Comment by Riaz Haq on October 25, 2015 at 9:53am

From Washington Post:

The new Pakistan-China Economic Corridor will move from here in the mountains down the Karakorum Highway into central Pakistan. From there, even more highways will be built to provide access to Gwadar Port in Baluchistan.

The initial outlines of that corridor already are visible here in northern Pakistan, where the highway snakes past mountains, glaciers and rocky gorges. At times, motorists can see the donkey trails from the original Silk Route, which traders traveled for more than 600 years before the 15th century.

China is spending hundreds of millions of dollars to upgrade the highway, one of the world’s most dangerous thoroughfares. To make it safer, Chinese engineers are smashing through mountains to build dozens of miles of tunnels, some of which are inscribed with the phrase “Pak-China Friendship Tunnel.” They are adding bridges, guardrails and concrete overhangs to funnel landslides and avalanches away from travel lanes.

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To fully reach its economic potential, however, the country must overcome the continued threat of Islamist militancy as well as a severe electricity shortage that significantly increases the cost and difficulty of doing business here.

To address that problem, China is promising Pakistan 18 new energy projects, including nine coal-fired power plants, five wind farms, three hydroelectric dams and one solar park. When completed, the projects will add 16,600 megawatts to Pakistan’s national grid, more than offsetting the electricity shortage, even with a projected annual growth rate of 7 percent by 2018, said Iqbal, the minister for planning and development.

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Over the past 13 years, the United States has given Pakistan about $10.5 billion in economic assistance and $7.6 billion in security-related aid. The U.S. military also reimbursed Pakistan $13 billion in counterterrorism support related to the war in Afghanistan, according to the Congressional Research Service.

The United States “was just not interested in building dams, electrical power plants, railways, roads and bridges and ports” in Pakistan, Nasr said.

China, by comparison, views its relationship with allies through a prism that is “geopolitical, geo-strategic” but also “geoeconomic,” Ma said. “According to Chinese philosophy, if you want to achieve some goal, you have to take a comprehensive approach, political, economic, military and social.”

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A major terrorist attack or Pakistani political crisis, common in a country that has witnessed three successful military coups since its founding in 1947, could quickly cause the Chinese to reassess their relationship, he said.

“Much of the skepticism reflects the rather dismal American experience in Pakistan over the years,” Hathaway said. “You almost never get results commensurate with the effort or money you put into it.”


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Within 100 miles of the border, for example, cellphone coverage is sparse. But when motorists reach the top of Khunjerab Pass, 3G service from a Chinese cellular provider bleeds across the frontier.

That’s the sort of modern convenience that Ameer Ullah Baig, a 60-year-old yak farmer who sleeps outside with his herds in the summer, is looking forward to.

Before the original Karakorum Highway opened in the 1970s, Baig said, his family relied on ponies and mules to get around and had to make wool overcoats to stay warm. Now, however, he rides a motorcycle to round up his herd and sleeps in a sub-zero, synthetic sleeping bag that he thinks was made in China.

“The highway was a blessing in disguise,” he said. “And I expect the same thing from the economic corridor.”

https://www.washingtonpost.com/world/asia_pacific/from-the-mountain... 

Comment by Riaz Haq on October 26, 2015 at 9:26pm

#China’s new Silk Road to the West is an opportunity Britain must grasp | via @Telegraph #CPEC #Pakistan 

http://www.telegraph.co.uk/finance/china-business/11953922/Chinas-n... …

Op Ed by Sir John Peace, Chairman Standard Charter Bank 

On a visit to Pakistan in April, President Xi announced $46bn in investments and credit lines in a planned China-Pakistan economic corridor. Earlier this year, one of China’s largest construction companies signed construction deals in Africa worth a combined $5.5bn. Both are OBOR projects, providing a platform for the cash-rich Chinese to invest, as well as the opportunity to lift growth across the world.
As these countries benefit economically from the infrastructure investment, Britain should be poised to take advantage. The British government has already indicated its support for the Asia Infrastructure Investment Bank. British banks like Standard Chartered, which has had a continuous presence in China since 1858, are well placed to assist with the financing of OBOR.
It is not only financial services, but a range of British business that should invest in OBOR, harnessing our expertise in PPP, engineering and supply chains.
For example, last week’s agreement signed by Standard Chartered and other banks with the London Metals Exchange reflects the increasing demand for commodities from OBOR projects.
The opportunities to invest in and support these infrastructure projects will be exciting.
We should endeavour to ensure British business is welcomed in these markets, ready to support them and trade with them as they establish themselves in the new world order. British luxury brand Burberry, for example, has been investing across south-east Asia, most recently opening a new store in Bangkok. It’s a long-term investment, just as China is investing in OBOR for long-term prosperity.

Comment by Riaz Haq on November 12, 2015 at 9:54am

#China will establish special economic zone in #Pakistan via New Europe. #CPEC #Gwadar http://neurope.eu/article/china-will-establish-special-economic-zon... …

China Overseas Port Holding, will establish a special economic zone of over 152 hectares at the deep sea port of Gwadar, Pakistan. The government of Baluchistan –Pakistan’s poorest- will later on provide the rest of the land to the Chinese corporation, which will own for more than 40 years a tax-free 923-hectare land.

The Pakistani authorities gave the permission to the Chinese state-owned company to lease the land for 43 years. According to China Daily, Gwadar is considered to be at strategic location as it stands between South and Central Asia and the oil-rich Middle East. The Chinese state company will be in full charge of the Gwadar zone.

The agreement between the two sides is part of the China-Pakistan Economic Corridor, which is a massive investment project worth $46 billion aiming to connect western China to the Arabian Sea.

The firm promised to create a trade-oriented powerhouse, including the construction of an export zone and an international airport. “China has asked us to provide land for building an export processing zone and a modern international airport in Gwadar,” Baluchistan chief minister Abdul Malik Baloch told AFP. China will also build another sea port and a road network to link the trade zone to the airport.

Wang Shida, a trade expert who works at the Chinese Institute of Contemporary Relations said that the new agreement between Pakistani authorities and China is a win-win deal. “The Pakistani economy will gain from the large number of processing firms that will move to the Gwadar port. It will also boost export from Pakistan. As for China, it will gain from cheaper oil imports from the Middle East and opportunities for Chinese companies will go global,” he told China Daily.

AFP reported that the economic zone will be guarded by a special security force of between 10,000 and 25,000 men. Moreover, the French news agency underlined that the Pakistani province has plenty of resources including oil, gas and minerals.

Some people in Baluchistan, already criticised their authorities of doing little to raise the living standards for the locals, giving way too much benefits to the Chinese firm without ensuring the local interests.

Comment by Riaz Haq on November 13, 2015 at 3:48pm

#China to support #Pakistan to ensure security of new economic zone, says Chinese general. #CPEC http://www.scmp.com/news/china/diplomacy-defence/article/1878647/ch... … via @SCMP_News

Beijing will back Pakistan to ensure the security of a new economic corridor granting access to the port of Gwadar that aims to create direct links between China and the Arabian Sea, a top general has pledged.

Central Military Commission vice-chairman Fan Changlong told Pakistan's army head Raheel Sharif on Thursday that Beijing looked forward to close cooperation "to ensure proper management and security of CPEC", according to a Pakistani military statement.

The China-Pakistan Economic Corridor is an ambitious US$46 billion project giving Beijing greater access to the Middle East, Africa and Europe through Pakistan, via a highway to Gwadar port on the Arabian Sea.

Fan's visit, the first by a Chinese general of his seniority in more than a decade, came two days after Pakistan handed hundreds of hectares of land over to China for the development of a free-trade zone in Gwadar as part of the project.

The development is part of China's ambition to expand its trade and transport footprint across Central and South Asia while countering American and Indian influence. India has expressed wariness about the project in the past, though analysts recently said concerns would arise only if there were "defence-related matters".


Fan, who headed a high-level military delegation, on Thursday met Sharif at the Pakistani army headquarters in Rawalpindi to discuss "matters of mutual interest, regional security, steps for regional stability and enhanced bilateral defence collaboration", the statement said.

Fan said China "deeply appreciates" Pakistan's efforts to eliminate militancy, particularly by the East Turkestan Islamic Movement, which Beijing says is active in the Xinjiang region, which borders Pakistan.

Xinjiang - the homeland of China's 10 million Uygurs, a mostly Muslim ethnic minority - is sporadically hit by deadly violence. Beijing has claimed that militants from the movement are hiding in Pakistan, a claim that has been supported by local security sources.

"China values the efforts of Pakistan Army in fighting ETIM," Fan said, adding that China and Pakistan were "best iron brothers, good friends and strategic partners".

Fan also met Prime Minister Nawaz Sharif in Islamabad on Thursday, with Sharif lauding Islamabad's friendship with Beijing as a "cornerstone" of its foreign policy.

The government of Baluchistan province - Pakistan's poorest - handed over about 280 hectares of a 923-hectare swathe of tax-exempt land in Gwadar on Wednesday. Beijing will develop that land under a 43-year lease.

The rest of the land would be handed over under the agreement with the public China Overseas Port Holding Company "soon", senior Pakistani government officials said.

Comment by Riaz Haq on November 16, 2015 at 7:51am

The #China-#Pakistan corridor: A fate-changer? #CPEC https://en-maktoob.news.yahoo.com/china-pakistan-corridor-fate-chan... … via @YahooNews


By Anatol Lieven:

These projects, if realised - and this is a very big if - have the potential to bring in tens or even hundreds of billions of dollars in additional investments. They could restore Pakistan's economic growth of the early 1960s, which led economists at the time to predict that the country would be one of the future leading economic powers of Asia.
This dream was lost when Pakistan recklessly attacked India over the Kashmir dispute in 1965, and Zulfiqar Ali Bhutto subsequently abandoned free market policies in favour of a horribly corrupt and badly managed populism.
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China certainly does not favour either international terrorism or a new security crisis in South Asia. Ideally, therefore, future Indian leaders might come to see an Indian interest in seeking reconciliation with Pakistan so as to link up with the Chinese corridor and open land routes for India to the Middle East and Europe.
This would require, among other things, serious work on a consensus between Delhi, Islamabad, Beijing and Washington on how to seek a peace settlement in Afghanistan.
Rampant problems
The biggest obstacles to China's plans lie not in strategic threats but in the corruption, dysfunction and incompetence of Pakistan's governing structures, and the culture of patronage which dominates Pakistani politics.
Thus in the area of transport, Pakistan railways are a shambles compared with those of India, though the two countries inherited the same systems at independence. Pakistan International Airlines has been in crisis for years, above all because - as with state-owned banks and industries - politicians (and generals when in power) have used it as a source of patronage and stuffed it with their relatives and supporters. This has led to the grotesque figure of 776 PIA employees per aircraft, one of the highest rates in the world.
Pakistan needs a huge outside investment in infrastructure in part because of its own chronic inability to raise taxes. At barely 10 percent of GDP, Pakistan's tax-collection rates are among the lowest in Asia. Pakistan suffers chronic electricity shortages in part because it cannot get the population to pay its electricity bills.
It does not have to be this way. Under President Ayub Khan in the late 1950s and early 1960s, a combination of a relatively honest, dynamic and far-sighted administration with plentiful US aid (above all for infrastructure, as with China's plans) and sound international advice led to Pakistan achieving some of the highest rates of economic growth in the world.
If Chinese money and Chinese influence can return Pakistan to those rates of growth, then this will not only help to stabilise Pakistan and create a barrier to violence there. It will also mark China's arrival as a truly great - and positive - force on the world stage.

Comment by Riaz Haq on December 12, 2015 at 3:06pm

#China entrepreneurs explore joint ventures in #Pakistan #CPEC http://www.pakistantoday.com.pk/?p=469870 via @ePakistanToday

A delegation of Chinese entrepreneurs visited the Islamabad Chamber of Commerce and Industry to explore business partnerships and joint ventures in Pakistan for various products including construction machinery, heavy duty vehicles, consumer electronics, hardware and glass wares.

The delegation was representing some big companies of China including FOXCONN Technology Group, China JiangSu NanTong LiuJjian Construction (CAMBODIA) Group, Wealthpower Technology Ltd, and Suzhou Super Glass Optical Technology Co Ltd. FOXCONN Technology Group has 1.2 million employees all over the world out of which 8 million were working in China.

The delegation informed that FOXCONN Technology Group was the most dependable partner for joint-design, joint-development, manufacturing, assembly and after-sales services to global computer, communication and consumer-electronics (“3C”) leaders and was looking for partners in Pakistan for manufacturing and distribution of these products. Similarly, CAMBODIA Construction Group produced big cranes, heavy duty construction machinery, trucks and were interested to start joint ventures in Pakistan.

The delegation members said that after the finalisation of China-Pakistan Economic Corridor project between the two countries, many Chinese investors were taking increased interest in Pakistan for investment and they have come on an exploratory visit to find out opportunities of investment and joint ventures in Pakistan. They also invited the ICCI delegation to visit China to find out business matchmakings.

Speaking at the occasion, LCCI President Atif Ikram Sheikh and Vice President Sheikh Abdul Waheed briefed the Chinese delegation about lucrative investment opportunities in Pakistan’s IT, construction, infrastructure development and other sectors. They said Pakistan was a big market of over 180 million people with strong demand for consumers’ electronics including computers, laptops, mobile phones, printers, copiers and digital cameras etc, and the Chinese investors should set up manufacturing plants in Pakistan to exploit these opportunities.

They said the government had started many construction projects in various cities while the CPEC would usher in more projects in energy and infrastructure development. They said Chinese investors should make Pakistan a production hub to meet domestic needs and export products to other regions. They assured that the ICCI would extend all possible facilitation to Chinese investors for investment and joint ventures in Pakistan.

Comment by Riaz Haq on January 8, 2016 at 8:22am

#WorldBank report warns #Pakistan of ‘substantial’ fiscal risks from #CPEC sovereign guarantees. #China loans 

http://tribune.com.pk/story/1023862/economic-prospects-wb-report-wa... …

Sovereign guarantees against the $46 billion China-Pakistan Economic Corridor (CPEC) investment and a likelihood of ramping up spending ahead of the next general elections could carry substantial fiscal risks for Pakistan, warned the World Bank (WB) on Thursday.

In its latest report titled Global Economic Prospects 2016, the Washington-based global lender has highlighted challenges and opportunities that CPEC offers to Pakistan. “Sovereign guarantees associated with CPEC could pose substantial fiscal risks over the medium term,” it noted.

State Bank of Pakistan (SBP) Governor Ashraf Wathra, and former finance minister Dr Hafiz Pasha have also expressed similar views about the implications of the CPEC investment on Pakistan’s external and fiscal accounts.

Wathra had said there was a need to divulge more details on debt and investment portions of CPEC, stressing the need for more transparency on part of the government. Pasha had projected that loans contracted under CPEC will push the country’s total external debt to $90 billion.

Commenting on the WB report, Pasha said Pakistan can offset the impact of the loans by increasing its exports by at least 50% in the next three to four years. He added that the game-changing project has financial implications for the country that have to be highlighted for better management of debt.

However, the government remains unable to give a well-thought out strategic trade framework, particularly at a time when exports are nose-diving. The last framework expired in June last year.

WB also warned that the hard won fiscal consolidation gains may be lost if spending ramps up in the period ahead of the 2018 elections.

The lender highlighted the opportunities for Pakistan in the next few years. It argued that over the near to medium term, the country stands to benefit from rising investments from China under CPEC, the return of Iran to the international economic community and persistently low international oil prices.

CPEC investment is estimated at around $45 billion until 2030. This includes $11 billion mostly public investment and $33 billion private investment in energy projects. The government has to give sovereign guarantees against the private investment including payments against power produced by the plants set up under CPEC.

WB said stronger growth and investment in Pakistan is predicated on reforms to strengthen the business climate, an improvement in the security situation, implementation of CPEC and an associated easing in energy constraints. It warned that these developments might not materialise as expected.

The lender noted that macroeconomic adjustment in Pakistan under an International Monetary Fund programme was progressing, while efforts to crack down on violent crime in Karachi are supporting investor confidence. It said CPEC agreement has further bolstered investor optimism, and, if implemented, has the potential to lift long-term growth.

Pakistan can be richer with rapid urbanisation: report

WB cautioned that fiscal deficits and public debt levels remain high. It said the debt-to-GDP ratio at 65% was high, which was the result of years of fiscal slippages. It said recently industrial activity has slowed in India and Pakistan, while external trade remains weak.

The global lender also highlighted challenges that the South Asia region faces in intra-regional trade. As a share of GDP, intra-regional exports are smaller than anywhere in the world, it noted. On average, India, Pakistan, Sri Lanka and Bangladesh’s exports to each other amount to less than 2% of total exports.

Average trade costs between country pairs in South Asia are 85% higher than between country pairs in East Asia, reflecting border barriers, poor infrastructure and transport connectivity, and generally poor business environments.

Comment by Riaz Haq on January 12, 2016 at 9:12pm

#China Powers up #Pakistan: The Energy Component of the CPEC | The Diplomat #CPEC 

http://thediplomat.com/2016/01/china-powers-up-pakistan-the-energy-... …


China and Pakistan held a ceremony beginning construction for the planned Karot hydropower plant on January 10, marking the start of one more energy project on the China-Pakistan Economic Corridor. The $1.65 billion hydropower plant, spearheaded by China’s Three Gorges Corporation, was the first project to receive funding from China’s Silk Road Fund. Upon completion (scheduled for 2020), the Karot plant will provide 720 MW of energy harnessed from the Jhelum River.

The Karot plant is part of the broader China-Pakistan Economic Corridor, or CPEC, which itself is part of China’s “Belt and Road” initiative to link China with Europe (and all the regions in between). Though the CPEC is often understood solely in terms of transportation infrastructure – developing the Chinese-controlled port at Gwadar and linking it to China via rail and road – that’s not the only aspect of the project. Under the “1+4” cooperation framework unveiled during Chinese President Xi Jinping’s April 2015 visit to Pakistan, the CPEC is the “1,” with the “4” representing key areas of the larger strategy. Energy is one of those four areas, along with Gwadar Port, transport infrastructure, and industrial cooperation. In fact, China and Pakistan officially broke ground on five new energy projects, all of them considered part of the CPEC, during Xi’s visit to Pakistan last year.

Along with the Karot hydropower project, the CPEC also includes Chinese construction of the world’s largest solar plant in Punjab Province. The first section began providing electricity in August 2015; the second portion is currently under construction by Chinese firm Zonergy. When completed by the end of this year, the entire solar plant is expected to produce up to 1,000 MW of power.

Another project is a coal power plant at Port Qasim, which was in fact the first energy project included under the CPEC framework. According to China Daily, the plant, being constructed by Powerchina Resources Ltd., will cost $2 billion and should be finished by the end of 2017. The project will consist of two 660 MW coal plants, for a total energy generation of 1320 MW.

Of course, Chinese investment in Pakistan’s energy sector predate the CPEC — just look at perhaps the most famous joint project, the $10 billion expansion of the Karachi nuclear power plant. But the scale of the CPEC energy projects are mind-boggling.

All told, 14 Chinese-constructed energy projects in Pakistan tied to the CPEC are supposed to provide an additional 10,400 MW of electricity by March 2018 – more than enough to make up for Pakistan’s 2015 energy shortfall of 4,500 MW. And that’s only part of the story. According to China Daily, there are a total of 21 planned energy projects in the works under the CPEC framework. Altogether, these projects should eventually produce 16,400 MW of power, roughly the same as Pakistan’s current capacity.

As they say, the best-laid plans often go awry, so it’s likely not every project will be completed on schedule (or even at all). But the sheer scale of China’s energy plans for the CPEC ensures that it has a chance to be a game-changer for Pakistan, where rolling blackouts are common due to energy shortages.

Comment by Riaz Haq on February 3, 2016 at 12:29pm

The inauguration ceremony of M8 was attended by Balochistan Chief Minister Nawab Sanaullah Zehri, General Raheel Sharif, Commander Southern Command Lt Gen Amir Riaz and other high ranking military and civilian officials.

The prime minister on the occasion also praised the services and sacrifices rendered by the Frontier Works Organisation (FWO) in the construction of CPEC.

“Despite security problems, work is in full-swing on construction of roads in Balochistan,” added Nawaz.

Prime Minister Nawaz elaborated that after completion of CPEC and other related projects, Balochistan would not be dependent for financial aid on the federal government.

“CPEC would ensure economic development of Balochistan,” he said, adding that the people of the province would be major beneficiaries of the mega project.

“Projects cannot be completed through mere slogans, rather a strategy was imperative for completion of projects,” he said.

The prime minister also reiterated his commitment on the occasion and said efforts were being made to develop Balochistan and bring it at par with other parts of the country.

ARMY CHIEF INSPECTS PROJECTS:

Meanwhile, Gen Raheel visited Hoshab area in Southern Balochistan to inspect new roads being built by army engineers as part of the China Pakistan Economic Corridor (CPEC).

According to DG ISPR Lt Gen Asim Saleem Bajwa, Gen Raheel lauded the pace and quality of work done by the Frontier Works Organisation (FWO).

In Pasni, the COAS held a meeting with Balochistan governor, chief minister and chief secretary.

The total road being built by the FWO for CPEC is 870kms long, out of which, 632kms have been completed within the last one and a half years.

Earlier in January, Prime Minister Nawaz Sharif had inaugurated the western route of the (CPEC) in Balochistan’s Zhob and laid the foundation stones of two key projects – upgradation of the Zhob-Mughal Kot section of the Dera Ismail Khan-Qila Saifullah Highway (N-50) and the Qilla Saifullah-Waigam Rud Road section of the Multan-Dera Ghazi Khan-Qilla Saifullah Highway (N-70).

The CPEC is a 3,000-kilometer network of roads, railways and pipelines to transport oil and gas from Gwadar Port to Kashgar city, northwestern China’s Xinjiang Uygur autonomous region.

http://www.pakistantoday.com.pk/2016/02/03/national/sharifs-on-the-... 

Comment by Riaz Haq on February 25, 2016 at 8:36pm

Logistic, #Technology Park to be built for $1.5 billion in #Pakistan as part of #CPEC. #China 

http://tribune.com.pk/story/1052973/cpec-logistic-tech-park-to-be-b... …

Federal Minister for Science and Technology Rana Tanveer Hussain said the Pak-China Science, Technology, Commerce and Logistic Park would be established in Islamabad at the cost of $1.5 billion.

Hussain, addressing a press conference, said it would be set up as part of the China-Pakistan Economic Corridor and serve as a platform for technological and commercial linkages between the two countries besides promoting investment and financing, e-commerce and research and development.

Game changer: All provinces will reap benefits of CPEC, says PM

The Minister said Pakistan would provide 500 hectares of land for the establishment of the Park and all other investment would be made by China. He said three sites had been tentatively identified and a delegation of Xinjiang Production and Construction Corporation would be arriving this month to finalise the site.

He said that the foundation stone of the project is expected to be laid in March next year and it would be completed in ten years in three phases. The minister said that this project would create job opportunities for 1,500 Pakistanis.

The minister stressed the need to move towards latest technology from obsolete one in order to compete with the rest of the world. In this regard, the government would allocate bigger share of the budget next year for the promotion of science and technology, he added.

The minister said that COMSATS Institute of Information Technology (CIIT), under the administrative control of Ministry of Science &Technology, had been holding Pak China Business Forums since 2012. In the forum, COMSAT invited Tech companies from China to participate with the main objectives of attracting Chinese investment in joint ventures in Pakistan.

Weighing in on benefits: Implementing transit fee on CPEC routes

Chinese companies have been showing increasing interest for the forum. From the 57 companies that visited in 2012, the number has risen to 125 in the 4th forum in 2015. 

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