China Signs Power Generation Deals With Pakistan

Comment by Riaz Haq on June 5, 2012 at 4:33pm

Here's Dambisa Moyo's interview on China's relationship with Africa:

Q: As for China’s specific role, you seem not so much politically worried as economically, even environmentally, concerned. It’s not that China’s actions are necessarily wrong, but that the West should be aware of the implications.

A: There’s nothing wrong about China going around the world making resource deals to support its growing population. What it’s doing makes a lot of sense. Yes, my concern is that other countries will not catch on until it is too late. In a zero-sum world, what will happen if China wins the race for resources? Other countries seem to be asleep while China is making a concerted effort. Some 24 ongoing wars and violent conflicts have their origins in commodities, and this trend is poised to continue. China is befriending what I call “the Axis of the Unloved”—countries and regions such as Africa, Brazil, Colombia, Argentina and parts of Eastern Europe that have been basically ignored by the Western economies. China is the leading trading partner and foreign investor in many of these countries—a very different approach to the West’s largely aid-based model.

Q: The Chinese economic edge in this is that its state capitalism offers advantages that the Western laissez-faire model does not.

A: Favoured Chinese companies have a zero or near-zero cost of capital. State-owned banks provide highly concessional credit lines, in the form of government grants or low-interest loans. Favoured companies also benefit from tax breaks and the preferential allocation of key contracts. Like the US$12-billion credit line extended to Wuhan Iron and Steel, a major steel producer, by the state-owned China Development Bank, for financing “overseas resource base construction.” And of course it helps to have a war chest of over US$3 trillion, while Western economies are struggling with cash constraints.

Q: The Chinese political edge is that it’s famously untroubled by governance issues in the countries it deals with.

A: Well frankly, in practice there is little to distinguish between the commodity counterparts of Western nations and those of China. U.S. and European countries are just as happy as China to strike deals with countries with less than pristine reputations—whether it’s Saudi Arabia, Venezuela or Russia. Two wrongs don’t make a right, but in this narrow sense, it’s unfair to constantly point fingers at China.

Q: So you think that criticism of China on both scores—cheating, so to speak, economically and being too comfortable with dictators politically—is often unfair and wrong?

A: Cheating is one thing, meddling in the markets is a whole other thing. Virtually all governments meddle in the commodities markets. Western governments are particularly egregious in this respect. The United States paid US$6 billion in commodity subsidies in 2010. OECD countries spend a total of US$226 billion on agricultural subsidies yearly. And in the EU, the Common Agricultural Policy sees some 40 billion euros spent on direct farm subsidies. So if meddling in the market is “cheating,” China has a lot of company. And the West has never had much of a problem dealing with despots and dictators if there is a benefit to be gained.

Q: For Third World nations, dealing with China rather than the West is often more attractive, you point out, not just for governments, but for the broad public. Why?

A: I think the reasons are quite clear. China pursues strictly business, symbiotic relationships, trading access to commodities for infrastructure, employment and other economic benefits. Take employment. The construction of the Imboulou Dam in [the Republic of the] Congo in 2010 employed 2,000 locals (compared to 400 Chinese). Survey results indicate that Africans much prefer to deal with the Chinese than with Westerners. In Ivory Coast, Mali, and Kenya, more than 90 per cent of respondents see China’s economic growth as “a good thing.” In Tanzania, 78 per cent agree, but only 36 per cent feel the same way about American influence. The difference is stark. Across the developing world, people want jobs, infrastructure and investment and the Chinese engagement does exactly that. Contrary to the assertions you commonly find in the Western media, I have seen no evidence that the Chinese are exploiting the countries they make deals with. In this sense these are old wives’ tales. To my mind, China’s strategy depends on mutually beneficial relationships—at least it has thus far.

http://www2.macleans.ca/2012/06/04/dambisa-moyo-on-resource-scarcit...

Comment by Riaz Haq on July 6, 2012 at 10:21pm

Here's Daily Times on Neelum-Jhelum dam progress:

The assembling of Tunnel Boring Machines (TBM) to dig mega tunnels according to international standards for 969 megawatts (MW) Neelum-Jhelum hydropower project is in process and will likely be operative during the first week of August 2012

Following international bidding, two German made TBMs costing Rs 8 billion had been installed on the project site Nauseri, Azad Jammu and Kashmir (AJK), where assembling of two giant mechanical milestones are under process and likely to be completed during last week of July and operative in the first week of August.

Speaking with Daily Times, Neelum-Jhelum Hydropower Company (NJHPC) CEO Lt Gen (r) Zubair Ahmed informed that with the help of TBMs, the early completion of 969 MW NJHP project could be possible and contribute in saving of Rs 67.5 billion revenue.

He said there is no truth in media reports that TBMs are not feasible for cutting mountains and could damage the entire project, adding that ‘project team had diverted river Neelum on October 2011, while 37.6 percent work on TBMs has been completed’.

He further said that after completion of 969 MW NJHP, more than 5.1 billion electricity unit would be generated, which will later be taken into the national grid at the point of Gakhar, Gujranwala, while the government would collect revenue of Rs 45 billion per year, adding ‘cost of per electricity unit generated from NJHP has been estimated Rs 2 per unit’.

This billion-dollar project was initiated in 2008 and estimated time of completion was announced 2015, however flood havoc completely destructed the whole infrastructure, and after the new design of NJHP, PC-1 cost was once again revised which increased its cost 135 times, which was approved by the Planning Commission on June 18 as Rs 274.822 billion new cost of this hydropower project.

Explaining the progress on Neelum water diversion tunnel, he said that more than 24 kilometres tunnel has been constructed out of total accumulated length 63 kms including entrance rage of tunnel through driller blast and other heavy mechanical equipment, however remaining part of tunnel would be completed soon as once TBMs would be operative. He also informed that the federal government has approved Rs 2.4 billion, which would be released soon and spent on construction of small projects including schools, model parks and health units for displaced persons from the site, while the land acquisition issue has also been resolved.

Out of 4,200 kanals of land, 3,850 kanals land has been acquired; however remaining land of 121.6 marlas is under litigation and would be resolved soon.

If Pakistan succeeded to commission NJHP before completion of controversial Indian hydropower project, it would not only grab water priority rights on the Neelum river, but also help Pakistan’s legal battle in the Permanent Court of Arbitration (PCA) at Hague against India on Kishanganga hydropower project as India is building it on the same river in held Kashmir with faulty design that negates the Indus Water Treaty. NJHP management was of the view that the completion of controversial Kishanganga could cause decrease in water inflow up to 14 percent in river Neelam, adding, ‘the country could face loss of $321 million annually, and agri-land of Muzaffarabad could be barren’. Public sector power managers ascertained that annual benefits of the project have been estimated at Rs 45 billion, adding that the project would payback its cost in about seven years.

http://www.dailytimes.com.pk/default.asp?page=2012\07\06\story_6-7-2012_pg5_12

Comment by Riaz Haq on July 18, 2012 at 10:19am

Here's Der Spiegel story on Chinese investment in Karakoram Highway connecting Pakistan with China:

China is shelling out massive amounts of money and manpower to improve Pakistan's Karakoram Highway, the highest motorway in the world. The supposed gift to its neighbor is a perfect example of China's economic strategy of taking on short-term expenses for the sake of long-term benefits.

The road roller struggles up the mountain, tar steaming in the heat. Several Chinese and Pakistani workers stand there, leaning on their shovels and observing how their boss, Mr. Li, operates the yellow machine. A few meters on, he stops and jumps out on the unpaved side of the road, directly before a chasm about 1,000-meters (3,300-feet) deep. Seemingly unfazed by the elevation, he nods to his workers and calls out: "That's how it's done. Any questions?"

Whether its high-rises, ports or streets, China is building -- worldwide and on a grand scale. The expansion of the famed Karakoram Highway from China to Pakistan, a part of the Silk Road trade routes, is just one of China's massive construction projects and an example of Beijing's strategy for the future -- investing a lot and giving generously in exchange for long-term benefits.

The almost 1,300-kilometer (800-mile) long path, which runs from Kashgar in western China's Uighur Autonomous Region almost to the Pakistani capital Islamabad, is set to be transformed from a dusty, bumpy road into a modern mountain highway. The section on the Chinese side is already finished. "For Beijing, it's about being able to export more goods to Pakistan, through the ports of Karachi and around the world," says China expert Fazal ur-Rehman of the Institute of Strategic Studies in Islamabad. Plans also include a future pipeline that runs along the Karakoram Highway, allowing China to bring in Iranian gas.

But government circles in India, China's rival in Asia, are concerned that after the expansion China will also be able to transport tanks and other heavy military equipment to the Indian Ocean. After all, China already showed its aggressive potential when it marched into Tibet in 1950, and a few years later when it occupied other parts of the region....
----------
The Chinese have summarily decided to drill a tunnel to bypass the newly created Attabad Lake, now a tourist attraction. "It will now take another few years," says Li.

Undeterred by the challenge, the Chinese hauled in heavy equipment. And where bricks were needed to protect the road with walls against landslides or falling rocks, brickworks were swiftly built on site. "Where protective walls were of no use, we built a tunnel," says Li.

Kilometer by kilometer, a monument to Chinese foreign economic policy is being erected. Beijing doesn't worry about the short-term rates of return for its building projects abroad, but on the long-term trade options that they open up instead. The country is also interested in gaining allies with its generous help. In many countries besides Pakistan, Chinese engineers are working on key infrastructure projects. And often the Chinese are also investing in exactly the places from which the West has long since retreated -- such as many African countries rich in natural resources.

http://www.spiegel.de/international/world/china-expands-karakoram-h...

Comment by Riaz Haq on December 26, 2012 at 10:59am

Here's a News report on Pak-China ties:

Pakistan is China’s Number 1 ally and the most special country for China.

These were the words of Prof Feng Zhongping, President, China Institute of Contemporary International Relations (CICIR), as he addressed members of the Pakistan Institute of International Affairs (PIIA) at the institute Tuesday morning.

The occasion was the visit by a five-member delegation of the CICIR who had an interactive discussion with a compact group of PIIA members and journalists. Chairperson of the institute, Dr Masooma Hassan, presided over the proceedings.

“Our ties with Pakistan”, Zhongping said, “are historic and as such we treat Pakistan as a very special country”. Pakistan, he said, had a geo-strategic location which was of pivotal importance to China. He said that Pakistan was an old friend of China and added that China had a history of never letting her friends down. Pakistan’s population of 180 million was of great consequence to China, he said.

Another member of the delegation, citing the importance of Pak-China ties, pointed out that it was Pakistan that helped open up China to the world by starting off an air service between the two countries and cited Pakistan’s efforts in bringing the US and China closer.

Pakistan’s location, Zhongping said, was very important as access to the Indian Ocean would make China a two-ocean power, with the Indian Ocean to one side and the Pacific to the other which would benefit the country greatly in light of her rapidly expanding trade with the world.

Asked by a questioner about the validity of the current perception that the US was grooming India to take on China militarily and was building India as a sequel to China, he said that it was premature to make a prognosis there and lots would depend on the Indian stance towards the issue of which there were no indications as yet. He said that all chances were that India would not be sucked into the US strategic plans of the US in the area as that could affect her rapid economic advances and undo the fruits of her development effort....

http://www.thenews.com.pk/Todays-News-4-146641-Pakistan-Chinas-numb...

Comment by Riaz Haq on February 22, 2013 at 7:37pm

Here's a news item published in The Hindu about a Chinese Think Tank report on Sino-Pak ties:

A new report by an official Chinese think-tank has hailed the relations with Pakistan as a “model of state-to-state relations” and strongly rejected suggestions that the ‘all-weather’ relationship was growing cold amid concerns about terrorism and a lack of aid.

New factors

The report, titled ‘A Model of State-to-State Relations’, was authored by Du Youkang, head of the Centre for Pakistan Studies at Shanghai’s Fudan University and a scholar who advises the government on its Pakistan policy.

Published last month, the report highlights new factors — from China’s growing ties with India to Pakistan’s economic and security troubles — as increasingly shaping the relationship, but comes to the conclusion that the “China-Pakistan relationship will remain a model for countries with different social systems to communicate and interact with each other in the future”, according to a summary published by the Communist Party-run The Global Times.

Increasing doubts

The newspaper said the publication looked to address the “increasing doubts” about the traditionally close relationship. As an example, the relatively small amounts of aid to Pakistan — dwarfed by aid from Washington — has been cited as contradicting the rhetoric about ‘all-weather’ ties. .

Terrorism in China’s far-western Xinjiang region, with Chinese officials blaming Pakistan-based groups, has also been seen by some analysts as an irritant.

However, describing Pakistan as “China’s closest friend in South Asia”, the report said bilateral ties were “established on the foundation of deep-rooted public opinion” and would not be significantly altered.

“Although there are some factors that may influence bilateral relations, for instance, the development of political relations lagging behind economic exchanges and Indian factors, there are no major differences or irreconcilable conflicts between the two,” it concludes.

http://www.thehindu.com/news/international/south-asia/sinopakistan-...

Comment by Riaz Haq on February 26, 2013 at 10:27am

Here's a news report on Pakistan's official position on Kishanganga arbitration results:

Islamabad: Downplaying the recent verdict by International Court of Arbitration upholding India's right to divert water from the Kishanganga hydro project, Pakistan said on Tuesday it was not a legal defeat for the country. Presidential spokesman Farhatullah Babar said that the arbitration award was not a legal defeat for Pakistan.

He said that Pakistan had put two questions of legal nature before the Court of Arbitration which were within its jurisdiction for determination. "The Court has given its conclusive determination on one question while on the second the final award will be given later in December".

The two questions, he said, were first whether India's proposed diversion of water from Kishanganga into another tributary breached the Indus Water Treaty and second if such a diversion was allowed whether there were limits on the quantum of water diversion.

Babar said that on the second question the Court categorically stated that the treaty did not permit reduction below dead storage of the water level in the reservoirs of run-of-river plants on the Western Rivers and India could not even flush water to such an extent that would deplete it dead storage level.

This condition applies not only at Kishanganga but for all future run-of-river hydroelectric plants according to the court award, he said.

He said this clear interpretation prohibiting India from depleting water below the dead storage level is a major relief for Pakistan as it protected the country's right to receive uninterrupted water supplies on the western rivers. "The uninterrupted flow, as much as the quantum, of water was critical for crops as delayed flows have seriously undermined crops in Pakistan due to late sowing," he said.

"The award had protected this right of Pakistan," Babar said.

Babar said that India has planned 150 run-of-river power plants on the western rivers of which 47 are above 50 MW's which made this particular decision very significant for Pakistan.

"Without such clear direction by the Court, the construction of these storage-oriented power plants by India, in the manner it has been seeking to build in the past, could have seriously undermined Pakistan's right of uninterrupted water flows from the western rivers," he said.

"Therefore while water may be diverted for power generation the power is to be constructed and operated in a manner that ensures a constant minimum flow of water in the Kanchenjunga/Vellum River".

He said that for determining of minimum flow regime the Court has asked both India and Pakistan to provide flow data and other details. A final award will be given later in December and in this context the decision was not yet conclusive, he said.

http://m.ibnlive.com/news/international-courts-verdict-on-kishangan...

Comment by Riaz Haq on March 26, 2013 at 7:54pm

Here's a report on China supplying 1000 MW Chashma 3 nuclear power plant:

China confirmed this week it will sell a new 1,000-megawatt nuclear reactor to Pakistan that the United States says would violate Beijing’s obligations under a nuclear supplier control group.

Chinese Foreign Ministry spokesman Hong Lei was asked Monday about a report in the Free Beacon March 22 that first disclosed the secret agreement for the reactor reached last month in Beijing between the China National Nuclear Corp. and the Pakistan Atomic Energy Commission.

“China has noted the relevant report,” Hong told reporters in Beijing.

Normally, Chinese government spokesmen deny such reports and label them “groundless” as a way to avoid comment. The spokesman’s use of the phrase “noted the relevant report” is unusual and a tacit admission the report is accurate.

U.S. intelligence and diplomatic officials privately said the agreement was reached in Beijing during a visit by a high-level Pakistani delegation of nuclear industry officials from Feb. 15 to 18.

The Chinese at the meeting urged Pakistan to keep the deal secret to avoid expected international opposition by states that say the sale violates China’s commitment to the Nuclear Suppliers Group, a 46-member association aimed at preventing the spread of nuclear weapons.

China agreed in 2004 not to sell additional reactors to Pakistan’s Chashma nuclear facility beyond the two reactors that began operating in 2000 and 2011.

However, Hong denied the sale violates the voluntary NSG guidelines.

“The cooperation between China and Pakistan does not violate relevant principles of the Nuclear Suppliers Group,” he said. “In recent years, China and Pakistan do indeed carry out some joint projects related to civilian use of nuclear energy. These projects are for peaceful purpose only, in compliance with the international obligations shared by both countries, and they are subject to guarantee and monitor by international atomic energy organization.”

However, U.S. intelligence officials said the China National Nuclear Corp. (CNNC) is Beijing’s main nuclear weapons producer and is working to modernize Pakistan’s nuclear arsenal in addition to the civilian reactor construction at Chashma.

China also is working to develop Pakistan’s nuclear fuel reprocessing capabilities, the officials said....

http://freebeacon.com/concerns-proliferating/

Comment by Riaz Haq on March 28, 2013 at 10:54pm

Here's a PakObserver report on Chinese investment in Pakistan:

Friday, March 29, 2013 - Islamabad—China is committed to invest heavily in Pakistan’s energy and other sectors to improve lives of people, Deputy Chief of Mission of the Chinese Embassy Yao Wen said Thursday.

Speaking at a function at a local school here, Yao Wen said Chinese are already working on 120 projects in Pakistan with around a quarter related to energy.

In addition, during the last five years volume of bilateral trade has grown by 70 per cent to over $ 12 billion with Pakistani exports increased two-fold from $1 billion to $2.2 billion, he informed.

Yao Wen stressed the need for enhancing collaboration between educational institutions and exchanges of students and researchers to promote intellectual cooperation.

Lauding the role of Pakistan in regional and global peace, stability and development, he said that Pakistan has offered great sacrifices to ensure peace.

Speaking on the occasion, President Ex-Chinese Association Raza Khan lauded the Chinese assistance and cooperation in various fields, terming it a great service to people of Pakistan.

He lauded the active involvement of Chinese Ambassador Liu Jian in capacity building of students and said that supporting needy students was a great service for social development. Raza Khan stressed the need for increasing people-to-people exchanges to promote understanding and carry forward cause of Pak-China friendship.

Terming China a sincere friend, Joint Secretary Ministry of Education Prof. Muhammad Rafiq Tahir said that two countries should fully unleash their potential of cooperation to benefit masses.

http://pakobserver.net/detailnews.asp?id=202003

Comment