Analyzing CPEC

[ramana]

Op-Ed from Hindusthat TImes

http://www.hindustantimes.com/editorial ... UFPhJ.html

India must be cautious, the China-Pakistan corridor has a geopolitical subtext

It is extremely difficult for India to accept the underlying Chinese claim that the China-Pakistan Economic Corridor, under the Belt-Road Initiative is an economic project with no geopolitical connotations



The China-Pakistan corridor has increasingly become about providing funds to the Pakistan military and to Chinese State-owned firms — to the point Pakistani industry has complained it is receiving no contracts (Representative Photo)


Beijing has stepped up its arguments in favour of its Belt-Road Initiative in the run up to its global conference on the transcontinental infrastructure programme in mid-May. Chinese officials directly sought to address Indian concerns about the flagship project of the BRI, the China-Pakistan Economic Corridor (CPEC), arguing it would not affect the territorial status of Pakistan-occupied Kashmir (PoK) — after all, there is already an existing China-built Karakorum-Kunlun Road going through that region since the 1960s.





Beijing’s view on Kashmir, they have claimed, has remained unchanged for decades. The BRI is portrayed as a giant Chinese contribution to global economic integration that would help boost growth and even help keep a check on extremism and terror. Beijing’s representatives have also noted that over 40 countries have signed up for the BRI and it has received endorsements even at United Nations forums. The subtext is that India’s continued resistance is futile and self-defeating.

I don't know who the editor of Hind Times is but this is a moron article.


What do they mean India should be cautious!

India has been wary about CPEC except for presstitutes in Delhi who write in favor of India joining it!
By the way it is not sub-text. Its only GEOPLOTICAL.

CPEC has no economic viability. Its a land based string of pearls strategy to encircle India.
And Congress which is supported by Hindustan Times owners has enabled this by weakening India with its corruption and do nothing policies.

[BharataTalwar]

Op-Ed from Hindusthat TImes

http://www.hindustantimes.com/editorial ... UFPhJ.html

India must be cautious, the China-Pakistan corridor has a geopolitical subtext

It is extremely difficult for India to accept the underlying Chinese claim that the China-Pakistan Economic Corridor, under the Belt-Road Initiative is an economic project with no geopolitical connotations



The China-Pakistan corridor has increasingly become about providing funds to the Pakistan military and to Chinese State-owned firms — to the point Pakistani industry has complained it is receiving no contracts (Representative Photo)


Beijing has stepped up its arguments in favour of its Belt-Road Initiative in the run up to its global conference on the transcontinental infrastructure programme in mid-May. Chinese officials directly sought to address Indian concerns about the flagship project of the BRI, the China-Pakistan Economic Corridor (CPEC), arguing it would not affect the territorial status of Pakistan-occupied Kashmir (PoK) — after all, there is already an existing China-built Karakorum-Kunlun Road going through that region since the 1960s.





Beijing’s view on Kashmir, they have claimed, has remained unchanged for decades. The BRI is portrayed as a giant Chinese contribution to global economic integration that would help boost growth and even help keep a check on extremism and terror. Beijing’s representatives have also noted that over 40 countries have signed up for the BRI and it has received endorsements even at United Nations forums. The subtext is that India’s continued resistance is futile and self-defeating.

I don't know who the editor of Hind Times is but this is a moron article.


What do they mean India should be cautious!

India has been wary about CPEC except for presstitutes in Delhi who write in favor of India joining it!
By the way it is not sub-text. Its only GEOPLOTICAL.

CPEC has no economic viability. Its a land based string of pearls strategy to encircle India.
And Congress which is supported by Hindustan Times owners has enabled this by weakening India with its corruption and do nothing policies.

I disagree however about the viability. Its hard to argue against Central Asia with its 125 million people needing access to the sea and the rest of the world + vice versa. This also opens up to influencing the massive Muslim region which both Russia and China are unable to subdue. This is exactly what we wanted to do via Chabahar port but the Iranians would rather engage in a proxy war in Syria and invite another decade of sanctions/hostilities from US and the Arab world. If India doesn't step in, Pakis will start engaging more in Central Asia via CPEC.

We picked the biggest loser in this fight and its time to cut our losses in Iran. They might regain their senses when the oil profits dry up.

A gateway to Central Asia is going to happen. The question is if China does it or we do it. China has the balls to start building in POK. Meanwhile our leaders don't have the balls to even reclaim the territory that they call an integral part of India.

We need to reclaim POK and Baluchistan needs to come under our control, economically and militarily. This will completely remove TSPs strategic significance and remove them from the Central Asian game. Baluchistan is key however. It has access to Central Asia, Middle East and Gulf. It has a relatively low population and would make an ideal base of operation, not only for India but any country or company wanting to cater to Central Asia.

[SSridhar]

China's OBOR initiative may create political and economic instability in Southeast Asia; India wary - Dipanjan Roy Chaudhury, Economic Times

India is closely watching China's growing influence over Southeast Asian countries. Although India has undertaken infrastructure and capacity building projects in these countries over the past three years, under the Narendra Modi government's Act East Policy, experts warn that massive Chinese investments under its 'One Belt, One Road' initiative may create political and economic instability in the region, impacting India.

Chinese investments are aimed at not only regional connectivity but also ideological hegemony, with countries such as Cambodia and Laos increasingly getting drawn into its sphere of influence, said one of the experts, who did not wish to be identified.

Cambodia, Laos, Indonesia and Myanmar are planning to attend a meeting on OBOR being convened by China on May 14-15. Certain reports suggest that Vietnam's top leader may, however, skip the meet given the lukewarm political relations between the two countries.

China is constructing the North-South Transport Link from Southern China to the Southeast Asian countries. According to the Asian Development Bank, Southeast Asian countries need huge investments in energy supply, transportation, telecommunication, water capacity and sanitation to keep pace with their economic growth and growing populations.

With infrastructure development, especially railway networks, requiring big-ticket investments, China's economic prowess makes its political ambitions achievable, experts from India and Southeast Asia said. However, increased economic relations have not yet translated into a deeper security cooperation between China and many Southeast Asian countries.

According to many Chinese commentators, these countries will take money but not sign up to the political, cultural and security requirements of China's vision of a "community of shared destiny". Singapore, Vietnam and Myanmar are a few such examples.

Singapore emphasises on a rules-based global order amid China's claims in South China Sea region. Tensions are high between Myanmar and China over Chinese funded dam and port projects in the country. Vietnam has had lukewarm political ties with China for decades and China's aggressive moves in South China Sea have sharpened the divide.

Indonesia and Malaysia are increasingly getting uncomfortable over this as well, notwithstanding the fact that China is undertaking several infrastructure related projects in both these countries.

Experts warn that Cambodia may be heading for a Sri Lanka type debt crisis situation. Cambodia, one of China's closest international partners and diplomatic allies, is truly under China's economic and political influence.

Cambodian Prime Minister Hun Sen recently described China as Cambodia's "most trustworthy friend". Similarly, Chinese President Xi Jinping described Cambodian King Norodom Sihamoni Cambodia "like a brother" when he visited Beijing in June 2016. China is now Cambodia's largest military supplier and provider of development aid and foreign investment, having given nearly $3 billion in loans and grants to the country since 1992.

A 2016 International Monetary Fund report showed that Cambodia's external multilateral public debt is now at $1.6 billion, while its bilateral public debt with China is $3.9 billion. While Cambodia and Sri Lanka are different in terms of their geographic location, demography and nature of strategic relations with China, there are some crucial lessons that Cambodia and other small countries in the region can learn to avoid ending up in Sri Lanka's position.

Cambodia needs to diversify its borrowing sources and consider taking loans from multilateral bodies and countries such as India and Japan, experts said. Cambodia will also need to diversify its foreign policy to include other countries and regional initiatives such as ASEAN and Mekong Ganga Cooperation, experts said.

China's influence in Cambodia is growing in tandem with increasing loans. This is evident in Cambodia's decision to ban the Taiwanese flag from being raised in Cambodia. This could be true for other countries in India's periphery as well including Maldives.

Maldives has leased an island close to Male airport for 50 years at the cost of $4 billion to a Chinese company, a development that could have adverse strategic implications for India. China has been eyeing opportunities to help build infrastructure in Maldives to expand its footprint in the Indian Ocean Region as part of the One Belt, One Road project.

[anupmisra]

CPEC won’t create environmental problems for Pakistan: China envoy
...and other promises made with a straight face..

Chinese Ambassa­dor Sun Weidong on Wednesday underscored the importance of Pakistan’s role in promoting China’s ‘Belt and Road’ initiative

Whoa!! This is the first time an admission of the role which the chinis expect the pakis to play!

The ambassador said that One Belt, One Road concept was based on traditional Chinese culture whose core values were peace, development and harmony.

19 early-harvest projects were under smooth construction with a total contract amount of $18.5 billion (Note: it is no longer the size of investment but the "contract size". Way to switch the narrative.)

Other vague promises:

Beijing would not transfer outdated capacity production here (whatever that means).

CPEC would not increase the financial burden on Pakistan.

China would not pursue unilateral trade surplus with Pakistan and would welcome export of Pakistani products to China

God speed, my chini and paki lurker friends, god speed!

[SSridhar]

CPEC won’t create environmental problems for Pakistan: China envoy

China would not pursue unilateral trade surplus with Pakistan and would welcome export of Pakistani products to China

Now, another piece of news. We don't need anything that Pakistan Produces : China Envoy - Defence News

• Chinese buying of Pakistan-made goods fell sharply in the first half of 2016-17 to $770 million against $1.02 billion a year ago
• Chinese Ambassador to Pakistan Sun Weidong said that Pakistan is not producing the goods that are needed in China

In a rare show of candour, a Chinese envoy has said that China has little interest in importing goods produced in Pakistan. It would be ready to import only after Chinese factories are established in Pakistan, and they begin manufacturing, the envoy said.

Explaining the reason behind the China-Pakistan trade imbalance, Chinese Ambassador to Pakistan Sun Weidong said that Pakistan is not producing the goods that are needed in China. But the situation will change when Chinese companies start producing such products in Pakistan, he said during a meeting with leaders of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in Islamabad, according to several media reports.

The statement confirms rising concerns that Pakistani business may have little to gain from the much-hyped China-Pakistan Economic Corridor (CPEC) because it would largely benefit Chinese business. New infrastructure would not only provide construction contracts, they will also help to create the right situation for establishing Chinese factories.

Despite promises of support from China, which describes itself as Pakistan's "iron brother", Chinese buying of Pakistan-made goods fell sharply in the first half of 2016-17 to $770 million against $1.02 billion a year ago. The full year data for 2016-17 is not yet available but early indications show a steep slide.Pakistan's exports to China has been continuously falling from $2.69 in 2013-14 to $1.9 billion in 2015-16.

Compared to these numbers, China has been promising the moon painting a picture of 16-fold increase in Pakistani exports.

"Pakistan can enhance its exports to $35 billion for which serious efforts are needed," Sun was quoted by the Pakistani media as saying during discussions with FPCCI leaders.

Such tall claims have raised serious questions which are being voiced by a section of Pakistani intelligensia and the media.

"There is a fear lurking in the shadows of CPEC that a time will soon come when the Chinese will start dictating terms and priorities rather than negotiating them," the Dawn in Pakistan said in an editorial on Sunday.

"As an increasing number of Chinese enterprises acquire stakes in Pakistan's economy, and as the government takes out more and more loans from Chinese state-owned banks for the balance of payments support, the space to negotiate and protect our own interests diminishes," it said.

This was evident in the manner China asked Pakistan to refuse a loan offer by the Asian Development Bank, and use a single source funding from a Chinese bank for the $8bn Peshawar-Karachi railway line project, the paper pointed out.

It advised Islamabad to be tougher during negotiations with China, and ensure that Pakistan's interests are protected.

Responding to concerns expressed by the Pakistani business community, Sun said no Chinese company would be allowed to install used machinery in Pakistan and transfer of technology would be made a prerequisite.

"Settling energy crisis in Pakistan is our top priority and we will add 11,000 megawatts of electricity to the national grid as soon as possible through highly efficient power plants," he said.

"After overcoming the energy crisis, we will develop infrastructure and in the last leg initiate the process of industrialisation," the Chinese envoy said. He emphazied that security arrangements in economic zones must be enhanced to ensure the safety of Chinese experts working in Pakistan.

[ramana]

X-post...

China is making the same risky errors in Pakistan that US made - Bloomberg

When President Xi Jinping announced in 2015 that China would pump $46 billion worth of investments into Pakistan, the recipients of his largesse seemed less surprised than one might have expected. The military and political elites of the Islamic Republic of Pakistan have long extracted aid from outside powers in return for keeping a lid on things at home. As far back as April 1948, barely eight months after independence, Prime Minister Liaquat Ali Khan assured Pakistani military commanders that three-quarters of the new nation's Budget would be devoted to defence -- fully expecting that the US would underwrite the pledge.

China's Silk Road

Xi will no doubt tout the Pakistan investments -- which include a network of road, rail, power and port projects that are collectively known as the China Pakistan Economic Corridor, or CPECBSE -- at his massive "Belt and Road" conference later this month. The Chinese argue these projects won't just link China to markets and suppliers from Europe to Southeast Asia, but also promote stability and development in the countries on its periphery. Indeed, even the International Monetary Fund hopes that China's billions will ease Pakistan's chronic supply-side constraints and perhaps reduce the pressure on the country's development budget.

That, however, reflects the sort of blind optimism to which Pakistan's US sponsors have succumbed for decades. If the Chinese aren't careful, they, too, will find that their money has bought them little more than headaches.

As part of CPEC, Chinese loans will flow into Pakistan for urban transport infrastructure, for power plants and for ports and highways. The first tranche focuses on power -- $18 billion is earmarked for the sector, particularly for coal-fired plants -- and $10 billion has been promised for highways, ports and Pakistan Railways.

China usually struggles to live up to such big promises, of course. But the numbers being bandied about have already seized Pakistan's imagination. Sectors like cement have started growing in response, boosting the Karachi Stock Exchange, which was the world's best-performing last year. Real estate prices have increased, too.

For China, the benefits of the corridor seem obvious. Much of its grand strategy rests on trying to avoid the "Malacca dilemma": 80 per cent of its oil, and much of its trade, flows through a narrow chokepoint at the Straits of Malacca that would be dangerously easy for the US, say, or India to blockade. One way to reduce that dependence would be to land oil or goods at China's new Arabian Sea port at Gwadar, in Pakistan's Balochistan province, and move them overland to Xinjiang province. In the process, Chinese analysts insist, China might well be able to improve Pakistan's economy, stabilize its politics and render it a bit less troublesome than it currently is.

Such reasoning overlooks several lessons of the past. The first: Don't ignore Pakistan's domestic politics. Already the whole program has become tangled in an internal tug-of-war. Leaders from restive Balochistan complain that CPEC, which was originally supposed to run mostly through their province and neighboring Khyber Pakhtunkhwa, now looks to benefit mostly the richer eastern provinces of Punjab and Sindh. Protesters say the route was changed to benefit Punjab in particular; the province is the stronghold of Prime Minister Nawaz Sharif and is ruled by his brother Shahbaz.

For the Chinese, these are uncharted waters. They will have to balance gains to the ruling elites in Islamabad and Lahore with those to the locals in Balochistan, who are more than capable of violently disrupting work on the corridor. If China fails to do so, Pakistan will end up more unstable, not less.

The second lesson is to beware of the Pakistan Army. Decades of foreign support have only further entrenched the military at the center of not just Pakistan's state, but its economy and society.

Pakistan is noisy and disputatious enough to make Chinese planners wonder whether the army might not make a better partner than the civilian government or the private sector. Already, CPEC has exacerbated civil-military disputes in a country that saw its first peaceful democratic transfer of power only a few years ago. Military organisations have begun much of the corridor's work, especially road-building. CPEC was at the top of the agenda when Pakistan's Army chief visited Beijing last month. And the Army has cited the task of securing the corridor as an excuse to raise an entire new division of nine battalions and six "civil wings." {This reminds me of Field Marshal Ayub Khan. In order to defeat the Indian army, he devised a plan to raise five-and-a-half Divisions with modern weapons, amounting to a quarter million soldiers, with the help of the US under the various defence treaties. Of course, these divisions were 'meant' to counter the communists like the USSR & China! That effort needed a large scale recruitment and prompted the UK High Commissioner Sir Morrice James, to remark “It is not so much the case of Pakistan having an Army but the Army having Pakistan”. Let us wait to see where the CPEC cloak takes the Pakistani Army to.}

The pattern is familiar to many in Washington: Money sent to Pakistan has a habit of winding up further bolstering the Army's power. Meanwhile, the civilian government is quietly but rapidly losing enthusiasm for CPEC projects, which it correctly recognises may wind up draining its resources instead of increasing them. For two successive years, the government has stepped in to reduce the amount of Pakistan's own money committed to the corridor.

The stronger the Army, and the weaker the incentives for the civilian government to open up the economy to countries other than China, the less likely Pakistan is to prosper in the coming decades. There's no question a more stable and prosperous Pakistan is vital for South and West Asia, for China and for the world. But it's far from certain that CPEC will produce one.

[KrishnaK]

Either way, speed of transport is irrelevant, what is relevant is cost of transport. I worked in logistics sector for a couple of years, what i learnt, is supply chains are all about getting cargo to depots at a rate that is full replenishment.

For eg, if my shop runs out of TVs and i want TVs, i ask Walmart to supply me TVs. The TVs i order, are going to come from a Walmart warehouse 10-50 kms away, by truck. Its not coming all the way from China. The warehouse will now send for 'orders to China' and they will calculate something like 'we need to order 500 TVs, because SriJoy ordered 50 today and we have another 9 orders of 50 over the next month to deliver, so we need to order 500 from China,which will show up in a month and replenish our stock'. All the 'speed of transport' indicates, is the rate of replenishment required and if speed of transport is lesser than rate of replenishment required, we build a bigger warehouse. And thats why people expand or downsize their warehouse holdings, depending on speed of replenishment.

Speed is inversely proportional to the time stock is in flight, which is locked up capital. So it has an effect on cost of goods. Unsure of just how much that effect is.

[venug]

cross posting, also related here:
China Tries To Encircle India. It Won't Work

Understandable or not, China’s unofficial agenda to encircle India won’t work. New Delhi and its allies—the US and Japan—won’t let it happen. And they are prepared to send this message to Beijing with a joint naval exercise in the Malabar in the Bay of Bengal this coming July.

Article doesn't explain why China's string of pearls strategy won't work, much ado about nothing given that it's title of the article.Just a joint exercise in Bay of Bengal that will send China roll back CPEC and play dead?

[malushahi]

was this posted here?

The program, named 'Khyber-Pakhtunkhwa-China Sustainable Donkey Development Programme' is expected to be worth a billion Pakistani rupees (approximately $9.5 million), and aims to attract Chinese investment in Pakistan's agriculture sector.

tallel, deepel.

[anupmisra]

was this posted here?

The program, named 'Khyber-Pakhtunkhwa-China Sustainable Donkey Development Programme' is expected to be worth a billion Pakistani rupees (approximately $9.5 million), and aims to attract Chinese investment in Pakistan's agriculture sector.

tallel, deepel.

..and ilon and sweetel. Remember the average baki family has four kids.

[SSridhar]

CPEC not only threatens India, it may also trigger Pakistan's collapse. Here's how - Dipanjan Roy Chaudhry, Economic Times

The much-hyped China-Pakistan-Economic-Corridor not only challenges India’s sovereignty as it passes through PoK but has all the potential to trigger socio-economic collapse of Pakistan giving rise to instability impacting India and other neighbours.

CPEC that is being touted as the flagship project under Beijing’s One Belt One Road (OBOR) or Belt and Road Initiative (BRI) could make Pakistan politically and economically subservient to China, warn scholars within Pakistan. “The result of CPEC would be Pakistan turning into a country like Greece and taking unprecedented loans in the name of CPEC. Our voice will not be heard until and unless we rebel,” claimed Dr Qaiser Bengali, a Pakistani economist, while addressing a meet in Karachi on Friday ahead of PM Nawaz Sharif’s trip to Beijing for the BRI meet. Indirectly referring to CPEC Dr. Bengali further claimed that all the statistics given by the government are presented in a way that people believe the economy is going in the right direction.

These alarming remarks were made in the backdrop of China deciding to pump additional funds for CPEC. April 16th, Chinese investments in Pakistan through the CPEC were revised upwards, from $46 billion to a whopping $62 billion. As part of CPEC, Beijing plans to build new industrial parks, railways, and roads to link its Xinjiang region with Pakistan’s port city of Gwadar. But instead of giving cause for celebration, the colossal Chinese investments heading to Pakistan have sparked massive protests from locals and environmentalists. Instead of opting for cutting edge technology the Chinese as part of CPEC decided to build power plants in power-starved Pakistan to produce 10,000 MW electricity but using obsolete technology.

A Pakistani scholar who did not wish to be identified told ET that CPEC would establish China as a neo-colonial power making Pakistan as its “province”. {Exactly what we have discussed here for a long time now} “China’s over-capacity in cement, glass, steel and manpower is being poured in OBOR including Pakistan. CPEC has become the convenient way for China to deploy its excess manpower abroad. Is this what is called all-weather friendship or is it a means to mortgage tomorrow’s future. By exporting labourers and raw materials it is another convenient way for China to keep its air clean. This is sort of reverse colonisation as feared by African countries few years back. Pakistan’s benefit from CPEC is not yet clear except the fact that the country’s economy will further burdened with high-interest loans,” alleged the scholar. The rate of interest for Chinese funded projects under CPEC is as high as 8 per cent.

In a recent article in the ‘Central Asian Caucus Analyst’, Mushtaq A. Kaw, Head of the Department of History, Maulana Azad National Urdu University, Hyderabad, wrote, “The project faces several inextricable challenges and threats ahead of its completion in 2030…Pakistan is currently unable to repay the Chinese loan due to its steeply soaring trade deficit (US$ 28 billion by June 2017) and national and international debts (US$ 73 billion respectively in 2015). China will benefit more from the project than Pakistan, because China is lending Pakistan for construction but the works will be executed by its own companies and work force. Most of the lending is on commercial terms, including overhead charges on debt-service and loan-reinsurance. Even the lending involves charges of a debt-to-equity ratio of around 80:20, or in some cases 75:25. And in most cases, return on equity is guaranteed at either 17 or 20 percent.”

But it is not the scholars alone who have raised voices against economic and political implications of CPEC on Pakistan. Mehran Marri, Baloch representative to the EU, speaking at a seminar on OBOR in Brussels on May 5, referred to the first-hand experience of local Pakistani communities and the Baloch people, through where the CPEC was passing, and highlighted their suffering and repression at the hands of the Pak army. Marri alleged that as the CPEC experience clearly showed, China was not driven by any altruistic motives, and was not promoting OBOR to improve the lives of the local people.

Meanwhile, Delhi is monitoring every step of CPEC carefully as it not only passes through PoK and has strategic implications for India but due to the fact that the mega-project has the potential to create massive socio-economic instability within Pakistan impacting the neighbours.

Even noted international think-tanks echo Indian views. According to a report released by the Stockholm International Peace Research Institute - a Swedish-based think-tank - India's opposition to CPEC reflects a concern over the internationalisation of the Kashmir dispute and the growing influence of China in the Indian Ocean.

[Peregrine]

X Posted on the STFUP Thread

China offers to rename China-Pakistan Economic Corridor

NEW DELHI: Seeking to allay India's concerns, China has offered to rename the China-Pakistan Economic Corridor (CPEC) which passes through Pakistan occupied-Kashmir(PoK), insisting it was an economic cooperation and connectivity enhancement project devoid of "sovereignty issues".

It also strongly pushed for New Delhi's participation in the 'One Belt, One Road' project.

Chinese ambassador to New Delhi Luo Zhaohui, while referring to frosty Indo-Pakistan ties, said China was willing to mediate to resolve the differences between the two countries if it was acceptable to both sides.

Referring to the CPEC, which is part of OBOR, he said China has no intention to get involved in the sovereignty and territorial disputes between India and Pakistan and that the project is for promoting economic cooperation and connectivity in the region.

"It has no connections to or impact on sovereignty issues. Even we can think about renaming the CPEC. China and India have had successful experience of delinking sovereignty disputes from bilateral relations before," he said in closed-door address to a think-tank on Friday.

India has been severely critical of the CPEC, saying the project violates its sovereignty as it runs through Pakistan-occupied Kashmir.

Luo said China is sincere in its intention to cooperate with India on the OBOR as it is "good for both of us."

Maintaining that China and India could be natural partners in connectivity and the OBOR, the Chinese ambassador said Indian economy was behind China by at least 13 years, suggesting New Delhi should grab economic opportunities offered by Beijing.

"Now the GDP of India is roughly that of China in 2004, some 13 years ago. China leads India by 13 years mainly because we started reform and opening up 13 years earlier," he said.

Referring to the view in India that China always puts Pakistan first when handling its relations with South Asian countries, he said the government always follows "China first" policy and that problems are dealt on merit.

"I want to tell you this is not true. Simply put, we always put China first and we deal with problems based on their own merits. Take Kashmir issue for example, we supported the relevant UN resolutions before 1990s. Then we supported a settlement through bilateral negotiation in line with the Simla Agreement. This is an example of China taking care of India's concern," he said.

On India's bid for the membership of the Nuclear Suppliers Group (NSG), he said, "We do not oppose any country's membership, believing that a standard for admission should be agreed upon first."

The envoy also proposed a four-point initiative to improve ties between India and China which includes aligning its 'OBOR' project with India's 'Act East Policy', and restarting negotiations on a free trade pact.

The proposal put forward by Luo includes starting negotiations on a 'China-India Treaty of Good Neighbourliness and Friendly Cooperation' and prioritising finding an early solution to the border dispute between the two countries.

"Firstly, start negotiation on a China-India Treaty of Good Neighbourliness and Friendly Cooperation. Secondly, restart negotiation of China-India Free Trade Agreement. Thirdly, strive for an early harvest on the border issue. Fourthly, actively explore the feasibility of aligning China's 'One Belt One Road Initiative' (OBOR) and India's 'Act East Policy'," he said.This is a load of codswallop

He said good ties between India and China were conducive to regional stability.

The development of China, India, Pakistan and the stability of the whole region call for a stable and friendly environment, he said.

"Otherwise, how could we open up and develop? That's why we say we are willing to mediate when India and Pakistan have problems. But the precondition is that both India and Pakistan accept it. We do this only out of goodwill. We do hope that there is no problem at all," Luo said.

"When the Mumbai terrorist Attack on November 26, 2008, took place, I was Chinese Ambassador to Pakistan, and I did a lot of mediation at that time," he said.

On trade ties between the two countries, Luo said he was happy to see that China had contributed its share to India's development.

"Today, China is the second largest economy in the world, with a GDP of 11 trillion US dollars. China's development also benefited from India's participation," he said.

My Question : Why is China tlying to become India's "Yellowel than Tulmelic Fliend"?

Cheers

[shravanp]

Bigger question: Why China is browing its pants in trying go convince India so much? Do they feel that until unless India is superconvinced, CHEE PAC will always be vulnerable?

[chetak]

Bigger question: Why China is browing its pants in trying go convince India so much? Do they feel that until unless India is superconvinced, CHEE PAC will always be vulnerable?

look at the apprehensive reactions of the paki people as well as the paki press on the CPEC with all it's dubious implications as well as the anticipated disastrous fallout as a whole, on the pakis as a country.

It's very much different from the reaction and the position of the paki govt (read paki army) as such.

SL is a glaring example of what their han filled future looks like. At least the lankans have India (and the US + the UK) to ask for help, which India may or may not give in the form that the lankans are asking but the pakis don't even have that crutch to fall back upon. They also have an increasingly aggressive afghanistan as well as iran to deal with and the baloch is are not behaving either, having sensed their chance now, what with the world attention being focussed on them and all.

I have this strong feeling that the CPEC has started to unravel in pakiland and the growing paki clamor for transparency regarding the exact terms and conditions of the entire fiasco has spooked the hans no end.

Coal based power plants in 2017?? and that too, using han coal all the way from china??

The reactions as is being played out in the paki press is muted but we all know that the paki army savagely controls the paki press by selective assassinations and other methods of gentle persuasion, after all, aren't the pakis are a democracy, as they themselves never seem to tire of reminding us??

black lentils by the handi full. The continued open and public beating up on shariff by the paki army is playing out far too long as sharif is already done for. The PA has made its position very clear as to who is the boss, so why exactly are they belaboring the point in such a humiliating way unless that have some other objective in mind which has not been disclosed to the paki public so far??

The PA does not want to take over the country now. It's in too much of a mess and the PA needs the civilian govt as the fall guy and they cannot come out of this mess smelling of attar unless they can shift the blame completely to sharif, ease out of the CPEC imbroglio and still retain the hans as their tallel and sweetel friends

Is it possible that the hans are trying to derisk gwadar and the CPEC by maybe seeking to access Indian ports or maybe they even slyly wanting to long lease some already identified minor harbor on the Indian coast which they will then develop to their own specific requirements by adding to and also leveraging the Indian rail and road network already in place ??

That, the usually sleeping han ambassador to India has suddenly woken up and become hyperactive in trying to convince India on the CPEC is by itself highly suspicious and does not bode well for us.

or, have the hans suddenly discovered Homer's Odyssey and the trojan horse thingee??

[Karthik S]

The PA does not want to take over the country now. It's in too much of a mess and the PA needs the civilian govt as the fall guy and they cannot come out of this mess smelling of attar unless they can shift the blame completely to sharif, ease out of the CPEC imbroglio and still retain the hans as their tallel and sweetel friends

PA is in control sir. They can't and will not take over overtly because of kerry luger bill.

[chetak]

The PA does not want to take over the country now. It's in too much of a mess and the PA needs the civilian govt as the fall guy and they cannot come out of this mess smelling of attar unless they can shift the blame completely to sharif, ease out of the CPEC imbroglio and still retain the hans as their tallel and sweetel friends

PA is in control sir. They can't and will not take over overtly because of kerry luger bill.

The PA was always in control of both the govt and the judiciary in pakiland.

Maybe the hans are asking for much more that maybe includes passing han friendly parliamentary gurantees that give them (personal) and their projects paki constitutional protections against arrests and nationalization of their assets??

[arun]

X Posted on the STFUP Thread

China offers to rename China-Pakistan Economic Corridor

NEW DELHI: Seeking to allay India's concerns, China has offered to rename the China-Pakistan Economic Corridor (CPEC) which passes through Pakistan occupied-Kashmir(PoK), insisting it was an economic cooperation and connectivity enhancement project devoid of "sovereignty issues".

It also strongly pushed for New Delhi's participation in the 'One Belt, One Road' project.

Chinese ambassador to New Delhi Luo Zhaohui, while referring to frosty Indo-Pakistan ties, said China was willing to mediate to resolve the differences between the two countries if it was acceptable to both sides.

Referring to the CPEC, which is part of OBOR, he said China has no intention to get involved in the sovereignty and territorial disputes between India and Pakistan and that the project is for promoting economic cooperation and connectivity in the region.

"It has no connections to or impact on sovereignty issues. Even we can think about renaming the CPEC. China and India have had successful experience of delinking sovereignty disputes from bilateral relations before," he said in closed-door address to a think-tank on Friday.

……………………. {Rest of Post Snipped} ………………………

My Question : Why is China tlying to become India's "Yellowel than Tulmelic Fliend"?

Cheers

Claim of Luo Zhaohui, the Ambassador of the Peoples Republic of China to India, about willigness of the Peoples Republic to rename the China Pakistan Economic Corridor aka CPEC, turns out to be forked tongue dragonspeak, not that name changing in the first place, except in PRC minds, would have assuaged India’s legitimate concerns on the whole CPEC enterprise in the first place.

Now, Beijing deletes envoy’s suggestion to rename China-Pakistan corridor : Hindustan Times

An embarrassed China has expunged its India envoy’s suggestion that Beijing could think renaming the China-Pakistan Economic Corridor to allay New Delhi’s concerns.

India has reservation about the ambitious project as it passes through Pakistan-Occupied-Kashmir, which New Delhi says challenges its sovereignty by lending legitimacy to Pakistan’s claim over the territory.

The suggestion made by Luo Zhaohui has been removed from the version of his speech published on the Chinese embassy’s website. ………

[arun]

X Posted from the “Managing Chinese Threat (09-08-2014)” thread.

Our former Foreign Secretary, Kanwal Sibal, wisely counsels that we should not attend BARF aka the Belt and Road Forum in Beijing.

Kanwal Sibal says that “BARF is an occasion for us {India} to puncture its {P.R.China} self-image as the next indispensable country by not accepting a form of kowtow by attending”.

The concluding excerpt of the article follows:

India is the second biggest country in Asia, in most ways China’s actual or potential peer. We have already developed strategic capabilities to deter China. The economic gap between India and China will close in the years ahead. India will not be isolated if it does not attend BARF, as the Chinese claim. The prize of the Indian market is much more important for China than that of the smaller countries straddling the BRI. We can deal with China bilaterally on the economic front without having to join it in promoting its leadership ambitions in Asia at our expense.

Given China’s provocations on several strategic fronts, BARF is an occasion for us to puncture its self-image as the next indispensable country by not accepting a form of kowtow by attending.

Daily Mail via Daily O:

India should not attend China's Belt and Road Forum in Beijing

[Peregrine]

X Posted on the STFUP Thread

Chinese firms violated Pakistan's laws and social customs: Report

BEIJING: Several Chinese firms in Pakistan have violated laws and local social customs of the Islamic nation during the construction of China's $ 46 billion economic corridor, according to a report.

Though there was "unexpected progress" in the implementation of the China-Pakistan Economic Corridor project, it still faces plenty of internal and external difficulties, said an article by Zhou Rong and Chen Xiaochen of the Chongyang Institute for Financial Studies (CIFS) at Renmin University of China.

"Some Chinese enterprises in Pakistan also have shortcomings. They are fond of instant success instead of making long-term plans. Several Chinese enterprises have violated Pakistan's laws and local social customs, which badly damaged the reputation of the Chinese people," it it said.

To solve these problems, the construction of the CPEC requires a long-term plan, it said.

"The Pakistan government is hoping that most of the power station and infrastructure projects can be completed ahead of next year's election. However, this may not be possible according to the construction contractors," it said.

The institute recently launched an intensive research programme to look at the progress and problems of the CPEC construction in Pakistan.

"After assessment, we found that the construction has been unexpectedly fast. Four key areas of cooperation - energy, transport infrastructure, industrial cooperation and Gwadar Port - have made significant progress," it said.

It said that in the face of the huge benefits of the CPEC, miscellaneous political forces all want to have a finger in the pie, which makes the original contradictions even more intensified.

Some decision-makers involved in construction of the corridor have little interest in project construction but great interest in personal gain, ignoring the social benefits of the project, the article added.

"In Pakistan, it is unrealistic to expect to eliminate corruption completely, but we hope it can be constrained as much as possible. In addition, political, environmental and security risks should be minimised by persuading the central government to take care of the interests of all parties," it added.

The CPEC is a planned network of roads, railways and energy projects linking southern Pakistan, and the Gwadar Port, to China's restive Xinjiang Uyghur autonomous region. As it passes through the Pakistan-occupied Kashmir (PoK), India has raised objection to the project

Cheers

[Peregrine]

X Posted on the PESW Thread

Pakistan's repayments on CPEC to peak at $5b in 2022: chief economist

ISLAMABAD: Pakistan’s debt and other repayments on China’s “Belt and Road” initiative will peak at around $5 billion in 2022, but will be more than offset by transit fees charged on the new transport corridor, says the Pakistan government’s chief economist.

China has pledged to invest up to $57 billion in Pakistan’s rail, road and energy infrastructure through its vast modern-day “Silk Road” network of trade routes linking Asia with Europe and Africa.

Officials expect a huge uptick in trade between the two nations once Pakistan’s Arabian Sea port of Gwadar is functional and work on motorways is finished allowing goods to cross the Himalayas to and from China’s western Xinjiang province.

The China-Pakistan Economic Corridor (CPEC), a flagship “Belt and Road” project, has been credited with helping revive Pakistan’s sluggish economy, but investors have raised concerns that Pakistan’s currency could come under severe pressure once debt repayments begin and Chinese firms start taking profits home.

Nadeem Javaid, who advises Prime Minister Nawaz Sharif’s government and works closely on the CPEC programme, told Reuters that such fears are misplaced as Islamabad would earn vast fees from charging vehicles moving goods from and to China.

Javaid said the Gwadar-Xinjiang corridor should be operational from June next year, and Pakistan expects up to 4% of global trade to pass through it by 2020.

“The kind of toll tax, rental fees that the Pakistani system will gain is roughly $6-$8 billion a year,” Javaid, chief economist at the planning ministry, said in an interview. “By 2020, I expect we will get this much momentum.”

He said China has huge incentives to transport oil and other goods bound for its western regions through Pakistan as the Gwadar-Xinjiang corridor shaves some 9,500 miles (15,000 km) off other traditional routes.

It doesn’t take long to imagine the savings on the many millions of litres of fuel, he said.

Risk to balance of payments?

Investors are watching Pakistan’s ballooning current account deficit, which widened by more than 160% to $6.1 billion in the nine months to March, largely due to imports of machinery for big CPEC projects.

Javaid said debt repayments and profit repatriation from CPEC projects will begin in 2019, totalling about $1.5-$1.9 billion, and rising to $3-$3.5 billion by the following year.

“It would be low in the beginning, and in 2022 it will peak at around $5 billion – not more than that,” said the chief economist, adding that the government does not think it likely that Pakistan will face a balance of payments crisis.

The last such crisis in 2013 saw Islamabad turn to the International Monetary Fund for help.

Javaid said the CPEC should boost economic growth, which he expects to hit 5.2% in 2016-17. Exports should also pick up once CPEC power projects totalling 7,000 megawatts come online and reduce the often crippling energy shortages.

Deepening political and military ties between Pakistan and China have helped closer financial integration, too, with Chinese companies starting to buy Pakistani firms and land.

Javaid said the two countries have also discussed using a currency swap agreement between their central banks to create a mechanism to avoid any third currency in international transactions.

“If some mechanism is going to be finalised on that, it will work as a buffer or a cushion that’s going to basically avoid or prevent any kind of default that could happen in unforeseen circumstances.”

But he added, “It’s only a contingency arrangement in case something bad happens.”

Cheers

[chetak]

X posted from the OBOR thread





ONE ROAD, MANY TROUBLES

Wednesday, 10 May 2017

One road, many troubles

On OBOR, CPEC, China will face challenges

There is a great deal of disapproval in the ‘liberal' media over India's refusal to participate in the China-driven One Belt One Road (OBOR) project, with commentators warning that India would be the eventual loser in economic terms. But all things cannot always be reduced to money and material; there is such a thing as geo-strategic position.

In this case, one of the components of the OBOR is the China-Pakistan Economic Corridor (CPEC) which passes through regions held by Pakistan that India has always disputed. It is facile for China to say that the project is not an endorsement of Pakistan's claims over the disputed region or a rejection of New Delhi's stated position, and that the matter is strictly in the economic domain. By taking part in the OBOR, India would end up diluting its stand on Pakistan-occupied Kashmir. In fact, China should be asking itself as to why it is going about with the ambitious scheme by neglecting New Delhi's sensitivities. Besides, parts of the region through which the CPEC will pass in Pakistan are restive — the Baloch area, for instance, is up in arms. There is no point in Islamabad blaming India for the unrest there because everyone knows the real cause — which is, that the Baloch people are disgusted with the atrocities Pakistan Army has been committing on them and suppressing their desires. Sooner or later, Beijing will understand the mess that it has got itself into. Pakistan will, without doubt, increase its brutal suppression to ensure that its friend China's project continues unhampered, but the more Islamabad does that the more troubles will mount. In fact, even some Chinese commentators have begun to question the sagacity of pushing ahead in the midst of these uncertainties.

In Pakistan, some fears have been expressed on whether the nation can afford the huge investments as part of its contribution. There is a very real fear that the more Islamabad falls into a debt trap the more it will have to lean on China to rescue it. And such acts chivalry come at a price.

Besides, China cannot avoid the conflicts that are arising in the region due to Pakistan's tendency to push terrorism in the region, including in Afghanistan. A section of the $50 billion CPEC passes through Afghan territory, and Kabul and Islamabad are not on the best of terms. This equation is unlikely to change for the better in the coming months as the CPEC progresses, because Pakistan will not let go of using terrorism as a state policy.

The recent conflict in which a few Afghan troops were killed by their Pakistani counterparts, has added to the complicity. Additionally, parts of Balochistan are alongside the borders of Iran — and Iran has recently hinted at striking into Pakistan to flush out terrorists that have been targeting it. The Gwadar port, in which China has heavily invested, is close to Iran. All in all, troublesome days are ahead for China and its friend over the OBOR/CPEC

[Peregrine]

CPEC will offer militants additional targets: US

The United States on Thursday claimed the emergence of the China-Pakistan Economic Corridor in Pakistan would allow terrorist groups more targets for attacks.

“The emerging China Pakistan Economic Corridor will probably offer militants and terrorists additional targets,” Daniel Coats, director of National Intelligence, told lawmakers during a Congressional hearing. Coats was testifying before the Senate Select Committee on Intelligence along with other top intelligence officials.

‘Pakistan responsible for deteriorating ties’

The National Intelligence director also pointed fingers at Pakistan, stating the country was responsible for the deteriorating ties with its neighbour, India.

“Islamabad’s failure to curb support to anti-India militants and New Delhi’s growing intolerance of this policy, coupled with a perceived lack of progress in Pakistan’s investigations into the January 2016 Pathankot cross-border attack, set the stage for a deterioration of bilateral relations in 2016,” said Coats.

The US administration further warned that ties might become worse if another ‘high-profile’ terrorist attack originates from Pakistan and takes place on Indian soil.

Speaking further on India-Pakistan relations, Coats said, “Increasing numbers of firefights along the Line of Control, including the use of artillery and mortars, might exacerbate the risk of unintended escalation between these nuclear-armed neighbors.”

Coats also stated that Pakistan-base terrorist groups “will present a sustained threat to US interests in the region and continue to plan and conduct attacks in India and Afghanistan.” He suggested easing tension and renewed dialogue between the countries. Coats said these will hinge “on a sharp and sustained reduction of cross-border attacks by terrorist groups based in Pakistan and progress in the Pathankot investigation.”

‘Terrorist groups will focus on soft targets’

He, however, showed confidence in Pakistan stating that it “will probably be able to manage its internal security”, and that these groups will be focusing on soft targets.

“The groups we judge will pose the greatest threat to Pakistan’s internal security include Tehreek-e Taliban Pakistan, Jamaat-ul-Ahrar, al Qaeda in the Indian Subcontinent, ISIS-K, Laskhar-e-Jhangvi, and Lashkar-e Jhangvi al-Alami”, he said further.

Coats also stated terrorist plots against the US homeland “will be conducted on a more opportunistic basis or driven by individual members within these groups.”

Coats also spoke about Pakistan’s nuclear weapons saying, “Pakistan’s pursuit of tactical nuclear weapons potentially lowers the threshold for their use.” He stated that early deployment during a crisis and more mobile nuclear weapons meant that systems would be outside the relative security of a storage site for a longer period of time. This would increase “the risk that a coordinated attack by non-state actors might succeed in capturing a complete nuclear weapon.”

Cheers

[anupmisra]

Kissing ass never ceases (even when it's not needed) - paki style. Let me count the ways.

Chinese president Xi calls for boosting CPEC construction

Prime Minister Nawaz Sharif... said Pakistan would support China in the promotion of its 'One Belt, One Road' (OBOR) initiative

Sharif congratulated the Chinese president on hosting the Belt and Road Forum

"testimony of China's growing stature in the international community"

"Pakistan fully supports China's vision of the Belt and Road Forum"

"Pakistan considers China its most valuable friend"

the participation by chief ministers of all four Pakistani provinces at the forum is an indication that "we are all one for [the success of] the China-Pakistan Economic Corridor"

We are your loyal subjects. XXOOXX

A comment from a well wisher:

SYMPATHISER
What is our country's contribution to the the Chinese other than providing personal needs and comforts on the road at various places of halts to the crews...

https://www.dawn.com/news/1332894/chine ... nstruction

[SSridhar]

China, Pak. ink pacts ahead of [BARF] summit - PTI

China and Pakistan on Saturday signed a number of infrastructure agreements to boost cooperation on the $46 billion China-Pakistan Economic Corridor, including for the development of the strategic Gwadar port, ahead of the two-day Belt and Road summit here [Beijing].

The pacts were signed in the presence of Pakistan Prime Minister Nawaz Sharif and Chinese Premier Li Keqiang ahead of the much-publicised Belt and Road (B&R) Forum beginning on Sunday.

The pacts deal with increasing bilateral cooperation within the framework of China’s ambitious Silk Road project, upgrading the main railway track between Karachi and Peshawar — referred to as ML-1 or Main Line-1, and an MoU for the establishment of a dry port in Havelian, Radio Pakistan reported.

Technical cooperation

Three agreements were signed pertaining to economic and technical cooperation worth 3.4 billion yuan (about $490 million) for the strategic Gwadar port in southern Pakistan and East Bay expressway, a 19 km controlled access road under construction in Gwadar.

[hanumadu]

http://www.thehindu.com/news/internatio ... 445984.ece

[arun]

X Posted from the OBOR thread.

Full text of response of our Ministry of Externall Affairs, Gopal Baglay, to a query on India’s participation in the Peoples Republic of China sponsored BARF aka the Belt and Road Forum. Being a part of One Belt, One Road (OBOR) aka Belt and Road Initiative, China Pakistan Economic Corridor (CPEC) is also mentioned.

Kudo’s to our Government for not participating in OBOR/BRI/BARF/CPEC which violates our terrotorial sovereignity. India also has no need to contribute to PRC aggrandizement and neo-colonial profiteering from PRC project and equipment exports under the OBOR/BRI/BARF/CPEC schemes. Kudos also for our Government pointing out that promoting connectivity is not a PRC monopoly and that India plays its own role in promoting connectivity.

Nice touch to imply that OBOR/BRI/CPEC does not follow recognized international norms, follow good governance, rule of law, openness, transparency and equality. Nice touch to also imply that OBOR/BRI/CPEC does not follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities; balanced ecological and environmental protection and preservation standards; transparent assessment of project costs; and skill and technology transfer to help long term running and maintenance of the assets created by local communities. And finally that OBOR/BRI/CPEC does not respect India’s sovereignty and territorial integrity.

Official Spokesperson's response to a query on participation of India in OBOR/BRI Forum

May 13, 2017

Responding to a query on participation of India in OBOR/BRI Forum, the official spokesperson said:

We had received formal invitation to participate in the 6 separate forums that China is organizing as part of the Belt and Road Forum being held in Beijing on May 14-16, 2017.

We are of firm belief that connectivity initiatives must be based on universally recognized international norms, good governance, rule of law, openness, transparency and equality. Connectivity initiatives must follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities; balanced ecological and environmental protection and preservation standards; transparent assessment of project costs; and skill and technology transfer to help long term running and maintenance of the assets created by local communities. Connectivity projects must be pursued in a manner that respects sovereignty and territorial integrity.

India shares international community’s desire for enhancing physical connectivity and believes that it should bring greater economic benefits to all in an equitable and balanced manner. We are working with many countries and international institutions in support of physical and digital connectivity in our own immediate and near neighbourhood.

Expansion and strengthening of connectivity is an integral part of India’s economic and diplomatic initiatives. Under the ‘Act East’ policy, we are pursuing the Trilateral Highway project; under our ‘Neighbourhood First’ policy we are developing multimodal linkages with Myanmar and Bangladesh; under our ‘Go West’ strategy, we are engaged with Iran on Chabahar Port and with Iran and other partners in Central Asia on International North South Transport Corridor. BBIN initiative is aimed at enhancing logistics efficiencies in South Asian region. We are also actively considering acceding to TIR Convention.

Guided by our principled position in the matter, we have been urging China to engage in a meaningful dialogue on its connectivity initiative, ‘One Belt, One Road’ which was later renamed as ‘Belt and Road Initiative’. We are awaiting a positive response from the Chinese side.

Regarding the so-called ‘China-Pakistan Economic Corridor’, which is being projected as the flagship project of the BRI/OBOR, the international community is well aware of India’s position. No country can accept a project that ignores its core concerns on sovereignty and territorial integrity.

New Delhi
13 May 2017

From our MEA website:

Official Spokesperson's response to a query on participation of India in OBOR/BRI Forum

[Peregrine]

CPEC: The case for full disclosure

I AM now less interested in CPEC, which is unstoppable, and more fascinated by how people think. Conventional wisdom has individuals using reason to objectively weigh the costs and benefits of an option and then choosing it if benefits exceed costs. More and more evidence on actual behaviour suggests that individuals start with their minds already made up and then pick and choose arguments to support their positions.

At this time, PML supporters are convinced CPEC is a game changer while those opposed to the party believe it is a recipe for disaster. The former claim Nawaz Sharif is an astute industrialist and China a trusted friend. The latter argue Nawaz Sharif is corrupt and is using hype to distract attention from his troubles. Supporters are not willing to consider that their party can make bad decisions; opponents are unwilling to concede that the PML could get something right. No one is basing their position on factual information, which remains irrelevant to the debate.

Such attitudes make it difficult to convince anyone that their views might be mistaken. Objectively speaking, everyone should be neutral on CPEC at this time as enough reliable information is not available to evaluate costs and benefits within reasonable bounds. The rational individual should be withholding judgement and demanding the numbers. Instead, storm troopers on both sides are frothing at the mouth, ready to dismiss all contrary arguments as treason.

Although I am convinced that few minds are likely to be changed by my opinion, I still feel a responsibility to present the case for neutrality till more data is available for credible analysis. I believe my argument will make sense even to those lacking the expertise of economists and financial analysts.

The starting point is the acknowledgement that $56 billion is a significant amount of money in the Pakistani context and that an infusion of this magnitude has the potential to do a lot of good. The big question is: will the potential be realised?

Instead of answering this question on faith, I suggest participation in a thought experiment. Imagine your family is facing financial hardship and everyone you have approached has turned you down. Now someone comes along offering a loan of a million dollars, an amount that can solve all your problems and change your life. Would you accept the money with your eyes closed?

I am hoping you will ask for the terms of the loan. Suppose you are told you would be expected to renounce your traditions. Or that you would have to indenture your children in case you fail to meet the repayment obligations. Would you accept the money on such terms?

These are hypothetical examples. I am not saying the Chinese are asking Pakistanis to give up their customs or indenture future generations. The extreme examples are only meant to dramatise the essential point that only a very foolish or reckless or desperate person would be willing to sign on the dotted line without knowing the terms of the deal. Is that an unreasonable conclusion?

Let us return to CPEC assuming the Chinese would not be asking for any such thing. But let us think of what the Chinese might ask for. Suppose they ask that whatever we buy with the money must be purchased from Chinese suppliers. Would you accept such a condition on a personal loan? If not, would you not worry if the nation is being asked for such an arrangement?

Consider the personal risks of accepting such a demand. The lender could sell you second-rate goods at above-market prices. Any tied arrangement would deprive you of better alternatives available in the market. At the national level, sole-sourcing would eliminate the efficiency gains resulting from procurement of supplies via competitive international bidding. Therefore, we should be reluctant to accept loans conditional on sole-sourcing.

The Chinese may not insist on sole-sourcing but ask instead for guaranteed charges and exorbitant rates of return on the investments, independent of whether the projects are profitable or not. Many people know someone unfortunate enough to get enmeshed in exploitative arrangements with loan sharks and are aware of the consequences. This kind of outcome is not to be taken lightly.

These examples are speculative and may appear outlandish, and I have no idea if CPEC involves anything of the kind. But that is exactly the point, because such examples are by no means purely a figment of the imagination. Readers are well aware that usury, the charging of exorbitant rates of return on loans, is prohibited in most religions for good reason. They know that bonded labour still exists in some industries. Some who know their history would recall that the British passed an act in 1938 to rescue the heavily indebted Punjabi peasantry from the clutches of moneylenders. And there are records of violent opposition to alleged attempts by missionaries to influence people by offering them material temptations.

The bottom line is that it is never a good practice to accept loans without full knowledge of the terms and conditions, more so when one is desperate for financial assistance. Readers would do well to read Shakespeare’s Merchant of Venice to reinforce this conclusion. And, if convinced, wouldn’t it be ethically wrong to urge the country to accept something that one would personally reject? You should not do to others what you would not do to yourself.

Intellectual honesty demands a stance of neutrality on CPEC till the terms and conditions are disclosed, without which one cannot arrive at an objective assessment of whether it could be potentially beneficial for the country. Only then could one move to the next stage of appraisal, knowing that even potentially beneficial projects of this magnitude have their success depend on many other factors.

Aside from the truly random and uncontrollable ones, these would include the implementation capacity of Pakistani governments, whose probity and track record is not one to inspire confidence. What would we need to do to hold the government’s feet to the fire and prevent another Reko Diq?

Cheers

[Austin]

China says India won't get a big role if it decides to join One Belt, One Road project later

http://www.ibtimes.co.in/china-says-ind ... tatadocomo

[Peregrine]

Terrorist attacks: Nawaz moves to allay Chinese leadership’s concerns

ISLAMABAD: Prime Minister Nawaz Sharif has assured the Chinese leadership that ‘troublemakers’ who want to sabotage the China-Pakistan Economic Corridor (CPEC) and Gwadar Port would be ‘taken care of’ and Chinese personnel working in Pakistan would be provided foolproof security.

Cheers

[Murugan]

Gunmen Kill 10 Labourers at Gwadar

http://www.aljazeera.com/news/2017/05/g ... 30168.html

"This conspiratorial plan [CPEC] is not acceptable to the Baloch people under any circumstances. Baloch independence movements have made it clear several times that they will not abandon their people's future in the name of development projects or even democracy."

[anupmisra]

The SeePack Master Plan by CDB (or, as translated into Mandarin - The Glorious Control of the Wastelands of Pakistan for the Greater Enjoyment of Restful Life for the Master Race Han and Their Local Inferior Surrogates)

I will not summarize the 231 page plan - Yawn! has done a reasonable job of it in the link below (Remember that only pakjab got the full version, rest of the dumb nation only got to see the 31- page highlights). Basically, this master plan could be modeled after the German concept of Lebensraum or in today's parlance - the total takeover plan by a superior extraterrestrial race to control an unruly but resource rich planet inhabited by stone age people who have barely invented the wheel. Quite a mouthful, hain?

I can sense a lot of browning of paki ankle-length pajamas over this revelation.

Enjoy.

https://www.dawn.com/news/1333101/exclu ... n-revealed

[Peregrine]

X Posted on the STFUP Thread

Beijing plans to turn Pak into its economic colony

NEW DELHI: China's longterm plans for Pakistan would do the East India Company proud. Proposals for the China Pakistan Economic Corridor revealed in Pakistani newspaper Dawn envisage thousands of acres of agricultural land being leased to Chinese enterprises to set up demonstration projects and a fibre-optic system that will facilitate the dissemination of Chinese culture.

The proposals seem to confirm that Pakistan will become an economic colony of China as CPEC will help Beijing tighten its strategic embrace of its ally and provide it connectivity from Xinjiang to the Arabian Sea at Gwadar in Balochistan.

The range and scope of the plan is breathtaking, showing a deep penetration into Pakistan's economic life. This could have several implications for India - Pakistan's sovereignty could be forfeited to Chinese interests and China would be uncomfortably close to India's borders in the east and west.

It would be a virtual ring-fence of India.

Thousands of acres of Pakistani agricultural land will be leased to Chinese enterprises, according to proposals for the China-Pakistan Economic Corridor (CPEC).

The land will be leased for projects ranging from seed varieties to irrigation technology. A full system of monitoring and surveillance will be built from Peshawar to Karachi, with 24-hour video recordings on roads and busy marketplaces for law and order.

A national fibre optic backbone will be used not only for internet traffic but also terrestrial distribution of broadcast TV, which will cooperate with Chinese media in popularising China's culture.

The Pakistani government has argued that CPEC will spur the economy and its linkages with agriculture and power will benefit citizens. Its critics, particularly in Gilgit-Baltistan and Balochistan, feel it is an infringement on their land and culture.

Others have pointed to strings attached to Chinese aid. It was noted that the "CM" of Gilgit Baltistan was not involved in the One Belt, One Road discussions in Beijing attended by PM Nawaz Sharif.

The Dawn report said, "The plan envisages a deep and broad-based penetration of most sectors of Pakistan's economy as well as its society by Chinese enterprises and culture. Its scope has no precedent in Pakistan's history in terms of how far it opens up the domestic economy to participation by foreign enterprises."

The report concluded, "In the areas of interest contained in the plan, it appears access to the full supply chain of the agrarian economy is a top priority for the Chinese.

After that, the capacity of the textile spinning sector to serve the raw material needs of Xinjiang, and the garment and value added sector to absorb Chinese technology is another priority.

Next is the growing domestic market, particularly in cement and household appliances, which receive detailed treatment in the plan.

And lastly, through greater financial integration, the plan seeks to advance the internationalisation of the renminbi, as well as diversify the risks faced by Chinese enterprises entering Pakistan."

Laying out the risks, it said the topmost problem was politics and security. The next big risk was inflation, which the plan said had averaged 11.6% over the past six years.

Cheers

[chetak]

looks exactly like hitler's lebensraum project, except that it involves the porkies.

the pakjabis are especially being placated for now, as the paki army is formed by a large majority of these greedy gangsters.

Detailed right down to farm produce, seed control and obviously unmentioned is the huge pork production program in the farms that will kick in automatically to feed the tallel and sweetel folks from across the border.

also, an older article

‘CPEC could become another East India Company’

Exclusive: CPEC master plan revealed

Exclusive: CPEC master plan revealed

Details from original documents laying out the CPEC long term plan are publicly disclosed for the first time.

KHURRAM HUSAIN

LONG TERM PLAN
HOW THE PLAN WAS MADE
Plan eyes agriculture
Large surveillance system for cities
Visa-free entry for Chinese nationals

The floodgates are about to open. Prime Minister Nawaz Sharif arrived in Beijing over the weekend to participate in the One Belt, One Road summit, and the top item on his agenda is to finalise the Long Term Plan (LTP) for the China-Pakistan Economic Corri­dor. [See next tab for details on how the plan was made].

Dawn has acquired exclusive access to the original document, and for the first time its details are being publicly disclosed here. The plan lays out in detail what Chinese intentions and priorities are in Pakistan for the next decade and a half, details that have not been discussed in public thus far.

Prime Minister Nawaz Sharif and Turkish President Recep Tayyip Erdogan at the One Belt One Road summit in Beijing. — APP
Prime Minister Nawaz Sharif and Turkish President Recep Tayyip Erdogan at the One Belt One Road summit in Beijing. — APP

Two versions of the Long Term Plan are with the government. The full version is the one that was drawn up by the China Development Bank and the National Development Reform Commission of the People’s Republic of China. It is 231 pages long.

Two versions of the Long Term Plan are with the government. The full version is the one that was drawn up by the China Development Bank and the National Development Reform Commission of the People’s Republic of China. It is 231 pages long.

The shortened version is dated February 2017. It contains only broad brushstroke descriptions of the various “areas of cooperation” and none of the details. It was drawn up for circulation to the provincial governments to obtain their assent. It is 30 pages long. The only provincial government that received the full version of the plan is the Punjab government.

The shortened version is dated February 2017. It contains only broad brushstroke descriptions of the various “areas of cooperation” and none of the details. It was drawn up for circulation to the provincial governments to obtain their assent. It is 30 pages long. The only provincial government that received the full version of the plan is the Punjab government.

For instance, thousands of acres of agricultural land will be leased out to Chinese enterprises to set up “demonstration projects” in areas ranging from seed varieties to irrigation technology. A full system of monitoring and surveillance will be built in cities from Peshawar to Karachi, with 24 hour video recordings on roads and busy marketplaces for law and order. A national fibreoptic backbone will be built for the country not only for internet traffic, but also terrestrial distribution of broadcast TV, which will cooperate with Chinese media in the “dissemination of Chinese culture”.

The plan envisages a deep and broad-based penetration of most sectors of Pakistan’s economy as well as its society by Chinese enterprises and culture. Its scope has no precedent in Pakistan’s history in terms of how far it opens up the domestic economy to participation by foreign enterprises. In some areas the plan seeks to build on a market presence already established by Chinese enterprises, eg Haier in household appliances, ChinaMobile and Huawei in telecommunications and China Metallurgical Group Corporation (MCC) in mining and minerals.

In other cases, such as textiles and garments, cement and building materials, fertiliser and agricultural technologies (among others) it calls for building the infrastructure and a supporting policy environment to facilitate fresh entry. A key element in this is the creation of industrial parks, or special economic zones, which “must meet specified conditions, including availability of water…perfect infrastructure, sufficient supply of energy and the capacity of self service power”, according to the plan.

But the main thrust of the plan actually lies in agriculture, contrary to the image of CPEC as a massive industrial and transport undertaking, involving power plants and highways. The plan acquires its greatest specificity, and lays out the largest number of projects and plans for their facilitation, in agriculture.



The plan states at the outset that the corridor “spans Xinjiang Uygur Autonomous Region and whole Pakistan in spatial range”. It’s main aim is to connect South Xinjiang with Pakistan. It is divided into a “core area” and what they call the “radiation zones”, those territories that will feel the knock on effects of the work being done in the core area. The core area includes “Kashgar, Tumshuq, Atushi and Akto of Kizilsu Kirghiz of Xinjiang” from China, and “most of Islamabad’s Capital territory, Punjab, and Sindh, and some areas of Gilgit-Baltistan, Khyber Pukhtunkhwa, and Balochistan” from Pakistan. It has “one belt, three passages, and two axes and five functional zones”, where the belt is “the strip area formed by important arterial traffic in China and Pakistan".

The plan states at the outset that the corridor “spans Xinjiang Uygur Autonomous Region and whole Pakistan in spatial range”. It’s main aim is to connect South Xinjiang with Pakistan. It is divided into a “core area” and what they call the “radiation zones”, those territories that will feel the knock on effects of the work being done in the core area. The core area includes “Kashgar, Tumshuq, Atushi and Akto of Kizilsu Kirghiz of Xinjiang” from China, and “most of Islamabad’s Capital territory, Punjab, and Sindh, and some areas of Gilgit-Baltistan, Khyber Pukhtunkhwa, and Balochistan” from Pakistan. It has “one belt, three passages, and two axes and five functional zones”, where the belt is “the strip area formed by important arterial traffic in China and Pakistan".
Header photo courtesy Reuters.

Agriculture
For agriculture, the plan outlines an engagement that runs from one end of the supply chain all the way to the other. From provision of seeds and other inputs, like fertiliser, credit and pesticides, Chinese enterprises will also operate their own farms, processing facilities for fruits and vegetables and grain. Logistics companies will operate a large storage and transportation system for agrarian produce.

It identifies opportunities for entry by Chinese enterprises in the myriad dysfunctions that afflict Pakistan’s agriculture sector. For instance, “due to lack of cold-chain logistics and processing facilities, 50% of agricultural products go bad during harvesting and transport”, it notes.



A full system of monitoring and surveillance will be built in cities from Peshawar to Karachi, with 24 hour video recordings on roads and busy marketplaces for law and order.



Enterprises entering agriculture will be offered extraordinary levels of assistance from the Chinese government. They are encouraged to “[m]ake the most of the free capital and loans” from various ministries of the Chinese government as well as the China Development Bank. The plan also offers to maintain a mechanism that will “help Chinese agricultural enterprises to contact the senior representatives of the Government of Pakistan and China”.

The government of China will “actively strive to utilize the national special funds as the discount interest for the loans of agricultural foreign investment”. In the longer term the financial risk will be spread out, through “new types of financing such as consortium loans, joint private equity and joint debt issuance, raise funds via multiple channels and decentralise financing risks”.

— Reuters photo
— Reuters photo
The plan proposes to harness the work of the Xinjiang Production and Construction Corps to bring mechanization as well as scientific technique in livestock breeding, development of hybrid varieties and precision irrigation to Pakistan. It sees its main opportunity as helping the Kashgar Prefecture, a territory within the larger Xinjiang Autonomous Zone, which suffers from a poverty incidence of 50 per cent, and large distances that make it difficult to connect to larger markets in order to promote development. The prefecture’s total output in agriculture, forestry, animal husbandry and fishery amounted to just over $5 billion in 2012, and its population was less than 4 million in 2010, hardly a market with windfall gains for Pakistan.

However, for the Chinese, this is the main driving force behind investing in Pakistan’s agriculture, in addition to the many profitable opportunities that can open up for their enterprises from operating in the local market. The plan makes some reference to export of agriculture goods from the ports, but the bulk of its emphasis is focused on the opportunities for the Kashgar Prefecture and Xinjiang Production Corps, coupled with the opportunities for profitable engagement in the domestic market.

The plan discusses those engagements in considerable detail. Ten key areas for engagement are identified along with seventeen specific projects. They include the construction of one NPK fertilizer plant as a starting point “with an annual output of 800,000 tons”. Enterprises will be inducted to lease farm implements, like tractors, “efficient plant protection machinery, efficient energy saving pump equipment, precision fertilization drip irrigation equipment” and planting and harvesting machinery.



The plan shows great interest in the textiles industry in particular, but the interest is focused largely on yarn and coarse cloth.



Meat processing plants in Sukkur are planned with annual output of 200,000 tons per year, and two demonstration plants processing 200,000 tons of milk per year. In crops, demonstration projects of more than 6,500 acres will be set up for high yield seeds and irrigation, mostly in Punjab. In transport and storage, the plan aims to build “a nationwide logistics network, and enlarge the warehousing and distribution network between major cities of Pakistan” with a focus on grains, vegetables and fruits. Storage bases will be built first in Islamabad and Gwadar in the first phase, then Karachi, Lahore and another in Gwadar in the second phase, and between 2026-2030, Karachi, Lahore and Peshawar will each see another storage base.

Asadabad, Islamabad, Lahore and Gwadar will see a vegetable processing plant, with annual output of 20,000 tons, fruit juice and jam plant of 10,000 tons and grain processing of 1 million tons. A cotton processing plant is also planned initially, with output of 100,000 tons per year.

“We will impart advanced planting and breeding techniques to peasant households or farmers by means of land acquisition by the government, renting to China-invested enterprises and building planting and breeding bases” it says about the plan to source superior seeds.

In each field, Chinese enterprises will play the lead role. “China-invested enterprises will establish factories to produce fertilizers, pesticides, vaccines and feedstuffs” it says about the production of agricultural materials.

“China-invested enterprises will, in the form of joint ventures, shareholding or acquisition, cooperate with local enterprises of Pakistan to build a three-level warehousing system (purchase & storage warehouse, transit warehouse and port warehouse)” it says about warehousing.



One of the most intriguing chapters in the plan speaks of a long belt of coastal enjoyment industry that includes yacht wharfs, cruise homeports, nightlife, city parks, public squares, theaters, golf courses and spas, hot spring hotels and water sports.



Then it talks about trade. “We will actively embark on cultivating surrounding countries in order to improve import and export potential of Pakistani agricultural products and accelerate the trade of agricultural products. In the early stages, we will gradually create a favorable industry image and reputation for Pakistan by relying on domestic demand.”

In places the plan appears to be addressing investors in China. It says Chinese enterprises should seek “coordinated cooperation with Pakistani enterprises” and “maintain orderly competition and mutual coordination.” It advises them to make an effort “seeking for powerful strategic partners for bundling interest in Pakistan.”

As security measures, enterprises will be advised “to respect the religions and customs of the local people, treat people as equals and live in harmony”. They will also be advised to “increase local employment and contribute to local society by means of subcontracting and consortiums.” In the final sentence of the chapter on agriculture, the plan says the government of China will “[s]trengthen the safety cooperation with key countries, regions and international organizations, jointly prevent and crack down on terrorist acts that endanger the safety of Chinese overseas enterprises and their staff.”

Illustration by Sana Nasir/Herald
Illustration by Sana Nasir/Herald
Industry
For industry, the plan trifurcates the country into three zones: western and northwestern, central and southern. Each zone is marked to receive specific industries in designated industrial parks, of which only a few are actually mentioned. The western and northwestern zone, covering most of Balochistan and KP province, is marked for mineral extraction, with potential in chrome ore, “gold reserves hold a considerable potential, but are still at the exploration stage”, and diamonds. One big mineral product that the plan discusses is marble. Already, China is Pakistan’s largest buyer of processed marble, at almost 80,000 tons per year. The plan looks to set up 12 marble and granite processing sites in locations ranging from Gilgit and Kohistan in the north, to Khuzdar in the south.

The central zone is marked for textiles, household appliances and cement. Four separate locations are pointed out for future cement clusters: Daudkhel, Khushab, Esakhel and Mianwali. The case of cement is interesting, because the plan notes that Pakistan is surplus in cement capacity, then goes on to say that “in the future, there is a larger space of cooperation for China to invest in the cement process transformation”.



“There is a plan to build a pilot safe city in Peshawar, which faces a fairly severe security situation in northwestern Pakistan”.



For the southern zone, the plan recommends that “Pakistan develop petrochemical, iron and steel, harbor industry, engineering machinery, trade processing and auto and auto parts (assembly)” due to the proximity of Karachi and its ports. This is the only part in the report where the auto industry is mentioned in any substantive way, which is a little surprising because the industry is one of the fastest growing in the country. The silence could be due to lack of interest on the part of the Chinese to acquire stakes, or to diplomatic prudence since the sector is, at the moment, entirely dominated by Japanese companies (Toyota, Honda and Suzuki).

One of the CPEC transport routes. — AFP
One of the CPEC transport routes. — AFP
Gwadar, also in the southern zone, “is positioned as the direct hinterland connecting Balochistan and Afghanistan.” As a CPEC entreport, the plan recommends that it be built into “a base of heavy and chemical industries, such as iron and steel/petrochemical”. It notes that “some Chinese enterprises have started investment and construction in Gwadar” taking advantage of its “superior geographical position and cheap shipping costs to import crude oil from the Middle East, iron ore and coking coal resources from South Africa and New Zealand” for onward supply to the local market “as well as South Asia and Middle East after processing at port.”

The plan shows great interest in the textiles industry in particular, but the interest is focused largely on yarn and coarse cloth. The reason, as the plan lays out, is that in Xinjiang the textile industry has already attained higher levels of productivity. Therefore, “China can make the most of the Pakistani market in cheap raw materials to develop the textiles & garments industry and help soak up surplus labor forces in Kashgar”. The ensuing strategy is described cryptically as the principle of “introducing foreign capital and establishing domestic connections as a crossover of West and East".

Preferential policies will be necessary to attract enterprises to come to the newly built industrial parks envisioned under the plan. The areas where such preferences need to be extended are listed in the plan as “land, tax, logistics and services” as well as land price, “enterprise income tax, tariff reduction and exemption and sales tax rate.”

Chinese troops march as they take part in Pakistan Day military parade. ─ AFP
Chinese troops march as they take part in Pakistan Day military parade. ─ AFP
Fibreoptics and surveillance
One of the oldest priorities for the Chinese government since talks on CPEC began is fibreoptic connectivity between China and Pakistan. An MoU for such a link was signed in July 2013, at a time when CPEC appeared to be little more than a road link between Kashgar and Gwadar. But the plan reveals that the link goes far beyond a simple fibreoptic set up.

China has various reasons for wanting a terrestrial fibreoptic link with Pakistan, including its own limited number of submarine landing stations and international gateway exchanges which can serve as a bottleneck to future growth of internet traffic. This is especially true for the western provinces. “Moreover, China’s telecom services to Africa need to be transferred in Europe, so there is certain hidden danger of the overall security” says the plan. Pakistan has four submarine cables to handle its internet traffic, but only one landing station, which raises security risks as well.

— AFP photo
— AFP photo
So the plan envisages a terrestrial cable across the Khunjerab pass to Islamabad, and a submarine landing station in Gwadar, linked to Sukkur. From there, the backbone will link the two in Islamabad, as well as all major cities in Pakistan.

The expanded bandwidth that will open up will enable terrestrial broadcast of digital HD television, called Digital Television Terrestrial Multimedia Broadcasting (DTMB). This is envisioned as more than just a technological contribution. It is a “cultural transmission carrier. The future cooperation between Chinese and Pakistani media will be beneficial to disseminating Chinese culture in Pakistan, further enhancing mutual understanding between the two peoples and the traditional friendship between the two countries.” The plan says nothing about how the system will be used to control the content of broadcast media, nor does it say anything more about “the future cooperation between Chinese and Pakistani media”.



Judging from their conversations with the government, it appears that the Pakistanis are pushing the Chinese to begin work on the Gwadar International Airport, whereas the Chinese are pushing for early completion of the Eastbay Expressway.



It also seeks to create an electronic monitoring and control system for the border in Khunjerab, as well as run a “safe cities” project. The safe city project will deploy explosive detectors and scanners to “cover major roads, case-prone areas and crowded places…in urban areas to conduct real-time monitoring and 24 hour video recording.” Signals gathered from the surveillance system will be transmitted to a command centre, but the plan says nothing about who will staff the command centre, what sort of signs they will look for, and who will provide the response.

“There is a plan to build a pilot safe city in Peshawar, which faces a fairly severe security situation in northwestern Pakistan” the plan says, following which the program will be extended to major cities such as Islamabad, Lahore and Karachi, hinting that the feeds will be shared eventually, and perhaps even recorded.

Tourism and recreation
One of the most intriguing chapters in the plan is the one that talks about the development of a “coastal tourism” industry. It speaks of a long belt of coastal enjoyment industry that includes yacht wharfs, cruise homeports, nightlife, city parks, public squares, theaters, golf courses and spas, hot spring hotels and water sports. The belt will run from Keti Bunder to Jiwani, the last habitation before the Iranian border. Then, somewhat disappointingly, it adds that “more work needs to be done” before this vision can be realized.

The plans are laid out in surprising detail. For instance, Gwadar will feature international cruise clubs that “provide marine tourists private rooms that would feel as though they were ‘living in the ocean’”. And just as the feeling sinks in, it goes on to say that “[f]or the development of coastal vacation products, Islamic culture, historical culture, folk culture and marine culture shall all be integrated.” Apparently more work needs to be done here too.

— AFP photo
— AFP photo
For Ormara, the plan recommends building “unique recreational activities” that would also encourage “the natural, exciting, participatory, sultry, and tempting characteristics” to come through. For Keti Bunder it recommends wildlife sanctuaries, an aquarium and a botanical garden. For Sonmiani, on the eastern edge of Karachi, “projects like a coastal beach, extended greenway, coastal villa, car camp, SPA, beach playground and a seafood street can be developed.”

It is an expansive vision that the plan lays out, and towards the end, it asks for the following: “Make the visa-free tourism possible with China to provide more convenient policy support for Chinese tourists to Pakistan.” There is no mention of a reciprocal arrangement for Pakistani nationals visiting China.

Finance and risk
In any plan, the question of financial resources is always crucial. The long term plan drawn up by the China Development Bank is at its sharpest when discussing Pakistan’s financial sector, government debt market, depth of commercial banking and the overall health of the financial system. It is at its most unsentimental when drawing up the risks faced by long term investments in Pakistan’s economy.

The chief risk the plan identifies is politics and security. “There are various factors affecting Pakistani politics, such as competing parties, religion, tribes, terrorists, and Western intervention” the authors write. “The security situation is the worst in recent years”. The next big risk, surprisingly, is inflation, which the plan says has averaged 11.6 per cent over the past 6 years. “A high inflation rate means a rise of project-related costs and a decline in profits.”

Efforts will be made, says the plan, to furnish “free and low interest loans to Pakistan” once the costs of the corridor begin to come in. But this is no free ride, it emphasizes. “Pakistan’s federal and involved local governments should also bear part of the responsibility for financing through issuing sovereign guarantee bonds, meanwhile protecting and improving the proportion and scale of the government funds invested in corridor construction in the financial budget.”

Illustration by Sana Nasir/Herald
Illustration by Sana Nasir/Herald
It asks for financial guarantees “to provide credit enhancement support for the financing of major infrastructure projects, enhance the financing capacity, and protect the interests of creditors.” Relying on the assessments of the IMF, World Bank and the ADB, it notes that Pakistan’s economy cannot absorb FDI much above $2 billion per year without giving rise to stresses in its economy. “It is recommended that China’s maximum annual direct investment in Pakistan should be around US$1 billion.” Likewise, it concludes that Pakistan’s ceiling for preferential loans should be $1 billion, and for non preferential loans no more than $1.5 billion per year.

It advises its own enterprises to take precautions to protect their own investments. “International business cooperation with Pakistan should be conducted mainly with the government as a support, the banks as intermediary agents and enterprises as the mainstay.” Nor is the growing engagement some sort of brotherly involvement. “The cooperation with Pakistan in the monetary and financial areas aims to serve China’s diplomatic strategy.”

The other big risk the plan refers to is exchange rate risk, after noting the severe weakness in Pakistan’s ability to earn foreign exchange. To mitigate this, the plan proposes tripling the size of the swap mechanism between the RMB and the Pakistani rupee to 30 billion Yuan, diversifying power purchase payments beyond the dollar into RMB and rupee basket, tapping the Hong Kong market for RMB bonds, and diversifying enterprise loans from a wide array of sources. The growing role of the RMB in Pakistan’s economy is a clearly stated objective of the measures proposed.

Conclusion
It is not clear how much of the plan will be earnestly followed up and how much is there simply to evince interest from the Pakistani side. In the areas of interest contained in the plan, it appears access to the full supply chain of the agrarian economy is a top priority for the Chinese. After that the capacity of the textile spinning sector to serve the raw material needs of Xinjiang, and the garment and value added sector to absorb Chinese technology is another priority.

Next is the growing domestic market, particularly in cement and household appliances, which receive detailed treatment in the plan. And lastly, through greater financial integration, the plan seeks to advance the internationalization of the RMB, as well as diversify the risks faced by Chinese enterprises entering Pakistan.



In some areas the plan seeks to build on a market presence already established by Chinese enterprises, eg Haier in household appliances, ChinaMobile and Huawei in telecommunications and China Metallurgical Group Corporation (MCC) in mining and minerals.



Gwadar receives passing mention as an economic prospect, mainly for its capacity to serve as a port of exit for minerals from Balochistan and Afghanistan, and as an entreport for wider trade in the greater Indian Ocean zone from South Africa to New Zealand. There is no mention of China’s external trade being routed through Gwadar. Judging from their conversations with the government, it appears that the Pakistanis are pushing the Chinese to begin work on the Gwadar International Airport, whereas the Chinese are pushing for early completion of the Eastbay Expressway.

But the entry of Chinese firms will not be limited to the CPEC framework alone, as the recent acquisition of the Pakistan Stock Exchange, and the impending acquisition of K Electric demonstrate. In fact, CPEC is only the opening of the door. What comes through once that door has been opened is difficult to forecast.

[Deans]

http://nationalinterest.org/feature/chi ... stan-11827

Even Unkil's conservative mag is now commenting on the `Pak will be a colony' plan.

[JE Menon]

It is unfortunate that Pakistan's army is in such a state of denial and wretchedness that its leaders are even considering this. Observe the blindness of the "leadership". It is allying with a country which has just put restrictions on the name "Mohammed", the name of the prophet of the religion in whose name, and the main reason, why Pakistan was created. You can't blame China for the actions it takes in its interest, and this is indeed in its best interest - a large fairly resource rich colony which is a permanent thorn in the side of it's primary competitor, and will be a bigger one when Beijing is through with CPEC. But what of the land and people of Pakistan? If you read through the plan, such as it is, the whole thing is transparently obvious. It is in fact a worse surrender than the one Niazi signed in Dhaka. Here they are surrendering due to inability to govern, not inability to fight. A fitting end, I would think, to the first modern state created in the name of Islam, by one with the name of the prophet, that it surrenders to a godless state.

[rohitvats]

^^^I'm going to Tweet a part of the above.

[kapilrdave]

^^ Eventually the pleasure will be mutual. Cheenis will also learn a lesson. US is smart to deal with the devil from the distance. Trust the leech porkis to squeeze the biladels dry before showing them their true color (read green color).

In all this, Bharat will be (or should be) waiting for the chance for an opening to a massive breakthrough. And chance will come.

[amit]

It is unfortunate that Pakistan's army is in such a state of denial and wretchedness that its leaders are even considering this. Observe the blindness of the "leadership". It is allying with a country which has just put restrictions on the name "Mohammed", the name of the prophet of the religion in whose name, and the main reason, why Pakistan was created. You can't blame China for the actions it takes in its interest, and this is indeed in its best interest - a large fairly resource rich colony which is a permanent thorn in the side of it's primary competitor, and will be a bigger one when Beijing is through with CPEC. But what of the land and people of Pakistan? If you read through the plan, such as it is, the whole thing is transparently obvious. It is in fact a worse surrender than the one Niazi signed in Dhaka. Here they are surrendering due to inability to govern, not inability to fight. A fitting end, I would think, to the first modern state created in the name of Islam, by one with the name of the prophet, that it surrenders to a godless state.

JEM,

I think the real clincher in that Dawn report is this part:

It asks for financial guarantees “to provide credit enhancement support for the financing of major infrastructure projects, enhance the financing capacity, and protect the interests of creditors.” Relying on the assessments of the IMF, World Bank and the ADB, it notes that Pakistan’s economy cannot absorb FDI much above $2 billion per year without giving rise to stresses in its economy. “It is recommended that China’s maximum annual direct investment in Pakistan should be around US$1 billion.” Likewise, it concludes that Pakistan’s ceiling for preferential loans should be $1 billion, and for non preferential loans no more than $1.5 billion per year.

Ok if China thinks the maximum direct investment per year should be US$1 billion, how many years will it take to invest US$50 billion????

I think the contours of the whole deal is becoming clear. It's pure land grab. China is one and a half times bigger than India in landmass but has considerably less arable land for agriculture. Truth be said they have worked around this problem by increasing agricultural productivity dramatically. However, there's a limit to how much you can do with productivity. And so China has been looking for farm land for a long time. It tried to buy/takeover land in poor African nations for farming but the temperature, soil condition and distance didn't make these efforts too viable.

Now they have a captive country which has good arable land and a land corridor, manned by the Chinese back to the Middle Kingdom. They are going to grab land for large industrial farming projects and if you read the document it clearly says that these farms will be run by Chinese companies with Chinese labour, producing stuff for the Chinese market. No mention of local involvement except for saying that the land would be taken from locals.

So the major emphasis is not on industrial activities but in farming which gives meaning to the US$1 billion cap being suggested. That should be sufficient for setting things like cold storages and making farming mechanised.

And safe cities with 24 hour video surveillance? That sound awfully like gated communities for the Chinese to live in away from the unwashed abduls much like how western expats live in Saudi Arabia. A few well trained Pakistani may be allowed in as servants and menial works. And the entire seacoast will become a recreational playground for the thousands of Chinese who would live in these gated communities and for tourists from the mainland - a home away from home.

Baluchistan will be massive mine for mineral extraction.

Gawd this is even worse than the East India Company colonisation effort.

And oh yes: Most nations have an army, Pak Army has a country & China is a nation with 2 armies: PLA & Pak Army. So China owns Pakistan

[JE Menon]

rohitvats, feel free...

amit, absolutely right, that is the exact thing that my eyes sat a while upon. Almost could not believe the brazenness of it, but the Chinese are simply saying it like it is. They don't even care enough to sugar-coat much, leaving their Pacolytes to do it on their behalf...

[Deans]

^^^I'm going to Tweet a part of the above.

Let's put this on Pak forums too. Or as a letter to editor of Dawn from a concerned Mohammed (I would have added PBUH but that may already
have been banned by their Chinese overlords).