Success of CPEC linked to job opportunities for Pakistanis

ISLAMABAD: The China-Pakistan Economic Corridor (CPEC) can only become a success if jobs are provided to the local people and Chinese companies are made bound to do businesses through joint ventures.

Transfer of technology should also be ensured otherwise local people would never be benefited by the CPEC projects. Moreover, there should be equal opportunities for Chinese and local companies to do business.

These views were expressed by participants of an event, “Rural Development and Industrialisation in Pakistan” organised by Rural Development Foundation (RDF) at Islamabad Club on Monday.

Representative of Rural Support Programmes Network (RSPN) Dr Abdur Rehman Cheema said though people of rural areas wanted jobs but he was doubtful if the Chinese companies would provide jobs to them.

Experts say Chinese companies should be made bound to do businesses through joint ventures

“Chinese companies completed projects worth $16 billion in different countries but employed 40,000 Chinese labourers on those projects. We need to make sure that it should not happen in Pakistan,” he said.

However, speaking about the positive points of the partnership with China, Dr Cheema said China focuses on financial issues and has no political interests.

He suggested that CPEC must aim to benefit local people.

Assistant Professor at Comsats University Dr Tahir Mumtaz Awan said the ‘One belt and one road’ was a project aimed at integration of 60 countries and five continents.

“It is a new Silk Route but the problem is local communities might not be integrated. Despite this, it is hoped that because of CPEC Gwadar will become more developed than Dubai. However, we should retain our land and suggest the Chinese to do businesses through joint ventures rather than pushing us to sell our assets such as land. Moreover, transfer of technology should also be ensured,” he said.

Former ambassador to the World Trade Organisation (WTO) Dr Manzoor Ahmed said things were changed rapidly because of CPEC. He said a few years ago Pakistan was losing eight to 10 billion dollars every year due to power shortage but because of CPEC the energy crisis was addressed.

“Moreover, tremendous development has been made in infrastructure. A number of roads are constructed due to which travel duration has reduced by half of the time. However, I have concerns that a number of statutory regulatory orders (SROs) have been issued allowing Chinese companies to bring machinery and equipment free of tax. There should be similar exemptions for the local businessmen otherwise they will not be able to compete. I also suggest that steps should be taken to increase the per acre yield of crops,” he said.

Deputy Chief of Party USAID-TDEA Rashid Chaudhry said because of a decision of the Federal Shariat Court, Pakistan had lost an opportunity for land reforms.

Representative of Food and Agriculture Organisation Farrukh Toirov said by 2050 population of the globe would reach nine to 10 billion so agriculture products have to be increased by almost 60 per cent.

“Though 60pc population of Pakistan lives in rural areas small sizes of farms will be an issue as it would be difficult to increase the per acre yield,” he said.

Earlier, Deputy Director RDF Sanaa Khetran said fundamental rights of farmers and those connected to agriculture should be secured and safeguarded and an environment of trust should be maintained.

First Secretary at the embassy of China Jia Wei was the chief guest but he did not address the participants.

Talking to Dawn, Mr Wei said CPEC had entered into the second phase.

“In the first phase, focus was on infrastructure and now in the second phase the focus is on industrialisation. Industrial zones are being built across the country and I hope more investment will come to Pakistan as Prime Minister Imran Khan has signed more MoUs during his visit to China,” he said.

Published in Dawn, April 30th, 2019

Author: Ikram Junaidi

Provincial govts struggling to facilitate CPEC economic zones

Source: Pakistan Today

Date:31st December 2018

Author: Ghulam Abbas

ISLAMABAD: Despite the federal government’s emphasis on kickstarting development activities at the identified special economic zones (SEZs) under the China Pakistan Economic Corridor (CPEC), the provincial governments are reportedly struggling to facilitate the SEZs with regard to the provision of utility services.

The seven identified SEZs in the country were presently facing several problems, including lack of gas allocation, infrastructure facilities, power supply, telecommunication and broadband services.

However, officials at the Board of Investment claim that electricity supply to the SEZs has already been arranged through 132 KV VAC Grid Station, adding that the relevant distribution company should provide the connections soon.

According to sources, SEZ Value Addition City Faisalabad was facing problems in getting a gas connection while M-3 Industrial City Faisalabad was unable to ensure the required electricity, as only 40MW were approved for the SEZ against the total requirement of 485MW.

Similarly, a request by the Punjab Industrial Estates Development and Management Company (PIEDMC) for the supply of gas to Quaid-e-Azam Apparel Park (QAAP), Sheikhupura, was still to be considered. The request was lying pending with different government departments/agencies.

Meanwhile, the decision to supply electricity to various units in Korangi Creek Industrial Park was yet to be taken while work on the Pakistan Telecommunication Company Limited (PTCL) network was still under progress.

The gas requirement of 3.5mmcfd for Khairpur Special Economic Zone (KSEZ) was denied by Sui Southern Gas Company (SSGC) after carrying out a survey on a report submitted to Sui Southern Gas Planning Department Hyderabad with regard to the possibility of a gas connection.

Moreover, gas connection to Bin Qasim Industrial Park was facing problems as the gas network was yet to be laid down. Power supply to Hattar Special Economic Zone, Phase VII, was also an issue, as power supply to the SEZ would be provided through various sources including 50MW through solar power; 70MW through hydropower (wheeling); and 345MW through the combined cycle power plant.

In addition to the above, Khyber Pakhtunkhwa Economic Zones Development and Management Company (KPEZDMC) would source electricity from Pakistan Electric Supply Company (PESCO). The issue of transfer of land to PESCO for the proposed grid station was still unresolved while Sui Northern Gas Pipeline Limited would conduct a survey (to asses if it is feasible or not feasible) for 40MMCFD of gas allocated for Hattar SEZ.

The over 4,500 acres M3 industrial estate was strategically located along M3 motorway keeping in view that Lahore, Karachi motorway of CPEC was just within a half an hour drive. The industrial surplus produced in this estate could be easily exported to Karachi, Gwadar, China and to the landlocked Central Asians States through reliable connectivity.

Though all plots available at SEZs in Faisalabad have been sold out to investors, provision of electricity, gas and other services to the locality was yet to be ensured by the Punjab government, said a source at the zone.

“Although Prime Minister Imran Khan lauded the performance of Punjab Chief Minister Usman Buzdar, we are witnessing a complete lack of governance in the province. The bureaucracy, which used to obey former chief minister Shahbaz Sharif, is apparently not taking the present government seriously. A company, which wants to establish its unit here, needs to wait for over 10 months to get an electricity connection,” said the insider, adding that the power and gas companies were also not cooperating with the new entrants at the zone.

“The plots at M3 Industrial Estate, which has been declared as SEZ, have been sold out to local firms or those in joint ventures with Chinese companies. A Chinese firm, which has joined hand with a local company to buy the land at the SEZ, was also uncertain about the commencement of its unit, as the firm may get the electricity connection in next 10 months,” said the source.

CPEC – a win-win situation for Pakistan, China

Source: The Daily Times

Date: 31st December 2018

ISLAMABAD: The China-Pakistan Economic Corridor (CPEC) is a major and pilot project of the Belt and Road Initiative and one major platform for comprehensive and substantive cooperation between China and Pakistan.

CPEC is an important consensus reached by the two countries. The Chinese leaders attach great importance to the development of CPEC. In May 2013, Chinese Premier Li Keqiang proposed the initiative of CPEC during his visit to Pakistan. During President Xi Jinping’s visit in April 2015, both sides agreed to promote a “1+4” pattern of economic cooperation, featuring a central role of the CPEC and four key areas including the Gwadar port, energy, transportation infrastructure and industrial cooperation, so as to achieve win-win results and common development. Both sides agreed on the principles of scientific planning, step-by-step implementation, consensus through consultation, mutual benefit and win-win results, as well as ensuring quality, safety, and environmental protection. During Prime Minister Imran Khan’s visit to China, the two sides reaffirmed their complete consensus on the future trajectory of the CPEC, timely completion of its on-going projects and joint efforts for realization of its full potential with a focus on social-economic development, job creation and livelihoods and accelerating cooperation in industrial development, industrial parks and agriculture.

Over the past 5 years, under CPEC, 11 projects have been completed. 11 projects are under construction. The total investment of the above 22 projects is around $18.9 billion. There are 20 more projects in the pipeline.

Being the largest and most comprehensive project under BRI initiative, CPEC is of great political, economic and social significance to China and Pakistan. Politically, it is a demonstration of the political willingness of the two countries to promote Sino-Pakistan strategic partnership of cooperation; economically, it is a project that will bring joint development to the two countries; and socially, it is aimed at mobilizing the people to work together for the betterment of our two nations.

II. Mechanisms of cooperation

To implement CPEC cooperation, China and Pakistan have set up a ministerial-level Joint Cooperation Committee on CPEC Long Term Planning (JCC). There are 7 joint working groups (JWG) under JCC, namely Planning, energy, transportation infrastructure, Gwadar port, industrial cooperation, social economic development and international cooperation. JCC is responsible for overall planning and coordination under CPEC, while the JWGs are responsible for the detailed planning and implementation of the projects.

The JCC secretariats are established in the National Development and Reform Commission (NDRC) of China and Ministry of Planning, Development and Reforms of Pakistan respectively. The two secretariats are responsible for communicating and coordinating with the line ministries related to the projects of CPEC. Until now, JCC has convened 8 meetings and since 2015 it is held on annual basis. The 8th meeting was held in Beijing on December 20, 2018. During the 8th JCC, both side reviewed the progress of the CPEC and reached new consensus. The two sides also decided to establish Joint Working Groups on social economic development and international cooperation.

The JCC has been effective in planning and construction of CPEC projects through equal, friendly consultations and mutual accommodation. The list of the projects as well as the long-term plan for CPEC were discussed and finalized in the JCC meetings.

III. Four major areas of the CPEC:

A. Energy

Energy is the power engine for economic development and a key factor to ease load-shedding and improve the lives of millions of people.

Energy projects are highlighted as the priority sector under the CPEC framework. There are 15 energy projects planned as priority with a total generation capacity of 11,110MW, among which 7 are completed and in operation and 6 are under construction with a total capacity of 6,910MW. At present, Zonergy 300MW Solar Park, 50MW Dawood Wind Farm, Jhimpir UEP wind power project, Sachal 50MW Wind Farm, Sahiwal 2×660MW Coal-fired Power Plant, Port Qasim 2×660MW Coal-fired Power Plant and Three Gorges Second and Third Wind Power Projects have been completed. These projects have added 3240 MW to Pakistani national grid, amounting to more than 11% of the total installed capacity of 29,000 MW in Pakistan.

CPEC energy projects include hydro, solar, wind and coal-fired power plants. The major coal-powered plants use super-critical thermal technology, which is the most advanced environmental control technique for coal-fired plants currently. Each project has got the approval of environmental impact assessment by the Pakistani government before the construction.

CPEC Energy projects are providing affordable energy to Pakistani consumers in a diversified way. The tariff of power plants have been sharply decreased from 16-18 Rs to around 8 Rs per unit. With the introduction of CPEC energy projects, Pakistan also reduced its heavy dependence on gas and LNG power plants, which account for 50% of total installed capacity. Pakistan’s foreign exchange has been saved in this regard.

CPEC energy projects are foreign direct investment based on commercial contracts, which are in accordance with the standard clauses provided by the Pakistani government. The CPEC energy projects are executed in accordance with BO(O)T mode. The financing of the energy projects are mainly provided by the equity of Chinese companies and commercial loans which borrowed from China Development Bank and other commercial banks in the rates of around 5%. In another word, any debt arising from CPEC energy project would be borne by the Chinese investors instead of the Pakistani government.

B. Infrastructure

Efficient transportation network is key to economic development. Currently, KKH Phase-II (Havelian-Thakot section), Karachi-Lahore Motorway (Sukkur-Multan section) and Lahore Orange Line are 3 projects under construction. The information highway for Laying of optical fiber cable (OFC) from Rawapindi to Khunjrab is in operation. These ongoing projects are funded by preferential loans from the Chinese government at around 2% interest rate with a total amount of 5.874 billion USD. The up-gradation of ML1 railway and the KCR are under discussion.

KKH Phase-II (Havelian-Thakot) project is located in Khyber Pakhtunkhawa with a total length of 118km, of which 39km is expressway with subgrade width of 24.7m, and 79km is Class-II highway with subgrade width of 12.3m. After the completion of KKH-II, the travel time from Havelian to Thakot will be reduced from 4 to 1.5 hours.

Peshawar-Karachi Motorway, also known as PKM project, starts from Karachi,passing through Lahore, and ends at Peshawar. The PKM (Sukkur-Multan section) is 392km long and 31.25m wide. It is a 6-lane access controlled Intelligent Transportation System (ITS) motorway funded by China’s EXIM Bank. It is the largest project under the CPEC framework.

ML1 is another mega project agreed at the JCC meeting. In May 2015, the National Railway Administration of China and Ministry of Railways of Pakistan signed a Framework Agreement on joint feasibility study of upgrading ML-1 and establishment of Havelian dry port. The feasibility study was funded by the Pakistani government. Until now, preliminary design of phase I has been completed. In May 2017, the framework agreement on up gradation of ML-1 and establishment of Havelian dry port was signed between the NDRC and Ministry of Planning. Both sides are engaged in negotiations of technical and financial terms of the project. The completion of this project will provide convenient and low-cost transportation for cargo and passengers benefiting 70% of the population of Pakistan along the ML-1.

China-Pakistan cross-border optical fiber cable project is an early harvest project under CPEC, with a total amount of USD 44 million. It runs from Rawalpindi to Khunjrab. It includes 820 km cable laying, 9 sites civil work, equipment installation and commissioning in the equipment room, as well as the backup of microwave links. The working environment is harsh, in particular that there is an altitude of 4500m near Chinese-Pakistan boarder.

C. Gwadar Port

According to an agreement between China Overseas Ports Holding Company (COPHC), Gwadar Port Authority (GPA) and Singapore Port Authority in 2013, the development and operation of Gwadar Free Zone was handed over to the COPHC. Up to now, COPHC has invested 250 million USD in the port renovation. 5 new quay cranes, a 100,000 M2 storage yard, a seawater desalination plant with capacity of 220,000-gallon pure water/day, 2 sets of sewage disposal systems and cargo handling equipment have been installed and 80,000 M2 green space has been added to the port area. 400,000 tons of cargoes have been handled by Gwadar Port in 2017.

The Gwadar Free Zone is located in the northern part of Gwadar, about 7km away from the port. The planned development period is from 2015 to 2030, and is divided into four phases. The 923-hectare Free Zone includes an initial area (25 hectares) and the northern area (898 hectares). The initial area is located in the west of the existing port. Its main purpose is to play a pilot role in setting up industries, and to increase cargo capacity for the port. The construction of the initial area includes a few projects: infrastructure, business center, trade exhibition hall, cold storage, warehouse. By January of 2018, all those constructions have been completed. The Gwadar Free Zone was inaugurated and the first International Expo was held in January, 2018.

Around 30 companies have invested in the Free Zone, with direct investment of about $474 million. With the construction of the free zone, the city of Gwadar will become a commercial hub of the region in the near future.

The project of Gwadar East Bay Expressway was agreed by China and Pakistan during President Xi Jinping’s visit to Pakistan in 2015. The EPC contract of the project was signed in September and the construction was started in November 2017. The construction period of the project is 36 months with the designed speed of 100 kilometers per hour, which is implemented by the China Communications and Construction Company (CCCC). After inauguration, the project will become the main channel for the cargo distribution of Gwadar Port and a vital communication line to connect the Free Zone in southern and northern areas of Gwadar.

D. Industry cooperation

The federal government of Pakistan and each province have attached paramount importance to industrial development and the construction of SEZs. The work has been in progress with the joint efforts of both sides.

In November 2015, Pakistan proposed to set up industrial cooperation working group under JCC, claiming that Pakistan has advantages such as adequate labour force and huge market potential to develop manufacturing. China agreed to strengthen cooperation in the following industries: steel, cement, automobile, construction materials, home appliances, textile, light industry and apparel, etc.

In March and April 2016, Pakistan had sent two delegations to China for studying China’s best practice in SEZ development. In November 2016, the two side established the joint working group and held the 1st meeting on industrial cooperation, during which the two sides agreed to work out the mechanism, key areas of cooperation and key projects. Later on, in the 6th JCC Meeting in the same month, Pakistan had submitted a list of 9 SEZs to China.

From 2017 to 2018, China’s expert panel had 3 successive on-site visits to 9 proposed SEZs, trying to make a comprehensive analysis and proposal on the strategy of industrial development for Pakistan. Through interactions with provincial governments, business associations and enterprises, the expert panel understood their demands in local development. The Chinese experts group suggested that the development strategy of each industrial park under CPEC project must be combined with the economic foundation and actual conditions in the locality, with distinctive features and differentiated approaches. The Chinese expert panel had also sent BOI its appraisals of the feasibility studies of 6 SEZs, while the rest 3 are to be submitted.

In early 2018, Pakistani Government had instructed BOI to formulate more accurately-targeted and more favorable policies on top of current preferential policies for two to three SEZs that were to be listed as key projects under CPEC. The two sides are negotiating details on the implementation of the Rashakai SEZ, which will be inaugurated as early as the first quarter of 2019. During the 8th JCC meeting in Beijing, the NDRC and BOI signed the MOU on industry cooperation, which will facilitate the cooperation in this regard.

Formulating and implementing preferential policies are a complex and systematic process which involves multiple ministries and institutions both at national and regional level. Chinese side suggests that Pakistani side should review relevant policies in a systematic manner to put forward trial or temporary institutional documents that will ensure immediate implementation of the policies. During the implementation, timely revision is required in the event of new situations to ensure the coherence, sustainability and feasibility of each preferential policy.

IV. Job creation and social responsibility

Localization is the principle that China adheres to in CPEC. According to the preliminary statistics, CPEC projects have created more than 75,000 direct job opportunities for Pakistani people. In order to promote economic development and employment of Pakistan, Chinese companies also subcontract a large number of projects to local Pakistani companies. This also develops relevant upstream and downstream industries, such as raw material processing, catering industry which also provide more employment opportunities for local people.

According to a report by Deloitte in 2017, CPEC will create 700,000 jobs for Pakistan from 2015 to 2030. A recent study by CPEC Centre of Excellence, Ministry of Planning, Development and Reform of Pakistan showed that CPEC could help create 1.2 million jobs under its presently agreed project.

Chinese companies have engaged themselves in three areas to fulfill their social responsibilities in collaboration with the Chinese Government. First is vocational training and education. During the 8th JCC, both side held the first social economic joint working group meeting. The Chinese side has proposed to conduct social cooperation on agriculture, education, medical care, poverty alleviation, water supply, vocational training.

The Chinese companies shared advanced techniques and successful experience to help Pakistan transform its human resources into advantages. The Chinese companies have sponsored thousands Pakistani students to study in China with scholarships and sent hundreds of Pakistani engineers and professionals to China for training. Chinese universities have set up two vocational training centers with local universities in Lahore and Quetta.

China Fund for Peace and Development (CFPD) has built the Faqeer primary school in Gwadar, which is known as “Chinese Pakistan Friendship school”. The School was completed and put into use in September 2016, accommodating 500 students, more than double of its designed capacity. Since the operation of the school, the Chinese company has donated books, bags, stationery, uniforms and 3 school buses for the students. The Chinese Embassy has also made donations to the school.

Second is medical care. A 500m²CPEC emergency medical center was set up in Gwadar port in May, 2017. It was donated and run by the Chinese Red Cross Foundation with a top class Chinese medical team working there, providing local residents with necessary first aid treatment and free medical examinations for local primary school students. Many Chinese companies have also donated medicine to residents near the project, and provided free medical examinations to the local people.

Third is mini projects for uplifting the living standards of poor people across different parts of Pakistan. Chinese companies are actively exerting their own advantages to build bridges and drill wells for residents to help them solve water and travel problems.

V. CPEC Long-Term Plan

In line with the consensus reached between leaders, relevant ministries and departments of both countries have set up a cooperation mechanism to coordinate the development of CPEC and jointly formulated the Long-Term Plan for China-Pakistan Economic Corridor (2017-2030).

China and Pakistan signed the Long-Term Plan at the 7th JCC after obtaining consent of both federal government and all the Pakistani provincial government. The plan provided the macro guidance for implementation of CPEC in the next phase, and could be adjusted based on the real situation as well as the consensus between the two parties during its implementation in the future. The Long-term Plan has made planning and design for CPEC’s next step in the areas of connectivity, energy, trade and industrial parks, agricultural, poverty alleviation, tourism, people’s livelihood and finance. This plan is effective till 2030, the short-term projects included will be considered up to 2020; medium-term projects up to 2025; and long-term projects up to 2030. It was made public by the two governments after it was signed.

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.

Govt introduces policy measures to boost agriculture sector under CPEC

The ministry of national food security and research has evolved comprehensive policy measures to work for development of agriculture sector under China Pakistan Economic Corridor (CPEC) to boost exports of agricultural products, enhance per acre yield of major crops, and produce high-tech value added products of international standards.
The measures are part of first ever “National Food Security Policy” announced by the ministry last week.
Under the policy measures, the ministry will prepare feasibility reports of trad-able commodities for each sub zone along the corridor, and will do pilot testing of rural businesses for the identified commodities and coordination for development of business zones along the corridor.
The government will also arrange a series of training programs aimed at capacity building of rural entrepreneurs and agricultural service providers.
Similarly, innovations for quality production, post harvest handling and processing will be introduced and investment portfolios will also be developed for public private partnerships to promote rural businesses.
Business models will be developed to promote value added agriculture all along CPEC route whereas special focus would be given on modern production and market infrastructure development for grain and fruit crops, fisheries, livestock and livestock products. China is second largest importer in the world with overall imports of $1966 billion including food imports worth of over $100 billion. Pakistan’s share in Chinese imports is only $2.93 billion while in food imports, the Pakistani share is only around 1 percent. China-Pakistan economic corridor (CPEC) has provided an opportunity to increase trade on the principles of complimentary advantages and mutual benefits. According to official sources, the key areas for agricultural economic and technical cooperation between China and Pakistan will be determined by fully considering the comparative advantage and cooperation needs. There will be an opportunity to produce high-tech value added agricultural produces at international standards for different potential markets. The commodities that can be potentially exported to China include cereals, dairy eggs, honey, live animals, tobacco, meat, sea more than 40 commodities identified across the corridor for promoting rural businesses through developing entrepreneurship, processing zones, skilled manpower and modern market infrastructure. The corridor crosses through the nine agro-ecologies. —APP


PCJCCI identifies potential sectors for Pak-China joint ventures

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

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

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

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

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


Under CPEC: First container vessel anchors at Gwadar


The first ever container vessel MS TIGER under the China Pakistan Economic Corridor (CPEC) project arrived at the Gwadar port on Wednesday, this vessel was escorted to the port by the navy ships, PNS DEHSHAT and KARAR where an impressive ceremony was held to welcome the ship onboard.

The new ship container service called the Karachi-Gwadar Gulf Express will connect the Gwadar port to the Middle Eastern hub of Jebel Ali as well as the neighboring Emirati ports.

PM to visit Gwadar amid concerns over anti-CPEC propaganda

CPEC is a game changer for Pakistan and its success is just a prelude to the economic prosperity of the country and hence has taken central stage in the economic, political and security calculus of not only Pakistan but the entire region”, said Commander Coast of Pakistan Navy, Rear Admiral Moazzam Ilyas while speaking at the reception ceremony.

He also said that considering the importance of the Gwadar Port as focal point of CPEC, its security is paramount. For this purpose, the Pakistan navy has raised Task Force 88 to provide maximum defence to the port and its surrounding areas.


China’s parliament puts Xi on course to rule for life


China’s Xi Jinping on Sunday secured a path to rule indefinitely as parliament abolished presidential term limits, handing him almost total authority to pursue a vision of transforming the nation into an economic and military superpower.

The move reverses the era of “collective” leadership and orderly succession that was promoted by late paramount leader Deng Xiaoping to ensure stability following the turbulent one-man rule of Communist China’s founder Mao Zedong.

The historic constitutional amendment breezed through the rubber-stamp parliament with 2,958 in favour, two against and three abstentions despite an unusual bout of online criticism that censors have scrambled to extinguish.

China’s supreme leader: Is extending Xi Jinping return to dictatorship?

Xi stood up first at the imposing Great Hall of the People in Beijing to cast his paper ballot in a red box, as delegates of the National People’s Congress applauded after each vote on the constitutional amendment to lift the two five-year term limit for the presidency.

The first constitutional amendment in 14 years had been expected to breeze through the legislature, which has never rejected a Communist Party diktat in its half-century of existence.

“This is the urgent wish of the common people,” Ju Xiuqin, a delegate from northeastern Heilongjiang province, told AFP, echoing party claims that the amendment had the unanimous support of “the masses”.

With little suspense, Xi to secure lifetime presidency

Xi, 64, has consolidated power since 2012 when he was appointed to the country’s top office: general secretary of the Communist Party.

While the position has no term limits, his two predecessors both gave it up after two terms as part of an orderly process established by Deng.

The country’s presidency is a largely ceremonial office, but the constitutional limits meant Xi would have had to give it up in 2023.

But with the new amendments, he could now have a lifetime to push his goal of turning China into global economic powerhouse with a “world-class” military by mid-century.

His rise has been accompanied by tighter restrictions on civil society, with the detention of activists and lawyers, and stricter limits on the already heavily controlled internet.

At the same time, he gained a measure of popularity among Chinese people through a relentless crackdown on corruption that has punished more than a million party officials, and sidelined potential rivals.

“I think that during the past five years, he has been carrying out a soft coup, including making the Politburo a mere figurehead,” Chinese political commentator Wu Qiang told AFP, referring to the 25-member Communist Party body one level under the ruling council.

CPEC is not just for Pakistan: Chinese newspaper

“He wants to prevent power from falling into the hands of technocrats like Jiang (Zemin) and Hu (Jintao),” Wu said, referring to Xi’s two predecessors.

While attention has focused on the term limits, the amendments also include major provisions that will engrave Xi’s eponymous political mantra in the constitution and hand the Communist Party an even larger role in the country’s affairs.

In a written report, the head of the parliament’s Standing Committee, Zhang Dejiang, said the amendments “will ensure the constitution improves and develops in step with the times and provide a firm constitutional guarantee for upholding and developing socialism with Chinese characteristics in the new era”.

The Communist Party says the move merely aligns the presidency with the limit-free titles of party secretary and military chief, claiming “the masses” unanimously called for the removal of term limits.

But the proposal was kept secret until it was revealed in a state media report on February 25, a week before the legislature’s opening session.

The party later disclosed that Xi had presided over a meeting of the Politburo in September during which the leadership decided to revise the constitution.

The party then sought proposals and opinions, culminating in a decision in late January to introduce constitutional amendments at the NPC.

“Xi Jinping has presided over so many important projects such as economic reforms and the fight against corruption. There was a consensus that we supported him having more time to finish his work,” said Dou Yanli, a delegate from eastern Shandong province.

The surprise move triggered a backlash online, prompting censors to block phrases and words such as “I disagree” and “emperor” and the image of Winnie the Pooh, the cartoon bear to which Xi has been compared.

Activists fear that removing term limits may lead to a further tightening of already strict controls on media, civil society and religion, as Xi tries to impose his highly ideological vision of socialism on every aspect of society.

Beijing-based activist Hu Jia, who says authorities forced him to leave the capital during the congress, called the amendment “illegal”.

“Xi asked all people to obey the constitution, and then used the amendment to place himself above it. He used the constitution as the ultimate legal weapon that binds officials and all citizens.”


CPEC is now connected with Central Asia by road network while bypassing Afghanistan

Bishkek, Kyrgyzstan: Central Asian cargo traffic will now link with Gwadar Port of Pakistan which is the flagship port of One-Belt-One Road (OBOR) project of China through China Pakistan Economic Corridor (CPEC), reports Dispatch News Desk News (DND) News Agency.

According to details, Central Asian cargo traffic will have access to Gwadar Port of Pakistan through Kashgar while bypassing Afghanistan as Uzbekistan is sending its first cargo shipment loaded on trucks to China through Kyrgyzstan,

CPEC route was already link with Tajikistan through Kashgar and Pakistan and China did dry run of CPEC last year from Gwadar Port to Kashgar.

Uzbekistan is sending its first convoy with an export cargo along the new transport corridor which is “Tashkent – Andijan – Osh – Irkeshtam – Kashgar route”.

Pakistan is linked now with Central Asia while bypassing Afghanistan
Pakistan is linked now with Central Asia while bypassing Afghanistan

The emergence of a new transport corridor between Uzbekistan, Kyrgyzstan and China was initiated by President Shavkat Mirzieev in May 2017. In October, a pilot car rally was launched with the participation of trucks from Uzbekistan, Kyrgyzstan and China.

The products of exporters of Uzbekistan and neighboring countries will be delivered to the consignees by vehicles of the joint venture. Upon arrival at the final delivery point, the city of Kashgar, the column will depart on the return route already with the imported products.

Islamabad Bureau adds:

“Physically, Pakistan is now directly linked with Kyrgyzstan, Tajikistan and Uzbekistan through two routes diverting at Kashgar (Kashi) while Kyrgyzstan and Uzbekistan are already linked with Kazakhstan through roads and railways”, said Agha Iqrar Haroon who is a Development Observer working in the region of Central Asia.

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The distance of a total length of 920 kilometers will be covered in 31 hours in total with 15 hours of rest time for trucks and 16 hours of run.

It is pertinent to mention that CPEC is a flagship project of China’s “One Belt One Road” (OBOR) initiative. OBOR will be critical bridge that will connect China with its neighbours in Central Asia and South Asia but will go as far as Middle East and Africa.

By linking China with the Arabian Sea and the Persian Gulf through Pakistan, CPEC will expand trade potential and enhance energy and security presence of China not only in the region but as far as Africa through Gwadar Port of Pakistan.

CPEC can be considered as a package that will boost Chinese, Central Asian and Pakistani economies by providing transport and energy: roads, bridges, gas pipelines, ports, railways, energy plants to Pakistan and a deep regional security mechanism to China while overseeing and manage safekeeping of Chinese assets.

Proposed by Chinese President Xi in 2013, the “One Belt One Road” (OBOR) initiative (program) is an estimated $5 trillion infrastructure spreading over 60-plus countries across Asia, the Middle East, Europe and Africa.

Chinese President considers this initiative as a “project of the century” and a biggest narrative that China is setting as an example in globalization by filling the gaps left by the US policy makers.

The “One Belt” part of it refers to the Silk Road Economic Belt while the “One Road” refers to the 21st-century Maritime Silk Road— a revival of the ancient Silk Road trading routes.


Pakistan’s development by-product of China’s global integration


China has undertaken the One Belt-One Road (OBOR), which is the path for increased connectivity through diplomacy, trade and economic cooperation. While global trade talks have stagnated, China seeks new trade routes and refurbishes old ones, helping developing countries restore physical and human infrastructure.

In this emerging dynamics of a post-globalisation world, China is the adhesive that is resuscitating ancient trade routes, including more countries and regions, honing each country’s comparative advantage, promoting mutual interests, and setting an example for cooperation.

Joseph Nye’s concept of ‘soft power’ is most applicable to China today – winning hearts and minds, people and communities through an interwoven route, the Silk Road. Pakistan has embraced the historic Initiative wholeheartedly. The China-Pakistan Economic Corridor (CPEC) is an unprecedented package of co-operation and development.

It is reshaping the geo-economic landscape and will prove to be a game-changer not only for Pakistan but the entire region. Never have investments through a bilateral cooperation framework been done with such speed and effectiveness.

Central and South Asia: Big nations in tussle to develop long economic corridors

Pakistan’s industrial sector

CPEC provides the industrial sector of Pakistan with an opportunity to modernise and become more efficient and competitive. Various energy projects, coupled with improvements in infrastructure and road networks, would help address some of the key constraints to growth.

More importantly, the development of Special Economic Zones (SEZs) would enable industries to smoothen supply chains, enhance collaboration and innovation capabilities, and help reap significant economies of scale.

However, this process will take time to materialise, and the nature of its trajectory would depend, at least in a short to medium term, on two main factors: 1. how the industrial transformation currently under way in China creates potential opportunities for Pakistan; and (2) how prepared Pakistan’s economy is to take advantage of this opportunity.

Industrial transformation in China

After experiencing rapid economic growth over the last three decades, China has been moving towards a new phase of development. The overall policy direction for this transformation stems from the 13th five-year plan (2016-2020), which was adopted by the Chinese government in March 2016.

The plan acts as a guiding principle to all ministries, industries and local governments in formulating their policy goals and development initiatives to complement this new growth paradigm.

The path for industrial modernisation, meanwhile, draws its inspiration from ‘Made in China 2025’ – a master plan adopted in May 2015 to turn China into one of the most competitive manufacturing powerhouses. The objectives are multi-fold, with a focus on emerging and existing industries as well as on quality improvement and brand development. To summarise:

  1. a) It aims to accelerate the development of new manufacturing and information technologies. Increased focus on provision of services, meanwhile, highlights another departure from the traditional industrial structure, and would require concentrated research and innovation efforts.
  2. b) On parallel terms, there is a comprehensive roadmap designed to transform and upgrade existing Chinese industries with a clear objective of moving away from mass production of low-end products towards narrow-based, specialised commodities.
  3. c) By narrowing production and focusing on luxury and specialised commodities, the industries would be trading economies of scale for higher marginal returns. Moreover, concentrating on value addition would give a boost to the process of brand development that China is striving for in order to break into the high-end market. Lastly, this change of strategy would aid in addressing the overcapacity problems that some industries (such as steel and coal) are experiencing at the moment.
  4. d) Furthermore, the plan highlights the importance of a reduction in the level of dependence on foreign industries for raw materials, services and other products. The plan sets targets to overcome such dependencies. For instance, it advises to increase the share of domestically produced core components and materials to 40% in 2020 and to 75% beyond that.
  5. e) Finally, the ‘one child’ policy in China has meant that parents have investment significantly in the education of their children. Consequently, there are very limited number of new Chinese entrants in labour intensive industry, causing relocation of such industries into youth rich countries such as Pakistan.

All this would result in a concentrated, specialised and vertically integrated industrial sector that would prioritise application of technology and brand development in order to achieve competitive advantage in high-end and smart manufacturing.

Mergers and acquisitions would be encouraged where certain inefficient firms still show potential; meanwhile, segments of the sector deemed either technologically out-of-date or incompatible with the new growth model would face liquidations, technology transfers and relocations in order to achieve ‘better asset utilisation’.

On the economic front, these advancements are being supported by three major changes that have started to affect the Chinese economy: a shift from investment fueled growth towards consumption-orientation; increased focus on technological enhancement; and a struggle to bring forth the ‘Green Revolution’.

How to maximise returns from these opportunities?

Pakistan not only has an edge over possible competitors when it comes to attracting technology transfers due to geographical proximity and a policy of strategic alliance, but with CPEC an actualising step towards the OBOR initiative, it also shows closer compatibility with China’s new growth model.

Furthermore, the ongoing construction of numerous coal-based power plants throughout Pakistan to ensure consistent electricity provision and the establishment of special task forces to protect CPEC-related ventures are reducing the major binding constraints to growth and FDI inflows.

Pakistan is arterial to Asia, South Asia and Central Asia

Efforts are also needed to align the objectives of federal and provincial government bodies in order to ensure a consistent and comprehensive support policy. The example at hand is the investment policy, which is now a provincial matter after the 18th Amendment, whereas the federal government is leading all industrial initiatives under the CPEC.

Dr M Amanullah is chief economist and Muhammad Usman Khan is an adviser in the Planning and Development Department, Punjab