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CPEC: The Bigger Picture

Why is Washington making a song and dance about the China-Pakistan Economic Corridor (CPEC)? Are their reservations with regard to the multi-billion programme rooted in deep concerns for Pakistan’s long-term wellbeing?

Do – like caring parents who believe their naive child should give a wide berth to bad company – they want Islamabad to keep the Chinese at an arm’s length? Or do the Americans look upon the corridor as a strategic ploy by Beijing to put its stamp on the region at their expense?

From the American perspective, as outlined by a senior State Department official, Alice Wells, twice during the past three months, the substantial capital inflows under CPEC are a Greek gift for Pakistan, which is already heavily indebted to foreigners – governments as well as multilateral institutions. The more the programme grows in size; the more funds will Islamabad have to borrow from the government and banks in China. As a result, the debt repayment obligations of the country will continue to inflate, forcing it to shore up its borrowing to work off the credit. That will be a classic case of debt trap from which, as a rule, the borrower finds difficult to get out. The argument seems valid. But, like any other valid argument, it may comprise questionable premises.

In order to appreciate CPEC and its implications for Pakistan, we need to look at the bigger picture from both China’s and Pakistan’s standpoints – not to speak of the US perspective.

CPEC is part of China’s flagship Belt and Road Initiative (BRI). As China sets its sights on becoming an economic superpower, it’s putting high premium on four things in the main: seamless and efficient trade flows, food and energy security, moving up the value chain in manufacturing, and development of its relatively backward regions.

China’s impressive economic growth over the past four decades has been export driven. The share of foreign trade in the country’s total economic output is 40 percent, which is exceedingly high considering that as a rule large economies tend to depend less on foreign sales and purchases. The Asian giant has been among the biggest beneficiaries of trade liberalization and opening up of markets worldwide and is keen that the phenomenon should continue.

The trade competitiveness of a country in significant measures hinges on curtailing the cost of both domestic and overseas transactions by putting in place an efficient infrastructure. According to a 2017 Asian Development Bank study, the current infrastructure deficit is a serious obstacle to trade expansion and economic openness and that the Asian continent alone needs $26 trillion infrastructure related investment till 2030. That is why bridging the infrastructure gap forms the key component of the BRI.

Putting in place the right infrastructure and building trade corridors also played a capital role in China’s development saga. Since China is a gigantic country, both raw materials and final goods have to be shifted from one part of the country to another over an enormous distance. That necessitated huge investments in overcoming transportation bottlenecks. China wants to replicate a similar model in the BRI, which would cut back significantly on the time and cost of the country’s foreign trade.

On account of the size and growth of its economy as well as the 1.4 billion population, China’s energy needs are ever growing. Already, it’s the globe’s largest energy consumer and importer of petroleum products. Ensuring timely and uninterrupted energy supplies is thus a priority for Beijing. Another priority is food security. Due to rapid industrialization, the share of agriculture in China’s GDP has been shrinking – at present, it accounts for less than eight percent of the overall economic product – making it increasingly dependent on food import.

Compared with Europe and North America, China is known as a manufacturer and seller of low-technology, low-quality products. The country is keen to erase this impression by graduating to a manufacturer and exporter of high technology, smart goods and services. This entails, on the one hand, import of technology related intermediate goods, such as semi-conductors, from developed countries, and, on the other, relocation of the heavy and labour intensive industries to less developed economies.

China’s development has been heavily biased towards coastal regions or the eastern part of the country. The western part, including the Xinxiang administrative region bordering Pakistan and Tibet, was largely neglected, which stoked social and political discontent. As per the development philosophy of the current leadership encapsulated in ‘Socialism with Chinese Characteristics for the New Era,’ Beijing is according high importance to the development of the hitherto neglected regions through industrial relocation and trade. The BRI is a seen as a significant contributor to this end.

The BRI, which seeks to revive the ancient Silk Road through which Asian nations traded with Europe, involves 60-plus countries, with China as their pivot. A network of roads, bridges and ports running through the participating countries would ensure that China’s international trade, which includes secure energy and food supplies, is conducted at low real cost. The immediate benefit for these by and large capital-deficient countries is infrastructure development.

The initiative is remarkably ambitious and China is supposed to inject close to one trillion dollars by 2030 into the various projects in both investment and credit modes. The BRI includes six corridors through which China will be connected to Europe and Africa through South Asia, the Middle East and Eurasia. One of these corridors is CPEC.

CPEC links China’s restive south-west to energy-rich West Asia and further to Europe through the Gwadar Port. As in the case of other BRI corridors, communication and energy related infrastructure development to the tune of $49 billion – the figure is subject to cost escalation – lies at the heart of CPEC. Of this, the $34 billion energy projects are in the IPP mode. These projects have contributed significantly to easing power outages in Pakistan. However, the mode of financing for the $15 billion transport projects is almost entirely Chinese credit.

So far, Pakistan has borrowed close to $5 billion for these projects, which the government claims to be on concessionary terms. Pakistan is seeking another $9 billion Chinese loan for the mega ML-I project, which will upgrade the main Karachi-Peshawar railway track. All over the world, trains are the preferred means of cargo transport. In Pakistan, however, the share of the railways in merchandise transport is only two percent.

CPEC will, no doubt, add to the public external debt. But an economy faced with low level of domestic savings has to rely on foreign capital to shore up the level of investment. Besides, if used to raise the productive capacity of the economy, debt is not something to be frowned upon. As the economy grows, its capacity to service the debt also racks up.

In addition, China will help Pakistan overcome its supply-side constraints through development of special economic zones (SEZs) and modernization of agriculture. Despite being an agro-based economy, Pakistan is a net food importer to the tune of $1.5 billion a year mainly because of productivity glitches. Pakistan is also eyeing relocation of some of China’s heavy or labour intensive industry to the SEZs to give a significant boost to its exports.

Due to CPEC, China has become the largest source of FDI into Pakistan. During last five years, the cumulative FDI from China crossed $5 billion, which accounts for 46 percent of the total investment into Pakistan. In contrast, only $530 million worth of FDI was received from the US during this period. China is also Pakistan’s largest trading partner. It goes without saying that increased commercial engagement between the two countries consolidates their overall bilateral relations.

For China, the benefits of the BRI go beyond mere connectivity and trade to ratcheting up its regional and global clout. Capital, whether it takes the form of equity or credit, is a principal source of extending leverage over other nations. No other country knows this better than the US, which since the close of the Second World War has been the capital user of military and economic assistance as a tool of advancing foreign policy objectives.

Not only that, as Washington is presently in a protectionist-cum-austere mode, Beijing sees it as a good opportunity to draw upon its massive foreign exchange reserves for building alliances centred on it. That’s the reason the BRI provides a springboard for the Sino-US face-off.

Source: The News

Date: 30/01/2020

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Beijing FATF Meeting

At last the Asia-Pacific joint group of the global watchdog on terror financing and money laundering, the Financial Action Task Force (FATF), has admitted that Pakistan has met most of the key terms of the body. The encouraging feedback means the country is going off the grey list and a formal announcement is expected at a plenary meeting of the body to be held in Paris in March. The development is a great success for the government. Pakistan suffered financial as well as strategic jitters when FATF placed it on the grey list in 2018, slapping it with a 27-point list of demands. Since then, the government’s journey to plug loopholes in money laundering and terror financing laws has covered many milestones like freezing the funds of Taliban-affiliated outfits and Hafiz Saeed and his LeT. In several meetings of the FATF forum, Pakistani delegates would be harshly grilled for failing to meet international standards. Every meeting ended with a string of warnings and reminders about legal measures and necessary laws. The Beijing meeting has passed Pakistan’s actions on 14 points. In October, the body was hardly convinced on five points.

Money laundering and terror financing are global issues but Pakistan has been under FATF scrutiny since 2008. The body placed Islamabad on its grey list for the first time in 2012. It remained there till 2015, and when Pakistan began decisive actions against terror groups alongside the Rah-e-Nijat operation, bringing down terror incidents considerably, the body removed it from the list. The body struck the country once again in 2018, and this time with far more aggression. All leading financial institutions also pressured Pakistan to address FATF concerns. On occasions, Pakistan complained about Indian politics behind the warnings. Despite all dirty politics and tricks, Pakistan’s efforts were finally acknowledged by a majority of members. In this regard, China’s role is excellent, while Turkey and Malaysia also openly helped Pakistan beat the grey list. The US delegates also found Pakistan’s actions encouraging.

Source: Daily Times

Date: 29/01/2020

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CPEC projects to be put on fast track, PM says

Prime Minister Imran Khan yesterday directed to expedite the completion of ongoing projects under the CPEC.

Chairing a high-level review meeting regarding progress on various projects under the CPEC here, the prime minister stressed the need to fully benefit from Chinese experience in social sectors, especially in poverty reduction and agriculture.

The prime minister gave directives to the CPEC Authority to accelerate implementation of various projects in the second phase of CPEC.

He said that the ongoing development projects under the CPEC should be completed on a fast-track basis and directed to give a final shape to the consultation process of the future projects on priority.

Lauding the time-tested friendship with China, he said that China had always supported Pakistan during difficult times and CPEC was a manifestation of the multi-dimensional partnership between the two countries.

He also observed that Chinese experiences in the social sector, especially for the eradication of poverty and promotion of agriculture, must be fully explored, says a press release issued here by the Prime Minister Office Media Wing.

The prime minister asked the relevant ministries to set a completion period and emphasized upon making the inter-ministerial coordination more effective to achieve desired results within the appointed time frame.

He also directed to brief him in the upcoming review meeting on the the projects falling under the CPEC second phase, including their completion period, implementation, removal of hurdles and the future mechanism.

The prime minister was briefed in detail over the progress on the short, medium and long terms CPEC Projects.

The meeting was apprised about the first phase of CPEC Projects in energy, road and rail networks, and the Gwadar Port, and the second phase projects, including industrialization cooperation, promotion of agriculture, social and economic progress, tourism and others.

It was informed that majority of the projects in the energy and road networks had been completed whereas work on the Gwadar Port and airport was under progress phase-wise.

The Orange Line project was completed while consultation process over feasibility of Quetta railway was underway.

The prime minister had already laid the foundation stone of the Allama Iqbal Special Economic Zone while Rashakai economic zone was expected in the next month.

The bidding process for Dhabeji Economic Zone would be completed soon, it was further informed.

The meeting also took stock of different proposals regarding proposed projects under CPEC phase two, in the education and health sectors, housing scheme for the low income groups, poverty reduction, Ehsaas poverty programme and eradication of malnutrition and stunting issues.

Minister for Economic Affairs Muhammad Hammad Azhar, Minister for Planning Asad Umar, Advisor Dr Abdul Hafeez Shaikh, Minister for Maritime Affairs Syed Ali Haider Zaidi, CPEC Authority Chairman Lt Gen (retd) Asim Saleem Bajwa, Naya Pakistan Housing Programme Chairman Lt Gen (retd) Anwar Ali Haider and other senior officials attended the meeting.

Source: The Nation

Date:  29/01/2020

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Pakistan Economy Watch lauds Pak’s stance over CPEC

The Pakistan Economy Watch (PEW) lauded the stance of the government over China-Pakistan Economic Corridor (CPEC) after the US criticism terming it encouraging and according to the national interests.

The US should understand that Pakistan cannot abandon this most important regional project which has potential to turnaround our troubled economy, it said.

The American opposition to the CPEC will not remain confined to statements and she would do everything to reverse it for which Pakistan and China must be prepared, said Dr. Murtaza Mughal, President PEW.

He said that the latest US statement against CPEC has come at a time when President Trump was claiming that his country and Pakistan had never been so close as now that exposes duplicity in policies.

Dr. Murtaza Mughal said that Pakistan can never ditch China to please the US as both countries have a long history of helping each other in difficult times while handing over Gwadar Port to the US is out of question.

He added that CPEC will benefit Pakistani economy while China’s international trade will be facilitated which will add to the global influence of Beijing which is not acceptable to the US.

For the same reason handle like FATF is being used against Pakistan as it is an open secret that most of the dirty money finds refuge in the US and UK but FATF will never raise any objection about it, he observed.

Most of the dollars received through the US in the shape of grants and loans find their way back to the US leaving Pakistan in debt but China has never resorted to such expliotation, he said, adding that Chinese support to infrastructure projects in Pakisan are visible to everyone.

Pakistani and Chinese experts have agreed to develop a textile cooperation framework under China Pakistan Economic Cooperation (CPEC) by focusing on readymade garment exports and textile skill training. It was expressed in a one-day workshop organised by the Board of Investment (BOI) to deliberate on adiagnostic study on Pakistan’s textile sector, conducted by the National Development & Reform Commission (NDRC) of China and China International Engineering Consulting Corporation (CIECC).

The Textile Diagnostic report provided the Chinese viewpoints on the potentials and barriers of large-scale Textile Mills in Pakistan.

The report was also one of the deliverables of the 9th JCC held in 2019 and is a precursor to a more detailed work on the Textile Sector of Pakistan.

The workshop was attended by Executive Director General (EDG) of BOI, Qasim Raza Khan, Project Director of the Project Management Unit (PMU) BoI, Asim Ayub, Director SEZs BOI, Abdul Samie, Executive Director APTMA, Sattar Shahid, Director Textile Industry Division, Kanwar Usman, Chairman PRAGMEA, Shaikh Mohammad Shafiq, Head of Pak-China Investment Company, Tariq Masood and representatives from line ministries, private sector and academia

EDG BOI, Qasim Raza Khan informed the participants that CPEC has now entered into the pragmatic phase of Industrial cooperation, and it is the right time to take Pakistan forward on the path of industrialisation.

It has been agreed that the Chinese side will continue to provide intellectual and technical support to accelerate Pakistan’s priority sectors especially through the 9 SEZs of Pakistan under CPEC wherein 03 SEZs have been prioritised and are now at an advanced stage of development, he added.

“The government is focused on bringing improvement in the key sector growth through inclusive growth in agriculture, industrial and services sectors,” said a statement by the Finance Division in response to certain news reports carried in a section of the regarding downward revision of growth by the World Bank.

Source:Gulf Today

Date:28/01/2020

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CPEC to help Pakistan meet food security needs: experts

The China–Pakistan Economic Corridor is a collection of infrastructure projects, is improving Pakistan’s connectivity not only within itself and China, but with over 60 other countries, which are part of the land route of China’s Belt and Road Initiative involving infrastructure development and investments.

With the second phase of the Chinese venture presenting opportunities to collaborate in the social sector, substantial emphasis needs be laid on the development of the country’s agriculture sector, which offers huge prospects of growth and trade.

The message emerged from a policy dialogue on ‘National Agriculture and Food Security in Pakistan’, which was held at Institute of Policy Studies (IPS) here in collaboration with Pakistan Agriculture Scientists Forum (PAS Forum). The session was addressed by Dr Muhammad Azeem Khan, chairman, Pakistan Agricultural Research Council (PARC); Professor Dr Anwar-ul-Hasan Gilani, vice chancellor, University of Haripur and ex-chairman, Pakistan Council for Science and Technology (PCST); Professor Dr Amanullah Malik, University of Agriculture, Faisalabad; Khalid Rahman, Executive President IPS; and Dr Abdul Wakeel, president, PAS Forum.

Presenting an overview of Pakistan’s agriculture sector, Dr Azeem Khan emphasized the need of enhancing productivity of various potential sub sectors of agriculture, not only with an aim to address the country’s food security concerns, but also to alleviate it for international trade.

Khan rued that Pakistan was a food exporting country till 2013 but became a food importing country thereafter. However, he observed that the second phase of China-Pakistan Economic Corridor offers a good opportunity to help the agriculture sector to recover, but the onus largely lies with the nation to set targets and strategies carefully in order to benefit from the forthcoming opportunities.

The PARC chairman was all for alleviating the agriculture sector via business-oriented model, which in his opinion, could only be done through value addition i.e. converting raw materials into standard commercial products and brands. He highlighted that combinations of different commodities and products being produced alongside the CPEC routes boast significant prospects in this regard. There is a huge potential for the production and export of fodder, edible oils and palm oil, whereas pulses and oil seeds are some other lucrative areas to invest in.

The speaker however pointed out that the post-harvest losses still remain a concern in the country, before adding that the solution lies in careful measures taken in the areas of production, diversification, post-harvest

handling, processing, certification, and value addition – all aimed at converting the harvest into high-value products while enabling them to maintain apex standards for international trade.

Khan also spoke fervently about the prevalent state of malnutrition in Pakistan, terming it unprecedentedly high while maintaining that a nutritionally food secure Pakistan should be the country’s top most goal.

Dr Malik spoke about potentials and opportunities for Pakistan’s agricultural sector in relevance to CPEC mega projects. He mentioned several agriculture items in which Pakistan could enjoy a competitive advantage over the rest of the world, especially when it comes to China.

The professor said that China is the world’s biggest farm produce importer, with its imports making up to 10 % of global farm produce trade. The country is a net importer of bulk agriculture products and there has been rapid growth in its imports from Belt and Road countries off-late. Pakistan too can target some of its exports to China such as soybean, barley, corn, wheat and cereals. Rice is the country’s major export to China but there is a lot more potential to it as well. In terms of fruit, cherries, grapes, mangoes, guavas and oranges are some of the products that can be looked at. He however said about 70% of China’s agriculture imports come from the USA, Brazil, South East Asia, European Union and Australia, and it will be very challenging, yet necessary, to raise our quality standards to compete with these countries.

Pakistan was sorely lacking in utilizing technology for its agricultural requirements when compared to other countries, Dr Gilani lamented while pressing for the need to make use of modern technological systems and methods that could cope with present-day challenges like global warming and climate change.

He stressed the need for focusing and investing on local capacity building initiatives as well as on improving access to international markets. The expert called for immediate measures such as making crops nutritive and resilient to climate change, rescuing of more farmland, empowering of small landholders, de-urbanization, preservation of water, recycling of crop/livestock waste and saving of food through public awareness drives if Pakistan is to answer its rising food security threats.

Source:The News

Date:28/01/2020

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Defending CPEC

Pakistan and China have rejected American claims that the China-Pakistan Economic Corridor (CPEC) is only being financed through loans and other non-concessional financing. Various ministries have been on a defensive charge to counter claims made by US diplomat Alice Wells a few days back. The Foreign Office spokesperson claimed that CPEC debt only amounts to “$4.9 billion, which is not even 10 per cent of the country’s total debt”. The spokesperson said CPEC has helped Pakistan address development gaps in various areas and gave the specific example of power plants with a total capacity of 7,000 MW. She also claimed that CPEC has enhanced regional connectivity and prosperity by providing enormous economic benefits for the people of Pakistan, along with socioeconomic development. The Planning Ministry separately claimed that the projects completed so far “have already brought relief and started yielding dividends and tangible socioeconomic benefits”. It said that CPEC projects will accelerate development and economic growth.

But there was also an oddly defensive line about “Pakistan being a sovereign state that exercises the right to choose economic partners…on a mutually beneficial basis.” This is common knowledge in all trade deals, which makes it a strange point to stress on. Foreign Minister Shah Mehmood Qureshi also stressed that when it comes to the CPEC, Pakistan “will continue to do what is beneficial to us”.

China, meanwhile, called the US statement “negative propaganda” and said that it strongly opposed US interference in China-Pakistan relations and CPEC. The Chinese Embassy claimed that Beijing always puts the interests of Pakistan’s people first in CPEC projects. The embassy statement also listed a series of CPEC-related achievements, including that CPEC projects have significantly improved Pakistan’s transportation infrastructure and power supply while creating over 75,000 jobs.

There were also direct attacks on US foreign policy in the statement. Criticism was focused on America’s use of sanctions for “blacklisting this and that country”, in reference to the Wells’ claim that blacklisted companies were working on CPEC-related projects. The embassy claimed US blacklisting had less to do with protecting the global economy, and more with its own political goals.

Source:The Express Tribune

Date:27/01/2020

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CPEC: A Diplomatic Tightrope

The mistrust in the relations between Pakistan and the United States has markedly been overcome over the last one year and a half.

Prime Minister Imran Khan has had a meeting with the US President Donald Trump on the sidelines of year. In a sign of significant improvement in the bilateral ties, Mr Trump is expected to visit Pakistan “soon” but this visit would not be part of the regional tour of the US President this year which would take him to India and Afghanistan.

The improvement in the ties is largely attributed to Pakistan’s efforts to persuade Afghan Taliban to hold direct talks with the United States and the two sides are expected to finalize a deal later this month which would pave the way for talks between Taliban and the Afghan government.

The United States also announced resumption of military training for the Pakistani army officials, though the overall military assistance would still stay suspended. But this time around, the cooperation between the two countries would not be restricted to security and military related matters but there are indications from Washington that it wants to extend cooperation to economic field as well.

Alice Wells, top US South Asian diplomat, in a talk at the Washington’s Wilson Center, announced last month a series of visits of US business delegation would take place this year.

In a further sign of improving relations, the United States is also expected to support Pakistan’s bid to get off so-called grey list of Financial Action Task Force (FATF) in its meeting, on February in Paris, of the countries which have not done enough to curb money laundering and terror financing.

Hopes for Pakistan to get off this list were raised in a meeting in Beijing last week when except for India the rest of the participants expressed satisfaction over Pakistan’s report of compliance with the FATF recommendations.

Pakistani authorities also hope that US bilateral support as well as at the international forums would encourage foreign investors particularly from the West to bring their money into Pakistan.

Pakistan has already been notified as a country having made significant progress by the World Bank on its index of ease of doing business.

President Trump called Prime Minister Imran Khan as a “friend” and said Pakistan and US have never been as close as are now.

All these positive signals are welcome but there are some challenges for the two countries too.

The United States has ramped up its criticism of China Pakistan Economic Corridor (CPEC). In her Wilson Center talk, Wells wanted Pakistan that its debt burden would increase manifold as according to her much of the money invested and committed by China is in the form of loans and not assistance.

She also raised questions about the transparency in the CPEC-related projects and even claimed that some firms blacklisted by the World Bank have been signed up for the CPEC projects. Wells repeated her concerns over CPEC during her visit to Pakistan last week.

Ironically, her outburst against CPEC at the time when Prime Minister Khan and President Trump were discussing ways and means to expand relations in Davos.

China on both occasions angrily rejected US concerns and Pakistan too rubbished the criticism.

In an interview with the CNBC during Davos tour, Prime Minister rejected criticism on CPEC as “nonsense.”

He thanked the Chinese government for its help to Pakistan in the infrastructure development.

“When the Chinese came to help us with the Belt and Road initiative (BRI) and CPEC, [we] were really at the rock bottom,” he said in response to a question whether the project was a debt-trap for Pakistan.

“So we are really grateful to the Chinese that they came and rescued us.”

In future, Pakistan has to tread a diplomatic tightrope to keep good relations both with Beijing and Washington.

China has been an all-weather and time-tested friend for Pakistan, which stood by it through thick and thin. Pakistan has had extensive cooperation in all fields with China. It also has historically close relations with the United States. It has to continue to strengthen its cooperation with the two countries on their own merit and depth of relations without compromising its ties with one at the cost of its ties with the other.

The Chinese side not only rejected the US concerns on CPEC but also made it clear that it would welcome efforts to strengthen Pakistan-US ties. The US pressure on Pakistan with regard to CPEC may intensify in the future but Pakistan has to stay firm in maintaining good relations with both countries in its own national interests.

The government ministers need also to show caution in their comments on matters relating to CPEC. At times, outlandish comments on the issue stir unnecessary controversies and create bad impressions, which are difficult to dispel.

They should not drag CPEC into domestic politics.

Prime Minister should restrain his ministers from commenting on CPEC-related matters unless they are well aware of the subject and only relevant ministers should publicly speak on the matters.

Pakistan as well as China has very rightfully offered third countries to join CPEC projects. Saudi Arabia has already shown willingness in this regard and the offer is open to the US and its Western allies.

The foreign ministry should arrange briefings with the diplomatic community in Islamabad with the help of Planning Commission on CPEC. Such briefings would help allay concerns about the project to a large extent.

There is a political consensus in Pakistan on CPEC. The government can send parliamentary delegations to foreign countries to lobby support for CPEC and address concerns in this regard. In view of US opposition to CPEC, Pakistan needs to step up diplomatic efforts for the defence of the project touted as a game changer for the region.

Pakistan and China could also launch joint efforts to convince regional and neighboring countries to join CPEC to turn it into a genuine trans-regional project.

India for its own reasons too opposes the CPEC and the Indian naval chief recently reiterated those concerns.

But a concerted effort to project it as a major project aimed at promoting regional connectivity would comfortably such propaganda to rest.

Source:The News

Date: 27/01/2020

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Textile cooperation framework under CPEC agreed

Pakistani and Chinese experts on Wednesday agreed to develop a textile cooperation framework under China Pakistan Economic Corridor (CPEC) to enhance ready-made garments, man-made fiber and textile skill training.

Qasim Raza Khan, executive director general, Board of Investment (BOI) said the CPEC had now entered into the pragmatic phase of Industrial cooperation, and it was the right time to take Pakistan forward on the path of industrialization.

“It has been agreed that the Chinese side will continue to provide intellectual and technical support to accelerate Pakistan’s priority sectors especially through the nine SEZs of Pakistan under CPEC wherein three SEZs have been prioritised and are now at an advanced stage of development,” Khan said at a one-day workshop organized by the BOI to deliberate on a diagnostic study on Pakistan’s textile sector, conducted by the National Development and Reform Commission (NDRC) of China and China International Engineering Consulting Corporation (CIECC).

The textile diagnostic report provided the Chinese viewpoints on the potentials and barriers of large-scale textile mills in Pakistan. The report was also one of the deliverable of the 9th JCC held in 2019 and is a precursor to a more detailed work on the textile sector of Pakistan.

Khan said he is confident that through this cooperation, many Chinese companies would reap benefits of Pakistan’s competitive advantages. Asim Ayub, project director of the Project Management Unit (PMU) BoI said the trade potential between the two neighboring countries had to be transformed into investment potential.

He specified three main areas of cooperation where Chinese could provide support to Pakistan with the objective of developing a textile cooperation framework. These areas include ready-made garments, man-made fiber and textile skill training.

Executive Director APTMA, Sattar Shahid was of the view that for any meaningful investment to be made, there was a need to fix the business climate i.e. effective contract enforcement.

He proposed the need for an efficient and workable bankruptcy law, besides the tariff sector of Pakistan needed to be revisited.

Chairman PRAGMEA, Shaikh Mohammad Shafiq was of the perspective that large scale units of Pakistan were only 20 percent of the total while SMEs comprised of nearly 80 percent.

“Majority of the concessional tariff lines involved in CPFTA-II was related to the textile sector which held a huge opportunity for Pakistan,” he added

“There exists a great potential for cooperation in the value-added textile section and

artificial fiber area by gaining technical expertise from the Chinese side.” The author of the Diagnostic study, Dr. Du Zhen Li, Deputy Director General of CIECC and the focal person on Joint Working Group (JWG) – Industrial cooperation (IC) from Chinese side, joined the workshop through a Video-con and shared that the Textile sector of Pakistan is chosen for the study based on its significance as an important industry, prioritized by the government of Pakistan.

Further, the Chinese Business community needed more information to understand the Textile industry of Pakistan in the backdrop of CPEC.:

Source:The News

Date:24/01/2020

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Pakistan remains grateful to China for CPEC, PM Imran tells CNBC

Prime Minister Imran Khan has roundly rejected the notion being projected by US officials that the China-Pakistan Economic Corridor (CPEC) is some sort of a debt trap.

In an interview with American media outlet CNBC, PM Imran said: “Pakistan is grateful to China as they helped us in difficult times by making investments.

“We were at rock bottom when the Chinese [government] came and rescued us,” the PM said.

Responding to a question, the prime minister rejected the impression that CPEC has made Pakistan ‘indebted’ to China.

He pointed out that Chinese loans account for only 5-6 per cent of Pakistan’s total loan portfolio.

He said CPEC envisages cooperation in different sectors, including technology transfer in the agriculture sector, and “because of Chinese investment, we have been able to attract more foreign investment in the country. We are establishing special economic zones under the project.”

Kashmir dispute

In the same interview, PM Imran also called upon US President Donald Trump and the United Nations to intervene for the resolution of the Kashmir dispute.

He said Kashmir is a far more serious problem than the world realises.

He said India has been taken over by the extremist Hindutva ideology embodied by the far-right party RSS, and recalled that Indian Prime Minister Narendra Modi was a life member of this extremist outfit.

Referring to the situation in occupied Kashmir, he said eight million people have been living under siege since August 5 last year.

“The Indian forces have picked up thousands of Kashmiri teenagers and arrested all their political leaders,” he noted.

The premier described it as a serious situation and warned that the friction could potentially spill over into a conflict between two nuclear-armed countries.

Iran willing to talk

When asked about tensions in the Middle East and the ongoing conflict between the US and Iran, the prime minister said war is not a solution to any problem.

He warned that a conflict with Iran will be disastrous for developing countries as it will lead to a sharp spike in oil prices.

He said the sensible way forward is dialogue.

“The US has spent more than a trillion dollars in Afghanistan and still people are dying there. Let me tell you, Iran will be more difficult.”

“And I told the same thing to [US] President [Donald] Trump, that war is not the solution.”

On the question of possibilities for a dialogue between the two countries, he said, “The Iranian leadership is receptive of the option”.

“They were willing to talk,” he said.

The prime minister made it clear that Pakistan will only be a partner in peace. He reminded the interviewer that Pakistan had suffered heavily both in terms of human and material losses in the war on terrorism.

Pak-US ties based on shared objectives

When asked to comment on the mistrust between the two countries and how can they can come closer, the prime minister said problems occurred when former military ruler Pervez Musharraf joined the US war in Afghanistan.

“The US kept asking Pakistan to do more and Musharraf promised them what he could not deliver.”

But now, the PM said, “this time [our relationship] is based on trust and common objectives”.

“Both of us are on the same page that there’s no military solution in Afghanistan and we are working hard to bring peace to the country.”

PM Imran said Pakistan is now a safe country and ready for business. Hailing the sacrifices rendered by security forces in the war on terrorism, he said Pakistan has disarmed militias and rehabilitated them.

Source: The News

Date:24/01/2020

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BRI: Catalyst for Global Peace & Economic Prosperity

Ever-since China announced the ‘Belt and Road Initiative’ (BRI) in 2013, two dominant opinions are being debated at international level on this massive global project. The optimists believe that BRI is a unique, incomparable and colossal global project which connects Asia through Eurasian region with Europe and Africa with a lot of promises. This class of international relations’ scholars considers BRI as a mega-project, aiming at improving regional and global connectivity and cooperation through development of communication infrastructure among countries lying on the ancient Silk Road and beyond.

The pessimists on the other hand, visualize BRI from the perspective of growing Chinese influence. This class of political scientists believes in the zero-sum game; the Chinese gain is directly proportional to their losses in the wider arena of international politics. At the global level, the Chinese rise is being viewed with a lot of skepticism by sole superpower and its allies. They see the Chinese rise as a threat to the existing world order, where the superpower has the flexibility of imposing its will, as and when it desires. Nevertheless, so far the Chinese rise has been more pronounced in the economic sphere where the US is its biggest trading partner at the international level while Japan is its major regional trading partner in East Asian region. Even India enjoys the status of a major trading partner of China with over $100 billion bilateral trade annually. This reflects that Chinese rise is peaceful, all-encompassing and beneficial for all. Chinese economic development has been beneficial for the neighbors like ‘a rising tide lifts all boats’.

In the post-cold war era, US/EU have been the leading beneficiaries of Chinese economic development and trade between East and West. As per Office of United States Trade Representative, China is the largest trading partner of US in goods. Besides the US, the EU and China are two of the world’s prime traders. Despite economic cold war between top two economic giants, in November 2019, the US and China agreed to finalize a trade deal which includes rolling back of a portion of the tariffs, which they have been placing on each other’s products. Such a deal would bring an end to the trade war between two global powers, providing opportunities for other states to benefit from the tension-free global economic environment. In the East Asian region, China and Japan are rapidly coming out of the past strategic rivalry through a renewed economic cooperation. After 2012 military build-up both sides have realized that regional rivalry and antagonism is not in favor of any state. Indeed, such an approach has benefited external power centers while damaging the regional integration.

According to Chinese officials, trade between China and Japan has risen in the last few years, entering into double digit (8.1%) in year 2018. In the same way, bilateral trade between South Korea and China raised by 11.8% in the same period. In a bid to redefining the ASEAN’s economic and security environment through BRI, China has invested over $500 billion in the region in five years from 2014 to 2018. The opportunities through BRI have drastically changed the regional economic outlook and ASEAN’s perception about China. Upon completion of BRI initiated projects, ASEAN’s diverse economies will be reoriented with a new and more vibrant outlook in the broader Asia-Pacific region; the emerging hub of international politics and global economic centers.

In South and Central Asian regions, there are major stakes with regard to BRI. Through BRI the Eurasian Heartland could come out from its global isolation to international mainstreaming. In South Asia, CPEC, the first flagship project of BRI has opened new vistas for the economic development and greater regional cooperation. Upon its completion in 2030, the impact of CPEC will be felt not only in Pakistan and China but, all regional states including those creating hurdles through undesired motives and unfounded bases.

Away from the power politics, under the changing global and regional geopolitical environment, BRI acts as a ladder to attain much needed global peace and much desired economic prosperity by building the long-awaited and essentially vital communication infrastructure. Infrastructural development, as envisaged in BRI is equally needed by developed and developing world. However, BRI is taking extra care of developing world, especially the poor countries.

In today’s world, poverty, underdevelopment and inequality are ostensibly intractable problems, eagerly awaiting sustained and durable resolutions. Indeed, economic development must proceed for addressing the concerns of all those affected. As a mega-project, BRI is aiming to enable grounds for all countries to revamp, modernize and kick start their economies and provide jobs to their unemployed masses for shrinking the angst in order to create an all-inclusive international society. This unexplored dimension of BRI would act as a potential source for reducing the growing trends of militancy and radicalization in the broader Eurasian region, ME and Africa, otherwise considered to be the militancy hit areas. In this way, BRI will be instrumental in bringing peace and cooperation among the communities from different regions of the world for achieving ‘shared growth through collaboration’, the essence of President Xi Jinping’s vision.

Although, we are looking at the brighter promising dimensions of BRI, there are substantial international challenges, confronting this gigantic global project as well. All these challenges can be tackled gradually and through a comprehensive approach of an all-encompassing model. In this socio-economic developmental model, the underdeveloped states must be taken on board while addressing their cultural, religious and nationalistic sentiments. In a nutshell, from the perspective of social constructivism, BRI offers greater prospects for global peace and economic prosperity, therefore, let’s join hands for a peaceful and stable economic order which provides the opportunities for a win-win situation for all.