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CPEC: How Pakistan is losing out to China

Discussion in 'South Asia & SAARC' started by layman, Apr 10, 2017.

  1. layman

    layman Aurignacian STAR MEMBER

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    Criticism, differences and doubts regarding the China Pakistan Economic Corridor have increased in Pakistan over the past year.The singular central thread that runs through all of them is that Pakistan’s sovereignty is increasingly at risk!

    As Pakistan realises that the CPEC — with investment now raised to an estimated $54 billion — cannot be viewed as a silver bullet that will lift Pakistan out of its dire economic difficulties or solve issues afflicting its society, doubts are magnified by the fundamental divergence in how both countries view the CPEC.

    While for Beijing it is part of a larger strategic objective which it views as an essential stepping stone towards global leadership, Islamabad sees it as a solution for its economic difficulties.

    Endorsed by the Pakistan army, politicians of the ruling party and some Pakistani diplomats, the CPEC has been projected as an opportunity that would ensure a 2.5 per cent rise in growth, add over 26,000 MW of energy and provide at least 700,000 jobs for Pakistanis.

    Recent assessments by Pakistani economists, journalists and politicians, however, offer a different picture.

    There are complaints that inter-provincial resentment and differences have flared, with accusations that the country’s eastern portion, where the majority of Pakistan’s economic bases are located, is being favoured.

    The CPEC is now disparagingly called the ‘China Punjab Economic Corridor!

    Because fuel for the CPEC’s new power plants must be imported from China’s Xinjiang-Uyghur Autonomous Region, the cost per unit of electricity generated will be double the present, adding to the consumers’ difficulties.

    There is serious concern about the interest repayment burden on Pakistan.

    The bulk of funding has come as loan-based financing to individual companies and not unconditional grants by the Chinese government, yet there is significant risk for the government as many of the power projects are under sovereign guarantees.

    Additionally, loans taken from Chinese entities by Pakistani companies in the first quarter of 2017 already totals $979 million compared to only $138 million for the same period last year.

    Pakistan’s liabilities, both private and public, are already a staggering 75 per cent of GDP, or Rs 22.5 trillion.

    Last November, Pakistan was unable to repay Rs 136.5 billion in bank loans stemming from the energy sector and postponed payment for another two years.

    While the governor of the State Bank of Pakistan has publicly regretted the absence of transparency in disbursements of funds received from China, the State Bank of Pakistan recently confirmed that Pakistan’s tax collection is unable to pay for debt servicing.

    The trade deficit is also rapidly growing with Pakistan’s imports from China rising from 4 per cent last year to 9 per cent already this year.

    Politicians in the provinces meanwhile complain that while tens of thousands of Chinese workers are employed on CPEC projects, no Pakistanis have yet got jobs.

    Complaints about the cost of security of the CPEC are mounting and China has declined to defray the expenditure.

    Because of China’s growing concern about the security of the 10,000 Chinese workers and CPEC projects, Pakistan announced it will double the size of the division-strength special security division commanded by a major general by the end of March.

    Pakistani politicians, who already cavil at the expenditure of $12 million per year on the SSD, have now become more strident in their criticism.



    The Gwadar port’s security, which is of special concern to China, imposes a heavy financial burden on Pakistan.

    In January 2016, the Pakistan navy decided to deploy two additional marine battalions to provide round the clock security at Gwadar.

    On September 21, 2016, in the wake of the deterioration in India–Pakistan relations over Kashmir, Chinese Premier Li Keqiang publicly expressed reservations and told Pakistan Prime Minister Nawaz Sharif that he ‘hoped’ Pakistan can continue to provide protection to the CPEC and Chinese personnel in Pakistan. The warning was echoed by China’s state-run media.

    In November 2016, during the inaugural Kashgar-Gwadar cargo run and subsequent transfer of containers to waiting vessels at Gwadar port, Pakistan’s navy deployed ships and aircraft to provide security cover to ensure safe and secure transit and assuage Chinese concerns.

    The role of Pakistan’s maritime forces has increased since Gwadar became operational with Pakistan’s navy assigned special responsibility to protect the Gwadar seaport project and more than 500 Chinese working there.

    It has strengthened maritime security capabilities to ward off attacks by terrorist groups or insurgents on seaports and vessels by intensifying security patrols, establishing the Pakistan marines’ force protection battalion and setting up coastal watch stations.

    With China refusing to provide any financial assistance towards the CPEC’s security expenses, the Pakistan government on September 24, 2016, decided to meet expenses incurred on the SSD by adding 1 per cent to the cost of all central energy projects and recovering it from consumers through the national electric power regulatory authority.

    The senate standing committee on planning development and reform has protested at billing citizens for providing security to thr Chinese in Pakistan.

    Pakistani analysts have also now begun pointing to China’s undue interest in Gwadar port. They point to the unmistakable similarities between Gwadar and Sri Lanka’s Hambantota.

    Saddled with unpayable Chinese loans, Sri Lanka now intends to allow a $1.4 billion debt for an 80 per cent equity swap that will allow China a 99-year lease on the Hambantota port and 1,500 acres of adjacent land.

    In Gwadar, the development of which the Chinese agreed to fund only in 2007 after Pakistan agreed to grant it ‘sovereign guarantees to the port facilities’ after decades of hard negotiation, the Chinese have signed a 40-year lease on 2,300 acres of land to develop a ‘special economic zone’ and an international airport.

    Gwadar additionally symbolises the sense of alienation felt by many in Balochistan.

    The Balochis assert that local fishermen have been forced to leave Gwadar, that they will soon become a minority in their homeland, and that most of the benefits of the CPEC are going to outsiders.

    The biggest threat to the CPEC and, potentially Sino-Pak relations is the unchecked rise of radicalisation of Islam in Pakistan.

    The closure on January 11, 2017 of the borders of China’s restive Xinjiang-Uyghur Autonomous Region with Pakistan is the first visible crack in the gloss of lacquer that the CPEC seeks to put on the China-Pakistan relationship.

    Chinese provincial officials are also increasingly naming Pakistan as the source from where Uyghur ‘terrorists’ enter China.

    China informed Islamabad last January that it plans to raise a 10,000-strong ‘private army’ for deployment in the CPEC to protect workers and construction sites.

    The accusation that Pakistan risks losing sovereignty to China is emotive and has the potential to spread. It could get aggravated with the presence of Chinese security personnel in Pakistan.

    Increasing criticism of the CPEC will hamper completion of numerous projects. China will, however, remain intent on achieving its strategic ambitions of acquiring Gwadar port and securing a large chunk of Pakistan occupied Kashmir and adjacent areas.

    In case of increased problems, it will invest an amount just adequate to keep the Sino-Pakistan relationship in a state of decent repair.

    Source
     
  2. SrNair

    SrNair Captain FULL MEMBER

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    So in sense ,this is actually happening.
    Pakistanis are giving their 'OWN LAND' at the their own 'PROTECTION' and also at their own 'EXPENSE' to Chinese with out considering any standard agreement structure and risking the sovereignity .
    What would they were doing when the negotiated for all these ?
    Pathetic.It seems like a dumb illiterate jealousy neighbour written off all of their properties for some cutthroat money lender for showing off to their rich eastern neighbour.
    According to the Pakistanis themselves the unchecked Chinese imports is already taking a good toll on indigenous industry like Textiles,Steels etc.
    Now they are insulting the Pakistanis by throwing threats like ' deployment of their own private Army'.
    When they signed a deal with China , they dont need US ,they dont need GCC but was so keen for Russia .
    And they imagined about a PAK-CHINA-RUSSIA Superpower triangle :D

    Now just look at where the imagination is going .
    US was far better than this ,except some occasional threats and itching they wouldnt interested in destroying the livehoods of millions of Pakistanis.

    They couldnt get the Chinese .China is not a developed nation means they are spending their money for their own people and interests .By developing Gwadar Chinese are creating a shortcut for their lifeline means trade .Pakistan development through this was a nonstarter for Chinese when they conceived all this project .


    'Look we have China on our sides,now what you are gonna do you little baniya Indian', this was the Pakistan mindset when they signed all of this stuff but Chinese ,the usual businessmen was waving their hands with India behind of the challenging Pakistan and we also smiled back .This is what happened here .

    This is also what going to happen in future.Debt would touch the himalayan peak and Chinese will leave this project by claiming infeasibility .All those structures will remain there and Pakistan cant use all of this without Chinese help.But Chinese can exploit entire Pakistan during a crisis situation .
    If Pakistan dares for same trick against Chinese like that they did against US to score points .Communist China will stick our mard i momins in a wall.
    In both cases we have to be careful about our interests.
     
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  3. Indian Jatt

    Indian Jatt 2nd Lieutant FULL MEMBER

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    CPEC is actually what will make or break Pakistan, since it involves power plants, roads, bridges and dams....please note that, power will not be an issue, it can also be confirmed that Chinese aswell as Pakistanis will get fair amount of opportunities.
    CPEC for Pakistan at this stage is a dream house....
     
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  4. Pundrick

    Pundrick 2nd Lieutant FULL MEMBER

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    The article is very pessimist, there are many positive to the CPEC as well. Pakistan is anyway a sunk ship, China just want to this ship to sail some of their product to their customer. Its upto the Pakistanis, how they treat the Chinese, as the history shows it is a country run by emotions and misadventures by their Army, so the future looks very difficult for this couple.

    China will soon try to control the Pakistani media, that will be interesting to see, they'll try their best to hide the Chinese activities in the region. But it won't last for long, as the radicals will always come into picture with some financial aid from big players and they'll kick some Chinese butts, that will force China to look for alternative route through Myanmar and Central Asia.
     
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  5. layman

    layman Aurignacian STAR MEMBER

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    Interesting analogy.... Yep radical minds can never be controlled...
    But India can sit and wait for it to implode. Because Chinese are serious they will go to any length to suppress and they are master of it.
     
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  6. Pundrick

    Pundrick 2nd Lieutant FULL MEMBER

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    Chinese are masters of business, but not like Indians/USA, they don't look at the long term perspective, In short they have zero knowledge of politics. They are trying their hands on a region which is run by sentiments and not logic. $ 1 million from RAWs pocket is more than enough to start massive anti-China movement, but the Pakistani Army supports the Chinese and they'll go to any extent to safeguard the Chinese investment.

    The problem is Pakistani Army is run by the Punjabi Sunnis and it is very difficult to start internal conflict between them, the minorities havn't got any proper representation in the Army and that is why it is tough to create mutiny, and it is also tough to prove any genocide as all the Punjabis unite whenever they carry out operations against any other community.
     
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  7. layman

    layman Aurignacian STAR MEMBER

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    Pak are selling the land for money simple as that. Chinese are never going to give jobs to Pak nor they are going to help Pak for indigenous developments. All they will do is give them ordinance to repaint.
    How much more can Chinese take to keep this CPEC viable for them, that is a Billion $ question.

    Wondering when Chinese feels the heat and it becomes really a big headache for them to maintain Pak they will simply leave Pak and what will the state of that nation.

    All Chinese knows is business and safeguarding it by suppressing . They are hated in Africa but no option as they pay money and use the resources of the other country, Nothing they build last even for considerable amount of time after they leave.

    That why i said CPEC has to be killed now, else it is going to be a big headache in the future.
     
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  8. A_poster

    A_poster Lieutenant FULL MEMBER

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    I have come to view whole of OBOR,not just CPEC, as a project of China to dump its overcapacity in Steel and Cement, which otherwise would have to be closed down. I posted a rough cost-benefit analysis of CPEC on this forum, and it cost multiple times in money and time for CPEC to serve as a transit route.

    When judged on this aspect, CPEC would probably be providing the best returns on Chinese investment as they have secured best deals on CPEC part of OBOR.
     
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  9. InfoWarrior

    InfoWarrior 2nd Lieutant FULL MEMBER

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    According to Chinese and Pakistanis, Indians are playing spoilsport by not joining CPEC and OBOR. China desperately wants India to join OBOR, which is frustrating for China. Pakistan thinks it is blocking India's link to Central Asia but in actuality it is only blocking the shortest land route to CA. There is no point in India even joining CPEC and the shortest land route to CA lies though Xinjiang, not through Pakistan. China wants India to think India needs OBOR to enable it to counter CPEC.

    http://www.hindustantimes.com/world...ia-to-india/story-lGXYEo6MFV2rht16VsoCWP.html

    http://timesofindia.indiatimes.com/...-in-a-pitch-for-cpec/articleshow/57511262.cms

    https://www.thenews.com.pk/latest/1...ses-India-to-ease-tensions-with-Pak-join-CPEC

    http://indianexpress.com/article/in...ia-should-join-cpec-to-ease-tensions-4441399/

    But in actuality it is China which requires OBOR.

    One fails to understand why Beijing is so adamant to not re-open the Himalayan land ports between India and Tibet, while at the same time, it is ‘inviting' New Delhi to join the CPEC bandwagon.
    The CPEC is a Chinese ‘dream’; when he visited Islamabad in April 2015, Chinese President Xi Jinping pledged $46 billion for it. When asked about India joining the venture, Chinese Foreign Ministry spokesperson Hua Chunying replied: “I wonder whether the Indian side takes this offer made by the Pakistani general as a goodwill gesture,” before adding: “The CPEC, as an important component of China’s Belt and Road initiative, is an open initiative. …China would like to discuss the possibility of introducing a third party.”
    http://www.dailypioneer.com/columnists/edit/for-india-cpec-is-a-corridor-to-nowhere.html

    http://timesofindia.indiatimes.com/...s-obor-chinese-daily/articleshow/57730081.cms

    https://timesofislamabad.com/chinas-advice-to-narendra-modi-over-obor/2017/03/20/

    https://www.thenews.com.pk/latest/193477-India-cannot-prevent-growth-of-OBOR-China-daily

    https://thehimalayantimes.com/kathm...a-call-nepal-likely-pledge-one-belt-one-road/
     
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  10. vstol jockey

    vstol jockey Colonel MILITARY STRATEGIST

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    This is what we call in Haryanavi, " khaat bhi teri, tail bhi tera aur G$$nd bhi teri."
     
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  11. SrNair

    SrNair Captain FULL MEMBER

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    Chinese themselves knows this is not going to work effectively .
    They are investing for an emergency route for near future .

    If there is any case of geopolitical crisis then Chinese can use this route instead of Malacca strait .
    Permanent debt condition of Pakistan and throwing of money to GHQ will ensures zero obstacles .
    Even US cant pressure Pakistan at that instant .
     
  12. layman

    layman Aurignacian STAR MEMBER

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    Not a emergency route but they want a full blown option to move this perishable goods at much faster time.

    This route will be primarily used for connectivity to Europe and Africa. They are having big troubles moving perishable goods now and it is costing them lot.
    And US has a option to cut it off as they control Gulf of Aden and Hormuz strait. Without these Chinese option are very limited and future is bleak for CPEC.
     
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  13. A_poster

    A_poster Lieutenant FULL MEMBER

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    That is OBOR, not CPEC. CPEC opens into Arabian sea and transporting anything by it even to Dubai (Forget Europe) is 16 times costlier than sea route, and takes 1.5 times more time than sea route.
     
  14. layman

    layman Aurignacian STAR MEMBER

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    Nope, costing will be cheaper. And time reduced as well as important perishable goods transportation which where the money is these days.
     
  15. A_poster

    A_poster Lieutenant FULL MEMBER

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    Again that is for OBOR's Central Asian part servicing central Europe and Russia. CPEC neither saves times,nor money, even if we ignore the fact that road is not open for 6 months.
     
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