China reiterates its pledge to lower trade barriers, widen market access

BEIJING: China on Thursday reiterated its pledge to further widen market access for foreign capital and lower non-tariff trade barriers, as it aims to boost flagging trade amid a slowing economy and a trade war with the US.

In a lengthy document that laid out areas for improvement, the State Council, the country’s cabinet, said trade with neighboring countries would increase, cooperation with countries signed up to its Belt and Road infrastructure initiative would deepen and Chinese firms would further expand into markets in Asia, Africa and Latin America, according to the official Xinhua News Agency.

China is locked in a 16-month long trade war with the United States that has disrupted global supply chains and rattled financial markets. Despite recent signs of progress in trade negotiations, there is growing uncertainty about whether Beijing and Washington can reach a phase one agreement that would put off another round of US tariff hike.

The role of foreign capital as a driver for the country’s industrial upgrade and high-quality development of trade will be maximized, said the State Council, adding that Beijing would increase policy support to boost trade.

Beijing will also further lower import tariffs and boosts imports of agricultural goods and services, while pledging to step up the protection of intellectual property rights by increasing punishment for infringements.

China’s exports contracted for a third straight month in October, while imports shrank for the sixth consecutive month, as US tariffs took a toll.

Beijing will accelerate efforts to build an export control system to manage trade risks, the government said without elaborating, adding it would continue to call for relevant countries to relax export controls on China.

Published in Dawn, November 29th, 2019

Chinese big players first to express an interest in Saudi Aramco

The World’s oil market maker is gearing up for the historic initial public offering (IPO) of state oil giant Saudi Aramco. Given that Aramco is the most profitable company in existence, earning $68 billion between January and September of 2019, expectations are high for the largest IPO to date.

But headwinds exist. Oil prices are middling, oil demand is tepid, and Middle East oil supplies are under constant threat of attack or seizure.

Attempting to put a further damper on the IPO deal, Iranian President Hassan Rouhani announced on Sunday the discovery of a new oil field, purported to contain between 20-50 billion barrels of oil – a value of $1 – $2.5 trillion at a global oil price of $50 per barrel.

Yet, under the current sanctions regime, Iran lacks the financial and technological resources to exploit such a find. China, one of Iran’s few remaining global partners, is capable of developing the field, but Beijing is likely to refrain from doing that given the enormous political risk.

But the Iranian discovery isn’t slowing the Saudis down.

Approval of the Aramco IPO by the Crown Prince Mohammed bin Salman is part of a larger initiative to reform and fundamentally improve the Kingdom’s economy, which has long been reliant on oil for revenue. Saudi Arabia needs a systemic reform package to bootstrap itself to the 21st century.

The Saudi oil giant is responsible for 10% of global oil production and published its prospectus last week. This provided a first glimpse into the company’s financial and business strategies including the economic, political and business risks Aramco faces.

While Prince Mohammed priced Aramco at $2 trillion, bankers have estimated it to be valued closer to $1.5 trillion, with bidding to purchase shares beginning November 17 and final pricing set for December 5. Shares would be sold on the Tadawul, the Saudi stock exchange.

As the most profitable company in the world and the largest oil producer, Saudi Aramco is seen by many as an attractive investment option. Aramco also boasts some of the lowest production costs of oil in the world, able to extract a barrel of oil for under $9, while U.S. shale operators average closer to $20, a significant advantage over rivals.

Consistent with their Belt & Road Strategy, the Chinese Silk Road Fund, state-owned oil producer Sinopec Corp (NYSE: HKSE), and China Investment Corp are among the first big players to express interest in the Aramco IPO.

Concerns of Peak Oil Demand & Climate Change

Despite its overwhelming size and yield, $111 billion in profits in 2018 certain geopolitical and economic risks may deter major investors from buying shares in the Saudi oil giant. Peak oil demand forecasts, a global push to reduce emissions, and geopolitical unrest all pose as significant risks the prospectus outlined to potential investors.

Amid growing concern over climate change, there has been an overall trend by investors to diversify away from fossil fuels and shift investment to clean energy sources. Earlier this year, the world’s largest sovereign investor, the Norwegian oil fund, announced it would move away from fossil fuels removing roughly $7.5 billion of oil and gas companies whose business operations focus on exploration and production.

Consequently, this push towards renewable energy has forced some of the world’s largest oil producing members, specifically OPEC, to decrease its production forecast to 32.8 million barrels per day (bpd) by 2024 citing an increase in alternative energy and climate change as factors.

As the recent Iranian attacks on the Saudi oil facilities and fields demonstrated, geopolitical conflicts in the Middle East and Africa threaten Saudi Aramco’s oil production and important transportation routes. In September, Saudi oil facilities were struck by drones and cruise missiles, removing 5.7 million bpd of oil form production and causing oil prices to spike, albeit briefly.

Escalating tensions, a rash of attacks and seizures of oil tankers, and threats by Iran have jeopardised the Strait of Hormuz, a vital transit route to oil reaching other markets. In 2018, oil transportation via the Strait averaged 21 million bpd.

Perhaps most notable in the Saudi Aramco prospectus was the assessment conducted by IHS Markit Ltd., forecasting that peak oil demand may occur in the next 20 years.

The Kingdom has previously downplayed any such notion of a slowdown in oil demand signalling that Riyadh is positioning itself for a low-carbon future.

The Aramco IPO comes at a time of ambiguity in the global oil market with low oil prices, an abundance of global oil reserves, and heightened geopolitical risk triggered by Iran. While market and geopolitical forces will make this IPO more challenging than they had hoped, Saudi Arabia has pledged to do whatever is necessary to ensure the success of the IPO.

Source: Belt and Road News

Alibaba’s Singles’ Day sales top $38 billion

After 24 hours of frenzied buying and selling, and weeks of aggressive advertising and promotions before it, the Alibaba Group  said today its sales hit another record high on Singles’ Day, the biggest shopping day on the planet.

The Chinese e-commerce giant said its platforms sold goods worth 268 billion yuan, or $38.4 billion today, easily exceeding last year’s record $30.7 billion haul. Electronics gadgets and fashion items were among the most sold goods in the 11th edition of the Singles’ Day annual event, company executives said in an interview.

More than half a billion people from a number of countries participate in the event, which is China’s equivalent to Black Friday and Cyber Monday. Except… Singles’ Day is much larger. The five-day Black Friday clocked less than $25 billion in sales last year. Cyber Monday clocked less than $8 billion. Alibaba Group said earlier today that it had netted its first $1 billion in sales in just 68 seconds and first $10 billion in half an hour.

To bridge people in China and those living elsewhere, Alibaba also maintains a number of dedicated websites. AliExpress  sells goods from Chinese brands to international residents; Tmall sells goods from global brands to China; and Taobao sells Chinese brands’ goods to people in China. Lazada, a subsidiary of Alibaba Group that caters to Southeast Asian markets, saw the number of buyers and merchants double this year. “This year, both buyers and merchants have more than doubled and we’ve already seen a series of record-breaking moments. We’re looking forward to sharing even more good news,” said Yin Jing, co-president of Lazada.

The retail giant said earlier today that dozens of brands, including Apple,  L’Oreal and Dyson, had received more than 100 million yuan, or $14 million, in pre-orders.

The shopping glitz hosted a number of celebrities, including Taylor Swift  and Asian pop icon GEM, to generate buzz. This year, the Hangzhou-headquartered firm also focused on live-streaming via its platform, a phenomenon that has gained significant traction in China.

In a live-streamed video, Kim Kardashian  announced last week that her fragrance brand KKW will be sold on Tmall this Singles’ Day.

One figure who was missing from the action was Jack Ma,  the founder of Alibaba Group, who retired in September this year. In previous years, Ma has not only delivered powerful speeches but also put on performances for employees and customers.

At a press briefing an hour ago, Alibaba Chief Technology Officer Jeff Zhang described 11.11 as an “airplane flying at turbo speed,” adding that making this supposed airplane more efficient has been the company’s biggest focus.

One such improvement is a logistics network, which is still a laggard for the technology giant. Last week, Alibaba Group announced it was investing an additional $3.3 billion in logistics unit Cainiao, which it co-founded with a number of other companies six years ago.

The biggest challenge for Alibaba remains the expansion of JD.com  and Pinduoduo, both of which have better hold over the smaller cities and towns and more organized logistics networks. The three of them are locked in an intense battle, with each one bandying out billions of dollars in discounts to lure — and sustain — customers every year.

Like Alibaba, JD.com and Pinduoduo also host similar campaigns each year. JD.com’s sales, which began November 1, had crossed $23.6 billion as of early today. This model has also been replicated by Amazon and Walmart -owned Flipkart  in India, Qoo10 in Singapore and 11th Street in South Korea.

Today’s milestone should help Alibaba win some more confidence from shareholders when it begins selling shares worth $15 billion in Hong Kong later this month.

Singles’ Day event falls on November 11 every year and is also known as “double 11.” The event is dedicated to people who are not in a relationship.

Source: TechCrunch 

Dated on: 13/11/2019

Pakistan, China resolve to strengthen strategic partnership

 Pakistan and China on Wednesday reaffirmed their resolve to further strengthen their bilateral strategic partnership.

A joint statement issued after the conclusion of Prime Minister Imran Khan’s two-day visit to Beijing said that the two sides reaffirmed their support on issues concerning each other’s core interests.

“Chinese leaders expressed solidarity with Pakistan in safeguarding its territorial sovereignty, independence and security. The Pakistan side reaffirmed its commitment to the One China Policy,” the statement said.

The prime minister visited China at the invitation of Chinese Premier Li Keqiang on Tuesday. During the visit, the premier called on Chinese President Xi Jinping, Premier Li and National People’s Congress Standing Committee Chairman Li Zhanshu. He also met Chinese entrepreneurs and businessmen.

The prime minister attended the closing ceremony of the Beijing Horticulture Expo 2019 as the chief guest. He congratulated the Chinese leadership and people on the 70th foundation anniversary of the People’s Republic of China.

He felicitated China for its remarkable growth and underscored that the reform and opening-up process of China was a model for developing countries.

“Supporting One Country Two Systems, Pakistan reiterated that affairs of Hong Kong were China’s internal matter and all countries should uphold international law and basic norms of non-interference in internal affairs of other countries,” the joint press release read.

The Pakistani side briefed the Chinese side on the situation in Indian-occupied Kashmir. The Chinese side responded that it was “paying close attention” to the current situation in occupied Kashmir and reiterated that the issue is a dispute left from history, and should be peacefully resolved based on the UN Charter, relevant UN Security Council resolutions and bilateral agreements.

“China opposes any unilateral actions that complicate the situation,” the statement said, adding that the two sides underlined that a peaceful, stable and prosperous South Asia was in the common interest of all parties.

CPEC:

Both sides maintained that the second phase of the China-Pakistan Economic Corridor (CPEC) will promote industrial and socio-economic development in Pakistan. The Pakistani delegation highlighted that the Gwadar Port has been granted various facilities enabling it to become a trade and logistical hub for the region.

“The two sides expressed determination to speedily execute CPEC so that its growth potential can be fully realised making it a high-quality demonstration project for the Belt and Road Initiative,” according to the statement.

Both sides agreed to jointly study identified projects in power, petroleum, gas, agriculture, industrial and infrastructure sectors. Those projects were entrusted to the concerned Joint Working Groups for deliberation and subsequent consideration by the Joint Coordination Committee (JCC).

The two sides held in-depth exchange of views on deepening bilateral cooperation in the areas of trade, investment, finance, defence and security, education, agriculture, social sector, people-to-people contacts and cultural linkages.

They agreed that early implementation of the second phase of the China-Pakistan Free Trade Agreement would contribute to an increase in bilateral trade.

During the visit, Prime Minister Imran and Chinese Premier Li witnessed the signing of various agreements and MoUs.

Prime Minister Imran thanked the Chinese leadership for providing opportunities to Pakistani students to study in China.

The leaders reviewed the bilateral defence cooperation and agreed to further strengthen this in the areas of military exercises, training cooperation, personnel exchanges, and equipment and technology cooperation.

Reaffirming that there is no military solution in Afghanistan, the two sides agreed that peace and stability in Afghanistan is vital for regional security and expressed satisfaction at the outcomes of the third China-Afghanistan-Pakistan Foreign Ministers’ Dialogue held in Islamabad on September 7.

The Chinese side appreciated Pakistan’s efforts in promoting peace and reconciliation process in Afghanistan. “Both sides maintained that an inclusive, and Afghan-led and Afghan-owned peace process would be key to bring peace and stability in the country,” the press release said.

Both sides reiterated their commitment to fight terrorism in all its forms and manifestations, with China calling on the international community to “objectively recognise Pakistan’s contributions to regional peace and security through its success in [the] fight against terrorism”.

Prime Minister Imran thanked the leadership and people of China for their hospitality, and invited the Chinese leadership to visit Pakistan at a mutually convenient time.

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China dominating India on disputed borders

In 1949 India became the second country to recognize China and in 1954 Nehru and Zhou Enlai signed the treaty of Panchsheel or the five principles of peaceful co-existence. According to the agreement both countries had to respect for each others traditional integrity and non interference. The relation between the two countries were at its peak during 1950 to 1959 and they had promoted slogan “Hindi Chinni Bhai Bhai”. When People’s Liberation Army(PLA) was busy in crushing a revolt in Tibet,the spiritual leader Dalai Lama fled to India and formed a Tibetan government in exile with the Indian support. The same year clashes took place between China and Indian forces and tension increased when Mao Zedong stated that the Lhasa rebellion in Tibet was caused by Indians. In 1959 a border conflict emerged in Himalaya and Ladakh (Indian Occupied Kashmir). The McMahon Line was drawn between Tibet (China) and British India in 1914 at Simla signed between British and Tibetan representatives. India recognize McMahon line which according to them defines their border with Tibet which was drawn in 1914 at Simla convention. However, China objects to validity of line and believes that it was not party to the convention. India demands return of the sacred Mount Kailash Manasarovar in Tibet, as it is sacred place for Hindus. China claimed these disputed areas as part of its territory and deployed its army on the borders. The pretext of the 1962 war besides Dalai Lama was dispute over the sovereignty of Arunachal Pradesh and Aksai Chin (Indian Occupied Kashmir). Skirmishes turned out to be a war in 1962 when India launched an attack from Ladakh and across McMahon line in Arunachal Pradesh(NEFA). The Indian army was too weak to fight Chinese as China counter attacked in Ladakh (western sector) Arunachal Pradesh (eastern sector) and crushed the Indian army. Indian army after heavy loses in the eastern sector escaped to Bhutan. Chinese army came down till Tezpur in Assam. During 1962 war the Chinese army occupied a large chunk of Arunachal Pradesh but returned after ceasefire. According India Today 3250 India soldiers were killed and India lost 43000 square kilometers of land to China in Aksai Chin. According to Chinese official the war achieved China’s policy objective of securing border in the western sector by acquiring control in the Aksai Chin. In the eastern sector their troops went back to the north of McMahon line after China unilaterally declared a ceasefire on 19 November 1962. China was successful in a month long war on both the front as India suffered heavy setbacks and badly defeated. Let us have a brief look at the India-China border disputes. The India China border is divided into three sectors. The western sectors in known as Askai Chin sector. It is a high altitude desert of 37000 square kilometers and second largest Indo China border area. The line drawn here is known as Johnson line by British in 1860 that extended upto Kunlun mountains. However, Chinese never recognized this line. China recognizes the Macartney -Macdonald line as the actual boundary which puts Aksai Chin in Xinjiang region of China. In 1893 boundary was revisited by British government and presented to China in 1899.Aksai Chin lies between India Occupied Kashmir (Ladakh) and China’s Xinjiang province. It is now under Chinese administration after 1962 war. China also claims over Daulat Beg Oldi, a tehsil in Leh, south of Aksai Chin as its area. China also claim that the Pangong lake in eastern Ladakh where Chinese and India troops had a standoff is entirely located in its territory. According to India that two third of the lake in the eastern Ladakh is controlled by China. The recent standoff between China and Indian troops is the first such incident after India revoked special status of Jammu and Kashmir. China has objected to the formation of Ladakh as Indian union territory saying that it undermined its territorial sovereignty. Second sector is central which include areas of Sikkim and Doklam. Doklam is a narrow plateau in the tri-junction of India, China and Bhutan. China claims that Doklam is a disputed territory between Bhutan and China. This region is close to India’s Chicken’s Neck a 20 kilometers wide stretch of land which connect the seven sister states in the north east India. Bhutan has not established diplomatic ties with China because of Indian pressure. According to Chinese daily Global Times India has severely Jeopardized Bhutan’s diplomatic sovereignty and control its national defence. India has signed a treaty with Bhutan to protect its border. China’s view point is that India has no right to make territorial demands on Bhutan’s behalf. According to them India not only violated China’s sovereignty but also challenged Bhutan’s independence. The recent standoff started after China’s plan to construct a road close to India’s strategic Chicken’s Neck. India is worried if this road is completed will put China at a strategic advantage and will give access to China to Siliguri Corridor (Chicken’s Neck) that links the seven north eastern states to the rest of India. Sikkim is another issue. India deposed the king of Sikkim in 1975 and manipulated the country’s parliament into a referendum to make Sikkim a state of India. The Nathu la and Cho la clashes were series of military clashes in 1967 between China and India along side of Sikkim. China has threatened India that they may support pro independence movement in Sikkim if India does not stop pursuing a regional hegemony through the border faceoff. China has conveyed that they may review their stance on Sikkim. Sikkim is important because of its strategic location and China’s refusal to recognize it as part of India. In Sikkim, Nepalis constitute two thirds of population and hold political power. The eastern sector comprises the state of Arunachal Pradesh, the largest disputed area covering around 90000 square kilometers. China claims it as its territory and refers to it as “South Tibet”. Arunachal Pradesh has 63 percent of its population belonging to faiths other than Hinduism. The state contains one of the highest proportions of Buddhist in India. It was also known as the North East Frontier Agency (NEFA). During 1962 war, entire Arunachal Pradesh was occupied by Chinese army but later they withdrew. However, China still claims it as its integral part. China objected to the visit of Dalai Lama to one of the monastery in Arunachal Pradesh. China has also recently condemned India prime minister Modi’s visit to the disputed state of Arunachal Pradesh. During the summit of Belt and Road Initiative (BRI) in Beijing, China removed a map from the website that depicted entire Jammu and Kashmir and Arunachal Pradesh as part of India. China recently also destroyed thousands of maps which showed Arunachal Pradesh as part of India. Another major issue of concern between China and India is water issue. There are four rivers which flow from China to India as they all flow from Tibet to India. There exist no agreement with India over the water resources. China is planning to build a number of water projects in Tibet including a dam on Brahmaputra. According many think tanks dispute relating to water will be major source of conflict between the two countries in the future. India is also opposing CPEC that passes through Gilgit Baltistan. The Pakistan interior ministry has already warned government of Gilgit Baltistan that India has made up plans to attack the CPEC installations to sabotage the mega project. Chairman Joint Chief Staff Committee General Zubair Mahmood Hayat confirmed in a speech that India has established a special cell at a cost of 500 million dollars to sabotage CPEC. There have been so many rounds of talks between India and China to resolve the differences over the borders. The last round was held between Ajit Doval and Chinese foreign minister Wang Yi after Doklam stand off. However, tension still persist along the western, central and eastern sectors of the disputed border. China’s position remains that Aksai Chin and Arunachal Pradesh (Southern Tibet) are Chinese territories and also Jammu and Kashmir which is disputed territory to be settled between Pakistan and India. Pakistan supports China’s stand on its border disputes with India. Friendship between Pakistan and China is very strong based on mutual trust and friendship. Pakistan’s close relation with China is very important to Islamabad. Thus it is rightfully sung that Pak Cheen Dosti Wang Woye (Long Live Pak-China Friendship).

Source: Daily Times 

Dated on: 27/9/2019

Author: Masud Ahmed Khan

China’s Global Digital Silk Road is arriving in the Middle East

It is these bridging ambitions that China has sought to realise in recent years through its flagship foreign policy project, the Belt & Road Initiative, a $1 trillion infrastructure development scheme to be rolled out across more than 60 Plus Countries .

China has significantly increased its presence in the Middle East, and in the Arab States in particular in recent years through initiatives such as the China-Egypt Suez Economic and Trade Cooperation Zone, the provision of significant levels of direct foreign investment in infrastructure and reconstruction efforts in Syria, Iraq and Libya, and through attempts to more closely economically integrate the region with its Central Asian neighbours.

Earlier this year, the China-Arab States Cooperation Forum, which was first established in 2004 to foster better exchanges between Beijing and members of the Arab League was upgraded to the status of a ‘strategic partnership of comprehensive cooperation and common development’.

Whilst Chinese port, rail and road upgrades have long caught the attention of regional analysts, the future of China-MENA relations may be based less on iron and steel and more on silicon.

Whilst Chinese port, rail and road upgrades have long caught the attention of regional analysts, the future of China-MENA relations may be based less on iron and steel and more on silicon. Alongside the Yinchuan Expo a special conference dedicated to ‘Online Silk Road’ was attended by business and political leaders from the Arab world and their Chinese counterparts.

Initiatives like this, and the Chinese led Digital Economy International Cooperation Initiative in which the UAE, Saudi Arabia, Turkey and Egypt have agreed to expand online cooperation with Beijing make one thing very clear: the historic ‘silk road’ of the past is being overlaid by an emergent ‘digital highway’ which may dictate the economic and political future of the Arab world.

The Chinese led Digital Economy International Cooperation Initiative in which the UAE, Saudi Arabia, Turkey and Egypt have agreed to expand online cooperation with Beijing make one thing very clear: the historic ‘silk road’ of the past is being overlaid by an emergent ‘digital highway’ which may dictate the economic and political future of the Arab world

Plans for the Digital Silk Road were first introduced by Chinese foreign policymakers in March 2015. A recent report by the Mercator Institute for Chinese Studies, the largest European think tank on China issues, notes that the emergence of the Digital Silk Road initiative reflects the confluence of two important objectives for the Chinese regime.

Firstly, the Chinese Communist Party has been particularly keen to promote the growth of home-grown IT champions and reduce technological dependence on overseas partners, particularly the United States. Beijing has channelled massive amounts of capital through state guidance funds into emerging technologies, a policy which is now paying dividends.

Chinese telecommunications giants lead the world in emerging 5G technology, China spends at least ten times as much on quantum computing research and development than the US and plans to have established at least 50 academic and research institutes in artificial intelligence by the end of 2020. In the AI sector alone, China filed 30,000 patents last year, triple the amount of American corporations.

Most importantly, in regard to future trends, China is home to more than a third of the world’s ‘unicorn’ companies, privately held start-up companies, largely in the technology sector valued at over $1 billion US dollars. Home grown technology companies such as WeChat, Baidu, Alibaba, and Tencent now rank among the world’s most profitable corporations.

Yet aware of the saturation of the Chinese domestic market and the need for expansion to keep profits coming in, the Communist Party has more recently turned to securing a second objective.

Chinese telecommunications giants lead the world in emerging 5G technology, China spends at least ten times as much on quantum computing research and development than the US and plans to have established at least 50 academic and research institutes in artificial intelligence by the end of 2020. In the AI sector alone, China filed 30,000 patents last year, triple the amount of American corporations.

China’s National Informisation Strategy, first slated in 2016 calls on Chinese digital corporations to ‘Go Out’ into the world and support the creation of a ‘Digital Silk Road’. Developing commercial markets overseas is seen as key to the expansion of China’s booming digital economy.

Chinese technology giant Huawei is an emblematic success story which attests to the successful achievement of these two economic aims. Huawei, transliterated as ‘China Doing’, was founded as a small-scale company producing phone switches in 1987. By the early 2000s, the Chinese government was nurturing the corporation and helping it successfully diversify.

By later in the decade, Huawei was ready to expand beyond Chinese borders and emerged as a bit player in a global telecommunications market dominated by American and European providers. Yet by midway through the present decade it was experiencing tremendous becoming growth- revenues more than doubled between 2014-18.

By 2017, Huawei overtook Ericsson to own the largest global market share in mobile infrastructure, and in 2018, it became the number one seller of mobile phones, beating out Apple in the process. Huawei now has its own semi-conductor subsidiary, HiSilicon, to reduce its dependence on American and Japanese parts and is in the process of developing its own Android-like operating system.

Political and ideological considerations also weigh heavily on China’s digital ambitions. A modernisation agenda focus on high-tech development is designed to restore the country to its rightful place in the global innovation hierarchy, a position that party historians claim was lost during the 1800s as European empires encroached on Chinese territory, stymied economic development and turned China into a vassal state during the ‘century of humiliation’ before the Communist Party came to power.

A modernisation agenda focus on high-tech development is designed to restore the country to its rightful place in the global innovation hierarchy, a position that party historians claim was lost during the 1800s as European empires encroached on Chinese territory

Further, control over critical infrastructure and monopolising on the global means of communication will allow China to project discursive and political power well beyond its borders. Chinese fibre optic cables now carry information throughout the world and the country plans town or supply 25% of cables globally over the next decade. Control over underseas cables is vital to the global flow of information- indeed 95% of all international data is carried by such cables. Huawei is currently building or improving nearly 100 of them.

Chinese information and communications technology firms are currently making significant inroads in regions where digital penetration is low. As Jon Hillman, a Senior Fellow with the Centre for Strategic and International Studies, a Washington based think-tank notes, ‘Chinese forms are quite active in Africa. They excel in rural areas where Western firms have been hesitant to invest’. One of China’s leading digital initiatives involves the so-called Pakistan East Africa Cable Express (PEACE) cable running from Gwadar in Pakistan with Djibouti, Somalia, and Kenya.

Chinese fibre optic cables now carry information throughout the world and the country plans to own or supply 25% of cables globally over the next decade.

What effect might Chinese digital infrastructure have on the MENA region? A recent report by Chatham House, a British foreign policy think tank, noted that Chinese firms are already making significant inroads in North Africa. Huawei opened its first cloud data centre in Egypt in February 2019. Tangier Tech, Morocco’s much publicised Chinese built smart city is expected to host 200 Chinese companies, many of which operate in high tech activities. In Tunisia, Chinese firms are actively participating in infrastructure improvements and technological development to fulfil the goals of the country’s ‘Digital Tunisia 2020’ strategy.

In the Gulf, Chinese influence is pronounced too. The UAE has established a $10 billion joint strategic investment fund between Abu Dhabi investment group Mubadala and the China Development Bank. The ‘internet of things’ and ‘blockchain’ technologies are central to the ‘Smart Dubai 2021’ project and area areas in which Chinese technologists play a leading role. Chinese online retail platform Alibaba has pledged to build a ‘Tech Town’ with Dubai developer Mereas Holding which will house over 3000 high-tech companies near Dubai’s Port, Jebel Ali.

Middle Eastern e-commerce, likely to be worth in excess of $50 billion USD by next year is largely powered by Chinese companies like Alibaba and JollyChic, the most popular digital marketplace in Saudi Arabia. In the field of financial technology, Chinese companies have also made great strides in the region.

Alipay and WeChat Pay, two popular e-pay services, are widely accepted in the region and partnering with domestic tech firms and financial institutions. The expansion of so-called fintech infrastructure is helping to internationalise the Renminbi, China’s currency and its economic institutions.

Whilst regional analysts should welcome the expansion of digital technology in a region which seeks opportunities to economically diversify and modernise, Chinese initiatives come with their own share of risks. In an economic sense, Chinese companies dominating the digital landscape may hinder the growth of local players. Chinese companies have a considerable head start over regional rivals and may come to dominate emerging digital markets in the region.

More importantly, as Mr Hillman notes the mass collection of data by Chinese corporations ‘can be used for commercial and strategic purposes’. The sharing of information among Chinese companies and between commercial operators and the Chinese government will allow Chinese tech giants to identify and eliminate local competitors.

Governments and regulators in the region would do well to insist on more equitable terms to maximise the benefits of Chinese investment- insisting on specific quotas of local employees and the sharing of useful intellectual property could be a start in this regard. Yet the more serious issues associated with Chinese digital investment are in the political sphere.

More importantly, as Mr Hillman notes the mass collection of data by Chinese corporations ‘can be used for commercial and strategic purposes’.

A number of governments have turned away from the use of Chinese technologies over the last decade due to fears of cybersecurity violations and espionage.

Activists in Serbia have turned against the provision of Chinese surveillance technologies, India is seeking to restrict the penetration of Huawei into its own domestic markets, and Australia has recently rebuffed efforts to lay a Pacific cable landing in Sydney, fearing that the security of Australian consumers and citizens information may be jeopardised by Chinese data gathering attempts.

Citizens in the Middle East should look with caution as recent revelations of significant data breaches by Chinese companies in Africa. Confidential data on the It network of the Chinese built African Union headquarters in Addis Ababa was diverted to Shanghai every night between 2012-2017. Chinese digital exports may also feed the growing appetite of regional powers to use digital infrastructure to repress domestic dissent.

Last year, China hosted sessions on censorship and surveillance for media officials from Morocco, Egypt, and Libya. A recent report by the Council of Foreign Relations argues that ‘under the guise of the BRI, China is seeking to export its authoritarian cyber controls’. China may share information with regional autocrats that proves a boon for autocrats but a disaster for the democratising impulses of the region’s citizen.

Chinese digital advancement could prove enormously beneficial in the Middle East and North Africa. It provides opportunities for economic diversification in states long dependent on single exports and the ability to integrate detached local and national economies into a powerful regional network.

Source: Belt and Road News 

Dated on: 16/9/2019

CPEC a harbinger of prosperity for Pakistan: Khusro Bakhtyar

ISLAMABAD (Dunya News) – The 58th progress review meeting of China Pakistan Economic Corridor (CPEC) projects was held on Friday under the Chairmanship of Minister for Planning, Development and Reform Mukhdum Khusro Bakhtyar.

Chinese Ambassador Yao Jing, DCPC Dr. Mohammad Jehanzeb Khan, Secretary Planning Zafar Hasan, representatives from Chinese enterprises and senior officials from relevant ministries also attended the meeting.

The CPEC review meeting deliberated upon issues confronting different projects under CPEC decided to fast track their resolution for timely completion of all projects.

The minister for planning underlined the need for meeting the projects  timelines and called for further gearing up the momentum in CPEC projects.

Bakhtyar said CPEC, as stated by Prime Minister Imran Khan, is a project of great national significant for Pakistan which will be a harbinger of development and prosperity for Pakistan and the region.

 

The minister said that the incumbent government, in consultation with the Government of China, has succeeded in expanding its scope to include other priority areas under its framework including socio-economic development, poverty alleviation, agricultural and industrial cooperation.

The second phase, as envisioned by Prime Minister Imran Khan, will focus, among others, on welfare projects for the betterment of the people of Pakistan and we are thankful to the Chinese government for broadening its framework which will contribute to the sustained development of Pakistan, stated the Minister.

He reiterated that the government remains fully committed to realize the potential and opportunities under CPEC framework.

Speaking on the occasion, Chinese Ambassador Yao Jing said that CPEC is heading in the right direction adding that CPEC is quite different from other Belt and Road initiatives as this flagship project manifests the longstanding friendship between the two friendly countries and will bring prosperity and progress for Pakistan.

CPEC is a product of vision of two brotherly countries that goes beyond traditional business dealings reflecting decades old strong bonds of bilateral cooperation and shared goals with win-win situation for all.

He stressed that the project will continue to progress on expedited pace, as reiterated by Prime Minister Imran Khan in his recent meeting with Chinese Foreign Minister, for timely completion of all projects.

During the meeting, various projects of CPEC were discussed in detail one by one. Secretary Power informed that the synchronized demand-supply study of CPEC energy projects will be firmed up by October 2019. NEPRA said that all pending tariff issues including of Port Qasim and Gwadar 300 MW coal project will be resolved soon.

Talking about Kohala Hydro power project, the minister said that it is an important project and expressed gratitude to the Government of China and Three Gorges for extending cooperation in this regard. It was decided that process for establishing appellate tribunal will be expedited to resolve future tariff issues of energy projects.

It was informed that the Gwadar development Authority, headed by Chief Minister Balochistan, has approved the Gwadar city master plan with some minor modifications. Secretary Communications informed that Multan-Sukkur motorway will be opened soon for general traffic as the work was almost complete.

The minister and the Chinese ambassador appreciated the pace of work on the East Bay Expressway project. Orange Line Train project and ongoing projects in Gwadar were also deliberated upon in detail. “SEZs would help in boosting Pakistan s exports and achieving sustainable economic growth,” the minister said.

India’s new nightmares: CPEC and AJK?

Indian Army chief General Bipin Rawat on Thursday said that the Indian Army is all set to free Azad Jammu and Kashmir (AJK) from Pakistan clutches and make it an integral part of India along with Indian Occupied Kashmir. However, decisions like these come under the jurisdiction of Central Government.

The irony is that these comments shortly came after Chinese Foreign Minister canceled his visit to India and decided to come to Pakistan, amid escalating tensions between Islamabad and New Delhi. While expressing his views regarding the situation of Kashmir, Wang Yi said

The Kashmir issue is a dispute left from history, China said it opposed any unilateral actions that complicated the situation in the Indian Held Kashmir (IHK). Beijing was paying close attention to the current situation in the IHK and emphasised that the issue should be properly and peacefully resolved based on the UN Charter, relevant UN Security Council resolutions and bilateral agreements.

Both sides also agreed to the fact that the China-Pakistan Economic Corridor, as a pioneering project of the Belt and Road Initiative, has entered a new phase of high-quality development. The two sides agreed to continue to firmly push forward the construction of CPEC, complete its on-going projects in a timely manner, and realize its full potential by focusing on socio-economic development, job creation, and better livelihood and accelerating cooperation in industrial parks and agriculture.

While news of Widespread allegations of torture and abuse of detainees by Indian security forces are now pouring in through the international media, many experts also believe that India is purposely releasing such kind of statements in order to withdraw peoples’ attention from the pressure that is being exerted by Pakistan on all the International forums to ease the lockdown in IoK.

Earlier today Prime minister Imran Khan also addressed a massive public gathering in Muzaffarabad to express solidarity with Kashmiris. While addressing the gathering he said that he has vowed to fight the case of oppressed people of Indian Occupied Jammu and Kashmir at the upcoming session of United Nations General Assembly (UNGA).

He further said that brave men do not commit atrocities on innocent people, adding that Indian Prime Minister Narendra Modi is a member of Hindu extremist RSS movement from his childhood.

 

Progress on CPEC very much on schedule: Chinese envoy

PESHAWAR: Chinese Ambassador Yao Jing has brushed aside the perception that work on the China-Pakistan Economic Corridor (CPEC) has slowed down, saying that progress on the project was very much on schedule.

He was talking to media persons during the two-day international conference on Belt and Road Initiative (BRI), China-Pakistan Economic Corridor (CPEC) and Tran-Regional Integration organised by the Area Study Centre, Russia, China and Central Asia, University of Peshawar on Wednesday.

“It’s not true. CPEC is actually a long-term project. There is no specification of speed on the project. Its progress is on schedule,” he said.

He was of the opinion that several stages were involved in the project. “In the previous stage, more attention had been focused on infrastructure development. With the new government in Pakistan, focus has been shifted to industrial cooperation, agriculture and social sector,” he said.

“Right now, we are working on community-based projects. The progress of the project cannot be judged by speed,” he argued.

Besides the Chinese ambassador, the inaugural session of the conference was addressed by Vice-Chancellor University of Peshawar, Prof Dr Mohammad Asif Khan and Director Area Study Centre, Prof Dr Shabir Ahmad Khan. Diplomats from Uzbekistan, Turkmenistan, Tajikistan, Kyrgyzstan, Russia and Iran also spoke at the conference.

The Chinese envoy welcomed the decision by the Pakistan government to keep open the Torkham border for 24 hours to improve trade between Afghanistan and Pakistan. “The Torkham border has historical importance. It has remained a trade route between Central Asia and South Asia,” he added.

He lauded the efforts made by the governments of Pakistan and Afghanistan to make the border more functional and feasible to facilitate trade and people-to-people contacts.

The Chinese envoy reiterated the resolve made by the Chinese foreign minister together with his Pakistani counterpart during his recent visit to Pakistan that the three countries should build a highway between Peshawar and Kabul and extend it further to Central Asia. This would certainly boost trade, he said.

About Kashmir, the Chinese ambassador said that China’s position on the issue was clear as it is against the unilateral Indian decision to change the status quo in Jammu and Kashmir.

“We think the views of the international community, the UN charter, the resolutions of the UN Security Council and the bilateral treaty between India and Pakistan should have been honoured,” he maintained.

He expressed serious concern over the humanitarian situation in the Indian-occupied Kashmir and emphasised the resolution of the dispute through peaceful means and meaningful dialogue.

The ambassador also expressed his surprise and shock over the failure of talks between the US and Afghan Taliban and stressed the need for continuation of the peace process.

He said the two sides had been making peace efforts since long and everyone had pinned hopes on the process. “Anyhow the process should be carried forward,” he said.

The Area Study Centre also inked memorandum of understanding with Kazakhstan State University, Euro-Asian National University and CPEC Centre of Excellence, Islamabad for promotion of academic and research.

Other speakers on the occasion termed the BRI as ‘spinal cord’ and buckle of the belt, which would ensure regional connectivity.

Prof Dr Shabbir Ahmad Khan called upon key stakeholders to participate fully in the project.Prof Dr Muhammad Asif Khan also spoke on the occasion.

Development of smart cities among opportunities in Belt and Road Initiative: Survey

SINGAPORE – Multinational organisations, firms and financial institutions see developing smart cities, industrial estates and special economic zones as opportunities in the Belt and Road Initiative (BRI).

Other sectors with potential include infrastructure projects in information and communications technology (ICT), roads and ports.

Investors also stated that they were keen on both renewable and non-renewable energy initiatives, with solar and wind projects standing out for renewables.

These were the key findings of a second regional survey on the BRI conducted by the Singapore Business Federation (SBF) and accounting firm PricewaterhouseCoopers Singapore (PwC) between mid-June and July 5 this year (2019).

The initial findings were shared at a media conference on Tuesday (July 30).

The full report will be released on Aug 15 at the Singapore Regional Business Forum, which will be held at The Ritz-Carlton, Millenia Singapore.

The inaugural Singapore Regional Infrastructure Summit will be held at the same venue on Aug 16 the next day.

In the survey, close to 50 respondents from multinational organisations, professional services firms and financial institutions were quizzed online about their interest, level of involvement and plans with regards to BRI-related opportunities.

The respondents were from financial services (26 per cent), professional services (17 per cent), and construction and materials (8 per cent), among others.

Some 32 per cent said they were currently involved in a BRI-related project, while 45 per cent indicated that they will be involved in the next three years.

About half are from organisations headquartered in Singapore, said PwC partner Jennifer Tay, who specialises in capital projects and infrastructure.

Political risk was the top risk associated with BRI projects, about 75 per cent of respondents said.

Ms Tay noted that many infrastructure projects have been halted or postponed due to recent political movements in the region.

“In the current environment… as the national apex chamber, we want to highlight that while we are pleased that the (Singapore) government is standing by to assist (businesses), it is important that we look out for opportunities that can help our businesses,” SBF chairman Teo Siong Seng said.

Mr Teo added that Asean has been acknowledged by many countries as a bright spot in the global economy, and the region has good fundamentals.

Opening up more collaboration opportunities within the region would benefit local companies and those based in Singapore, he said.

Around 75 per cent of respondents said that they see opportunities in partnering with BRI country governments in Asean and South Asia.

“The cross-border nature of the BRI makes it a significant catalyst in regional infrastructure development and is likely to bring together investors across regions to jointly develop much-needed infrastructure projects, especially for under-served communities,” Ms Tay said.

Speaking in Mandarin at the media conference, MCC Singapore chief executive Tan Zhiyong noted that third-party markets commonly face financing issues.

MCC Singapore is a building services firm which has been involved in projects such as the construction of Keppel Distripark and Universal Studios Singapore.

He hopes that financial institutions and enterprises in the region can work together for business ventures in third-party markets to develop smoothly, Mr Tan said.

He highlighted the Dara Sakor project, a joint development by MCC Singapore and Cambodian real estate developer Union Development Group, which has been included as a key industrial capability and investment project of the BRI.

MCC Singapore hopes that the Dara Sakor project can be a model for other Singapore-China joint developments in third-party markets, Mr Tan said.

Last year, Singapore was the largest foreign investment destination for China in the BRI, capturing close to 23 per cent of the total investment outflow from China to Belt and Road countries.

Singapore and China have collaborated in third-party markets in sectors such as infrastructure, financing and professional services.

Source: The Straits Times

Date: 30th July, 2019