Comment by Riaz Haq on April 16, 2015 at 8:33pm

Chinese President Xi Jinping is set to unveil a $46 billion infrastructure spending plan in Pakistan that is a centerpiece of Beijing’s ambitions to open new trade and transport routes across Asia and challenge the U.S. as the dominant regional power.

The plan, known as the China Pakistan Economic Corridor, draws on a newly expansive Chinese foreign policy and pressing economic and security concerns at home for Mr. Xi, who is expected to arrive in Pakistan on Monday. Many details had yet to be announced publicly.

“This is going to be a game-changer for Pakistan,” said Ahsan Iqbal, Pakistan’s planning minister, who said his country could link China with markets in Central Asia and South Asia.

“If we become the bridge between these three engines of growth, we will be able to carve out a large economic bloc of about 3 billion living in this part of the world…nearly half the planet.”

Beijing’s primary concern is that instability in neighboring Pakistan and Afghanistan is spilling into China’s predominantly Muslim northwest, and could grow worse with the withdrawal of U.S. troops from the region.

China sees a historic opportunity to redraw the geopolitical map by succeeding where the U.S. has largely failed, building critical infrastructure that could kick-start economic growth and open new trade routes between China and Central and South Asia. A cornerstone of the project will be to develop the Pakistani port of Gwadar, a warm-water port run by the Chinese on the doorstep of the Middle East.

‘If ‘One Belt, One Road’ is like a symphony involving and benefiting every country, then construction of the China-Pakistan Economic Corridor is the sweet melody of the symphony’s first movement.’

—Wang Yi, China’s foreign minister

If realized, the plan would be China’s biggest splurge on economic development in another country to date. It aims over 15 years to create a 2,000-mile economic corridor between Gwadar and northwest China, with roads, rail links and pipelines crossing Pakistan.

The network ultimately will link to other countries as well, potentially creating a regional trading boom, Pakistani and Chinese officials say.

The Pakistan program has been described by Chinese officials as the “flagship project” of a broader policy, “One Belt, One Road,” which seeks to physically connect China to its markets in Asia, Europe and beyond.

“If ‘One Belt, One Road’ is like a symphony involving and benefiting every country, then construction of the China Pakistan Economic Corridor is the sweet melody of the symphony’s first movement,” Wang Yi, China’s foreign minister said during a visit to Pakistan in February.

Terrorism-plagued Pakistan is a risky bet for Beijing, however. During the Chinese president’s coming visit, Islamabad is set to announce that it will raise a special security force of thousands to protect the Chinese workers and engineers who will flood into Pakistan to carry out the work alongside locals, Pakistani officials said.

The largest part of the project would provide electricity to energy-starved Pakistan, based mostly on building new coal-fired power plants. The country is beset by hours of daily scheduled power cuts because of a lack of supply, shutting down industry and making life miserable in homes—a major reason for the election in 2013 of Prime Minister Nawaz Sharif, who promised to solve the electricity crisis.

The plans envisage adding 10,400 megawatts of electricity at a cost of $15.5 billion by 2018. If those projects deliver, plugging the electricity deficit, Mr. Sharif would be able to go into the 2018 election saying he has lived up to his pledge.

After 2018, adding a further 6,600 megawatts is outlined—at a cost of an additional $18.3 billion—that in cumulative total would double Pakistan’s current electricity output.

The plan has gained political momentum—and new funding sources—since Mr. Xi outlined his vision to build modern-day equivalents of the ancient Silk Road between East and West.

Despite the more-muscular Chinese ambitions, U.S. officials say the new economic strategy complements Washington’s vision for the region.

“We think there’s a great amount of potential complementarity between a China-Pakistan infrastructure corridor and the interests we’ve talked about in South and Central Asia for some time,” said a State Department official. The U.S. and China “have coincident interests in seeing a stable, peaceful and prosperous Pakistan.”

ENLARGE

Still, Beijing’s plan would dwarf the multibillion-dollar U.S. assistance program in recent years for Pakistan. Under the 2009 Kerry-Lugar-Berman Act, the U.S. poured more than $5 billion in aid to Pakistan between 2010 and 2014, including $2 billion on infrastructure, some of which is still being spent. In the energy sector, the U.S. program is adding some 1,500 megawatts of generating capacity.

Unlike the U.S. approach of giving traditional development aid, which some say has yielded only incremental improvements to Pakistani infrastructure, most of the Chinese money would be spent on a commercial basis, through investments or loans.

Andrew Small, author of “The China-Pakistan Axis: Asia’s New Geopolitics,” said China was reacting to the perceived failure of Western aid to make a significant difference to Pakistan. “The Chinese response is that you haven’t done it on a large enough scale,” Mr. Small said. “They’re saying that it is only by doing it on this kind of big-bang scale that you’re going to have the transformative economic effect that Pakistan needs.”

Gwadar, operated by a state-run Chinese firm, is set to begin commercial operations this year, and one of the deals to be signed by the Chinese president while in Pakistan is a final agreement on building a new international airport there, Pakistani officials said.

Mr. Small said propping up Pakistan economically furthers China’s regional competition with India. China sees Pakistan as a strategic counterweight to India. Conversely, the U.S. is backing India, which President Barack Obama visited in January, as a counterweight to China, despite Washington’s long relationship with Islamabad.

The U.S. aid program in Pakistan is winding down, while American forces have largely pulled out of Afghanistan, where China is trying to initiate peace talks between Afghan President Ashraf Ghani’s government in Kabul and the Taliban insurgents.

Beijing fears that without its intervention, chaos, extremism and economic stagnation in Pakistan and Afghanistan will blow across into its bordering northwestern region of Xinjiang, which has a large Muslim population. China has grown increasingly concerned in the past two years about an surge in jihadist and separatist violence in Xinjiang.

Northwest China is far from the Chinese coast, and shipping goods to and from there through Pakistan would potentially be quicker and cheaper than using any Chinese port, cutting costs and time in half, according to Pakistani calculations.

Beyond the economics of the Pakistan corridor are strategic advantages: China is concerned that too much of its trade depends on the narrow sea channel of the Strait of Malacca, analysts said. In the event of a future war in Asia, the Strait of Malacca could be blockaded by the U.S. Navy or another competing power. Pakistan would provide an alternative land route for Chinese trade.

During his visit, Mr. Xi will sign off on billions of dollars worth of the more-advanced projects in the corridor project, allowing the start of groundwork, Pakistani officials said. In addition the economic corridor framework, more than $10 billion in other new Chinese infrastructure projects for Pakistan are in the works.

Frederick Starr, a professor at Johns Hopkins University and an expert on Central Asia, said the new corridor has potential to link Europe to China through Central Asia and the Caucasus, and reach onward through Pakistan and India to Southeast Asia, a route that he said “will in 30 years be more important even than China’s [current] route to the West.”

http://www.wsj.com/articles/china-to-unveil-billions-of-dollars-in-...

Comment by Riaz Haq on April 29, 2015 at 4:01pm

Forty Years After Fall of Saigon, Entrepreneurs Return to Vietnam

Henry Nguyen was a toddler when his family fled Vietnam just before the fall of Saigon 40 years ago.

Now he’s back, part of an influx of Vietnamese-born entrepreneurs returning to the country to reap the benefits of its shift to a more market-oriented economy.

Since his return in the early 2000s, Mr. Nguyen has become one of the best-known business figures in the Vietnam. He is head of Vietnam operations for Boston-based fund manager IDG Ventures, and he recently introduced the Big Mac to the country as McDonald’s Corp.MCD +0.20%’s first franchisee here.

In another sign of the changing times, Mr. Nguyen, the son of a civil engineer who worked with the old South Vietnamese government, is married to the daughter of Vietnam’s communist prime minister. The couple and their twin daughters live in Ho Chi Minh City, the name by which Saigon is now known.

“It’s something I never planned on or anticipated,” said Mr. Nguyen, a fresh-faced 41-year-old American with thick-rimmed glasses and spiky hair. “But looking forward, this is where my life is.”

The fact that Mr. Nguyen has gotten so far highlights how much Vietnam has changed since the South capitulated to Communist forces on April 30, 1975. It also points to the important role the country’s diaspora has played in expanding the scope and scale of what could be one of the world’s next great economic success stories.

As Vietnam’s Communist Party began to loosen its hold of the economy in the early 1990s after the collapse of the Soviet Union, Viet Kieu, or overseas Vietnamese helped lead the march of foreign investment into the country.

Seattle-raised entrepreneur David Thai helped blaze the trail when he moved to Hanoi in the 1990s. He became the first overseas Vietnamese to register a private company and open a chain of coffee shops under the name Highlands Coffee. Since then, officials say other expatriate Vietnamese have invested more than $20 billion here, mostly in and around Ho Chi Minh City, still in many ways the country’s economic engine.

Intel Corp. appointed U.S. national Than Trang Phuc to launch a $2 billion chip factory in Ho Chi Minh City in the early 2000s, while other Vietnamese returned from America, France and elsewhere to set up private businesses.

The potential payoff is significant. Frederic Neumann, co-head of Asian economic research at HSBC HSBA.LN -0.25% views Vietnam as the best example of a frontier economy benefiting from rising costs in China. Thanks to multibillion-dollar investments from companies such as Samsung Electronics Co.005930.SE +1.39% and Intel INTC -0.41%, exports of smartphones and other electronics now have eclipsed old standbys such as textiles and footwear, leaving the country comfortably higher up the value ladder than cheaper locales such as Cambodia or Bangladesh.

http://blogs.wsj.com/frontiers/2015/04/29/forty-years-after-fall-of...

Comment by Riaz Haq on April 30, 2015 at 3:33pm

Research reveals that we are living through the largest investment boom in human history. Oxford University's Bent Flyvbjerg, an economic geographer who specializes in mega-project planning and management, estimates global mega-project spending at between $6-9 trillion annually. This is 8 percent of the world's combined GDP.

Mega-projects are not just moving with the times; they are growing in number and in scale at a terrific pace. Investments in behemoth infrastructure projects in the transportation, energy, water and agricultural sectors, in particular, are skyrocketing.

In a 2014 paper published in the Project Management Journal, Flyvbjerg noted that between 2004 and 2008, China alone "spent more on infrastructure in real terms than during the entire 20th century, ... an increase in spending rate of a factor of 20."

http://www.truth-out.org/news/item/30495-mega-giga-tera-inside-the-...

Mega, Giga, Tera: Inside the Biggest Investment Boom in History

http://onlinelibrary.wiley.com/doi/10.1002/pmj.21409/abstract;jsess...

What You Should Know About Megaprojects and Why: An Overview

Comment by Riaz Haq on May 11, 2015 at 4:51pm

LAHORE: The Pakistani society is quickly adapting to technological change. Be it the spectrum auction that marked the arrival of 3G, 4G services or wireless appliances making their way into the mainstream, Pakistanis are slowly coming of age. Similarly, awareness among people of electronic appliances has also increased the demand of these products.

This trend has been taken into account by businesses as an opportunity to invest in the Pakistani market and derive high rewards.

Haier-Ruba group is a company that has shown an exponential growth rate since its inception in the country. The group deals in many businesses ranging from polyester yarn, electronic appliances, power generation, real estate and automobile business.

Recently, its primary achievement can be attributed to the successful development of the Haier-Ruba Economic Zone (HREZ) with the support of Chinese authorities.

The HREZ is located near Lahore and is spread at 300 acres, but it is looking to expand especially after the China-Pakistan Economic Corridor (CPEC) breakthrough.

Haier-Ruba President and CEO Faisal Shah Afridi said the company is looking to buy more land, increase investments and target a wider market .

“We need more land around the motorway and are willing to buy 3,000-5,000 acres of land at market price,” Afridi said.

The HREZ is a part of the CPEC and Afridi expressed hope that this will prove to be a gateway for other Chinese industrialists to venture into Pakistan.

Afridi said that Haier-Ruba also plans to establish regional zones in Pakistan.

“Currently, under HREZ, we are have undertaken 11 projects, the annual turnover of these is $800 million,” said Afridi. “We are planning to invest another $1.5 billion in the next five years for our future ventures.”

The background

Ruba Group’s partnership with Haier dates back to 2001 when a company was established through a joint venture.

After the initial success and rising demand of electronic appliances, Haier Pakistan was set up in 2006, to further diversify its product line with another investment of $0.5 million kicking in later. Currently, the company boasts of annual turnover of Rs46 billion.

http://tribune.com.pk/story/883770/joint-ventures-haier-ruba-plans-...

Comment by Riaz Haq on December 21, 2015 at 7:17pm

After encouraging response, #Haier #Mobile #Pakistan to grow aggressively with #smartphone manufacturing in Q1 2016 http://tribune.com.pk/story/1013408/cellphone-market-with-encouragi... …

It has been barely seven months since Haier Pakistan further diversified its portfolio and entered the saturated cellphone market, but the overwhelming response has forced the company to pursue its expansion plans more aggressively.

Haier is the first company that is establishing a mobile phone assembly plant near Lahore with an investment of $5 million. The plant, which is likely to be completed by the end of the first quarter of 2016, will have the capacity to assemble 1.5 million cellphones annually.

“It takes years for a mobile company to diversify in such a competitive market, but we did it quite brilliantly. The coming year will be exciting for us as by March we will be launching the mobile assembly plant in Pakistan as per our commitment to bringing in technology and making our products more competitive,” said Zeshan Qureshi, Chief Executive Officer of Haier Mobiles, in an interview with The Express Tribune.

For Qureshi, the company’s product range has expanded to 27 in a short span, as it was only seven at the beginning. By March 2016, the company is hopeful that it will be able to further diversify the product range to around 35.

“The quality of our products is being appreciated in the market; this is due to our strong research and development wing that helped in selling over 0.5 million units in about seven months,” he added.

The price range is also flexible. Mobile sets are available at as low as $15 and go up to $300. The company has introduced three mobile categories for low, medium and high-end customers.

“We are about to launch a high-end product, V-6, which will be available at $450, the highest so far for our company,” Qureshi said.

He was of the view that any mobile brand should have a portfolio of 25 products in order to penetrate 100% in the market.

“At present, we have 80% penetration in Pakistan’s mobile market via our network of 18,000 distributors. There might be few areas remaining but we hope to reach those soon.”
The company has also introduced theft and accidental insurance for all its products through its 29 customer care centres.

Journey in Pakistan

Haier is operating in Pakistan’s market for 15 years and has established itself as a reliable name in household products. According to the company, every household has at least one appliance of Haier.

“The new era is of internet of things and every electronic appliance manufactured these days has these features. In order to connect these appliances with internet, we need a mobile or a tablet. And we have introduced mobiles to connect with the world,” he said.

Qureshi cited taxation and grey trafficking as areas that were affecting the brands. However, he said, it could be curbed if brands started investing in local markets as Haier was doing.

“We can only force the government to create an eco-system for mobile companies if they have strong presence and contribute reasonably to the economy, technology transfer and job creation.”

Comment by Riaz Haq on June 18, 2016 at 10:35am

It's official: #GE Appliances now belongs to #China's #Haier http://cnet.co/1PeSkl1 via @CNET

http://www.cnet.com/news/its-official-ge-appliances-belongs-to-haier/

After six months and $5.6 billion, the appliance division of General Electric officially belongs to Chinese manufacturer Haier, the companies said at a press conference Monday.

Haier's purchase of GE's Louisville, Kentucky-based appliance division is an assertive attempt to build a stronger presence in the US appliance market. Haier, which is based in Qingdao, China, is the world's leading appliance manufacturer, but the company only holds 1.1 percent of the US appliance market (US customers might be familiar with the brand's refrigerators, air conditioners or rolling R2D2 mini-fridge). Meanwhile, GE Appliances claims nearly 14 percent of the same market.

For many US shoppers, the GE brand is synonymous with household appliances like refrigerators and ovens. But the multibillion-dollar sale to Haier gives GE the chance to rid itself of those consumer-facing appliances to focus on more lucrative industrial manufacturing (think jet engines, industrial power systems and locomotives).

In the short term, people won't see much of a change as a result of the acquisition, said Chip Blankenship, president and CEO of GE Appliances. The GE name will still appear on appliances, and customers will still receive the same support.

"We'd like (customers) to be confident that we stand behind our products as we always have," Blankenship said.

GE Appliances stated in a news release the sale will generate an after-tax gain of approximately $0.20 per share, but the company expects restructuring to offset those gains. When asked about potential layoffs of GE Appliances employees, Blankenship said, "we don't anticipate any change."


There's been talk of GE selling its appliance division for at least eight years. Sweden-based Electrolux came close to buying GE Appliances for $3.3 billion in 2014, but the US Department of Justice objected to the deal last year on the grounds that a merger of two leading manufacturers of cooktops, ranges and wall ovens would reduce competition and options for consumers. GE quickly rebounded with the announcement that it would sell to Haier in January.

Haier was initially set to buy GE Appliances for $5.4 billion, but the price increased by about $200 million because of "increased working capital in the business," according to GE. GE Appliances currently has 12,000 employees that produce appliances out of Louisville and facilities in Indiana, Alabama, Georgia and Tennessee.

Comment by Riaz Haq on July 2, 2016 at 9:11am

#Turkey's Arcelik to acquire #Pakistan #Karachi-based appliance maker Dawlance for $258 millionNikkei Asian Review

http://asia.nikkei.com/Business/Companies/Turkey-s-Arcelik-to-acqui...


Earlier this year, Arcelik was outbid for General Electric's appliance business by Chinese heavyweight Haier. Later, another Chinese company, Midea Group, beat Arcelik in the race for Toshiba's home appliance business.

On Thursday, Arcelik announced that it has signed an agreement to acquire Dawlance, Pakistan's market-leading home appliance company. The $258 million deal is expected to receive regulatory approval and close by the end of the year.

The acquisition will provide Arcelik a foothold in the world's sixth-most populous country, which is expected to grow around 5% a year for the next three years.

It is also expected to give Arcelik's Asia-Pacific growth strategy another boost, following the company's recent $100 million investment in a Thai refrigerator plant.

Privately owned Dawlance was founded in 1980 in Karachi, where it has two manufacturing sites. It has another site in Hyderabad. Its workforce, which is also spread through its distribution, sales and service networks, is 3,000 strong.

It is Pakistan's leading refrigerator and microwave brand, No. 2 air conditioners and No. 3 in the laundry category. Dawlance in 2015 reported $221 million in revenue and $45 million in EBITDA (earnings before interest, taxes, depreciation and amortization).

"Arcelik's recent investments in Thailand and Pakistan [are expected to provide] a strong platform for growth in Southeast Asia," CEO Hakan Bulgurlu said, adding that European markets have reached a "saturation point for white goods" and are beset by "long-term economic malaise."

He continued: "Economic growth in Pakistan is leading to more disposable income and purchasing power whilst technological advances are making white goods more efficient and more affordable. Pakistan's rapid urbanization and social development is seeing the emergence of more single-family dwellings, creating more demand for consumer appliances."

The CEO also vowed to strengthen Dawlance's product offerings and brand position.

Arcelik is owned by Koc Holding, Turkey's largest industrial conglomerate, which is also active in energy, finance, consumer durables and auto manufacturing.

Arcelik had $5.2 billion in turnover last year. It leads Turkey's white goods and consumer electronics markets. With global brands like Beko and Grundig, Arcelik products are sold in 133 countries. Before the Dawlance deal, Arcelik had 10 brands under its umbrella and had become known for its aggressive acquisition strategy across Europe, Africa and Asia.

Arcelik is Europe's third largest white goods producer.

With its $324 million acquisition of South Africa's Defy Appliances in 2011, it became Africa's largest white goods maker.

Arcelik's total workforce after the Dawlance deal will reach to 30,000 across 18 manufacturing facilities, including those in Turkey, Romania, Russia, China, South Africa and Thailand.

Comment by Riaz Haq on April 26, 2017 at 10:26pm

#Pakistan to set up #infrastructure bank with $1 billion capital to finance private sector development. #IMF #IFC

https://tribune.com.pk/story/1394404/pakistan-set-1b-infrastructure...

Finance Minister Ishaq Dar has announced that the government will set up Pakistan Infrastructure Bank with a paid-up capital of $1 billion, which will give financing to private investors for development projects.

Pakistan government and the International Monetary Fund (IMF) would have 20% shares each in the bank and the rest would be held by global organisations such as the International Finance Corporation, he said.

AJK plans tourism corridor along CPEC
He was speaking at a briefing held for the Pakistani media towards the end of his visit to Washington DC during which he attended spring meetings of the IMF and the World Bank.

Dar also revealed that the government would soon be launching Pakistan Development Fund (PDF) and its shares worth Rs100 billion would be offered to Pakistani diaspora in order to channelise their remittances effectively.

Later, these shares will be listed on the Pakistan Stock Exchange. “After the success of Sukuk (Islamic bonds), the PDF will be another attractive investment for overseas Pakistanis,” he remarked.

Giving a detailed round-up on the plenary sessions with the IMF and World Bank, the minister said there was positive sentiment about the tremendous economic rebound experienced by Pakistan over the last four years.

“Pakistan was on the verge of bankruptcy in 2014 and today it is likely to achieve approximately 5% growth during the current financial year,” he said. “Both IMF and World Bank are on the same page with the Pakistani government in these projections.”

Promotion of it: Work on innovation centres begins

Global credit rating agencies have upgraded the rating of Pakistan from negative to stable and from stable to positive in the last four years to an extent that the country is likely to be included in G-20 countries by 2030.

Comment by Riaz Haq on May 14, 2017 at 10:06pm

Exclusive: CPEC master plan revealed

https://www.dawn.com/news/1333101

For industry, the plan trifurcates the country into three zones: western and northwestern, central and southern. Each zone is marked to receive specific industries in designated industrial parks, of which only a few are actually mentioned.

The western and northwestern zone, covering most of Balochistan and KP province, is marked for mineral extraction, with potential in chrome ore, “gold reserves hold a considerable potential, but are still at the exploration stage”, and diamonds. One big mineral product that the plan discusses is marble. Already, China is Pakistan’s largest buyer of processed marble, at almost 80,000 tons per year. The plan looks to set up 12 marble and granite processing sites in locations ranging from Gilgit and Kohistan in the north, to Khuzdar in the south.



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



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

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

Comment by Riaz Haq on August 28, 2023 at 10:19pm

Haier revolutionizes cooling solutions with launch of Pakistan's first Solar Hybrid Air Conditioner


https://en.dailypakistan.com.pk/28-Aug-2023/haier-revolutionizes-co...

Haier is proud to unveil an unprecedented leap in the realm of cooling solutions with the introduction of Pakistan's very first solar hybrid air conditioner. This groundbreaking innovation marks a monumental shift towards sustainable and energy-efficient living, setting new standards in the industry. The launch of the solar hybrid air conditioner underscores Haier's dedication to shaping a brighter future for generations to come.

The Haier solar hybrid air conditioner is a groundbreaking marvel that operates entirely on solar power during daylight hours, eliminating the need for any intermediary devices such as inverters, batteries, UPS, or converters. By seamlessly integrating four 540W solar panels and establishing a direct connection to the outdoor unit, the AC functions autonomously, setting an industry precedent. This marks a historic milestone in Pakistan, where an air conditioner operates directly on solar power without any supplementary support.

For the very first time, consumers can embrace cooling technology that not only cools their spaces but also ensures zero electricity bills during daylight hours. Never before in Pakistan has an air conditioner operated directly on solar power without any intermediate support. This innovative approach significantly minimizes the concerns related to electricity costs and additional equipment expenses. As daylight graces the solar panels, the AC operates exclusively on solar energy, providing cooling comfort without the burden of utility bills. The system seamlessly switches to the grid only in case of cloudy weather, mimicking the hybrid concept found in modern-day hybrid cars. Additionally, the same holds true for nighttime operations.

Comment