The findings reveal that no industrial growth has taken place in Pakistan due to its proximity to the CPEC project….reports Asian Lite News
It’s been almost a decade since China launched the much-hyped China-Pakistan Economic Corridor (CPEC), but the infrastructure project has failed to offshoot considerable economic growth in cash-strapped Pakistan.
A report by DW highlighted the assessments of several experts who have concluded that CPEC’s outcomes in Pakistan have fallen short of expectations
Azeem Khalid, a Pakistan-China relations scholar at COMSATS University Islamabad told DW, “The overpromising and underdelivering have remained a crucial factor, coupled with inherent capacity issues, and instability on the political and security fronts”.
Khalid said that he believes the tangible benefits of CPEC for the Pakistani people have been limited, while the burden of public debt and payments to Chinese companies has surged.
“It is safe to assert that the hype surrounding CPEC was more a product of propaganda than a reflection of reality. China, aided by elements within Pakistan’s media and academia, vigorously marketed the project, leading to inflated expectations,” he told DW.
The multi-billion dollar CPEC project pledges huge Chinese investment into developing rail and road links as it is intended to ship Chinese goods via the Xinjiang region across the mountain border through Pakistan and into the Arabian Sea at Gwadar Port.
Michael Kugelman, a South Asia expert at the Washington-based Woodrow Wilson International Center for Scholars told DW that the CPEC slowdown can be attributed to both economic and security factors. Pakistan’s worsening economic crisis, and China’s own recent slowdown, have dampened prospects for new projects.
A video report by VOA News also emphasized on the reasons behind no major impact on Pakistan’s economic growth because of the CPEC project.
The findings reveal that no industrial growth has taken place in Pakistan due to its proximity to the CPEC project.
Ammar Habib Khan, an economist told VOA, “The objective of CPEC was essentially improving infrastructure and connectivity that could result in higher exports but did not expect industrial growth to happened”.
Red tape, political turmoil and security risks in Pakistan plus the COVID-19 pandemic pushed Chinese investors away. The report said that these factors also delayed Phase II of the CPEC project.
So far, four out of 13 Special Economic Zones planned under CPEC have seen any development.
Ammar Habib Khan said, “The scale at which the Chinese require infrastructure that doesn’t exist in Pakistan due to which SEZs have not been able to take off as of yet. And concerns are they will not be able to take-off in the next few years.”
China is also concerned about security threats to BRI projects which could jeopardize new investment projects in Pakistan. (ANI)
Experts say that China is getting tired of Pakistani lethargy in supporting timely completion of CPEC projects, writes Mohammed Anas
By briskly appointing an ambassador to Kabul, China has emitted that it is planning to reconfigure its ambitious Belt and Road Initiative projects. There are signals that China may focus more on the Afghanistan-Iran leg of its projects as “delays” are plaguing the China-Pakistan Economic Corridor (CPEC) due to a dysfunctional Pakistani government.
On Wednesday, the Taliban-led foreign ministry said that Prime Minister Mohammad Hassan Akhund had accepted Ambassador Zhao Xing’s credentials at a ceremony in the Afghan capital.
Beijing did not immediately signal if Zhao’s appointment could lead to a formal recognition of the Taliban government. In any case, it is unlikely that China would go that far, as there appears to be a consensus among various external stakeholders that Taliban should first form an inclusive government before formal recognition can be considered.
China in Afghanistan
No government has formally recognised the Taliban since they seized power from a US-backed government in August 2021 when all American-led NATO troops withdrew after nearly 20 years of involvement in the Afghan war.
Only Pakistan and the European Union have their top diplomats in Kabul in the capacity of charge d’affaires. Overall, India, Iran, Pakistan, Qatar, Russia, the UAE and Uzbekistan are among the countries that have kept or reopened their diplomatic missions in Afghanistan since the Taliban takeover.
Ahead of appointing its ambassador, Beijing has taken steps to help the Taliban stabilise the Afghan economy and deal with a dire humanitarian crisis. Western nations suspended all financial aid and imposed economic sanctions on the new Kabul rulers after departing the country. Chinese investors have signed significant agreements with Kabul in the Afghan mining and oil sectors.
Analysts say China’s security concerns are driving its increased diplomatic engagement with the Taliban to prevent the conflict-torn country from sliding into chaos again.
“China is interested in Afghanistan’s security and the potential development of terror groups in its immediate neighborhood,” said Torek Farhadi, a senior regional analyst and former Afghan official. “This is why next to the new ambassador, the Chinese military attaché is seated,” he said, referring to the photo the Taliban official released after the meeting with Zhao.
But senior Pakistani journalist Haroon Rashid says that the Chinese are getting tired of Pakistani lethargy in supporting timely completion of CPEC projects. “Chinese have realised that if they get late on CPEC projects and in the meanwhile the India-Middle East-Europe project gets on track, they will miss the bus. They are ready to take the risk with the Taliban and then convince Iran to take their BRI forward,” said Rashid.
He added that Chinese have not interacted with the Interim Pakistan government significantly since it came to power and it says a lot about their trust on the present Pakistani regime. “Plus, Arab countries like Saudi, UAE and Qatar have already bid for several Pakistani properties like major airports and other installations. We know that Americans are in full cahoots with these Arab nations. It is also driving Chinese away from Pakistani rulers,” he said.
Chinese Vice Premier He Lifeng, the special representative of Chinese President Xi Jinping, attends the Decade of China-Pakistan Economic Corridor (CPEC) celebration event in Islamabad, Pakistan, July 31, 2023. (Xinhua/Ahmad Kamal)
Afghanistan, unlike Pakistan, is China’s neighbour and thus it will be more convenient for China to manage any future project.
Meanwhile, some analysts also say that once the new Pakistani government will assume charge, it will work to implement the agreement to extend the China-Pakistan Economic Corridor (CPEC) to Afghanistan.
The lack of security in Pakistan and the resurgence of TTP (Tehreek-e-Taliban Pakistan) and other terrorist organisations in the region have prevented any movement for the CPEC being linked to Afghanistan.
China and Iran Partnership
More than China, the India-Middle East-Europe project has evoked sharp reactions in Iran. The Iranian media has described it as a US plot to get Israel recognized by Arabs and sideline Iran, China and Russia in the West Asian scheme of things. “The India-Middle East-Europe corridor will compete with China’s BRI project. The goal of this project is to connect India’s ports with the United Arab Emirates, Saudi Arabia, etc. by developing a large-scale rail network and then get access to Israel and Europe from there.
This is not only limited to economic matters, but by standing with Saudi Arabia and Iran, China has given a clear message that now its political position has also become strong in this region and the UAE and Saudi Arabia have also joined BRICS, which also includes India, China and Russia. America cannot afford such a situation,” wrote Tehran Times in one of its edit pieces.
Tehran Times compared US designs with that of the British Empire that following the fall of the Ottoman Empire shadowed the Arab region.
Persian newspaper Sobh-e-No commented that the planned project is to stymie the importance of Iran which is the heart of trade in the region. “US President Joe Biden is trying to achieve his three strategic goals with one plan; it means competing with China, bypassing Iran, and undermining its economic interests, as well as bringing Saudi Arabia closer to the Zionist regime of Israel. Some G20 countries, such as Saudi Arabia, while claiming diplomatic efforts to get closer to Iran, are promoting projects to bypass Iran,” it wrote.
A Delhi-based senior analyst told India narrative that the announcement of the economic corridor has generated intense angst in Iran and that no official has made any comment on it. He also admitted that once any progress will be made on the route, Tehran will provide more leeway to China that already plans to expedite its plethora of projects in the country.
According to other Persian newspapers like Kayhan, and news agencies Tasnim and ISNA, Iran should expedite projects with China and Russia and open alternative routes using the Suez Canal before Arabs succumb to US pressure to sink deep into the economic corridor.
One of the major Chinese projects in Iran is development of the East-West International Transport Corridor in the Maku Free Zone. “It has the capacity to create a framework for a powerful communication network from China to the Baltic and Scandinavian countries, and considering its geographical location, the Maku Free Zone actually plays the role of a four-way land in this route and in China’s One Road-One Belt Initiative (BRI),” said Hossein Garousi, head of the Maku Free Zone Organisation.
Iran’s ties with China — part of a broader shift toward the East — have strengthened particularly since the United States withdrew from the nuclear deal and reimposed sanctions on Tehran in 2018. China reportedly continued importing Iranian oil despite US sanctions. In 2021, the two countries signed a 25-year strategic agreement to strengthen economic and security cooperation.
“Iran is very important as a source of energy, but also as a provider of security in the region. In the future, Iran and China are going to be very closely interdependent,” Nasser Hadian, a professor of political science at the University of Tehran told the Iran Primer on the possibility of Iran-China relations getting a whip of the wind.
One more project that may grab attention in both Chinese and Iranian planning is the development and use of Chabahar port.
Located on the edge of the Indian Ocean, it is the only deep-sea port in Iran with direct ocean access. Its geographic proximity to countries such as Afghanistan, Pakistan, and India, as well as its status as a key transit center on the burgeoning International North-South Transport Corridor, gives it the potential to develop into one of the most important commercial hubs in the region.
Chabahar is also one of the few places in Iran that is exempt from US sanctions, which significantly simplifies trade procedures with other countries.
With India and China competing to invest in this harbor, Iran is trying to play the two rivals off each other to boost its own international standing. India and China have their own plans for Chabahar and bilateral relations with Iran. While the scope of Sino-Iranian interaction in Chabahar port remains limited at this point, evidence of intensified Chinese activity with Iran suggests that it is attempting to compete with India for greater influence in the region.
However, a Professor of Tehran University’s Academy of International Relations told India Narrative that it would not be in Iran’s interest and neither its diplomatic morals will allow it to shun India in favour of China as far as total control of Chabahar is concerned. “Iran needs both China and India to form a coalition against Western hegemony while seeking to affirm a more active role in Central Asian and Middle Eastern affairs. And given heightened Chinese and Indian investment in Chabahar, I don’t see any turning back on commitments. Besides, Iran is now a member of Shanghai Cooperation Organisation (SCO) and BRICS and thus is bound by more obligations. However, as we say, international relations are driven by national interests. So, let’s keep our fingers crossed.”
Baloch organisations say China is interested in building military ports at Jiwani and Sonmiani while the one at Gwadar is most likely to remain a part for commercial purposes, reports Rahul Kumar
So, how many ports is China building in Pakistan’s conflicted province Balochistan? Surprisingly, it could be as many as three and all in Pakistan’s poorest province of Balochistan.
For the world, it is the Gwadar port that is in the spotlight. However, Baloch organisations say China is interested in building military ports at Jiwani and Sonmiani while the one at Gwadar is most likely to remain a part for commercial purposes.
The Jiwani port lies barely 35 kms from the Iran border to Pakistan’s west while Sonmiani lies in the opposite direction as it is located in the Baloch industrial township of Hub, close to Karachi — one of the biggest commercial ports in Asia.
India Narrative speaks with Jamal Nasir Baloch, the head of Foreign Affairs department of the Free Baloch Movement (FBM) — a political party seeking to regain independence for a Baloch nation usurped by Pakistan in March 1948.
Baloch says: “China is keen to construct a naval base in Jiwani which is sandwiched between Iran and Gwadar, and also build a submarine base in Sonmiani in Balochistan near the commercial port of Karachi”. He adds that Gwadar, which has been speculated to be a military port for China in global eyes, is likely to remain a commercial port.
Islamabad had given away Gwadar to the Chinese State-owned China Overseas Port Holding Company (COPHC), the builder of the Gwadar port, under a 40-year lease in 2017. COPHC had been building the port under President Xi Jinping’s ambitious initiative to link China and Pakistan through a vast network of roads, railway, pipelines and power projects under the $62 billion China Pakistan Economic Corridor (CPEC).
Baloch says: “We believe that Gwadar port is for the benefit of China which wants to protect its energy interests by bypassing the Malacca Strait. Therefore, to be able to protect its energy and commercial interests in Gwadar, China wants two more — a naval base in Jiwani and a submarine base in Sonmiani”.
Both the ports will be on either side of the Gwadar port, lending it the security Beijing needs to secure its energy supplies from the Gulf region, just in case regional powers in South Asia and South-East Asia block the Malacca Strait with support from Western powers.
Baloch says that it was in 2018 that more than a dozen Chinese PLA officers met officers of the Pakistani Army in Jiwani. “China regularly sent batches of military officers to Jiwani and took soil samples as well”. The plans were to build a wall and cordon off the entire peninsula after relocating the local people from Jiwani.
Regarding China’s submarine base in Sonmiani, which lies to Pakistan’s east, Baloch says this lagoon is suitable for an underground submarine base as it offers added protection. “It is a naturally secure area”, he emphasises.
Sonmiani is also important because it is close to Balochistan’s industrial town of Hub and boasts of the Sonmiani flight test range from where Pakistan has been test-firing its nuclear-capable ballistic missiles.
Baloch adds that despite the initial research and travel by Chinese military officers, China stopped the construction in both Jiwani and Sonmiani after Beijing noticed a financially-strapped Islamabad slide towards the West.
“But we think that the stoppage of work on the ports is only temporary. China is waiting for stability to return to the Pakistani foreign policy so that it can reassure itself that Islamabad is tilting back towards Beijing. Thereafter it will begin work on the two military ports”, Baloch stresses.
The FBM activist says that the Baloch believe that the West will not be able to prevent Pakistan from gravitating towards China because most of the Pakistani Army officers, except the senior-most officers, hate the US. Another reason for his confidence is that China has been making efforts to bring Iran and Pakistan closer against the Baloch community — currently the only opposition to Chinese ports and CPEC investment.
With the Baloch community scattered on both sides of the border, called the Goldsmith Line, and maintaining close ties, the two nations are weary. Moreover, the Baloch armed groups have provided stout resistance to the Pakistani Army, killing dozens of soldiers in almost daily, and sometimes audacious, attacks.
Underscoring that all three ports are being built by China in Balochistan against a simmering local sentiment, Baloch says, “China has provided drones for attack, forensic support as well as surveillance tools to the Pakistani security forces against us. Just think, why is China investing so many billions in a place where there is no drinking water or power supply but ample hostility?”
(The content is being carried under an arrangement with indianarrative.com)
Chinese Vice Premier He Lifeng, the special representative of Chinese President Xi Jinping, attends the Decade of China-Pakistan Economic Corridor (CPEC) celebration event in Islamabad, Pakistan, July 31, 2023. He on Monday attended the Decade of CPEC celebration event in the Pakistani capital, during which he read President Xi's congratulatory letter and delivered a speech. (Xinhua/Ahmad Kamal)
Pakistan has little to rejoice after the visit of Chinese Vice Premier He Lifeng. Pakistan government’s declining capability and credibility in tackling internal security challenges is not reassuring for Chinese leadership. Signing of six minor deals in major areas of cooperation indicates China’s preference of remaining in game while being cautious at the same time
For some years now, Pakistan is seen braving many setbacks in its bilateral cooperation with China. Expecting much-needed impetus through the long-awaited visit to the country by Chinese President Xi Jinping, the Pakistani government continued updating its wish list. First announced in 2020, the high-profile visit kept on getting postponed on different pretexts since then. Finally, China granted a visit to Pakistan when its Vice Premier He Lifeng visited the country from July 30 to Aug 01, 2023.
Despite being ridiculed in domestic media, the government remained hopeful of the long-term impact of the visit on strategic ties with China. However, the outcomes of the ‘high-profile’ visit appear far off from strategic or long-term. Most of Pakistan’s expectations were tied to the China-Pakistan Economic Corridor (CPEC) which is considered the symbol of iron brotherly ties between the two countries. However, the clouds of security concerns and lack of political clarity proved to be too dark for increasing the cooperation in a meaningful manner. The absence of movement on various projects under CPEC over the last few years clearly indicates the effect of these two factors on expanding the sphere of cooperation.
Chinese Vice Premier He Lifeng, the special representative of Chinese President Xi Jinping, attends the Decade of China-Pakistan Economic Corridor (CPEC) celebration event in Islamabad, Pakistan. (Xinhua/Ahmad Kamal)
During the visit, He Lifeng held some important meetings with Pakistani leadership including Pak Prime Minister Shehbaz Sharif, President Arif Alvi, the Army Chief Gen. Asim Munir, Minister for Finance Ishaq Dar and Planning Minister Ahsan Iqbal. Apart from that, he also attended events commemorating a ‘Decade of CPEC’ and a ‘PLA Founding Day’ event at Pak Army Headquarters at Rawalpindi. Shehbaz Sharif thanked the Chinese leader for the recent Chinese financial help, which came at a very crucial time. However, a glimpse into the list of agreements signed during the visit does not look as if the iron brother ties have taken any leap. Overall, the two countries signed six pacts to enhance cooperation in diverse fields. These included agreements on joint cooperation committee of CPEC, the establishment of an expert exchange mechanism within CPEC, the upgradation of ML-1 railways, a feasibility study for realignment of the Karakoram Highway Phase II, MoU on the Industrial Workers’ Exchange Programme through diplomatic channels and export of dried chillies from Pakistan to China. The nature of these deals cannot be considered to be adding significant strategic value to the bilateral cooperation.
Moreover, the Pakistani government’s declining capability and credibility in tackling internal security challenges is not reassuring for the Chinese leadership. Signing only basic deals in major areas of cooperation indicates China’s preference for remaining in the game while being cautious at the same time. Beijing’s inclination in increasing the scope and speed of implementation will be clear only once the new regime takes over in Islamabad after a few months. Meanwhile, China is expected to keep on pressuring the Pak government regarding the safety of its nationals and assets, which have been repeatedly targeted by the insurgents.
Pakistani President Arif Alvi meets with Chinese Vice Premier He Lifeng (C), the special representative of Chinese President Xi Jinping, in Islamabad, Pakistan. (Xinhua/Ahmad Kamal)
Apart from the volatile security situation in Pakistan, the precarious economic situation here is leading to lowering Chinese faith in the country’s capacity to deliver. While Beijing continues to step in to avert possible debt defaults by Pakistan, the helping hand appears to be increasingly reluctant. The recent rollout of $2.4 billion support by China amid the economic crisis in Pakistan came after a lot of wavering. The ever-ballooning circular debt is also not helping further investments in the power sector of CPEC. The experiences of Chinese Independent Power Producers (IPPs) in getting their dues clear in Pakistan is making the new investors wary about fresh investments. The intentional inadequacy in deliverables of the latest visit by the Chinese Vice Premier may be seen as a symptom of this wariness.
Even as both Beijing and Islamabad repeatedly professed that the project has been a game changer adding thousands of jobs and boosting livelihoods of the locals, analysts said that these may be just claims….reports Asian Lite News
No independent or third party assessment has been undertaken for the 10 year old China Pakistan Economic Corridor (CPEC) – the flagship of multi-trillion Belt and Road Initiative (BRI). Even as both Beijing and Islamabad repeatedly professed that the project has been a game changer adding thousands of jobs and boosting livelihoods of the locals, analysts said that these may be just claims.
Haroon Sharif, the head of Pakistan’s Board of Investment in 2018-19 told Voice of America (VOA) that the statistics provided by the government were merely the claims of the government, not based on third-party assessment.
“The figure could be only credible when it is based on the third-party independent economic assessment,” Sharif said.
Recently, Ahsan Iqbal, Pakistan’s Federal Minister for Planning, Development and Reform, however, said that the project has been implemented in record time due to total commitment of the leadership of both countries.
In May, Chinese newspaper Global Times claimed that till 2022, the CPEC created 236,000 jobs, and the number of Pakistani workers reached 155,000. Data tells a different picture with Pakistan’s unemployment rate having only gone up. In January, Pakistan’s local newspaper Dawn noted that around 6.205 million people or 8.5 per cent of the total workforce of 73 million may remain unemployed in 2022.
In fact, since 2013, China’s loans to Pakistan have increased multi-fold. In June 2013, China’s loans to Pakistan stood at about $4 billion. The amount at present is estimated at $30 billion. Much of the loans have come under the CPEC. China is Pakistan’s largest bilateral creditor.
The initial budget for the project was $62 billion but over years, the cost has escalated, dampened with delays and other executional hindrances. However as Beijing battles its own economic challenges at home, Chinese loans are now gradually drying up.
Pakistan Prime Minister Shehbaz Sharif who took charge last year blamed the previous Imran Khan government for delays though took no step to change the course.
According to Committee for the Abolition of Illegitimate Debt (Cadtm), of the total amount, Pakistan owed around $10 billion the Chinese banks Between July 2021 and March 2022, over 80 per cent of Pakistan’s bilateral debt service went to Beijing, it said, adding that though Islamabad and ruling elite view CPEC as a game changer, experts and local economists have different insights.
Geopolitica.info noted that China has reportedly ceased to provide Pakistan with a steady stream of funds due to delays in CPEC projects caused by Islamabad’s bureaucratic corruption, internal politicking, and heightened security threats in Balochistan and Sindh provinces.
The foreign policy website said that except for putting the blame on the former government for the CPEC slowdown, Sharif and his ministers have not taken any action to resume work on several stalled projects. “Given Pakistan’s dire economic situation, it appears unlikely that CPEC projects will be completed on schedule, and a failure of this magnitude could put the whole China’s Belt and Road Initiative at risk,” it added.
Bottomline: if CPEC was a success story as presented by both Islamabad and Beijing, Pakistan’s economy wouldn’t be tattering. The cash starved nation has just managed to avert a sovereign default after receiving a $3 billion bailout package from the International Monetary Fund (IMF).
Without a credible third party 360 degree assessment of the CPEC, no one would know the real story or impact of the much hyped mega project.
Sharif had extended an invitation to Turkey to join CPEC in November of last year in order to reduce poverty and promote prosperity in the region…reports Asian Lite News
Pakistan Prime Minister Shehbaz Sharif has invited Turkey to join the China-Pakistan Economic Corridor (CPEC) again on Wednesday, reported Dawn.
Prior to this, Sharif had extended an invitation to Turkey to join CPEC in November of last year in order to reduce poverty and promote prosperity in the region. He had suggested months prior that China, Pakistan, and Turkey form a “trilateral arrangement” around CPEC in order for all three countries to profit from its potential, according to Dawn.
The Prime Minister made these comments while speaking during the fourth Milgem class corvette’s launch at the Karachi Shipyard on Tuesday, where Turkish Vice President Cevdet Yilmaz was also present.
Speaking at the ceremony in Karachi, the PM stated that while Port Qasim was a centre, Gwadar, where the business had “just started,” needed to be connected.
Notably, CPEC is a flagship project of China’s Belt and Road Initiative (BRI).
Beijing’s international infrastructure investment programme, known as the BRI, a term established by China’s Xi Jinping in 2013, was created to rebuild China’s Silk Road, which linked Asia with Africa and Europe in order to boost trade and economic development, as per CNN.
Each year, the effort has seen billions of dollars poured into infrastructure projects, including the construction of ports from Sri Lanka to West Africa, the paving of motorways from Papua New Guinea to Kenya, and the provision of power and telecoms infrastructure for people in Latin America and Southeast Asia.
The China-Pakistan Economic Corridor (CPEC), a multi-billion dollar project was introduced in 2013 and quickly dubbed the flagship extension of the Belt and Road Initiative.
Pakistanis hoped that this new development program will bring change and turn the country into a regional hub.
However, the investment has only had debilitating impact on the South-Asian country.
Balochistan, an impoverished province with significant mineral potential, continued to bear the brunt of the CPEC projects being built on its territory with no expectation of financial gain. This sense of exclusion has fuelled a mass rebellion in Balochistan against the CPEC. (ANI)
Pakistan Prime Minister Shehbaz Sharif meets Chinese President Xi Jinping.(photo:facebook.com/ShehbazSharif)
Xi made the remarks in a congratulatory message to the Decade of China-Pakistan Economic Corridor celebration event held in Islamabad, Pakistan….reports Asian Lite News
Chinese President Xi Jinping said on Monday that China will work with Pakistan for high-standard, sustainable, and livelihood-enhancing outcomes and further build the China-Pakistan Economic Corridor (CPEC) into an exemplary project of high-quality Belt and Road cooperation, Xinhua reported.
Xi made the remarks in a congratulatory message to the Decade of China-Pakistan Economic Corridor celebration event held in Islamabad, Pakistan. The event took place for the disputed CPEC project despite the looming economic crisis that has gripped Pakistan due to increasing Chinese loans in the country. Notably, CPEC is a flagship project under China’s Belt and Road Initiative (BRI).
Xi said, “This has added new impetus to the economic and social development of Pakistan and laid a good foundation for regional connectivity and integration. It is a vivid testament to the all-weather friendship between China and Pakistan and provides an important underpinning for building an even closer China-Pakistan community with a shared future in the new era.”
Stressing that China and Pakistan will continue to improve overall planning and expand and deepen cooperation, Xi said no matter how the international landscape may change, China will always stand firmly with Pakistan.
Xi added China and Pakistan will continue to work hand in hand and forge ahead in solidarity to carry forward the ironclad friendship, coordinate development and security, pursue the cooperation of higher standards, broader scope and greater depth, and take the China-Pakistan all-weather strategic cooperative partnership to new heights, so as to make an even greater contribution to peace and prosperity in the two countries and the broader region.
Vice Premier of China, He Lifeng, arrived in Pakistan on Sunday for a three-day visit to take part in a ceremony to commemorate the China-Pakistan Economic Corridor (CPEC) project’s tenth anniversary, Dawn reported.
During his Pakistan visit, Lifeng would also hold meetings with Prime Minister Shehbaz Sharif and President Dr Arif Alvi.
Beijing’s international infrastructure investment programme — BRI — a term established by China’s Xi Jinping in 2013, was created to rebuild China’s Silk Road, which linked Asia with Africa and Europe in order to boost trade and economic development, as per CNN.
Each year, the effort has seen billions of dollars poured into infrastructure projects, including the construction of ports from Sri Lanka to West Africa, the paving of motorways from Papua New Guinea to Kenya, and the provision of power and telecoms infrastructure for people in Latin America and Southeast Asia.
In 2019, Italy became the only major Western country and the only country from the G7 group of advanced economies to join the BRI.
Quoting the Foreign Ministry of Pakistan, Dawn reported that Lifeng has played a “prominent role” in China’s international economic relations and implementation of the Belt and Road Initiative.
He was “instrumental in the planning and execution of multiple CPEC projects in Pakistan” while serving as chairman of China’s National Development and Reform Commission from 2017 to 2023, the Foreign Office stated.
The China-Pakistan Economic Corridor (CPEC), a multi-billion dollar project, was introduced in 2013 and quickly dubbed the flagship extension of the Belt and Road Initiative. Pakistanis hoped that this new development programme will bring change and turn the country into a regional hub.
However, the investment has only had a debilitating impact on the South-Asian country.
Balochistan, an impoverished province with significant mineral potential, continued to bear the brunt of the CPEC projects being built on its territory with no expectation of financial gain. This sense of exclusion has fuelled a mass rebellion in Balochistan against the CPEC.
Pakistan’s economic troubles have deepened in recent years, with some critics blaming CPEC investments as a main contributing factor. (ANI)
The prime minister also criticised the slow progress on the Gwadar port project, being built by China for maritime and naval use. …reports Asian Lite News
In a passionate speech in Balochistan on Thursday, Pakistani Prime Minister Shehbaz Sharif said that Balochistan, the country’s largest and poorest province, has faced criminal negligence. Sharif was on a visit to the alienated south-western Pakistani province to inaugurate development projects, in a region that has one of the worst human development indices in the world.
Sharif, who like all mainstream Pakistani politicians is keen to exploit the vast natural resources of Balochistan, urged the Baloch community to support foreign investors instead of attacking them.
In a tweet, Sharif said: “Despite sporadic attempts here and there, Balochistan has been a victim of our collective neglect. The province has not progressed at par with other federating units, which is a shame”.
He took the opportunity to blame the Imran Khan government for damaging relations with foreign countries, particularly China. Sharif highlighted that the Chinese halted work on the China-Pakistan Economic Corridor (CPEC) due to disinterest by the previous government and also due to attacks on Chinese nationals. Besides blaming the previous government for the under-developed and poverty-ridden conditions of the Baloch, he also lamented the deadly attacks on Chinese nationals working on the massive transport corridor and infrastructure project.
The prime minister also criticised the slow progress on the Gwadar port project, being built by China for maritime and naval use. Sharif also highlighted how the Gwadar Export Zone had languished due to which the country was unable to conduct trade through the Gwadar port. He, however, did not mention that the Gwadar port faces mass opposition, where local people had organised protests and sit-ins for the past many years.
Pakistani Chief of the Army Staff (COAS), General Asim Munir too was present during Sharif’s address along with other military officers–a clear indication that the Army and the Sharif government were working hand in glove. In fact Gen. Munir had recently paid a visit to China, where the well-being of CPEC and security for Chinese nationals was bound to have been discussed.
The Baloch community has been resisting Pakistan and China’s collaborative attempts to mine resources – gas, coal, copper and gold – from their province. Their demands for more rights and autonomy over their resources has turned into a deadly conflict between various armed organisations and the Pakistani Army.
The Baloch have been battling large-scale violation of human rights by Pakistani armed forces. This includes forcible abductions, custodial killings, torture and Death Squads. The masses also have been at the receiving end of military campaigns that involve the use of drones, helicopter gunships as well as aerial attacks.
A Baloch expert told India Narrative that Balochistan was not part of Pakistan, therefore, “any foreign country willing to invest in Balochistan should undertake such an initiative only after Balochistan is liberated”. He requested foreign investors not to invest in war-hit Balochistan because their investments would get impacted due to the conflict.
In repeated attacks in June, armed rebels set fire to dozens of trucks ferrying coal from Balochistan to Punjab. Even the Baloch women have joined the nationalist struggle. At least two women from the Baloch Liberation Army (BLA) have committed suicide bombings – one against the Confucious Institute killing the Chinese director and two other teachers, and the second one against a military convoy carrying senior Pakistani officers.
The opposition to Pakistani projects in Balochistan is being noted as far as Canada, where the mining giant Barrick Gold’s copper and gold project in a conflict-ridden Balochistan is being questioned.
(The content is being carried under an arrangement with indianarrative.com)
The off-tracking of CPEC power projects is being attributed to a lack of Chinese interest in providing more finances amid pilling up of debt in the sector. Critics also contend that the early completion of power projects was driven more by Chinese interests than the infrastructure needs of Pakistan … writes Dr Sakariya Kareem
The power projects often cited as examples of success achieved by Pakistan and China under CPEC are rapidly running out of steam. While the progress on most of the CPEC components has been sluggish since the inception of the project umbrella in 2015, the power sector was seen as an outlier with several completions achieved. However, going by the developments o the last few years, the power projects seem to have joined their laggard peers.
The off-tracking of CPEC power projects is being attributed to a lack of Chinese interest in providing more finances amid the pilling up of debt in the sector. Critics also contend that the early completion of power projects was driven more by Chinese interests than the infrastructure needs of Pakistan.
Shehbaz Sharif.(photo:instagram)
The Shanghai Thar Coal Block-1 presents the latest instance of a power project facing Chinese reluctance in financing. The 1320 megawatt local coal project was inaugurated in March 2023 by Pak Prime Minister Shehbaz Sharif. The plant was envisioned to reduce dependence on imported coal for power production in the country. However, the financial closure of the project appears uncertain now as the Industrial and Commercial Bank of China (ICBC) has reportedly decided to withdraw $300 million of its financing commitment. Although the project had started, the financial closure was pending as Sinosure was seeking due approval from the Chinese government.
As per some executives of Shanghai Electric, the non-availability of any financier may lead to its application for financial close not getting approved. The financial problems in the project are arising out of the power division’s inability to clear the outstanding bills of the plant. Since the start of the project, Pakistan’s Central Power Purchasing Agency is said to be paying only 50-75 per cent of the monthly invoice of the company, as compared to its claim of settling 85% of dues to all CPEC Independent Power Producers (IPPs). The demand of the power generation company for an increase in the tariff from PKR 8.3 to PKR 21 per kilowatt hour is expected to further strain the financial position of the power division.
The project is believed to be ailing from operational issues as well. According to some unnamed sources from the Pak Ministry of Planning, Development and Special Initiatives (PD&SI) recently quoted by the Pakistani newspaper, Business Recorder, the newly-established plant is facing frequent disruptions. Many forced outages were observed in May 2023 due to technical faults in its coal mines. The presence of huge amounts of mud in coal is said to have resulted in faults in these mines. The power regulator of the country, the National Electric Power Regulatory Authority (NEPRA) was also seen taking note of the recent problems in its operations.
Earlier, Chinese reluctance in providing support to power projects in Pakistan became apparent in the case of the Neelum Jhelum Hydropower Project (NJHP) located near Muzaffarabad. The 969-megawatt project which started in April 2018 has remained halted since July 2022 due to blockage I its 68 km-long tunnelling system and the Chinese have been quite slow in repair work. For several months, the company responsible for maintenance work, China Gezhouba Group Company (CGGC) kept delaying the work on one pretext or another. Among other things, it blamed the local protests near the plant and the failure of the Pakistan police to offer credible security.
On the other hand, Pakistani authorities maintain that the Chinese company has often been found violating the security protocols at the site. The problems, though seemingly of coordination or security, indicate a shift in the way China look at providing incremental support to power projects in Pakistan. Unsure of getting the desired rate of return from a country confronting an unprecedented economic crisis, Chinese companies have been visibly cautious. Overall, this cautiousness has also started to obscure Beijing’s strategic vision of CPEC.
Experts believe that China now is wary of Pakistan’s instability which has put the chances of its CPEC project moving ahead in danger….reports Asian Lite News
The China-Pakistan Economic Corridor (CPEC) project that was commenced a decade ago was held as a harbinger of prosperity for Pakistan. However, seven years later, many projects under the CPEC still remain non-starters while some of those being operational have become liabilities and are incurring losses.
China’s ambitious CPEC project launched in 2013 was flawed from the beginning when it was assumed that it would be able to generate jobs and growth in Pakistan. While China had its own agenda of resolving its energy needs through the CPEC project by bypassing the existing route from the Straits of Malacca between Malaysia and Indonesia, Pakistan was constantly grappling with its internal horrors like blasphemy-related lynching and over-expressive “jihadi” groups.
Ever since the CPEC project came into existence few local groups started opposing it and the project itself faced a lack of a “skilled” workforce.
The education system of Pakistan is in shambles and it offered low-grade human capital. Corruption has been a bedrock of CPEC dealings in Pakistan. Officials and companies involved received kickbacks and everything was overlooked in the name of national security with no opacity.
The constant face-offs between the locals and the Chinese workers get highlighted in the media on a daily basis. A special force of 10,000 has been deployed to protect Chinese workers in Pakistan, while the locals live in fear.
Pakistan declared itself bankrupt and this has totally taken the steam out of the CPEC project. China is aware that Pakistan is going Sri Lanka’s way and anytime the public can explode due to the volatile conditions.
Petrol, cooking gas, and even basic amenities like wheat have become elusive to the common man in Pakistan. The infamous ‘wheat crisis of Pakistan’ has been mostly the result of Ukraine-Russia war, poor distribution, and the smuggling of wheat to Afghanistan.
The International Monetary Fund (IMF) has revealed that China holds roughly USD 30 billion of Pakistan’s USD 126 billion in total external foreign debt, which is thrice the amount of IMF’s debt (USD 7.8 billion) and exceeds it borrowings from the World Bank and Asian Development Bank combined.
When Islamabad urged Beijing to forgive its debt liabilities worth USD 3 billion owed by it to China-funded energy projects established under the CPEC the clear response was a no.
Earlier China was able to lure struggling Pakistan into its debt trap as it has done to many other smaller countries. Pakistan has a debt of more than USD 19 billion invested in the plants is owed largely for the building of independent power producers (IPPs) on take-or-pay power generation contracts.
Pakistan’s all-weathered-ally China refused to budge on Islamabad’s request to renegotiate the power purchase agreements worth USD 3 billion on the pretext that its prominent banks, including China Development Bank and the Export-Import Bank of China, were not in a position to revise any of the clauses of the agreement reached earlier with the government.
Dejected by the unfriendly response Pakistan Tehrik-e-Insaf (PTI) Senator and industrialist Nauman Wazir stated that “First, the tariff determined by National Electric Power Regulatory Authority (NEPRA) at the time of allowing power generation in the private sector was on the very high side.”
Moreover, he said, “Then, the IPPs submitted erroneous declarations concerning capital, financial assets and operational cost of the company, which became obvious when the balance sheets of the IPPs were made public.”
Pakistan is reeling under immense pressure and has entered troubled water with debt liabilities of USD 294 billion, which ironically represents 109 per cent of the GDP.
Beijing itself is facing an economic crisis at home and cannot afford infrastructure loans.
When Pakistan’s PM Shehbaz Sharif visited Beijing to meet and requested a rollover of USD 6.3 billion in debt, China had allegedly given affirmation after which Sharif openly announced that over USD 4 billion debt would be revised, but all these were mere talks as nothing concrete ever came into existence.
On the other hand, it is not just CPEC that has taken a hit even the ties between China and Pakistan are on a decline. A very recent observation is China’s silence against India’s move to exclude Pakistan from a high-level meeting on the sidelines of a virtual so-called BRICS summit, including other developing nations.
Experts believe that China now is wary of Pakistan’s instability which has put the chances of its CPEC project moving ahead in danger.
China, being a capitalistic nation, has directed its companies to invest in Pakistan with the pure aim to earn profit and build on its CPEC project.
But there are many recent attacks on Chinese nationals in Pakistan that have irked China. President Xi Jinping too expressed his great concern about the safety of Chinese nationals in Pakistan when he last met his Pakistani counterpart.
China is keeping a close watch on Pakistan deteriorating situation and is aware that a recent round of talks with the International Monetary Fund to release new funds had failed.
Pakistan is a country with a history of military coups and extremists having a say in key policy decisions. This often resulted in major CPEC dealings being stalled that were found to be corrupt in nature.
The only thing that is working for China-Pakistan relations and keeping the CPEC dream alive is growing US-India security ties. China is in the middle of an intense trade war with the US and in the same breadth it is about to extend military assistance to Russia, arch-rival to the US.
Islamabad understands that it can no longer take financial assistance from the United States and is now overly dependent on China for economic and military assistance. (ANI)
