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OBOR, Chinese Strategy and Implications

The Strategic Issues & International Relations Forum is a venue to discuss issues pertaining to India's security environment, her strategic outlook on global affairs and as well as the effect of international relations in the Indian Subcontinent. We request members to kindly stay within the mandate of this forum and keep their exchanges of views, on a civilised level, however vehemently any disagreement may be felt. All feedback regarding forum usage may be sent to the moderators using the Feedback Form or by clicking the Report Post Icon in any objectionable post for proper action. Please note that the views expressed by the Members and Moderators on these discussion boards are that of the individuals only and do not reflect the official policy or view of the Bharat-Rakshak.com Website. Copyright Violation is strictly prohibited and may result in revocation of your posting rights - please read the FAQ for full details. Users must also abide by the Forum Guidelines at all times.
Singha
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Re: OBOR, Chinese Strategy and Implications

Postby Singha » 17 May 2017 09:16

Converting debt to equity means the chinese buy put the sri lankan stake in the projects like hambantota. Nice move.

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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 17 May 2017 09:21

X posted from the CPEC thread.


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.









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.

Image

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.



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Re: OBOR, Chinese Strategy and Implications

Postby ArjunPandit » 17 May 2017 09:22

, China on the other hand challenges the American led world order and sets leadership by uniting the entire regional players except India

Unites, but against china due to all the disputes it has with its neighbors. Just because people come to eat free lunches doesnt mean they are marrying the host's ugly AIDS/Herpes infected daughter. Worse, they may marry, take the dowry and then never to be seen again (US funding to pakistan)

Xi Jinping follows the Sun-Tzuvian ideal of "the supreme art of war is to subdue the enemy without fighting",

I would love you to keep counting upon that, coz when the war bugle sounds, you will brown your pants or will it be red the color of proletariat comrades.

as it emerges into an economic superpower at the dawn of the 21st century. Does India possess any strategy or ideal?

For the time being It doesnt need to, just wait and bide its time and wait for you to make a big mistake. As they say, "you never hear the shot that takes you down". We're not the ones who's stuck our neck out, China has. While you have been implementing your string of pearls around India. you have also implemented Necklacing.

Let's be candid, from now own, china can not stay in the realm of regional superpowers. It will either as a global superpower, if CPEC succeeds, or it will have to again restart the cycle after CPEC has been an economic and military failure.

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Re: OBOR, Chinese Strategy and Implications

Postby Rudradev » 17 May 2017 09:50

Neshant wrote:US joined the Obor meeting only after it became apparent India would not be attending.

They figured the Obor wasn't going anywhere without India's participation (and obor in general didn't make any economic sense) so they attended for a free lunch.

Probably more to it.

http://www.aljazeera.com/news/2017/05/r ... 02276.html

Per Nikki Haley, USA and PRC are working together on a "resolution targeting Pyongyang" at UNSC.

After EU, Japan and India spurned the Belt and Load Folum, Chingadyas begged and pleaded with the Americans to send a delegation to save their ugly faces. As quid plo quo for coopelating on the resolution.

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Re: OBOR, Chinese Strategy and Implications

Postby yensoy » 17 May 2017 09:53

Tuan wrote:Don't know if anyone posted this article here, but it portrays the Belt and Road Forum in a nutshell. While American leadership is struggling with its ambiguous policy of protectionism and anti-globalization rhetoric, China on the other hand challenges the American led world order and sets leadership by uniting the entire regional players except India. It seems like Xi Jinping follows the Sun-Tzuvian ideal of "the supreme art of war is to subdue the enemy without fighting", as it emerges into an economic superpower at the dawn of the 21st century. Does India possess any strategy or ideal?


China is challenging the "American led world order" by trying to implement a colonial world order from the 1800s. Nice try.

Meanwhile the rich and moneyed class of China is surreptitiously (not really, because you know everything can be traced in China) transferring their wealth out of the mainland, to Western countries including America which apparently is "struggling with its ambiguous policy of protectionism and anti-globalization rhetoric".

OBOR is toast. Tell Mr Xi to go back to the drawing board, try to include some other viewpoints and come up with a "win-win" solution. Where "win-win" doesn't mean "I win by selling you stuff, you win by buying my stuff". Honestly, China has the money and capacity to come up with such a solution and I would welcome it if it is truly "win-win". A start could be made by opening up its own markets.

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Re: OBOR, Chinese Strategy and Implications

Postby manjgu » 17 May 2017 09:55

Rudradev....As quid plo quo for coopelating ( copulating) on the resolution.

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Re: OBOR, Chinese Strategy and Implications

Postby manjgu » 17 May 2017 10:00

ArjunPandit... i dont get ur argument about restart the cycle once CPEC has been a economic and military failure !! a) how will it be a military failure..i think thats the only thing ( military) that will succeed. Chinese navy will be permanently stationed in Gwadar and prowling Indian ocean? b) CPEC can fail for the Pakis but not for the hans. They will extract the last ounce of blood ( debt servicing) from the Napakis. c) the amounts involved in CPEC are big but nothing to dent the Hans given their forex reserves. i dont see merit in ur argument.

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Re: OBOR, Chinese Strategy and Implications

Postby yensoy » 17 May 2017 10:00

BTW, have others noticed the blue zone in the CPEC map marked "Western Pakistan zone of logistic channel, mineral exploration and ecological conservation"?

Here is the translation from Chinglish:

logistic channel: there will be a road
mineral exploration: and mines, lots of them, since there is nothing else of value there other than minerals
ecological conservation: and nothing else will be built

Baluchistan gets the shaft, literally.

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Re: OBOR, Chinese Strategy and Implications

Postby Malayappan » 17 May 2017 14:12

Can China Afford Its Belt and Road?

Author explores two possible routes of financing - Yuan and Dollar. Both have serious issues.
Also the keenness to rope in others can be understood.
If we accept the analysis, one possible conclusion - OBOR is a cloak, CPEC like smaller scale actions are likely to be the deal. Finance in Yuan and then writeoff, acquiring the asset.

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Re: OBOR, Chinese Strategy and Implications

Postby SSridhar » 17 May 2017 14:48

Malayappan wrote:Can China Afford Its Belt and Road?

If we accept the analysis, one possible conclusion - OBOR is a cloak, CPEC like smaller scale actions are likely to be the deal. Finance in Yuan and then writeoff, acquiring the asset.

That is correct. The countries that China's OBOR would encompass are mostly small nations or those in financial grief, like Greece. Or, teetering countries like Pakistan, Laos, Cambodia which are under its thumb. What China wants to achieve is nothing but Finlandization, predominantly in Asia and wherever possible in Eurasia. It would first want to do that on a large scale in Asia and India could be a spoilsport in that and hence the desperation to get India inside the tent. India is strategically located too do stop the Chinese efforts and Indian sea-faring over centuries, its contacts and its cultural impact along with soft-power have been bigger than that of the Chinese. There is trust that India wouldn't gobble up smaller nations like the way Chinese have been doing and Indian approach is soft, not aggressive at all. China is worried that India would put spokes in its 'Project Finlandization' which is the real intention behind Project OBOR.

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Re: OBOR, Chinese Strategy and Implications

Postby ArjunPandit » 17 May 2017 16:20

c) the amounts involved in CPEC are big but nothing to dent the Hans given their forex reserves.

With due regards, there is more to question in your argument than mine, but let me share my points and debate. The question I feel like asking you is that are you implying that Billions of dollars will be written off without huge military/economic/political repercussions? But let's keep that aside till we settle my arguments.

There are two implicit questions in your part, 1. Military, 2. Economic. Let me explain one by one
1. Economically: Their fx reserves are big in relation to the CPEC investments, AS OF TODAY, in a high export driven high growth environment, and with a population that was young and when they did not spend huge amounts on military (more on it in pt 2), socially(healthcare, social benefits etc.). This growth is decreasing. With BRF, their expenses will certainly increase for all the projects, military forces around it and all the new shiny toys reqd to be == to Uncle Sam or even beat it (more R&D, less of stealing/buying US/russian stuff). . Internally, they will have to support ageing population, This debt, debt+int, or the equity JV arrangements are flying now because of good times. Once the party is over, the westernized CPC mandarins and chinese mangoes will be questioning the govt for these write offs instead of their supporting their healthcare in old age and their kids' education. All this coupled with decrease in exports due to potential increased hostility in western capitals and neighbours would cause them huge huge pain.
2. Militarily: Here the new power and old power games will start playing out (proxy wars, direct wars, handling local unrest/conflicts: remember east india company). Once OBOR/BRF is implemented, there is little that china can do to avoid getting involved in such conflicts, unless it gets generous and writes off(impacting point 1 and taking write offs). Also, there's no way western world order will allow imperialism 2.0 (unless it involves them :evil: ). Now who all China have in the name of allies: Pakistan, NoKo, Phillipines, African Nations? Russia is a slippery friend (going by what happened in WW2 with Germany and Russian/Chinese are not old flames to yearn for each other). Now let's take a count of the nations they have managed to antagonize: US, India, Japan, SoKo, we can count UK in this list too as it will go by what Uncle sam says. EU will probably play or actually be a victim of Chinese imperialism. Apart from themselves, they dont have any military or even economic power to support them. Their own economy is export driven, which will slide down the commode at the first sign of strain in relationships with west. Khan will use the old rule books of today's order for toilet paper and play more dirty than them. With all the bases coming up faster than the military expertise (not just having big ships and hacked planes), they are sticking their neck too far outside their hide outs. Even if there is no direct war, china would be left handling simultaneous insurgencies (supported by western powers) in Pakistan(asia), Central Asia and Africa (that too in an optimistic scenario).

My sense is it would have been better had they did it piece meal, under the radar (did you hear an Indian official or Nehruvian babu?) and saw how things go rather than jumping in the river after testing water through their feet with shoes worn.

Now in the original post, this was one of the scenarios
if CPEC succeeds, or it will have to again restart the cycle after CPEC has been an economic and military failure.

....and a rare but quite plausible
PS: I meant entire BRF/OBOR and not just CPEC.

CPEC can fail for the Pakis but not for the hans. They will extract the last ounce of blood ( debt servicing) from the Napakis
That's what Pommies had thought, then Uncle Sam, and now China. The difference between Pommy/Uncle Sam is intinmacy with the pork infestation they had. You have to wait till Porkis start immigrating in great Hanland, start blowing them and their masters and PA/ISI starts the game of extracting money from Chinese for the protection of CPEC due to increased unrest, while funding/sponsoring the unrest themselves, but hey, hasn't that already started.
As one of the three Chinese curse says "May you live in interesting times", Chinese and we are surely going to live in "intelesting times'

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Re: OBOR, Chinese Strategy and Implications

Postby A_Gupta » 17 May 2017 18:20

ArjunPandit wrote:With BRF, their expenses will certainly increase for all the projects, military forces around it and all the new shiny toys reqd to be == to Uncle Sam or even beat it (more R&D, less of stealing/buying US/russian stuff).


A small request, "Belt And Road Forum" is BARF. Which is quite appropriate.
BRF is Bharat-Rakshak Forum, don't let China usurp that acronym. :((

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Re: OBOR, Chinese Strategy and Implications

Postby Deans » 17 May 2017 18:40

Tuan wrote:India isolates itself as the rest of Asia joins China’s OBOR summit

Don't know if anyone posted this article here, but it portrays the Belt and Road Forum in a nutshell. While American leadership is struggling with its ambiguous policy of protectionism and anti-globalization rhetoric, China on the other hand challenges the American led world order and sets leadership by uniting the entire regional players except India. It seems like Xi Jinping follows the Sun-Tzuvian ideal of "the supreme art of war is to subdue the enemy without fighting", as it emerges into an economic superpower at the dawn of the 21st century. Does India possess any strategy or ideal?


Attending or not attending a summit has nothing to do with being isolated. None of the countries are contributing any money to OBOR or have made any meaningful policy declaration to facilitate OBOR.

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Re: OBOR, Chinese Strategy and Implications

Postby manjgu » 17 May 2017 18:50

Deans..i agree its nothing to do with being isolated..but its true we dont have a counter narrative or some bright idea. We cant even provide good connectivity to SAARC countries..the much vaunted road to burma, thailand is no where to be seen !! so much for the look east policy.


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Re: OBOR, Chinese Strategy and Implications

Postby shiv » 17 May 2017 19:35

India isolated is nonsensical rhetoric. India has been isolated on so many counts - with 1/6 of the world's population our isolation is our business and the rest of the timepass observers can put both their thumbs in their musharrafs.

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Re: OBOR, Chinese Strategy and Implications

Postby Deans » 17 May 2017 19:49

Manjgu, I don't think its a question of either our being isolated or having a counter narrative. OBOR/ CPEC is a commercial proposal between the Chinese and the investee country. India has no locus-standii to either approve or offer a counter proposal. If there is a project in India we can evaluate it on its merits. I'd be happy to see the Chinese build a highway across Arunachal, connected with Kolkata and Dhaka.

There is no technology or money barrier in any OBOR project China is proposing to so. They had the capability to execute these projects 10 years ago.
The fact that they want to do it now, is in my view, a combination of a serious slowdown in the Chinese economy coupled with other problems, like unsustainable bad debts, lack of demand, capital flight, ageing population etc. Eleven is desperately trying to postpone the problem with OBOR - whose main assumption is that the quasi dictatorships in the investee states will have a higher probability of paying back loans than his state owned enterprises and if they don't, they offer better collateral. At the same time, there are a number of states which are economically distressed, small/weak and without the checks and balances that a mature democracy offers, which will readily agree to OBOR proposals, because their leaders too want to postpone their day of reckoning and enjoy the use of `other peoples money'.

I'd like to see what happens with Venezula, which has 50 Bln of Chinese loans (more than `Tarrel...' friend Pak, though its a much smaller non OBOR country). Venezeula can't repay so its only source of revenue is mortgaged to China while its people literally starve.

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Re: OBOR, Chinese Strategy and Implications

Postby manjgu » 17 May 2017 21:42

Deans..u didnt get me. Its true India has no locus standii to either approve any OBOR project. What i meant we have not pursued our economic interest as actively..we have a 'LOOK EAST' policy. What has come out of it? we could have our own mini OBOR connecting SE Asian countries. I mean we are not setting any agenda on the diplomatic, economic front. Atleast the Chinese see a looming problem with their economy and working to address it.

Even in SriLanka or African countries has China made a loss on its investments? i am not sure about Venezuela but Chinese will / are already extracting their pound of flesh. How does it matter to chinese if the locals are starving.

Of what i know of Chinese, they will not allow Pakis to take them for a ride. The Hans are not so naive as the Yankees to be taken for a ride. They have Paki balls in their hands and can squeeze them anytime. Even in the relatively small mining projects in Baluchistan they have taken their share. The Pakis will provide and pay for the security of the chinese. and no Paki is going to immigrate into China ( given the fond affection of muslims and hans).

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Re: OBOR, Chinese Strategy and Implications

Postby A_Gupta » 17 May 2017 23:32

manjgu wrote:Deans..u didnt get me. Its true India has no locus standii to either approve any OBOR project. What i meant we have not pursued our economic interest as actively..we have a 'LOOK EAST' policy. What has come out of it? we could have our own mini OBOR connecting SE Asian countries. I mean we are not setting any agenda on the diplomatic, economic front. Atleast the Chinese see a looming problem with their economy and working to address it.


1. PM Modi upgraded the previous government's "LOOK EAST" to "ACT EAST".

2. Some of the achievements and shortcomings are discussed here:
http://thediplomat.com/2017/05/modis-st ... half-full/

Thus, for the first time, a clear geoeconomic strategy is evolving in New Delhi that emphasizes the primacy of the IOR and India’s role as an Indian Ocean regional power. However, the glass is only half full, because the geoeconomic strategy needs to be supplemented by a clear strategic geopolitical vision. The Modi government has yet to do that.....During the last couple of years, the Modi government has shown it has the political will to drive foreign policy. This has been reflected in India’s geoeconomic endeavors. If the government goes a step further, it can also reflect it its own vision for geopolitics.


3. Regarding OBOR-like stuff, quoting from the above:

Connectivity is an important facet of Act East, just as it is for India’s neighborhood policy. The northeastern states are the gateways of land connectivity to Southeast Asia. However, poor infrastructure and insurgency have been hindrances to road connectivity in the region. Despite this, India’s trade with Myanmar through the northeast corridor has increased by 86 percent between 2013-14 and 2015-16.


A third important pillar of the Modi government’s strategic geoeconomic vision – again, closely related to the first two – is the emphasis on India’s maritime role. Thus, the government has launched Sagarmala, a project that envisages developing a series of ports on both sides of India’s coast. The region has gained importance because of India’s location at the center of global maritime trade routes. India’s foreign policy in the Indian Ocean Region (IOR) received renewed impetus with the setting up of a separate IOR Division under the Ministry of External Affairs in January 2016. The Modi government has strengthened relations with Seychelles and Maldives and launched Project Mausam, a project with soft influence in the region.


IMO, there is no point in having Belts or Roads for the sake of having them, e.g., like CPEC; the correct metrics for success are things like this: "India’s trade with Myanmar through the northeast corridor has increased by 86 percent between 2013-14 and 2015-16". e.g., for all the money China is sinking into CPEC, China's trade with Pakistan has no such success.
(e.g., pull up the 5-year view of
China exports to Pakistan: http://www.tradingeconomics.com/china/e ... o-pakistan
and
China imports from Pakistan: http://www.tradingeconomics.com/china/i ... m-pakistan
)

Unlike China, India is not looking to lend and spend money to itself to make use of gross overcapacity of Indian industry. So in terms of return on investment, India's effort with Myanmar is way, way, way ahead of CPEC.

In brief, there is no need to dhoti-shiver; the need is to build on the momentum of the last three years.

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Re: OBOR, Chinese Strategy and Implications

Postby A_Gupta » 18 May 2017 01:49

http://www.dailykos.com/stories/2017/5/ ... mperialism

Posted because of this good summary:
China’s OBOR hides the risk of creating vassal states for many reasons:

1. China’s OBOR popularity has grown in recent years as opportunities for infrastructure spend, excess steel & raw material capacity, RoI diminishes in their own country and Chinese firms look for other regions to deploy their surplus capacity

2. Most of the OBOR programs have heavy Chinese buyback. China banks underwrite the loans; Chinese companies bring raw material & IPs; Chinese engineering firms bring man power from China as well. In summary, China getting land rights for Chinese firms & nationals to make money

For Eg: Coal plants in Pakistan with 25% RoI for investors are signed and nations have to underwrite high cost of energy purchases. Deals with purchase price of $0.14/kwh — 12% more than the average cost PAID by US Consumer in a country with 1/6th the purchasing power of USA

3. Countries have to generate trade surplus with China to pay back loans. Today EVERYONE of them have a trade deficit

4. For many countries, repayment of Chinese loans is a massive layout of their yearly budget. Pakistan’s CPEC outflow will account for 10% of their annual currency transfers. China $6B China-Laos railway line is 50% of their 2015 GDP.

5. Outside of a few exceptions, the corridor & investment is centered in some of the world’s most corruption prone regions. An unintended (or deliberate) outcome is the growth of vassal states

6. Government to Government loans are at 2% over 30 years while bank loans are pegged to Yuan and have 8% annual interest rate (Incidentally, World Bank charges up to 20% in some of these nations on USD loans

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Re: OBOR, Chinese Strategy and Implications

Postby manjgu » 18 May 2017 05:39

A_gupta..86% trade increase metric means nothing unless we know the base figure. is it 86% of 1 M usd or 200 M USD or 1 Billion USD? its not about Dhoti shiver..just pointing that we dont have any real plans to project Indian economic, diplomatic or even military power even in our immediate neighbourhood.

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Re: OBOR, Chinese Strategy and Implications

Postby shiv » 18 May 2017 05:54

manjgu wrote:just pointing that we dont have any real plans to project Indian economic, diplomatic or even military power even in our immediate neighbourhood.

This is correct. So what? We need to get out of the state we are in with states like UP and Bihar and parts of other states totally under developed and misgoverned by criminal secular forces. I seem to recall that you did not think much of the issue of elections and leadership in India. That is more important to me than grandiose gestures in foreign lands that you seem to hanker for just because China is doing it - and I ask that you stop complaining about what India is not doing on a thread about what China is doing. I would rather see Indians innovating and making Indian lives better rather than howling that we are not pouring money into impressing other turdworlders

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Re: OBOR, Chinese Strategy and Implications

Postby Rudradev » 18 May 2017 06:20

X posting from J&K thread. My thoughts on how CPEC has replaced the nuclear blackmail/jihadi terrorism dyad as the gun which Pakistan points at its own head to negotiate with India.

****

We have to see this in the light of the CPEC drama, and especially the types of articles that are coming out in the Paki media, brimming with the realization that their country is about to be irretrievably mortgaged in an East-India-Company type situation for perpetual colonial exploitation by China.

This is the Paki "gun to my own head" way of dealing with India. In the "second battle of Kashmir" you describe above, the period began with the unveiling of Photochor Khan's n-weapons in 1987. There began a renewed period of Paki proxy war via terrorist tanzeems under the umbrella of nuclear blackmail. This went on through Pokhran and Chagai into Kargil, when the Paki nuclear bluff was finally and resoundingly called by India. After that, Musharraf just kept repeating himself hoarse that Kashmir is a nuclear flashpoint, world must solve it, India must make concessions to avoid a nuclear holocaust in which India suffers immeasurably (but Pakistan is totally destroyed) etc. He kept repeating the threats of the nuclear suicide bomber, and was completely ignored as we went ahead with LoC fencing, rooting out terrorist cells, and finally sealed the deal with Parakram. After Parakram the US told Musharraf to shut up and stop sending terrorists into India. The nuclear bluff had fizzled out. That's how the "second battle of Kashmir" ended.

Now we see the Pakis again pointing a NEW gun to their own head... CPEC! They are threatening India that we will soon find ourselves with China as both a northern and a Western neighbour... even though the effect of Chinese colonization will be to end the state of Pakistan as we know it. It is not so different from threatening self-destruction by turning their entire nation into a nuclear suicide bomber.

The unspoken deal being offered by Pakistan is : give us Kashmir, then we will normalize relations with you (India) and allow our economy to grow via trade with India etc. In effect, we will become a diligent partner in SAARC and collaborate with you for our mutual prosperity (it is BS of course, but it is what they are peddling). On the other hand, if we don't give Kashmir to Pakistan, they will sell themselves to the Chinese as a colony because "it is the only route to prosperity we have left open to them", and then we will be sorry :rotfl:

Of course, like the previous nuclear gun, the CPEC gun which the Pakis are now pointing at their heads isn't only meant for an Indian audience. It is for the West, especially the US as well. If things had gone according to plan for the Pakis, Clinton/Abedin would have won the US presidency... and the Americans would have come swooping in to intervene in SoothAsia to prevent Pakis from selling themselves to the Chinese (ooo, the poow widdle Pakis). POTUS Clinton would have pressured evil Yindoo Modi to give up Kashmir so that Pakistan did not mortgage itself to CPEC. Unfortunately for the Pakis, Clinton lost, and Trump became POTUS instead. Now they are half mortgaged to the Chingadyas and they have no idea what to do next :mrgreen:

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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 18 May 2017 07:31

x posted from the CPEC thread

OBOR - CHINA GREAT GAME PLAN EXPOSED BY NAJAM SETHI !


https://www.youtube.com/watch?v=B8Hw48P4MBU




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Re: OBOR, Chinese Strategy and Implications

Postby KL Dubey » 18 May 2017 08:33

I did not realize that Comrade Xi's Obscene Orifice (ObOr) and Chinese Pecker (C-Pec) would get this much attention on BRF. Just because every Pawkee accompanied by his four squaws is rushing out of his tepee to gawk at Comrade Xi's shriveled and puckered precious jewels, do you really wanna see too ?

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Re: OBOR, Chinese Strategy and Implications

Postby arshyam » 18 May 2017 08:52

manjgu wrote:A_gupta..86% trade increase metric means nothing unless we know the base figure. is it 86% of 1 M usd or 200 M USD or 1 Billion USD? its not about Dhoti shiver..just pointing that we dont have any real plans to project Indian economic, diplomatic or even military power even in our immediate neighbourhood.

A_Gupta-ji did point out what our plans in the region were. Are you not able to comprehend what he showed? What do you mean by "real plans"?

You are questioning the baseline, fine. But then it behooves you to at least find out what that baseline is and counter his data. But that's not as easy as whining, is it?

Those plans are tailored our interests, needs and capabilities. Tell me: how do you build an OBOR kind of corridor through Myanmar, Thailand, Laos and Vietnam when our own NE connectivity is patchy, not to mention having to go through the Coochbehar chicken's neck? Shouldn't our focus first be on improving these things by way of better roads in the NE states (currently underway), and trans-shipment corridors through BD so we could get to Tripura quicker? Or Myanmar? The latter, incidentally, is also underway. On top of these, have you ever heard of the Sittwe port? Even after doing all these things, where will goods come from/go to, given that our major states in that region like AS, WB, BH and OD are not economic heavyweights, at least not yet? Shouldn't our focus be on them first?

Instead of this constant whining, I would suggest, if I may, to actually think through an OBOR like plan that India can build, taking all the above factors into account. It would be much better than simply whining and dhoti shivering.

Your repeated posts on this topic only illustrate a yearning to be seen doing something for the sake of doing something. Sorry, but no ice.

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Re: OBOR, Chinese Strategy and Implications

Postby KL Dubey » 18 May 2017 09:07

arshyam wrote:Instead of this constant whining, I would suggest, if I may, to actually think through an OBOR like plan that India can build, taking all the above factors into account. It would be much better than simply whining and dhoti shivering.


In other words, thinking at the level of a Pawkee (or their deepest-ocean friend) is easy - anything more substantial is harder.

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Re: OBOR, Chinese Strategy and Implications

Postby A_Gupta » 18 May 2017 09:20

manjgu wrote:A_gupta..86% trade increase metric means nothing unless we know the base figure. is it 86% of 1 M usd or 200 M USD or 1 Billion USD? its not about Dhoti shiver..just pointing that we dont have any real plans to project Indian economic, diplomatic or even military power even in our immediate neighbourhood.


a. It is a off a small base to be certain, currently around USD $1 billion per year.

b. As I said, consider how much India has invested versus the return.

c. The article I posted did lay out PM Modi's geoeconomic plan for India's neighborhood.

d. Military tie ups with a whole bunch of countries to India's east is just a beginning. Read the strategic threads on these countries, enough news-items have been posted there.

e. India is not a North Korea to build up military might while starving its people. Nor will there be a plan to project power for the sake of being seen as powerful. India does and will project economic, diplomatic and military power based on a cost-versus-benefit basis. The benefit India seeks now is economic growth - trade, Make In India, jobs, etc., and some times the cost is doing what it takes to keep India from having to defend itself in open warfare.

f. Remember that story about Dronacharya teaching archery to the Kuru princes; and he asks each prince to take aim at the bird target and asks them what they see. They see trees and the sky and so on and so forth; Arjuna sees the eye of the target alone and nothing else. So he is the only one who can hit the target. IMO, PM Modi is focused like that.

g. Last thought - doing well and having room for improvement are not mutually exclusive. In fact, in today's world, one must continuously improve in order to continue to do well. We can discuss "ACT EAST" with this in mind.

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Re: OBOR, Chinese Strategy and Implications

Postby Deans » 18 May 2017 09:56

Loaning money to a foreign country is the riskiest investment possible and not one a poor capital starved country like India should undertake, without a lot of thought. There are more attractive projects to pursue in India - which is why India attracted almost the same amount of FDI as China in 2016, though our economy is a fifth of China. In contrast, even foreign investments made by very astute Indian companies in `risk free' countries have largely been unsucessful (e.g. Tata-Corus). Even the US and institutions they back, have repeatedly lost billions on foreign loans, though they have the ability to implement regime change to collect their dues.
I am in favor of concentrating whatever foreign aid/loan budget we do have, towards strategically and economically useful projects in our neighborhood, where we can better monitor implementation and then invite our private sector to supplement govt efforts. To some extent GOI is already doing that. Where the pace is slow - e.g. Chabahar port, its because the Iranians are also dragging their feet and because of political uncertainty (Iranian elections) which would cause any prudent lender to pause. The last thing we need is getting into a bidding war with China or give any country the impression that we offer easy money.
Last edited by Deans on 18 May 2017 10:05, edited 1 time in total.

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Re: OBOR, Chinese Strategy and Implications

Postby DavidD » 18 May 2017 09:58

A few points:

1) As mentioned a few posts back, the infrastructure projects are meant to be a doorway, not an end goal in itself. Infrastructure projects are generally not profitable in and off itself, particularly with transportation projects. The increase in economic activities that they bring, however, oftentimes far outweigh the direct profits (tolls, electricity payments, etc.). In China's there's a saying, if you want a place to get rich, build roads to it. This represents a different philosophy regarding infrastructure from the west, which usually studies the profitability of a project before deciding on whether to build it. The Chinese believe that an area's true potential is only revealed after it's well connected with the rest of the world. In short, build a bridge to nowhere, so that someday nowhere may become somewhere.

2) CPEC and the BRI at large is a long term vision by China and their expected returns is not limited to interest payments, transit tolls, or power bills. Economically, they will allow China to export excess industrial capacity, create future trading partners, tie economies along the BRI to Chinese supply chains, internationalize the Yuan, and allow for lucrative developments that come with owning/managing some of the land along the OBOR. Politically, they will allow China to draw the involved countries into China's orbit, create good will with locals, and stabilize bordering regions. People generally don't become radical anything unless they're desperate. Instead of seeking security via military means, China sees economics as the mean to ensure security. Rich people don't like to blow themselves up.

3) The BRI is a $4+ trillion project of which CPEC is only a prominent beginning. As such, it needs to succeed, and China will be willing to pay to make sure it does. It's unlikely that the Pakistani economy is truly ready to receive so much investment so quickly, so it's inevitable that China will have to foot some of the bill. Think of it as the free rides and coupons that got Uber started, except China will get more than just market share and publicity as discussed in point #2.

4) To expand on point #2's expected economic benefits, the main export will be capacity (e.g. coal power plants, steel plants, textile factories, low end electronics assembly, etc.), but not products per se. These are capacity that China no longer need and are in line to be shuttered anyway, so it costs China little, but will benefit locals in terms of jobs, exports, and improved logistics. How does China benefit from this? The exported capacity still needs maintenance, spare parts, management, distribution logistics, import of intermediate products, etc., and China will be a big part of the business involving those areas. As China moves up the value chain, higher value-added capacity will be exported. This ties China to the entire region's economy, making China an indispensable cog in an Euroasian supply chain. The reason China is doing this now is because the Chinese economy has moved comfortably ahead of the surrounding nations.

5) The OBOR is not just a logistics chain connecting China and Europe, the areas they pass through are just important if not more important. Land connections between East Asia and Europe have their uses, but it’ll never be at an economically significant scale with technologies of the current day or the foreseeable future. The ultimate goal isn’t to create land bridges between China and Europe, that’s a myopic view, the ultimate goal is to create a new “Europe” centered on China.

Essentially, what I'm saying that focusing on the loans and how much money these projects can make is missing the forest for the trees. The BRI has a far grander vision, and its success won't be measured until decades down the road.

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Re: OBOR, Chinese Strategy and Implications

Postby DavidD » 18 May 2017 10:03

Bart S wrote:
chetak wrote:Me thinks that the hans have pretty well buggered themselves and attracted a bad global press for the OBOR when the exact opposite was what they had expected.

Two huge markets, India and the EU have given them a public thumbs down.

some very embarrassing hitherto unpublicised CPEC plans have also been made public by the paki press which is hostile to the CPEC and its after effects.

were the crore commanders also a part of the paki delegation??


Japan as well. Which is significant, since unlike India or the EU they actually have the money power to make massive infrastructure investments (born out of good sense and viability, of course, not over capacity).


Or maybe not.

https://www.thenews.com.pk/print/204578 ... -countries

Japan wants Pakistan to open CPEC for other countries
Japan wants Pakistan to open CPEC for other countries
KARACHI: Japan, Pakistan’s decades’ old business partner, believes that Pakistan should open China-Pakistan Economic Corridor (CPEC) for countries willing to be the part of the mega plan.

“At the moment, only Chinese and Pakistani companies can undertake projects in CPEC, if these restrictions are removed many private businesses in Japan may be interested in investing,” Toshikazu Isomura, consul general of Japan in Karachi, said in an interaction with newsmen recently. He said Japan is Pakistan’s partner since long and 82 Japanese companies were already operating in Pakistan.

“Japanese companies have invested over $500 million in the country in last three years,” Isomura said in a briefing regarding State Minister for Foreign Affairs of Japan, Nobuo Kishi’s recent visit to Karachi.

The Japanese consul general said their state minister had meetings with Prime Minister and other functionaries and discussed issues of bilateral interest. Easing of tariff barriers on import of Pakistan’s textile and leather products in Japan was also discussed.

Talking about CEPC, Isomura said, “The project is good for Pakistan and good for the region. Pakistan should open it for its old business partners.”

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Re: OBOR, Chinese Strategy and Implications

Postby amit » 18 May 2017 10:06

Ok you dhoti-clad disbelievers see, gawk and be awed by the world's greatest OBOR music video.



The video with its scantily clad pretty ladies is the version of Chinese culture that is reserved for the TFTA mards of CEPCstan. Rue on what you shall miss you SDREs.

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Re: OBOR, Chinese Strategy and Implications

Postby shiv » 18 May 2017 10:12

B'yel dan' ro-oa'! I lowe it

Bart S
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Re: OBOR, Chinese Strategy and Implications

Postby Bart S » 18 May 2017 10:17

DavidD wrote:A few points:


Essentially, what I'm saying that focusing on the loans and how much money these projects can make is missing the forest for the trees. The BRI has a far grander vision, and its success won't be measured until decades down the road.



The only thing that the that long post 'said' was that you are just a slightly more sophisticated version of the 50-center, drinking the CPC koolaid.

DavidD wrote:
Bart S wrote:
Japan as well. Which is significant, since unlike India or the EU they actually have the money power to make massive infrastructure investments (born out of good sense and viability, of course, not over capacity).


Or maybe not.

https://www.thenews.com.pk/print/204578 ... -countries

Japan wants Pakistan to open CPEC for other countries
Japan wants Pakistan to open CPEC for other countries
KARACHI: Japan, Pakistan’s decades’ old business partner, believes that Pakistan should open China-Pakistan Economic Corridor (CPEC) for countries willing to be the part of the mega plan.

“At the moment, only Chinese and Pakistani companies can undertake projects in CPEC, if these restrictions are removed many private businesses in Japan may be interested in investing,” Toshikazu Isomura, consul general of Japan in Karachi, said in an interaction with newsmen recently. He said Japan is Pakistan’s partner since long and 82 Japanese companies were already operating in Pakistan.

“Japanese companies have invested over $500 million in the country in last three years,” Isomura said in a briefing regarding State Minister for Foreign Affairs of Japan, Nobuo Kishi’s recent visit to Karachi.

The Japanese consul general said their state minister had meetings with Prime Minister and other functionaries and discussed issues of bilateral interest. Easing of tariff barriers on import of Pakistan’s textile and leather products in Japan was also discussed.

Talking about CEPC, Isomura said, “The project is good for Pakistan and good for the region. Pakistan should open it for its old business partners.”


Japan ignored the OBOR summit charade just like India.

The above is just Japanese trying to be good businessmen, or maybe countering demands for investment/money from Porkis. Basically telling Porkis that if they want to get screwed by the PRC Japan would like to sell them condoms.
Last edited by Bart S on 18 May 2017 10:24, edited 2 times in total.

Deans
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Re: OBOR, Chinese Strategy and Implications

Postby Deans » 18 May 2017 10:17

Japan's statement indicates that even a country with major investments in Pak and no ill will towards it, cannot participate in CPEC. Why then is there a clamour for India to `join CPEC' ?
It also confirms that China will not allow any other country to break their monopoly on business with Pak. Hence, a non Chinese vendor will not be allowed to supply material for a CPEC funded project even if the cost is lower (This has already been the case with the Jinnah solar park, where Turkey got shafted, though their bid to supply power was less than half of China's).

Deans
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Re: OBOR, Chinese Strategy and Implications

Postby Deans » 18 May 2017 10:26

Bart S wrote:
DavidD wrote:A few points:

Essentially, what I'm saying that focusing on the loans and how much money these projects can make is missing the forest for the trees. The BRI has a far grander vision, and its success won't be measured until decades down the road.


Exactly. So even if OBOR/CPEC becomes a visible failure, Eleven will say that people don't see the larger vision, because the results will be apparent only after decades. NS will use the same logic when people start questioning if CPEC has got Pak any benefit. Both will hope they are not around when the results of the grand vision are more apparent.

DavidD
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Re: OBOR, Chinese Strategy and Implications

Postby DavidD » 18 May 2017 10:29

Deans wrote:Japan's statement indicates that even a country with major investments in Pak and no ill will towards it, cannot participate in CPEC. Why then is there a clamour for India to `join CPEC' ?
It also confirms that China will not allow any other country to break their monopoly on business with Pak. Hence, a non Chinese vendor will not be allowed to supply material for a CPEC funded project even if the cost is lower (This has already been the case with the Jinnah solar park, where Turkey got shafted, though their bid to supply power was less than half of China's).


Still early in the process, China can't fund it all, investment from others will be welcomed. BTW, I thought Turkey is still involved in the Jinnah project?

DavidD
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Re: OBOR, Chinese Strategy and Implications

Postby DavidD » 18 May 2017 10:31

Deans wrote:
Bart S wrote:


Exactly. So even if OBOR/CPEC becomes a visible failure, Eleven will say that people don't see the larger vision, because the results will be apparent only after decades. NS will use the same logic when people start questioning if CPEC has got Pak any benefit. Both will hope they are not around when the results of the grand vision are more apparent.


You could say that about any grand vision that requires decades of work. CPEC is the first section, you'll see the vision come to fruition much sooner than the BRI as a whole.

manjgu
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Re: OBOR, Chinese Strategy and Implications

Postby manjgu » 18 May 2017 10:32

a) india thailand trade : 2010 6.64B USd 2015 7.92B USD India Myanmar trade : 2011-12 1.8 B Usd 2015-16 : 2.05 B Usd ..so much for 86% increase b) does anyone know status of road link between India and Myanmar, thailand which was to be opened in 2016 !! so much for LOOK EAST & ACT EAST.

Rudradev
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Re: OBOR, Chinese Strategy and Implications

Postby Rudradev » 18 May 2017 10:36

The empelols of China, throughout the fictitious succession of "dynasties" that the Han like to claim as their "history", had such a gift for Gland Vision that they never once wore any clothes.


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