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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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Pakistan, Russia set to sign $10b offshore pipeline deal next week

ISLAMABAD: In a major breakthrough, Pakistan and Russia are poised to sign a $10-billion offshore pipeline deal, a project planned by the latter to capture the energy market of Pakistan.

Sources told The Express Tribune that the cabinet had approved the signing of the gas pipeline laying deal and Pakistan ambassador to Russia had been authorized to ink a memorandum of understanding with Moscow.

The envoy is likely to ink the understanding in Moscow on Monday. Final cost of the project will be assessed following a feasibility study to be conducted by Russian energy giant Gazprom.

Russia has nominated Public Joint Stock Company Gazprom for implementation of the project. Pakistan’s cabinet has also permitted the company to conduct the feasibility study at its own cost and risk.

One-week deadline: Sindh warns cutting off gas supply to country

Inter State Gas Systems (ISGS) – a state-owned company of Pakistan established to handle gas import projects and is already working on gas pipeline schemes like Tapi, has been nominated by Pakistan to execute the offshore pipeline project along with Gazprom.

ISGS is also working on the $10-billion Turkmenistan, Afghanistan, Pakistan and India (Tapi) gas pipeline to connect South and Central Asia and construction work on the scheme in Pakistan will start in March next year.

These projects are called a game changer for Pakistan as they will not only lead to regional connectivity, but will also meet growing energy needs of the country.

Amid a long-running tussle with Europe and the United States over the annexation of Ukrainian region of Crimea, Russia is looking for alternative markets and wants to capitalise on the growing energy demand in South Asia.

Russia, which controls and manages huge gas reserves in energy-rich Iran, plans to export gas by laying an offshore pipeline through Gwadar Port to Pakistan and India, which are seen as alternative markets because Moscow fears it may lose energy consumers in Europe over the Crimea stand-off.

Russia has been a big gas exporter to European Union (EU) countries and Turkey since long and despite US anger the European bloc has continued to make imports to meet its energy needs.

Moscow receives gas from Turkmenistan and then exports it to EU states. Later, it has got gas deposits in Iran as well and is looking to gain a foothold in markets of Pakistan and India.

OGDC finds new deposits of oil, gas in Sindh

Pakistan has been experiencing gas shortages, particularly in winter, for the past many years as domestic production has stood static with new additions being offset by depleting old deposits.

In a bid to tackle the crisis, the previous government of Pakistan Muslim League-Nawaz (PML-N) kicked off liquefied natural gas (LNG) imports from Qatar under a 15-year agreement two and a half years ago and is bringing supplies through other sources as well.

According to a government official, after signing the MoU for the offshore pipeline, work on the feasibility study will begin in an attempt to assess viability of the project. Russia is even ready to finance the study. Russian gas exports touched an all-time high in 2017. According to Gazprom, gas flows to Europe and Turkey, excluding ex-Soviet states, hit a new daily record at 621.8 million cubic metres.

Annual exports touched 179.3 billion cubic metres (bcm) in 2016, a significant jump from the previous high of 161.5 bcm in 2013 and well above the 2015 total of 158.6 bcm.

Published in The Express Tribune, June 3rd, 2018.

SOURCE: https://tribune.com.pk/story/1726303/1-pakistan-russia-set-sign-10b-offshore-pipeline-deal-next-week/?amp=1&__twitter_impression=true

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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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How China’s Belt And Road Just Got A Big Boost From Europe’s TIR Convention

In 2016, China became a member of the UN’s TIR Convention, which enables transporters to ship goods through 73 partner countries by truck with just a single customs inspection, but it wasn’t until this month that their participation officially went into effect.

On May 18th, a caravan of trucks with large blue and white TIR plates departed in a ceremonial launch from Dalian in the northeast of China bound for Novosibirsk in Russia, 5,600 kilometers away. Having already undergone a customs inspection in the Dalian-bonded zone, these vehicles will not need to go through another for the duration of the journey, speeding up their transit time considerably. Why does this matter so much to China and its future economic prospects?

What is the TIR Convention?

Founded in Geneva in 1975, the Transports Internationaux Routiers (TIR) or International Road Transports convention is a multilateral treaty facilitated by the United Nations Economic Commission for Europe (UNECE) to improve road transportation throughout the continent by removing en route customs inspections and on-site duty payments for approved carriers departing from select locations. This essentially allowed trucks to traverse dozens of European countries without needing to be checked at each border, which greatly improved the speed and efficiency of trade, decreasing the lead time of a journey by up to 80%.

With the creation of the European Single Market in 1993, TIR was rendered moot for intra-European transit. However, as globalization kicked into high gear throughout the 1990s and 2000s, the TIR was expanded to include countries outside of the EU, eventually attracting 73 member states across Europe, Central Asia, the Middle East, North Africa, and East Asia, making it the go-to customs arrangement for international ground transport which is currently speeding up 1.5 million border crossings per year.

The TIR has also been adapted from its original vision of being solely for road transport and has become truly multimodal, allowing for rail, river and sea legs to be included if at least one part of a journey is done by truck.

Now that China is part of the TIR picture, goods can be shipped from some of the biggest manufacturing centers in the world more rapidly and cheaper. Going the other way, the TIR allows manufacturers from other member states to get their products to China’s booming middle-class market by land more efficiently than they ever could before–in theory, anyway.

“As well as opening up new, more efficient and cost-effective trading routes for China’s manufacturers to the rest of the world, the TIR Convention will open up reciprocal trading routes for external manufacturers into the country,” said Umberto de Pretto, the Secretary General of the IRU, a major international road transport organization with over 100 member countries.

Why this matters

Hard infrastructure—roads and rail lines and airports—mean little without the soft infrastructure which makes them viable. Countries don’t only need to “build it” but they need to come up with policies and agreements with other countries to maximize the potential of these new infrastructural offerings. Some of these agreements come in the form of trade organizations, customs zones and multinational economic areas, while others are along the lines of initiatives like China’s Belt and Road Initiative (BRI) or conventions like the TIR. As we previously covered on Forbes:

The first stage of China’s Belt and Road initiative, which aims to create a network of interconnected trade stations across Eurasia, is customs. Getting rid of the red tape to allow goods to traverse this massive land mass as efficiently as possible is key to making these routes sensible and profitable. The aim is to make land borders nearly as easy for goods to flow across as the open ocean, and this is being done step-by-step.

Later this month, the Shanghai Cooperation Organization (SCO) is going to have its summit in Qingdao, and it should not go without notice that every member of the group has already ratified TIR.

How the TIR Convention helps China’s Belt and Road

IRU press photo

Truck with TIR plates departing from Dalian.

China’s Belt and Road Initiative (BRI) is a large-scale endeavor to create and enhance economic and political corridors across Eurasia and Africa, and programs such as the TIR Convention ultimately provide a major boost towards these ends. According to the IRU, the TIR convention has the potential to increase the volume of total trade between China and the other countries of the Belt and Road by $13.6 billion.

It currently takes between 8-12 days to transport products door-to-door by truck between an inland city in China and Europe. This is roughly four times faster than shipping by sea and around 50% faster than rail. Now with China being a full-fledged member of the TIR, shipping overland between China and Europe becomes an increasingly attractive option for manufacturers looking to get their products to the other side of Eurasia.

Production moving deeper inland

The impact of the TIR convention and China’s participation in it is magnified many-fold by the geographic redistribution of manufacturing to inland areas throughout Eurasia.

Beginning in the early 2000s, China’s “Go West” policy saw the all-out rebuilding of the country’s transportation infrastructure and the large-scale migration of companies inland from the prosperous cities of the east coast to then-backwaters like Chongqing, Chengdu, Zhengzhou, Wuhan and Xi’an.

Chongqing City, China. (Photo by: Prisma Bildagentur/UIG via Getty Images)

This movement has gained momentum in recent years with the Belt and Road Initiative, and even cities in China’s far west, such as Horgos and Kashgar, have been primed to become major manufacturing centers.

These development gave new relevance to overland trans-Eurasian transport, as the places where goods were being manufactured in China were suddenly very far from any seaport and significantly closer to their target markets in Europe, so it no longer made any logistical sense to truck products thousands of kilometers east in order to ship them back west again.

It is no coincidence that most of the TIR gateways in China are emerging BRI transport hubs:

Dalian: a major multimodal transport hub on the Pacific.

Erenhot: a new city and trade station on the border of China and Mongolia that sits at the heart of the China-Mongolia-Russia Economic Corridor.

Horgos: a massive conurbation of development that extends across the China/Kazakhstan border.

Manzhouli: a major BRI hub on the China/Russia border.

Suifenhe Port: another China/Russia trade hub.

When you add to this picture the emerging special economic zones in other parts of Eurasia–such as those on the Kazakhstan side of Khorgos, Alyat in Azerbaijan, Malaszewicze in Poland, and dozens of others–along with mega-transportation projects like the Western Europe-Western China Expressway, which runs from the east coast of China all the way to the Baltic Sea at St. Petersbur–it is looking as if the the geospatial distribution of manufacturing and the way goods are moved across Eurasia could have the potential to be significantly altered in the near future.

SOURCE: https://www.forbes.com/sites/wadeshepard/2018/05/31/how-chinas-belt-and-road-just-got-a-big-boost-from-europes-tir-convention/#34ab6f8a2517

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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/

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China threatens to hit back at US with tariffs on 106 more US products

BEIJING: Just hours after the Trump administration unveiled a list of $50 billion worth of Chinese goods on which the White House plans to impose 25 per cent tariffs, China hit back with its own list of 106 US products, including soybeans, corn, cars as well as aircrafts, that it would also target with tariffs of 25 per cent if the US does not back down.

The US’s list of 1,333 imports which ranges from aerospace equipment to industrial robots, satellites, semiconductor parts and machinery for everything from railways to biscuit ovens – specifically targets a key Chinese campaign to upgrade its economy called “Made in China 2025”.

That Made in China national plan, designed to turn China into a “manufacturing superpower” by investing in sectors such as IT, new energy vehicles, robotics and other forms of smart manufacturing, may be the real sticking point in a potential trade war between China and the US.

“Made in China 2025 is a must for China,” said an independent economist based in Shanghai. “Thus it will be China’s bottom line. We can negotiate, we can bargain on this, we can impose small punishments on each other but if the US touches on the foundation of Made in China 2025, there will definitely be a large trade war,” she said.

Beijing describes Made in China, first introduced by a Chinese think-tank in 2013 and adopted by the Chinese government in 2015, as an effort to avoid the middle-income trap that developing countries can fall into, and encourage home-grown innovation.

To achieve this, China wants to replace most of the foreign technology it imports with locally made components. China’s 2025 campaign is billed as a way to get the country on par with industrial heavyweights, alongside Germany, South Korea, Japan and the US.

The US and other critics do not see it in the same light. In the conclusion of the US trade office investigation into Chinese trade practices, which was the basis of president Trump’s initial announcement of the tariffs in March, the Made in China policy is mentioned numerous times.

China’s top-down approach to economic planning could also stand in the way. State support encourages companies and local officials to chase subsidies, eventually creating overcapacity, according to senior adviser and China practice lead at the Crumpton Group, Jude Blanchette. “Central planning often gets you a lot of waste,” he said. Still, he believes what can be achieved will have a critical impact. “Made in China 2025 is going to drastically change global value chains and how industries operate, if China gets half of the way, that’s going to have profound repercussions.”

Source: https://profit.pakistantoday.com.pk/2018/04/04/china-threatens-to-hit-back-at-us-with-tariffs-on-106-more-us-products/

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PCJCCI identifies potential sectors for Pak-China joint ventures

LAHORE: Pak-China Joint Chamber of Commerce and Industry (PCJCCI) has identified seven high potential sectors for joint ventures and investment between Pakistan and China, which include handicrafts, textile, leather, gemstone, sportswear, surgical instruments, and technology-based agriculture along with reclamation and salinity control.

Pak-China Joint Chamber of Commerce and Industry  (PCJCCI) office-bearers presented a research paper to Deputy Minister China and Counsel for the Promotion of International Trade Jinan, Teng Shaung, during a meeting here at the Expo Centre, according to the joint chamber’s spokesperson on Monday.

Teng Shaung was heading an 81-member delegation to participate in the Auto Show, which got the entire auto engineering sector assembled under one roof. All government high-ups, local and international buyers and manufacturers along with machinery manufacturers, raw material providers, and service providers were present at the event. She also distributed a questionnaire backed by primary research to have direct feedback from the stakeholders of the auto market on this occasion.

The deputy minister was satisfied and hopeful for the joint business ventures in different automotive sectors. She thanked PCJCCI President SM Naveed and other office-bearers for serving as a bridge between business communities of Pakistan and China to explore and expand the opportunities in the commercial and industrial sector.

During her trip, Teng Shaung also visited many places including different trade bodies, expo centers, wholesale markets, and shared her primary research with local stakeholders. The idea behind the primary research was to gauge true potential and make a SWOT analysis for disseminating prospective investors from China in related sectors. She highly applauded the research conducted by PCJCCI in this regard and assured to disseminate the valuable findings of this research among Chinese investors.

SOURCE: https://profit.pakistantoday.com.pk/2018/03/19/pcjcci-identifies-potential-sectors-for-pak-china-joint-ventures/

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Stability in Pakistan integral to China’s development, reiterates Chinese ambassador

LAHORE: Ambassador of People’s Republic of China to Pakistan Yao Jing has said that China cannot afford to lose Pakistan because stability in its neighbourhood is integral to China’s development.

He made these remarks while speaking at an interactive policy dialogue organized by Lahore Centre for Peace Research (LCPR) on the topic ‘Pakistan-China Relations in the 21st century’, which was arranged in his honour, said in a press release issued on Saturday.

In his keynote speech, the Ambassador of China emphasised that Pakistan matters to China’s vision of development and growth as enshrined in last year’s 19th China’s Communist Party Convention.

Chinese ambassador meets CJP

He said that Pakistan’s importance to China would continue to increase because of the centrality of the China Pakistan Economic Corridor (CPEC) route in the Belt and Road Initiative(BRI). Yao added that a stable Pakistan was vital to China’s growth.

The Ambassador reminded the distinguished gathering that China envisages CPEC to be a lead project for connectivity and peace.

He stated the project was not only for the benefit of Pakistan and China as “ownership of CPEC finally belongs to the whole world”.

Earlier, Ambassador Shamshad Ahmed Khan, former foreign secretary and currently Chairman Lahore Center for Peace Research, highlighted the unwavering commitment of Pakistan and China’s leadership to build stronger economic and social ties between the two countries.

CPEC projects: Chinese ambassador urges active participation

He emphasised that China’s relations with Pakistan were not based on transient interests but have remained unconditional. He also noted that China’s Belt and Road Initiative (BRI) is a huge regional agenda with mutual interests rooted in China’s and Pakistan’s common vision for a better future and prosperity of the region.

“Rooted within BRI is China-Pakistan Economic Corridor (CPEC) initiative that harbours economic prosperity for greater benefit of the entire region,” he remarked.

Khan praised the Chinese leadership in promoting world-wide connectivity for socio-economic development and reiterated that Pakistan was also determined in its commitment to support CPEC.

The event was also attended by the Chinese Consul General Long Dingbin, former Finance Minister, Dr Salman Shah, former Pakistani diplomats and notable defense analysts, as well as people from the academia.

 

Source: https://tribune.com.pk/story/1662661/1-stability-pakistan-integral-chinas-development-reiterates-chinese-ambassador/

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