OBOR, Chinese Strategy and Implications

disha · Post by **disha** » 15 May 2017 23:14

^ I had been pointing out that several moons back. All one needs to do is create a "All-weather containerized Baki" so that they can be transported en-masse on the OBOR/CPEC.

Vivek K · Post by **Vivek K** » 15 May 2017 23:17

disha · Post by **disha** » 15 May 2017 23:35

On a short note., hence keeping my points minimum:

1. CPEC is useless unless the main market is India. Traditionally, goods and services went from India via the 'silk road' to the world and minerals & precious metals came to India via that route.

2. OBOR (or the sea-route) from Sri-lanka to Africa ( Dar-es-salaam to Lobito) is fraught with risks. Djibouti to Dakar along the rim is more natural and has less risks (comparatively). But the fact is to make that route actually work., it has to be driven via an internal need for economic dependence and not by a master-slave relation which China is pursuing.

3. Entire souther route from Myanmar to Africa is under the Indian sphere of control. It was like that several millennia ago and will be like that for several millennia from now. Chinese cannot change history or geography.

Vivek K · Post by **Vivek K** » 15 May 2017 23:41

The goal is to establish Chinese dominance. The TFTA Pakis will be the first to be enslaved (but that is what they want so no problem there). The goal of OBOR isn't charity, but to establish China as a superpower.

Peregrine · Post by **Peregrine** » 16 May 2017 00:22

Belt Forum ends without creating system for joint implementation; Indian presence felt

BEIJING: The two-day Belt and Road Forum ended in Beijing on Monday evening with promises of joint action by participating countries, but without establishing an institutional framework for implementing the planned construction program.

Though India is the only major country to boycott the event, its presence was felt during discussions between China and other South Asian countries on different programs.

For instance, China signed an agreement to lay a $8 billion railway line connecting it to Nepal. But this rail line cannot be sustained economically if Chinese goods cannot access the Indian market.

"India is in the room without being in the room," Laurence Brahm, founding director of Himalayan Consensus, told the official China Global Television.

Chinese expert and former counselor in Mumbai, Liu Youfa, said, "India has problems with the China Pakistan Economic Corridor. But it can still join the Belt and Road projects even if it has not come here".

The official Chinese media took a somewhat different view saying that India cannot keep other countries from joining the program even if it decided to stay away. Such accusations seem to be the ramblings of a paranoid China!

The meeting was attended by the prime ministers of Pakistan and Sri Lanka, the deputy prime minister of Nepal and the state counsellor of Myanmar.

"While India recently issued an official statement saying it would not be part of the "One Belt and One Road" (B&R) initiative, it will not affect the trend towards cooperation in infrastructure development among its neighbouring countries at all," Global Times said in its online edition.

The article was apparently meant to convey a message to the Indian audience because it was not published in the Chinese edition of the paper.

At the end of the summit, Chinese president Xi Jinping acknowledged that some of the participating countries had suggested that an institutional framework should be created for implementing the project. But there was no sign this has been done.

Xi said that the next Forum will be organised by China in 2019, indicating that Beijing will continue to control the Belt and Road Initiative (BRI) despite its promise about equally sharing the responsibility.

A joint communique signed by 30 heads of state promised to implement plans for cooperation in trade and infrastructure construction programs across Asia, Europe and Africa.

It was not clear if the communique reflected the views of western nations, including the United States and Germany, which have publicly expressed their reservations on issues like transparency and level playing field in the Belt and Road Initiative (BRI).

Jinping assured the assembled delegates that there will be no attempt to push a country's political ideologies and systems onto another country during the implementation of the Belt and Road Initiative.

This was obviously in reference to widely heard criticism that China's main purpose is to enhance it's geopolitical influence by financing and constructing infrastructure projects in countries that cannot afford to do it themselves. One such country is Pakistan, which is strategically located between India and Pakistan. A look at the Atlas shows no country between India and Clapistan!

"The Belt and Road Initiative originates from China, but it belongs to the world," Chinese President Xi Jinping said adding, "The Belt and Road construction spans different regions, development phases and civilisations. It is an open and inclusive cooperation platform."

The conference saw BRI, which was originally billed as an infrastructure program, growing into a larger platform of economic diplomacy and trade consultations. Participants agreed to promote a rules-based, open and multilateral trading system with the World Trade Organisation at its core.

Xi said that the Forum had identified and agreed on 270 deliverable goals of BRI. "We will unleash new driving forces for economic growth, and rebalance economic globalisation," he said adding, "We will support cross-border e-commerce and smart city development. We will seek greater complimentary [development] between the Belt and Road Initiative and development plans of different countries," he said.

Signatories to the joint communique pledged to promote a rules-based, open and multilateral trading system with the World Trade Organisation at its core.
Cheers

rgosain · Post by **rgosain** » 16 May 2017 01:28

OBOR and its fascination with resurrecting the long dormant and mythical Silk road in the deserts of Central Asia brings to mind images of empires blown away on the desert sands by hubris, and the following stanza needs no introduction

My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!

Prem · Post by **Prem** » 16 May 2017 03:27

http://en.people.cn/n3/2017/0515/c90000-9215493.html
Full text of President Xi's speech at opening of Belt and Road forum

China will enhance friendship and cooperation with all countries involved in the Belt and Road Initiative on the basis of the Five Principles of Peaceful Co-existence. We are ready to share practices of development with other countries, but we have no intention to interfere in other countries' internal affairs, export our own social system and model of development, or impose our own will on others. In pursuing the Belt and Road Initiative, we will not resort to outdated geopolitical maneuvering. What we hope to achieve is a new model of win-win cooperation. We have no intention to form a small group detrimental to stability, what we hope to create is a big family of harmonious co-existence.
- China will put in place the following mechanisms to boost Belt and Road cooperation: a liaison office for the Forum's follow-up activities, the Research Center for the Belt and Road Financial and Economic Development, the Facilitating Center for Building the Belt and Road, the Multilateral Development Financial Cooperation Center in cooperation with multilateral development banks, and an IMF-China Capacity Building Center. We will also develop a network for cooperation among the NGOs in countries along the Belt and Road as well as new people-to-people exchange platforms such as a Belt and Road news alliance and a music education alliance.The Belt and Road Initiative is rooted in the ancient Silk Road. It focuses on the Asian, European and African continents, but is also open to all other countries. All countries, from either Asia, Europe, Africa or the Americas, can be international cooperation partners of the Belt and Road Initiative. The pursuit of this initiative is based on extensive consultation and its benefits will be shared by us all.

yensoy · Post by **yensoy** » 16 May 2017 06:35

kit wrote:India needs to charge a tax on whatever Chinese stuff that gets on OBOR through third countries . Also closing border with Pakistan will ensure economic blockade of CPEC

1. As you say, we need to keep exact tab of the number of trucks and tonnes of crude passing through PoK; these should be added to a bill with penalties slapped on, to be levied on Pak when they lose the next war.
2. A complete boycott of ships which have called in at Gwadar. These ships cannot be allowed to call on any Indian port in the next 3 months, period. Someone was saying that ships could drop off Chinese stuff at Gwadar, sail empty to India before loading up. That behaviour should be banned.

Murugan · Post by **Murugan** » 16 May 2017 09:18

EU rejects OBOR - a WION report

Singha · Post by **Singha** » 16 May 2017 09:20

Link missing

chetak · Post by **chetak** » 16 May 2017 09:26

What is China’s belt and road initiative?

What is China’s belt and road initiative?

The many motivations behind Xi Jinping’s key foreign policy

The Economist explains
May 15th 2017by J.P. | BEIJING

OVER the weekend Xi Jinping welcomed 28 heads of state and government to Beijing for a coming-out party, which continues today, to celebrate the “belt and road” initiative, his most ambitious foreign policy. Launched in 2013 as “one belt, one road”, it involves China underwriting billions of dollars of infrastructure investment in countries along the old Silk Road linking it with Europe. The ambition is immense. China is spending roughly $150bn a year in the 68 countries that have signed up to the scheme. The summit meeting (called a forum) has attracted the largest number of foreign dignitaries to Beijing since the Olympic Games in 2008. Yet few European leaders are showing up. For the most part they have ignored the implications of China’s initiative. What are those implications and is the West right to be sanguine?

The project is the clearest expression so far of Mr Xi’s determination to break with Deng Xiaoping’s dictum to “hide our capabilities and bide our time; never try to take the lead”. The Belt and Road Forum (with its unfortunate acronym, BARF) is the second set-piece event this year at which Mr Xi will lay out China’s claim to global leadership. (The first was a speech against protectionism made at the World Economic Forum in Davos in January). In 2014, Wang Yi, the foreign minister, said the initiative was Mr Xi’s most important foreign policy. Its ultimate aim is to make Eurasia (dominated by China) an economic and trading area to rival the transatlantic one (dominated by America).

Behind this broad strategic imperative lie a plethora of secondary motivations—and it is the number and variety of these that prompts scepticism about the coherence and practicality of the project. By investing in infrastructure, Mr Xi hopes to find a more profitable home for China’s vast foreign-exchange reserves, most of which are in low-interest-bearing American government securities. He also hopes to create new markets for Chinese companies, such as high-speed rail firms, and to export some of his country’s vast excess capacity in cement, steel and other metals. By investing in volatile countries in central Asia, he reckons he can create a more stable neighbourhood for China’s own restive western provinces of Xinjiang and Tibet. And by encouraging more Chinese projects around the South China Sea, the initiative could bolster China’s claims in that area (the “road” in “belt and road” refers to sea lanes). The trouble is that some of these ambitions contradict others: is a dodgy project in central Asia a better place to invest than American government securities? And with different motivations go conflicting interests. There is infighting between the most important Chinese institutions involved, including the ministry of commerce, the foreign ministry, the planning commission and China’s provinces. To make matters worse, China is finding it hard to identify profitable projects in many belt-and-road countries (Chinese businessmen in central Asia call it “One Road, One Trap”). To cap it all, China is facing a backlash against some of its plans, with elected governments in Sri Lanka and Myanmar repudiating or seeking to renegotiate projects approved by their authoritarian predecessors.

As a result the forum—on the face of it a celebration of the initiative—will in reality find Mr Xi seeking to contain a backlash against it. That may seem to justify Europeans in their decision to stay away. But the suspicion that the project will fail could be misguided. Mr Xi needs the initiative because he has invested so much in it. China needs it because it provides an answer of sorts to some of its economic problems. And Asia needs it because of an unslakeable thirst for infrastructure. The belt and road initiative has plenty of problems but Mr Xi is determined to push ahead with it.

Deans · Post by **Deans** » 16 May 2017 09:28

shiv wrote:
A_Gupta wrote:From November 2016: on Gwadar:
http://www.hellenicshippingnews.com/gwa ... a-limited/

Hahahahahaha Phat gayi tuttistan ki....

Its the first time I've seen a Chinese analyst confirm the figures in western sources - that road transport or a pipleline from Gwadar would be
10 times more expensive (I'm being generous and assuming the end destination is Central China) that the current mode of sea transport.
Most people assume a pipeline is built by joining lengths of pipe together. The reality is a lot more complicated.

chetak · Post by **chetak** » 16 May 2017 09:34

Murugan wrote:EU rejects OBOR - a WION report

Not surprised.

the OBOR gathering being seen as an invitation a party, prior to one's own hanging by the chinaman who is all ready with the hang rope and a waiting hangman.

Bring your checkbook and pay for your own hanging.

Deans · Post by **Deans** » 16 May 2017 09:51

There are simpler and more effective ways to hit Pakistan's trade than boycotting companies using Gwadar.

1. Stop export of cotton to Pak (couple of years back, when figures were last available, Tirupur imported cotton from Africa and Gujarat
exported it to Pak !).
2. Stop beef exports to Pak (done via the Gulf). A whistle blower scheme can be started and offending companies will not be allowed to do
business in India. Increased beef prices in Pak is a very sensitive thing for the aam abdul.
3. Tax MNC's who do business with Pak. (call it a security surcharge). No visas for any MNC executive who has visited Pak. RAW interrogates
anyone in India extending a visa invite to a Paki citizen. That will kill the existing practice of senior MNC managers in India having a regional
responsibility that includes Pak. Target companies that have a significant impact on the Pak economy but are easily replaceable in India
e.g. Siemens (power equipment), Unilever, Citibank.
4. Stop all land trade via J&k (which is largely used for terror financing by over-invoicing Indian exports) and scrutiny of invoices through Wagah.

And just for optics and to satisfy public opinion:
- Stop PIA from operating in India (on grounds that there's likely to be another 9/11).
- Revoke MFN as Pak does not extend it.
- Extreme vetting of all visa applications. Exit tax for Indians who want to visit Pak.

A Deshmukh · Post by **A Deshmukh** » 16 May 2017 10:36

Deans wrote:There are simpler and more effective ways to hit Pakistan's trade than boycotting companies using Gwadar.

1. Stop export of cotton to Pak (cople of years back, when figures were last available Tirupur imported cotton from Africa and Gujarat
exported it to Pak !).
2. Stop beef exports to Pak (done via the Gulf). A whistle blower scheme can be started and offending companies will not be allowed to do
business in India. Increased beef prices in Pak is a very sensitive thing for the aam abdul.
3. Tax MNC's who do business with Pak. (call it a security surcharge). No visas for any MNC executive who has visited Pak. RAW interrogates
anyone in India extending a visa invite to a Paki citizen. That will kill the existing practice of senior MNC managers in India having a regional
responsibility that includes Pak. Target companies that have a significant impact on the Pak economy but are easily replaceable in India
e.g. Siemens (power equipment), Unilever, Citibank.
4. Stop all land trade via J&k (which is largely used for terror financing by over-invoicing Indian exports) and scrutiny of invoices through Wagah.

And just for optics and to satisfy public opinion:
- Stop PIA from operating in India (on grounds that there's likely to be another 9/11).
- Revoke MFN as Pak does not extend it.
- Extreme vetting of all visa applications. Exit tax for Indians who want to visit Pak.

+1

A Deshmukh · Post by **A Deshmukh** » 16 May 2017 10:47

History being repeated.
Decrepit Mughal emperors gave entry to the British East India Company - and eventually loosing sovereignty.
Now Pakis being Pakis, are inviting the new EIC - CPEC to take over their country.

We should just close our borders (economic)...following Deans prescription.

panduranghari · Post by **panduranghari** » 16 May 2017 13:17

Cross post

Chinese Bond Yield Inverts

China’s $1.7 trillion government-bond market is exhibiting a new sign of stress: The yield on longer-term debt has fallen below that on shorter-term debt—an anomaly that some traders are blaming on Beijing’s efforts to reduce financial risk.

Early on Thursday, the five-year yield /quotes/zigman/15861749/realtime BX:AMBMKRM-05Y -0.59% rose to 3.71%, breaking above the 10-year yield /quotes/zigman/15861751/realtime BX:AMBMKRM-10Y +0.15% for the first time since records began—even though the latter, at 3.68%, was near a 25-month high. Bond yields rise as their prices fall.

Such a “yield-curve inversion” defies normal market logic that bonds requiring a longer commitment should compensate investors with a higher return. It usually reflects investor pessimism about a country’s long-term growth and inflation prospects. When the U.S. Treasury /quotes/zigman/15866666/realtime BX:TMUBMUSD10Y -0.07% yield curve inverted in 2006 and 2007, most analysts cited Asian central banks’ heavy buying of longer-dated U.S. government debt.

Dear Chinese, Good luck with trying to get even one OBOR project off the ground.

yensoy · Post by **yensoy** » 16 May 2017 13:17

SriJoy wrote: 1. I don't think boycotting ships that go to Gwadar will be logistically feasible. We don't want to hamstring shipping giants like Maersk, MSC, CMA-CGM, etc. They won't be able to coordinate their shipping to the extent that they can 'keep off ships calling to Gwadar/India' mutually exclusive. This will be to our detriment, as its effectively creating logistical hurdles for import/export ease of business. This is also not feasible because since Gwadar is essentially a chinese port, its India vs China. Push comes to shove, India loses a 'container war' with China- no shipper- giant or otherwise- will forego container traffic from China in favour of India.

2.Forgive my ignorance, but if ships sail to India empty and leave loaded up, then Import = nil, Export = max, ergo, trade balance is in India's favour ?

1. No I am not calling for boycott of all of Maersk or CGM etc. I am saying that we will not allow for them to use Gwadar and any Indian port in a single voyage. They are free to return to their home port or final destination, cleanse the ship

, and come back to India.

2. There will be mismatches in import/export numbers. It is highly likely that containers will reach Gwadar loaded and return empty (and return they must). It is also likely that bulk carriers are loaded at Gwadar with minerals mined from Baluchistan & Afghanistan, but they arrive into Gwadar empty. Folks have been saying that the big shippers will try to balance it against supply/demand from Indian ports.
My point is that we should not allow any traffic flows related to CPEC projects to be balanced through Indian ports.

SSridhar · Post by **SSridhar** » 16 May 2017 13:41

India's objections to Belt and Road Forum a show for domestic politics: Chinese daily - PTI

BEIJING: India's refusal to join China's Belt and Road Forum was "partly a show" for domestic politics and aimed at piling pressure to get Beijing's "special attention", a state-run Chinese daily said today.

"India hopes that it can shape bilateral relations more actively, and expects China to give special attention to the interests of India. But this is not how countries interact," an editorial in Global Times said.

"India's objection to the B&R is partly a show for domestic politics, partly to pile pressure on China. However, the absence of New Delhi in the B&R has not affected the forum in Beijing, and it will exert even less effect on the progress the initiative will make in the world," it said.

India skipped the Belt and Road Forum (BRF) due to its sovereignty concerns over the $50 billion China-Pakistan Economic Corridor, which passes through Pakistan-occupied Kashmir (PoK).

The daily said if India sees itself as a big power, it should get accustomed to the many divergences with China, and try to manage these divergences with China.

"It is almost impossible that two big countries can reach agreements on all things. This can be proved by the many differences between China and the US. But China and the US have maintained smooth bilateral relations, from which New Delhi can learn," it said.

It said both the countries should be vigilant about people with destructive power.

Stating that the Belt and Road Forum for International Cooperation concluded here yesterday with "fruitful" results despite India's absence, it said "as so many large delegations participated, including from the US, Japan and South Korea, the international community has shown a very positive response to the infrastructure-building initiative."

"However, India sent no official representatives. The country's External Affairs Ministry spokesperson said Saturday that India cannot accept a project that violates its sovereignty and territorial integrity. India appears to be the only country that has expressed disapproval of the initiative in recent days," it said.

About the status of India-China relations, it said "Sino-Indian relations have not seen a serious downturn. The border of the two countries has been peaceful in these years, the most important force for stable bilateral relations."

It said both the countries have prioritised economic and social development in their national strategies.

"Maintaining friendly ties conforms to the two countries' fundamental interests. The specific frictions between Beijing and New Delhi should not be regarded as a signal for intense geopolitical competition," the daily said.

Referring to India-China differences over Beijing's opposition to New Delhi's admission into the Nuclear Suppliers Group (NSG) and UN listing of JeM leader Masood Azhar as a terrorist, it said, "Overall, these new problems are caused by India's requirements for China. However, China does not do as it wants."

"India hopes that it can shape bilateral relations more actively, and expects China to give special attention to the interests of India. But this is not how countries interact," it said.

Another report in the daily quoted Observer Research Foundation Chairman Sudheendra Kulkarni, who attended the BRF, as saying that India should rethink its position on the Belt and Road initiative, and China, Pakistan and India should address disputes and find innovative cooperative solutions.

"The main reason behind India staying out of the forum is the China-Pakistan Economic Corridor, part of which passes through the disputed territory of Kashmir," Kukarni told the daily.

He suggested that two major connectivity initiatives be built: an India-China Economic Corridor and an India-Pakistan Economic Corridor, and these corridors should be connected in a way that Kashmir becomes a "bridge", rather than a barrier, between India and Pakistan.

He said India will deprive itself of huge benefits if it stays out of the inter-continental, collaborative agenda mooted by China and endorsed by almost the entire world.

"The initiative is going to be the most powerful economic growth engine in world history," he said.

Srikanth Kondapalli, chairman of the Centre for East Asian Studies at Jawaharlal Nehru University, who attended the event told a session on think-tank exchanges at the forum that China and India can cooperate in the low-carbon industry and the construction of a smart city, and that the initiative can also contribute to education, public health and gender equality.

Philip · Post by **Philip** » 16 May 2017 14:18

The Pakis have always practised the world's "oldest profession" very professionally. In fact,they're the leading catamite country on the planet, where their menfolk ,both in and out of uniform,are willing perform any "trick" for some whampum,boodle,dosh,bread,argent,whatever you may call it! They also display a unique skill of being able to service two clients simultaneously,namely the US and China,though from which end of the spectrum is preferred by the two is anyone's guess!

EU snubs China
https://www.theguardian.com/world/2017/ ... t-and-road

EU backs away from trade statement in blow to China's 'modern Silk Road' plan
Member states wary of Xi Jinping’s Belt and Road initiative without guarantees on transparency, sustainability and tendering process
Xi Jinping at the Beijing summit
The EU’s rejection of the trade statement will come as a blow to XI Jinping, who hoped the two-day summit in Beijing would bring world leaders behind his Belt and Road vision. Photograph: Mikhail Svetlov/Getty Images

Tom Phillips in Beijing
Monday 15 May 2017 15.58 BST Last modified on Monday 15 May 2017 22.00 BST
The EU has dealt a blow to Chinese president Xi Jinping’s bid to lead a global infrastructure revolution, after its members refused to endorse part of the multibillion-dollar plan because it did not include commitments to social and environmental sustainability and transparency.

Xi made his latest bid for global leadership on Monday, telling leaders including Russia’s Vladimir Putin and Turkey’s Recep Tayyip Erdoğan that the world should reject protectionism, embrace globalisation and pull together like a skein of geese.

Xi’s comments came on the second and final day of a high-profile summit in Beijing about his Belt and Road initiative, a multibillion-dollar infrastructure spree that China claims will kickstart a new era of trade and development. The scheme’s ultimate aim – encompassing pipelines and a port in Pakistan, bridges in Bangladesh and railways to Russia – is to create what China calls a “modern Silk Road”.

The $900bn question: What is the Belt and Road initiative?

However, in a snub to Xi’s rallying cry for cooperation, the Guardian understands that the EU’s 28 member states decided not to support a statement about trade prepared by Beijing to mark the end of the summit.

“We made clear that, for Europe, the Belt and Road initiative can only be a success if it’s based on transparency and co-ownership,” said one high-level EU diplomat, who spoke on the condition of anonymity. “Apparently to Chinese surprise, the EU was united on this.”

The rejected statement related to a trade panel held during the Beijing summit that was attended by representatives of countries including Belgium, Estonia, Germany, Hungary, Italy and Spain. China had hoped that all EU member states, as well as other nations attending the conference, would support the text, one of three prepared to mark the end of the convention on Monday.

Beijing had billed the forum as its most important diplomatic event of the year and hoped it would give global legitimacy to Xi’s signature foreign policy initiative. Leaders from Africa, Asia and Latin America flew in to Beijing to show their support.

However, the leaders of most major western powers, including Donald Trump, Angela Merkel and Theresa May, skipped the event while India voiced public opposition to what one newspaper called “a colonial enterprise”.

The Guardian understands that EU members decided not to support China’s trade statement because a series of concerns they had raised with the Chinese government were not incorporated into the draft text.

A public summary of the EU’s position on the Belt and Road initiative, published in the runup to the forum, suggested members wanted guarantees that projects would be economically and environmentally sustainable and subject to fair tendering processes.

An unnamed diplomat confirmed to Agence France-Press that several EU states had declined to back China’s trade statement.

A spokesperson for the British government said that since the UK had not taken part in the trade panel related to the statement it would not have been expected to sign up to outcomes related to that session.

“The UK welcomes the Belt and Road initiative, which has the potential to promote and develop economic growth,” the spokesperson said, adding that the chancellor, Philip Hammond, had taken part in a session about finance and that the UK had signed up to principles related to that event.

On Sunday morning, Hammond offered a resounding endorsement of Xi’s “bold and visionary project” telling his hosts Britain was “a natural partner” in the scheme.

Speaking at Beijing’s Mao-era Great Hall of the People on Sunday night, Xi said his “project of the century” would “add splendour to human civilisation” and help build a new era of harmony and trade. On Monday he said his plan was “open to all like-minded friends … It does not exclude or target any party”.

However, some sceptics see the plan as largely a ruse to boost China’s own economy by shifting excess industrial capacity to less developed nations and draw poorer countries tighter into Beijing’s economic grip.

Chinese state media hit back at critics on Monday. “Some countries seem obsessed with the idea of containment or game-playing, and seem unable to see the truth in the mist of history,” an editorial in the Beijing Youth Daily said.

Speaking to the state-controlled China Daily, one Chinese academic rejected the suggestion that Beijing was guilty of “practising neo-colonialism ... exploiting energy resources ... [and] supporting authoritarian regimes”. He Jingtong, a business professor at Nankai University in Tianjin, said: “I think none of this holds water. If you look at history, tell me when has China been a colonial power? If it hasn’t been in the past, why should it be now?”

PS:"World must unite like a flock of geese" says the latter-day Confusion-us",Comrade XI Gins. What he really means is that the nations of the world must unite and become "Beijing Duck"!

anupmisra · Post by **anupmisra** » 16 May 2017 16:33

A Deshmukh wrote:History being repeated.
Decrepit Mughal emperors gave entry to the British East India Company - and eventually loosing sovereignty - by inviting the new avatar of EIC - CPEC to take over their country.

Now, this post makes sense. Should be tweeted. Except, call them "Wannabee scions of failed Mughal emperors".

SSridhar · Post by **SSridhar** » 16 May 2017 17:30

Dawn 'leak' on China-Pakistan Economic Corridor draws Nawaz Sharif government’s ire - Mubashir Zaidi, The Hindu

A Pakistani newspaper report on the broad contours of the China Pakistan Economic Corridor (CPEC) implementation plan till 2030 has attracted criticism from the government, which said the details were quoted from one of the working papers among many prepared to be discussed with the Chinese leadership at the One Belt One Road Summit.

The Dawn said it had acquired exclusive access to the original document that discloses for the first time what the Chinese intentions and priorities in Pakistan are for the next decade and three years.

Opposition parties have called for making the details of the plan public before finalising the projects. Nafisa Shah, an MP from the Pakistan People's Party, said the government must come clean on the long term plan published by Dawn, which has huge implications for the Pakistan economy.

[Asad Umar, economic expert and leader of Imran Khan’s Pakistan Tehree-e-Insaf, alleged that lack of government’s seriousness may affect this project. “This is the kind of lack of seriousness, which has resulted in Pakistan losing rather than gaining from all free trade agreements we have signed, ” he said.{This comment is totally asinine. The typical dilemma is that Pakistanis cannot criticize China at all but the DAWN report is truly alarming at the same time. The scapegoat is the GoP. All Pakistanis are in the CPEC project together because they want India to be subjugated in the end and they see the Chinese help as inevitable. But, even dim-witted Immy understands that the price that the Chinese demand will 'dissolve' the Land of the Purest. This is a classic example of cognitive dissonance}

Planning Minister Ahsan Iqbal said he was appalled at the Dawn report and called it factually incorrect. “We couldn’t release the Long Term Plan without final consultation with the Chinese side which was done yesterday,” he tweeted.

The newspaper reacted sharply to the Minister's remarks on the report in its editorial on Tuesday. “The general sentiment is pro-CPEC; and this newspaper also supports the project. But that does not mean the government has carte blanche to negotiate the terms of this massive enterprise entirely in secret. The people have a right to know what exactly is being negotiated; this is especially crucial given the scale of the joint enterprise," Dawn wrote . {That is precisely the dilemma. After all, China gave them the 'Islamic Bomb' to balance the 'Hindu Bomb'; it stands steadfast with Pakistan; more than that, it does everything to stop the 'Indian hegemony' in the region. The Pakistanis are not left with many friends. They have no leverage at all against China. They don't mind being castrtated by the Han Chinese provided they are promised that the Hans would blacken at least one eye of the Bani Hindu mortal enemy. DAWN may wail all it can but there can be no change on the ground because the Chinese dominance over Pakistan is far too tight already}

The newspaper report noted that much-trumpeted Gwadar Port in the long term plan has 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,” the report said.

While unveiling the plan, the report said it was drawn up by the China Development Bank and National Development Reform Commission of China goes beyond the scope of CPEC, which initially was considered as a trade route from Kashgar China to the Gwadar Port in Balochistan Province. Although it envisaged industrial zones and power plants, the plan now includes leasing out thousands of acres of agricultural land to Chinese enterprises to set up demonstration projects in areas ranging from seed varieties to irrigation technology.

A_Gupta · Post by **A_Gupta** » 16 May 2017 17:53

The larger context: an evaluation of China's attempts to grow soft power:
https://www.cfr.org/backgrounder/chinas ... soft-power

AjayKK · Post by **AjayKK** » 16 May 2017 18:14

A comment (perhaps by a BRfite?) on the CPEC article published by Swarajya

Article:
https://swarajyamag.com/world/cpec-is-c ... -privilege

Comment:

Here is how it is likely to unfold.

Pakistan has squeezed USA for all its worth, and still has given pretty little in return. It will do the same with China. China will realize what a two headed snake Pakistan is in about a decade. And Pakistani terrorists (so called non state actors) will exact a heavy headcount to eject chinese from within its territory. The debt that is left will be written off at some time as unpayable..

That is Pakistani development model.

SSridhar · Post by **SSridhar** » 16 May 2017 18:43

In the Afghan jihad, Pakistan used the US-China dyad to counter the Soviet Union. Two decades later, it is using China-Russia combo to counter the US. I hope that within a decade, it will use US-Russia to counter the Chinese (if the Americans and the Russians are still dumb) or the US-Russia-China will join together to avenge the Pakistanis.

shiv · Post by **shiv** » 16 May 2017 19:01

The Xinjiang-Pakistan road is bust. Nothing can go on that route easily. The old silk road was camels and yaks. Not any more

arshyam · Post by **arshyam** » 16 May 2017 20:09

shiv wrote:The Xinjiang-Pakistan road is bust. Nothing can go on that route easily. The old silk road was camels and yaks. Not any more

Or they can use the same camels and yaks to climb over those snowbound high passes and avalanches

arshyam · Post by **arshyam** » 16 May 2017 20:20

SriJoy wrote:1. I don't think boycotting ships that go to Gwadar will be logistically feasible. We don't want to hamstring shipping giants like Maersk, MSC, CMA-CGM, etc. They won't be able to coordinate their shipping to the extent that they can 'keep off ships calling to Gwadar/India' mutually exclusive. This will be to our detriment, as its effectively creating logistical hurdles for import/export ease of business. This is also not feasible because since Gwadar is essentially a chinese port, its India vs China. Push comes to shove, India loses a 'container war' with China- no shipper- giant or otherwise- will forego container traffic from China in favour of India.

Sorry, but this is the typical loser attitude many Indians have with respect to our own leverage. Why should we care about hamstringing Maersk or anyone else? What yensoy is suggesting is that they are free to call at our ports, but not when visiting Paki ports as the latter are under "sanctions". With little business going to Gwadar anyway (even Karachi is way too little), who do you think they'll choose?

SriJoy wrote:This is also not feasible because since Gwadar is essentially a chinese port, its India vs China. Push comes to shove, India loses a 'container war' with China- no shipper- giant or otherwise- will forego container traffic from China in favour of India.

This is another assumption that you are making - that Gwadar will be a major Chinese port like Shanghai or Shenzhen. There is no way Gwadar is going to generate that kind of business, so there is no benefit for these shipping companies to not heed to India. Lastly, since the demand will be low to begin with, the actual ground impact to China will be minimal, but will cause huge loss of face to them. Well worth it, IMHO.

arshyam · Post by **arshyam** » 16 May 2017 20:28

This was on this morning paper's front page:

anupmisra · Post by **anupmisra** » 16 May 2017 21:05

Philip wrote:EU snubs China

Today's WSJ (print edition) has the same story.

Prem · Post by **Prem** » 17 May 2017 04:15

Putin in Peking

chetak · Post by **chetak** » 17 May 2017 05:33

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??

A_Gupta · Post by **A_Gupta** » 17 May 2017 06:29

I'm dreaming of the great Pakistani mutiny of 2027, when Pakistanis rise in revolt against their Chinese overlords because they suspect the food that China is putting on their market is being laced with flavors derived from pork.

Tuan · Post by **Tuan** » 17 May 2017 07:34

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?

SSridhar · Post by **SSridhar** » 17 May 2017 07:47

Sri Lanka on OBOR, India, China and itself - PTI

The Sri Lankans are slippery customers, though.

BEIJING: Sri Lanka, which attended the just concluded Belt and Road Forum here, has backed India's concerns on "sovereignty and territorial integrity" over the OBOR project, saying it is difficult for New Delhi to accept the $50 billion China-Pakistan Economic Corridor (CPEC) as it goes through the "heart of Indian interests".

India, which skipped the high-profile meeting, would have joined "very happily" in the One Belt and One Road (OBOR) initiative of China, said Sarath Amanugama, Sri Lanka's Minister on Special Assignment.

"Unfortunately, the issue is going through the heart of Indian interests. If it was some uncontested region, India would have negotiated its way out. Here, especially the Kashmir issue getting dragged into it, makes it difficult for India to be flexible," Amanugama, who accompanied Lankan Prime Minister Wickramasinghe to the two-day forum, said.

He said India, China and Sri Lanka were very much part of the ancient Silk Road route as the Chinese Buddhist scholars like Faxian visited both India and Sri Lanka leading to big discoveries of Buddhist relics in the island nation.

"(Chinese) President Xi Jinping has emphasised connectivity. These countries were connected many centuries ago. This will link up these countries on certain rational basis. Once the regional problems are resolved, then India has to play big role in the initiative," he said, adding, "India anyway has to play big role because you cannot think of a belt and road without going over and close to India."

India skipped the meeting due to its sovereignty concerns over the $50 billion CPEC, which goes through Pakistan- occupied Kashmir. The two-day conference in Beijing brought together leaders from 29 countries.

Besides Wickramasinghe, the summit was attended by Pakistan Prime Minister Nawaz Sharif, Russian President Vladimir Putin, Turkish President Recep Tayyip Erdogan and several other leaders, heads of UN, World Bank and IMF.

Wickaramasinghe, who arrived here a day after he hosted Prime Minister Narendra Modi in Sri Lanka, had a low-key presence at the high-profile summit.

While Sharif and many other leaders spoke at the inaugural ceremony, the Sri Lankan leader reportedly took part in the discussions in the roundtable meeting yesterday.

Amunagama said that Sri Lanka will not permit any foreign military operations in its port by any country including China, in an effort to reassure India's security concerns over Chinese military activity.

Confirming reports that recent Chinese requests for docking of its submarines was declined, he said, "we denied them permission."

"Lanka's position is that our harbours and ports are for commercial operations. All other countries have no strategic interests. We are equidistant from everyone," he said.

Earlier, a Chinese submarine was allowed to be docked in Colombo harbour by former president Mahinda Rajapaksa in 2014 which sparked protests from India.

"China, India, US and all other countries, they cannot come into our territorial waters without the consent of the Sri Lankan government," Amanugama said.

Even the Hambantota harbour which Sri Lanka plans to hand over to China under debt equity scheme will function under Sri Lankan Port Authority (SLPA).

He said in the agreement currently being finalised to give 80 per cent stake to Chinese shipping company, it will be allowed to operate inside the harbour but all the outside operations will be carried out by SLPA.

The harbour master who permits the ship movement in the harbour will be an SAPA employee, he said.

Allaying India's concerns, he said Sri Lanka is taking assistance from the Indian Navy to maintain maritime security including tracking submarines.

India is also providing patrol boats, he said.

About Hambantota port, he said, it is entirely a commercial operation. "It was constructed with Chinese assistance costing about $1.4 billion. It was established during the regime of Mahinda Rajapaksa," he said.

"But we had an extended debt. Sri Lanka is facing a problem of debt repayment," he said, defending Sri Lanka opting for debt swap for harbour.

Sri Lanka has an estimated debt of $8 billion to China. The loans were taken for different mega projects.

"So last year we raised it with Premier Li Keqiang. At first we asked for a debt relief, either to write it off or to reschedule payment. But the Premier said it is not possible because they have lent money to several other countries. We cannot write it off to create precedent," he said.

"However, the Chinese premier suggested to convert it into equity by forming a joint venture company. The company will be registered in Sri Lanka. Chinese side will convert that into equity. Sri Lanka doesn't have to repay," he said, adding, "it was a win win situation for us".

Bart S · Post by **Bart S** » 17 May 2017 08:49

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).

Neshant · Post by **Neshant** » 17 May 2017 09:02

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.

Singha · Post by **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.

chetak · Post by **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.

also, an older article

‘CPEC could become another East India Company’

Exclusive: CPEC master plan revealed

Exclusive: CPEC master plan revealed

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

KHURRAM HUSAIN

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ArjunPandit · Post by **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.