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Gwadar free zone’s industrial units to start working by year end

KARACHI: At least 10 industrial units will start working at Gwadar port’s free zone by this yearend as the first phase of the zone has been completed, a senior Chinese official said on Tuesday.

Zhang Baozhong, chairman of China Overseas Ports Holding Company Pakistan (COPHC) said six of the industrial units are from China, while four are local and they are setting up projects related to edible and palm oil processing and automotive and services industries.

“A sum of $300 million has already been invested in the mega-project, while another approximately $200 million would be spent on phase-II for which the feasibility report is already complete,” Baozhong said, speaking at the Federation of Pakistan Chambers of Commerce and Industry’s (FPCCI) event.

In January, former Prime Minister Shahid Khaqan Abbasi inaugurated the first phase of Gwadar Port’s free zone that would facilitate regional and global trade under the China-Pakistan Economic Corridor projects.

COPHC, the operator of Gwadar port, said more than 30 firms related to banking, fish processing and hospitality committed around $500 million of direct investments in the zone. The port was leased to China’s state-run company for 40 years.

Baozhong said Gwadar port is operational and the customs authorities have deployed manual one-customs clearing system to process import and export consignments. The web-based one customs system could not be installed at Gwadar port due to unavailability of interconnection infrastructure.

COPHC’s chairman said the port’s berth lengths would be increased to 1,500 meters from existing 600 meters while the approaching channels would be deepened to 17-23 meters through dredging, which would enable arrival of any type and size of vessel in the world. “Business community, government, local communities and chambers of commerce are extending support in the development of Gwadar, which is a popular investment destination for investors in China as well as in Pakistan,” he added.

Baozhong said Gwadar is the most efficient port in the country offering low handling charges, no demurrage, and infrastructure connecting to the rest of the country. “In five years, it will be the new economic hub in the region.”

Senior Vice Chairman FPCCI Syed Mazhar Ali said the apex trade body planned to set up a sub-office in Gwadar to serve as the information sharing platform for the business communities of China and Pakistan.

Balochistan government granted land for the development of FPCCI sub-office, while COPHC offered the body to set up a temporary office in their building in Gwadar.

SOURCE: https://www.thenews.com.pk/print/326039-gwadar-free-zone-s-industrial-units-to-start-working-by-yearend

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To avoid China’s debt trap, Malaysia to re-examine projects under Belt and Road Initiative

Malaysia is not keen to blindly go ahead with projects offered by China under its Belt and Road Initiative (BRI), the recently-elected Malaysian government has said. It also indicated that it would attempt to balance its relationship with Beijing and re-examine the projects that were earlier agreed to by the previous government.

The need to avoid the Chinese debt trap was a topic that was repeatedly underscored in the run-up to the elections in Malaysia by the Pakatan Harapan alliance and its leader and current Prime Minister, the 92-year-old Mahatir Mohamad.

“China comes with a lot of money and says you can borrow this money. But, you must think, ‘How do I repay?’ Some countries see only the project and not the payment part of it. That’s how they lose large chunks of their country. We don’t want that,” Mohamad said, reported news agency ANI.

 Mohamad’s newly formed government would take a look at the projects under the BRI that were agreed to by the previous government led by Najib Razak, Mohamad’s former protégé.

Malaysia is not the first country in which projects funded or built by China have come under the scanner when the government changed after an election. The same thing happened in Sri Lanka in 2015, when the new Maithripala Sirisena government cancelled some of the Chinese-backed projects that had been signed by the previous government of Mahinda Rajapakse.

The Sirisena dispensation, left to deal with the mounting debt because of the Chinese projects, found itself unable to repay the loans. In December 2017, the Sri Lankan government was forced to hand over control of the Hambantota Port to Chinese companies for a period 99 years.

Concerns have also been rising in Pakistan, which has placed its already-precarious economy under further strain of Chinese loans to continue its projects along the troubled China-Pakistan Economic Corridor (CPEC).

Mahatir Mohamad’s concerns seem to stem from the spate of agreements that were signed by the Najib government under Chinese President Xi Jinping’s pet Belt and Road Initiative. Among these was the $13.1 billion East Coast Rail Link (ECRL), which aims to link Malaysia’s more industrialised east coast with its less-developed western coast and interior highlands. will run from Port Klang, Malaysia’s main port near the capital Kuala Lumpur, to Tumpat on the border with Thailand, bisecting the peninsula’s hilly interior.

Other projects include a build-and-manage agreement for a deep-sea port and an industrial park near the city of Melaka, a port rebuilding project in the town of Kuantan, and a massive residential project close to the southern border with Singapore.

China has already been accused by a number of countries of using the Belt and Road Initiative as a tool to further its expansionist goals by giving out loans for high-value projects of uncertain viability.

Malaysia’s geography would also provide an attractive strategic positioning for China, given its location along the Malacca Strait, through which a massive portion of China’s energy supplies pass through.

SOURCE: http://zeenews.india.com/world/to-avoid-chinas-debt-trap-malaysia-to-re-examine-projects-under-belt-and-road-initiative-2114262.html

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Chinese ambassador meets Caretaker PM, briefs him on CPEC

Ambassador of China Yao Jing, Tuesday, called on Caretaker Prime Minister Justice (R) Nasirul Mulk and briefed him about the historic friendly relations that existed between China and Pakistan. He was paying a visit to Prime Minister to congratulate him on his assuming office of the prime minister of Pakistan.
The ambassador while congratulating the premiere briefed him about the various projects under the ongoing China-Pakistan Economic Corridor and informed that these projects were going on fast-track and will be completed on their expected time. Ambassador Yao Jing also conveyed greetings from the Chinese leadership to the Prime Minister on assuming office.
He said that China attached great importance to China-Pakistan all-weather strategic cooperative partnership. In recent years, with the joint efforts of both sides, China-Pakistan relations have achieved fruitful results. The CPEC embodies the achievements of the two countries’ mutually beneficial cooperation and marks a new height in China-Pakistan relations.
At the same time, comprehensive exchanges and cooperation in various fields such as economy, trade, people-to-people exchanges and education have been conducted. The two countries have cooperated closely in international and regional affairs, effectively safeguarding the common interests of both parties. China hopes that Pakistan will maintain political stability and complete major domestic political processes smoothly.
China wishes the caretaker government to successfully organize the election, and hopes that the PM and the caretaker government will continue to promote friendly cooperation between China and Pakistan. China believes that regardless of the outcome of the election, China-Pakistan all-weather strategic partnership will continue to advance. Prime Minister Nasirul Mulk while expressing his gratitude to the Chinese envoy held that both the countries had the same vision of common prosperity and shared destiny of progress of their people.

SOURCE: https://pakobserver.net/chinese-ambassador-meets-caretaker-pm-briefs-him-on-cpec/

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CPEC: transport or economic corridor?

Three CPEC routes are expected to form an impressive transport corridor connecting China to the Arabian Sea. If the Chinese start using these routes to trade with Middle East and North African countries, CPEC will turn into a cross-border trade and transit corridor. With enough traffic, we might also get some toll income. But the real returns are to be expected for Pakistan, only if CPEC truly becomes a vibrant economic corridor. how can we make it happen? Merely by creating a few special economic zones? And what is an economic corridor anyway?

Trade corridors have been in existence for centuries, with famous Silk, Spice and Incense routes connecting the Orient with the Occident. Trade corridors depict movement of goods and services in specific geographical patterns. Transport corridors, a most recent phenomenon, generally refer to a linear area, connecting two or more economic centres and often employing a combination of surface transport networks such as road and rail.

Economic corridors however are a wider concept. They represent not just connectivity and trade but also widespread economic activity in a geographic area, in the shape of industrial and economic clusters, connected markets, and a network of economic centres. Connectivity is a prerequisite for establishing economic corridors but not sufficient.

History shows that transport corridors do transform into economic corridors through gradual development, urban agglomeration and increased trade and economic activities, leading to formation of new settlements and economic clusters. This however takes time. The present Grand Trunk (GT) Road is an example of a trade and transport route turned into a vibrant economic corridor, with numerous urban centres and economic clusters along the route. This route however has been in existence for more than two millennia, upgraded by Sher Shah Suri in the 16th century.

If we could wait for centuries, CPEC might transform into a vibrant economic corridor on its own. But if we want it sooner, we need to catalyse this process through a well thought-out strategy.

Firstly, it is important to realise that economic corridor is not a linear concept, meaning thereby that CPEC, besides connecting China to Gwadar, needs to spread horizontally connecting to a network of secondary cities and smaller markets. Research shows that productivity impact of connectivity is higher for rural areas, which previously had poor connectivity. This requires aligning of public investments with CPEC through an integrated spatial planning strategy and plugging existing missing links, especially in less-developed regions.

Secondly, a real economic corridor of this scale cannot take off by public investments only. Therefore, the next step is to mobilise private investment, which would require regulatory and business environment reforms. Public investment should only be used to provide infrastructure or to address market failures in selected cases.

The third area is to ensure equitable growth. With new corridors coming up, there is a risk that much of the investment would flow to already flourishing urban and economic centres. The role of the government is therefore to ensure fair distribution of dividends of these new investments and remove any disparities.

These steps however require well-coordinated actions by multiple federal and provincial government departments. We therefore need to carefully think through our governance structure for corridor development. Other countries have established fully-empowered private sector-driven statutory bodies that coordinate actions across a range of departments and are accountable for clear performance indicators such as quantum of investment mobilised and number of new jobs created, rather than showing summits, conferences and roadshows as their achievement.

Investment for CPEC road infrastructure stands around $11 billion. At 2% interest and 20-year repayment period, it translates into $672 million debt-servicing payment every year. The toll payments alone will not be sufficient to pay back this amount. Economic corridor development is therefore the only way to go.

Published in The Express Tribune, June 5th, 2018.

SOURCE: https://tribune.com.pk/story/1727674/6-cpec-transport-economic-corridor/

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Businessmen ask parties to elucidate policy on CPEC

LAHORE – The Lahore Businessmen Front, the opposition group of traders and industrialists at Lahore Chamber of Commerce and Industry, has urged the political parties to elucidate their policy regarding China Pakistan Economic Corridor in (CPEC) their economic agenda to the business community before the forthcoming general elections.

FPCCI standing committee chairman and LBF senior leader Sardar Usman Ghani criticised the government for not taking into account the concerns of local businesses regarding the China- Pakistan Economic Corridor.

He said the corridor has a deep rooted implication for the region stretching from Pakistan, China, Iran, Central Asia to USA and India.

He said that the inflow of Chinese investment and business enterprises will adversely impact the interests of Pakistani business communities, urging the government to announce the same incentives to the local investors declared for foreign investors of China Pakistan Economic Corridor in  projects.

He said that successive past governments and present rulers had totally neglected the business and industrial sectors. He said that political parties besides convincing general voters should also give a clear road map to improve the falling exports and support the deteriorating economy.

He stressed that all political parties should develop a consensus on the economic roadmap to make Pakistan a strong economy.

He said the charter of the economy was absolutely necessary for achieving better economic growth and all political parties should rise above their political interests and develop a consensus on the economic roadmap and national economic agenda to put Pakistan on the path of sustainable economic growth.

SOURCE:https://nation.com.pk/03-Jun-2018/businessmen-ask-parties-to-elucidate-policy-on-cpec

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CPEC: A momentum for prosperity

In a world defined by unexpected conflicts, CPEC and BRI have the potential to push these trajectories into altogether different directions. For Pakistan it will mean trading conflict and insecurity for peace and prosperity, argues the Senate’s Leader of the Opposition, Sherry Rehman.

The CPEC Summit 2018 was an important event with a distinguished group of thought leaders. In a conference full of unconventional wisdoms and cutting edge info, a lower‑riparian speaker’s job was quite unenviable. In more ways than one, the summit signalled Pakistan’s commitment to change and growth. What it signalled bang in the middle of election year was Pakistan’s agreement across the board on one thing: no one wants to be left out of this momentum.

The first thing that came to mind at a big‑ticket CPEC conference in Pakistan was that we are currently standing at a nodal pivot in Pakistan and China’s long‑established special relationship; but what also came to mind is that we are at an axial point where the world is rapidly turning in a re‑calibration of its priorities. Amidst the noise of dangerous new global conflicts that threaten the peace and prosperity of many nations, and fires that engulf entire regions, CPEC and BRI signal another engine moving relentlessly on, in entirely another direction of growth and peace. We can literally hear the wheels of a bold new order shift its shape under our feet.

We can also see the pulsation of the pointless regional neuralgia this partnership is giving some. My advice to them is that, they really shouldn’t worry, but instead join this enterprise.

It is truly the Asian Century. By linking the Atlantic to the Pacific through BRI, President Xi Jinping’s China is poised to redefine the global economic order as we know it, and change the way we think about the world. As the tracks for new global connectivity reframe human enterprise, with Gwadar as its launching pad, and Malacca not the only option, China becomes a two‑ocean power. This is both commercially relevant and strategically significant. As a key part of the constitution of the Peoples Republic, One Belt One Road (OBOR) has now cemented its place in the wheelworks of China’s long‑term vision of progress through economic partnerships. It is a projection of soft power unparalleled in the 21st century.

All this is relevant to Pakistan obviously in ways no other grand plan for exporting surplus was. Today, as we see China’s investments in Pakistan materialising through CPEC, I am clear that a major part of its success is powered by the groundwork and foundation PPP’s government provided.

Under [the then] President Zardari’s leadership, rooted in Zulfiqar Ali Bhutto’s revolutionary vision to share the Chinese Communist Party’s goals, and PM Benazir Bhutto’s brilliant championing of this joint vision, Pakistan’s relationship with China has gone into another dimension altogether. President Zardari’s vision was based on a grand idea for pivoting to the East at a time when the rest of the world was still busy calling on other capitals. This vision is shared and will be carried on forward by PPP under Chairman Bilawal Bhutto‑Zardari’s leadership.

PPP understood the grand Chinese dream well. Providing state support and strategic access to our warm waters was part of the vision. Therefore, we knew that Chinese development stewardship for Gwadar Port was pivotal to the CPEC becoming a reality.

CPEC has already created 60,000 jobs and Pakistanis would likely be able to make the most of these opportunities. We need trained manpower though.

Over the years, all of us have worked closely with Chinese officials and investors in facilitating projects, people‑to‑people relationships, cultural exchanges, and, most importantly, ensuring the security of everyone involved in CPEC projects. As we speak, 2,700 students from Pakistan were granted scholarships to study in China with thousands already learning Mandarin across the country. This kind of exchange is as important as big‑scale projects. Because building trust between peoples is what binds countries together in ties that sustain the tests of time, in all weathers and all storms.

As the first container ship sailed into Gwadar in March, CPEC has already started making an impact in all provinces in order to bring prosperity. We have a long way to go in providing safe drinking water and schools to the people of Gwadar, but I am glad to see that social responsibility and signature projects are beginning to complement each other.

This must be something we work on together as early projects start harvesting into reality. Everywhere there is an industrial park or SEZ, a port or energy project, there should be a groundswell of children going to schools, functioning healthcare units and waste‑to‑ energy plants, which China is so good at doing at every level. The responsibility for this lies with Pakistan, and with the provinces too, but I urge our Chinese friends to double their interest and investment in social development as they are doing already in partnership with UNDP in Balochistan.

We are proud to say that the forward‑looking government of Sindh has also been leading the way in renewable energy projects to bring prosperity. Sindh province contributes 930 megawatts of wind energy to the national grid with the help of CPEC projects. In line with this, the federal government should allow the use of renewable energy in Sindh.

As part of our history of joint cooperation, PPP looks forward to continuing to work closely with local and Chinese stakeholders in achieving our common goals and interests for the betterment of our people and the region. Two ports are now operating in their optimal capacities and other commercial ports, including the important Keti Bunder, are under development in partnership with the Chinese.

But CPEC is not a one‑party or one‑province ambition. It is a national project that goes beyond infrastructural development and we will stand by all efforts to create consensus and operationalise this grand ambition. Consensus‑building among political parties and provinces is crucial as the windfall from this venture can change the game for Pakistan.

Pakistan is not equivocal about its relationship with China. Right now, as we see promises turning into projects, the widespread public ownership of the ‘feel‑ good’ factor that China generates in Pakistan continues as do questions about equity transparency spread. With a multi‑billion dollar investment like CPEC, responsibilities and obligations for both Pakistan and China double. Transparency and equitability are the foundations for which an initiative with a scale as grand as CPEC must be built on.

As CPEC rolls out in Pakistan, there are three obvious areas to focus on: economy, environment and security.

It is undeniable that as an infrastructure and investment pipeline, CPEC has the potential of taking Pakistan into a quantum leap of prosperity and peace. It is believed that Chinese investment can stimulate a 15pc increase in Pakistan’s GDP by 2030 and would likely create over a million jobs across multiple sectors in Pakistan which will in return bring prosperity. While still in its very early stages, CPEC has already created 60,000 jobs and we hope that Pakistanis would be able to capitalise on this new job market. We need more Pakistanis trained to hold down these jobs.

However, development does not start and end at infrastructure and economic growth. We must also look into tech‑knowledge sharing and collaborations as we enter the Fourth Industrial Revolution. The development of regional value chains, a phenomenon that has entirely reshaped global trade in recent decades, is a particularly exciting prospect. Pakistan is well‑positioned to gain from this shift and CPEC is the perfect opportunity to bring advanced manufacturing and production practices to the country.

We have a responsibility to empower our youth and Pakistan can be a powerhouse of opportunities. Almost 60pc of Pakistan’s population is under the age of 30, making it the country’s most important demographic. To put that in context, three out of five Pakistanis are under the age of 30, full of hope and energy, but most without real employment prospects. Close to 60pc of them are currently in unstable or underpaying jobs and about 35pc are working in unpaid jobs. CPEC has given the millions of young people who enter the workforce every year a renewed hope and prosperity. We have a joint task to find ways in which we can tap into the potential of Pakistan’s youth and expand their growth, and look at ways to accelerate youth employment and skill training and to bring prosperity to this region. I look forward to working with the Chinese leadership on ensuring that more jobs and skills are created for Pakistanis.

As CPEC grows, Pakistan and China must look into a broader range of ventures and issues where we can cooperate and work on, one of which is environmental protection and climate change. Pakistan currently is the 7th most vulnerable country in the world to climate change. Pakistan’s carbon emissions are expected to double in two years and surge 14 times by 2050, which is way more than the global average. Given my travels in China, I know that the People’s Republic is no stranger to challenges brought about by climate change.

The enormous industrial investments and projects that will come with CPEC can be amplified if we prioritise creating a clean energy economy. I can only hope that we safeguard the future of the generations to come and that what we do today, in the name of progress, does not create new challenges for them. We hope that the Chinese government can bring to Pakistan the clean energy initiatives they have strictly enforced at home. We are old friends, and whom else can you ask for more, except from friends. Together, we must resolve to move towards eco‑friendly, sustainable and renewable energy sources.

Let me reiterate, if there is one thing that Pakistanis agree on, it is CPEC’s vision of human security, economic cooperation, reform and joint prosperity. As an economic bloc, South Asia will be one of the wealthiest regions in the world, with markets and growth vectors second only to China. At the same time, the region is also forecast for growing inequality, land hunger, poverty‑based migrations, water stress, and social deficits. These trends can be divisive in a region already crackling with tensions.

We believe that CPEC will create a new engine for reinvigorating innovation and ingenuity not just in both the countries but for the region as well. It is this cooperation, innovation and ingenuity that will drive the project of peace in a world divided by inequities, conflicts and social disorder.

The CPEC Summit once again highlighted the Chinese government’s unfaltering cooperation, support and friendship to the people of Pakistan. The future really does lie in peace through economic partnerships. Let us hope our roadmaps take our young people into a brighter, energised, connected millennium.

The writer is Leader of the Opposition, Senate of Pakistan.

SOURCE: https://www.dawn.com/news/1409514

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Media urged to play role in success of CPEC by discarding negative perception

ISLAMABAD: Local and international media have a pivotal role in ensuring successful execution of China Pakistan Economic Corridor (CPEC) projects by discarding propaganda of anti-CPEC and anti-Pakistan elements.

“CPEC has become an important element of Pak-China friendship and its success would be great depending upon the dissemination of correct information regarding the corridor,” Project Director of CPEC, Ministry of Planning, Hassan Daud Butt said while addressing an International Conference on News Agencies here on Monday.

He also stressed the need to enhance interaction with international media players for sharing the true image of Pakistan.

The two-day Conference titled “Pakistan-Media Opportunities and Challenges”, was organized by Associated Press of Pakistan (APP) here at a local hotel to establish direct and hassle-free linkages to cope with emerging competitive environment for news agencies in the world.

The conference was attended by representatives from news agencies of over 20 countries.

Hassan Butt said the government was sharing information to build a long-term and trustful relationship with media to ensure the accurate and positive reporting in this regard.

He said the government had promoted access to information by publications and websites, besides regular engagements with media (press briefings, seminars, summits).

He said besides other topics like politics etc, journalists should promote development communication in Pakistan by projecting the positive aspects of the corridor.

Giving a presentation on the current status of CPEC projects, Butt said most of the Early Harvest Projects had already been completed or were in the final stage.

He said CPEC had helped Pakistan in removing major bottlenecks in the way of the country’s economy, especially in energy and infrastructure sectors, paving the way for increased and sustainable economic growth.

“In 2013, Pakistan’s economic growth rate was around 3 percent. However, after the successful launch of CPEC, the growth rate kept on increasing and this year, the growth rate was recorded at 5.8 percent and next year’s target has been set at 6.2 percent,” he added.

The CPEC Project Director informed that the western alignment of the corridor had almost been completed while the Central route was expected to be completed by 2015.

He said work on up-gradation of railways’ Mail Line-1 project would start soon while up-gradation of ML-II and ML-III had also been included in the Long Term Plan of CPEC.

He said Gwadar was transforming into a state of the art international port city at a rapid pace and soon “we will see Gwadar as the hub of trade in the region”.

Regarding social sector and education projects, he said top ten business schools from China and Pakistan had reached an agreement for mutual cooperation and sharing the research work, done in the development sector.
He said CPEC had become a benchmark for other countries who are part of the Chinese One Belt One Road Initiative.

He said the Government of Pakistan wanted to bring the country’s population out of poverty at a fast pace just like China did in the past.

To a question, Butt said CPEC would be a joint venture and will be a win-win model for the two countries as both countries will equally benefit from the project.

SOURCE: https://nation.com.pk/14-May-2018/media-urged-to-play-role-in-success-of-cpec-by-discarding-negative-perception

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Karachi Expo Centre to be re-modelled for CPEC

Karachi: Federal government initiated remodeling and expansion of the Karachi Expo Centre (KEC) at the cost of Rs 8 billion within next four years to accommodate growing number of exhibitors and visitors.

The purpose of the expansion was to make the Expo Centre compatible with China Pakistan Economic Corridor (CPEC).

Groundbreaking ceremony of the project was performed by Secretary Commerce, Muhammad Younus Dagha in Karachi Expo Centre.

KEC is being expanded and re-modelled to incorporate new facilities. A total of three more exhibition halls would be added to the Centre. Presently, the centre has six halls.

Under the remodelling project, a convention centre for holding trade related conferences, a multi storey information technology (IT) tower for offices and other facilities including a parking lot would be constructed.

The master plan of the project has been designed by the National Engineering Services Pakistan (NESPAK).

“We studied studied all major expo centers existing around the world and came up with the most modern concept of the designing. The project will have its own parking plaza which will be able to accommodate around 5000 vehicles”, said NESPAK Managing Director Arif Chengezi while expanding on the remodeling project.

Federal Secretary said that the purpose of the expansion project was not only to modernize the present centre but also to create capacity for meeting the ever increasing trade related needs of the country.

He said that the remodelling project was in perfect conformity with the government’s trade objective of earning more foreign exchange for financing the developmental needs of the country.

The Commerce Secretary applauded the role of trade development authority of Pakistan in pursuing the project and completing its legal formalities diligently.

He said that the Ministry of Commerce through video conferences with missions abroad had achieved quite a lot. In these conferences, added the secretary, the hurdles were identified and removed through collective expertise to enhance trade.

Commerce Secretary also appreciated the role of business community in increasing exports of the country this year. In the year 2017-18, the exports increased from July to April by 14 percent.

The Secretary added that there was a broad based expansion, in terms of both product sectors and destinations, in the exports this year.

He added that over all from July to April this year, our textile and clothing export had shown a growth of 8 percent, agro food had grown by 30 percent and other sectors like mineral and metal, engineering goods and surgical instruments had also respectively grown by 12 percent, 13 percent, and 14 percent. Exports to the USA had also increased by 17% . There was also an 8% increase in exports to UK and China both.

The expansion of the Karachi Expo Centre was not an isolated effort of the government. Only last year, Ministry of Commerce had launched an initiative titled “Emerging Pakistan” with the aim of promoting various strengths of the country and dispelling negative stereotypes about Pakistan, abroad.

The secretary informed the gathering that the Economic Coordination Committee (ECC) of the cabinet had approved the three year expansion for the prime minister’s (PM) Export Enhancement package. He hoped that the same zeal would be shown to complete the project within the scheduled timeframe.

“The construction of IT tower is a special feature in the expansion and up gradation of the KEC, which will soon meet the needs of the service sector”, Secretary Commerce stated.

Secretary of Trade Development Authority of Pakistan (TDAP) Inam Ullah Khan while giving a brief overview of the Karachi Expo Centre said that many national exhibitions were held there. He explained that in these exhibitions, select buyers, from around the world, were shown the entire range of products made in the country.

Inam Ullah Khan said that KEC was being expanded and modernized in order to create a capacity for holding larger exhibitions for the country.

He also was of the view that the intended expansion of the KEC was in keeping with overall up-gradation of the infrastructure of the country under the CPEC.

He added that the expanded KEC would provide an export outlet to the series of special economic zones (SEZ) being established under the CPEC program in the country.

 

SOURCE: https://dailytimes.com.pk/247785/karachi-expo-centre-to-be-re-modelled-for-cpec/

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China-Pakistan Economic Corridor developed faster than expected: Chinese experts

BEIJING : The China-Pakistan Economic Corridor (CPEC) has developed faster than expected: Chinese experts, but political stability in Pakistan will be the backbone of future sustainable growth, experts said Wednesday. The recent inauguration of a superhighway project under the CPEC will improve regional connectivity, which will be a positive outcome of the multi-billion-dollar project, Zhou Rong, a senior research fellow at the Chongyang Institute for Financial Studies at the Renmin University of China, told the Global Times.

“The development of the China-Pakistan Economic Corridor (CPEC) is getting better and better, as improved infrastructure will help link upstream and downstream businesses,” he said. Pakistani Prime Minister Shahid Khaqan Abbasi.

On last week inaugurated the Sharqpur-Rajana section of the Lahore-Abdul Hakeem Motorway, or M-3, in Rajana Town near the textile city of Faisalabad in eastern Punjab province, according to the Xinhua News Agency. The 138-kilometer section is a vital part of the 230-kilometer M-3, which is being funded by the Pakistani government and built by China Railway 20th Bureau Group.

“Besides the motorway project, other projects – for example, some power plants – have already begun to deliver benefits to local people,” Zhou said.

He noted that China-backed energy projects had resolved electricity shortages in major industrial cities, which also made those areas much more competitive than previously.
The Pakistan Neelum-Jhelum project, one of the most significant hydropower stations in Pakistan, saw its first turbine generator, which is designed to generate 243,000 kilowatts, officially start supplying electricity to the national grid, according to Beijing-based Economic Daily. Construction work on the project began in 2008, with China Gezhouba Group Co as the major contractor.

“In the past few years, investors from both China and Pakistan got too excited about the China-Pakistan Economic Corridor (CPEC), and they overlooked the problems with the Pakistan economy,” Mei Xinyu, a research fellow at the Chinese Academy of International Trade and Economic Cooperation. He told the Global Times. “Now, they need to carefully assess potential risks in some projects, and Pakistan’s ability to repay its debts,”

Mei warned. In the first 10 months of the fiscal year 2017-18 which ends on June 30, Pakistan’s government borrowed $9.6 billion from foreign countries. Of that, loans from China stood at $1.5 billion.

Pakistan expects to obtain new Chinese loans worth $1 billion to $2 billion to help it avert a balance-of-payments crisis. On May 24, China increased the size of a currency swap agreement with the South Asian country by 10 billion yuan ($1.57 billion) to 20 billion yuan.

“Political instability and widespread corruption are still serious issues in Pakistan, and it is crucial to strike a balance between political strategy and business profitability,” said Wang Yiwei, director of the Institute of International Affairs at the Renmin University of China.”Still, the CPEC can be an example of regional growth and stability,” he noted.

As Pakistan’s general election which will take place in July nears, the international community is keeping a close watch. The results may affect the continuity of policies, Zhou noted.

“More importantly, the country has to push forward construction of industrial parks under the CPEC, which can be a driving force for attracting clusters of industries,” he said.—APP

SOURCE: https://pakobserver.net/cpec-developed-faster-than-expected/

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CPEC: CDWP clears Pakistan Railways’ Mainline-I project at $3.4b cost

ISLAMABAD: Pakistan haphazardly cleared on Thursday the Pakistan Railways ’ Mainline-I project of the China-Pakistan Economic Corridor (CPEC) at an initial price tag of $3.4 billion, as ambiguity remains over financing, scope and exact cost of the ‘strategic project’.

The Central Development Working Party (CDWP) recommended the project for final approval of the Executive Committee of the National Economic Council (Ecnec). The CDWP has a mandate to approve projects worth up to Rs3 billion or $26 million, and all other schemes over the threshold are cleared for final approval of Ecnec.

Keeping CPEC on track

Projects that are referred to Ecnec include up gradation of Pakistan Railways existing mainline-1 (ML1) at a cost of Rs381.1 billion ($3.4 billion), according to an announcement by the Planning Commission on Thursday. The Mainline project of Pakistan Railways has been declared as a strategic project by both China and Pakistan.

It was for the fourth time that the mainline project, which is part of CPEC, has gone for CDWP’s endorsement. Earlier, the CDWP cleared the project in June 2016. Then, in September 2017, it again discussed the scheme due to changes in the design cost. Again in March, the project was put before the CDWP but was withdrawn.

Just three days ago, Minister for Planning and Development Ahsan Iqbal said that the project was not yet ready and Pakistan was waiting for China’s response on the exact financing modalities of the scheme. The total cost of the two phases of the project will be far higher than $8.2 billion, which had been estimated four years ago. Iqbal had given the statement after chairing the CPEC review meeting.

The CDWP’s endorsement is just the beginning of the process of approval and it is not the final approval, said Sartaj Aziz, Deputy Chairman of the Planning Commission. Aziz chairs the CDWP meeting. He said the important part will be financing terms, as Pakistan wants competitive pricing.

Aziz said the mainline project was very critical for Pakistan Railways, as this single project can revive the state-owned enterprise.

However, the CDWP has cleared the scheme in a haphazard manner, which may further delay its execution. The government neither knows the project’s exact cost and financing, nor does it have any idea about the terms of Chinese loan that will cover 85% of the total cost.

“Pakistan Railways was categorically asked to submit a firm cost and scope, however, to date it is not available with Pakistan Railways,” according to the working paper of the project that was submitted to the CDWP for its decision.

On May 12, Pakistan Railways informed that the Design Consultants, Creek, will submit the complete working of cost including drawings during the first week of June and only then the Review Consultant would be able to verify the firmed up scope and cost of the project, it added. The PC-I based on such firmed up cost could be submitted to the Planning Commission in the second week of June, the working paper noted. Yet the CDWP went ahead with the decision to clear the scheme.

The Member Infrastructure suggested that even before launching the ML-I project, the newly developed Railway Strategic Master Plan including management and regulatory changes should be adopted. A Railways authority should be set up as an independent watchdog and Pakistan Railways be restructured, according to him.

A third party must certify not just the price and specifications but also the scope and the underlying principles driving the project programme and project design. He also proposed to set up a ML-I corporation as a separate company under Pakistan Railways to handle the project.

CPEC and skills development

The CDWP cleared the scheme at $3.4 billion cost but the Chinese have estimated the cost of the first phase at $4.1 billion. Initially, the total cost of the project, which has a length of 1,872 kilometres, had been estimated at $8.2 billion. But the government subsequently decided to split the project into two due to its high cost and the work that requires refurbishment and expansion of the main rail line.

Now, Pakistan wants to construct only the 748km track under phase-I of the project, according to the new PC-I of the scheme.

The Planning Commission has already mishandled the 969MW Neelum Jhelum hydropower project that had also been approved without first securing the financing and incomplete design. The project cost jumped from Rs15 billion in 1989 to Rs507 billion in 2018.

SOURCE: https://tribune.com.pk/story/1718404/2-cpec-cdwp-clears-pakistan-railways-mainline-project-3-4b-cost/