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China and US Battle For Influence in Pakistan

Top US and Chinese diplomats have visited Pakistan to meet with the country's new prime minister Mr. Imran Khan within days of his assuming office. The US Secretary of State Mike Pompeo was the first to call on Prime Minister Imran Khan in Islamabad. Pompeo's visit was soon followed by a three-day visit by Chinese Foreign Minister Wang Yi. What is at stake in the battle between China and the United States in Pakistan is the prize of global superpower status, according to the US-based Wall Street Journal.

There is a lot of speculation in the western media about the objectives of Pakistan policies being pursued by the two great powers and their impact on the US-China competition for world dominance. Such speculations have centered on the debt related to China-Pakistan Economic Corridor (CPEC) and the US leverage in potential IMF bailout of Pakistan.

American business publication Wall Street Journal has produced a short video explaining how its staff sees what it describes as "US-China conflict brewing in Pakistan". What is at stake in the battle between China and the United States in Pakistan is the prize of global superpower status. Here are the key points it makes:

1. The US-China conflict brewing in Pakistan is about global dominance sought by the two great powers.

2. If China succeeds, it could become the new center of global trade. If the US wins, it could frustrate China's push to become a global power. The impact of it will be felt around the world for decades.

3. China has already surpassed the United States as the world's biggest exporter of goods and services.

4. The biggest project in China's Belt and Road Initiative (BRI) is China-Pakistan Economic Corridor (CPEC) in which China is investing heavily and providing massive loans.

5. China could use the infrastructure built in Pakistan under CPEC to gain access to the Indian Ocean and supplant the United States in Pakistan.

6. CPEC-related spending is sinking Pakistan deeper in debt to China. It could force Pakistan to seek $8 billion to $12 billion bailout by IMF where US is the biggest shareholder with veto power.

7. US does not want the IMF bailout money to be used to repay Chinese debt. Not bailing out Pakistan is not an option because it could cost US an important ally in the region.

8. US could, however, use IMF bailout to limit what Pakistan can borrow from China. Such a condition will achieve the US objective of significantly slowing down CPEC and BRI.

9. Pakistan's dilemma is that it needs both the infrastructure improvements financed by China and the IMF bailout to ease pressure on its dwindling foreign exchange reserves.

10. Whoever wins in Pakistan will become the number one global superpower.

Here's the Wall Street Journal video:

https://youtu.be/wvw-85CC1t4

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Views: 68

Comment by Riaz Haq on September 12, 2018 at 7:05pm

#China, #Pakistan agree to open economic corridor to #investors from other countries to ease concerns about the strategic intent behind its vast #infrastructure push . #UnitedStates #India #CPEC #BRI https://sc.mp/2CPkfgJ via @SCMPNews

The agreement was reached during a meeting in Islamabad between Ning Jizhe, vice-chairman of China’s National Development and Reform Commission, and Pakistan’s Minister for Planning, Development and Reforms Makhdoom Khursro Bakhtiar.

In a statement released after the meeting on Sunday, Pakistan’s planning and development ministry said the country had introduced new socioeconomic targets for the project, and agreed to establish a mechanism for third-party participation.

On Tuesday, Chinese foreign ministry spokesman Geng Shuang confirmed the decision, saying the two sides would open up the China-Pakistan Economic Corridor to other countries and that it would benefit the whole region.


The move is the latest sign of Beijing trying to adjust its approach amid a series of setbacks in countries involved in its “Belt and Road Initiative”. The economic corridor is a flagship project under that strategy, which aims to build a huge trade and infrastructure network spanning Asia, Europe, Africa and Latin America.

Pakistan’s Dawn newspaper quoted unnamed sources as saying that Beijing wanted involvement from “countries friendly to both Pakistan and China because it wished to steer clear of adverse criticism, particularly from the US and India”.

China, Pakistan can resolve investment problems, but ‘belt and road’ concerns should not be ignored, experts say
Zhao Gancheng, director of South Asia Studies at the Shanghai Institutes for International Studies, said the move was an effort to address the backlash over China’s activities in the region.

“Inviting a third party will help to ease concerns and the view that there is strategic intent behind the cooperation between China and Pakistan – in particular concerns held by India,” Zhao said.

He added that inviting third countries to take part would also help to improve the global standing and recognition of the projects.

Sun Shihai, an expert in South Asian studies at the Chinese Academy of Social Sciences, said Beijing was learning lessons from recent setbacks but that overall its global infrastructure push was on track.

“China needs to reflect on the problems that have emerged as it makes progress with the belt and road,” Sun said. “The uneven distribution of benefits among different provinces and regions in Pakistan may have caused some grievances and scepticism within Pakistan – China can make adjustments and address these issues.”

The US$60 billion Gwadar port deal is one of the projects that has drawn criticism. The US and India see the port project as China seeking to extend its geopolitical influence, while there have been warnings from the International Monetary Fund and others that Chinese infrastructure investments will create a debt trap for Pakistan.

On Sunday, Pakistan’s new Prime Minister Imran Khan reaffirmed his country’s commitment to the economic corridor.

But the day before, the Financial Times quoted Abdul Razak Dawood – the Pakistani member of cabinet responsible for commerce, textiles, industry and investment – as saying that companies from Pakistan had been put in a “disadvantaged” position. He suggested that Pakistan should “put everything on hold for a year” and even “stretch CPEC out over another five years or so”.

Facing a trade war and bumps along the belt and road, China may have to revisit the cost of its grand plan
Chinese foreign ministry spokesman Geng denied Pakistan was seeking to delay or extend the project, saying “Pakistan-China relations are impregnable and the government’s commitment to the CPEC is unwavering”.

Comment by Riaz Haq on Sunday

#Pakistan keen to start #CPEC’s next phase. #China has invited Prime Minister #ImranKhan to attend the China International Import Expo as the guest of honor at the conference to be attended by members of Belt and Road Initiative. #BRI #trade #exports 
https://tribune.com.pk/story/1803731/1-pakistan-keen-start-cpecs-ne...

The Chinese government has invited Prime Minister Khan to attend the China International Import Expo. Pakistan is the guest of honour at the conference to be attended by members of the Belt and Road Initiative.

It added that the joint working groups meetings were planned to be convened in October. There are five working groups: planning, energy, transport, Gwadar and industrial parks.

Planning Secretary Zafar Hasan gave an overview of the ongoing projects and rundown of the schedule of the upcoming events, leading to the 8th Joint Cooperation Committee (JCC).

The cabinet committee endorsed the government’s new priority list of CPEC. The committee decided to prioritise development of Gwadar, Special Economic Zones, Pakistan Railways $9 billion Main Line 1 project, inclusion of social sector development and third-country participation in CPEC, according to the official handout

The committee – the highest bilateral decision-making body – has planned to hold its 8th meeting in the first week of December in China, declared the planning ministry.

The PTI government has undertaken an internal review of CPEC aimed at making it more representative of the aspirations of the people.

Also, the Chinese ambassador on Friday met PM’s Adviser on Textile and Industry Razak Dawood. Both the sides agreed to work more closely to build a brighter and prosperous future for the region, according to a statement issued by the minister’s office after the meeting.

----
Meanwhile, the 8th JCC will review progress on the implementation of decisions taken during the 7th JCC that was held in November last year.

The officials said progress could not be made on most of the issues that had been decided in the last JCC meeting.

At present, 22 projects worth $28.6 billion are under various phases of implementation under CPEC. They include energy projects estimated at $34.8 billion, road projects at $5.8 billion, ML-1 at $9 billion and Gwadar port and city projects.

The 7th JCC meeting had agreed to resolve the issue of the revolving fund, which was to be set up to make energy payments to Chinese investors. However, the issue remains unresolved till date.

In a related development, the Pakistan Private Infrastructure Board extended the deadlines of a few projects that were falling behind schedule.

The deadlines on ML-I project could not be met. Both the sides agreed to finalise the preliminary design of the project by November 2017 that remains outstanding.

Progress on four provincial road projects – Mansehra-Muzaffarabad-Mirpur Motorway, Gilgit-Shandur-Chitral Road, Naukundi-Mashkhel-Panjgur Road and Keti Bandar port development – could not be made either.

The greater Peshawar Mass Transit Circular Rail and the Quetta Mass Transit projects also remained on papers during the past one year.

The resolution of the Gwadar Water supply scheme of five million gallons per day had been declared an urgent priority by the 7th JCC. So far, no tangible progress has been made.

Bottlenecks to the construction of 300 megawatts Gwadar coal-fired power plant could not be removed, and Pakistan now wants to address it during the prime minister’s visit.

China and Pakistan had also agreed to start construction on the New Gwadar International Airport within six months of signing of the implementation agreement. But work on the project has yet to be started.

However, a Chinese delegation is expected to visit Pakistan soon to discuss the airport project, the officials said.

Similarly, four out of nine prioritised Special Economic Zones have also remained stuck for the past one year.

Comment by Riaz Haq on Sunday

#Pakistan's army chief Gen Bajwa visits #Beijing after 'Silk Road' tension. He is most senior figure to visit staunch ally #China since the new government of Prime Minister Imran Khan took office in August. #CPEC #BRI https://www.reuters.com/article/us-pakistan-china-military/pakistan...

Pakistan has deepened ties with China in recent years as relations with the United States have frayed.

Bajwa may be hoping in Beijing to smooth out any Chinese alarm at comments last week by Pakistan’s commerce minister, Abdul Razak Dawood, who suggested suspending for a year projects in the China-Pakistan Economic Corridor (CPEC), the Pakistan leg of China’s Belt and Road Initiative that includes recreating the old Silk Road trading route.

Bajwa, the Chief of Army Staff (COAS), regularly holds meetings with world leaders due to the Pakistan armed forces’ outsize influence in the nuclear-armed nation, where the military controls security and dictates major foreign policy decisions.


“During the visit COAS will interact with various Chinese leaders including his counterpart,” Major General Asif Ghafoor, the military spokesman, tweeted late on Sunday.

Beijing has pledged to invest about $60 billion in Pakistan for infrastructure for the Belt and Road project.

Dawood, in an interview with the Financial Times, also suggested the CPEC contracts had been unfairly negotiated by the previous government and were too favorable to the Chinese. Later he said the comments were taken out of context, but did not dispute their veracity.

The critical comments were published just after China’s top diplomat, State Councillor and Foreign Minister Wang Yi, visited Pakistan and the two sides reaffirmed the mutual benefits of the Beijing-funded projects.

On Thursday, Pakistan’s government said it wanted CPEC to include more projects with a focus on socio-economic development, something which would align more with the populist agenda of Khan’s new administration.

Comment by Riaz Haq 23 hours ago

#China says #military ties 'backbone' to relations with #Pakistan. Belt and Road initiative (#BRI) should be a benchmark for China-Pakistan ties. #CPEC https://reut.rs/2PHj04s

Military ties between China and Pakistan are the “backbone” of relations between the two countries, a senior Chinese general told Pakistan’s visiting army chief, days after a Pakistani minister stirred unease about Chinese Silk Road projects.

General Qamar Javed Bajwa is the most senior Pakistani figure to visit ally China since the new government of Prime Minister Imran Khan took office in August, and his trip comes a week or so after a senior Chinese diplomat visited Islamabad.

Pakistan has deepened ties with China in recent years as relations with the United States have frayed.

Bajwa may be hoping to smooth out any Chinese alarm at comments last week by Pakistan’s commerce minister, Abdul Razak Dawood, who suggested suspending for a year projects in the China-Pakistan Economic Corridor, the Pakistan leg of China’s Belt and Road Initiative that includes recreating the old Silk Road trading route.

On Tuesday, Zhang Youxia, a deputy chairman of China’s powerful Central Military Commission which President Xi Jinping heads, reiterated to Bajwa that the two countries are “all weather” strategic cooperative partners.


“China-Pakistan military ties are an important backbone of relations between the two countries,” said Zhang according to a statement by China’s Defence Ministry late on Tuesday.

“The two militaries should further pay close attention to practical cooperation in all areas, keep raising the ability to deal with various security risks and challenges, and join hands to protect the common interests of both countries.”

However, Zhang cited Xi as saying that the Belt and Road initiative should be a benchmark for China-Pakistan ties.

He said China appreciated the new Pakistan government’s platform of fully promoting the relationship and that China was willing to work with the new government to push construction of the China-Pakistan Economic Corridor.

Beijing has pledged to invest about $60 billion in Pakistan for infrastructure for the Belt and Road project.

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