Analyzing CPEC

[K Mehta]

Yesterday Chinese ambassador to Pk went running to Imran Khan (late in night) after it was leant Imran's party is planning an Islamabad shut down and taking over the capital.
Chinese envoy was assured by Imran that CPEC is a game changer and has full spport of his party, there is no way CPEC will ever be compromised in Pk. And there is no plan of shutting down CPEC.

Indraji it was more of dimran being summoned to the commissar office than the commissar running to dimran.

[IndraD]

No saar; it was other way round

'The two reportedly met at Imran's residence in Bani Gala in Islamabad.' http://timesofindia.indiatimes.com/worl ... 934983.cms

[Falijee]

Chini Blothers Take Pakis For A Ride - Again !

In revised offer, China wants to work as construction contractor in Gwadar

ISLAMABAD:

China has withdrawn its offer of setting up a liquefied natural gas (LNG) terminal at Gwadar Port on the build-and-operate model and now wants to work as an engineering, procurement and construction (EPC) contractor for the project.
“In response to the revision of offer by China, Pakistan will own and operate the terminal and award EPC contract to the Chinese company working on the Gwadar LNG pipeline project under a government-to-government arrangement,” an official told The Express Tribune.

Chini blothers have cleverly shifted the business risk of the venture to bhooka nanga Pakistan ; if the project is done properly China wins; if the project fails , China does not lose .

According to the official, a meeting of the price negotiation committee has already been held. The Exim Bank of China will provide financing at the rate of London Inter-bank Offered Rate (Libor) plus 2%.

Saddled with additional debt on top of the existing one ; Pakis are slowly being integrated as a Chini colony , being blissfully unaware !

The Executive Committee of National Economic Council (Ecnec) has given its approval for the Gwadar LNG pipeline, which will give a good signal to Iran, as Pakistan has planned to extend the pipeline by 80 km to connect it with the Iranian border.

Big dreams ; bombastic words fill up the void where action cannot

One LNG terminal is already running at Port Qasim with a handling capacity of 600 million cubic feet per day (mmcfd). A contract for second terminal at the port, which will also have the 600-mmcfd capacity, has been awarded and work is going on.

All these projects are "very necessary " if the timeline for Pakistan - is to be met - to become the fourth or fifth BIGGEST (cannot recall !) economic power of the entire world

[DavidD]

I like cliches, because sayings usually don't become cliches unless there's some degree of truth to it. The cliche I'd like to invoke here is sticks and carrots. I frequent many military forums focused on various nations, they're all understandably nationalist-leaning, and nationalist forums like this one tend to focus on sticks. It's good that the Indians are starting to carry around a bigger stick now. It seems to me that previously the prevalent thought on this board has been that the Pakis are crazy, that they don't care about living, and that they're liable to use their nukes in a mutually destructive effort at a moment's notice. As it turns out, with their muted response to the "surgical strikes", they very much would like to live like anybody else.

That's a good start, but what about the carrots? What could incentivize the Chinese and the Pakis to drop their support for the terrorists? Well, recent reports indicate that Chinese businessmen and workers have reservations re: CPEC because of safety concerns, that the Chinese government has been applying pressure on the Pakis to stop supporting the radicals because of such concerns. So why not support CPEC? Obviously the fact that it goes through POK is an issue, so why not build a branch through J&K? Mother nature has already built a conduit criss-crossing the two halves of Kashmir in the form of the Indus river, and the two countries have learned to share it, so why can't we humans build a new conduit for the two to share?

It would be a monumental undertaking for sure, but would peace between India and Pakistan require anything less?

[deejay]

I like cliches, because sayings usually don't become cliches unless there's some degree of truth to it. The cliche I'd like to invoke here is sticks and carrots. I frequent many military forums focused on various nations, they're all understandably nationalist-leaning, and nationalist forums like this one tend to focus on sticks. It's good that the Indians are starting to carry around a bigger stick now. It seems to me that previously the prevalent thought on this board has been that the Pakis are crazy, that they don't care about living, and that they're liable to use their nukes in a mutually destructive effort at a moment's notice. As it turns out, with their muted response to the "surgical strikes", they very much would like to live like anybody else.

That's a good start, but what about the carrots? What could incentivize the Chinese and the Pakis to drop their support for the terrorists? Well, recent reports indicate that Chinese businessmen and workers have reservations re: CPEC because of safety concerns, that the Chinese government has been applying pressure on the Pakis to stop supporting the radicals because of such concerns. So why not support CPEC? Obviously the fact that it goes through POK is an issue, so why not build a branch through J&K? Mother nature has already built a conduit criss-crossing the two halves of Kashmir in the form of the Indus river, and the two countries have learned to share it, so why can't we humans build a new conduit for the two to share?

It would be a monumental undertaking for sure, but would peace between India and Pakistan require anything less?

David, you talk logically and sound informed. Then how did you miss the 70 years of carrots that India has given Pakistan. Be it territory, POWs, IWT, no sticks despite attacks on Parliament, Mumbai, etc, etc.

This despite Pakistan harboring International terrorists and murderers from India and China backing it. Indians are dying at the hand of these terrorists. Carrots are still being offered. Just before Pathankot attack, it was our Prime Minister who was in Pakistan taking the olive branch.

So why support CPEC - so tomorrow, Pakistan will thank for our support with another terrorist attack and for which China will provide international support.

And we haven't shared Kashmir with anyone. We won't. It is ours and we will take it.

[Peregrine]

I like cliches, because sayings usually don't become cliches unless there's some degree of truth to it. The cliche I'd like to invoke here is sticks and carrots. I frequent many military forums focused on various nations, they're all understandably nationalist-leaning, and nationalist forums like this one tend to focus on sticks. It's good that the Indians are starting to carry around a bigger stick now. It seems to me that previously the prevalent thought on this board has been that the Pakis are crazy, that they don't care about living, and that they're liable to use their nukes in a mutually destructive effort at a moment's notice. As it turns out, with their muted response to the "surgical strikes", they very much would like to live like anybody else.

That's a good start, but what about the carrots? What could incentivize the Chinese and the Pakis to drop their support for the terrorists? Well, recent reports indicate that Chinese businessmen and workers have reservations re: CPEC because of safety concerns, that the Chinese government has been applying pressure on the Pakis to stop supporting the radicals because of such concerns. So why not support CPEC? Obviously the fact that it goes through POK is an issue, so why not build a branch through J&K? Mother nature has already built a conduit criss-crossing the two halves of Kashmir in the form of the Indus river, and the two countries have learned to share it, so why can't we humans build a new conduit for the two to share?

It would be a monumental undertaking for sure, but would peace between India and Pakistan require anything less?

DavidD Ji :

I, for one, would rather have India stop all the “Begging” of Cwapistan to allow for the Transit Trade to Afghanistan and the C A Republics. Such a facility will force India to give Cwapistan Land Access to Nepal, Bhutan, Bangladesh and possibly Myanmar.

Consider the number of Cwapistani Trucks and Railway wagons being allowed to traverse the Indian Territory and think of the number of Terrorist and their Arms, Ammo etc. that will be pushed into India. Allowing C-PEC transit through India will give both Cwapistan as well as China access into India to carry out their Terrorist and other Activities which will be harmful nay disastrous to India.

Regarding “their muted response to the "surgical strikes” : By admitting to the Indian Surgical Strikes the Cwapistani Army will suffer a humungous loss to their H & D with the mango Abduls. Thus their denial.
Cheers

[kapilrdave]

Who wants peaceful relations with a terrorist state of pakistan eh? Those days are gone when we hoped to have peaceful and friendly relations with TSP. That is simply an unrealistic expectation is a foregone conclusion. The only thing we always wanted was that somehow we manage to simply ignore TSP, which also proved impossible.

Now we need to give peace a chance, and that's all we need to do to provide long term peace to ourselves.

[Peregrine]

Part 1: An introduction into CPEC's long-term plan and challenges

ISLAMABAD: Most structural weaknesses of Pakistan’s economy, which are hampering its journey towards prosperity and inclusive growth, could be addressed in the next 10 to 15 years, if the country is able to achieve the targets outlined in the long-term plan of the China-Pakistan Economic Corridor (CPEC).

According to the draft, the economic corridor will boost Pakistan’s national output by 1.5% from 2016 to 2020 and by another 1% from 2020 to 2030.

From 2016 to 2020, trade between China and Pakistan will grow 24% and bilateral direct investment will rise 25%. Industrial value addition should exceed 1.5% and 500,000 to 800,000 new jobs will be created.

However, these outcomes depend on successful implementation of the CPEC strategic framework. Political wrangling over the CPEC by both ruling and opposition parties may deprive the country of the benefits of industrialisation and orderly urbanisation – the two key objectives of the long-term plan.

“International, interwoven domestic, ethnic and religious factors might give rise to terrorist activities and affect the secure environment for corridor construction,” note Chinese planners. They say global powers shifting their focus to this region might create uncertain influence.

“The core area includes Kashgar, Tumshuq, Atushi and Akto of Kizilsu Kirghiz of Xinjiang, and Corps Tumshuq, most of Islamabad capital territory, Punjab and Sindh, and some areas of Gilgit-Baltistan, Khyber-Pakhtunkhwa and Balochistan,” says the draft report.

However, Pakistan suggests that the corridor’s core area may be extended on the Chinese side up to Khorgos on the China-Kazakhstan border and add an appropriate direct connectivity between Kashgar and Khorgos as a priority project in the short term.

Pakistan’s access to Russia and Europe through China and Kazakhstan would have far-reaching positive geo-economic impact.

Chinese authorities have explained in detail the CPEC routes passing through Pakistan, which they describe as “one belt, three passages, two axes and five functional zones”.

One belt refers to the strip to be formed by an important arterial traffic route in China and Pakistan, which lies in the core area of the corridor. This northeast-southwest strip starts from Kashgar, passes through Taxkorgan, Khunjerab Pass, Islamabad and Lahore, and ends in Sukkur where it is divided into two routes heading to Karachi and Gwadar on the Arabian seacoast.

However, the Chinese caution that construction of the corridor may be disrupted by domestic and regional challenges.

The corridor construction and its operation also face constraints from physical geographical factors. South Xinjiang is far from China’s main production and consumption centres. Its industrial base is weak and the size of its economy is limited.

Areas along the Indus River within Pakistan are relatively economically developed, but have limited resource-carrying capacity due to high population density. The western part of Pakistan is underdeveloped with poor natural conditions.

Pakistan’s economic recovery and development foundation is weak, according to Chinese experts. There are major bottlenecks restricting economic and social development.

Energy shortage, obsolete infrastructure, low efficiency of administration, unbalanced regional economic and social development, high risks of exchange rate and capital control, all pose potential challenges to the corridor construction.

Cheers

[Peregrine]

CPEC imperilled

The old comrades-in-protests Chairman Imran Khan and Sheikhul Islam Tahirul Qadri have agreed to join hands once again to stage another show in Islamabad. A show that’s meant to shut down the capital for all official business.

Infighting within political parties in a democratic dispensation is one issue but taking it to a treacherous level and branding opponents as enemy agents and traitors is a serious allegation deserving investigation. Casting such allegations against the head of the government when a project such as the CPEC, which has been named as the game-changer for the country is taking shape, is indeed most unfortunate.

By creating chaos and turmoil in the country, Imran Khan and his sponsors are indirectly supporting the forces that oppose the CPEC project.

Clearly, Western powers and India view the CPEC as being against their geopolitical interests, for the project will not only benefit Pakistan but will also provide China a much shorter route to the Arabian Sea. At present, China traverses a long route of about 16,000kms for the transportation of its goods through the Strait of Malacca. After getting access through Pakistan when the CPEC materialised, the distance would be drastically reduced to 4,000kms. What a happy situation for both countries!

Rightly, China has been viewing the dharna politics with trepidation. That was the reason why the Chinese envoy met Imran Khan to know his views about the CPEC.

Cheers

[kit]

Chini Blothers Take Pakis For A Ride - Again !

In revised offer, China wants to work as construction contractor in Gwadar

ISLAMABAD:

China has withdrawn its offer of setting up a liquefied natural gas (LNG) terminal at Gwadar Port on the build-and-operate model and now wants to work as an engineering, procurement and construction (EPC) contractor for the project.
“In response to the revision of offer by China, Pakistan will own and operate the terminal and award EPC contract to the Chinese company working on the Gwadar LNG pipeline project under a government-to-government arrangement,” an official told The Express Tribune.

Chini blothers have cleverly shifted the business risk of the venture to bhooka nanga Pakistan ; if the project is done properly China wins; if the project fails , China does not lose .

According to the official, a meeting of the price negotiation committee has already been held. The Exim Bank of China will provide financing at the rate of London Inter-bank Offered Rate (Libor) plus 2%.

Saddled with additional debt on top of the existing one ; Pakis are slowly being integrated as a Chini colony , being blissfully unaware !

The Executive Committee of National Economic Council (Ecnec) has given its approval for the Gwadar LNG pipeline, which will give a good signal to Iran, as Pakistan has planned to extend the pipeline by 80 km to connect it with the Iranian border.

Big dreams ; bombastic words fill up the void where action cannot

One LNG terminal is already running at Port Qasim with a handling capacity of 600 million cubic feet per day (mmcfd). A contract for second terminal at the port, which will also have the 600-mmcfd capacity, has been awarded and work is going on.

All these projects are "very necessary " if the timeline for Pakistan - is to be met - to become the fourth or fifth BIGGEST (cannot recall !) economic power of the entire world

The LNG and petrochemical complexes would be the first to go up in any war

[kit]

I like cliches, because sayings usually don't become cliches unless there's some degree of truth to it. The cliche I'd like to invoke here is sticks and carrots. I frequent many military forums focused on various nations, they're all understandably nationalist-leaning, and nationalist forums like this one tend to focus on sticks. It's good that the Indians are starting to carry around a bigger stick now. It seems to me that previously the prevalent thought on this board has been that the Pakis are crazy, that they don't care about living, and that they're liable to use their nukes in a mutually destructive effort at a moment's notice. As it turns out, with their muted response to the "surgical strikes", they very much would like to live like anybody else.

That's a good start, but what about the carrots? What could incentivize the Chinese and the Pakis to drop their support for the terrorists? Well, recent reports indicate that Chinese businessmen and workers have reservations re: CPEC because of safety concerns, that the Chinese government has been applying pressure on the Pakis to stop supporting the radicals because of such concerns. So why not support CPEC? Obviously the fact that it goes through POK is an issue, so why not build a branch through J&K? Mother nature has already built a conduit criss-crossing the two halves of Kashmir in the form of the Indus river, and the two countries have learned to share it, so why can't we humans build a new conduit for the two to share?

It would be a monumental undertaking for sure, but would peace between India and Pakistan require anything less?

David, you talk logically and sound informed. Then how did you miss the 70 years of carrots that India has given Pakistan. Be it territory, POWs, IWT, no sticks despite attacks on Parliament, Mumbai, etc, etc.

This despite Pakistan harboring International terrorists and murderers from India and China backing it. Indians are dying at the hand of these terrorists. Carrots are still being offered. Just before Pathankot attack, it was our Prime Minister who was in Pakistan taking the olive branch.

So why support CPEC - so tomorrow, Pakistan will thank for our support with another terrorist attack and for which China will provide international support.

And we haven't shared Kashmir with anyone. We won't. It is ours and we will take it.

The money that the Pakistani army makes off the country can in no way justified if kashmir is settled. Why would the generals and their cohorts want to lose their cushy benefits ?

[DavidD]

deejay: carrots without sticks is just as useless as sticks without carrots, best to use a combination of the two. You're gonna have to share Kashmir, if not officially then unofficially, there's just no way to take that large piece of territory from a nuclear armed opponent. It's just like how China isn't gonna take AP either. They're not relinquishing the claims, but they sure as heck ain't preparing for an invasion either.

kit: political powers change hands, the generals can be lured away from the military if they can make money doing something else, and when they do they wouldn't want a strong military at their back. It'll take a visionary leader, who himself is a general, to lead this transition. It'll take some time for someone like that to come along, but conditions must be right on the ground first.

[IndraD]

Even in Pakistan there is realisation too much dependence on China is not good:
Why Pakistan needs to look beyond CPEC

Daily Times Pk
It is the matter of simple principle. We are not putting our eggs in many baskets. Rather, it is just one and that is a Chinese basket. To me, as much as it can strengthen Pakistan, it can make us increasingly vulnerable as well.

There are precedents to this. China has made massive investments in Latin American economies. Just like CPEC they were heavy on the infrastructure side. As much as these countries imported merchandise from China, they also imported aftershocks of a Chinese slowdown. This was followed by inflation increasing by 700 percent in Venezuela. Stock markets of Brazil, Chile, and Peru tumbled as negative sentiments took hold. Exports also skidded in Latin American economies. Similarly, any future slowdown in Chinese economy can have negative bearings on our economy as well given our increasing future connectivity with China through CPEC. In the same vein, our foreign direct investment flow will also become susceptible to Chinese money.

But these can be offset by boom years of Chinese growth. So where can major risks come from that can have widespread and sustained implication for Pakistan? To me, the biggest of them all can come from energy projects.

Most of the CPEC energy projects are coal-based, which are being built under build-own-transfer principle. Any Chinese company building a power plant will own it once it is completed, and after securing an agreed-upon profit margin will transfer the power plant to the government of Pakistan. So what can the government do with such a large scale of power infrastructures? It sure can’t run them all by itself. One option can be to contract them out to foreign investors. But given that world economies are moving away from fossil-fuels based energy — particularly coal-based — to renewables, government may find it hard to rope in many foreign investors.

This shift towards renewable source of energy is based on efforts to contain global warming through curbing carbon dioxide emissions. Energy produced through fossil fuels like coal, oil, and gas are high in carbon content, while energy produced through renewable sources like solar, wind, and nuclear are virtually carbon-free. Based on this premise, not many international banks are going to finance a purchase of a coal-based power plant.

The result? These power plants can become a fiscal liability. A liability worth billions of dollars. Ideally, in this scenario, Pakistan should look to hedge against such potential risks by investing its time in other opportunities as well. Pakistan should look beyond CPEC

http://dailytimes.com.pk/opinion/29-Oct ... eyond-cpec

[chanakyaa]

First trade activity under CPEC kicks off -- Hundred containers full of promises (Or Chinese garbage)

GILGIT: Pakistan and China kicked off first trade activities under the China-Pakistan Economic Corridor project (CPEC) on Monday as over a hundred Chinese containers arrived at the Sust port after clearance from customs and an inaugural ceremony was held at the port a day earlier. Sust is a village in Hunza. It’s the last town in Pakistan on the Karakoram highway before the Chinese border.

The containers left for Gwadar after custom clearance.

The ceremony was attended by Chinese officials as well as Gilgit-Baltistan Chief Minister Hafeezur Rehman and the Force Commander of Gilgit-Baltistan, Saqib Mahmud Malik.

Addressing the inaugural ceremony, Mr Rehman said that under the CPEC the fate of GB would change, adding that one thousand Chinese containers would pass through the Karakoram highway in Gilgit-Baltistan every week. “This activity will bring prosperity and end unemployment in the region,’’ the chief minister said.

He said that it was an important day for both Chinese and Pakistani people since trade activity under the CPEC had officially started.

“The federal government has approved projects worth Rs72 billion in the region to provide GB with modern technology. The Shuntar pass, Babusar road and Gilgit-Skardu road would also be constructed under the CPEC,’’ Mr Rehman said.

Police personnel were posted on the containers as part of security measures for the CPEC.

Talking to Dawn, the customs superintendent at the Sust port, Ishaq Kiani, said containers loaded with CPEC projects goods were exempted from paying import tax. “Forty-five Chinese containers have departed from Sust and the remaining would leave after clearance,’’ he said.

[abhijitm]

Is pakistan looking at CPEC as a leverage over china? Just like how they dealt with US for it supplies to afghanistan via karachi.

[Bart S]

Is pakistan looking at CPEC as a leverage over china? Just like how they dealt with US for it supplies to afghanistan via karachi.

There is no commodity at the moment for which the CPEC route is cost effective or viable for trade to and from the Chinese heartland. At best it can be an emergency backup route and in case of the sea routes getting choked, but then again it is even easier for a say a western coalition to shut down Paki ports than it is to shut down the Malacca Straits/Southeast Asian sea routes, plus as a backup route to access the ocean, the routes through Burma are a lot more viable and make much more sense.

Also the only reason they have/had leverage over America was American stupidity and poor foreign policy decisions besides Afghanistan being land-locked. Not only do they have no such leverage against China but the Chinese practically own them and are their only source of weaponry.

They have zero leverage against China apart from threats/posturing/bravado with a gun to their own head, the usual TSP staple of terrorism and their unparalleled ability to shamelessly default on loans.

[Peregrine]

China and CPEC implementation

The Chinese government is concerned whether projects related to the CPEC will ever be completed in the wake of a growing security threat to Chinese workers and the international difficulties faced by Pakistan. In order to convert existing challenges into opportunities, the Chinese government has activated its state-run think tanks to understand the undercurrents impeding consensus between the provincial and federal governments in Pakistan.

As part of this campaign, two Pak-China think tank seminars were held, one each in Islamabad and Beijing, in September. Policymakers from both countries deliberated on the opportunities and challenges of the CPEC.

Convinced about the win-win dimension of the CPEC for both countries, the Chinese have become sensitive about any valid or invalid criticism of the CPEC in our smaller provinces. They are reluctant to assume that the criticism in KP and Baltistan aims more at expanding economic benefits for these regions than targeting the CPEC per se. They are taking the political rhetoric and dynamics in the provincial capitals too seriously. Routine bureaucratic delays and inefficiencies are being seen as a calculated move to block the CPEC’s ‘early harvest projects’.

Their other biggest worry is the concern about security cover for Chinese workers. They quote how many Chinese workers have been killed, kidnapped or fired at in Balochistan and Sindh in the last three years. They worry that the security situation is likely to deteriorate further. Three factors in their view are not to be ignored in this context: a) the Afghan Taliban are surging in Afghanistan and, therefore, may feel embolden to carry out violent acts in Pakistan; b) India has been providing funds for destabilising Balochistan and no respite is in the offing; and c) American global agenda to prop up India against Pakistan and China will not falter any soon. The net outcome is likely to exacerbate insecurity, not ruling out barbaric violent incidence.

While both sides recalled their strategic partnership in all sorts of fancy clichés, they also noted that misstating the CPEC as a strategic project risked raising false expectations, especially in Pakistan. Normally China does not publically question official statements of Pakistan. It was a bit distressing when they quizzed the figure of $46 billion investment in the CPEC. According to them, only $13.9 billion have been invested so far in multiple projects. There is no guarantee that the remaining $32 billion will be invested in the CPEC. At best, the oft-quoted figure is an estimate and its spending is subject to foolproof security cover for the Chinese in Pakistan.

Surprisingly, the Chinese side underplayed the importance of the Gwadar Port for China in terms of accessing oil and other commodities. It was vehemently contested by them that the Malacca Strait would never be blocked and in any case, China currently imports only seven percent of its oil from abroad. Other points made by the Chinese policymakers included possible army control of the implementation authority for the CPEC to be set up in Pakistan at their advice and better relations with Afghanistan as a must for link-up with the Central Asian Republics.

It was worrisome to note that the Chinese policymakers did not feel confident about Pakistan’s ability to protect their citizens. On the other hand, the Pakistani side made it clear that the CPEC enjoyed support across all political parties among Pakistanis. Nevertheless, the umbrella project should be seen generating employment and establishing economic zones, not becoming a conduit for trading Chinese goods and commodities only. It was hoped that the Chinese state companies would use the experience learnt by them in Africa and in the Kyrgyz and Kazakhstan republics to recruit Pakistani engineers and technicians in line with their qualifications. Projects should benefit wider sections of population, beyond the political and business elites.

Further, it was pointed out that the strength of bilateral ties comes from mutual strategic interests, tested interdependency in moments of despair, mutual willingness to transform relations to meet new and emerging challenges and unstinting public support in both countries for each other at regional and international levels. For commonality of interests and mutual respect, any change in government or leadership in either of the two countries, or the demise of the cold war era and its associated alliances or subsequent readjustments should not affect their relationship.

I pointed out in Beijing that the CPEC is unlikely to have smooth sailing due to the complexity of securing the Gwadar-Kashgar corridor and the differences among provincial governments on the composition of the package under the CPEC. A number of power projects under the CPEC have already hit snags. Some have been abandoned and some are moving very slow. With Afghanistan turning hostile and Iran cold towards Pakistan, the CPEC may face difficulties.

China will not change its current policy to support the CPEC as a priority pilot project of the ‘One belt, One road’ vision of its president, but the increased cost of security for the corridor is likely to weigh heavily on the Chinese leadership while moving beyond the early harvest projects. Both Pakistan and China should be ready to brace themselves for ‘potential setbacks’ and come up with matching resilience to stay the course.

Some of the points gained from the Beijing Seminar were:

• The unfailing bilateral commitment and determination to the CPEC and the results of the early harvest projects serve as catalysts to remove the political misgivings and bureaucratic inefficiencies confronting the CPEC in KP, Balochistan and Gilgit-Baltistan.

• Pakistan’s security situation is still precarious despite the success of anti-terrorism operations. Foolproof security cannot be ensureddue to the continuing Afghan imbroglio and the unending hostile Indian interventionist policy.

• Domestic power politics is not directed against the CPEC. It is all about maximising gains for regions in order to promote the electability factor of the party concerned. No sabotage of the CPEC is on the card in Pakistan.

• Chinese worries about Pakistan’s isolation and its impact on the CPEC are exaggerated. Pakistan cannot be isolated by India beyond a limit. India has overplayed its hostility card and was snubbed by China and Russia at the Brics summit. However, Pakistan may encounter another combined onslaught from India and the US against the CPEC, declaring it a strategic alliance rather than economic with some strategic content in order to isolate Pakistan.

• India is opposed to Chinese presence in the Indian Ocean. It will certainly treat the presence of the Chinese navy at Gwadar as an assault on its exclusive right to be the primary force in the Indian Ocean. Pakistan is prepared to deal with this new dimension of China-Pakistan friendship. However, pitted against India, Pakistan will be ignored by the international community.

• China and Pakistan’s friendship has withstood hostility from powerful quarters for the past 65 years. The economic transformation of their relationship will move ahead, albeit not without hurdles. However, perceptions, rhetoric, ground realities and results of early harvest projects (PRGRR) will greatly determine whether the CPEC can further Sino-Pakistan ties.
Cheers

[SSridhar]

Is pakistan looking at CPEC as a leverage over china? Just like how they dealt with US for it supplies to afghanistan via karachi.

I think the Chinese are too clever to allow that. Pakistan cannot employ the same technique with China.

[venug]

100 police-guarded Chinese containers arrive in Pakistan as CPEC trade kicks off

[venug]

India is opposed to Chinese presence in the Indian Ocean. It will certainly treat the presence of the Chinese navy at Gwadar as an assault on its exclusive right to be the primary force in the Indian Ocean. Pakistan is prepared to deal with this new dimension of China-Pakistan friendship. However, pitted against India, Pakistan will be ignored by the international community.

IOR...okay, but it would have been nice if the primary reason would be Chinese presence in PoK which is part of J&K. This is outright violation and India interestingly hasn't made a big deal out of this. As per Unfair, Mangla dam and infra work in PoK which is now part of CPEC, were done in 60s and yet we are fine with it.

[SSridhar]

Chinese investments may hurt rather than help Pakistan, say think tanks, IMF - Saibal Dasgupta, ToI

Two international think tanks have warned that Chinese investments in Pakistan will not boost the domestic economy. Instead, it will push Islamabad towards a major debt problem. This comes after the International Monetary Fund recently said that the Beijing-funded China Pakistan Economic Corridor (CPEC) has raised Pakistan capital account deficit to seriously high levels.

"In conclusion, the CPEC is unlikely to be a game changer for Pakistan's economy," London-based Capital Economics said in a recent report. "Given the poor prospects of reforms in the rest of the economy, we expect growth will be average around 4.5 per cent over the next decade, which is little changed from its performance over the past 10 years."

China is also taking the major risk of alienating India, which is uneasy about the project, the Washington-based Peterson Institute of International Economics said in a recent report. It said India might also try to create problems for the project, but did not explain how it will do that.

"China risks upsetting India with CPEC for several reasons, the most prominent being that some infrastructure projects will run through Pakistan-controlled Kashmir, the land India claims as its own. Moreover, CPEC's upgrades of the Gwadar port have created fears the facilities may one day be used to serve the Chinese navy. For these reasons, India could try to place roadblocks in CPEC's path".

Almost every day, Pakistani officials have been promising an amazing economic turnaround+ with the help of the $44 billion economic corridor, which is being financed and constructed by Chinese companies. The project helped bail out Pakistan's prime Minister Nawaz Shariff from a difficult situation last year when he faced growing criticism over power outages across the country. Nearly 80 per cent of the project funds have been allocated for electricity generation with the promise of producing a colossal $16,000 mw by 2030.

Some Pakistani experts and politicians have raised questions+ if the project was worthwhile as it would bind the country is a major debt wrap. Pakistan will bear heavy cost for machinery used in the project as most of it would be imported from overseas sources, Capital Economics said. CPEC has 8,000 Chinese workers who are likely to remit a major part of their incomes back home.

"What's more, since it will be Chinese companies running many of the new power stations, the income from selling the electricity generated will flow out of Pakistan," Oliver Jones, the researcher for Capital Economics said.

Though newspaper headlines in Pakistan proclaim the short-term benefits out of construction activity in the project, Jones is pessimistic about it.

"The short-term boost from construction is unlikely to be as much as the headline figures imply, and in any case there are big doubts the projects will be delivered on the scale that is planned," he said.

The IMF raised serious concerns saying that the project will push up Pakistan's current account deficit to 1.5 per cent of GDP next year. Medium-to-long term issues like increasing capital outflows "could arise from CPEC-related repayment obligations and profit repatriation," the IMF said in its final review of its three-year loan to the country.

[Peregrine]

CPEC in trouble : Pakistan's Khyber Pakhtunkhwa province to move Peshawar court

NEW DELHI : The China Pakistan Economic Corridor could be in further trouble as the provincial assembly in Pakistan's Khyber Pakhtunkhwa (KP) plans to move court against the way it is being implemented, several Pakistani media outlets reported.

The KP assembly will file a writ petition today in the Peshawar high court (PHC) about alleged delays in completing+ the western route of the CPEC, The Express Tribune reported.

"Our province has not been given its due share for CPEC western route. We have not been provided with any documents regarding CPEC . So speaker assembly will move court on behalf of the province as per mandate given by parliamentary leaders," said the KP government's spokesperson Mushtaq Ghani, The News International reported.

KP's Pakistan Tehreek-i-Insaaf (PTI) government wanted other opposition parties to become part of the petition, but they have stayed away from the issue. And a dismayed Federal government said that "moving court on such issues results in flight of foreign direct investment."

PTI has said that Prime Minister Nawaz Sharif and his PML-N party want to concentrate a major chunk of the CPEC project in the Punjab province - which falls on the eastern route - where the PML-N has been ruling for eight years.

The PML-N government at the Centre said the KP government is trying to distract attention from its "non-performance."

"Non performance of PTI's KP government whereby they could not bring about any significant development for three and half years, has led them to the present state of denial, and take this escape route," said Federal Minister Planning and Development Ahsan Iqbal yesterday, according to The News.

"I want to tell them (the KP government) that moving court on such issues results in flight of foreign direct investment. The investors don't see such action and course as friendly and conducive. It will be damaging for the CPEC," said Iqbal, who is also anchorperson for CPEC.

A "national-level project" like the CPEC should not be used for political purposes, the minister said.

CPEC has come fire in Pakistan lately. Last month, several Pakistan senators expressed grave fears that it could turn into another rapacious East India Company, if the country's interests aren't actively protected, Dawn reported. And an editorial in today's Dawn said CPEC is beset with weak planning, and the constant change in its timelines is sending a signal that Pakistan is a high-risk country for investors.
Cheers

[Peregrine]

The fine print on the CPEC portfolio

ISLAMABAD: Mega projects are all about multi-billion dollar budgets, fast-tracking schedules and triggering media hype. However, they also involve creating a consistent but compelling narrative for stakeholder consensus.

Pakistan too, is expected to get a “CPEC booster shot” of around $5 billion in Foreign Direct Investment over the next couple of years – with a promise to jump start its sluggish economy, at least in the short term. Since 2013, China-Pakistan Economic Corridor (CPEC) has had its fair share of highs and lows in the national media but a closer look reveals that the devil is in the details. Whilst the government claims that CPEC is the ‘Holy Grail’ of its development agenda, the picture is not as simple as it is portrayed to be.

Missing policy frameworks

Imagine the chaos that may ensue if we execute the $51.5 billion CPEC programme in the absence of a national transport policy. All stakeholder exercises in the past have failed to roll out a viable and fair national transport policy. The Federal Ombudsman Secretariat called for formulation of the national policy in February this year but the issue has been thrown on the backburner once again.

Policymakers need to decide the market structure and offer just the right incentives. For instance, if we liberalise the power market and offer targeted subsidies to firms willing to invest in rural areas, we can expect increased rural electrification levels. In the absence of such a winning policy blueprint, the participation of private sector in infrastructure projects will remain low.

Can we break the “connectivity bottleneck” in absence of such a policy framework? Only time will tell.

Who’s calling the shots?

A Prime Minister’s Delivery Unit has been set up in Islamabad that works with the Joint Cooperation Committee of China’s National Development and Reform Commission (NDRC) and Planning Commission. Although a multi-tier mechanism has been put in place besides setting up five joint working groups to deal with energy, transport infrastructure, special economic zones, Gwadar and planning; it is the Ministry of Finance that is calling all the shots. The role of the CPEC secretariat at the Planning Commission has been reduced to that of an inter-provincial coordinator.

CPEC planners lack the deep domain experience of putting systems and processes in place for the performance reporting of Engineering, Procurement and Construction (EPC) companies and frequent tracking of key variables. The only tool available at hand is an obsolete PC-iii form and the committee established by the prime minister in June 2015 to propose alternative mechanisms for monitoring of megaprojects has not yet come up with a new project management process suite.

Problems with the boomtown, Gwadar

Gwadar has an acute drinking water shortage as its Ankara Kaur dam has dried up. The Mirani dam will not able to meet its future water requirements after a mass migration of labour force takes place to complete projects such as Gwadar airport and coal power plants.

With a depth of only 14.5 metres, Gwadar can’t become a trans-shipment hub for transit trade from Central Asian states. Moreover, oil shipments from Gwadar to China via trains aren’t economically viable as it costs 800% higher than direct shipments to Chinese ports.

Iffy Economics: The Chinese model

In 2014, Sri Lanka borrowed several billion dollars from China for infrastructure development, on the condition that major contracts shall be awarded to Chinese firms without any competition. All these projects are now in shambles – with the Sri Lankan government reaching out to the International Monetary Fund for payback of expensive Chinese loans.

Drawing parallels, Pakistan is also repeating same mistakes by awarding contracts to Chinese players without any competitive bidding – with a sovereign guarantee of 18% return on investments.

Moreover, there is no guarantee that Chinese will pump money into our local economy by sourcing materials and labour force from Pakistan. The lion’s share of 400,000 jobs that will be created may go to Chinese labour force – not to mention the hefty cement and construction material import bill that may touch the billion dollar mark.

The way CPEC is unfolding now calls for new rules of business such that it mutually benefits both economies. All tenders should be open and transparent with mandatory provisions to source local materials, labour and management. The key lesson to learn at this stage is that there’s no such thing as a free lunch and there are no shortcuts to development.
Cheers

[SSridhar]

Shuffling CPEC - Edit, DAWN

THE constant changes being made to the bouquet of power projects under the CPEC umbrella shows the weak state of planning that went into the whole affair. Latest reports suggest that two more projects may have been knocked off the list due to reservations about the use of imported coal. In one case, a 660MW initiative has been disallowed completely, and in another, the project sponsors have been told to arrange foreign financing and shift to local coal, meaning their timeline has been disrupted, putting a question mark on the entire project. At the same time, the government is rushing to commission a new 1200MW plant to run on imported LNG.

The changes come after similar midcourse alterations to the terms in the solar tariff, as well as the collapse of the Salt Range coal-fired power project. Given these frequent changes, it is becoming clear that foresight and planning were missing from the launch of one of the biggest series of energy-sector investments ever in this country’s history. This is one reason why calls for greater transparency in CPEC are so pertinent. Clearly, the impact of imported coal on the external account of the country ought to have been studied long before the projects were approved, granted an upfront tariff, and issued letters of support and generation licences. The change of mind came at the Private Power and Infrastructure Board sometime in October. This is the same body that approved the projects and granted them letters of support earlier in the year. Perhaps such a strong emphasis on coal-fired power plants was never a good idea to start off with, due to their impact on the external account as well as the environment. But the way the government is changing its mind in the middle of the project timelines sends a signal to investors that Pakistan remains a high-risk country, and dampens investor enthusiasm further.

[SSridhar]

Karakoram Highway inadequate for CPEC traffic, says Senate panel - DAWN

The Special Committee of Senate on China-Pakistan Economic Corridor in its third interim report has raised concern over inadequate width of the Karakoram Highway (KKH) to cater to future traffic volume to be generated by the CPEC.

It also expressed concern over the safety of the people living along the Ataabad lake as cracks have appeared in the embankments on both sides of the lake because of construction activities on the highway.

The committee suggested immediate steps to strengthen the lake’s embankments and widen the KKH to meet future CPEC trade requirements.

ATAABAD LAKE: The report said that there was a general perception in the area that the landslide, which created Ataabad lake, was the result of weakening of mountains because of blasts carried out for construction of the highway. A huge landslide took place on the other bank of the Hunza river where no road existed and no blast took place.

The report noted that there were instances of a few lakes having been formed in the region because of landslides that blocked river paths and there were also a few cases where dams had been formed due to this phenomenon, but because of water pressure such dams developed cracks and finally broke and the gushing water swept away localities situated downstream.

“This danger also existed at the Ataabad lake till the spillway was constructed and steps were taken to firm up the falling debris,” it added.

KKH NARROW WIDTH: The committee felt that the KKH with its present width was inadequate to cope with the CPEC-generated traffic load as the width of containers plying on the highway was about three metres with high mountains on the one side and a deep gorge on the other.

The report noted that fatal accidents on the KKH were already frequent because of small width of the highway and with the heavy CPEC traffic plying on the highway it would be very difficult and risky for the area people and tourists to move from one place to another.

“With the present width of the KKH the increased traffic will move at a snail’s pace and negotiating frequent bends and turns will require high skills on the part of drivers. On the whole, the driving on KKH will be a highly risky and time-consuming undertaking,” the report said.

In view of the above limiting factors, the committee proposed that work on the construction of another two-lane highway on the other bank of the river be undertaken immediately and there should be bridges connecting the two highways at every 10 kilometres (a total of about 40 bridges) and vehicles should ply only on one direction on either road to avoid accidents.

ALTERNATIVE ROUTE: The committee proposed another alternative route for the CPEC by connecting Gahkuch to Shandur and to Chitral via Shandur Pass.

“There is a 120-km-long metalled road from Gahkuch to Gulag Muli in Plundar tehsil. The 27-km-long road between Gulag Muli and Shandur Pass is non-metalled. Beyond the Shandur Pass, the 60-km road to Boone is also non-metalled. The 80-km-long section of the road between Boone and Chitral is already metalled. From Chitral onwards we can touch the Swat Motorway and travel on the existing excellent roads in Khyber Pkhtunkhwa to rejoin CPEC routes.

“This alternative route involves construction of less than 90 kilometres of metalled road in not so difficult terrains and the committee recommends that this opportunity should be accorded priority,” the report said.

GAS PIPILINES: The committee recommended laying of a parallel pipeline along the proposed road to Tajikistan to bring natural gas from Tajikistan to Gilgit.

It noted that Tajikistan and China were working on a 1000-km-long $10 billion gas pipeline project to supply 30 billion cubic meter natural gas per year from its Galkynysh gas field to China.

“Let us explore possibilities of nego­tiating small modification in the Tajikistan-Afghanistan-Pakistan-India gas supply agreement to supply Gilgit-Baltistan with natural gas from Tajikistan.

ELECTRICITY: The report noted that $36 billion had been allocated for electricity generation to overcome loadshedding in the country, but it was a pity that not a single dollar of the CPEC had been earmarked for any power generation project in Gilgit-Baltistan.

The committee recommended that work on a high power grid connecting all power projects of the area be started immediately. It said that there was possibility of constructing one such grid at Chilas, the site of Diamer-Bhasha dam, and the other at Shandur in Ghizer district. The possibility of having a third one between Skardu and Neelum valley for onward connection to the Mangla dam project also appeared to be feasible and necessary, the report said.

EXTENTION OF GILGILT AIRPORT: The report said that flights between Islamabad and Gilgit were based on visual sighting and suggested that small ATR42 aircraft could conveniently handle the descent and turn simultaneously and noted that it was becoming very risky for larger aircraft such as B737 to negotiate safe landing.

In order to manage the fast-growing air traffic between Islamabad and Gilgit, the committee recommended that the number of flights of ATR42 aircraft be increased to an average of four flights a day or around 50 flights (both ways) a week.

[IndraD]

provincial assembly in Pakistan's Khyber Pakhtunkhwa (KP) plans to move Supreme court against CPECfor the way it is being implemented .

Our province has not been given its due share for CPEC western route. We have not been provided with any documents regarding CPEC+ . So speaker assembly will move court on behalf of the province as per mandate given by parliamentary leaders," said the KP government's spokesperson Mushtaq Ghani, The News International reported.

PTI has said that Prime Minister Nawaz Sharif and his PML-N party want to concentrate a major chunk of the CPEC project in the Punjab province - which falls on the eastern route - where the PML-N has been ruling for eight years.

http://timesofindia.indiatimes.com/worl ... 285770.cms

[IndraD]

Chinese investments may hurt rather than help Pakistan, say think tanks, IMF

IMF has said CPEC has raised Pak capital account deficit to seriously high levels

http://timesofindia.indiatimes.com/worl ... 276325.cms

[Peregrine]

Gwadar Port opening on Sunday

ISLAMABAD: The civil and military leadership of China and Pakistan will open international port at Gwadar on Sunday. Prime Minister Nawaz Sharif and Chief of Army Staff General Raheel Sharif will see off Chinese containers leaving for Africa.

Heads of the armed forces, diplomats, chief ministers of Balochistan and other provinces and other dignitaries will be invited for this event in the next 48 hours.

Defying designs of India and its allies, loading of 300 containers will be completed on Saturday and they will depart from the port the next day.

To counter Gwadar, India has invested $12 million in Iran’s Chaubahar port, which is no match to Gwadar port. Balochistan Chief Minister Sanaullah Zehri is going to China on invitation next month.
Cheers

[SSridhar]

Chinese ship, trade convoy reach Gwadar port - DAWN

GWADAR: The first trade convoy carrying Chinese goods for export through the western route of the China-Pakistan Economic Corridor (CPEC) and a Chinese ship arrived at the port here on Friday.

Official sources confirmed the anchoring of the ship at the port and said another vessel was expected to arrive within 24 hours.

The second trade convoy was scheduled to reach here on Saturday (today).

The goods will be exported to countries in the Middle East and Africa.

A ceremony marking the opening of trade activities through the corridor will be held on Sunday, which will attended by Prime Minister Nawaz Sharif, Chief of the Army Staff General Raheel Sharif {Why COAS?} , Balochistan Governor Muhammad Khan Achakzai, Chief Minister Nawab Sanaullah Zehri and ambassadors of 15 countries.

Meanwhile, the Gwadar Yakjehti Council took out a procession in support of the CPEC.

Speaking at the Gwadar Press Club, the organisers of the procession termed the CPEC a game-changer for the region, especially Balochistan, as it would bring about progress and prosperity.

They said the elements opposing the CPEC were not well-wishers of the people of Gwadar.

“We are happy that Gwadar is at the centre of the CPEC because this will remove poverty and create jobs for the local people,” one of the speakers said.

The speakers praised the role of the Pakistan Army and said the corridor could not have been completed without the support of the armed forces.{One more 'paid crowd' by the Army to jack up its case for taking over the CPEC from the civilians} They added that the council would always try to protect the rights of people of Gwadar.

[Peregrine]

First ship leaves Gwadar amid fanfare

CEREMONY and fanfare marked the departure on Sunday of the first vessels from Gwadar port carrying cargoes that originated in China and Pakistan.

Prime Minister Nawaz Sharif assured the nation that “CPEC is for everybody”, trying to remove misgivings in the smaller provinces about the utility of the project.

A short ceremony was held at the port, including speeches, one duet sung by a Pakis­tani and a Chinese singer and videos produced by the Inter Services Public Relations. After unveiling a plaque, the prime minister and Gen Raheel Sharif stood for a photo op in front of one of the vessels loaded with containers.

Lyrical tributes paid to the corridor project and Pakistan-China friendship sometimes went over the top, sounding part Homer and part Kipling.

Sharif says ‘CPEC is for everybody’; Chinese envoy terms the event significant for Sino-Pakistan ties
In one video, for example, the corridor project was described by the narrator as “giving Pakistan a position no less than that of a jewel in the crown”. It was an awkward choice of words given the colonial past it evokes.

The ceremony was attended, among others, by Gen Rashad Mehmood, Chairman of the Joint Chiefs of Staff Committee; retired Lt Gen Nasser Khan Janjua, Adviser to the Prime Minister on National Secu­rity; Lt Gen Aamir Riaz, Commander Southern Comm­and; Jamiat Ulema-i-Islam chief Maulana Fazlur Rehman and Raheela Hameed Khan Durrani, the Speaker of Balochistan Assembly.

The prime minister described the arrival of the convoy as the “break of a new dawn” and “a watershed event”, emphasising that the vision of a shared prosperity that underlies the China-Pakistan Economic Corridor (CPEC) is badly needed in a world torn by conflict.

He also praised the Frontier Works Organisation (FWO) for completing the road network in the face of a harsh terrain and trying weather conditions.

The ISPR videos played during the event described CPEC as the fruit of “Gen Raheel Sharif’s vision”, whereas the prime minister described it as a vision common to Chinese President Xi Jinping’s worldview and the government’s own Vision 2025, “which aims to make Pakistan a hub” of regional connectivity.

He said the federal government had spent Rs49 billion on laying the road network in Balochistan, a part of CPEC.

A day earlier the director general of the FWO told Dawn that Rs35bn had been spent over the past two years on these projects. It is not clear yet where the discrepancy comes from.

The remarks by the Chinese ambassador were more matter of fact. He described the day simply as “of significance to China-Pakistan relations”.

“This is the first time that a trade convoy successfully passed through the western part of Pakistan from the north to the south,” he said. “The event proves that the port “has restored its designed handling capacity.

“This is also the first time that China and Pakistan have co-organised a trade convoy through Pakistan to Gwadar port,” the ambassador said.

EMPTY CONTAINERS: Several containers that were brought to Gwadar were empty, according to people privy to the arrangements. Pakistan’s persistent trade deficit means that containers regularly accumulate within the country and often have to be shipped out empty.

Three parties came in for special mention during the ceremony. The President of the Gilgit Baltistan Chamber of Commerce, Qurban Ali, was one. He played a role in facilitating the Chinese trucks after their entry into Pakistan, as well as making arrangements to send enough cargoes from Pakistan to China so that sufficient containers would be available in China for the return journey.

The role included helping in clearing of the consignment and transfer of the contents of some of them into Pakistani trucks.

Special permission was obtained from the ministry of communications to allow about 25 Chinese trucks to make the full journey to Gwadar, he said. He put the total number of trucks that entered Pakistan from China at 125.

“We are sitting at the entry point of CPEC,” Qurban Ali told Dawn. “This project could change our destiny.”

He pointed out that a growth in ties was inevitable, although keeping the road open for commercial traffic throughout the year presented some challenges.

An air link between Skardu and Kashgar is also under consideration, as well as between Gilgit and Urumchi, he claimed.

China is also considering building an airport at Tushturghun, the next major stop on the Karakorum highway after it enters China.

Other operators who were awarded for their contribution included Agility, a logistics provider, and the Capital Group of Companies, which helped arrange the empty containers for outward shipment, as well as one of the two vessels berthed at Gwadar port for the exercise.

Sino Trans, a state-owned Chinese logistics provider, arranged for the Chinese shipment. The company’s senior executive was given a chance to speak at the ceremony.

He praised the efforts of the army in arranging the convoy and said it would spur the corridor projects further. “CPEC is a great systematic project,” he observed. “We are still on a journey to discover the internal and external challenges we are facing through this pilot convoy. There is still a lot of work to do, especially in certain regions where people still have apprehensions about the change that CPEC is going to bring for them.”

It took a strong push from the FWO to bring all these parties together and make this convoy possible. Having done so, they have demonstrated the operational viability of the routes and the port.

But the question remains whether the routes and the port used in this exercise will become commercially viable soon enough so that similar traffic can be generated in the absence of a coordinated push, when market forces alone will decide which port to use for outbound cargoes. This question will remain long after today’s vessels have departed. Reality bites!

Saleem Shahid adds: Addressing the gathering, Balochistan Chief Minister Nawab Sanaullah Khan Zehri said the Gwadar port had become the nerve-centre of the China-Pak Economic Corridor projects being executed in Pakistan.

Mr Zehri said the Army had played an important role in making Gwadar port functional and in execution of projects pertaining to CPEC.

He said that CPEC would not only connect Kashgar to Gwadar but it would also going to become a “game changer” for the entire region.

He said that work on construction of a free trade zone in Gwadar was near completion. “We already have issued SROs for customs and duty exemption in the free trade zone,” he said.

The chief minister said the Balochistan government was enjoying the support of the federal government and China in execution of development projects.

Comments : A total of 125 Trucks from China and "some" Empty Containers from Cwapistan! Wow a "Big" Container ships calling Gwadar for may be 200 Containers. Front, Front Watching Happening, Happening What.
Cheers

[anupmisra]

first vessels from Gwadar port carrying cargoes that originated in China and Pakistan

So here's the story so far:

1. 125 chini trucks driven by chinis enter bakiland from the north.
2. 125 chini trucks laden with chini containers travel the length of bakiland to get to "gawadar"
3. On the way these trucks pick up empty containers from baki shippers
4. A chini logistics manager handles the entire transaction
5. On reaching 'gawadar", a chini container ship takes over chini second rate maal to be shipped to other ports
6. Chini truckers and engineers are felicitated with songs, prayers and awards by the bakis who go delirious


All I see is that it's a home run for the chinis. What did the bakis get from this simple transaction? They have nothing to export anyway (note the empty containers).

[Bart S]

^Prostitutes also moan and make noises during the act, either because they want to or their customers want them to. The Pak-China relationship is nothing more.

[sanjaykumar]

Yes but Pakistan may find that the best way to make a whore moan is not to pay her.

[partha]

An article on CPEC from Ashok Malik who has an insider view of the Modi Govt.

http://blogs.timesofindia.indiatimes.co ... continent/

As India opened up its economy in 1991, this absence of sufficient economic osmosis with its neighbours emerged as a paradox. Every prime minister since then, irrespective of party and whatever his individual instincts and political beliefs, came to accept that as India’s economy grew, Pakistan would be compelled by business and commercial logic to engage with India.
This could be a product of enlightenment or self-interest, internal pressure or global currents: but it would happen. It would make Pakistan, depending on where it was placed, India’s Canada or India’s Mexico. The persuasiveness of the north-south trade route could not be rejected forever.
CPEC alters that supposition. It replaces Pakistan’s dependence on a north-south trade corridor with its bet on an east-west corridor, from Kashgar (Xinjiang province) to Gwadar. This trade route is fairly unprecedented and is an expression of a new economic and strategic geography that China wants to define.

CPEC challenges the BS view held by some of our policy makers (a view also promoted by the likes of good Haqqani) that India-Pak could be like US-Canada and that as Indian economy grows, Pakistan would want to make peace with India and reap the benefits from opportunities that a bigger Indian economy would provide and hence India should tolerate terror attacks and concentrate on economy. The author argues that CPEC challenges this view. I think he is right.

By embracing the east-west corridor (CPEC) Pakistan is not just abandoning its obvious north-south trade alignment but in effect turning its back on the subcontinent and on South Asia. It sees itself as culturally in West Asia and strategically as located within the Chinese politico-economic zone. This means that irrespective of how quickly or impressively India’s economy may expand in the coming decades, Pakistan is not interested in a linkage let alone integration. New Delhi’s assumption that this was a long-term inevitability no longer holds.
How does India respond? It can wage a political and diplomatic battle to make CPEC un-implementable. This is possible but not probable.
A harder school in the Indian establishment believes that if the subcontinent is no more the unit of reckoning for Pakistan, then India’s interest in recognizing and preserving shared tangible legacies, including natural and water resources, should correspondingly decline. Expect more on that in the coming days.

Good that Modi Govt recognizes the point the author makes about CPEC and is working on changes to the long term policies w.r.t Pakistan.

[SSridhar]

Has CPEC now kicked off? - Khurram Hussain, DAWN

NOW that a couple of hundred containers have been loaded onto two vessels at Gwadar port and dispatched to various destinations around the world, can we say that CPEC is up and running? The short answer is no. The long answer is not yet.

The convoy that brought the containers to Gwadar, and the ceremonial send-off at the port with the usual unveiling of plaques, was not a commercial endeavour. It was a forced push, mostly led by the FWO [Frontier Works Organization] whose DG said he did it to help dampen some of the “despondency” that was beginning to surround the project. Fair enough, the despondency was indeed addressed and a point was indeed made that the roads and the port infrastructure exists to handle this volume of cargo.

But to get an idea of what it took to make it possible, consider a few details. First, the Chinese were apprehensive, feeling that it is not yet commercially viable, and the government too felt it was a little premature to undertake such a task. The Chinese actually aired their apprehensions briefly when Yuan Jianmen, the executive from Sinotrans, the company that arranged the convoy of goods from the Chinese side, said that “there is still much work to do, especially in certain regions” where people still need to be persuaded of the benefits that CPEC will bring for them.
The convoy of trucks to Gwadar had a security escort involving more than a hundred personnel, and as many vehicles as there were trucks.

Next the Chinese raised the point that there are not enough containers available on their side of the border for export shipment from Pakistan, since most of them are booked already, so a special consignment had to be arranged to go to China carrying Pakistani goods just so containers for the return journey would be available over there. The services of a businessman from Gilgit were utilised for the purpose of arranging this consignment of goods.

The convoy of trucks itself had a security escort involving more than a hundred personnel, and as many vehicles as there were trucks. In addition, there was helicopter protection throughout the journey, as well as drone surveillance from above. The convoy took more than two weeks to reach Gwadar, so stops had to be arranged for such a large number of trucks, which required sleeping arrangements, food and parking space. In some locations, even R&R (if you get my drift) had to be arranged for the drivers to incentivise them to take the less trodden path west of the Indus river.

From Quetta to Gwadar alone, the journey took four nights, with the fifth being in Gwadar. The route is barren and empty except for two small towns along the way (Panjgur and Turbat), with no maintenance facilities for vehicular traffic, no place to get food for the drivers, and no place to spend the night. The FWO actually arranged for proper ‘harbours’ for the trucks in four locations along the N85 highway using Alaska tents for sleeping and food brought from outside. It was quite a logistical feat if you can imagine the amount of space that number of trucks takes up, and that the size of the personnel travelling was in the hundreds (including security detail).

Clearly the roads are there for trucks to travel on, but it is not yet viable for commercial traffic to ply these roads to access Gwadar port. Add to this the distance. According to one person (a commercial party) that was involved in the arrangements, the western route taken by the trucks will never be viable for cargoes originating in Lahore or south of Lahore. That means it’s only viable for cargoes originating in KP, upper Punjab, Gilgit-Baltistan or China. Considering most of Pakistan’s export base is located around Lahore and south of Lahore, this means the route will only be commercially viable for a small number of Pakistani producers, or for the Chinese, who continue to harbour strong apprehensions on security as well as the costs of utilising the western route.

Of course none of this means that the road network should never have been built. It should be built. In time, it has to be expanded from the current two lane alignment to six lanes. The Karakoram Highway took almost three decades before it began to grow into a large commercial artery, and that process still has a long way to go before it reaches full bloom.

That is the point here. The roads being built under the CPEC connectivity projects are a long-term proposition. It will be a couple of decades before they become arteries for major commercial traffic, but when that begins to happen, it will definitely be a ‘game changer’ for Pakistan. Some unscrupulous real estate agents are already beginning to cash in on the headlines and trying to sell Gwadar property under the pretext that “trade has now begun, prices there are about to skyrocket”. Don’t fall for this line! Trade has not started at Gwadar yet.

At this point, it is important to start thinking of ways to literally push cargoes towards Gwadar, provided its cargo handling is reliable enough. So here is a suggestion. A large number of containers leave Pakistan every year completely empty because we have a trade deficit with the outside world, and since more is imported than exported, containers naturally tend to accumulate within the country. Empty containers are routinely shipped out of the country, and their transport and insurance costs are lower. In fact, almost half of the containers that went out of Gwadar port as part of this exercise were empty. Is it possible to make a rule that all empty containers must be shipped out of Gwadar from now on? This will help de-clog Karachi’s two ports, and push traffic towards Gwadar.

In any case, the exercise was a successful demonstration of the infrastructure built so far, but it will be many years before real commercial traffic begins to flow along it.

[Arjun]

China Should Either Make Peace With India Or Forget About CPEC

[svinayak]

Rothschild on China
He advises China to invest on land infrastructure and not focus on sea trade.
Very significant looking at the global changes and Chinese infrastructure move.

[Peregrine]

Has CPEC now kicked off? - Khurram Hussain, DAWN

The convoy of trucks itself had a security escort involving more than a hundred personnel, and as many vehicles as there were trucks. In addition, there was helicopter protection throughout the journey, as well as drone surveillance from above. The convoy took more than two weeks to reach Gwadar, so stops had to be arranged for such a large number of trucks, which required sleeping arrangements, food and parking space. In some locations, even R&R (if you get my drift) had to be arranged for the drivers to incentivise them to take the less trodden path west of the Indus river.

SSridhar Ji :

Sir Ji, the Pakistani Army as a Business Conglomerate is into Wedding Halls, Golf clubs, Corn Flakes etc, etc. & etc. and is also looking for new avenues of Business.

The above shows that the Pakistani Army is also in the R & R Business especially in the ability to provide Portable Nookie Houses at Short Notice as stated above that provided R & R facilities for the Truck Drivers.

One can therefore conclude that the Pakistani Army having got into the International Chain of Nookie Houses will now vie and compete for the International Nookie House of the Year.
Cheers

[Rohit_K]

Pak Senators fear China may use CPEC to enhance trade with India
http://www.dawn.com/news/1296886/senato ... with-india

ISLAMABAD: Some lawmakers expressed concern on Wednesday over the possible use of the China-Pakistan Economic Corridor (CPEC) by China to enhance trade with India. During a meeting of the Senate Standing Committee on Planning and Development, some lawmakers were of the view that China was investing in the CPEC project to explore new vistas of trade with different countries right from neighbouring India to Central Asian states and Europe.

Chairman of the committee Syed Tahir Hussain Mashhadi endorsed a point of view of a senator that with improved rail and road links with India through Munabao and Amritsar under the CPEC, China would expand its trade not only with Central Asian states and European countries but also with India to economically strengthen its eight underdeveloped provinces.

“China will definitely use the CPEC to expand trade with India because one who invests always watches one’s interests first,” Mr Mashhadi said.

He said China’s trade relations with India were far bigger than with Pakistan as China had inked $100 billion trade agreements with India last year.

“Irrespective of sour Pakistan-India relations, China will do trade with Indian through the CPEC,” Mr Mashhadi said.

[Peregrine]

X Posted on the PESW and STFUP Threads

CPEC project: Nascent industries afraid of big Chinese firms

ISLAMABAD: Despite prospects of hefty benefits in many aspects, the business community sees the $45-billion China-Pakistan Economic Corridor (CPEC) project a threat to the domestic industry if the government does not come up with certain preemptive measures to give protection to vulnerable sectors of the economy.

Some business segments think that the flagship project poses new challenges to the industry in Pakistan, especially those sectors that are at the stage of infancy or smaller in size compared to gigantic Chinese industries.

The industries in China have achieved economies of scale over the years primarily because of a huge domestic market, industrial-friendly policies and scores of incentives from the government.

Apart from CPEC, Pakistan has also not been a major beneficiary of the free trade agreement (FTA) with China as the arrangement gives an edge to Beijing and promotes more imports than exports from Pakistan.

The business community fears that if the corridor is used only for exports from China without giving a fillip to Pakistan’s industries by providing a competitive environment, it will prove damaging to the domestic industrial units.

“It is imperative for the government of Pakistan to keep in mind all these factors while negotiating the second phase of the FTA with China,” suggests Atif Iqbal, Executive Director of the Organisation for Advancement and Safeguard of Industrial Sector. He is of the view that in talks with China some leverage should be provided for Pakistan’s products to enable the local industry to compete well in the race.

“CPEC can only be beneficial if Pakistan’s exports are ramped up with facilitation for the local industry,” he says.

In order to create a win-win situation under CPEC, the two neighbours will have to pave the way for a healthy competition among different industries without cutting roots of each other through unfair price wars or dumping of goods.

A new vision needs to be developed by the two sides who will pledge to facilitate each other’s economies.

Incentives-filled policies

Individually, in order to shield its infant and vulnerable industries, Pakistan should frame policies in such a manner that these could offer incentives for giving a boost to productivity and pushing exports to China and other markets by taking advantage of the infrastructure being built under CPEC, rather than turning Pakistan into a consumer market.

Owing to electricity and gas shortages, high production costs and the terrorism and extremism threat, the domestic industries have been operating at a disadvantage over the years.

Though some gains have been made on the political and security fronts, the economic indicators have yet to show a marked turnaround. Exports, in particular, are an area of concern as shipments have dwindled to less than $20 billion from $24 billion in the past two years and are still falling.

Policy-makers should draft such policies that have a clear roadmap and a growing focus on future developments.

However, before achieving economic stability as well as economies of scale, the domestic industries are direly in need of protection. If the government desires to have sustainable industrial growth, it must not only ensure provision of basic utility services including gas and electricity, but also create an atmosphere conducive for business and strengthen the institutions responsible for keeping a check on unfair trade practices.

Effective policy implementation

Some recent government decisions such as announcement of the Strategic Trade Policy Framework 2015-18 and reactivating the National Tariff Commission are pragmatic steps for improving the situation. However, such policies will only bear fruit when these are implemented forcefully.

The tariff commission needs to be extra vigilant and take immediate notice of unfair trade practices like dumping and subsidisation of foreign goods. The survival of the domestic industry largely depends on price equilibrium in the market.

In the current scenario when free trade accords are increasingly being negotiated and signed, it is imperative for the trade regulatory authorities of Pakistan to stem the unfair trade practices and safeguard the interests of domestic industry.

The business community also wants to see that investigations are conducted timely by the tariff commission for trade remedy, strictly in accordance with the international treaties and commitments. In case of delay, the importers or exporters will take undue advantage by resorting to unnecessary litigation to abuse the process of law as has been observed in the past.

Ub Pachhtaye Kaa Hoyi Jub Chirdian Chug Gaye Khet?

Cheers