where young entrepreneurs are changing things, but it will take a long time, and a fundamental change in domestic investment trends to grow that industry.

and yes, simply increasing electricity does have a massive effect on a country plagued by chronic electricity shortages.

 

[Napa]

1. corruption (endemic)
2. at best, an ambivalent attitude towards entrepreneurship limited to certain communities
3. lack of trust in financing (mistrust of western financial systems)
4. lack of expertise
5. mistrust of consumerism, less individualism
6. tenuous property rights
7. barely any intellectual property rights
8. lack of land reforms (capital tied up in land)

off the top of my head, in that order roughly.



pakistan is a country of 220 million people, no other country of that size has such a narrowly developed private sector. pakistan had a (relatively) thriving private sector in the 60s before bhuttos nationalised everything, and crazy amounts of bureaucracy crept into everything.

now that the companies have been privatised again you still have a lot of those old inefficient practices still present. theres a change, especially in the ecommerce space where young entrepreneurs are changing things, but it will take a long time, and a fundamental change in domestic investment trends to grow that industry.

and yes, simply increasing electricity does have a massive effect on a country plagued by chronic electricity shortages.

Let me say that availability of electricity is a necessary but not sufficient condition for development.

 

[Yossarian]

3.5 years later, how is the CEPC working out for Pakistan? Has it improved or worsened Pakistan’s external debt situation?

Mega projects like this are not measured in such short time periods. They are measured in decades, or even longer. Bridges, roads, railways and other infrastructure on such mega projects take time to build, but once built won't disappear overnight. The benefits, once completed, will last far into the future. Sure there may be a few hiccups along the way, but ultimately it's a win-win for both Pakistan and China

 

[Yossarian]

It is very rare for private sector in underdeveloped countries to become competitive without the import of technology from Western countries. The most common route for the growth of private enterprise in multiple Asian countries has been for Western multinationals to partner in developing industries with technology and FDI.

Pakistan has to create conditions conducive for Western multinationals to invest. Simply increasing the availability of electricity is not enough.

Pakistani private sector has many intelligent and capable persons. They are doing the best they can given the conditions.

Why only Western countries? Surely even you can see that the world is changing, and the West no longer has a monopoly on industrial technology?

 

[Napa]

Why only Western countries? Surely even you can see that the world is changing, and the West no longer has a monopoly on industrial technology?

Western (a term which includes Japan and South Korea) firms have a decades long track record of investing in low income countries leading them to develop economically.

Other than the West, China now has technology in some areas. However, China also has a pool of medium priced labor and shows no inclination of exporting jobs that this labor could do. I doubt China will make the sort of investments that Western firms have made.

Western FDI still remains essential for development , Chinese FDI is sale of Chinese infrastructure.

 

[Cpt. Rishwat]

Western (a term which includes Japan and South Korea) firms have a decades long track record of investing in low income countries leading them to develop economically.

Other than the West, China now has technology in some areas. However, China also has a pool of medium priced labor and shows no inclination of exporting jobs that this labor could do. I doubt China will make the sort of investments that Western firms have made.

Western FDI still remains essential for development , Chinese FDI is sale of Chinese infrastructure.

Infrastructure includes roads, fossil fuels for energy I would guess. Maybe you are still hoping to float all of these resources via the seas across the world.

 

[Napa]

Infrastructure includes roads, fossil fuels for energy I would guess. Maybe you are still hoping to float all of these resources via the seas across the world.

Your post doesn't make sense. My point is that Western firms make investments to reduce labor costs which benefits the FDI recipient as it leads to the development of modern industries. Chinese firms do not invest to take advantage of lower labor costs, they "invest" to sell Chinese power plants or in Africa to extract minerals etc.

Of course roads are not going to be shipped over the seas, that is a ridiculous idea. However, the cheapest method of transporting manufactured goods across continents is by ship rather than trucks and trains.

https://en.wikipedia.org/wiki/Containerization#Twenty-first_century

I am not hoping for anything, just pointing out the way the world works.

 

[Yossarian]

However, the cheapest method of transporting manufactured goods across continents is by ship rather than trucks and trains.

Not unless you can shave thousands of miles, and many days, by taking a shortcut over land using road and rail, instead of going the long way around by sea.

Even more so if China is shipping products from central or western China, since you're also saving on time and cost by not having to first transport the goods by road and rail to Chinese seaports in the east.

You really need to take some geography lessons and then look at some maps showing the lengths of sea routes Chinese shipping have to navigate through.