Pakistan emerges as leading partner of BRI: survey

BEIJING: Pakistan has emerged as a leading partner of the Belt and Road Initiative (BRI), introduced by President Xi Jinping six years back, according to a survey released at a media and think tank exchange event held in Nanjing, Jiangsu province.

The fast and smooth functioning of the China-Pakistan Economic Corridor (CPEC) makes Pakistan’s role most prominent in the community of the nations. The CPEC is cited as a practical demonstration of BRI’s concept of shared destiny.

According to the survey, BRI has been gaining more recognition globally and will help support economic development across Asia and beyond. The 2019 Belt and Road Media and Think Tank Exchange Event attracted mainstream media representatives and think tank experts from 17 countries, including Pakistan and India.

Mushahid Hussain Sayed, Chairman of the Senate’s Foreign Affairs Committee, represented Pakistan at the meeting. Addressing the meeting, he said that the media and think tanks have an important function in the international community with regard to communicating and avoiding conflicts.

“People are the best bridge to different cultures communicating,” he said. “An initiative is needed for cultures to learn from each other, and we need to promote the development of such an initiative.”

A report released during the event, titled “Leading a New Round of Global Opening up and Cooperation; The Belt and Road in the Eyes of the International Community”, found that the global community’s recognition of the initiative has been increasing each year.

China’s neighbouring countries particularly Pakistan has the best understanding of it, according to the report. In last year’s survey of six ASEAN countries, Indonesia, Thailand, Malaysia, Singapore, the Philippines, and Vietnam, 70pc of respondents said they knew of the BRI.

In another survey conducted in 11 Asian countries, including Israel, Saudi Arabia, and India, 56pc of respondents thought the BRI provides a new solution for global governance and a new mode for equal and win-win cooperation among countries.

The international community recognizes the BRI’s positive impacts on the development of their own countries, the report said.

Last year, in a survey in 21 countries, 53pc of respondents recognized the BRI’s positive impact on regional and global economic development, and 74.7pc of respondents from 11 Asian countries believed the BRI could bring more opportunities for their countries’ development.

Since the Belt and Road Initiative was launched in 2013, it has shown itself to be fruitful and has generated higher expectations from the international community.

In a 2018 survey in 17 countries, 72.5pc of the respondents thought of the BRI as a global public product with bright prospects, and 69.3pc wished their governments would further participate in the initiative.

In another survey this year in 11 Asian countries, 76.7pc of the respondents found that the BRI could bring more development opportunities to Asia.

Gao Anming, deputy director of China International Publishing Group, said that the event provides new opportunities for communication and cooperation between Chinese and foreign media and think tanks.

Hu Hong, the vice-mayor of Nanjing, said that the Belt and Road Initiative can help promote mutual understanding and cooperation between China and other countries and that the media and think tank exchange event will help countries to deepen communication and enhance friendship.

Source: Profit Today

Date: May 20, 2019

Belt and Road Brings Chinese Finance to the Gulf

During his meeting with the King of Bahrain, Sheikh Hamad bin Isa al-Khalifa, in 2013, Xi Jinping stated that China would deepen financial cooperation with Gulf countries. In recent years, this intention has been realized. With the Belt and Road Initiative (BRI), China has been expanding its financial foothold in the Gulf region, which is positioned as one of the most crucial financial hubs in the world.

While Chinese finance has been present in the Gulf since the early days of China-Gulf relations, Xi, with his assertive financial reforms, including greater integration in the global financial economy, aims to reinforce this process through the BRI.

Growing Presence and Bond Market

Corresponding to the BRI’s official “Vision and Action” document, which states that “financial integration is an important underpinning for implementing the Belt and Road Initiative,” Chinese banks and financial institutions have increased their cross-border financial transactions, presences, and activities in the Gulf region.

This is particularly apparent in the UAE, the Gulf’s most important financial center. According to the Dubai International Financial Center’s (DIFC’s) 2015 annual Operating Review report, banks from China had doubled their balance sheet since mid-2014. In 2018, it was further reported that Chinese financial entities make up nearly a quarter of the total assets in the DIFC, with total value reaching $33.4 billion by September 2017, a 30.5 percent increase from the $25.6 billion reported at end of 2016. Additionally, Chinese banks have also elevated their licenses with the DIFC to Category 1, changing their presence from subsidiary to branch status.

Moreover, following the direction in the BRI “Vision and Action” plan to “open and develop a bond market,” these banks have increased their issuance of bonds in the region.

In October 2016, the Hong Kong branch of the China Construction Bank (CCB) listed a $600 million bond on Nasdaq Dubai, the Gulf’s global financial exchange. In the same month, the Agricultural Bank of China (ABC) was approved by Dubai Gold and Commodities Exchange (DGCX) as the first listed market-maker for Shanghai Gold Futures.

The Industrial and Commercial Bank of China (ICBC), after upgrading its branch’s services from strictly commercial to providing investment banking and asset management to its Gulf clientele, also listed a $400 million bond on Nasdaq Dubai in mid-2017. That made for a total of five ICBC bonds listed on DGCX, after the listing of a $500 million bond in May 2015 and a $400 million bond in June 2016.

Not long afterwards, the CCB listed another $1.2 billion bond in Dubai. The CCB’s chairman, Guo Yuo, statedthat the bonds are intended to support the bank’s activities in the region under the BRI. In March 2018, the ICBC also raised $1.4 billion through the issuance of two bonds on Nasdaq Dubai, which brought the total amount of bonds issued by Chinese banks via the exchange to $5.4 billion.

Institutionalizing Financial Relationships

China’s financial expansion in the Gulf has also been institutionalized. For example, the Shanghai Stock Exchange partnered with the Abu Dhabi Global Market (ADGM) in April 2018 to develop a platform in the UAE known as the “Belt and Road Exchange,” aimed to support Chinese investors and businesses in the Gulf.

Although to date there are no specifics regarding the platforms via which the new exchange would trade, or when it might be opened, we do know that the future exchange aims to help Chinese enterprises finance investments undertaken as part of the BRI. A few months later, the ADGM launched its first overseas representative office in Beijing.

Similarly, in 2017 Shanghai Gold Exchange partnered with the DGCX to establish DGCX Shanghai Gold Futures, which saw the first-ever use of the Shanghai Gold Benchmark Price in global markets.

In July 2018, Chinese state-owned Everbright Group, which operates across banking, securities, asset management, insurance, and funds as well as in futures and investment management, also signed an MoU with the DIFC to explore collaboration opportunities related to the implementation of the financial aspects of the BRI.

Currency Expansions

Such moves have also been accompanied by efforts to expand the use of Chinese currency in the Gulf.

The BRI is intended to complement the ongoing strategy to globalize the Chinese renminbi (RMB), a process that began in 2009 and still faces obstacles. The “Vision and Action” plan states that the BRI aims to establish currency swaps and settlement mechanisms, to uplift the status of the RMB as an international reserve currency, and to incorporate the RMB in the IMF’s Special Drawing Rights (SDR) basket of currencies, a goal that was achieved in 2016.

In the Gulf, this intent was echoed by Xi in his speech at the Arab League headquarters in 2016. A number of Chinese banks have responded to Xi’s call by becoming active in promoting the use of RMB in the Gulf, mainly through currency swaps and trade settlement deals.

The People’s Bank of China (PBOC), for example, signed a 35 billion RMB ($5.6 million) currency swap deal with Qatar Central Bank (QCB). The PBOC has also renewed its $5.42 billion currency swap agreement with the UAE, after the latter was included as a RMB Qualified Foreign Institutional Investor (RFQI) with a quota of 55 billion RMB, paving the way for the Central Bank of the UAE to invest in China’s capital market.

Furthermore, the ICBC has also decided to join the Dubai Commodities Clearing Corporation (DCCC), turning itself into a settlement bank for DGCX, and the Chinese bank has been reportedly pursuing negotiations with Gulf governments and entities about issuing RMB bonds in China.

Besides currency swap agreements, RMB clearing centers have also been established in the Gulf. In 2015, the ICBC founded a renminbi clearing center in Doha, which became the first in the Gulf to allow trade priced in RMB to be cleared locally. This helps make the renminbi “trade invoicing currency” in the Gulf. Banks in the Gulf are now able to skirt various custodial relationships with banks in Hong Kong to access currency at the Doha branch. This also effectively enables the creation of a pool of liquidity in renminbi, thereby enabling a push for trade across the wider region.

A year later, the ABC was also appointed by the PBOC to operate another renminbi clearing center in Dubai.

Though still limited, these developments have gradually expanded the popularity and use of Chinese renminbi in the Gulf. HSBC’s RMB Internationalization

Study found that there has been a noticeable increase in the number of UAE businesses using the renminbi – from 34 percent in 2015 to 46 percent in 2016. In January 2016, the RMB had also become the most active currency used in the UAE and Qatar for direct payments to China and Hong Kong and the rate of using the renminbi in direct payments between Kuwait and China exceeded 10 percent. Lately, Saudi Arabia has also declared that the country is currently preparing for renminbi funding.

China’s Belt and Road is usually thought of in terms of literal roads, ports, and bridges. In the Gulf, however, it’s taking a different form as China pursues increased financial cooperation with a globally important financial hub.

Source: The Diplomat

Author: Dr. Muhammad Zulfikar Rakhmat is a lecturer at Universitas Islam Indonesia and a research associate at Jakarta-based Institute for Development of Economics and Finance (INDEF).

BRI transforming world economic order

This Thursday and Friday, Beijing is hosting a second international forum on the Belt and Road Initiative, and it won’t be a small deal. The four weeks preceding this event have seen a surge of nations and institutions joining the BRI framework, beginning with Italy’s memorandum of understanding in March as the first member of the Group of Seven nations to join, followed soon thereafter by Luxembourg and Switzerland.

Weeks later, China won another victory by consolidating billions of dollars’ worth of infrastructure deals with the 16+1 Central and Eastern European Nations that have signed on to the BRI. This particular forum was especially important as it saw Greece join the alliance, changing the name to the 17+1 group. Greece’s official participation in this bloc extended the group beyond its nominal “central and eastern” geographical limits, and the importance of Greece – whose Port of Piraeus and emerging rail infrastructure funded by China – provide a key bridge in the Maritime New Silk Road to Europe.

If that wasn’t enough, China participated in the April 9-10 International Arctic Forum in Russia where the first treaty was signed between Moscow and Beijing on scientific cooperation in the Arctic, and sweeping agreements were made around Chinese-Russian infrastructure development on a policy that has become known as the “Polar Silk Road” – again extending the limits of the BRI beyond its “east-west framework.” Just as the Arctic conference was ending, an unprecedented Canadian Arctic Policy Report was publicized calling for a transformation of Canada’s Arctic doctrine toward a pro-development orientation in response to the “changing geopolitical rules” initiated by Russia and China

While China and Russia consolidated the BRI-Eurasian Economic Union treaty in June 2018, a major leap was announced toward the finalization of a China-Eurasian Economic Partnership, with the Chinese Commerce Ministry’s deputy director of Eurasian affairs, Wang Kaixuan, stating on April 19:

“Now it has to be endorsed by the specialized agencies. China has already completed its internal procedures. We are now waiting for our Russian counterparts, after that we can immediately start the negotiations. I believe that will happen soon.”

From April 15-16, China initiated a sweeping array of treaties with Arab countries during the second Arab Forum on Reform and Development under the heading Build the Belt and Road, Share Development and Prosperity.” The Arab nations already have more than US$200 billion worth of annual trade with China and 18 Arab countries have signed MOUs with the BRI.

China’s capacity to bring long term infrastructure to nations torn by Western-funded wars and regime change is seen as a vital stabilizing influence not only to alleviate poverty and de-radicalize but also to provide a framework for genuine independence from Western intrigues. Commenting on the forum, the president of Lebanon stated, “The Arab countries have huge markets. We regard China as a good friend and are willing to further consolidate the relationship with China. We would like to draw the experience from China’s reform and development so as to benefit our people and seek our opportunities for development.”

Rather than embrace this new potential, Western “old paradigm” forces representing the entrenched deep state have screamed and hollered against the dangers of China and Russia threatening our democratic way of life.” Exemplifying this outlook was The Washington Post’s April 20 feature article “How Washington can beat China’s global influence campaign,” calling for an “alternative to the BRI” controlled by the Western elite. This plan is entirely absurd, since America has not only permitted its own infrastructure and productive powers to rot for 50 years, but has created no relevant infrastructure that has benefited nations abroad during that same time frame. All that has been created under decades of lending by the International Monetary Fund and World Bank that has meant debt slavery, impoverishment, and a $700 billion derivatives bubble that is ripe to explode.

Although great efforts were made over two years by the Five Eyes/Mueller-led witch hunt to destroy the potential alliance US President Donald Trump was proposing to form with Russia and China, the now published Mueller report turned out to be little more than a goose egg, failing to  prove any of the claims of Russian collusion. Jumping off that victory, Trump called loudly on April 5 for a conversion of vast military expenditures that only risk World War III toward a program of long-term investments among Russia, China and the US:

“Between Russia, China and us, we’re all making hundreds of billions of dollars’ worth of weapons, including nuclear, which is ridiculous.… I think it’s much better if we all got together and didn’t make these weapons … those three countries I think can come together and stop the spending and spend on things that are more productive toward long-term peace.”

Going into this week’s BRI Forum (titled “Belt and Road Cooperation: Shaping a Brighter Shared Future”), 5,000 participants, including 37 heads of state and 100 heads of organizations, will discuss the mega-projects that will give vitality to the coming century with the Chinese leadership and business community. There is no doubt that the collapse of the trans-Atlantic banking system will be on everyone’s mind as opportunities to tie our destiny to long-term projects that benefit all nations will be presented as open offers for all to join. Will the West follow Italy’s and Greece’s lead by joining the BRI, or continue to party like it’s 2008?

Source: Asia Times

Date: April 25, 2019

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.

Greek businesses give their backing to China’s Belt and Road Initiative

Source: SMN


Date: 17th December 2018

Greek businesses and Chinese scholars voiced confidence in the prospects of Sino-Greek cooperation in the context of the Belt and Road Initiative (BRI) during a forum in Piraeus, Greece’s largest port which in recent years has become a strong symbol of the win-win bilateral cooperation between the two countries.

The BRI was the main theme of the forum organised by the Chamber of Commerce and Industry of Piraeus (PCCI) and the Chinese Embassy in Greece, with its co-organiser Renmin University of China.

Reflecting on the achievements to date in this corner of the globe and along the 21st century’s Silk Road, five years after the launch of Beijing’s initiative, Greek and Chinese delegates explored the challenges lying ahead as the opportunities to further boost bilateral cooperation to benefit both sides, are seized.

Pointing to Sino-Greek cooperation at Piraeus port, Vassilis Korkidis, president of PCCI, said: “Greece can and should make further use of the opportunities opened up both from its key geopolitical position and from the primacy of Greek shipping to the global economic phenomenon.”

Piraeus Port Authority SA is managed by China’s Cosco Shipping Corp has managed the Piraeus Port Authority SA since 2016, and Piraeus Container Terminal SA since 2010, posting remarkable results as Piraeus advances to become top port in the Mediterranean and among the five largest container hubs in Europe.

Chinese Ambassador to Greece Zhang Qiyue stressed the BRI is proposed by China, but it is actually owned by the world, saying “it is also a call on the part of China to other countries to cooperate in any way we can”.

It is a good initiative for globalisation and the world to work together, not in isolation, the Chinese ambassador said, saying China is trying to align her development with the development strategies of other countries.

The BRI blessing

Source: The Nation

Writer: Dr Ahmad Rashid Malik

Date: 15th December 2018

The Belt and Road Initiative (BRI) is the great project of this century and the project has entered into its fifth anniversary. Many things have been happening and the project has the capacity to further include a large number of people. The idea floated by the Chinese President Xi Jinping in Kazakhstan and Indonesia in 2013 has gained strength and will continue. The project aims at helping out the poor economies and in the long run, enable them to pay back their debits, if any.

The BRI gives space and technology to poor countries and builds their finances. Habantota Port in Sri Lanka provided Sri Lankans with great help.  Tajikistan has been given loans to build its projects. In its own style, Malaysia has cancelled its projects worth US$ 23 billion signed by country’s previous regime. Malaysia has come up its own way of solution. However, the Malaysian example has not repeated by any other country.

This does not mean that all countries under the BRI have been reconsidering to review its loans plan. There might be minor relocation depending on the situation. The  Kyauk Pyu Port in Myanmar has been bestowed with US$ 1.3 billion. The port is a strategic one diverting the import of oil from the Middle East to Myanmar to reach Yunnan Province in China, by passing the Strait of Malacca. The project will be financed by the private sector and the room for investment has been increasing.

There are a number of major projects being taken up by regional governments and the momentum is scaling. The BRI is yet a master plan and it is going quite well. The plan has been based upon case-by-case basis depending on individual countries’ needs and requirements. An Action Plan 2015-17 issued by the Chinese Government’s Leading Group for Advancing the Development of One Belt One Road contains instructions such as “share responsibilities and progress together”.

China has a mechanism to run a BRI project. Various institutions get to work and to coordinate with each other including international components. The early implementation of any BRI project depends on this mechanism. State owned enterprises took on projects quickly and gave out loans. The China Banking and Insurance Regulatory Commission recently estimated that Chinese banks had lent US$ 200 billion for 2,600 projects. Even then, not all Chinese overseas investments are State-funded. Private investors and ethnic Chinese from outside China are also involved, thus making the Chinese loans for BRI as multinationals, going beyond the border of China.

When Chinese companies within China and outside of China conduct a combined business this will enhance its chances of oneness and transparent liquidity, giving it name of multinationals. In Cambodia, construction there is mostly done by Chinese workers; Chinese tourists arrive in groups managed by Chinese tourist agencies, stay at Chinese-owned hotels, shop at Chinese-owned malls and eat at Chinese restaurants. All these activities are collectively on China and the BRI pattern.

The BRI is largely fuelled by China’s large trade surpluses and foreign-exchange reserves and many other outcomes as a great state. The country needed somewhere to invest its money and to export its industrial surpluses in befitting manner.  Therefore, the BRI critics just cannot blame China on these accounts.

The Chinese capital has a lasting value to be invested all over the world. There is nothing wrong about it as the US dollar also does its global business. The work by Chinese Yuan is also admirable. China has not been keeping its Yuan at home; rather China is allowing its Yuan to create prosperity abroad.

China has not been creating a debt-trap strategy, rather Chinese Yuan is badly needed to overcome poverty, create more jobs, and to create prosperity. China has also been following a policy of write-off of loans. This will not only create prosperity, it will also create a situation for a better competition. No country in the global community would be allowed to sit idle and not to contribute.

Where the US dollar has not created life and prosperity for decades for many countries, the Chinese Yuan has the capacity to create such a miracle and to share with the a large community. Historically, Chinese Yuan has not created its sphere of influence, exploitation, and discrimination among the community of nations in the past.

The vast and dedicating act of Yuan will create a better world. The Western financial institutions are creating a difficult situation for developing debt-oriented economies. In the systematic debt situation, countries became further indebted and they cannot come out of that situation. In that situation, Chinese model of debt and loans creature a better situation for the developing countries.

China is also one of the biggest investors in the African continent. Beijing pledged US$ 60 billion in 2015 and another US$ 60 billion recently for further development. This is great picture of creating a better world in Africa and contributing in its prosperity. Therefore, in a nut shell, we can assume that Chinese strategy of debt and loans disbursement is a blessing and greatly contributing to the world.

5 years of Belt and Road initiative: Chinese vision for shared destiny

Source: Daily Times

Date: 14 th December 2018

ISLAMABAD: Pakistani youth needs to get the required knowledge and skills to be able to part of the emerging new vision of economic and political transformation of the growing world.

China and its phenomenon growth and peaceful rise provide ample example that with consistent efforts and hard work, achieving prosperity is not a distant dream but can be a reality. These were the consensus amongst the scholars speaking during the seminar on “Five years of Belt and Road Initiative: Chinese Vision of Shared Destiny” organized by Centre for Belt and Road and CPEC Studies-Institute of Peace and Diplomatic Studies.

Farhat Asif, Founder President, Institute of Peace and Diplomatic Studies, speaking on the occasion the occasion said that Chinese model of shared destiny is rare and has all the essence to bring peace and prosperity in the region.

Dr. Muhammad Munir, Assistant Professor in National defense University said that BRI is open for states to join its project. Pakistan is main stakeholder in BRI which is dependent on the success of CPEC. Chinese concept is that investing on individual will prosper whole region. BRI will also benefit the common people. CPEC has made the trade most cost effective with its characteristic of trickledown effect.

While talking about Belt and Road Initiative Dr. Muhammad Khan, Head of Department in International Relations in International Islamic University said that Belt and Road has provided China access to market, Global economy and reach over Africa, Europe (the investment hub). BRI is Win-Win situation and states are finding benefit from this project. He was of the view that west instead of opposing and propagating should also get the benefit.

Ambassador ® Javed Hassan, Director, Chinese Studies Centre, National University of Science and Technology, while speaking on the Occasion highlighted at length about the wisdom and vision behind the BRI and how the Chinese nation has transformed them through hard worked. He has also discussed both Pakistan’s and Chinese perspective. He said that one may like it or not China has come a long way and this is a great moment of celebration that BRI has come so long way in just 5 years under all pressures and propaganda. China has achieved what took Europe 400 years. He has advised the Pakistani youth that they must learn the new emerging knowledge to foster forward the interest of Pakistan in the global world.

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.