OBOR, Chinese Strategy and Implications

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Neshant
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Re: OBOR, Chinese Strategy and Implications

Postby Neshant » 10 Oct 2018 08:37

Peregrine wrote:X Posted on the Analyzing CPEC & Terroristan Threads

Terroristan Reduces the CPEC US$ 60 Billion Loan by US$ 2 Billon and takes a Further Loan of US$ 42 Billion!


They are trying to become "too big to fail".

Take more and more loans until the lender(s) becomes their hostages fearing they might default.

Eventually they will default on it all, of course.

The default will be to :

a) not pay the loans and refuse to even service the interest
b) offer to handover the so called infrastructure (none of which will ever turn a profit) to the lender under really bad terms
c) watch the lender sink even further into the red operating that infrastructure under those unfavorable terms
d) finally wait for the lender to throw in the towel and offer a pennies-on-the-dollar buyout of the infrastructure from the lender.

By doing the above, Pak gets billions of infrastructure essentially for free after burning a massive hole through the lender's pockets.

But until that day of "official" default, keep milking the lender for more loans while giving the lender false hope that someday the tab will be repaid.

The larger they can grow this Bernie Madoff CPEC scheme, the stronger their position when defaulting.

This is Pakistan Economic Development Strategy 101 and I have a PhD in understanding it.

Peregrine
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OBOR, Chinese Strategy and Implications

Postby Peregrine » 10 Oct 2018 15:59

Peregrine wrote:X Posted on the Analyzing CPEC & Terroristan Threads

Terroristan Reduces the CPEC US$ 60 Billion Loan by US$ 2 Billon and takes a Further Loan of US$ 42 Billion!
Neshant wrote:They are trying to become "too big to fail".

Take more and more loans until the lender(s) becomes their hostages fearing they might default.

Eventually they will default on it all, of course.

The default will be to :

a) not pay the loans and refuse to even service the interest
b) offer to handover the so called infrastructure (none of which will ever turn a profit) to the lender under really bad terms
c) watch the lender sink even further into the red operating that infrastructure under those unfavorable terms
d) finally wait for the lender to throw in the towel and offer a pennies-on-the-dollar buyout of the infrastructure from the lender.

By doing the above, Pak gets billions of infrastructure essentially for free after burning a massive hole through the lender's pockets.

But until that day of "official" default, keep milking the lender for more loans while giving the lender false hope that someday the tab will be repaid.

The larger they can grow this Bernie Madoff CPEC scheme, the stronger their position when defaulting.

This is Pakistan Economic Development Strategy 101 and I have a PhD in understanding it.
Neshant Ji :

1. Terroristan is "No Bernie Madoff" and the Chinese are in no way a gullible groups of investors.

2. You must never forget what they have done in Kyrgyzstan, Humbantota, Cambodia Zambia, Venezuela etc.

4. Terroristan is nowhere even near to being a "Malaysia"!

5. China has got the Terroristanis in a "Vice-Like Grip"!

I remind you that the British Ruled present day India, Pakistan, Bangladesh, Sri Lanka and Myanmar as well as controlled Kuwait, Bahrain, Qatar and present day Emirates as well as Muscat and Oman also Aden. They even had the Indian Rupee in most of the Persian Gulf Countries mentioned here. The British Controlled all this Territory with about 200,000 European British Personnel.

The Chinese are going to have 500,000 Brainwashed, Committed Hardened Chinese Communist Party Cadre. All the Terroristani so-called Leaders are a bunch of petty crooks, too clever by half who act beyond their own intelligence and that is not much to say the least!

Thus the Chinese will control the Terroristanis like a Puppeteer controls His Puppets at the End of the Strings!

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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 10 Oct 2018 16:35

Time for India to beware of the paki's "iron brother" and" all weather friend" now rather slyly, pathetically and deviously trying to become India's "wooden brother" and "summer season friend", especially when it's raining heavily in han land due to the dark clouds precipitated by the amerikis who said that they were sick of being robbed by the hans and are resetting their market access to get the hans forcibly into a fair trade mode where the balance of trade is almost equalized and the unfair advantage lies with no one. The sentiments expressed by the cheeni embassy in dilli is bogus and patently self serving and is born of a rapidly rising panic and an increasing loss of confidence in their ever lessening ability to counter the amerikis.

It is also highly hypocritical of the hans, considering how the hans have harassed India in the past decades, using their self assumed "huge and invincible economic and military power" to keep India unsettled, off balance and always on the back foot.

just see how the hans have completely turned around the reasons for the ameriki trade retaliation and are parading themselves as the victims. We need to guard against such venomous snakes. They are now looking to bugger India by seeking unilateral access to India's markets under the guise and subterfuge of............

It said practising unilateral trade protectionism in the name of "national security" and "fair trade" will not only affect China's economic development, but also undermine the external environment of India and hinder India's booming economy.

"As the two largest developing countries and major emerging markets, China and India are both in the vital stage of deepening reform and developing economy, and both need stable external environment," said Counselor Ji Rong, spokesperson of the Chinese Embassy in India.


paradoxically, the hans have been aggressively seeking unhindered entry and access into India's "booming economy" and port as well as transportation infrastructure even before trump entered the ring and tore them a new one, even to the extent of maliciously using the CPEC to try and browbeat India and to extract concessions and almost forcibly integrate India into their barely disguised and nefarious debt burdening scheme.

It was doklam that gave the hans their first and early inklings of a resolute political leadership in India that was made of a very different metal and also that the same leadership well understood how the game was to be played.




India, China must work together to offset impact of US' approach on trade: Chinese Embassy





India, China must work together to offset impact of US' approach on trade: Chinese Embassy

10 October 2018, New Delhi


India and China need to deepen cooperation to fight trade protectionism in the wake of the unilateral approach being adopted by the US on trade-related disputes, the Chinese Embassy said Wednesday.

It said practising unilateral trade protectionism in the name of "national security" and "fair trade" will not only affect China's economic development, but also undermine the external environment of India and hinder India's booming economy.

"As the two largest developing countries and major emerging markets, China and India are both in the vital stage of deepening reform and developing economy, and both need stable external environment," said Counselor Ji Rong, spokesperson of the Chinese Embassy in India.


He was replying to media queries relating to trade friction between China and the US.

Last month, US President Donald Trump imposed USD 200 billion tariff on Chinese imports. China retaliated by imposing tariffs on about USD 60 billion of US imports.

Washington threatened to impose additional tariffs of over USD 260 billion on Chinese imports if China retaliates again.

"Under the current circumstances, China and India need to deepen their cooperation to fight trade protectionism," Ji said.

He said China and India share common interests in defending the multilateral trading system and free trade and referred to comments by President Xi Jinping and Prime Minister Narendra Modi to safeguard the multilateral trading system and free trade at the World Economic Forum in Davos.

"Facing unilateralism and bullying activities, China and India have more reasons to join efforts to build a more just and reasonable international order," Ji said.

The Chinese Embassy spokesperson also said the US should reflect on its own practice of interfering in the internal affairs of developing countries such as China and India under the pretext of human rights and religious matters.

"The so-called 'militarisation' of South China Sea by China is distorting of facts. The US should stop making troubles and creating tensions, and respect the efforts of relevant parties to resolve problems through negotiation and consultation," Ji said.

Referring to the Indo-Pacific region, the spokesperson said China was firmly against attempts to use the so-called Indo-Pacific strategy as a tool to counter China.

At the same time, Ji said, Beijing was open to all initiatives that will help regional development and cooperation.

"The allegation that China has put some developing countries into 'debt trap' is nothing but an attempt to sow discord," Ji said.

He said China's economic cooperation with other developing countries is to ensure win-win situation and common development.

"China is open to all initiatives that will help regional development and cooperation. What we are firmly against is attempts to use the so-called Indo-Pacific strategy as a tool to counter China

He said China was looking forward to the US taking concrete steps to become a trusted partner of the developing countries.
Last edited by chetak on 10 Oct 2018 16:59, edited 2 times in total.

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Re: OBOR, Chinese Strategy and Implications

Postby nam » 10 Oct 2018 16:52

I agree with the ambassador. Time for India to openly tell US, they need to source from Indian manufacturers and in turn we will buy more American oil and weapons.

Also slap duty on Chinese dumping.

This way we have offset impact of US trade war.

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Re: OBOR, Chinese Strategy and Implications

Postby TKiran » 10 Oct 2018 16:59

Actually there's no medium or long term impact on China because of this trade war. Only short term pain, but they will come back. Yes this trade war would have been catastrophic if it started in 2008. But that time has passed.

Now coming to China's strategy, they want Pakistan to attack India directly either just before the general elections or just after the elections. They have already fortified doklam and Tawang. So India can't do a Bangladesh to Tibet.

When Pakistan attacks India, India would be surprised, but there's real danger of India breaking Pakistan into 4. To avoid that, they will open a front close to doklam and try to cut off North East. As it's two front war, they will force India for a ceasefire as soon as pakis reach Srinagar. They will force India for "Simla" agreement.

This is my prediction.

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OBOR, Chinese Strategy and Implications

Postby Peregrine » 10 Oct 2018 17:15

Fully Posted on the Terroristan Thread

Saudi's oil refinery in Gwadar threatens Iran, China – ANI
ISLAMABAD: Pakistan's latest announcement about Saudi Arabia's investment in an oil refinery at the port city of Gwadar has set alarm bells ringing in the international arena.
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Re: OBOR, Chinese Strategy and Implications

Postby chola » 10 Oct 2018 17:16

nam wrote:I agree with the ambassador. Time for India to openly tell US, they need to source from Indian manufacturers and in turn we will buy more American oil and weapons.

Also slap duty on Chinese dumping.

This way we have offset impact of US trade war.


The US doesn’t need us or anyone else to do anything. They are crushing Cheen by themselves. They are not accepting quid pro quos from even formal allies.

In fact, it is the converse, the amreekis have served notice by wrenching concessions from South Korea, Canada and Mexico. Japan and EU are next. If and when the chinis cave in, the Chinese market will buy from America not the allies because only the US will be at the table with the browbeaten lizard.

The power of Trump is overwhelming. As I wrote before, we need to get off the fence in regards to our relationship with the US. China is an easy mark since they are the US’ biggest rivals and ours. But the real tests are our attachments to Russia and Iran.

The chini-amreeki trade war shows us that Unkil doesn’t need anyone else to “balance” Cheen so there is absolutely nothing for us to bargain on that front. What’s up for bargaining are our relationships with other Amreeki enemies. That is where the danger lies. I hope Modi plays this correctly. The truth is buying chit like the S400 from Russia can put us in the same damn situation Nehru put us with NAM.

chetak
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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 10 Oct 2018 17:52

TKiran wrote:Actually there's no medium or long term impact on China because of this trade war. Only short term pain, but they will come back. Yes this trade war would have been catastrophic if it started in 2008. But that time has passed.

Now coming to China's strategy, they want Pakistan to attack India directly either just before the general elections or just after the elections. They have already fortified doklam and Tawang. So India can't do a Bangladesh to Tibet.

When Pakistan attacks India, India would be surprised, but there's real danger of India breaking Pakistan into 4. To avoid that, they will open a front close to doklam and try to cut off North East. As it's two front war, they will force India for a ceasefire as soon as pakis reach Srinagar. They will force India for "Simla" agreement.

This is my prediction.


The amerikis have learned now how to bell the cheeni cat.

There is no going back to the huge and unfavorable trade imbalances of the past with the cheenis or mexico or canada or EU or even India, for that matter.

Any following POTUS after trump would be certifiably stupid to allow anything like that to happen ever again. They will blame trump but will hold fast to the economic gains that trump has made. They will also give a hefty bill for services rendered to any country that was previously free loading off them for decades. It looks like the US Marshall plan may have finally ended.

This is a long awaited paradigm shift for the amerikis, where all their "friends" had their hands deep into the ameriki pockets and the US taxpayer was paying thru his nose to support/subsidise some ill advised immigration policy in some european country. Once their own defence spending increases, their welfare measures will decrease and taxes will rise to cover the ever unpopular welfare and unemployment expenses on the free loading malsi immigrants.

BTW, If the hans get up to any mischief like a two front war with their paki pals, the malacca straits will be the first port of call for the IN and panic will set in as far as the world markets are concerned. The hans simply can not afford this and they also simply cannot afford to take on all the others eagerly waiting to screw their happiness.

No matter how much you love the cheeni, you just cannot ignore the fact that they have some very grave and disturbing fragilities in their economy now. The pakis are even worse off. The external conditions are even worse for them both and they are actually without friends at this moment except the venal host parasite relationship that they have with each other and that will not sustain too long under such harsh tests as a two front war against India will put them through. the hans will have to foot the entire bill for the war as well as a major part of the generated world wide ill will.

The hans will not escape the huge backlash of the ill-treatment of their own uighur muslim minority populations, separatist movements and similarly, the pakis will not be very happy with a resurgent baluchistan, maybe also sind that will surely rise up, seeing their chances.

India's SLOCs are much less vulnerable as the mid east and iranian and russian and the US oil will continue to flow to India, albeit at a higher price. Other navies will try and blockade any oil going to the cheeni from the outside but for sure, some bit of oil may get through.

IN will completely shut down the malacca straits for the cheeni's trade

No one will risk their huge access to the Indian oil markets by not supplying to us and no one will blockade us, whereas there are enough navies ready to blockade the cheenis.

So, dream on.

India to connect North East with Bangladesh’s Chittagong port: Ram Madhav

Beijing: India has unveiled a major plan for the development of its North Eastern states by connecting them with Bangladesh’s Chittagong port and invited for the first-time limited Chinese investments which were shunned till now due to security concerns in the border areas.

Senior cabinet ministers from Assam, Tripura and Nagaland—the states governed by the BJP and its allies—accompanied by BJP general secretary Ram Madhav visited the southern Chinese city of Guangzhou last weekend and met Indian and Chinese businessmen.

“There, we had an interaction with the Indian community who are exporters,” Madhav told the Indian media in Beijing on Wednesday.

“Later, we had a session with Chinese groups like e-bike manufacturers, software and hardware firms,” he said, adding that they interacted with ministers and showed interest to go to Assam to explore the opportunities.

Madhav outlined a plan prepared by the BJP-led government for the development of North Eastern states by providing the landlocked region direct access to Bangladesh’s Chittagong port instead of shipping the goods all the way from Mumbai and Chennai ports.

“North-East is a special focus area for our government. So we are connecting Tripura with Chittagong port which is about 90 miles,” he said.

Through Chittagong port entire North East is connected with ocean trade, he added.

“Right now goods to North East are to be taken by rail and road from Mumbai or Chennai through Kolkata to Guwahati. If we are going to connect to Chittagong port, it will be an excellent connectivity,” he said.

The Chittagong port is the busiest seaport on the coastline of the Bay of Bengal. Madhav said North East connects with five countries, Bangladesh, Bhutan Nepal, Myanmar and China through Tibet.

Neshant
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Re: OBOR, Chinese Strategy and Implications

Postby Neshant » 10 Oct 2018 21:16

Seen through another lens, US is getting Canada, EU, Japan, South Korea..etc to fall in line with it's trade battle against China. US will not allow these countries to position themselves as a trans-shipment point for China made goods into the US as a means of circumventing tariffs on China's exports.

Longer term the US is attempting to build an economic NATO against China with these allies where all of them insist on an end to mercantilist trade policies of China and no trade deficits with China.

One thing that will be gone in the next few years are the huge trade surpluses China has enjoyed. The bigger fear for China is the huge implosion of leverage within their country which the loss of it's massive trade surpluses will entail.

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Re: OBOR, Chinese Strategy and Implications

Postby Mukesh.Kumar » 11 Oct 2018 11:03

Sierra Leone demurs- USD 400 mn new airport project cancelled.
Read all [url=Mamamah airport: Sierra Leone cancels China-funded project]about it[/url]

  1. New government taking power
  2. IMF+ World Bank sounding debt alarm
  3. Can extend life of current facility through renovation and building a bridge connecting airport with capital at lower cost

Further comments from The East African
News of the termination of the project was revealed in a letter addressed to the director stopping all contracts relating to the construction.

“After serious consideration and due diligence, it is government’s view that [it] is uneconomical to proceed with the construction of a new airport when the existing one is grossly under-utilised,” it says.

The letter from the Ministry of Transport and Aviation noted that it had appointed an official to take inventory and provide oversight of the assets.

Peregrine
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OBOR, Chinese Strategy and Implications

Postby Peregrine » 11 Oct 2018 17:20

X Posted on the Analyzing CPEC and Terroristani Threads

Pakistan's bailout exposes some serious flaws in China's belt and road p[b]lan - Mihir Sharma

Pakistan’s government has finally admitted it needs help[/b]. Finance Minister Asad Umar says he will be meeting officials of the International Monetary Fund on the sidelines of its annual meeting Bali this weekend. There he’ll try and work out the terms for a bailout that would cover a $10 billion hole in Pakistan’s financing needs.

The decision has to be a little humiliating for new Pakistani Prime Minister Imran Khan -- an anti-Western firebrand who’s had to turn to the West for help just like virtually every other Pakistani leader before him. More importantly, the process is likely to be a window into what’s wrong with China’s globe-spanning Belt and Road infrastructure initiative.

On the one hand, this is a familiar situation: Pakistan has had to seek bailouts 10 times since 1990 and still owes money from the last time it needed a handout. Khan was wise to approach the IMF early enough in his tenure that he can blame the previous government and accuse it of mismanagement.

Pakistan’s problem isn’t only poor macroeconomic stewardship, however. It’s the deals the preceding administration struck with China. A few years ago, Chinese President Xi Jinping promised to invest $60 billion into Pakistan’s economy. Since then, Pakistanis have hoped Chinese money would fund the power and transport infrastructure that could jump-start growth.

Building the China-Pakistan Economic Corridor -- often hailed as the most crucial leg of the Belt and Road -- has proved to be more expensive than expected. Machinery imports for Chinese projects caused Pakistan’s current account deficit to rise by over 50 percent in the first two years of the CPEC build-out. Islamabad has struggled to pay for all this and probably can’t expect more help from China: Beijing has been generous enough already, lending Pakistan $5 billion in 2017-18 and putting in an emergency $1 billion this summer when the country was staring once again at empty coffers.

If CPEC operated on straightforwardly commercial terms, none of this would be a problem. Then the projects would be remunerative for Pakistan. The IMF might demand some mild adjustment to their payment schedules and other parameters, and business could continue. The Fund’s likely other bailout terms -- devaluing the currency, privatizing the state airline, hiking interest rates and implementing long-delayed structural reforms -- would probably hurt a lot more.

But nobody expects that to be the case. In fact, it’s likely that CPEC’s costs to Pakistan are much higher than would make sense for the projects in question. Worse, currently these costs are opaque and some are hidden by the security establishment behind a veil of secrecy.

The IMF doesn’t operate like that; it will expect to be told, transparently, what the actual costs are for CPEC projects. That’s the point at which Khan’s backers in the military will begin to worry, because if the terms are as ruinous as suspected, support for CPEC -- and, by extension, for China’s paramountcy in Pakistan -- will wither. Worse, the IMF may withhold some aid: Senior U.S. officials have already said any bailout shouldn’t lead to Western taxpayers paying off Chinese bondholders.

It’s an open question what Khan himself will pick, if he’s then forced to make a choice between staying the course with CPEC and financing his own grandiose new welfare schemes. But the lesson for Pakistan’s leaders -- and, indeed, all those looking to China to rescue them from the pesky demands made by Western finance -- runs deeper.

It may seem simpler at first to take advantage of Chinese money that doesn’t demand countries carry out painful investment-friendly domestic reforms if they want to borrow money. But without structural changes of the sort that lenders like the IMF demand -- and which Pakistan, for one, has constantly postponed -- crises such as the one Islamabad now faces are inevitable. Pakistan needs to reform so that its producers and exporters thrive. Unless these enterprises succeed, CPEC can’t be paid for and, even if it gets built, it will provide few benefits to ordinary Pakistanis.

As for China, this is a moment to step back and realize that the Belt and Road as currently envisaged isn’t working as planned. Cost escalations, hidden charges and other nasty surprises have soured one country after another on Chinese-led infrastructure. Worse, Beijing simply isn’t willing to commit enough resources to play lender of last resort for the countries that the BRI might drive towards default.

As a consequence, more countries that China sought to bring within its own sphere of influence are likely to be pushed away -- and to turn again to the West for help. I suspect this isn’t where Chinese President Xi Jinping hoped his new Silk Road would lead.

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OBOR, Chinese Strategy and Implications

Postby Peregrine » 11 Oct 2018 18:38

X Posted on the Analyzing CPEC & Terroristan Threads

Beijing welcomes Riyadh in CPEC

QUETTA: Chinese Ambassador to Pakistan Yao Jing has said China has no objection over inclusion of Saudi Arabia and other countries in the China Pakistan Economic Corridor (CPEC) projects and would welcome Riyadh’s investment in Pakistan.

“We will welcome Saudi Arabia and other countries’ investment in CPEC projects. China wants to expand CPEC up to central Asian states via Afghanistan,” the Chinese ambassador said while speaking to businessmen and journalists at two separate functions in Quetta on Wednesday.

Chinese ambassador also confirmed that CPEC projects are being revisited in view of the Pakistan Tehreek-e-Insaf (PTI) led new government’s vision, adding that new development projects will be included in the project with consensus.

Govt says Riyad all set to join CPEC as third Partner

Yao said reviewing the CPEC agreement is natural as the new Pakistani government which came into power after the July 25 general election has its own agenda and vision.

The envoy said the new Pakistani government wants to give all attention to socio-economic sector and in reviewing of CPEC agreement the desire of the Pakistan’s new government would be considered.

“Both China and Pakistan governments have agreed to further expand the CPEC,” he said, adding that taking decision with mutual understanding and consensus is part of the CPEC agreement.

He said both the governments have decided to continue work on ongoing projects launched under CPEC in Pakistan and particularly Balochistan and these projects would be completed on time.

Yao said Pakistan and China have very cordial relations since long; they are not only partners in CPEC but have lots of other ties and projects in which they are helping each other. “China and Pakistan are strategic partners,” he said.

He said that the main objectives of CPEC include establishing road-network, construction of highways and motorways, power generation and developing agriculture sector.

Yao Jing said in the next phase, China will focus on joint ventures and will give attention to socio-economic sector, which is also vision of the new Pakistani government.

“Under CPEC it was decided that more resources would be provided to the western provinces of Pakistan. It is our desire to link the mega project to Central Asian states via Afghanistan and under CPEC will open new ways of development and prosperity in the entire region,” he said.

The Chinese ambassador said CPEC has entered “a new era” and that jobs would be created for the people of Pakistan through its various projects. “Balochistan offers numerous opportunities to investors in terms of agriculture, livestock, mines and minerals,” he said.

At the chamber of commerce, businessmen urged the Chinese ambassador to establish a Chinese consulate in Quetta to address their business needs. The ambassador promised the business community that their request would be discussed with Chinese high-ups.

Responding to a question about Balochistan’s share in CPEC, Yao Jing said Balochistan is an important part of CPEC and the second phase of the project would be more important for Balochistan.

He said that though entire Pakistan is equal for his country, China wants to work for the development of different sectors of Balochistan on priority. “China will help in developing agriculture, industry and other sectors in Balochistan,” he said.

Austerity axe falls on CPEC, Gwadar projects

The envoy said he is very much inspired with the vision of new federal and Balochistan governments as they want to develop socio-economic sector. “Balochistan should be main beneficiary of CPEC. Chinese investors would find out new trade and investment opportunities in Balochistan,” he added.

Yao said Balochistan has great potential in mineral resources, mining, livestock, and fisheries and there is need to work for the promotion of these sectors. He said China will extend all help and assistance to the local people for sending fruit, vegetable and seafood to international market.

He said he had a meeting with Balochistan Chief Minister Jam Kamal and observed that new provincial government is more interested in the development of the province and providing maximum facilities to its people.

To a question, he said the Chinese universities are open for Pakistani students and these universities offer scholarships in March every year and students could apply for admission online. However, he said, Balochistan students would be provided assistance in applying for admission to the Chinese universities.

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Re: OBOR, Chinese Strategy and Implications

Postby arun » 11 Oct 2018 19:54

X Posted from the Analyzing CPEC thread.

Our representative on the IMF Executive Board should ensure that Christine Lagarde’s commitment on obtaining full details on Conning Pakistan to Enrich China aka CPEC is 800% adhered to. Also any possibility of the IMF loans being used to allow China to bail out of Pakistani commitments must be squelched. Juicy bits about Higher than Himalaya’s, Deeper than Indian Ocean, Sweeter than Honey, As close as lips to Teeth, Stronger then Steel Iron Brother ripping off the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan should be leaked thereafter:

Transcript of International Monetary Fund Managing Director Christine Lagarde's Opening Press Conference, 2018 Annual Meetings, Bali, Indonesia
October 11, 2018

Participants:

Christine Lagarde, Managing Director, IMF
David Lipton, First Deputy Managing Director, IMF
Gerry Rice, Director, Communications Department, IMF …………………

MR. RICE: Thank you, Madame Lagarde. Let me take The Wall Street Journal in the front row, please.

QUESTIONER: Madame Lagarde, thanks for taking questions.

The Government of Pakistan has said this week that it is going to seek a program from the IMF. One of the issues here is that the Government of Pakistan has incurred quite large debts, many of them from China as part of China's Belt and Road Initiative. A large number of countries have incurred very large debts as part of this initiative, and policymakers in the U.S. have expressed concerns about whether a program to Pakistan and other countries so indebted would be kind of a backdoor bailout of China.

I was wondering if you could address how the IMF would approach a program with Pakistan and other countries who may find themselves in this situation, given these concerns that have been raised about the Belt and Road Initiative. Thank you.

MS. LAGARDE: Well, first of all, I have seen, like you, the press statement, but I have not yet seen the Finance Minister of Pakistan. And David and I are going to see the delegation this afternoon. So I am assuming that there might be a program request on their part, but that has not been discussed. And we will explore that this afternoon.

Second point, the IMF is available to its entire membership. We have 189 members, and we have to serve the entire membership, each and every one of them.

Third point, in whatever work we do, we need to have a complete understanding and absolute transparency about the nature, size, and terms of the debt that is bearing on a particular country. And to really understand the extent and composition of that debt, both in terms of sovereign, in terms of state‑owned enterprises and the like of it, so that we can actually really appreciate and determine the debt sustainability of that country, if and when we consider a program.

A fourth point, this issue of debt transparency and an appropriate understanding of debt is not only going to apply to Pakistan. It has to apply to all countries. And it is part of a necessary disclosure exercise that we have to agree with our members for the purpose of a debt sustainability analysis, but also for the purpose of the governance and corruption project that has been approved by the Board of the IMF, and for which we are now moving into the implementation period. Again, on that point, fully understanding what the liabilities are and to whom they have been assigned is a necessity. ……………..


IMF Press Release:

Transcript of International Monetary Fund Managing Director Christine Lagarde's Opening Press Conference, 2018 Annual Meetings, Bali, Indonesia

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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 12 Oct 2018 15:51


Peregrine
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OBOR, Chinese Strategy and Implications

Postby Peregrine » 12 Oct 2018 17:57

chetak Ji :

From the above Article :

With Pakistan’s economy in a shambles, Islamabad is in a bind. It needs China’s funds but has realised that it is rapidly sinking into a debt trap. Other Asian countries are waking up to the threat as well. Myanmar has slashed the cost of its proposed China-funded Kyaukpyu port from $7.3 billion to $1.3 billion. Bangladesh too is downsizing — or cancelling — BRI projects.

Does this mean that the Chinese are charging their Clients OVER FIVE AND A HALF TIMES THE ACTUAL COSTS?

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chetak
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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 12 Oct 2018 18:46

Peregrine wrote:
chetak Ji :

From the above Article :

With Pakistan’s economy in a shambles, Islamabad is in a bind. It needs China’s funds but has realised that it is rapidly sinking into a debt trap. Other Asian countries are waking up to the threat as well. Myanmar has slashed the cost of its proposed China-funded Kyaukpyu port from $7.3 billion to $1.3 billion. Bangladesh too is downsizing — or cancelling — BRI projects.

Does this mean that the Chinese are charging their Clients OVER FIVE AND A HALF TIMES THE ACTUAL COSTS?

Cheers Image


Sirji,

the hans have all the adorable characteristics of a notorious history sheeter throwing his weight about, intimidating people with his dadagiri and collecting hafta from shopkeepers.

Unfortunately for the hans, a much bigger and badder dada has just strolled into town, in the form of the US controlled IMF.

Why have the hans persistently hidden their OBOR/BRI/CPEC "business model" and more importantly, their largesse to their friends with benefits, like the paki army crore commanders, for example??

Trump will prise the nitty gritty details of the cheni's debt loaded loans from the depths of their financial caves and parade it before the world, this being merely another front in the US's already broad fronted "trade" thrust against the hans.

OR, failing which, the pakis (as well as the chinese too) will be very very deeply disappointed by the sheer miserliness and meagerness of the forthcoming IMF loan.

chetak
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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 12 Oct 2018 22:36

Maybe India is emerging as another player in the great game of today


India’s Necklace of Diamonds – Garlanding China





India’s Necklace of Diamonds – Garlanding China
October 12, 2018

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Coming out of the shadow of the ‘Panchsheel’ principles, Prime Minister Narendra Modi has been ticking all right boxes, especially when it comes to counter India’s most compelling competitor, China. As both cooperation and deterrence are integral parts of any foreign policy, what Prime Minister Narendra Modi has achieved in the last four years to secure India’s interests, as far as China is concerned, is worth noting. Prime Minister appears to be not only engaging with China but also parallelly replying to one of its unofficial strategy of “String of Pearls”, through creating an unofficial deterrence. We have made an attempt to decode this.

First of all, What is China’s String of Pearls?

According to experts, it is an attempt by China to encircle India through maintaining and developing its strategic bases in countries around India, such as Pakistan, Maldives, Myanmar among others which will help in confining India to its own land and limiting its influence on the neighbouring countries. This also provides China with an easy access and control over the vast Indian ocean. Interestingly, even when China continued to pursue this strategy, however unofficially, previous government of India had no reply to it.

This string of pearls phenomena in the background of recent Chinese ‘One Belt One Road’ strategy has got a further boost as China is now not only focussing on countries around India but going further to Central Asia and Africa.
So, what is India’s answer to this unofficial strategy now?

India’s Necklace of Diamonds

Some strategic experts have always talked about a potential necklace of diamonds (strategic bases) that India can use to garland China or deploy the very Chinese strategy of encirclement. They have even hailed it as India’s answer to China’s string of pearls. However, this looked like a distant reality a few years ago, but with the changing geo-strategic realities and a ‘power’ push from the top leadership of India in recent times, there is now a significant progress towards this seemingly distant goal.

Let us analyse the emerging pattern from India’s recent foreign policy pushes, especially in the background of Prime Minister Narendra Modi’s visits.

India Building its Strategic Bases (Mining the Diamonds)

Changi Naval Base, Singapore – Prime Minister Narendra Modi paved the way for signing of a significant agreement between India and Singapore which provided Indian Navy ‘direct’ access to this naval base. This is crucial as Indian navy ships can now not only refuel but even rearm while sailing through the South China Sea.

Sabang Port, Indonesia – India got the military access to a strategic port like Sabang in 2018, located right at the entrance of one of world’s most famous choke point, Malacca Strait. This is one of the most significant agreements, as India now holds the strategic position in the Indian ocean through which large chunk of trade and crude oil passes on to China. Indian Naval ship INS Sumitra had visited Sabang Port recently.

Duqm Port, Oman – India leveraging its rising status in the Indian Ocean gained strategic military access to this port in 2018, located on the south-eastern seaboard of Oman which protects Indian interests in the western theatre of the Indian Ocean, especially for facilitating India’s crude imports from the Persian Gulf. Moreover, it is now an Indian facility located right between the two important Chinese pearls (bases) Djibouti in Africa and Gwadar in Pakistan.

Assumption Island, Seychelles – Overcoming the initial resistance, India is now developing this naval base in Seychelles, first agreed in 2015. Both the countries have continued to work on the project which gives the military access to India. This particularly signifies India’s increasing strategic presence not only in Indian ocean but also in the African continent where China is desperately trying to penetrate through the maritime silk route.

Chabahar Port, Iran – Prime Minister Narendra Modi signed the contract for development of this port in 2016. This port provides India access to Afghanistan and a precious trade route to Central Asia. In fact, India is reportedly about to begin operations at the Iranian port soon. This will give an unprecedented boost to India’s plan to increase its co-operation and contacts with Asian and Central Asian countries.

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India Developing its Existing Strategic Assets (Polishing the Potential Diamonds)

India, Asia and Central Asia

Ashgabat Agreement & INSTC –

India joined this multi-modal transport agreement in 2018, to access Central Asian countries like Turkmenistan, Uzbekistan, Kazakhstan, which are western neighbours of China.

In recent times, India has been seen increasing its engagements with various countries in Central Asia. This is essentially reflected in the remarkable increase of India’s trade with Central Asia from approximately $ 750 Mn in 2012-13 (here) to almost $ 1.5 Bn in 2017-18 (here). This is a growth of 100 per cent in the last 4-5 years.

In 2015, Prime Minister Narendra Modi became the first Indian prime minister to have visited all five Central Asian countries in one go, since their formation.

Ashgabat agreement has provided India land connectivity to Central Asia if seen in conjunction with the International North-South Transport Corridor (INSTC) in which India has hugely invested. This gives a clear view of the picture that India is not only escalating fast towards establishing connectivity to Russia but is also expanding its routes to all Central Asian countries like Turkmenistan, Uzbekistan, Kazakhstan, Kirgizstan and Tajikistan.

India, East Asia and South East Asia

Mongolia –

Mongolia is a country which is sandwiched between two giant neighbours, Russia and China. It has been actively looking to widen its relations with other countries, also known as its “Third Neighbour Foreign Policy”.

Notably, it was Prime Minister Narendra Modi’s vision to develop India’s relationship with Mongolia. Factually, PM Narendra Modi was the first Indian Prime Minister to have ever visited Mongolia, which is situated right in the backyard of China. This was particularly a strategic move to hint China that if it dares to come and play in and around India, we will no longer tolerate such overtures and can respond back methodically.

The Prime Minister announced a credit line of $ 1 Bn to Mongolia. Mongolia has already started the construction of its first ever oil refinery using India’s credit line which will end its dependency on fuel from neighbouring countries like China and Russia.

A recent visit by External Affairs Minister (EAM) Sushma Swaraj to Mongolia in April 2018, which was also by an Indian EAM after the gap of around 42 years. Further, an important point which advertently gave this crucial relationship a boost was that India and Mongolia decided to establish an air-corridor which will end Mongolia’s dependency, a landlocked country, on China which keeps threatening it by land blockages. This gave a bargaining chip to Mongolia which it can easily leverage against China.

So, due to all these mindful efforts, a symbiotic relationship has been established between India and Mongolia. Both the countries have come closer than ever before and Mongolia is emerging as a diamond in India’s necklace.

Japan -

Japan is the Chinese neighbour on its north-eastern frontier. It has always felt threatened by the rise of China. By and large, the complementarities between Japan and China don’t exist.

In fact, Japan has been aligned to USA’s camp since the days of cold war. India is its recent emerging special strategic partner to counter China’s influence.

As soon as Prime Minister Narendra Modi went to Japan in 2014, Japan and India elevated their relationship and arrived at a “Special Strategic and Global Partnership”.

Not only this, India and Japan signed the long-pending civil nuclear agreement in 2016. This has been a major achievement of the Modi Government, as India is the only country outside of the Non-Nuclear Proliferation Treaty (NPT) that has been signed by Japan for civil nuclear cooperation.

Further, India and Japan are working together on a game-changing Asia-Africa Growth Corridor (AAGC) which is being seen as a counter to China’s One Belt and One Road Initiative (OBOR) initiative. China is so rattled by this plan that one of its leading news agencies found it a ‘division plan’.

This clearly shows that China is actually upset by this India and Japan’s joint strategic move on the ever-evolving ‘grand chessboard’ of Asia and Africa. Undoubtedly, Japan is the natural diamond of India’s necklace.

Vietnam –

Strengthening its deterrence against China, Vietnam, the south-east neighbour of China has been increasingly bestowing its full cooperation with This recently saw a greater boost when Prime Minister Narendra Modi visited the country in 2016, after a gap of almost 15 years.
This is also reflected in “Comprehensive Strategic Partnership” between India and Vietnam.

Further, India upped the ante by holding a joint naval exercise in 2018 with Vietnam in Vietnamese waters, the region is in proximity to the South China Sea. Chinese media reported it as a futile attempt to flex muscle.

After much hesitation under the previous regime, Brahmos missiles deal with Vietnam is now in the advanced stage.

India has also expedited the process of supplying high-speed patrol boats for Vietnamese coast guards.

India’s satellite monitoring station in Vietnam, which is going to be activated soon, suggests that India is now ready to play a more constructive role in the South China Sea than ever before.

So, in recent times, Vietnam has emerged as yet another important diamond in India’s necklace, which will particularly be helpful to maintain a balance of power in the South East Asia region.

Conclusion

After looking at all the facts, it can be said that India in recent times has worked incessantly towards asserting itself to achieve a better strategic cooperation with other countries. India’s recent policy shift from Non-Alignment to Multi-Alignment also reflects in the above discussion. India is not only developing the existing strategic bases (diamonds in its necklace) but also building newer bases, as well.
Further, India is fast developing routes to reach Central Asian countries. All the countries discussed above have shown great interests in connecting and working together with India. Some of them are cooperating with India to increase their trade relations, while others to maintain the ‘balance of power’ in specific regions.

Resultantly, an explicit pattern has emerged from India’s recent foreign policy pushes that India has befriended with almost all the countries in China’s periphery, and in the way, this is giving India the strategic access. This pattern can be seen in the necklace of diamonds that garlands China.

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Re: OBOR, Chinese Strategy and Implications

Postby Rudradev » 17 Oct 2018 01:49

Apologies if posted before:

https://www.scmp.com/week-asia/opinion/ ... udi-arabia

With CPEC, Pakistan risks Chinese anger by courting Saudi Arabia

The Khan administration is making political hay with the China Pakistan Economic Corridor – including efforts to reduce potential IMF loans and avoid becoming the focus of a confrontation between the US and China

By Tom Hussain
6 Oct 2018


Since 2015, Beijing has insisted that the China Pakistan Economic Corridor (CPEC), the showcase project of President Xi Jinping’s “Belt and Road Initiative”, is purely an economic programme – as its name suggests.

Apparently, the new Pakistani administration of Prime Minister Imran Khan did not receive the memo. In the space of a couple of weeks, it has taken two decisions which have cast the CPEC as a bargaining chip in Pakistan’s complicated, ill-managed relationships with other key partners.

First, it has suddenly reduced the potential value of the CPEC programme to US$50 billion by 2030, down from US$62 billion. In one fell swoop, it decided to starve the western overland route from Xinjiang to the Chinese-operated Arabian Sea port of Gwadar of funding.

Pakistan is also considering slashing its planned spending on a CPEC project to rehabilitate its horribly outdated national railways network. Priced at about US$8 billion, it would constitute the single largest project of the enormous programme.

These drastic measures are part of Khan’s urgent response to an unsustainable current account deficit, which is currently at a record level, and severely depleted foreign exchange reserves. Viewed from his perspective, these issues were brought about, in part, by the greedy enthusiasm of his ousted predecessor, Nawaz Sharif, for the CPEC. Sharif failed to foresee the impact of massive inflows of Chinese machinery on Pakistan’s external finances, which have been kept afloat – barely – by a series of emergency Chinese loans and central bank deposits this year.

Economists are convinced Pakistan has little choice but to apply to the International Monetary Fund (IMF) for a balance of payments bailout. Already, it is clear that any prospective bailout would come at a steep political price. US secretary of state Mike Pompeo has vowed to ensure that any American taxpayer money lent to Pakistan by the Bretton Woods institution would not be used to settle its Chinese debts. Accordingly, the IMF mission to Islamabad pushed for greater disclosure about CPEC project contracts.

This raises a poignant question: was the Khan administration’s decision to dump the western CPEC route an attempt to persuade the US to soften its line on multilateral financial assistance?


The answer may lie across the border in Iran, the target of the sanctions-driven Middle East agenda of US President Donald Trump. CPEC’s western route offered China an opportunity to develop an overland belt and road extension into Iran – a natural destination, given the considerable investments it made after the 2015 multilateral deal on Tehran’s nuclear programme.


Not any more.

In other words, Dim Im has realized that China cannot be milked for any more handouts. He needs IMF handouts. Trump/Pompeo have made it clear that any IMF handouts cannot be used to service Paki debt to China. Hence, to sweeten the deal for the Americans, Dim Im is selling out Iran and China by abolishing that part of CPEC that would have connected the two overland. :mrgreen:

Pakistan’s second decision, to invite Saudi Arabia to develop a massive refinery complex at Gwadar, certainly suggests the CPEC is being manipulated to serve ends other than China’s. The reformist Saudi administration of Crown Prince Mohammad bin Salman has courted the Trump administration to counter Iran’s growing role across the Middle East, and was delighted when Washington abandoned the nuclear deal struck by former president Barack Obama. Riyadh must be salivating at the prospect of setting up a strategic oil reserve 120km from Pakistan’s border with Iran. Tehran, on the other hand, would be foaming at the mouth at this brazen attempt to undermine its flailing economy.

Asad Umar, the Pakistani finance minister, has admitted China was not informed about the prospective Saudi investment at Gwadar, the CPEC’s crowning glory. It was merely told that Pakistan planned to involve unspecified third-party investors, an idea China has always been open to because of the broader objectives of the belt and road plan.

Beijing had no idea the Khan administration was seeking to leverage Gwadar to persuade the Saudis to provide Pakistan with oil on a deferred-payment basis, so as to ease the pressure on its forex reserves and reduce the amount it would need to borrow from the IMF.

It must have been alarmed to learn the identity of the mystery investor, and then to hear Pakistan’s information minister, Fawad Chaudhry, describe the Saudi project as part of the CPEC. He hastily backtracked the next day, but not before strengthening the impression that the Khan administration was not being entirely honest or sincere with its “iron brother”.


This is Part 2 of Dim Im's Tactical Brilliance. Don't just sell out the China-Iran overland connection that CPEC was supposed to make. Add further salt in the wound (and try to appease Amrika even more) by bringing KSA trojan horse into the space created. Eye-ron Biladel will understand (or will they? By all reports Xi et al are absolutely furious about the economic tariff war being inflicted upon them by Trump... how are they going to take this obvious double-betrayal? They use Pakis to counter India, but the most pressing matter for them now is to counter the USA.)

The reasons for its duplicity are clear enough. Pakistan is uncomfortable with the prospect of becoming the focal point of an economic confrontation between the US and China that threatens to escalate into a 21st-century cold war. It has also noted that talks are under way to bring India into the fold of the counter-belt-and-road fund recently launched by the US and Japan, and that the European Union has unveiled similar plans to resist China’s economic expansionism.

Pakistan’s economic and strategic circumstances simply do not accord it the luxury of taking sides in a stand-off between behemoths, all of which it is beholden to. This promises to invigorate the conversations to be held during Khan’s forthcoming visit to China. :D

Officially, China will persist with the position that it is working to develop the CPEC in accordance with Pakistan’s wishes. It may seek to placate Khan by agreeing to improve the terms of existing and future CPEC project agreements, reschedule some of the bilateral debt, and relax tariff barriers for Pakistani exports. But Xi must be wondering whether the calculated gamble of showcasing his signature initiative in Pakistan is going to pay off or backfire.



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OBOR, Chinese Strategy and Implications

Postby Peregrine » 24 Oct 2018 14:34

X Posted on the Terroristan & Analyzing CPEC Threads

World Bank to undertake study on CPEC - Shahbaz Rana

ISLAMABAD: Beijing has engaged the World Bank for undertaking a study on the China-Pakistan Economic Corridor (CPEC) as Islamabad lacks the institutional capacity to conduct evidence-based research to gauge the real potential of the $60-billion investment programme.

The study covers the implementation status of CPEC and its future prospects, according to a briefing World Bank Country Director Illango Patchamuthu gave to Planning Minister Khusro Bakhtiar on Tuesday.

The Washington-based lender is conducting the study on six different aspects of CPEC and expects to complete the work by the end of this year, said officials.

The development comes at a time when Pakistan is urging China to fast-track work on the CPEC projects being completed with Chinese grant.

Senate riled up over Saudi role in CPEC

The Economic Affairs Division had undertaken a review of China-sponsored two infrastructure and two social-sector projects, finding that progress on them was far behind the schedule.

The government also asked Chinese authorities to fund another road project – Raikot-Thakot – costing $709 million through a grant. Bakhtiar raised the issue of project grant with a delegation of China Road and Bridge Company (CRBC).

“The World Bank is carrying out an analytical study on CPEC investments in Pakistan,” confirmed a spokesperson for the World Bank. She added that the study was going on and was expected to be completed in coming months.

As it is usual for such studies, the research team is consulting with relevant stakeholders. The study is supported by the China-World Bank Group Partnership Facility, said the spokesperson.

A few years ago, China had set up a $50-million partnership facility for investment projects and operations, knowledge development and south-south learning, human resource cooperation and financing for global and regional programmes.

The World Bank study will also review the prospects of trade and implications of the CPEC debt. Pakistan does not have proper estimates of jobs opportunities being created under CPEC.

The planning minister on Tuesday desired that at least 80% of jobs being created in the Rashakai Special Economic Zone must be given to Pakistanis.

Pakistan had signed CPEC deals in 2014 without conducting research. Even the think tanks being set up with public funds for conducting research have become mere tools of publicity. Pakistan does not have estimates of the Chinese cargo traffic that will pass through its territory under CPEC. During the meeting with the World Bank delegation, the planning minister urged them to take Pakistani research institutes on board while conducting the CPEC study.

The minister said the government was working on a robust economic plan to introduce structural economic reforms to take Pakistan among middle-income countries in the long term. He vowed to increase the country’s low investment and saving ratios to bring them on a par with regional peers. The minister stressed the [b]immediate need for enhancing tax revenues to 20% of GDP and simultaneously increasing domestic savings to 20% of GDP.[/b]

The minister said the government offered friendly investment policies and Pakistan was emerging as one of the attractive destinations for foreign investment.

PM Imran vows greater CPEC share for Balochistan

However, an Asian Development Bank (ADB) report on Asia Economic Integration underlined that Pakistan was getting 70% of its total foreign investment from China alone. The share of investment from Japan was only 2.5%, European Union 21% and the United States 5.6%.

Similarly, Pakistan’s trade with China was slightly over one-fifth of its total trade with the rest of the world. The planning minister stated that improving tax administration, encouraging financial institutions to expand the range of savings and investment instruments, reducing the procedures, cost and time associated with investing, improving management practices and supporting technology extensions would bring about economic turnaround for the country.

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Re: OBOR, Chinese Strategy and Implications

Postby Neshant » 28 Oct 2018 04:03

The $60 billion infrastructure China claims to have built for Pakistan is barely worth 1/5th of that over-invoiced bill.

China does not want World Bank to do an analysis on the real cost of that infrastructure nor its potential for (non) profitablility since it's a debt trap scheme.

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Re: OBOR, Chinese Strategy and Implications

Postby Falijee » 02 Nov 2018 00:41

The Collision Of The 3 Geographies

The collision of these 3 geographies is creating a new world order
World Economic Forum
Samir Saran
Nov 1, 2018

For the past seven decades, the world has been moulded by a strong, transatlantic relationship with the US and EU underwriting the terms of peace, stability and economic prosperity.
The success of this order has created its own existential challenge. Its rising beneficiaries in Asia and elsewhere increasingly challenge the validity of these arrangements and the efficacy of rules that have managed global affairs. While the historian John Ikenberry described the liberal world order as a “hub and spoke” model of governance, with the West at its centre, it is now clear that the peripheries of the system are developing wheels and engines of their own.
The decline of US and Europe. The Rise of Asia !
ndeed, the rise of Asia as a whole is recasting the physical and mental map of the world. Proliferating transnational relationships and new flows of finance, trade, technology, information, energy and labour have created three new strategic geographies which are already escaping the shadow of transatlantic arrangements. They essentially represent the collision of erstwhile political constructs – and their management requires new ideas, nimble institutions and fluid partnerships.

The Indo-Pacific

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Eurasia

The Arctic

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As these three geographies discover themselves, then, there are five trends that deserve attention:

1. The first is the risk of separate cold wars across geographies.

2. More "coalitions of convenience” are likely to emerge across these geographies.

3. The third is the possibility for new institutional dialogues.

4. The fourth trend: the opening up of the Arctic will test the ability of powers to provide security as a public good in other parts of the world.

5. Finally, the institutional matrix will also evolve in response to these changes.

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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 02 Nov 2018 11:13

Credit could and should have been given to the present GoI for its perspicacious and principled stand.

One seriously doubts if any other govt except this particular one would have thought through the serious implications or even made a token resistance to the relentless OBOR/BRI/CPEC overtures, threats and demands, forget having the b@!!$ to reject outright these scam schemes and would have undoubtedly jumped in both feet first thus landing India in the schitt for decades to come.


Belt and roadblocks: India’s stance vindicated as China’s grandiose BRI plans run into resistance





Belt and roadblocks: India’s stance vindicated as China’s grandiose BRI plans run into resistance

Brahma Chellaney, October 29, 2018,

Sierra Leone has become the latest country to scrap a Belt and Road (BRI) project, cancelling a $318 million airport deal with China. After smooth sailing, BRI is now encountering strong headwinds, as partner nations worry about sovereignty eroding debt traps. In multiple countries, BRI projects are being scrapped or scaled back.

India was the first country to come out against the opaque BRI, Chinese President Xi Jinping’s marquee initiative. India boycotted Xi’s much-hyped BRI summit, held to drum up global support for his initiative. The May 2017 summit in Beijing attracted 29 heads of state or government, including Russia’s Vladimir Putin and Turkey’s Recep Tayyip Erdogan. But, while the US sent a joint secretary equivalent official to the summit, India sent no one.

Indeed, India publicly portrayed BRI as a non-transparent, neocolonial enterprise aimed at ensnaring smaller, cash-strapped states in a debt trap to help advance China’s geopolitical agenda. An official Indian statement before the BRI summit declared that “connectivity initiatives must be based on universally recognised international norms, good governance, the rule of law, openness, transparency and equality” and that they must also “follow principles of financial responsibility to avoid projects that would create unsustainable debt burden”.

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Illustration: Ajit Ninan

Some commentators in India were quick to claim that, through its summit boycott, India had isolated itself. They also predicted that India would come out a loser by turning its back on what they saw as a promising infrastructure building initiative that New Delhi too should have tapped.

But at the BRI summit itself, India received implicit support. The European Union openly echoed India’s concerns by saying BRI did not include commitments to transparency and social and environmental sustainability. The EU’s refusal to back Xi’s BRI-related trade statement marred the summit.

Before long, the US began depicting BRI as the dawn of a new colonial era. Then US secretary of state Rex Tillerson called China a “new imperialist power” whose practices are “reminiscent of European colonialism”.

The word “predatory” is now being used internationally about China’s practices. The International Monetary Fund has warned that Chinese loans are promoting unsustainable debt burdens. The price such burdens exact can extend to national sovereignty and self-respect. The handover of Hambantota port on a 99-year lease to China was seen in Sri Lanka as the equivalent of a heavily indebted farmer giving away his daughter to the cruel money lender.

Beijing has leveraged big credits to gain even military presence, as its first overseas naval base at Djibouti illustrates. Trapped in a debt crisis after borrowing billions of dollars, Djibouti was left with no choice but to lease land for the base to China for $20 million in annual rent. China is similarly seeking to employ its leverage over cash-strapped Pakistan to build a naval base next to Gwadar port.

In the Maldives, China has acquired several islets in that heavily indebted Indian Ocean archipelago. While the terms of the various lease agreements have not been disclosed, the acquisitions have come cheap; for example, China paid just $4 million for Feydhoo Finolhu, an island that previously served as a police training centre.

However, China’s grandiose BRI plans are running into broader resistance. Malaysian Prime Minister Mahathir Mohamad, with Chinese Premier Li Keqiang by his side in Beijing’s Great Hall of the People, recently criticised China’s use of infrastructure projects to spread its influence. By warning China against “a new version of colonialism”, Mahathir highlighted international concerns over Beijing’s use of geo-economic tools to achieve geopolitical objectives.

Sri Lanka’s experience has been a wake-up call for other countries with outsize debts to China. A number of BRI partner-states have begun trying to renegotiate their deals with Beijing. Some have decided to cancel or scale back projects. Mahathir, during his Beijing visit, announced the cancellation of Chinese projects worth nearly $23 billion. And China’s close ally, Pakistan, has downsized its main BRI railroad project by $2 billion.

BRI seeks to export China’s model of top-down, debt-driven development through government-to-government deals clinched without competitive bidding. But, increasingly, BRI is being seen internationally as an attempt to remake global commerce on China’s terms and project Chinese power far and wide.

Vulnerable countries are awakening to the risks of accepting loans that are too good to be true and then slipping into debt entrapment. China is even replicating some of the practices that were used against it during the European colonial period, such as the concept of a 99-year lease. BRI, by creating a mountain of debt, risks undermining China’s international standing, including engendering hidden hostility. A broader pushback against China’s mercantilist practices is already emerging.

Against this background, India’s brave, principled stand against BRI stands fully vindicated. India can pride itself as the intellectual leader that helped shine a spotlight on BRI’s financial and security risks and thereby moulded the international debate. The larger international pushback against China’s predatory practices is likely to intensify in the coming years, putting greater pressure on BRI.

DISCLAIMER : Views expressed above are the author's own.

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Re: OBOR, Chinese Strategy and Implications

Postby kit » 06 Nov 2018 09:49

chola wrote:
Neshant wrote:^^ Will be interesting to watch as China tries to trap Malaysia into unpayable OBOR debt with white elephant projects.

Maybe they will ask for the lease of a naval base..oops I mean maritime port in the Straits of Malacca for 99 years.

But how stupid are Malaysian politicians having signed on to such deals in the first place.


Why do we expect these countries to be naive and stupid in regards to Cheen?

Most Asian countries like Malaysia run trade and monetary surpluses with Cheen.

The chances are more than equal that they will take Cheen’s money and then ask for writeoffs if the PRC wants them to keep a neutral stance and not go over to Unkil completely.



If some politician decides that a few millions in his bank account is worth more than his country ? ..for example maldives ? ..how many politicians really care for their nation ? .. as the saying goes everything is for sale at the right price

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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 06 Nov 2018 10:40

kit wrote:
chola wrote:
Why do we expect these countries to be naive and stupid in regards to Cheen?

Most Asian countries like Malaysia run trade and monetary surpluses with Cheen.

The chances are more than equal that they will take Cheen’s money and then ask for writeoffs if the PRC wants them to keep a neutral stance and not go over to Unkil completely.


If some politician decides that a few millions in his bank account is worth more than his country ? ..for example maldives ? ..how many politicians really care for their nation ? .. as the saying goes everything is for sale at the right price


The next "elected" politician may well repudiate the entire agreement in the "national interest".

There is no defence against such a move.

Maldives is one example and SL is one example of the han counter move.

Its chess played on a global/regional scale with long term ramifications.

But it also looks like an unofficial international nexus is slowly shaping up to frustrate the han's "peaceful" rise. The hans are breaking out of their historical geographical confines while endeavouring to confine their adversaries to the same plight

It is about time too that this massive ponzi scheme is shut down and the uninterrupted run of debt trapped economic/military onslaught is sunk before it becomes irreversible because of the sheer momentum generated and fuelled by the very precipitous scale of its size.

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Re: OBOR, Chinese Strategy and Implications

Postby chetak » 09 Nov 2018 00:41

Well, if true, this came much sooner than I thought it would.



Caixin Global Verified account @caixin

China think tank head Li Yang says nation's economy may be entering a long-term "downward spiral"



Economy at Risk of Long-Term ‘Downward Spiral,’ State Researcher Says

The head of an influential state-backed think tank has forecast that China’s economic expansion may be entering a long-term “downward spiral” as all three engines of growth — investment, exports and consumption — slow down.

The comments by Li Yang, head of the National Institution for Finance & Development (NIFD) and the former deputy head of the Chinese Academy of Social Sciences, come against the backdrop of increasing concern among the country’s top policymakers about the outlook for the world’s second-largest economy and the impact of the trade war with the U.S. Gross domestic product (GDP), a measure of all goods and services produced in an economy, rose by 6.5% year-on-year in the third quarter, the lowest in almost a decade.

“GDP (growth) is slowing, investment (growth) is slowing, export (growth) is slowing and consumption (growth) is slowing” and the growth rates are slowing at the same pace or faster than GDP growth, Li said in a speech at the Chinese Institutional Investors Summit on Saturday in Beijing.

“There’s a lot of musing about what’s really going on with the numbers, but in short, we need to pay extremely close attention because it might mean that the economy is in a kind of downward spiral,” Li said. “The recent meeting between the central authorities and private enterprises also suggests that the situation (of the private sector) is quite serious.”

President Xi Jinping held a seminar with private entrepreneurs on Thursday in Beijing to assure them of the government’s and the Communist Party’s support for the private sector as the entrepreneurs struggle amid a cooling economy and an unfavorable financing environment. The event followed a meeting of the Politburo, a committee of the Party’s top 25 officials chaired by Xi, which also emphasized support for the private sector.

Employment worries

In addition to his academic roles, Li is a delegate to the National People’s Congress — the country’s legislature — and a member of its financial and economic committee. He also advises a number of provincial and municipal governments, according to his biography on the NIFD website.

Li’s speech touched on several economic challenges facing China, including job creation; monetary policy and the changing dynamics of credit creation; the relationship between the country’s financial system and the real economy; and the potential impact of the trade war between China and the U.S. and its geopolitical significance.

Although government data show that the target for job creation this year was met ahead of schedule in October, evidence is starting to emerge that the employment situation could become more challenging in 2019 or 2020, compounded by the U.S.-China trade friction, Li said.

“As the economy cools, it’s possible new job creation will soften, companies who are in difficulty will cut wages, the growth rate of salaries will decline, and we will see an absolute fall in pay,” Li said. “We may even see people lose their jobs. This is the impact of Sino-U.S. trade friction passing through into the labor market.”

Li also highlighted weak credit creation by financial institutions and how the credit impulse, which is the change in new lending by banks as a percentage of GDP, has weakened significantly. Although the People’s Bank of China can influence the money supply and can add more money to the financial system by cutting banks’ reserve requirement ratio, for example, financial institutions also influence money supply by increasing their lending.

But the process of money creation has stalled or contracted because demand for loans from companies is insufficient and profitable investment opportunities are limited, Li said. This has become a prominent problem and a sign of economic contraction, he said.

Although the PBOC has adjusted the way it calculates total social financing (TSF) — the broadest measure of credit in the economy that includes bank loans, “shadow banking,” and bond and equity issuance — growth in TSF has lost steam and continues to slow, Li said, adding that the Chinese Academy of Social Sciences estimates the increase in the measure will be “even worse” next year, he said.

Economic aggression

Li also raised the alarm about the economic slowdown in Guangdong, Jiangsu, Shandong and Zhejiang provinces in the first half of 2018. These are China’s most developed regions, and they showed a slide in growth that was higher than the national average, he said.

Turning to the deterioration in relations between China and the U.S., Li said this is not a short-term problem that can be solved anytime soon. Washington’s China policy has undergone a fundamental change from one of engagement and negotiation to one of containment.

China’s call for its relationship with the U.S. to be based on a new model of great power relations, which in effect signals China does not acknowledge the U.S. as the world’s No. 1 superpower, somehow crossed a red line with Washington, he said. The U.S.’s aim is now to stifle China’s ability to develop its technological strength, and this is a form of economic aggression, Li said.

China should not give in to the U.S., and while it should not go on the attack, neither should it be afraid of a fight, Li said. Beijing should stick to its position but also seek to reduce friction by offering reasonable solutions.

Li also called for the government to take a market-oriented approach to managing the economy, such as abandoning the policy of handing out massive subsidies to encourage innovation, and to expand reforms.

“There are important reforms such as property rights, especially the issue of non-state ownership, intellectual property rights,” as well as accelerating fiscal reform, Li said.

Philip
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Re: OBOR, Chinese Strategy and Implications

Postby Philip » 11 Nov 2018 14:40

The acute problem is the Chin virtual takeover of Pak.Bankrupt as it is with "Captain" going to Begging...oops! Beijing,the error was in a Paki paper quite deliberate no doubt,the rulers and establishment of Porkistan ,having prostrated themselves and prostituted themselves too to the Chins,have allowed them to happily exact a "Chin takeaway" of the country.Buses will ply through POK,a fait accompli no matter how much we howl in protest, day by day China will cement in hard concrete its strategic outposts not only in Pak,but also in Lanka,Burma,and in Africa too. The West may sneer at the impracticability of the Chin BRI,but it fails to realise that it is the military and strategic aspect that China covets more. If China's shipping is interfered with in the IOR,ICS or Pacific,China can do the same against those nations who have acted against it in its own backyard.When the crunch time comes,
it will be v.interesting to see which western nations stand up to it. Already Britain fatally infected by the Brexit virus is also travelling fast to kowtow to the Mandarins of Begging for trade deals to counter its losses in Europe.

If there is active anti-Chin ops on the ground ,with incidents as we saw earlier in Baluchistan,the OBOR masterplan may get fatally doomed.If not,we'll just have to grin and bear it.

Neshant
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Re: OBOR, Chinese Strategy and Implications

Postby Neshant » 03 Dec 2018 03:17

Trying to enslave Pakistan through debt.

Standard OBOR operating procedure.

All the assets built in Pakistan will end up under the ownership of China.

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China rules out giving hard cash to Pakistan

https://timesofindia.indiatimes.com/wor ... 911405.cms


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