One of China’s Most Ambitious Projects Becomes a Corridor to Nowhere

[Local.Dada]

Bloomberg) -- The four-times-a-week propeller plane from Karachi whips up a cloud of dust as it lands on an arid airstrip. Passengers cross the tarmac in the scorching sun and enter an arrivals terminal not much larger than a tractor-trailer. Outside, soldiers carrying AK-47s are waiting. This is Gwadar, a remote scratch of land on Pakistan’s southwest coast. Its port is the last stop on a planned $62 billion corridor connecting China’s landlocked westernmost province to the Arabian Sea, the crown jewel of President Xi Jinping’s Belt and Road Initiative, designed to build infrastructure and influence around the world.

Plans originally called for a seaport, roads, railways, pipelines, dozens of factories and the largest airport in Pakistan. But, almost seven years after the China-Pakistan Economic Corridor was established, there’s little evidence of that vision being realized. The site of the new airport, which was supposed to have been completed with Chinese funding more than three years ago, is a fenced-off area of scrub and dun-colored sand. Specks of mica in the dirt are the only things that glitter. The factories have yet to materialize on a stretch of beach along the bay south of the airport. And traffic at Gwadar’s tiny, three-berth port is sparse. A Pakistan Navy frigate is the only ship docked there during a recent visit, and there’s no sign of the sole scheduled weekly cargo run from Karachi.

Less than one-third of announced CPEC projects have been completed, totaling about $19 billion, according to government statements. Pakistan bears much of the blame. It has repeatedly missed construction targets as it ran out of money; it got a $6 billion bailout from the International Monetary Fund last year, the country’s 13th since the late 1980s. Two successive prime ministers have been jailed on corruption charges. And the Baloch Liberation Army’s desire for a separate homeland in Balochistan province, where Gwadar is located, has made life there uneasy. In May, militants stormed the city’s only luxury hotel, shooting up the white-marbled lobby and killing five people.

But setbacks in Gwadar point to larger problems along the Belt and Road. China is scaling back its ambitions, not just in Pakistan but around the world. Its economic growth has slowed to the lowest rate in three decades, inflation is rising and the country has been feeling the effects of a trade war with the U.S. The picture is getting even darker as a coronavirus epidemic that originated in central China threatens to cause further delays and cutbacks. “The biggest constraint for China now is its own economy,” says Jonathan Hillman, a senior fellow at the Center for Strategic and International Studies in Washington.

In a number of countries, projects have been canceled, downsized or scrutinized. Malaysia renegotiated the terms of a rail link being built by China and scrapped $3 billion of planned pipelines. In Kenya, a court halted construction last year on a $2 billion power plant financed by China. And in Sri Lanka, new leaders said they want to regain control of a port in Hambantota that was leased to a Chinese company for 99 years when the previous government couldn’t pay back a loan. That takeover sparked concern in many Belt and Road countries that China’s largesse comes with the risk of ceding critical infrastructure. And it has increased wariness about the price of indebtedness to China, which the Washington-based Center for Global Development says puts at least eight nations, including Pakistan, at high risk of debt distress.

All that could result in shaving hundreds of billions of dollars off an estimated $1 trillion of planned Belt and Road spending, according to a September report by law firm Baker McKenzie. While the value of signed projects increased last year, data from China’s Ministry of Commerce show actual spending stalled at $75 billion in 2019 after falling 14% the previous year. Total spending from the beginning of 2014, shortly after President Xi announced the initiative, through November 2019 is $337 billion, government figures show, far short of China’s ambitious goals.

For Full Article

https://www.yahoo.com/finance/news/one-china-most-ambitious-projects-210022297.html

Thoughts?

 

[Local.Dada]

Looks like this thread will go the same way as the corridor. Empty and abandoned

By the way I am not rubbing it in, Pakistan needs to improve it's economy by changing it's internal policies and the way businesses are done instead of outsourcing to China who are notorious for looking out for themselves even if it means some one else will suffer.

As few have pointed out this was a bad idea to begin with.

 

[InziRules]

CPEC has not been abandoned. This is Pakistan, a project running and meeting every deadline is about as likely as Bhakhts not overloading this thread trying to decry any economic progress. It hasn't been the raging success some people thought it would be, but it has brought jobs, brought some degree of development to provinces like Balochistan and increased Sino-Pak cooperation.

 

[Vastunna]

Realistically, CPEC can never be the ideal blockbuster which many people over here dream it will be.

 

[IndianHero]

From neutral sources I have read that project may not be as successful as it was anticipated to be. But it has some part (even though minor) of contribution to economy. Few jobs got created and I read the CPEC deal will not bear profits for the next 15 to 20 years for pakistan as the contract has been written in a such way that first 25 years china will take nearly 90 % so after 20 years pakistan can see profits from this project.

 

[MenInG]

Love the anti Pak flavour in this thread from usual suspects:

"But setbacks in Gwadar point to larger problems along the Belt and Road. China is scaling back its ambitions, not just in Pakistan but around the world. Its economic growth has slowed to the lowest rate in three decades"

 

[Local.Dada]

Love the anti Pak flavour in this thread from usual suspects:

"But setbacks in Gwadar point to larger problems along the Belt and Road. China is scaling back its ambitions, not just in Pakistan but around the world. Its economic growth has slowed to the lowest rate in three decades"

The article is more Anti-China than Pak if you could cal it that.

 

[Bewal Express]

If the project is a waste of time, why the Indians propagating against it all the time. Surely they should be happy that both Ch and PK have wasted money.

 

[Local.Dada]

If the project is a waste of time, why the Indians propagating against it all the time. Surely they should be happy that both Ch and PK have wasted money.

Why do you care about what indians think? This is a huge initiative between Pak and China. This article is from Yahoo (US edition) and seems to be written by either a Chinese-American or a Chinese origin journalist.

Instead of being hung up on what Indian posters are thinking you are free to either refute this or give your thoughts on why it is failing.

Trust me will keep an open mind instead of having a preconceived view point and being stubborn or open to counter opinions like a few display on india related topics.

 

[InziRules]

If the project is a waste of time, why the Indians propagating against it all the time. Surely they should be happy that both Ch and PK have wasted money.

Because they don't realise that infrastructure development alone is a huge part of CPEC. That even if it doesn't bring direct financial benefits on that level, having developed infrastructure (Even with delays) is bigger than those direct gains. Because we can use that infrastructure for other things too. It's bringing jobs, I know so many people back home on CPEC jobs. It's producing more and power, as Power China, among others set up shop in Pakistan. It's bringing a lot of benefits and no drawbacks, other than on a macroeconomic level, which is not the concern of an average Pakistani, and those loans are not a major issue anyway, compared to our general economic outlook.

They don't like to see us prosper in anyway.

 

[Bewal Express]

Why do you care about what indians think? This is a huge initiative between Pak and China. This article is from Yahoo (US edition) and seems to be written by either a Chinese-American or a Chinese origin journalist.

Instead of being hung up on what Indian posters are thinking you are free to either refute this or give your thoughts on why it is failing.

Trust me will keep an open mind instead of having a preconceived view point and being stubborn or open to counter opinions like a few display on india related topics.

I am about the General Ind Propaganda against it. The more they moan about it, the more i think we are onto a good thing.

 

[Kroll]

CPEC is a massive project, I mean of gargantuan proportions. It's literally a game changer. So taking this into account and the fact that this Pakistan, it's silly to call it the corridor to nowhere.

The projects will continue to progress albeit really slowly so you have to take these project completion targets with a pinch of salt.

 

[MenInG]

British High Commissioner Dr Christian Turner CMG Friday said Gwadar will be a key economic hub for Pakistan. The High Commissioner presided over the coin toss for a celebrity cricket match – the Gwadar Dolphins led by the Prime Minister’s Special Assistant Zulfi Bukari, versus the Showbiz Sharks led by Wasim Khan, CEO of the Pakistan Cricket Board. The match was dedicated to Pakistan climbing hero Ali Sadpara.

The High Commissioner saw the long-term potential of Gwadar to be a leisure and business centre for Pakistan, as well as how it could be a key hub to connect Balochistan with the rest of Pakistan, as well as neighbouring countries. During his visit the High Commissioner underlined that any inward investment must be environmentally friendly and should benefit the local community.

https://dailytimes.com.pk/726006/uk-hc-says-gwadar-will-be-a-key-economic-hub-for-pakistan/

 

[Napa]

China’s Belt and Road Initiative never made much sense to me. Countries in the modern world become rich by developing modern industries, not by providing “trade routes”.

The world’s oceans are low cost “trade routes” to all countries except for a few small landlocked ones. Construction of new trade routes seemed to be about Chinese desire to employ its resources that would otherwise have been idle.

 

[observer1]

I agree with MenInG .

A good barometer to check whether or not Pakistan is onto a good thing is to look at the reaction of Right Wing Indians frothing at the mouths.

They screeched when Imran came into power and they screech whenever China is involved.
They screech when Afghanistan or Balochistan is mentioned and they screech when Kashmir is mentioned.

They screech at fellow Indians for not towing the Hindutva line and they screech when Sikhs protest at their Anti Farmer rhetoric.

They can screech as much as they like. It will never change how pathetic they make their Country look.

 

[Napa]

I agree with MenInG .

A good barometer to check whether or not Pakistan is onto a good thing is to look at the reaction of Right Wing Indians frothing at the mouths.

They screeched when Imran came into power and they screech whenever China is involved.
They screech when Afghanistan or Balochistan is mentioned and they screech when Kashmir is mentioned.

They screech at fellow Indians for not towing the Hindutva line and they screech when Sikhs protest at their Anti Farmer rhetoric.

They can screech as much as they like. It will never change how pathetic they make their Country look.

Your attitude in reading the posts discussing CEPC through an anti-India prism pretty much explains why Pakistan hasn't been able to develop modern industries. Everything is India's fault.

 

[Bigboii]

I agree with MenInG .

A good barometer to check whether or not Pakistan is onto a good thing is to look at the reaction of Right Wing Indians frothing at the mouths.

They screeched when Imran came into power and they screech whenever China is involved.
They screech when Afghanistan or Balochistan is mentioned and they screech when Kashmir is mentioned.

They screech at fellow Indians for not towing the Hindutva line and they screech when Sikhs protest at their Anti Farmer rhetoric.

They can screech as much as they like. It will never change how pathetic they make their Country look.

Should india apply the same barometer with Pakistani rw

I mean Modi sure does make Pakistanis mad with his stupid antics so must be doing something right for India?

 

[Cpt. Rishwat]

China’s Belt and Road Initiative never made much sense to me. Countries in the modern world become rich by developing modern industries, not by providing “trade routes”.

The world’s oceans are low cost “trade routes” to all countries except for a few small landlocked ones. Construction of new trade routes seemed to be about Chinese desire to employ its resources that would otherwise have been idle.

You could hardly call Britain landlocked, but when the EU deal ran out, there were still large tailbacks of lorries at Dover caused by red tape. First time I'm hearing that roads are going to become unnecessary as everything will be transported by sea.

 

[the Great Khan]

China’s Belt and Road Initiative never made much sense to me. Countries in the modern world become rich by developing modern industries, not by providing “trade routes”.

The world’s oceans are low cost “trade routes” to all countries except for a few small landlocked ones. Construction of new trade routes seemed to be about Chinese desire to employ its resources that would otherwise have been idle.

Im sorry but this post alone disqualifies you from ever talking about this topic again.

 

[Stewie]

So many Indians care for CPEC... who knew!!!!

LMAO!

Hand them all mom battis.. they are holding a vigil for us it seems!

 

[the Great Khan]

Should india apply the same barometer with Pakistani rw

I mean Modi sure does make Pakistanis mad with his stupid antics so must be doing something right for India?

Modi is the best thing to happen to PAKISTAN..

 

[Itachi]

So many Indians care for CPEC... who knew!!!!

LMAO!

Hand them all mom battis.. they are holding a vigil for us it seems!

Keep your friends close, keep your enemies closer.

 

[King-Misbah]

You could hardly call Britain landlocked, but when the EU deal ran out, there were still large tailbacks of lorries at Dover caused by red tape. First time I'm hearing that roads are going to become unnecessary as everything will be transported by sea.

Logistics will always be an important factor, Pakistan slowly becoming a logistic state is good news.

 

[Napa]

You could hardly call Britain landlocked, but when the EU deal ran out, there were still large tailbacks of lorries at Dover caused by red tape. First time I'm hearing that roads are going to become unnecessary as everything will be transported by sea.

Obviously you need roads for internal distribution. The Gwadar port and Sri Lanka’s Hambantota port are part of China’s BRI which are NEW trade routes or additions to existing trade routes.

It seems a bit far fetched that stuff produced in China will be transported by road and rail to Gawdar to be shipped elsewhere.

Hambantota has already been a failure for Sri Lanka.

“Sri Lanka wants its ‘debt trap’ Hambantota port back. But will China listen?“

https://www.google.com/amp/s/amp.sc...its-debt-trap-hambantota-port-back-will-china

Rather than providing China a port for its exports, Pakistan should rather develop new modern industries that will produce stuff to be exported.

 

[Bigboii]

[MENTION=142162]Napa[/MENTION] I think Chinese are doing thier version of Marshall plan by interlocking thier economy, military with thier allies/puppet states
all of this aid/loans are there to strengthen thier allies economically and politically

something similar to what US did with its allies

What do you think they are doing wrong in this situation? What can they fix to make this plan work for China?

 

[Bigboii]

^
Pakistan is lucky and unlucky at the same time

US wanted to invest heavily into Pakistan's economy and propel it into the upper echelon of US allies (similar to Japan, SK, Taiwan not as close as European allies but still close)

Cause the belief was that to counter USSR you needed an ally in the region with a robust economy so the military ends of things are maintained (something they were also looking at Iran to do and until shahs overthrow they benefitted but Pakistan with its high population was always going to be the center/ main ally in the region)

You can judge this closeness and interest of US in Pakistan by this important fact
Pakistan had one of the latest US jets of its time
so in modern times look at a country with F-35 and just look at thier economy and prestige and you'll know exactly what I am talking about...

This investment and focus was there till the 1965 war
after the war US started putting a break in thier relationship cause US didn't want an ally who isn't thier lapdogs and Pakistan wasn't thier lapdogs
They refused to listen to US and started the war without thier "permission" after that US knew Pakistan wasn't to be trusted and slowly but surely the US influence waned in Pakistan affairs

The Kashmir affair and wars associated with it propped Pakistan back into poverty and poor economy

Now a similar oppurtinity awaits Pakistan another future superpower knocking on our doors looking to build economy/military (but they associate some costs with it like being a lapdog of China and agreeing with everything they say and refusing to do anything they even hint at refusing)

But I am afraid that history might repeat itself cause we haven't fixed our issues in Kashmir, our political system is still not where it should be to keep the country stable, ethnic turmoil, red tape

So we are looking at another opening to propel the country into the future but we are like PCT just working on talent (IE in Pakistan's case its geography and willingness of superpowers to make it a close ally)

but increasingly in modern day talent alone won't cut it it requires some introspection, it requires some work, biggest thing modern booming economy requires

a peaceful, stable country and that can only come with a stable political system and I am afraid there still a lot to be desired on that front...

 

[Napa]

[MENTION=142162]Napa[/MENTION] I think Chinese are doing thier version of Marshall plan by interlocking thier economy, military with thier allies/puppet states
all of this aid/loans are there to strengthen thier allies economically and politically

something similar to what US did with its allies

What do you think they are doing wrong in this situation? What can they fix to make this plan work for China?

1. I think China has accumulated a lot of wealth by running trade surpluses. They want to convert some of that to physical assets. They try to buy US assets but are often rebuffed by the US government on national security concerns. BRI is one way of getting physical assets around the world.

2. BRI is a government initiative, so the economic thinking of the private sector is not there. The Hambantota port was poorly thought out and caused Sri Lanka many problems.

3. There is a big difference between how the US and other Western countries invest, and how China invests. The US private sector investments are usually in resources (like oil) or in manufacturing/services. When IBM or Microsoft open development centers in India, they are providing jobs to tens of thousands white collar workers, and these bring in billions of dollars to India. When the invested in manufacturing in China, it brought in trillions to China through exports. Western companies benefitted because they got low cost manufacturing and services, but they made the recipient countries very rich (Japan, China, SK, Malaysia etc.).

3. When China invests, it does not invest in industries with obvious export capabilities. Roads in Pakistan and trains in Africa do not have immediate or obvious exports. It is true that infrastructure helps other industry develop, but I believe there is already enough infrastructure in Pakistan. It is not the lack of infrastructure that is holding back Pakistan from developing exporting industries, it is something else.

4. Chinese investment comes with the import of Chinese goods and labor, which results in the recipient country ending up with a larger debt. It would have been better for China to have used as much local resources as possible, which it does not. So Chinese lending creates a market for Chinese manufacturing and labor, which suits them just fine but results in larger debt for the recipient country.

5. What Pakistan needs to do is be very clear about the implications of taking on debt. The thinking shouldn't be "It's wonderful that China is lending us $50 billion for power plants and roads, and we will get all this new infrastructure". The thinking should be "We are taking $50 billion in debt. How much will this investment produce in terms of new exports? It needs to produce at least $50 billion to have a net positive impact on our forex situation". Basically Pakistan should focus on getting exports oriented industries (manufacturing, software etc.) instead of spending tens of billions on infrastructure like the Gawdar port with uncertain prospects. It should follow China's example, China got rich not by getting Western investments in its infrastructure, it got rich by getting foreign investments for export oriented manufacturing.

 

[Last Monetarist]

These devious scoundrels are going to deliberately crush these economies under the guise of concessionary infrastructure financing.

Debt traps building white elephants, we are already seeing this play out painfully in this country.

https://www.reuters.com/markets/europe/african-nations-mend-make-do-china-tightens-belt-road-2021-11-22/

Deep in Kenya's Great Rift Valley, members of the National Youth Service tirelessly swing machetes to clear dense shrubs obscuring railway tracks more than a century old.

It's a distinctly low-tech phase for China's Belt and Road drive in Africa to create the trade highways of the future.

There's not enough money left to complete the new 1,000-km super-fast rail link from the port of Mombasa to Uganda. It ends abruptly in the countryside, 468 km short of the border, and now Kenya is resorting to finishing the route by revamping the 19th-century colonial British-built tracks that once passed that way.

China has lent African countries hundreds of billions of dollars as part of President Xi Jinping's Belt and Road Initiative (BRI) which envisaged Chinese institutions financing the bulk of the infrastructure in mainly developing nations. Yet the credit has dried up in recent years.

On top of the damage wrought to both China and its creditors by COVID-19, analysts and academics attribute the slowdown to factors such as a waning appetite in Beijing for large foreign investments, a commodity price crash that has complicated African debt servicing, plus some borrowers' reluctance to enter lending deals backed by their natural resources.

"We are not in the go-go period anymore," Adam Tooze, a Columbia University historian, said about China's overseas investment projects. "There is definitely a rebalancing from the China side," said Tooze, whose new book Shutdown examines how COVID-19 affected the world economy, adding that Beijing's current account surplus was "dwindling somewhat".

Chinese investments in the 138 countries targeted by BRI slid 54% from 2019 to $47 billion last year, the lowest amount since the BRI was unveiled in 2013, according to Green BRI, a China-based think-tank that focuses on analysing the initiative.

In Africa, home to 40 of those BRI nations, Chinese bank financing for infrastructure projects fell from $11 billion in 2017 to $3.3 billion in 2020, according to a report by international law firm Baker McKenzie.

This is a blow for governments who were anticipating securing Chinese loans to build highways and rail lines linking landlocked countries to sea ports and trade routes to Asia and Europe. The continent is facing an estimated annual infrastructure investment deficit of around $100 billion, according to the African Development Bank.

"The pandemic has actually made things worse. Those numbers will go up," said Akinwumi Adesina, the president of the bank, citing the need for additional infrastructure to support health services.

Hold-ups have hit some other BRI projects across the continent, such as a $3 billion Nigerian rail project and a $450 million highway in Cameroon.

China's ministry of foreign affairs did not respond to a request for comment.

Beijing officials have said that the two sides have a mutually beneficial and cooperative relationship and that lending is done openly and transparently.

"When providing interest-free loans and concessional loans, we fully consider the debt situation and repayment capacity of the recipient countries in Africa, and work in accordance with the law," Zhou Liujun, vice chairman of China International Development Cooperation Agency told reporters in late October.

Another Chinese official, who declined to be named as they are not authorised to speak to the media, said Beijing always intended to implement BRI gradually to manage debt default risks by countries or projects.

Officials in Kenya said its rail route were long-term projects that would be seen through over time, without giving any specific timeframe. The COVID-19 has presented the world with unforeseen and unprecedented challenges, they added.

"Eventually, this standard gauge railway will still be complete because it is part of what we call the Belt and Road Initiative," said James Macharia, Kenya's transport minister.

The government has already spent about $5 billion on its new rail link, and can't currently afford the additional $3.7 billion needed to finish it. The last station hooked up is only accessible by dirt roads.

Hence engineers in the Rift Valley are no longer building new infrastructure, but rather shoring up colonial-era viaducts and bridges in an operation that the government estimates will cost about 10 billion shillings ($91 million).

There are knock-on effects and, over the border in Uganda, construction on a modern railway line has been delayed because it's supposed to link to the Kenyan one.

That has been one factor in the hold-up in a $2.2 billion loan from the Export-Import Bank of China (Exim Bank), David Mugabe, spokesperson for Uganda's Standard Gauge Railway project, told Reuters.

In Nigeria, the government turned to London-headquartered Standard Chartered Bank (STAN.L) this year to finance the $3 billion railway project initially slated to receive Chinese backing. Standard Chartered declined to comment on the deal, citing confidentiality agreements.

In Cameroon, the $450 million highway linking the capital Yaounde and the economic hub of Douala, whose funding was secured from China's Exim Bank in 2012, stalled in 2019 as the bank stopped disbursing further tranches of the loan.

Exim Bank did not respond to a request for comment on its loans to Uganda and Cameroon.

Zhou Yuyuan, Senior Research Fellow at the Centre for West Asian and African Studies at the Shanghai Institutes for International Studies, said the COVID-19 crisis had strained Chinese lending institutions and African finances alike.

In future, he added, Beijing was likely to encourage more corporate Chinese investment in the continent, to fill the role of state-backed financing. "Once the pandemic is over, Africa's economy is likely to recover," he said. "That could drive China's corporate investment."

The pandemic has added to the obstacles facing President Xi's self-described "project of the century". After peaking at $125.25 billion in 2015, Chinese investments into BRI nations have dropped every year, apart from 2018, when they edged up 6.7%, the Green BRI data showed.

In 2018, Pakistan balked at the cost and the financing terms of building a railway. The previous year, there were signs of growing problems for BRI, after China's push in Sri Lanka sparked protests.

AidData, a research lab at the College of William and Mary in the United States, said in a study at the end of September that $11.58 billion in projects in Malaysia had been cancelled over 2013-2021, with nearly $1.5 billion cancelled in Kazakhstan and more than a $1 billion in Bolivia.

"A growing number of policymakers in low and middle-income countries are mothballing high-profile BRI projects because of overpricing, corruption and debt sustainability concerns," said Brad Parks, one of the study's authors.

China's foreign ministry said in response to the AidData report that "not all debts are unsustainable", adding that since its launch the BRI had "consistently upheld principles of shared consultation, shared contributions and shared benefits".

A key problem is debt sustainability.

Copper producer Zambia became Africa's first pandemic-era sovereign default last year after failing to keep up with payments on more than $12 billion of international debt, for example. A recent study suggested more than half of that burden is owed to Chinese public and private lenders. read more

In late 2018, Beijing agreed to restructure billions of dollars in debt owed by Ethiopia.

Some African governments are also growing more reluctant to take out loans backed commodities such as oil and metals.

"We can't mortgage our oil," Uganda's works and transport minister Katumba Wamala told Reuters, confirming the country had refused to pledge untapped oil in fields in the west to secure the railway loan.

The finance squeeze means African governments must make more strategic investment decisions in terms of debt sustainability, said Yvette Babb, a Netherlands-based fixed income portfolio manager at William Blair.

"There is no infinite amount of capital," she said.

 

[Napa]

1. I think China has accumulated a lot of wealth by running trade surpluses. They want to convert some of that to physical assets. They try to buy US assets but are often rebuffed by the US government on national security concerns. BRI is one way of getting physical assets around the world.

2.

3.

3.

4. Chinese investment comes with the import of Chinese goods and labor, which results in the recipient country ending up with a larger debt. It would have been better for China to have used as much local resources as possible, which it does not. So Chinese lending creates a market for Chinese manufacturing and labor, which suits them just fine but results in larger debt for the recipient country.

5. What Pakistan needs to do is be very clear about the implications of taking on debt. The thinking shouldn't be "It's wonderful that China is lending us $50 billion for power plants and roads, and we will get all this new infrastructure". The thinking should be "We are taking $50 billion in debt. How much will this investment produce in terms of new exports? It needs to produce at least $50 billion to have a net positive impact on our forex situation".

These devious scoundrels are going to deliberately crush these economies under the guise of concessionary infrastructure financing.

Debt traps building white elephants, we are already seeing this play out painfully in this country.

https://www.reuters.com/markets/europe/african-nations-mend-make-do-china-tightens-belt-road-2021-11-22/

The above Reuters article is pretty much consistent with what I had posted earlier. Anti-Indian posters should try to look beyond where the criticism is coming from, and look at what is actually being said.

BRI produces markets for Chinese industry and labor. It also gives China future control of commodities and infrastructure. Recipients of BRI should ask themselves the hard question "We are taking $50 billion in debt. How much will this investment produce in terms of new exports?"

 

[Buffet]

Uganda to lose only international airport to China over debts

Uganda to lose only international airport to China over debts



Uganda is on the verge of losing it’s only international airport, the Entebbe International Airport, to China after a debt agreement with the Asian country expired on November 17.

The Ugandan government had, on November 17, 2015, signed an agreement with Export-Import Bank of China (Exim Bank) to borrow $207 million at two per cent upon disbursement, with a maturity period of 20 years including a seven-year grace period.

And with a failure to pay back the loan, it has emerged that the deal signed with the Chinese lenders virtually means Uganda will surrender its most prominent and only international airport.

A statement on Friday by the Uganda Civil Aviation Authority (UCAA), says “some provisions in the Financing Agreement with China exposed the Entebbe International Airport and other Ugandan assets to be attached and taken over by Chinese lenders upon arbitration in Beijing.”

It also emerged that China has rejected recent pleas by Uganda to renegotiate the toxic clauses of the 2015 loan, leaving Ugandan President Yoweri Museveni’s administration in limbo.


A discrete investigation carried out by a media outfit into the deal has also revealed that the Ugandan government had waived international immunity in the agreement it signed to secure the loans, exposing the Entebbe International Airport to take over without international protection.

“The Ugandan government had, in March, sent a delegation to Beijing hoping to renegotiate the toxic clauses of the deal but the officials came back empty-handed as China would not allow the terms of the original deal to be varied.

“Last week, Uganda’s Finance Minister Matia Kasaija apologized to parliament for the mishandling of the $207 million loan from the China Exim Bank to expand Entebbe International Airport,” the report said.

The Entebbe International Airport is Uganda’s only international airport and handles over 1.9 million passengers per year.

https://www.ripplesnigeria.com/uganda-to-lose-only-international-airport-to-china-over-debts/

--------------------------------------

If the conditions of the deal were made public then waiving international immunity may not have been in the term.

 

[NishanKonar]

Uganda to lose only international airport to China over debts

View attachment 113334

Uganda is on the verge of losing it’s only international airport, the Entebbe International Airport, to China after a debt agreement with the Asian country expired on November 17.

The Ugandan government had, on November 17, 2015, signed an agreement with Export-Import Bank of China (Exim Bank) to borrow $207 million at two per cent upon disbursement, with a maturity period of 20 years including a seven-year grace period.

And with a failure to pay back the loan, it has emerged that the deal signed with the Chinese lenders virtually means Uganda will surrender its most prominent and only international airport.

A statement on Friday by the Uganda Civil Aviation Authority (UCAA), says “some provisions in the Financing Agreement with China exposed the Entebbe International Airport and other Ugandan assets to be attached and taken over by Chinese lenders upon arbitration in Beijing.”

It also emerged that China has rejected recent pleas by Uganda to renegotiate the toxic clauses of the 2015 loan, leaving Ugandan President Yoweri Museveni’s administration in limbo.


A discrete investigation carried out by a media outfit into the deal has also revealed that the Ugandan government had waived international immunity in the agreement it signed to secure the loans, exposing the Entebbe International Airport to take over without international protection.

“The Ugandan government had, in March, sent a delegation to Beijing hoping to renegotiate the toxic clauses of the deal but the officials came back empty-handed as China would not allow the terms of the original deal to be varied.

“Last week, Uganda’s Finance Minister Matia Kasaija apologized to parliament for the mishandling of the $207 million loan from the China Exim Bank to expand Entebbe International Airport,” the report said.

The Entebbe International Airport is Uganda’s only international airport and handles over 1.9 million passengers per year.

https://www.ripplesnigeria.com/uganda-to-lose-only-international-airport-to-china-over-debts/

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If the conditions of the deal were made public then waiving international immunity may not have been in the term.

In India military strategy experts have already said its only a matter of time Gwadar port is handed over to China due to CPEC debt and will be used as strategic base against India ( just like Hambantota in Sri Lanka )

 

[street cricketer]

Uganda to lose only international airport to China over debts

View attachment 113334

Uganda is on the verge of losing it’s only international airport, the Entebbe International Airport, to China after a debt agreement with the Asian country expired on November 17.

The Ugandan government had, on November 17, 2015, signed an agreement with Export-Import Bank of China (Exim Bank) to borrow $207 million at two per cent upon disbursement, with a maturity period of 20 years including a seven-year grace period.

And with a failure to pay back the loan, it has emerged that the deal signed with the Chinese lenders virtually means Uganda will surrender its most prominent and only international airport.

A statement on Friday by the Uganda Civil Aviation Authority (UCAA), says “some provisions in the Financing Agreement with China exposed the Entebbe International Airport and other Ugandan assets to be attached and taken over by Chinese lenders upon arbitration in Beijing.”

It also emerged that China has rejected recent pleas by Uganda to renegotiate the toxic clauses of the 2015 loan, leaving Ugandan President Yoweri Museveni’s administration in limbo.


A discrete investigation carried out by a media outfit into the deal has also revealed that the Ugandan government had waived international immunity in the agreement it signed to secure the loans, exposing the Entebbe International Airport to take over without international protection.

“The Ugandan government had, in March, sent a delegation to Beijing hoping to renegotiate the toxic clauses of the deal but the officials came back empty-handed as China would not allow the terms of the original deal to be varied.

“Last week, Uganda’s Finance Minister Matia Kasaija apologized to parliament for the mishandling of the $207 million loan from the China Exim Bank to expand Entebbe International Airport,” the report said.

The Entebbe International Airport is Uganda’s only international airport and handles over 1.9 million passengers per year.

https://www.ripplesnigeria.com/uganda-to-lose-only-international-airport-to-china-over-debts/

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If the conditions of the deal were made public then waiving international immunity may not have been in the term.

So another global project added to the Habantota port.

The Chinese will now own an international airport (not sure for how many years) and a port (for 99 years) through their loan services to developing nations. Looking at the rising levels of unsustainable debts in Pakistan, the Chinese may have played their cards right with respect to taking ownership of the Gwadar port as well from a geopolitical standpoint.

 

[RajBan]

So another global project added to the Habantota port.

The Chinese will now own an international airport (not sure for how many years) and a port (for 99 years) through their loan services to developing nations. Looking at the rising levels of unsustainable debts in Pakistan, the Chinese may have played their cards right with respect to taking ownership of the Gwadar port as well from a geopolitical standpoint.

But as long as the recipient is comfortable with the idea of asset lease, I think it's absolutely fine. Ofcourse Chinese will ask for control of strategic assets like ports, mines, commercial enterprises and infrastructures in return if the investment does not generate enough liquidity and Pakistan might be comfortable with such an idea if it benefits the powers that be.

 

[street cricketer]

But as long as the recipient is comfortable with the idea of asset lease, I think it's absolutely fine. Ofcourse Chinese will ask for control of strategic assets like ports, mines, commercial enterprises and infrastructures in return if the investment does not generate enough liquidity and Pakistan might be comfortable with such an idea if it benefits the powers that be.

Well China is a friendly nation to Pakistan and by far its strongest ally. I don't think it would mind even if China takes over the Gwadar port if Pakistan is unable to repay the debt. Even if China uses the port for military purposes, Pakistan wouldn't be too bothered as China's naval efforts at Gwadar would be aimed at countering its traditional enemy, India from both sides via the sea route.

 

[NishanKonar]

Well China is a friendly nation to Pakistan and by far its strongest ally. I don't think it would mind even if China takes over the Gwadar port if Pakistan is unable to repay the debt. Even if China uses the port for military purposes, Pakistan wouldn't be too bothered as China's naval efforts at Gwadar would be aimed at countering its traditional enemy, India from both sides via the sea route.

Ideally Pakistan should mind if their key assets like seaports , airports and dams are taken over by foreign entity. These are like natural resources for a country. Essential for economic growth in future

Foreign ownership is fine for manufacturing sector , not infra and natural resources

 

[RajBan]

Well China is a friendly nation to Pakistan and by far its strongest ally. I don't think it would mind even if China takes over the Gwadar port if Pakistan is unable to repay the debt. Even if China uses the port for military purposes, Pakistan wouldn't be too bothered as China's naval efforts at Gwadar would be aimed at countering its traditional enemy, India from both sides via the sea route.

Exactly. They get Chinese FDI to build infrastructure (port and road infrastructure) that they can still leverage on preferential terms if leased back to China. At the same time both Pakistan and China will have better control on the Arabian sea route compared to past adding more competition to India or Iran. This is a win win deal for Pakistan and China.

 

[RajBan]

Ideally Pakistan should mind if their key assets like seaports , airports and dams are taken over by foreign entity. These are like natural resources for a country. Essential for economic growth in future

Foreign ownership is fine for manufacturing sector , not infra and natural resources

The Pakistani establishment clearly thinks differently and I think it does not matter whether it is under self control or Chinese managed as long as the strategic benefits continue for the establishment. The only downside could be that Chinese will have a bigger share of the high end commercial portfolios, and jobs but I don't think establishment or power structures will get impacted. Common men may not necessarily see enough economic opportunities for them and be limited to just consumers as well as local businesses might act as a second fiddle to their Chinese counterparts.

 

[cricketjoshila]

Well China is a friendly nation to Pakistan and by far its strongest ally. I don't think it would mind even if China takes over the Gwadar port if Pakistan is unable to repay the debt. Even if China uses the port for military purposes, Pakistan wouldn't be too bothered as China's naval efforts at Gwadar would be aimed at countering its traditional enemy, India from both sides via the sea route.

If china militaries gwadar it threatens the gulf of Hormuz. Almost all sea traffic to east and south east asia passes through that.So its not India specific issue but will threaten a number of countries and their interest.

US,UK and India has therefore secured military access to the Duqm Port of Oman, this is bang opposite to Gwadar.

 

[MenInG]

<blockquote class="twitter-tweet" data-partner="tweetdeck"><p lang="en" dir="ltr">In a meeting today, I ordered inquiry into criminal delay in Gwadar Breakwater project. It baffles mind how PTI govt ignored it despite availability of $445m grant, $484m soft loan & feasibility. From energy to infrastructure, every project under PTI suffered costly delays.</p>— Shehbaz Sharif (@CMShehbaz) <a href="https://twitter.com/CMShehbaz/status/1544637018596147200?ref_src=twsrc%5Etfw">July 6, 2022</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

 

[Major]

Cpec was all good until pti came into power and handed it over to the army. Ever since this project has become a big joke.

What was suppose to fix our economics vows will end up destroying it

 

[dildilpak]

I believe in calling a spade a spade & CPEC has done absolutely nothing for Pakistan. Created a few local jobs here & there while the bulk of the jobs went to the Chinese. But obviously Pakistan got laden with all the debts & the blame for slow execution/security of the projects. The Pakistanis should have thought out about this very same debt trap the whole world was warning them about when entering the project, but now they are stuck with the half baked moneypits and ruthless Chinese masters.

 

[RajBan]

I believe in calling a spade a spade & CPEC has done absolutely nothing for Pakistan. Created a few local jobs here & there while the bulk of the jobs went to the Chinese. But obviously Pakistan got laden with all the debts & the blame for slow execution/security of the projects. The Pakistanis should have thought out about this very same debt trap the whole world was warning them about when entering the project, but now they are stuck with the half baked moneypits and ruthless Chinese masters.

Pretty much what it is. Chinese are father of all Mahajans. They will take away the land and its resources once the country is in debt trap. And it is all very 'legal' unlike the erstwhile Mahajans.

 

[dildilpak]

Pretty much what it is. Chinese are father of all Mahajans. They will take away the land and its resources once the country is in debt trap. And it is all very 'legal' unlike the erstwhile Mahajans.

Whats a mahajan?

 

[JaDed]

Pretty much what it is. Chinese are father of all Mahajans. They will take away the land and its resources once the country is in debt trap. And it is all very 'legal' unlike the erstwhile Mahajans.

Maharajas?

 

[cricketjoshila]

Whats a mahajan?

Money lender