China’s belt and road lending set to rise, Morgan Stanley says

BEIJING (Jan 31): China’s sweeping push to increase international trade and infrastructure investment will likely get a boost this year from government support and better financial conditions in recipient countries, according to Morgan Stanley.

Investment to nations along the route of President Xi Jinping’s signature Belt and Road Initiative will grow at an annual pace of 14% between 2018 and 2020, compared with a contraction of 1.6% in 2016 and 2017. That will double total spending on the project to US$1.2 trillion to US$1.3 trillion by 2027, the bank said in a research note released Wednesday.

The trade and investment drive aims to connect Asia and Europe through a series of infrastructure projects. It’s at the core of Beijing’s national foreign policy strategy and was  added to the Communist Party constitution in October. Chinese money would also lift the exports and imports of Belt and Road countries by 10% and 5% respectively in the next decade, analysts led by Kevin Luo and Jenny Zheng in Hong Kong wrote in a note.

“The key domestic driver is Beijing’s new guidance on outbound investment — since late 2016, policy makers have tightened capital controls on ‘irrational’ overseas investment, while continuing to support B&R investment,” the analysts wrote, adding that the Belt-Road share of overall outward investment rose to 12% in 2017 from 8% in 2016.

Malaysia, the Philippines, Indonesia, Russia, Saudi Arabia, Thailand and Pakistan are countries that will benefit most from the push, the report said.

Source: http://www.theedgemarkets.com/article/chinas-belt-and-road-lending-set-rise-morgan-stanley-says

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Rs 10bn worth benefits given to Chinese firm through tax exemption

ISLAMABAD: Senate’ Standing Committee on Finance, Revenue, Economic Affairs and Narcotics Control informed that around Rs 10 billion worth benefits were given to a Chinese company working on the Multan-Sukkur Motorway in the form of tax exemptions.

Considering the Calling Attention Notice moved by Senators Muhammad Daud Khan Achakzai, Muhammad Mohsin Khan Leghari, Barrister Murtaza Wahab, Sitar Ayaz, Sassui Palijo, Nauman Wazir Khattak, Mukthiar Ahmed Dhamrah Aajiz, Kamil Ali Agha, Saleem Mandviwalla, Ahmed Hassan, Farhatullah Babar and Ilyas Ahmed Bilour regarding the issuance of SRO 47(1)12018, dated January 23, 2018, the committee asked the Federal Board of Revenue (FBR) that how the Chinese firm was given exemption depriving the local firms.

Pakistan Peoples Party (PPP) Senator Murtaza Wahab stated that the FBR granted this exemption at a time when the construction work was only 37 per cent complete without seeking approval of the federal cabinet. He said as per the constitution FBR has no right to issue SRO especially benefiting a foreign firm.

FBR Inland Revenues (IR) Policy Member Dr Iqbal replied that the Economic Coordination Committee (ECC) approved the exemption for this Chinese construction company which was later on ratified by the federal cabinet.

On the question of granting exemption after completion of 37 per cent work of the project, the FBR replied that this summary was moved by the Ministry of Communication so only they can give a reply to this question in more detail. The committee decided to summon the high-ups of the Ministry of Communication for seeking further details about this project in the next meeting.

Senator Nauman Wazir Khattak informed the committee that the Supreme Court (SC) judgment clearly defines that the federal cabinet is the competent authority to issue SRO and recommended the finance committee to declare the said SRO illegal.

According to him, former finance minister Ishaq Dar had categorically stated on the Senate floor that all imports of China-Pakistan Economic Corridor (CPEC) would be non-discriminatory and no specific exemptions for CPEC projects for import of material would be given to Chinese companies.

At least 30 per cent work on Multan-Sukkur M5 Motorway has been completed and now the Chinese company is being given exemption from government duties whereas, in the original tender documents and the tender awarded to the company, the said duty was included in the project cost. In the original bid documents, all government duties were included. Exempting these duties at this point in time is unfair and unjust with other bidders who took part in the bid.

According to Khatak in the initial PC-1, the Bill of Quantities (BoQ) and specifications were different and in the final award, the BoQs have been reduced without informing other bidders and getting their rates as per the changed BoQs.

“The tender was floated and the bid was received a number of times, wherein there is a dramatic variation in the prices. Finally, the price was negotiated and BoQs were changed for this specific company. This is a violation of PPRA rules,” he said and recommended NAB to investigate all such matters.

Source: https://profit.pakistantoday.com.pk/2018/02/01/rs-10bn-worth-benefits-given-to-chinese-firm-through-tax-exemption/


Some CPEC projects could get listed at Pakistan’s stock market


Gwadar Free Trade Zone projects, which fall under the umbrella of the China-Pakistan Economic Corridor (CPEC), could be listed at the Pakistan Stock Exchange (PSX), a move aimed at helping Chinese investors raise funds for the endeavour.

In a statement released on Monday, the PSX said it would facilitate Chinese investors – under the broader CPEC projects – in raising funds for projects to be set up at the Gwadar Free Trade Zone and get listed at the bourse.

In this regard, the statement added, the PSX and China Overseas Ports Holding Company Pakistan (Pvt.) Limited (COPHS) officials signed a Memorandum of Understanding (MoU). Prime Minister Shahid Khaqan Abbasi, along with other Pakistani and Chinese government officials, witnessed the signing ceremony.

PM inaugurates free trade zone, first international Gwadar expo

“The primary purpose of the MoU is that the PSX will make its best endeavour to help and facilitate the investors, businesses and companies in the Gwadar Free Trade Zone, so that they can raise funds from the exchange,” the statement said.

“The COPHC will extend help to the PSX in conducting due diligence on the investors and businesses in Gwadar Free Zone that are applying to the stock market for listing of equity and debt securities.”

Through the MoU, both companies have mutually agreed to cooperate for listing of equity and debt securities at PSX, in response to strategic national priorities of the Government of People’s Republic of China and Islamic Republic of Pakistan with respect to ‘One Belt-One Road’ initiative in general and ‘China-Pakistan Economic Corridor (CPEC)’ initiative in particular.

Development at Gwadar Port and Gwadar Free Trade Zone suggests that the Chinese government and private sector entities would invest at the free trade zone. The port and the trade zone are both part of the broader CPEC projects worth over $60 billion. CPEC projects largely fall in the areas of infrastructure development and setting up of power projects in Pakistan.

PM to visit Gwadar amid concerns over anti-CPEC propaganda

The PSX is the national securities exchange of Pakistan, whereas the COPHS is a China-based multinational organisation, which provides expert marine services, container terminal management and maintenance of port facility services.

COPHS works in Pakistan with an aim to transform one of the most strategically located port of Gwadar into an economic hub of Pakistan and will cater to all types of international commercial activities generated from one business to another, irrespective of quantity, quantum and magnitude.

“Gwadar has enormous potential from all angles and dimensions for any kind of business activity, whether known or emerging with ever developing technologies,” added the statement.

Source: https://tribune.com.pk/story/1621425/2-cpec-projects-get-listed-pakistans-stock-market/


PM inaugurates free trade zone, first international Gwadar expo


Prime Minister Shahid Khaqan Abbasi has told the Balochistan government to draw plans for the development of the coastal areas of the province and promised federal government’s full cooperation in this regard.

Addressing the opening ceremony of the two-day Gwadar Expo in Gwadar, the prime minister announced an ‘Equalisation Package’ for Balochistan under which the federal government would provide 50% funding for development works in every district of the province.

“[A] free zone is an integral part of the Gwadar port and with it, the Gwadar port project will pave the way for the speedy development of Balochistan and create ample jobs opportunities,” Prime Minister Abbasi told the ceremony.

“The Equalisation Package will ensure the provision of equal facilities in all districts of the province to achieve the goal of sustainable development,” he said.

The PM said it was incumbent upon the Balochistan government to find solutions to its problems and meet the challenges. As far as federal government was concern, he added, it would provide all help and facilities to the province.

He described the China-Pakistan Economic Corridor (CPEC) as “the most important initiative of our generation and the most visible part of the Belt and Road Initiative”. He added the project was the realisation of the vision of Chinese President Xi Jinping and former prime minister Nawaz Sharif.

CPEC to promote connectivity, shared prosperity in region: China

“The CPEC is a reality now,” Abbasi said, adding that under the project, motorways and highways were linking Gwadar and Khanjrab and Peshawar and Karachi. He added that railway lines were being modernised, power projects were being established and special economic zones would generate employment.

The Gwadar Expo is being jointly organised by the Gwadar Development Authority and the China Overseas Ports Holding Company (COPHC). It aimed at providing a platform for interaction between local, foreign private sector and government officials for exploring investment opportunities.

On the occasion, Chinese Ambassador to Pakistan Yao Jing reaffirmed his country’s support for Pakistan for its progress and prosperity. “Chinese businessmen will continue to invest in the developmental projects of Gwadar,” he said.

COPHC Chairman Zhang said the development of Gwadar would not only help improve the local economy but also the overall economic conditions of the country.

CPEC will transform Pakistan into commercial trading centre, Chief of Naval Staff

Ports and Shipping Minister Mir Hasil Khan Bizenjo, Chairman Joint Chiefs of staff Committee General Zubair Hayat, Commander Southern Command Lt Gen Asim Saleem Bajwa, provincial ministers Sarfraz Bugti and Asim Kurd were also present at the ceremony.

Source: https://tribune.com.pk/story/1621031/1-pm-inaugurates-free-trade-zone-first-international-gwadar-expo/


Gwadar Free Zone to turn into region’s big commercial hub: Chairman COPHC

GWADAR: Chairman China Overseas Port Holding Company (COPHC) Zhang Baozhong, on Sunday, said that with the construction of Gwadar Free Zone, the port city of Gwadar would become a big commercial hub in the region.

In an interview with APP, the COPHC chairman Zhang Baozhong said that development of Gwadar would help to improve the overall economic conditions of the country and also of the local people.

Zhang said that for the construction of Gwadar Free Zone, China has employed around 2,000 local people keeping in view their involvement in the mega project.

He said China was very happy with the strong support extended by Pakistan’s federal and provincial governments for holding of Gwadar Expo 2018.

He said Expo which attracts delegations from countries including Iran, Saudi Arabia and the United Arab Emirates would help in the proper marketing of local products including fishing, embroidery and dairy products.

Yu-FeiMarine Technology Chairman Chon Baoliang told APP that his company would train the locals in fishing and farming.

He said that plan is underway to set up an institute in Gwadar focusing on the new technology of fish catching and long distance fishing.

He further said that the project would prove to be a win-win cooperation between Pakistan and China.

Source: Pakistan Today, 28th January 2018.


Pakistan demands relaxed tariffs from China under ASEAN

ISLAMABAD: As Pakistan and China are going to hold another round of talks on revising Free Trade Agreement (FTA) next month, Pakistan has demanded relaxed tariffs from China under Association of Southeast Asian Nations (ASEAN) to relatively balance bilateral trade.

China will extend every support to Pakistan treating it as a friendly and neighbouring country. We can give maximum relaxation on trade but to the extent of what the market allows,” Chinese ambassador to Pakistan Yao Jing said while addressing a news conference along with Minister for Commerce and Textile Industry Pervaiz Malik here on Tuesday. The envoy said Pakistan as a neighbour, definitely occupies a special position in China’s policy, adding that China will do whatever is required to promote Pakistan’s exports.

“The difficulty we face is to identify items to be imported from Pakistan. This is why I suggest Pakistani exporters to visit China for exploring its commodity markets. Similarly, China will like to send purchasing delegations to identify more items for the bilateral trade,” he further added.

“China will love to buy Pakistani products and will endorse whatever competitive products Pakistan introduces in the Chinese markets,” he said.

The Chinese ambassador said that “This year Pakistan and China will hold another round of FTA. I understand that there are concerns from private sector and manufacturers on Pakistan’s side on the FTA. China considers Pakistan a special partner and it will never like to damage its industry through this kind of bilateral agreement. Our intention is to have a more convenient and facilitating mechanism of bilateral trade. We want to encourage and facilitate trade cooperation on principles of following Pakistan’s convenience, concerns and satisfying its requirements.”

Yao Jing informed that he had discussed with the Commerce Minister some ideas to ‘ease and relax’ visa mechanism for Pakistani businessmen especially exporters so that they can have a better understanding about trade opportunities in China.

He further informed that the Chinese embassy and counsellor generals would have regular meetings with the Ministry of Commerce to encourage all exporters and businessmen to further strengthen the bilateral trade.

Answering a question, the envoy assured that the Chinese government would accommodate and extend maximum concessions possible to Pakistani products under the FTA.

The envoy said that in the long term, China will support Pakistan establish special economic zones which would help increase Pakistan’s capacity to manufacture quality products for export to international markets.

He also sought specific suggestions from Pakistan to attract Chinese manufactures to invest in Pakistan’s industrial sector.

Replying to a question, the Commerce Secretary Muhammad Younus Dhaga said that the last round of the FTA held in Beijing was very positive as the issues highlighted by Pakistan were taken well by the Chinese side. He said Pakistan has demanded the relaxation of tariff on a number of items as per the treatment given to ASEAN members by China.

Meanwhile, Chinese ambassador invited Pakistan to attend a six-day international ‘Import Expo’ scheduled to be held at its National Exhibition and Convention Centre, Shanghai from November 5 to 10 this year.

Source: Pakistan Today, 23rd January 2018.


Newly launched Pak-China Employment Exchange to link Chinese employers with Pakistani employees

Pakistan and China have collaborated to develop an employment exchange to facilitate talented Pakistani individuals in getting their hands on the CPEC-related jobs.

The instituted exchange has been developed through collaboration between one of Pakistan’s famous job portals, Rozee.pk and the Pakistan China Joint Chamber of Commerce & Industry (PCJCCI). The platform that will link the Chinese employers with Pakistani individuals has been made operational in the Chinese, Urdu and English languages so that all the participants are able to take equal parts in the program. The exchange will officially be launched at a dedicated ceremony due to held today.

As the China-Pakistani Economic Corridor is a vast scale project consisting of development of road infrastructure and different industrial hubs etc., it is expected to bring a vast array of employment opportunities to the Pakistani individuals as well. The project has already provided employment to more than 30,000 Pakistani individuals and the number will only grow. The Port Qasim Coal-fired Power Project alone has provided job opportunities to 5,000 of Pakistani individuals.

In order to take full advantage of the other jobs that would be created as part of the project and hence unlock over 7 million highly skilled Pakistani professionals across all sectors of industry, this dedicated job portal was launched by Rozee.pkin collaboration with PCJCCI.

SM Naveed, President Pak-China Joint Chamber of Commerce & Industry, while launching the project mentioned, “This project will add considerable value to Chinese businesses establishing operations in Pakistan by quickly supplying them with highly skilled Pakistani talent.”

Monis Rahman, Chairman & CEO of Rozee.pk added, “Rozee.pk’s mission is to connecting talent with opportunity. CPEC related projects are anticipated to have a Big Bang effect on the Pakistani economy. This employment exchange will leverage Pakistan’s most valuable asset, its people, to help our Chinese partners achieve shared goals”.

The China Pakistan Economic Corridor is a mega-scale economic project that was launched between Pakistan and China two years ago. The corridor which will cross through Pakistan will work on developing the Pakistani infrastructure. With an initial investment of $46 billion that came into Pakistan as part of the project, CPEC is now being valued at a whopping 62 billion dollars.

Source: TechJuice, 18th January 2018.

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Bitcoin price slips as China widens crackdown on cryptocurrency

BEIJING: China is preparing for a new crackdown on cryptocurrency, planning to stamp out remaining trading in the country, according to state media.

China will gradually clean up over-the-counter trading platforms, peer-to-peer networks where large exchanges occur and firms registered in the country which allow Chinese to trade overseas, the state-run Securities Journal said Tuesday.

The publication cited an anonymous source close to regulators tackling online finance risks.

The new plan follows China’s crackdown on cryptocurrency trading last year, which saw Beijing shut down bitcoin exchanges and ban all initial coin offerings.

But alternative channels for trading cryptocurrencies have popped up, including on social networks like WeChat, QQ and Telegram.

Those online groups facilitating large-scale peer-to-peer trade appear likely to suffer greater scrutiny in the coming months.

The international value of bitcoin and other cryptocurrencies has plunged in recent days amid fears of a crackdown in Asia and concerns that many currencies’ rapid rise in value last year could reflect an inflating bubble.

At one point on Wednesday, the price of bitcoin on some exchanges had tumbled more than 20 percent, falling below the $10,000 mark that the currency broke through in November of last year.

The market movements come just one month after the most valuable cryptocurrency bitcoin broke through the $20,000 mark in December.

Source: ARY News, 17th January 2018.

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Indonesia keen to join CPEC, says envoy

ISLAMABAD – After Saudi Arabia, Iran and few other countries, the Republic of Indonesia has expressed its desire to be part of the China-Pakistan Economic Corridor by exporting coal for power projects or by way of setting up a railway system for the CPEC.

In an exclusive interview with Waqt News the other day, the Ambassador of Republic of Indonesia in Islamabad Iwan Suyudhie Amri has said that the people of Pakistan and this region, seem excited about the CPEC.

He said that if the project succeeded it would change the logistic route in the region from the Middle East through Pakistan up to China.

The ambassador said that the CPEC would prove an opportunity to tap for Pakistan.

Amri said that, “hopefully, the pace of the CPEC in account of infrastructure development in Pakistan will increase.”

To a question, the ambassador stated, the basic focus of the CPEC was supply of energy, which included various energy plants.

As Indonesia is refined in coal industry, it can provide coal for the power projects under the CPEC, Amri said.

“Indonesia also holds expertise in railway system, so it can establish a train system for [the] CPEC and that is how Indonesia could be part of the mega project,” the Indonesian diplomat said.

The ambassador expressed his hope that the sustained pace of the CPEC would have a trickledown effect on Pakistan’s economy, which in turn would have a positive impact on the south Asian region too.

The Indonesian envoy told the scribe that since his arrival in Islamabad one and a half years ago, the security situation had been improving, for which the role of all the stakeholders was appreciable.

On the economic front, the ambassador said that the trade volume between Islamabad and Jakarta was $1.6 billion before signing of the Free Trade Agreement in 2013, which had touched 2.2 billion dollars.

Expressing his satisfaction on the growth of Pak-Indonesia economic ties, Amri said that Pakistani “kinnow” had been introduced in the Indonesian markets and would remain available for six months. Amri lauded the taste of Pakistani mangoes.

He said that Pakistani mangoes would debut in Indonesian markets by next year.

Likewise, Amri said a number of Indonesian products also stood a good chance to enter Pakistani markets, which could benefit both the countries.

Source: The Nation, 13th January 2018.

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China Confident Of Ensuring CPEC Success

The China-Pakistan Economic Corridor (CPEC), a flagship project of China’s prestigious Belt and Road Initiative, passes through Pakistan-occupied Kashmir. The CPEC links China’s restive Xinjiang region with Pakistan’s Balochistan province.

Beijing—China on Tuesday said it is confident in ensuring the USD 50 billion  CPEC success, a day after Pakistan’s security czar alleged that the US along with India is conspiring against the ambitious economic corridor.

The China-Pakistan Economic Corridor (CPEC), a flagship project of China’s prestigious Belt and Road Initiative, passes through Pakistan-occupied Kashmir. The CPEC links China’s restive Xinjiang region with Pakistan’s Balochistan province. CPEC is bringing a lot of opportunities in different sectors and areas and China is so confident of ensuring CPEC success.

Foreign Ministry spokesperson Hua Chunying told reporters today that China hopes more countries to join the project.

“I want to reiterate that CPEC is a new type of framework for the long term cooperation in various areas between China and Pakistan,” she said when asked about Pakistan’s claims.

The project is not only of positive significance for the development of the two countries but also conducive to the development of whole region, Hua said.

“We hope CPEC can receive more support and recognition of more countries and we are confident in ensuring the success of the building of CPEC with various parties including Pakistan,” she added.

Pakistan’s National Security Advisor Lt Gen (retd.) Nasser Khan Janjua yesterday accused the US of conspiring against the multi-billion economic corridor with India.—PTI

Source: Kashmir Observer, 20th Dec 2017.