Expanding CPEC.

Source: Express Tribune

Writer: Yasir Masood

Date: 12 December , 2018

The recent visit of Prime Minister Imran Khan to Beijing in the first week of November has further heightened the brotherly relations between Pakistan and China. President Xi Jinping appreciated Prime Minister Khan’s firm resolve to introduce economic and social reforms in Pakistan by following the Chinese practices of incremental reforms and their implementation for achieving development, progress and prosperity. Apart from other diversified talks, pledges, promises and commitments to rectifying Pakistan’s current financial crunch, the China-Pakistan Economic Corridor (CPEC) has also been further solidified by mutual consultation for extending it in the just and right direction.

It is beyond doubt that CPEC carries a colossal importance in the upkeep of amicable relations especially through perpetual commercial linkages which encompass over 2,700 km from Gwadar to Kashgar. Overall, the project fruition is surmised to be completed in 15 years through three different phases — 2013-2020, 2020-2025 and 2025-2030. CPEC and its connectivity to Central Asia, the Middle East and Africa are strongly believed to redesign the current economy of the entire region. The corridor is an extension of China’s proposed 21st century ‘Silk Road Initiative’ or ‘Belt and Road Initiative’ (BRI), which is a strategic initiative for the entire region that aims to make Pakistan an economically-vivacious and business-oriented country. Investments under CPEC in infrastructure and energy sectors, through the implementation of early harvest projects, are already reaping an encouraging economic growth of the country that will provide a springboard to the economy of Pakistan. In the first phase of implementation of CPEC (early harvest projects), priority has been given to developing rudiments of CPEC to initiate the economic activities.

The government is now objectively engaged in identifying those areas which directly or indirectly can redirect the socioeconomic predicament of the people of Pakistan in order to realise the true potential of CPEC. Therefore, the apex catalyst of CPEC is to make the initiative a ‘gateway to prosperity’. Accordingly, six major areas are identified by the current government for the expansion of CPEC which are: Trade & Market Access; Industrial Development & Global Value Chains; Socioeconomic Development & Poverty Alleviation; Agriculture Modernisation & Marketing; Gwadar Oil City & Blue Economy and; Regional Connectivity & Third Country Participation. These key areas through mutual cooperation would help steer CPEC towards the right direction in the upcoming five years (2018-2023). Increased level of all these outcomes will converge to higher development, the accelerated growth rate in economies of both the countries coupled with contributions to the development of the region and contiguous states.

The variety of projects in the areas of trade and market access under CPEC will originate a plethora of opportunities in different spheres of life. In this connection, collaborative bond with China will be the rich source of promoting trade, facilitating market access, elevating the standard of living and achieving sustainable inclusive growth in Pakistan during the next five years. In addition, through CPEC, Pakistan will be able to open its doors to the world by expanding its trade and transport links, as well as boosting economic influence across Central Asia, South Asia, the Middle East, Africa and Europe.

Under the fold of Industrial development and global value chains, the government is charting out industrial cooperation and import substitution with China in light engineering sector through the selective relocation of the Chinese industries. This relocation of Chinese export-focused light manufacturing and consumer products labour intensive industry will likely double the export index. Repositioning expansion of the IT sector through joint ventures along with the transfer of technology and capacity building will certainly drive up productivity graph.

For the socioeconomic development and poverty alleviation, Chinese experiences will help a great deal, for instance, it has been able to lift around 700 million out of poverty in about 30 years. Through CPEC more than a million direct jobs and manifold indirect and induced ones will be created to handle unemployment and poverty reduction. In addition, capacity development of skills via technical and vocational hubs across the country along with community-based projects in low job areas will also be established.

Under the realm of agricultural modernisation and marketing, the government has prioritised value addition and co-branding of dairy, livestock and poultry sectors to significantly uplift these sectors. Productivity enhancement of fruits and high-value crops through the transfer of technology in precision agriculture (drip irrigation and sprinklers, etc) will be focused and application of modified and high yield variety seeds for crops diversification to substitute edible oil/pulses imports.

The government is also stepping up Gwadar with Blue Economy by the establishment of Oil City in Gwadar to substitute refined oil imports with crude oil. Development of aquaculture for fisheries and seafood along the coastal area would also be tapped. Coastal tourism will also further the prospects of Balochistan in particular.

Moreover, the focus will also be upon the CPEC infrastructure towards connectivity improvement, analysis of the alternative optimal routes for the region through Gwadar port, and exploring the feasible connections among Central Asia, the Middle East, Africa and Europe to achieve regional harmony and prosperity.

Pakistan requires to advocate more aspects of CPEC as well as align it with all relevant national, provincial and local plans of Pakistan. Therefore, both Pakistan and China must broaden bilateral cooperation, arrange periodic meetings of experts during the next five years in order to brand the benefits of CPEC through the implementation of various projects, strengthening the mutual communication and cooperation between the various federal level ministries, institutions, provincial departments, business communities and stakeholders. The current five-year plan (2018-2023) of CPEC includes objectives that demand pressing needs and actions by both countries to accomplish the goals in true letter and spirit.

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RCCI for expediting work on CPEC economic zones

Source: The Nation
Date: December 13, 2018

The Rawalpindi Chamber of Commerce and Industry (RCCI) has urged the government to expedite process and working on CPEC Special Economic Zones.

The Labour-intensive industry from China under China Pakistan Economic Corridor (CPEC) shall be relocated in Pakistan to boost the local employment.

President RCCI Malik Shahid Saleem on Wednesday in a statement also pointed out that the upcoming industrial framework agreement with China would help to move forward with relocation of Chinese industries and large scale investment in Pakistan, he added. However he urged upon ministry of planning that the industrial parks would be developed aligned with local available resources.

The RCCI president said, “We recognize CPEC as a game changer and we urge the government to focus on the 4th part of CPEC plan, which is Industrial Zones Development.” He further said that the CPEC is the flagship project of multi-billion dollar One belt one road (OBOR) and the success of this key mega project will bring the economic revolution in the country and the region. However, the agreements must be followed by the land of law and benefit of Pakistani trader, investors, and industrialists must be kept on priority.

The joint ventures between Chinese and Pakistani companies will increase the ownership of the key stakeholders, he added. The more we have local ownership in the projects the more it will be successful. Malik Shahid Saleem also referred that RCCI recently signed a memorandum of understanding with China Road and Bridge Corporation (CRBC) for exploring the investment opportunities existing in Rashakai Especial Industrial Zones aiming in promoting Rashakai SEZ among its members, strengthening the information through exchange of delegations and using RCCI platform in expansion of business in Rashakai SEZ by holding joint exhibitions, seminars and symposiums.

He said Pakistan’s economy offered great potential to Chinese investors for joint ventures and investments. He said CPEC would be mutually beneficial for Pakistan and China and would ensure level playing field for the businessmen and investors of both countries.

SEZ will help Pakistan to improve its GDP, poverty alleviation and unemployment, he added. RCCI Chief urged both Pakistani and Chinese governments to work hard in completing all projects within stipulated time frame.

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‘Agriculture framework under CPEC to focus on JVs’

Source: The News
Date: December 13, 2018

ISLAMABAD: Federal Minister for Planning Makhdum Khusro Bakhtyar has said agriculture framework under the China-Pakistan Economic Corridor (CPEC) focused on joint ventures, value-addition, cold chain management, and marketing and branding to overcome socioeconomic weaknesses.

Addressing the PIDE conference on Wednesday, the minister said that the SME sector has been identified as one of the key sector of economic growth, and CPEC was an opportunity for Pakistan and China for growth and prosperity, both.

The minister said consumption in Pakistan was 93 percent of the GDP, highest among emerging economies, whereas in Bangladesh, consumption was about 74 percent. “The saving rate in Pakistan is less than half of other countries of the region,” he said, urging to increase saving, and to balance between direct and indirect taxes.

Khusro Bakhtyar said the service sector contributed 56 percent to domestic GDP, but its share in exports was very small. He pointed out that imports from China have reached $18 billion.

“The country needs import substitution policies, and the government is devising policy packages for this purpose,” he added. CPEC was an opportunity for Pakistan and China for growth and prosperity.

Shahid Hussain Assad, who discussed “Revenue Management, Issues and Challenges” at the conference, said Pakistan faced several issues in tax collection, including the narrow tax base and low tax to GDP ratio. “Large informal economy proves to be a reason in loss of taxable income,” he said.

He also pointed to political lobbying tax exemptions and concessions as reasons for low tax collection. He suggested simplification of tax procedures and harmonisation of federal and provincial taxation to broaden the tax base.

Riaz Riazuldin, former acting governor of State Bank of Pakistan discussed “Exchange Rate Management in Pakistan” and said the management regimes kept changing, and poor rate management was one of the reasons behind poor export performance. He said remittances had to be boosted to stabilise the exchange rate.

Dr Ashfaq Hasan Khan, member, Economic Advisory Council, argued that exchange was a very weak determinant of exports and exchange rate has very adverse impact on the external debt. He said any potential benefit of exchange rate was wiped out due to increase in external debt, and in addition the devaluation raises the costs of inputs for local production which hurts the economy badly.

Dr Khan emphasised on the need to control public debt and boost private investments.

Dr Asad Zaman, vice chancellor, PIDE, concluded the session, and argued that the exchange rate could only be managed at the cost of foreign reserves, which was rather bad for the economy.

A panel discussion on “Governance, Housing, Poverty and Employment” generated debate on pulsing issues of poverty, lack of employment opportunities, insufficient housing facilities, as well as the dearth of institutional capacity in Pakistan.

Dr Talat Anwar, professor of Public Policy at PIDE, said Pakistan should learn from China’s experiences by evaluating their experience on poverty reduction strategies. “Low rent houses for poor, targeted health reforms, education emergency, and emergency provision are the main lessons from China for Pakistan,” he added.

Abdul Wajid Rana, program leader, IFPRI, Pakistan, emphasised the civil service reforms in Pakistan.

“Civil service reforms are necessary for fiscal stability and for collaboration between politicians and civil servants,” he said.

Rana was of the view that the current reforms should be focused on emerging challenges and work towards increasing collaboration. He said that ineffectiveness of state institutions was undermining Pakistan’s economic, social, and political development.

Emerging challenges of civil service reforms should be centralisation to decentralisation, hierarchical to collaborative federation, top down to participative governance, and globalisation, as well as SDGs, technical advancement, accountability, vibrant judiciary, and active legislative committees, he added.


Peace, Afghanistan and CPEC.

Source: Pakistan Observer

Writer: Naveed Aman Khan

Pakistan, Afghanistan and China trilateral economic cooperation on the Belt and Road would benefit all three of the countries. The China-Pakistan Economic Corridor (CPEC) is believed to be a game changer in South Asia. Part of China’s ambitious Belt and Road initiative (BRI), CPEC is over US $ 60 billion infrastructure development project that aims to connect Xinjiang region of China to Gwadar port of Pakistan. With such a large scale infrastructure investment, CPEC has drawn attention of other regional powers. Since October 2016, Afghanistan has expressed strong desire to join and has even done through official channels. Former Afghan Ambassador to Pakistan, Mr.Omar Zakhilwal, showed his country’s interest in joining CPEC and stressed that a development project of this scale would be beneficial to Afghanistan. If rightly executed, China and Pakistan stand to gain enormously by welcoming Afghanistan to CPEC. China has long harbored an interest in Afghanistan’s untapped reserves of natural resources, but the security situation in the country has prevented further investment and procurement. Pakistan will benefit from easier access to Central Asia through Afghanistan, as well as economic relief from the return of Afghan refugees to their country once the security situation is stabilized. As a landlocked, terrorism and militancy prone nation, Afghanistan is in desperate need of infrastructural development and uplifting its economy by access to Chinese investors. Thus, it appears that trilateral cooperation to include Afghanistan into CPEC can be a win for all parties involved. Afghanistan’s security situation has been steadily declining since 2014, when a large number of international forces began to withdraw from the country. The Taliban’s resurgence, which coincided with the withdrawal of forces, has led to several large scale attacks in the country. While the exact numbers are currently unclear, as Afghanistan has yet to officially be invited to be a part of CPEC, joining may present several benefits.

CPEC is to bring industrialization and investment to Pakistan, the carry over effects of which will benefit neighboring Afghanistan. Pakistan has already undertaken building of several roads to improve connectivity between the two countries. The 75 km Torkham-Jalalabad road is one of them while the Peshawar-Torkham road is another. While both these developments have faced considerable completion challenges, they are a step towards increasing connectivity with Pakistan, and in turn, gaining Afghan access to CPEC. Pakistan has constructed two roads leading from Dera Ismail Khan to Angoor Adda and Ghulam Khan, linking with the Paktika and Khost provinces of Afghanistan respectively. These roads will enable Afghan business people and investors to access the enormous consumer market in South Asia, increasing Afghanistan’s exports and reducing the cost of imports.

By becoming a part of CPEC and BRI, Afghanistan will have the opportunity to stabilize its economy by enhancing its trade opportunities. Over 75 percent of Afghanistan’s total exports go to Pakistan and India. Main Afghan export goods are carpets, rugs, dried fruit and medicinal plants, not the copper, iron ore and other valuable resources Afghanistan possesses in abundance. Accessing the wider BRI network will provide two opportunities. firstly, access to markets in China, Central Asia and parts of Europe that Afghanistan doesn’t currently trade extensively with and secondly the chance to diversify Afghan trade products by exporting copper, iron and other resources to countries on the BRI.

For China, Afghanistan presents strategic value due to its geographic location at the crossroads of South Asia and Central Asia. Its vast mineral resources are untapped and present a valuable economic opportunity. These are valued at US $ one trillion. Afghanistan’s security and corruption challenges have in the past deterred many investment opportunities. Potential investment will stabilize Afghanistan’s security situation. This effort will require great cooperation. In 2008, China had signed a thirty-year agreement with Afghanistan government to access Mes Aynak, the world’s second largest untapped copper deposit. The deal, which was worth over $3 billion, was viewed with great interest until it stalled due to security concerns and attacks by the Taliban.

China has played central role in successful peace talks between Afghanistan and the Taliban by encouraging the latter to join the peace negotiations. Ensuring security in Afghanistan not only contributes to stability in the country but it also allows China to be at ease regarding instability from Afghanistan impacting security and stability in its western region, specifically Xinjiang. China has only made minimal contribution to directly support the security effort in Afghanistan, largely deferring to America and NATO. Since 2014, China has increased its security cooperation, providing military aid for counter-terrorism efforts. A greater effort to combat militancy in Afghanistan will open the doors for Chinese investment and access to the country’s untapped resources.

A stable and thriving Afghanistan presents several direct benefits to Pakistan. Firstly, it will allow Pakistan to ease the economic toll of hosting Afghan refugees. For decades, Pakistan has hosted millions of Afghan refugees, who fled major wars and conflicts in their country. Over the years even more Afghans were born within Pakistan, which increased the economic burden on a country that was already struggling. Pakistan had spent over US $200 billion on hosting Afghan refugees. As a result, since 2015, the Pakistani government has forced several hundred thousand refugees to return to Afghanistan, drawing the ire of humanitarian organizations. The economic integration and improvement of Afghanistan’s economy will allow for millions of refugees to slowly return to their homeland and reap the benefits of the new economic opportunities, while easing the burden on Pakistan’s economy. Secondly, a cooperative relationship will open up the doors for easier access to trade with Central Asia for Pakistan. Already, there is some movement in this direction. The Central Asia Regional Economic Cooperation (CAREC) Sher khan-Ninjpayan border route has been identified by Tajikistan, Afghanistan and Pakistan as a potential corridor for trade. With an improving economic situation in Afghanistan, supplemented by enhanced security, the region could serve as a transit hub for countries like Pakistan to reap the benefits of trade. Thirdly, cooperating on economic development while also emphasizing security will be a win-win for both countries and allow for the improvement of cross-border relations. Afghanistan and Pakistan have long blamed each other for security concerns within their borders. Close cooperation between both countries’ security forces will lay the ground work for eliminating militancy along the Afghanistan Pakistan border which has been a militant haven. Such regional cooperation will ensure regional development.

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China will likely speed up its Belt and Road projects amid US tensions: Citi

Writer:Kelly Olsen
Date: December 12, 2018

China will likely speed up infrastructure projects in its ambitious Belt and Road Initiative amid trade tensions with the United States, Citi said in a report Tuesday.

Several Chinese companies and various sectors, including mining and transportation, are poised to benefit from that development, the report said.

The Asian giant announced the BRI in 2013, aimed at recreating and modernizing ancient Silk Road trade routes. It has become the signature foreign policy program of Chinese President Xi Jinping’s government.

 The program is an ambitious infrastructure project aimed at connecting more than 60 countries in Asia, Europe, Africa and the Middle East through overland and maritime routes.

But it has been widely criticized, amid concerns that the high debt incurred for projects might become unsustainable for countries such as Sri Lanka, and others could face risks due to political changes, including those in Malaysia.

China has elevated the program to a top national strategy, Citi said, adding that tensions with the U.S. mean Beijing is prepared to take a different approach in the construction projects in order to expand its influence in countries that are part of the initiative.

 China will likely “escalate the loan and shorten the project approval” process to quicken the pace of infrastructure building “so as to diversify trade and economic activities there away from the U.S.,” Citi analysts said in the report.

“We believe the BRI will primarily benefit the railway sector, given China’s distinct advantages globally in terms of technology and cost in railway infrastructure,” they said, noting that building of power plants, telecommunications facilities and ports should also increase.

‘Kinder, gentler’

Some Chinese firms stand to benefit from this, the report said, stating the examples of China Railway Group and China Railway Construction.

Others include Chinese train manufacturer CRRC — which produces rolling stock such as railroad cars, wagons and coaches — as well as equipment maker China Railway Signal & Communication, Citi said in its report. All are listed in Hong Kong.

Some industries are also set to make inroads.

“We see near-term opportunities for sectors such as commodity and mining, transportation and logistics, as well as finance,” Citi said, citing specific firms such as Chinese oil and gas company PetroChina and the Bank of China, both listed in Hong Kong. Shanghai-listed Conch Cement is also “well positioned to benefit from the initiative,” it said.

In a separate Citi report assessing the progress of the Belt and Road Initiative after its first five years, the U.S. bank suggested that China may be forced to modify the BRI into a “kinder, gentler” version that would sit better with its critics.

Some challenges include the heavy reliance on the U.S. dollar in order to fund the infrastructure projects, Citi said. Other pressures China continues to face include criticisms from recipient countries that projects are too favorable to China and “explicit opposition” from the U.S., the report said.

However, all that could contribute to Beijing becoming more open to changes, as seen in China’s “growing interest” in working with multilateral development banks to jointly finance projects, the report said.

But whatever modifications are made, the program is here to stay.

“Though it might change shape, the BRI is certainly not going away,” Citi noted.


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What you need to know to understand Belt and Road

Source: World Economic Forum

Writer: Bruno Maçães

There are two things everyone needs to know about the Belt and Road. First, as officials in Beijing will tell you, this grand project is measured in decades, with its conclusion planned for 2049, the centenary of the founding of the People’s Republic of China. Second, the initiative is both global and revolutionary. Its aim is to create a new order in world politics and the world economy.

Past equivalents to the Belt and Road would have to be just as shapeless and ambitious. Perhaps concepts such as “the West” come the closest — even in the manner that a metaphor came to acquire epochal significance. If the initiative succeeds, it is very likely that we shall use the name to refer to the new arrangements, much as we use “West” as a shorthand for the existing order.

What will the world look like after the Belt and Road? In the first Belt and Road summit in 2017 Xi Jinping hailed it as the “project of the century.” If all goes according to plan, the Belt and Road will change the shape of the world economy and world politics, returning us to a time when China occupied the center of global networks.

There will be new infrastructure, of course, and that will be an obvious and easy metric of success. In twenty or thirty years some of the new Belt and Road projects will likely stand as the highest example of what human ingenuity can achieve in its drive to master natural forces. A bridge crossing the Caspian Sea may make road transport between Europe and China fast and easy, changing old mental maps separating continents. The Kra Isthmus Canal in Thailand will do the same for the Indian and Pacific Oceans.

But infrastructure is ultimately a means. The geographic space being transformed must be connected before it can start to grow areas of economic activity; industrial parks along infrastructure routes are slowly integrated to establish regional value chains and eventually support China’s rise to a technological superpower, leading the transformations of the future.

Artificial intelligence, robotics, genetic engineering and space exploration. As it expands, the Belt and Road is bound to become increasingly futuristic. Self-driving vehicles on land, sea and air and trillions of connected devices worldwide will be empowered by a Belt, Road and Space fleet of China-centered satellites. Chinese companies are already planning to engage in deep-space economic activity, like building orbit solar power plants, and mining asteroids and the moon. One or more Sputnik moments – when Chinese technology leaps far ahead of what the West can do – will offer the final and most meaningful metric of success for the Belt and Road.

The Belt and Road will never become universal—just as the West never became universal—but in some areas of the world it will rule unimpeded and different shades of influence will be felt everywhere.

The problem is to determine the core of the new Chinese world picture and identify the main traits which it will come to impress upon the whole. Many of those traits are already visible in what is but the construction stage of the Belt and Road.

Virtues are regularly invoked. Countries have relations of dependence, generosity, gratitude, respect and retribution. Relations between countries are much more diverse and complex than in the more formal Western-led order. Ritual is important, and so is history. Nations are better seen as intersecting stories and power the ability to determine where the story goes next.

Even in its formative stage the Belt and Road is an exercise in the opacity of power. There is an exoteric doctrine of the initiative and then an esoteric practice where deals are agreed upon, often with no written evidence, and where hierarchy resembles that of security-clearance levels of access. The Belt and Road is like holy writ—never revealed completely and all at once, but only bit by bit and over many decades.

Rapid change, old-fashioned morality, and secret communication. This will be a world of soothsayers, saints, and spooks.

The Belt and Road may well never realize its goals. It may be abandoned as it runs into problems and the goals it sets out to achieve recede further into the distance. But success and failure are to be measured in terms of these goals, so we must start from them.

The new world the initiative will try to create is not one where one piece on the chessboard will be replaced, not even one where the pieces will have been reorganized. It will be a world built anew by very different people and according to very different ideas.

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Chinese investors given another extension for two CPEC projects


ISLAMABAD: The government on Tuesday gave another extension to Chinese investors for achieving financial close of two major power sector projects worth $2.2 billion under the China-Pakistan Economic Corridor (CPEC).

The projects given extensions include 4000MW Matiari-Lahore Transmission Line and 300MW Gwadar Coal Power Project.

At a meeting of the Private Power & Infrastructure Board (PPIB) presided over by Power Minister Omar Ayub Khan, the $1.7bn Matiari-Lahore line was given a three-month extension to achieve financial close with a fresh deadline of Feb 28, 2019.

The contractors were earlier given a six-month extension in financial close in March this year which ended on Dec 1. The new deadline was approved on assurance that commercial operation date (COD) of the project would remain unchanged at Mar 31, 2021. The delay was caused in firming up transmission line service agreement, finalisation of loan-related matters with the State Bank of Pakistan and problems in land leases.

“Keeping in view the importance of much needed +660kV High Voltage Direct Current (HVDC) Matiari-Lahore Transmission Line Project which is specifically designed to provide power evacuation for Thar coal-based power projects, the board has agreed to allow extension in letter of support (LoS) for achieving financial close,” said an official statement.

It was explained that it was the first HVDC line in the country and also the first private sector transmission project under CPEC which had achieved substantial progress. “Such extensions would not compromise the completion date of the project which is March 2021,” the statement said.

A special purpose vehicle (SPV) — Pak Matiari-Lahore Transmission Company Ltd (PMLTCPL) owned by three Chinese firms — was given a 25-year licence for the construction of 878-kilometre line by the power regulator in February this year.

The SPV is owned by two Hong Kong-based companies: Zhong Cheng Xin International Ltd holding with a stake of 69.98 per cent and Zhong Zhuo Ye International Ltd 30pc. Both the entities are wholly owned by State Grid International Engineering Ltd, a 100pc subsidiary of China Electric Power Equipment and Technical Company, which in turn is 100pc owned by State Grid Cooperation of China.

The SPV is required under the licence to achieve COD of the line by Mar 1, 2021 and will be empowered under the licence to run it for 25 years. The project is expected to be completed at a cost of $1.7bn and the government is extending a series of tax concessions for it.

Likewise, the 300MW Gwadar coal-based power project was given a nine-month extension to achieve financial close until August 2019. The project has seen repeated delays in the past and saw changing investor portfolio.

Informed sources say the project still had many issues to resolve: contractors faced difficulties in land acquisition which has mostly been settled now but would require cost adjustments in the tariff while some delays were also caused due to environmental issues and internal management.

They added that there were still uncertainties over the project even though Pakistani authorities have been pushing for its completion to ensure uninterrupted power supply to Gwadar port and allied establishments. The board allowed a nine-month extension in its letter of intent until August 2019.

The PPIB said these extensions will enable sponsors to obtain tariff from the power regulator and LoS from PPIB, leading to financial close and help start construction to ensure much needed electricity to Gwadar to promote business for newly developed port, boost socio-economic activities and start the Special Economic Zones and Export Processing Zones in Gwadar.

These activities will create employment opportunities and develop social facilities under Corporate Social Responsibility, the PPIB stated.

Ayub told board members that his ministry has taken the challenge of controlling theft and losses as well as overhauling transmission and distribution systems to remove bottlenecks in the supply of electricity to consumers.

He said sustainability in the system was only possible by bringing transparency in power system, induction of indigenous and renewable energy and introduction of new technology in transmission and distribution systems.

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NHA plans to build DI Khan-Zhob section

Source: The Express Tribune
Date: December 11, 2018

The National Highway Authority (NHA) plans to build the 210 kilometres Dera Ismail Khan-Zhob section of the western route of China-Pakistan Economic Corridor (CPEC).

Its first portion is a 50km four-lane motorway from Yarik on Indus Highway to Sagu, according to an NHA official.

Beyond Sagu up to Zhob, dualisation of the DI Khan-Quetta Highway (N-50) is being done under the project, he added. The project includes the construction of Darazinda and Zhob bypasses.

The proposed right of way of the project is 100 metres for Yarik to Sagu, while 50m will be acquired for dualisation of N-50.

The official said Chinese financing for the project for upgrading the road for the western route would be among the important points on the agenda for the next CPEC Joint Cooperation Committee meeting scheduled to be held in the 3rd week of this month.

Matters regarding financing are being pursued with the Chinese government, he added. He said the Zhob-Quetta and Quetta-Sohrab sections of CPEC’s western route were in the feasibility study stage.

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CPEC is Pakistan’s national priority, China told

Source: DAWN
Date: December 11, 2018.

ISLAMABAD: Pakistan on Monday reaffirmed its commitment to the China-Pakistan Economic Corridor (CPEC) by pledging to complete it as a national priority.

The assurance was conveyed to the Chinese side by the Foreign Office at the inaugural round of bilateral political consultations. Foreign Secretary Tehmina Janjua led the Pakistani delegation at the meeting, while the Chinese side was headed by Vice Foreign Minister Kong Xuanyou.

“Pakistan side conveyed that CPEC is a national priority for the government and Pakistan remains committed to the successful implementation of CPEC,” the FO said in a statement on the meeting.

“The two sides also resolved to work together towards completion of the ongoing projects and agreed to expand CPEC to new areas of cooperation in line with the vision of the leadership of Pakistan,” it added.

The reiteration comes ahead of the upcoming meeting of the Joint Coordination Committee (JCC) of the CPEC in Beijing next week.

Prime Minister Imran Khan had last month paid his maiden visit to China. During the trip, which analysts say reinforced Pak-China bond, the two countries showed “complete consensus on the future trajectory of CPEC, timely completion of its ongoing projects and joint efforts for realisation of its full potential with a focus on socio-economic development, job creation and livelihoods and accelerating cooperation in industrial development, industrial parks and agriculture”.

However, there is speculation that despite the positivity exhibited during Mr Khan’s Beijing trip, the Chinese have concerns about the future of the CPEC.

The Pakistani and Chinese delegations at their political consultations “agreed to build on the consensus developed during Mr Khan’s visit”, the FO said.

“They reaffirmed ‘all-weather strategic cooperative partnership’ between the two countries and expressed their satisfaction at the strong bilateral ties in political, economic, security, cultural and other spheres,” the statement said.

Chinese Vice Foreign Minister Kong Xuanyou also called on Foreign Minister Shah Mehmood Qureshi after the political consultations.

Mr Qureshi said the prime minister’s visit to China marked “a milestone in the history of bilateral relations and has deepened the bond of trust and friendship between two nations”. Reassuring the Chinese delegation about the CPEC, he said Pakistan would complete this project as envisaged by the leadership of both countries.

Mr Qureshi confirmed Pakistan’s participation in the 2nd meeting of China-Afghanistan-Pakistan foreign ministers’ trilateral mechanism to be held in Kabul on Dec 15.

The Chinese vice foreign minister also visited the General Headquarters for a meeting with Army Chief Gen Qamar Javed Bajwa.

“During the meeting matters of mutual interest, regional security and enhanced bilateral cooperation came under discussion,” the Inter-Services Public Relations (ISPR) said.

Gen Bajwa underscored that Pak-China relations were all-weather and based on mutual trust and confidence. “The visiting dignitary commended the sacrifices and resilience of the people and armed forces of Pakistan and appreciated the role Pakistan Army has played in battling the scourge of terrorism,” the ISPR said.

Last month security forces had foiled a terrorist attack on the Chinese consulate in Karachi. The Chinese government had on that occasion praised Pakistani security forces for their timely action and emphasised on ensuring the safety of Chinese institutions and personnel in Pakistan.

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How A Growing U.S.-China Rivalry Is Reshaping The Global Tech Landscape

Source: Forbes
Writer: Alex Capri
Date: December 09, 2018

For observers of the U.S.-China geopolitical rivalry, the arrest of Huawei’s CFO, Meng Wanzhou, in Canada, should serve as a wakeup call for the rest of the tech sector. The allegations against China’s telecom giant for breaching U.S. sanctions highlights the escalating technology race and hybrid cold war between the world’s two superpowers.

Washington and Beijing are now at a historical tipping point, and national security priorities are driving policies that will lead to further decoupling of American and Chinese interests. This, in turn, will lead to further fragmentation of global value chains in the tech sector.

Tech companies—or any firms that depend on cutting edge technology—will need to gauge their risk environment around two key factors: First, how to react to a wave of disruptive policy measures such as export controls, sanctions, blocked acquisitions and blocked technology transfers. Second, how to minimize the damage that will come as a result of disentanglement from existing technology ecosystems.

 Beijing’s provocative tech agenda

At the heart of this competition is the Made in China 2025 plan, Beijing’s strategy to lead the world in AI, robotics, aerospace and other industries.

China’s rapid advancement in technological capability has in many ways caught Washington and its allies flatfooted. Since 2017, For example, Beijing has been creating a navigational satellite constellation to rival America’s GPS. In 2018 alone, it launched 11 BeiDou satellites, some as few as 17 days apart.

 Beijing can now offer its partners an alternate version of America’s GPS, thereby undermining Washington’s geopolitical monopoly in this area, and it can  leverage the BeiDou program to extract concessions from its client states, such as agreements to buy more Chinese digital infrastructure and equipment.In the competition to win the battle of 5G standards— the technology that provides lightning-fast connectivity and better bandwidth in the internet of things (IOT)—China is leveraging its 650 million mobile internet users and its planned infrastructure along the digital Belt and Road to expand its global influence.

In a bid to become self-sufficient and cut its reliance on foreign semiconductor technology, Beijing is reportedly investing $31.5 billion in a National Integrated Circuit Industry Investment Fund, among other funds.

Lately, Beijing’s focus has increasingly turned to what it calls “civil-military fusion.” Recently, a series of state-backed venture capital funds have brought together tech startups and other private companies with the Peoples Liberation Army. In 2017, for example, the Foshan Civil-Military Innovation Industries Fund was launched to the tune of $28.75 billion.

Washington’s technology counter-offensive

The U.S. Department of Defence (DOD) now officially lists China as an “adversary.” A recent DOD report list key areas of strategic focus including Beijing’s efforts to leverage technology to modernize its military, and its plans to harness the Belt and Road Initiative to further enhance its economic clout. This has fed a popular narrative in Washington and beyond that China’s strategic ambitions need to be confronted and contained. Thus, firms should expect to see fewer technology transfers to Chinese companies, the blocking of deals (such as Huawei getting locked out of the U.S., Australia and possibly the U.K. and Japan) and the placement of targeted individuals and firms on sanctions lists. Whether all of this will produce the desired outcome by Washington and its allies is, of course, debatable.

The U.S. Export Control Reform Act, passed in August, will lead to the expansion of an export controls list. There will be new export licensing requirements for a broad range of so-called dual-use technologies–defined as technologies that can be use for commercial and military purposes. In the digital economy, this will impact a wide range of industries: robotics, AI, autonomous vehicles, even facial recognition technology. The effects could be widespread, with collateral damage to foreign firms.

Chinese smartphone maker ZTE serves as a cautionary tale. Its reliance on U.S. technology for both components like microchips and software from the Android operating system highlights China’s dependence on foreign suppliers.

Hikvision, China’s largest maker of facial recognition surveillance equipment, may suffer a fate similar to ZTE, as the U.S. government is threatening to ban Silicon Valley chipmakers from selling it American technology. Unlike ZTE, however, which avoided a likely collapse when Washington agreed to waive the technology ban, Hikvision may not be so lucky.

China’s major Achilles heel continues to be its dependence on foreign semiconductor technology. Every area of Beijing’s Made in China 2025 plan relies on foreign-owned integrated circuit technology, with much of it coming from five American manufacturers: AMD, Intel, Micron, Nvidia and Qualcomm.

Even Yangtze Memory, Beijing’s state-funded national champion, which recently announced that it had developed a state-of-the-art 64-layer 3D NAND flash memory chip, will depend entirely on critical early-stage equipment—needed for mass production—from foreign firms. Primary partners are Applied Materials and KLA-Tencor, both American companies.

The Scale of disentanglement

All of this leaves the global tech sector in a highly vulnerable position. Increasing U.S. export controls that restrict or block access to American technology could cause major damage to Beijing’s geopolitical aims. But foreign firms will suffer collateral damage as well, as they will be penalized for being imbedded with denied parties.

Over the past three decades, for example, the American companies named above have invested billions of dollars in collaborative ventures and production facilities in China. For all the world’s leading semiconductor firms, China will soon become their largest market.

According to PWC’s Global Strategy group, 80% of the corporate research and development (R&D) money spent in China in 2017 came from non-Chinese multinationals. Disentangling these ecosystems will require dismantling complex, intertwined relationships, with potentially heavy economic and financial consequences across global value chains.