CPEC projects – Central News Hub

‘Pakistan in CPEC Debt Trap, China Holds the Key’

Pakistan’s senior officials emphasized that simply seeking loans from international organizations is insufficient; instead, Pakistan must devise a strategy to repay the debts incurred through CPEC extensions…reports Asian Lite News

Pakistan’s struggling economy and current monetary policies have left the nation unable to repay loans and fulfill commitments related to Independent Power Producer (IPP) projects initiated under the China-Pakistan Economic Corridor (CPEC).

The administration has always turned a blind eye towards the matter, stated Kamran Khan the President and Editor-in-Chief for the Dunya Media Group, a prominent news organization in Pakistan.

In a debate session with Khalid Mansoor the Former Special Assistant to the Prime Minister of Pakistan on CPEC and Shabbar Zaidi the Former Chairman, the Federal Board of Revenue (FBR) mentioned Pakistan is now locked in a CPEC debt trap, and only China has the key to set us free. Today, Pakistan’s IPPs under the CPEC offer a classic example of a debt trap. According to his statement during the Dunya news debate, “The creditor country extends excessive credit to a debtor country with the intention of extracting economic or political concessions when the debtor country becomes unable to meet its repayment obligations. The conditions of the loans are often not publicized. The borrowed money commonly pays for contractors and materials sourced from the creditor country.”

China-Pakistan.

His statement also mentioned that “Highly over-invoiced, non-competitive CPEC power projects, with a promised minimum of 17 per cent dollarized profits, have delivered the world’s most expensive electricity to Pakistani people and industries. Capacity payments and 3.5 per cent plus London Interbank Offer Rate loan terms have turned Pakistan’s debt burden into a full-fledged national security crisis. And now classic outcome of an intelligently laid debt trap: Pakistan just can’t pay the financial charges and now China has a critical say in our economic destiny.”

He said that merely asking for a loan from international bodies is not enough, Pakistan needs to find a way by which Pakistan can pay back the debt extended by CPEC.

In the debate, he questioned Mansoor, “Why did we not enquire that the loans that we are getting from China are on the market price and not over invoiced, and was Pakistan capable of paying the questioned loans back when they were offered?”

Answering the same, Mansoor said “We did not make any adequate policies for China separately, as making policies is the job of the government. We were supposed to get investment to set up industries, if these industries had been set up it could have enabled us to pay back the loan. But all this did not happen”

Taking the same issue even further, Shabbar Zaidi the Former Chairman of FBR said “Since day one I have been the person who has raised questions over the financial viability of CPEC. I have been the one person in Pakistan who has always said that the proposed Special Economic Zones cannot be developed and the strategy behind CPEC is wrong, and our country will not be able to return loans at 17 per cent return. And I always have shown my confidence the transfer pricing designed by Pakistan is wrong”.

Zaidi also added, “Tell me a single CPEC plant that has maintained proper operations in Pakistan and we have verified the entity’s supply”. He also added that the loans and projects offered under the CPEC are not a Foreign Direct Investment (FDI) but a bond that has to be paid back to China which Pakistan in its current economic conditions cannot fulfil in any way. (ANI)

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SPECIAL: Is Pakistan a killing field for Chinese nationals?

Pakistan has become a killing field for Chinese nationals and no amount of their security is fool proof that Beijing wants it to be. Rather incidents of attack on Chinese nationals have increased with the noticeable rise in anti-China feelings in Pakistan’s Sindh, Balochistan, Pakhtunkhwa provinces and also in Pakistan-occupied Kashmir region in the recent past … writes Dr Sakariya Kareem

After three Chinese language teachers and their Pakistan driver were killed in a suicide bombing outside the Karachi University in April this year, Beijing issued a stern warning: “The blood of the Chinese cannot be shed in vain, and those behind this incident will surely pay the price.” The Pakistan government, under China’s pressure, maintained that the security of Chinese residents would be ensured in every manner.

But in Pakistan, which is drowned in huge debt and flood while being hobbled with ramshackle political governance, the gap between pledge and ground reality seems to have widened further. An unidentified assailant killed a Chinese national and injured two others in the middle of Pakistan’s Karachi town on September 28. Since 2016, when Beijing launched the China-Pakistan Economic Corridor (CPEC), this was the 10^th attack on Chinese nationals and interests in Pakistan. In Karachi alone, this was the second attack on Chinese nationals since the Shehbaz Sharif government came into power.

Indications are clear: Pakistan has become a killing field for Chinese nationals and no amount of their security is foolproof as Beijing wants it to be. Rather incidents of attack on Chinese nationals have increased with the noticeable rise in anti-China feelings in Pakistan’s Sindh, Balochistan, and Pakhtunkhwa provinces and also in the Pakistan-occupied Kashmir region in the recent past.

This year on January 17, a massive anti-China protest rally was organised by political activists and people in Pakistan’s Sind province’s Sann town on the 118^th birth anniversary of veteran Sindh nationalist leader G M Syed. While raising pro-freedom slogans, the protestors at the rally condemned China for exploiting their resources.

In July 2020, a huge protest erupted in Muzaffarabad of Pakistan-occupied Kashmir against China, condemning it for the illegal construction of Neelum Jhelum and Kohala Hydropower stations. The protestors highlighted the environmental impacts of dams constructed by China under the CPEC initiative.

In November 18, 2020, thousands of Pakistani labourers staged a protest against China in Karachi, complaining about unequal wages received by them as compared to Chinese workers involved in CPEC projects.

Last year in August, people burned tires, chanted slogans, and shut down Pakistan’s port city of Gwadar, protesting against China’s illegal fishing in nearby waters and the CPEC project which is a part of President Xi Jinping’s Belt and Road Initiative, stretching across 70 countries in the world.

Gwadar Port is an integral part of the multi-billion CPEC project and as per ‘The Guardian’, Pakistan surrendered it to a Chinese-backed multinational corporation for a lease of 40 years. It has given a fillip to the insurgency in Balochistan with separatist groups carrying out attacks on Chinese nationals and CPEC projects.

Nine Chinese workers were killed in July last year when a vehicle laden with explosives and driven by a suicide attacker rammed the bus in which they were travelling towards the Dasu Hydropower project in the Upper Kohistan area of Pakistan’s Khyber Pakhtunkhwa province. The Tehreek-i-Taliban Pakistan (TTP) claimed responsibility for the blast. Pakistan had to pay millions in compensation to the family of the Chinese workers killed.

China’s ambassador to Pakistan, Nong Rong escaped unhurt, yet five people were killed and 12 others injured when a suicide bomb attack was carried out at a luxury hotel in Pakistan’s Quetta in April 2021. Earlier, the Chinese Consulate in Karachi was attacked by the Baloch Liberation Army in November 2018. It was the second attack on Chinese interests in that year after a bus carrying Chinese engineers was targeted by suicide bombers in Baluchistan’s Dalbandin city in August 2018. Three Chinese nationals were injured in that suicide bomb attack.

In 2017, an outfit called ‘Majeed Brigade’ attacked a five-star hotel in Gwadar when the Chinese delegation was busy planning for a port project. Eight people were killed in that attack. In the same year, a video on Twitter and other social media surfaced in which a purported member of the ‘Majeed Brigade’ is heard warning Chinese President Xi Jinping to “get out of Balochistan.” Earlier in May 2017, the couple Li Zang Hing and Ming Leassi Ha were kidnapped from Quetta and were later killed. The Islamic State had claimed responsibility for killing the Chinese couple who were said to be teachers at a language centre in Quetta.

Records suggest that in the last six years, especially after Chinese men landed in hordes in Pakistan in connection with CPEC projects, different extremist groups have made Chinese interests targets of their attacks inside the country. On May 6, 2016, the foundation of the CPEC initiative was laid in Sukkur city in Pakistan’s Sindh province with the beginning of the construction of a section of highway between Sukkur and the city of Multan. A few days later, China experienced its first shock when a Chinese worker and his driver were wounded in a bomb attack in Sindh province on May 30.

A detailed analysis of attacks will reveal that Chinese nationals’ presence on Pakistani soil was unacceptable to people in the country from the beginning of the launch of the CPEC project. Yet China has never criticised the Pakistani government or its law enforcement agencies for their failure to stop the attacks on Chinese nationals. This is surprising for foreign watchers across the world.