How Your Company Can Benefit from China’s Belt and Road Initiative

I like to keep company with savvy international people with expertise that complements mine. My longtime friend, David Baxter, is one of those people. He is a South African who now lives in the Washington, D.C. area but routinely travels all over the world to advise governments and companies as an international development consultant. I call him “Mr. PPP” (Public Private Partnerships) because one glance at his LinkedIn profile makes that clear. As Mr. PPP, David specializes in public development projects in Africa, the Middle East, Asia, and everywhere else, which gives him insight into how governments are fostering international business, which governments are serious about international development, and which ones are smart about it. When speaking with David recently, we concocted a series of blog posts about the impact of China’s Belt and Road Initiative from David’s boots-on-the-ground perspective.

Many of these BRI countries will need increased economic activities to pay back their Chinese debt and will welcome U.S. and foreign companies that want to use their new infrastructure in both import and export ventures.

The goal of this and the future connected blog posts is to help U.S. and international companies understand what China is doing in target international markets so that they can benefit from utilizing Chinese-funded or Chinese-built infrastructure. As David put it, “Increased traffic using those facilities is in the national government’s interest, and those facilities are ready doors to enter into many regions. Why aren’t companies looking at opportunities where they’re using Chinese infrastructure in these foreign markets?”

Since 2013, China has been busy making friends through its Belt and Road Initiative (“BRI”). China aims to encircle countries in the historical overland Silk Road and new maritime Silk Road in interconnected infrastructure to bring them closer into China’s realm of influence and provide a host of mutual benefits to China and the involved countries. China provides long-term, low-interest loans to governments and often provides the lowest priced skilled labor required for those projects.

As of May 2019, over 60 countries have agreed to or expressed interest in BRI projects, and those countries encompass about 2/3 of the world’s population, representing both potential markets for Chinese goods and potential labor pools for lower-cost labor. They represent a large portion of the world’s natural resources, which can provide raw materials to feed China’s manufacturing complex. These countries include Pakistan, India, Sri Lanka, Malaysia, Philippines, Thailand, Cambodia, Vietnam, Myanmar, Laos, New Zealand, Iran, United Arab Emirates, Saudi Arabia, Qatar, Turkey, Egypt, Ethiopia, South Africa, Russia, Poland, Ukraine, and many more (see CFR’s Belt and Road Tracker for the full map, and CSIS’ interactive map is also excellent). These countries include many of the global energy producers (Middle East and Russia) and energy consumers (developing nations). Because China is an export-focused economy, it cannot let up its current pace of development. It needs to keep its SOEs and workers busy, either on domestic or international projects, or both.

But like all friendships that come with strings attached, many countries have started to feel uneasy about chummying up too close with their lender. In China’s BRI, in which China shows up with a checkbook, an open handshake, and a Xi Jinping-worthy smile (especially when that relationship sometimes mandates Chinese firms be included in the bidding process) those strings can feel more like chains. Debt trap diplomacy is a term that has been used to describe China’s BRI projects because China has been willing to extend loans on outwardly favorable terms with plenty of recourse for China if the borrowing nation defaults.

Due in part to this type of heavy-handed diplomacy, U.S. and foreign companies have opportunities to make inroads into these countries and markets. The Chinese are building ports, roads, rails, and power plants, along with cables and pipelines, but they do not control who uses the infrastructure. And because China’s BRI investments often bring additional cultural and political baggage, some target countries are loathe to fully engage with China. China’s “big brother” oversight through both technology and individuals on the ground and Chinese information (and disinformation) networks disguised as cultural enrichment programs, together with the prospect of Chinese colonization by leaving its workers in-country are just some of the concerns of BRI partner countries. Many of these BRI countries will need increased economic activities to pay back their Chinese debt and will welcome U.S. and foreign companies that want to use their new infrastructure in both import and export ventures. Those countries with ports, energy infrastructure, and a willing (trained or trainable) labor force will be most attractive to companies in maritime countries like the U.S. who know that maritime transport is a fraction of the cost of overland transport.

In sum, China is looking at the long game, and so should your company. (For instance, China’s state-owned Chinese Overseas Ports Holding Company has a long-term lease on Pakistan’s Gwadar Port through 2059, but in Chinese consciousness, anything less than 1,000 years is shot-term planning.) If your company does not have a 40- or 50-year plan, it should start to think in those terms. China’s long-term BRI infrastructure development is a boon to companies who are looking to engage with new international markets for raw materials, a deeper labor pool, and potential consumers. In our future posts, we’ll do our best to help you recognize and utilize the most promising BRI markets, including identifying potential legal issues.

By  on 

Source: China Law Blog

Zong 4G First to Launch Prepaid and Postpaid Roaming Bundles for China

Zong 4G has become the first Pakistani telecom operator to offer both prepaid and postpaid roaming bundles for China as part of its strategy of offering seamless services for its customers.

Keeping customers’ convenience in mind, these roaming bundles for China are being offered to ensure that the customers can enjoy Zong 4G’s seamless services while traveling.

Both Zong 4G’s prepaid and postpaid customers can avail the relevant roaming bundles for their travels to China. Postpaid customers can avail the package by dialing 310 helpline, which includes 60 voice minutes, 60 SMS and 3GB of data at an affordable rate of PKR 3000 plus taxes.

Keeping in mind flexibility, Zong 4G is offering two convenient roaming bundles for its prepaid customers. The prepaid customers can subscribe to the roaming bundles by dialing *4255# to consume 300 Voice minutes, 300 SMS for PKR 2000 plus taxes or dialing *4255# to consume 150 Voice minutes, 150 SMS for just PKR 1000 plus taxes.

Commenting on the launch of these industry-first roaming bundles, Zong 4G’s Spokesperson said, “As a customer-centric company, Zong 4G has always aimed at offering our customers with the best in class services and solutions. The launch of these two exciting bundles ensures that our customers can now make and receive calls, send and receive messages and stream the web hassle-free.”

As a company that believes in innovation and world-class customer experience, Zong 4G is geared to meet to the needs of its customers who travel for both business and leisure.

Source: Propakistani

Dated on: 6/9/2019

How Solar Can Power China’s Belt And Road Trade Ambitions

Investment in solar and cross-border power networks in the nations covered by China’s Belt & Road Initiative (BRI) could help them leapfrog fossil fuels.

Those are the conclusions in a new study from Tsinghua University and Harvard University.

The Belt in the BRI represents the Silk Road Economic Belt loosely based on the ancient Silk Road, from Asia to Europe. The Road refers to the 21st Century Maritime Silk Road that connects China to South East Asia, South Asia and on to North Africa. Its initial focus has been centred on power, transport, education and steel.

Researchers assessed the solar potential of BRI nations discounting agricultural and forestry land. They found that if just 4% of the remaining low-value and unshaded land was given over to PV projects, the entire electricity demand of the BRI region could be met by 2030.

As the economies of BRI nations continue to develop and infrastructure projects and industrial activity ramp up, the demand for electricity will rise sharply.

“If we continue to rely on fossil fuels for energy, it can add significantly more CO2 to the atmosphere, not just this year, but for the next few decades,” said co-author Xi Lu from Tsinghua University. “This is not sustainable. If we want to achieve the emission reduction goal set by the Paris Agreement, we need renewable energy.”

The scope of the study spanned 66 countries with geographical connections. By adding in the expansion of distribution across borders, the researchers hope to address one key imbalance. They found that nations with 70.7% of the solar potential are responsible for 30.1% of the regional power demand.

“It would be challenging because different countries have different priorities when it comes to development,” Lu says. “But the BRI is an opportunity as it sets up a framework for collaborations between countries, associations, and industries to happen. There are also funds and banks committed to promoting green development of the BRI, which provides financial support.”

China’s New Development Bank is one obvious source of that financial support. It has already backed solar and other renewable energy projects in South Africa to the tune of nearly $400 million since it signed its first loans in December 2016.

As the dominant force in solar manufacturing, Chinese firms would also be likely to do well out of any pan-continental solar push. In 2018, eight of the ten largest firms, measured by shipments, were Chinese.

Efforts to establish intercontinental distributions networks from North Africa to Europe have stalled in the past, however. That was largely a private endeavour compared to the far more geopolitically charged efforts of the BRI.

Source: Forbes

BRI, aimed at economic uplift of partners, is not a geopolitical tool

Source: Global Times

Date: 27th December 2018

Is the Belt and Road initiative (BRI) a geopolitical strategy and tool China has created to scramble for hegemony as what the US and some Western countries claim? This is the most contentious argument as the international community sifts through China’s intention of reaching out to the wider world in a momentous spree of infrastructure building and poverty alleviation.

The fact is that the BRI is a geo-economic rather than geopolitical construct and has nothing to do with geopolitics in form or content. China neither has the intention of forming alliances through the BRI nor plans to seek a sphere of influence. China seeks partners, not allies, in implementing the initiative. The US is grossly mistaken in regarding the initiative as a geopolitical concept.

Some in the West call the BRI China’s Marshal Plan. They are two different things that are not comparable. The Marshall Plan was an American initiative providing aid to West European countries with the political motivation of containing the spread of Communism at the start of the Cold War. The recipients were countries with the same political system as the US and the other goal of the plan was to facilitate the formation of a military alliance with European countries.

In sharp contrast, the BRI is more about investment. Countries of different political systems are welcomed to participate and it doesn’t aim at a military alliance. The significance of the BRI as a geo-economic concept lies in that it can help solve development problems some backward regions are grappling with and provide them enabling conditions for the same.

I recently visited some countries and regions along the Belt and Road routes. Take Peshawar in Pakistan, a city plagued by terrorism in northern Pakistan. The security there has certainly improved in recent years with the progress in the China-Pakistan Economic Corridor. Local people know that terrorism would stand in the way of Belt and Road projects, so they consciously resist the designs of fissiparous elements, leading to reduction in incidents of terrorism.

In northern Myanmar, the construction of the China-Myanmar Economic Corridor under the BRI has seen a marked improvement in security as the importance of peace and stability in facilitating the project dawns on the people.

The BRI can influence major-power relations. The US is planning a $60 billion fund that will bankroll infrastructure projects in Africa, Asia and the Americas and the European Union has also put forward its foreign policy plan to improve transport, energy and digital infrastructure links with Asia. These moves will help meet the huge demands for infrastructure in developing regions. Why can’t major powers cooperate to carry out these infrastructure development initiatives?

Japan and China have agreed to step up cooperation in infrastructure projects in third countries. Some Western countries such as Britain are eyeing closer cooperation with China under the BRI. The initiative is open and inclusive; the more participants it draws in, the more secure and healthier its development. It will serve as a platform to step up cooperation among major powers.

In short, the BRI is a promising mechanism for economic cooperation, a new tool for managing security and a platform that can be used to explore more major-power cooperation.

The article was compiled by Global Times reporter Yu Jincui based on a speech by Huang Renwei, executive vice dean of Fudan Institute of Belt and Road & Global Governance, at the Third Understanding China Conference recently held in Beijing.

7 million people in China left cities to move to rural areas and take up farming last year, and it reveals a growing trend.

Source: Business Insider

  • A rising number of educated urbanites in China are choosing to wave goodbye to city life and head back to the land.
  • “Reverse urbanization” is picking up as infrastructure improves in remote areas.
  • Last year the Ministry of Agriculture announced that seven million people had returned to the countryside from cities.
  • Of these, 60% had done so to work in agriculture.


When thousands of diseased and bloated pig carcasses floated down a tributary of the Huangpu River in Shanghai in early 2013, after being dumped upstream by farmers, the stench turned Zheng Lixing’s stomach.

“If you were there, you wouldn’t have been able to eat for a few days,” says Zheng, a native of Shaanxi province in northwest China with a doctorate in polymer science from Tianjin University of Science and Technology.

The experience got him concerned about the state of the agricultural sector in China, which, for centuries before its industrialization, was an agrarian society.

Three years later, with two million yuan from their own pockets and investors, Zheng and four other university graduates from Shaanxi returned home and acquired 13 hectares (32 acres) of farmland in Liquan county. They wanted to show local farmers the benefits of switching to organic methods.

The quality of the soil is poor, he says, and will take another few years to recover fully. Soil contamination, caused by pesticide and fertilizer use, but also industry and waste disposal, is a big threat to China’s food security.

Zheng’s farm uses only organic fertilizers, such as chicken and pig dung, and no chemical pesticides. As a result, however, crop yields are low, and this puts other farmers off following their example.

“We won’t break even until the end of this year,” he says, adding that the neighbors may have a change of heart when they see how better-quality products can fetch higher prices.

Zheng is among a rising number of educated urbanites in China choosing to wave goodbye to city life and head back to the land.

The modernization of farming in China is on the government’s agenda. In March, President Xi Jinping said more effort should be made to encourage talented university graduates and overseas returnees to move to rural areas to revitalize them and boost innovation.

The drive to boost the rural economy includes tax breaks, easier financing, and other support measures for rural entrepreneurs.

About 60% of China’s population lives in towns and cities, a huge increase from 26% in 1990. However, that is still well below the average of 75% in the developed world, and “reverse urbanization” is picking up as infrastructure improves in remote areas.

Last year the Ministry of Agriculture announced that seven million people had returned to the countryside from cities, although it did not give a time frame for the migration. Of these, 60% had done so to work in agriculture, it said.

Ma Yanwei, who acquired an 11-hectare farm in Inner Mongolia’s Alashan prefecture in 2015, says the government is supporting local farmers with water conservation methods in the arid region, which is on the fringe of a desert.

“Although Alashan is under threat from desertification, the air and soil are very good. Local farmers use underground water for irrigation. But they plant corn, which consumes a lot of water,” says Ma, who graduated from Beijing Normal University with a doctorate in ecology.

“After digging ditches around a patch of land, they water all the land before moving on to another patch, wasting a lot of water through evaporation. Only the roots need to absorb water.”

The local government provides piping, which Ma teaches local farmers to use. With holes in the hosepipes spaced 20cm (8 inches) apart, they are rolled out alongside the base of crops, and water drips from holes. This method uses only half the amount of water, he says.

A native of Harbin in China’s northeast, his previous job at a Beijing-based environmental organization brought him to Alashan in 2004. “It is beautiful and the locals are friendly,” he says.

Also helping others to adopt environment-friendly farming techniques is Yixi Kanzhuo, who graduated from Beijing’s University of International Business and Economics with an executive MBA. The Dalian native worked for the See Foundation, China’s largest NGO dedicated to environmental protection, before moving to Yushu in Qinghai province, in the country’s northwest.

“I always went to Qinghai for the foundation. I met a native there who has about 1,300 hectares of land situated 4,500 meters (14,800 feet) above sea level. I moved to Qinghai in 2015 and married him last year,” she says. Like many ethnic Tibetans in the area, her husband abandoned his land after the government launched a policy around 2005 to move nomads into towns.

“It’s a desolate area. When I first came here, transport was inconvenient, with no motorways or asphalt roads. But since a national park was established last year, basic infrastructure is being built,” she says.

 The couple are building a home on their farm, which is 300km (185 miles) from the nearest town, as they attempt to revive largely deserted pastures on the plateau, and help those who have fallen into poverty since the relocation.
“They haven’t returned to their farms… They originally led self-sustainable lives by raising livestock and making clothes from wool.” Yixi says.

Since the move, they have been living in government-built houses in towns that lack basic services, such as medical facilities, elderly care, rubbish disposal, and running water, she adds.

They were promised an annual subsidy for relocating, but some families claim they are not receiving as much as they were told they would. Tibetans generally have high birth rates, and families, often of seven or eight people, quickly became destitute.

“Before 1985 each nomad [in Yushu] owned more than 100 yaks. They were never worried about money because they just had to sell a yak when they needed it.

“Before his whole family relocated to town a decade ago, my husband lived on the farm until he was 15 and his life was carefree. But after being relocated, people were cut off from their [traditional] way of life and couldn’t find work,” Yixi says.

She and her husband built their home using a traditional mortar made of soil, glutinous rice, and quicklime, she says, to show others how it was possible to return to their pastures and carve out a sustainable lifestyle.

The couple have organized a cooperative with seven other families, with 300 head of livestock, so “everybody can take turns grazing the livestock throughout the year to help conserve the pastures”.

Their farm will observe local customs, she adds, eschewing mass slaughter of livestock in deference to Tibetan Buddhist culture.

“Most of the produce is for sale locally, because outsiders are not keen on yak meat, suyou [fat distilled from yak and sheep’s milk] and qula [the residue from making suyou]. Our produce will include Armillaria luteo-virens [an edible mushroom], which thrives during the rainy season on the high plateau, and butter made from yak milk, which non-locals will like,” Yixi says.

“Our venture is not simply about agriculture. It’s about how people can live harmoniously with nature. We want to build living quarters for visitors, who will be able to ride horses, meditate, do yoga and live a tranquil life on the farm.

“We can train locals in how to serve visitors and cook food for them. The scenery is beautiful here, as we are near the source of the Yellow River. A road leading to our farm will be completed next year and [the government] will start building a small airport in Yushu next year.”

For a city dweller, life in the remote countryside took a lot of getting used to for Yixi. “When I first arrived, I went for as long as 20 days without washing my hair,” she says.

In spite of the hardship, she says her new life is much better than when she lived in the big city.

“To earn 20,000 to 30,000 yuan [US$2,900 to US$4,350] a month, people have to commute through the crowded subway every day and spend all their salary on living expenses. They only live for work. There’s no dignity,” she says.

“I hope our kids will be born in the house. They will be able to grow up surrounded by nature and lead a happy life.”

In Shaanxi, Zheng says he dreams of growing high-quality produce for export, like Japanese and Western farmers.

“China is so big that it can sustain any kind of fruit. We can’t sell the grapes we produce, even though they only cost several yuan a bunch. Japanese ones sell for several hundreds a bunch,” he says.

“There is a success story in another town in Shaanxi, where 20 million yuan was spent to establish a vineyard. The grapes sell in Hong Kong for more than 200 yuan a kilogram.

CPEC to help addressing Pakistan’s long term economic constraints: Moody’s

Source: Business Recorder

Author: Shoaib Ur Rehman

Date: 14 December 2018.

ISLAMABAD: In its annual credit report released on Thursday, Moody’s has said that infrastructure and power projects under China Pakistan Economic Corridor (CPEC) will address Pakistan’s long-term economic constraints an strengthen its growth potential.

“Pakistan’s longer-term economic prospects remain robust, in part because of improvements in power supply, infrastructure and national security that have raised the country’s growth prospects and hence business confidence,” said the report Moody’s-a credit rating agency.

It said institutional reforms planned by the new government, if effectively implemented, would also bolster institutional strength, which has increased in recent years with greater central bank autonomy and monetary policy effectiveness.

“However, the reforms will be challenging for any government to navigate because of the country’s large bureaucracy and complex federal-provincial politics and administrative arrangements,” it added.

Neverthless, Moody’s said in short time, it expects the country’s real GDP growth to slow down to 4.3-4.7 percent in fiscal 2019 and 2020, from 5.8 percent in fiscal 2018, in part due to policy measures taken to address the external imbalance.

It said that the credit profile of Pakistan (B3 negative) reflects the country’s high external vulnerability, weak debt affordability, and very low global competitiveness.

“Significant external pressures driven by wider current-account deficits have reduced foreign-currency reserves, which are unlikely to be replenished in the near term unless capital inflows increase substantially,” the report stated.

“While Pakistan’s public external debt repayments are modest, low reserve adequacy threatens the ability of the government to finance the balance of payments deficit and roll over external debt at affordable costs.”

Moody’s said its assessment of Pakistan’s susceptibility to event risk is driven by external vulnerability risk. Current-account deficits will remain wider relative to 2013-16 levels, with near-term prospects for a marked and sustained reversal unlikely unless goods imports contract sharply, it pointed out.

“Absent significant capital inflows, the coverage of foreign-exchange reserves for goods and services imports will remain below two months, below the minimum adequacy level of three months recommended by the International Monetary Fund,” the report stated.

The government’s narrow revenue base restricts fiscal flexibility and weighs on debt affordability, while its debt burden has increased in recent years, it observed.

“At around 72 percent of GDP as of the end of fiscal 2018, the government’s debt stock is higher than the 58% median for B-rated sovereigns, and Moody’s expects the burden to rise further and peak at around 76pc of GDP in fiscal 2020 — in part because of currency depreciation — before gradually declining as the twin deficits gradually narrow.

The moderate but rising level of external government debt also exposes the country’s finances to sharp currency depreciation.

What you need to know to understand Belt and Road

Source: World Economic Forum

Writer: Bruno Maçães

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

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

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

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

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

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

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

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

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

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

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

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

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

Belt and Road Initiative: The String of Economic Pearls

Source: Pakistan Observer

Writer: Athar Rashid

According to the estimates of some economists, by 2050, the contribution of Asia in the global GDP will be more than 50%. So, this is an opportunity for Pakistan being in Asia (South East Asia) to benefit from it in the next two decades. Pakistan is a significant partner in the Chinese grand Belt & Road initiative (BRI) also known as One Belt, One Road (OBOR) with CPEC as the flagship project of this massive initiative. CPEC is a framework of regional connectivity which consists of a series of bilateral agreements on multiple projects.
CPEC is an umbrella term used for various projects that have the potential to feed into the larger BRI structure. CPEC is a great economic opportunity for Pakistan to capitalize. As a flagship project of BRI, CPEC churns out experience, opportunities, and expertise for not only Chinese and Pakistani people but also for the other BRI partner countries. CPEC experience can benefit all stakeholders who want to avail the fruits of BRI. Chinese Belt & Road Initiative (BRI) spans around sixty-eight countries over multiple continents and covers about seventy percent of the world’s population in its grand design.
CPEC is a significant part within that large network of BRI. So, in the larger scheme of BRI, Pakistan is one of Sixty eight countries, China is working with to create the potential for sustaining what President Xi Jinping refers to as the “Chinese Dream.” BRI is a framework under which all participating countries enter the fold to help create a community that shares its destiny with China’s. The “Chinese Dream,” referred by President Xi entails sustained growth for China through trade. Therefore, the BRI framework is to achieve “Chinese Dream” through creating a community of countries linking their economic destiny to that of China. Chinese progress and development would mean mutual growth of all stakeholders.
Through Chinese ambitious BRI, Beijing is struggling to build up partners who are willing to align their future with its own. The people’s Republic of China is hoping to create a community where everyone wins through market access, trade relationships and adopting Chinese cultural as well as business norms.As BRI enters its fifth year of implementation it is believed to have some of the largest infrastructure and investment projects in history.Opponents of the BRI claim that the vast global network of new road, rail and pipeline projects will benefit primarily China. Securing sea lanes, ports and refueling stations will help China’s exporters reach overseas markets and give China uninterrupted access to energy imports.
Establishing overland connections to the Indian Ocean will open new trade routes and make Chinese military and commercial vessels less vulnerable to strategic choke points such as the straits of Malacca and Hormuz. On the other hand Chinese President Xi in his keynote address at the 2017 Belt and Road Forum for International Cooperation, specified that the central objective of BRI is to build “land, maritime, air and cyberspace connectivity” and create “networks of highways, railways,and sea ports.”
Numerous studies on the BRI provide evidence that many Chinese development projects accelerate economic growth in partner countries. Nonetheless, it is uncertain who benefits the most from such projects. China committed $50 billion to be invested in Pakistan under the umbrella of CPEC, of which $35 billion will be invested in energy projects and $15 billion in infrastructure, Gwadar development, industrial zones, and mass transit schemes. In the next five years, it is expected that it will be more than $55 billion. This project primarily creates a huge amount of foreign direct investment for Pakistan, at the same time, it will also create greater trade opportunities to China by giving access to a new market for its trading goods.
By building connectivity infrastructure that helps local residents and businesses reach more distant markets, these investments could spread economic activity to rural, remote and disadvantaged areas of the countries along the BRI route. The Belt and Road Initiative (BRI) is based on the win-win philosophy of Confucius. With the successful execution of many CPEC energy and infrastructural projects, both Pakistan and China are going to benefit. China will have all that it needs at the moment to make its presence felt in every corner of the world; more seaports and direct routes to connect with different parts of the world, cutting down the shipping costs etc. Pakistan will see phenomenal growth in its infrastructure, energy and telecommunication sectors.
Pakistan is also doing concentrated efforts to integrate CPEC to its greater network of society. The Planning Commission of Pakistan is trying to improve the academic circle in the country by aligning the vision of Higher Education Commission of Pakistan (HEC) to produce faculty members abreast with the knowledge and expertise of the BRI/CPEC Initiative. This capacity building will certainly help in the human development in shape of skilled students and professionals to serve the long term project of CPEC in a befitting manner.
Chinese investment in BRI countries is around $50 billion and is growing with the passage of time. There are around fifty six economic zones planned in twenty countries, out of which nine are in Pakistan. In the next five years, China will add twenty five hundred, short term research visits for foreign scientists, and train five thousand and four hundred engineers. Most significantly there will be the relocation of twenty five million jobs worth of industry for the people of countries along the BRI. BRI is a great chance and opportunity for countries like Pakistan.
There are many other competitors alongside Pakistan to benefit from the enormous opportunities offered by the grand BRI initiative like Laos, Cambodia, Vietnam, Indonesia, and Malaysia who are looking forward to receiving their share of industrial relocation, jobs, and other economic opportunities. Pakistan needs to work hard in a planned manner to obtain maximum benefit out of this tough competitive opportunity. The Policy makers and shakers in Islamabad should use BRI as an opportunity for global connectivity and trade. Through CPEC and BRI at large, Pakistan can get market access to all the BRI partnering countries which will be a great opportunity for the investors and exporters. The land and maritime routes can effectively be used by Pakistani entrepreneurs and companies to export their products and services to the countries along the BRI route. In order to facilitate that Pakistan needs to renegotiate the visa facility for Pakistani tourists and businessmen with Chinese authorities.
Chinese tourists and businessmen get on arrival visa in Pakistan, the same facility should be extended to the Pakistanis to make the mutual partnership even stronger. Moreover, exporters from Pakistan face a tough time in China because their competitors enjoy zero-rated tax thus leaving Pakistani goods uncompetitive. Pakistan and China should work together for a better free trade agreement (FTA) in order to further strengthen their bonds.

One Belt, One Road, One Big Mistake

Source: Foreign Policy

The headlines coming out of this year’s APEC conference in Papua New Guinea focused on the conflict between America and China that kept the forum from issuing a joint communiqué. Less noticed were two short memorandums released on the sidelines of the conference by the island nations of Vanuatu and Tonga. In return for renegotiating existing debt, both agreed to become the newest participants—following other Pacific nations like Papua New Guinea and Fiji—in Chinese President Xi Jinping’s signature foreign-policy venture, the Belt and Road Initiative (BRI).

As Xi’s trillion-dollar development strategy has snaked away from the Eurasian heartland and into the South Pacific, western Africa, and Latin America, concern has grown. Many Americans fear that the Belt and Road Initiative is an extension of efforts by the Chinese Communist Party (CCP) to undermine the security and economic architecture of the international order. China’s growing largesse, they worry, comes largely at the expense of international institutions and American influence.

This angst lies behind another announcement made at last month’s APEC gathering: Australia, Japan, and the United States declared that they had formed their own trilateral investment initiative to help meet infrastructure needs in the Indo-Pacific. For some this is not enough: In its most recent report to the United States Congress, the bipartisan U.S.-China Economic and Security Review Commission recommended that Congress create an additional fund “to provide additional bilateral assistance for countries that are a target of or vulnerable to Chinese economic or diplomatic pressure.”

This is the wrong response to the Belt and Road Initiative. Ignore the hype: For the Chinese, this initiative has been a strategic blunder. By buying into the flawed idea that barrels of money are all that is needed to solve complex geopolitical problems, China has committed a colossal error. Xi’s dictatorship makes it almost impossible for the country to admit this mistake or abandon his pet project. The United States and its allies gain nothing from making China’s blunders their own.

In Xi’s speeches, the phrase most closely associated with the Belt and Road Initiative is “community of common destiny.” Xi’s use of this term is meant to link the BRI to the deeper purpose party leaders have articulated for the CCP over the last three decades. China’s leaders believe that not only is it their “historic mission” to bring about China’s “national rejuvenation” as the world’s most prestigious power, but that China has a unique role to play in the development of “political civilization” writ large.

It is the Chinese, Xi maintains (as Hu and Jiang did before him), who have adapted socialism to modern conditions, and in so doing have created a unique Chinese answer to “the problems facing mankind.” Though this answer began in China, Xi is clear that the time has come for “Chinese wisdom and a Chinese approach” to benefit those outside of China. The Belt and Road Initiative is intended to do just that. By using the Chinese model of socialism to develop the world’s poorer regions, the initiative justifies Xi’s grandiose claims about the party’s historic mission on the international stage.

To match these lofty aims, Chinese academics and policy analysts at prestigious party think tanks have articulated more down-to-earth goals for the initiative. According to them, the BRI promises to integrate China’s internal markets with those of its neighbours. Doing so will bring its neighbours closer to China geopolitically and bring stability to the region. By increasing economic activity in China’s border regions, such as Xinjiang and Tibet, the Belt and Road Initiative will lessen the appeal that separatist ideology might have to the residents. Another projected benefit is the energy security that will come through the construction of BRI-funded transport routes. Finally, by articulating and then following through on an initiative that puts common development over power politics, China will gain an advantage over other major countries (read: Japan and the United States) who present the world as a black-and-white competition for hegemony. The community of common destiny, these analysts have claimed, is a community that will immensely benefit China.

As the Belt and Road Initiative is only five years old (and many of its main members have been involved for a far shorter time) its full results cannot yet be judged. However, a preliminary assessment can be offered for BRI projects in South and Southeast Asia, the region described by Chinese leaders as the “main axis” of the Belt and Road Initiative. It is here that BRI investment is strongest and has been around longest. The picture is not promising. The hundreds of billions spent in these countries has not produced returns for investors, nor political returns for the party. Whether Chinese leaders actually seek a financial return from the Belt and Road Initiative has always been questionable—the sovereign debt of 27 BRI countries is regarded as “junk” by the three main ratings agencies, while another 14 have no rating at all.

Investment decisions often seem to be driven by geopolitical needs instead of sound financial sense. In South and Southeast Asia expensive port development is an excellent case study. A 2016 CSIS report judged that none of the Indian Ocean port projects funded through the BRI have much hope of financial success. They were likely prioritized for their geopolitical utility. Projects less clearly connected to China’s security needs have more difficulty getting off the ground: the research firm RWR Advisory Group notes that 270 BRI infrastructure projects in the region (or 32 per cent of the total value of the whole) have been put on hold because of problems with practicality or financial viability. There is a vast gap between what the Chinese have declared they will spend and what they have actually spent.

There is also a gap between how BRI projects are supposed to be chosen and how they actually have been selected. Xi and other party leaders have characterized BRI investment in Eurasia as following along defined “economic corridors” that would directly connect China to markets and peoples in other parts of the continent. By these means the party hopes to channel capital into areas where it will have the largest long-term benefit and will make cumulative infrastructure improvements possible.

BRI and CPEC beyond reproach

Source: The Nation
Writer:Malik Muhammad Ashraf
Date: December 07, 2018

The visionary initiative of BRI and CPEC by China is probably the most discussed subject around the globe and in spite of its criticism by the USA and some other detractors there seems a consensus about the transformational role of both these mega-economic undertakings. An action plan jointly issued by China’s National Development and Reform Commission in conjunction with China’s Foreign Ministry and Commerce Ministry on 28th March 2014 narrated the objectives of this grandiose initiative in these worlds “ It is aimed at promoting orderly and free flow of economic factors, highly efficient allocation of resources ad deep integration of markets, encouraging the countries along the Belt and Road to achieve economic policy coordination and carry out broader and more in-depth regional cooperation of higher standards and jointly creating an open, inclusive and balanced regional economic cooperation architecture that benefits all”. It clearly enunciated partnership premised on the idea of sharing the benefits among the countries under the umbrella of BRI and CPEC.

Impressed by the scope and the likely economic impact of the initiative on the regional and global economy, even UK and some other countries have indicated their interest in becoming part of the scheme. At the same time a persistent campaign by the countries and elements inimical to BRI and CPEC has also been going on with the often professed claim that the participating countries will ultimately become debt slaves of China like Sri Lanka. Spurning of Chinese loans by Malaysia is also preferred as an argument in support of their claims. Even in Pakistan certain lobbies have also been supporting that argument and expressing reservations about economic benefits of CPEC.

Nevertheless the fact remains that the transformational role of both BRI and CPEC in lifting the economic profile of the region and is beyond reproach. World Bank’s director Macroeconomic, Trade and Investment Caroline Freund addressing SDPI Conference in Islamabad the other day that BRI and CPEC were playing important role for promoting intra-regional trade by building infrastructure. On the debt burden said “we are concluding a detailed study about BRI but our initial assessment shows that debt has not become major problem for loan recipient countries under this mega initiative. It stands at around 5 per cent of total loan portfolios of 71 countries of BRI” The Chinese Deputy Chief of Mission in Pakistan Lijian Zhao informed the audience that the misconception of debt trap levelled against BRI proved a lie through the work done by the World Bank. He revealed that BRI had generated 200000 jobs out of which 75000 were created in Pakistan through CPEC adding that Pakistan was the largest recipient of FDI from China and the largest trading partner with the help of CPEC.

The foregoing observations are irrefutable realities. As far as Chinese loans to Pakistan are concerned they constitute only 6.3 per cent of its total debt liabilities and therefore belie the argument of the detractors and the US that the current economic crisis was attributable to the growing Chinese loans. It is pertinent to point out that most of the CPEC projects, particularly pertaining to energy sector with an estimated cost of $ 34 billion are direct investment with no debt liability at all. The loans given on the infrastructure projects were advanced on much lower the rates charged by the international lending agencies. It is estimated that more than 3000 MW of electricity has already been added to the system through the energy projects initiated under CPEC which means they have already started contributing to the national economy. The rest of them would be completed by the end of 2019 leading to an addition of 10,600 MW to the national grid with all the accompanying potential and benefits for growth of industry and other development projects. The infrastructure that will be built under CPEC including roads and railway tracks will also provide tremendous impetus to the growth process and make Pakistan a hub of regional economic activity. Nobody in his right mind can contest that emerging reality. Infrastructure development is the fundamental ingredient and engine of growth in any economy.

The phenomenal economic prosperity and industrial development in the Asian countries such as China, South Korea, Singapore and Malaysia during the last three decades is a ranting testimony of this modern reality. Attainment of high level growth is unimaginable without industrialisation and gradual lessening of dependence on the agriculture sector. CPEC is undoubtedly a complete recipe for bringing that transformation in Pakistan.

China is the most trusted friend of Pakistan which over the years has played a very significant role in the economic development of the country besides boosting its defence capabilities. The relations between the two have been on the upward curve irrespective of who was in power in both the countries. It has withstood vicissitudes of time and is now poised to achieve eternity with the initiation of CPEC.

During the recent visit to China by Prime Minister Imran Khan both the countries not only reaffirmed their unflinching commitment to continue with the current CPEC projects but also to expand its scope by adding 15 more projects to it which imparted new dimension to the strategic partnership and friendship between the two countries. Chinese Consul General in Lahore talking to media revealed that instead of hard cash China was planning to eventually provide multiple forms of bailout packages to Pakistan in the shape of phenomenal investments in fresh projects which he reiterated would boost and help her to overcome the financial crunch. He emphatically declared that China would not leave Pakistan in lurch and channelise maximum resources to strengthen its languishing economy.


The statement of the Consul General indicates the depth of relations between the two countries and the genuine concern of the Chinese government about economic difficulties of Pakistan. The flow of direct investment is actually the best recipe to contain the debt burden and for generating additional resources for developmental needs of the country. The countries faced with resource constraint invariably try to create avenues for foreign direct investment which in the modern era have become a pivotal ingredient of growth and development. The Chinese new strategy to help Pakistan to tide over the economic melt-down is indeed a visionary move that provides a credible and long lasting mechanism to boost the economy and realistically speaking deserves unqualified appreciation.