China Pakistan Economic Corridor (CPEC): Myths And Facts

Is China using China Pakistan Economic Corridor (CPEC) to colonize Pakistan just as the British East India company colonized India centuries earlier?



Will Pakistan be caught in a massive Chinese debt trap and eventually become China's colony? What are the terms of Chinese financing and investments in CPEC projects in Pakistan?

Are Pakistanis required to pay exorbitant interest rates on infrastructure loans and unreasonably high return on equity on power plant investments?

Is there an IBM-like organized campaign of fear, uncertainty and doubt (FUD) being waged by CPEC's detractors to convince Pakistanis that it's a zero sum game in which China's gain is Pakistan's loss?

Is there no possibility of win-win in CPEC for both China and Pakistan?

Viewpoint From Overseas host Faraz Darvesh discusses these questions with Misbah Azam and Riaz Haq (www.riazhaq.com)

https://youtu.be/NixuaR0_jws




Related Links:

Haq's Musings

Campaign of Fear, Uncertainty and Doubt Against CPEC

CPEC Financing: Is China Ripping Off Pakistan?

CPEC Transforming Least Developed Parts of Pakistan

Pakistan Rising or Falling? Reality vs Perception

Pakistan Generating Positive Vibes at Davos 2018

CPEC to Create Over 2 Million Jobs in Pakistan

Pakistan's $20 Billion Tourism Industry Boom

Home Appliance Ownership in Pakistani Households

Riaz Haq's YouTube Channel

PakAlumni Social Network

Comments

Riaz Haq said…
Pakistan's auto sales surge 23 pct in January 2018

http://www.xinhuanet.com/english/2018-02/12/c_136970661.htm

The Pakistan Automotive Manufacturers Association announced on Monday that Pakistan's locally assembled cars and Light Commercial Vehicles (LCVs) sales volume jumped by 23 percent to 23,562 units in January on the yearly comparison and by 22 percent on the monthly comparison.

The growth was largely attributed to Pak-Suzuki Motor Company's (PSMC) impressive sales numbers of the Wagon-R (an increase of 1,101 units) and Cultus (an increase of 680 units) and a strong response to Honda Atlas Cars' BR-V (an increase of 500 units).

Moreover, recent changes in import procedures have also resulted in a higher offtake for the less than 1,000cc segment, as consumers continue to shift to Pak-Suzuki Motor Company.

According to the Pakistani auto industry's official numbers, volumes for PSMC and Honda Atlas Car (HCAR) increased by 24 percent and 10 percent on yearly comparison while Indus Motor's volumes decreased by 7 percent.

Furthermore, growth was also recorded in LCVs sales, as they increased by 38 percent to 3,638 units in January this year when compared with the sales of 2,629 units in January last year.

Similarly, tractor sales continued to perform well, thereby registering 5,863 units for January, up by 9 percent as against 5,390 units in the same month of last year.

Moreover, motorcycles and three-wheelers also witnessed a fair bit of increase of 20 percent on the yearly comparison and 13 percent on the monthly comparison.

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Imports of used cars in Pakistan jump 70pc

https://www.dawn.com/news/1385303

Imports of used cars and minivans surged to 65,723 units in 2017, up almost 70 per cent from 38,676 units a year ago, latest data released by the auto industry shows.

The arrival of sport utility vehicles (SUVs) also increased 59pc to 7,758 units. Imports of pickups and vans registered a 9pc rise to 3,154 units.

The local industry maintains a record of each imported vehicle, whether new or old, through the Import General Manifest (IGM). Every imported car is logged in the customs’ IGM.

Toyota Vitz remained the most popular imported car in 2017. As many as 8,680 units arrived in 2017, up almost 40pc from a year ago. The volume of Daihatsu Mira swelled 73.1pc to 6,091 units.

Riaz Haq said…
Who’s Afraid of China

http://newslinemagazine.com/magazine/whos-afraid-china/

Ishrat Husain is a former dean and director of IBA and a former governor of the State Bank of Pakistan.

The foremost singular contribution that has already made a significant and visible difference is the addition of 10,000MW to the generation capacity in Pakistan, in a span of four years. It has overcome chronic energy shortages, altered the fuel mix, and substituted plants with 61 per cent efficiency factor in place of those operating at 28 per cent, bringing down the cost to consumers. Electricity outages had cost the economy about 1.5 to 2 percentage points of the Gross Domestic Product (GDP). Export orders were cancelled and the buyers walked out of Pakistan as their traditional suppliers could not fulfil the orders on time, due to energy shortages. The value of exports took a dip, precipitating a balance of payments crisis. As new hydel, renewable, coal-based projects come on board, there will be a corresponding shrinking of imports of furnace oil and diesel.

The associated risk of an additional supply of power is that unless we restructure or privatise the distribution companies, or make the power distribution sector competitive, the circular debt would keep on rising. Distribution losses and non-recovery of dues have put enormous pressure on public finances, and the subsidies on this account may escalate if institutional reforms are not undertaken.

The second area that would benefit Pakistan is the construction of highways and the railway line linking Gwadar with Kashgar and the mass transit systems within big cities. The rehabilitation and upgrading of the main railway line with high speed trains, would relieve businesses of the high cost of domestic transportation of goods to and from Karachi (at present, the bulk of the freight is carried by a trucking fleet). The inner city mass transit systems in Lahore, Peshawar, Karachi and Quetta, would provide safe and affordable public transport to the citizens, who face inconvenience and spend a lot of time and money in commuting to work. The reduced travel time and saving in transportation expenses would increase their productivity and also augment the purchasing power of the lower income and the lower middle-income group.

The western route would open up backward districts in Balochistan and southern Khyber-Pakhtunkhwa (KP) and integrate them with the national markets. The communities living along the route would be able to produce and sell the output from their mining, livestock and poultry, horticulture and fisheries, to a much larger segment of consumers. Their transportation costs would become considerably lower, the proportion of perishables and waste would go down, cool chains and warehousing would become available and processing would become possible in the adjoining industrial zones. Access to a large trucking fleet and containers, with greater frequency and reduced turnaround, time may help in the scaling-up of operations. The fibre optic network would allow the citizens of these deprived districts access to the latest 3G and 4G broadband Internet connections.
Riaz Haq said…
Western route of CPEC to be completed earlier than eastern route: Chinese envoy

https://dunyanews.tv/en/Business/445901-Western-route-CPEC-eastern-route

Acting Ambassador of the People’s Republic of China, Zhao Lijan Friday said that under the China Pakistan Economic Corridor (CPEC), western route of the project would be completed earlier than the eastern route.

Speaking at the National Press Club here about CPEC Project, the Chinese envoy dispelled rumors about the Western Route and said that western route of CPEC would be completed earlier than the eastern route.

He said work on various project under the CPEC was going with full speed and 22 projects would be completed during the current year while 18 projects would be completed next year.

He said around 70,000 Pakistanis had got employment in these projects.

The Chinese envoy said under the CPEC, the government had plan to complete a total of 200 projects till 2030 which would provide jobs to hundreds of thousands of people.

He expressed the hope that the next government in Pakistan would also continue the pace of progress on CPEC projects.

About Gwadar Port, he said, Gwadar International Airport would be completed in October this year. He said fisheries was an important sector of Gwadar and establishing a re-processing plant at the port Pakistan could further increase its exports.

He invited the overseas Pakistanis to come to their country and invest in Gwadar Port, adding that more than 30 Pakistanis companies had been registered at the Port.

He said the investors were being provided facilities of electricity, gas, water and wifai.

In energy projects under the CPEC, he said, $13 billion were being invested, adding that several energy projects had been completed which had overcome load-shedding problem in Pakistan to a great extent.

Under the CPEC, he said industrial parts would be established in Pakistan.

To a question, he said Pakistani were hard workers and capable people and if they could make an atomic bomb then stabilizing their economy was not a big task for them. He said in the 1970s decade Pakistan’s Gross Domestic Product (GDP) was equal to China, adding that today’s success story of China was a result of hard work and dedication of Chinese people.

He said that China desired improvement in Pak-India relations and both Pakistan and India could resolve their issues with peaceful dialogue.
Riaz Haq said…
CPEC projects: China deposits $1 billion: envoy

https://fp.brecorder.com/2018/06/20180630386244/

 NAVEED BUTT
 
 JUN 30TH, 2018
 
 ISLAMABAD

Chinese Deputy Head of Mission Lijian Zhao Friday said that more than 70,000 Pakistanis are working on various development projects under China-Pakistan Economic Corridor (CPEC) while China has deposited $1 billion with the State Bank of Pakistan.

"China has given a soft loan to Pakistan at around 2 percent interest rate for major infrastructure projects of $6 billion under the CPEC," he added. He said major transport projects included M-5 Motorway project (Multan-Sukkur), Orange Line Metro Train and KKH Phase II (Thakot-Havelian Section)."

About energy projects, he said that China is helping Pakistan overcome energy crisis. He said that as many as six power plants including 2×660MW coal-fired power plants at Port Qasim Karachi, three wind power projects in Sindh, solar power project and Sahiwal coal-based power plants have been completed. He said that 10 power plants including coal and hydropower projects are under construction. He said that these power plants have a total generation capacity of 11,000MW of electricity.

He said that five years earlier, there was seven to eight hours electricity load-shedding daily in Islamabad. But now there is zero load-shedding in Islamabad. He said that sometimes load-shedding in the federal capital occurs due to technical reasons and old transmission lines.

He said that 14 projects are under construction, eight have been completed and 21 projects are in pipeline while their groundbreaking has been taken place. He said that there are 43 early harvest projects under the CPEC and most of them would be completed in 2019. He said that a few hydropower projects are long-term which would be completed in 2023.

About Gwadar free zone, he said that more than 30 Pakistani companies have been registered for Gwadar Free Industrial Zone and more companies are in pipeline. He said that China has constructed 'Business Centre' within a record time of five-and-a-half-month in Gwadar. He said that China Overseas Port Holding Company has also installed desalination plants at Gwadar for supplying drinking water to the people in the port city.

Answering a question, he said that Pakistan Peoples Party (PPP) government had handed over Gwadar to Chinese companies. He said that Gwadar Port is very significant for China, Pakistan and rest of the world. He said that China is also responsible for developing Gwadar free port. He said Part-I of free port was appearing on the ground.

He said that as many as nine industrial parks would be established in Pakistan. He said that facilities of electricity, gas, internet and road, etc, would be provided to the industrial zones.

The Chinese envoy said that Gwadar international airport would be built soon and its groundbreaking ceremony would be held after October 2018.

The Chinese deputy head of mission said a hospital is also operating in Gwadar. He said that fisheries would be a great industry in Gwadar. He said 500 students are studying in a Gwadar school built by the Chinese companies.

Answering a question about western route, he said that propaganda is done in this regard. He said that the western route is also in the interests of China and it would be completed.

Furthermore, he said that China has made tremendous economic growth. He said that now China is working to enhance its gross domestic product (GDP) growth, adding in the next 10 years, GDP of China would be doubled.

Zhao also said that China wants good relationship with every country, including the United States.
Riaz Haq said…
Investment project with 14% is impossible. Sinosure's rates are set at maximum 7% for the total period of 15-20 years of the project. However it is paid only once, therefore it is 0.3-0.5% every year. If you add LIBOR+4.5%, it is only about 6%, not 14%.

https://twitter.com/zlj517/status/1044321706033197058

At budget seminar today it was authoritatively disclosed that loans for CPEC projects are at LIBOR+ 4.5%+Insurance guarantee 7.5% ie nearly 14% interest. Can any economy borrow at this rate? Watch out! Absence of transparency undermining CPEC. Clarification needed.

https://twitter.com/FarhatullahB/status/1044256222852108288

http://web.isanet.org/Web/Conferences/HKU2017-s/Archive/a30ae7f2-83ba-4b48-b15c-3ebbe670d948.pdf

Research into the NEPRA archives has indicated that in July of 2015 [CPEC start, April 2015] there began a flood of petitions filed consecutively for inclusion of Sinosure fees into wind power project financing. For NEPRA, this amounts to an unmatched influx of pressure unseen anywhere else in their operating history, and presents compelling evidence both in frequency and qualitative content to move to withdraw support from the null hypothesis.


The NEPRA petition database shows a large uptick in requests that the Government of Pakistan capitulate to Chinese requirements to utilize insurance through Sinosure. For Chinese projects abroad, project insurance flows through one provider. This firm is the China Export and Credit Insurance Corporation/中国出口信用保险公司, or Sinosure. This State Owned Enterprise is China’s main insurer of export financing and provides protection for SOE’s and other large firms against political, commercial and/or credit risks operating or exporting abroad.

Critically, Sinosure coverage is mandatory insurance for Chinese overseas bank loan and equity investment. In other words, it is required for anyone outside China who wants access to this type of capital from Chinese actors.

In stark contrast to previous years of highly diverse NEPRA petition data, Sinosure related documents show a high degree of coordination. They are unwavering in noting that Chinese state-owned insurance for project funding is required for Chinese capital. Five separate petitions from firms note that “[…] Plea: Sinosure Insurance is a contingent requirement of Debt from China. It is approved by NEPRA for other Projects (Coal etc.). It is a mandatory cost for Chinese Debt and should be incorporated as a pass-through cost by NEPRA.”42 This exact language is found in each of the five petitions originating from distinct wind energy firms. Highly similar language to this is also found in a petition from the Government of Sindh, Directorate of Alternative Energy/Energy Department in Karachi, signifying coordinated inter-governmental and private sector pressure.43 Furthermore, Harbin Electric International, a Chinese State Owned Enterprise, filed its own petition to
Riaz Haq said…
In late March, the government of Italy signed a memorandum of understanding to join China’s Belt and Road Initiative, Beijing’s $1 trillion plan to develop land and sea trade routes from Asia to Africa to Europe. Italy is the first large European economy to do this, agreeing in principle to deals with China worth about $2.8 billion in investment in a variety of sectors.

https://foreignpolicy.com/2019/04/01/italy-should-learn-a-thing-or-two-from-pakistan/


This set off alarm bells in the White House and groans in the European Union. While the Trump administration fretted about yet another Chinese attempt to expand its sphere of influence, the EU stressed that Italy was undermining Europe’s ability to engage with China as a single bloc.

Italy’s rationale for joining the Belt and Road Initiative is straightforward: An influx of Chinese investment could help push Italy out of its economic doldrums. Meanwhile, Italian exporters could gain access to China’s massive domestic market. That sounds attractive enough, but Italy would be wise to look to other countries that have signed up for the initiative and the challenges they’ve faced. Pakistan’s experience in particular is telling.

At first blush, the two countries seem wildly different. Italy is a member of the G-7 and the world’s eighth largest economy. Pakistan, despite having more than triple the population, barely cracks the top 40. It has also been bailed out by the IMF nearly 15 times.

On closer inspection, though, the two countries share important similarities.

Both Pakistan and Italy are heavily burdened with debt: As of 2018, Pakistan’s debt was 73 percent of GDP, and Italy’s was an eye-popping 132 percent.Both Pakistan and Italy are heavily burdened with debt: As of 2018, Pakistan’s debt was 73 percent of GDP, and Italy’s was an eye-popping 132 percent. Each is reliant on external help: Pakistan has required a combination of IMF loans and the support of the Gulf states and China to keep it in the black. Similarly, since the 2008 financial crisis, Italy has relied on bailouts from the European Central Bank. To compound matters, Italy’s growth rate has been near zero.
As a result, both states have been hungry for external capital, both are in search of new markets for their exports, and both need to claw their way out of debt. In Pakistan, former Prime Minister Nawaz Sharif decided that Belt and Road fit the bill, and he opened his country up to a wave of Chinese investments in 2015.

The results have been mixed. China has indeed poured money into Pakistan, but it’s been in the form of loans to Pakistan that it must then give to Chinese firms to set up shop there. Those firms have invested in equipment bought in China—not Pakistan. With little capital going into Pakistan, the country’s debt burden has only shot up. Pakistan is now negotiating with the IMF for a new bailout, but the IMF’s concern about the lack of transparency of Pakistan’s debts to China has complicated matters.

One can foresee similar tensions arising in Italy: a European Central Bank that is reluctant to come to the aid of an Italy that takes on greater debt in exchange for less transparency. The United States has advanced the argument that the IMF and its donor states shouldn’t subsidize Pakistan’s dealings with China. Italy could find itself in a similar position with the European Central Bank.


Riaz Haq said…
AidData’s new dataset of 13,427 Chinese development projects worth $843 billion reveals major increase in ‘hidden debt’ and Belt and Road Initiative implementation problems

https://www.aiddata.org/blog/aiddatas-new-dataset-of-13-427-chinese-development-projects-worth-843-billion-reveals-major-increase-in-hidden-debt-and-belt-and-road-initiative-implementation-problems

The AidData report, Banking on the Belt and Road, offers a bird’s-eye view of China’s geo-economic strategy before and after the introduction of the BRI in 2013. It details how spending patterns, debt levels, and project implementation problems have changed over time, leveraging insights from a uniquely granular dataset that captures 13,427 projects across 165 countries worth $843 billion. These projects were financed by more than 300 Chinese government institutions and state-owned entities. The new 2.0 Global Chinese Development Finance Dataset covers projects approved between 2000 and 2017 and implemented between 2000 and 2021. It is the most comprehensive dataset of its kind.

“China has quickly established itself as the financier of first resort for many low-income and middle-income countries, but its international lending and grant-giving activities remain shrouded in secrecy,” said Ammar A. Malik, a Senior Research Scientist at AidData and co-author of Banking on the Belt and Road. “Beijing’s reluctance to disclose detailed information about its overseas development finance portfolio has made it difficult for low-income and middle-income countries to objectively weigh the costs and benefits of participating in the BRI. It has also made it challenging for bilateral aid agencies and multilateral development banks to determine how they can compete—or coordinate and collaborate—with China to address issues of global concern.”
----------------

“China will soon face higher levels of competition in the global infrastructure finance market due to the Build Back Better World Initiative and the E.U.’s recently announced Global Gateway Initiative,” said Parks. “As we enter this new era of strategic rivalry, it will be more important than ever that G7, Chinese, and host country policymakers rely on hard evidence rather than opinions or conjecture.”
Riaz Haq said…
BBC Misrepresents my Views on "Debt Trap Diplomacy"


By Debora Brautigam


http://www.chinaafricarealstory.com/2021/12/bbc-misrepresents-my-views-on-debt-trap.html


The BBC misrepresented my views this morning, and I admit I'm stunned. I'm a big fan of the BBC. Living in Taiwan and Hong Kong, in the 1970s doing fieldwork across Africa in the 1980s, I used to listen to the BBC World Service on my shortwave radio and I trusted them to present nuanced and balanced analysis.
Last night I had a call from London. I picked up to find a BBC reporter who wanted my views on Chinese "debt trap diplomacy." Apparently the head of Britain's intelligence service, Richard Moore, had given the BBC an interview in which he said that the Chinese have deliberately used debt as leverage to acquire strategic assets. We spoke for awhile on background and I outlined why this idea had little basis in fact, drawing on my extensive research with Meg Rithmire about the Hambantota Port in Sri Lanka and other cases, and that of other researchers. I gave examples from Montenegro, Kenya, Zambia, and other places where these fears have been trumpeted in the media, but without evidence to support them. He said that another reporter would call me in an hour and record an interview.
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I quickly listened to the BBC recording (my clip is about 1 hr 50 minutes into the program) and was horrified to find that the only clip they took from the interview was my explanation of the "idea" of debt trap diplomacy and the "conventional wisdom" about the case in Sri Lanka. They completely discarded all the evidence I presented after that about why that conventional wisdom was not correct. Then, they brought in a former adviser to the Trump administration whom he interviewed at some length about the China threat, but again providing no evidence about "debt trap diplomacy" aside from this: "we've charted it globally and it's fairly widespread". She also repeated the claim that the Chinese bring in all their own workers.

The reporter leading the story clearly had his mind made up already about the point of view he wanted to present. My little clip was prefaced by a question I was never asked: "What can we do to combat this?" he said, rather than a question that would have made room for a more balanced discussion of this claim. It all reminds me, rather depressingly, about the widespread belief that the Chinese were acquiring large amounts of land in Africa to grow food to send back to China. I spent three years doing field research on that myth and wrote an Oxford University Press book debunking it. No one makes that claim anymore--not due to me, I think, but simply because a more interesting "threat narrative" has now gripped the media's mind. Sigh.
Riaz Haq said…
The Chinese ‘Debt Trap’ Is a Myth
The narrative wrongfully portrays both Beijing and the developing countries it deals with.

By Deborah Brautigam and Meg Rithmire

https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/

The notion of “debt-trap diplomacy” casts China as a conniving creditor and countries such as Sri Lanka as its credulous victims. On a closer look, however, the situation is far more complex. China’s march outward, like its domestic development, is probing and experimental, a learning process marked by frequent adjustment. After the construction of the port in Hambantota, for example, Chinese firms and banks learned that strongmen fall and that they’d better have strategies for dealing with political risk. They’re now developing these strategies, getting better at discerning business opportunities and withdrawing where they know they can’t win. Still, American leaders and thinkers from both sides of the aisle give speeches about China’s “modern-day colonialism.”

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China, we are told, inveigles poorer countries into taking out loan after loan to build expensive infrastructure that they can’t afford and that will yield few benefits, all with the end goal of Beijing eventually taking control of these assets from its struggling borrowers. As states around the world pile on debt to combat the coronavirus pandemic and bolster flagging economies, fears of such possible seizures have only amplified.

Seen this way, China’s internationalization—as laid out in programs such as the Belt and Road Initiative—is not simply a pursuit of geopolitical influence but also, in some tellings, a weapon. Once a country is weighed down by Chinese loans, like a hapless gambler who borrows from the Mafia, it is Beijing’s puppet and in danger of losing a limb.

The prime example of this is the Sri Lankan port of Hambantota. As the story goes, Beijing pushed Sri Lanka into borrowing money from Chinese banks to pay for the project, which had no prospect of commercial success. Onerous terms and feeble revenues eventually pushed Sri Lanka into default, at which point Beijing demanded the port as collateral, forcing the Sri Lankan government to surrender control to a Chinese firm.

The Trump administration pointed to Hambantota to warn of China’s strategic use of debt: In 2018, former Vice President Mike Pence called it “debt-trap diplomacy”—a phrase he used through the last days of the administration—and evidence of China’s military ambitions. Last year, erstwhile Attorney General William Barr raised the case to argue that Beijing is “loading poor countries up with debt, refusing to renegotiate terms, and then taking control of the infrastructure itself.”

As Michael Ondaatje, one of Sri Lanka’s greatest chroniclers, once said, “In Sri Lanka a well-told lie is worth a thousand facts.” And the debt-trap narrative is just that: a lie, and a powerful one.

Our research shows that Chinese banks are willing to restructure the terms of existing loans and have never actually seized an asset from any country, much less the port of Hambantota. A Chinese company’s acquisition of a majority stake in the port was a cautionary tale, but it’s not the one we’ve often heard. With a new administration in Washington, the truth about the widely, perhaps willfully, misunderstood case of Hambantota Port is long overdue.

The city of Hambantota lies at the southern tip of Sri Lanka, a few nautical miles from the busy Indian Ocean shipping lane that accounts for nearly all of the ocean-borne trade between Asia and Europe, and more than 80 percent of ocean-borne global trade. When a Chinese firm snagged the contract to build the city’s port, it was stepping into an ongoing Western competition, though one the United States had largely abandoned.
Riaz Haq said…
Phase-II of CPEC, flagship BRI project, much broader in scope: Pakistan Ambassador to China
Phase-II much broader in scope: Ambassador


https://www.globaltimes.cn/page/202201/1246043.shtml


GT: The first brick of the CPEC was laid in 2013, it has been nine years, can you comment on the current status of CPEC construction efforts? Tackling the energy shortage was frequently mentioned in the earlier years of the CPEC, how is the situation now?

Haque: The CPEC marks a new phase in Pakistan-China relations by placing economic cooperation and connectivity at the center of bilateral agenda. Being the flagship project of the Belt and Road Initiative (BRI), it aims to enhance connectivity and trade linkages between Pakistan, China and the region through a network of roads, rail, fiber optic, energy pipelines, industrial clusters and Special Economic Zones.

In its first phase, the CPEC has helped us develop major infrastructure and address our essential energy needs. The energy projects which have already been completed include 1,320 megaWatt (MW) capacity coal-fired power plants in Sahiwal (Punjab), Port Qasim (Karachi) and Hub (Balochistan); 660MW Engro Thar coal power project; 1,000MW Quaid-e-Azam Solar Park in Bahawalpur (400MW project is complete while 600MW is under-implementation), and some smaller wind & solar energy projects. A mega, 878-kilometer long, Matiari to Lahore ±660 KV HVDC Transmission Line project has also been completed with the capacity to evacuate 4,000 MW electricity.

It has also upgraded Pakistan's national and international highway network to provide more reliable Pakistan-China connectivity across the Karakoram Mountains and smoother inland communications. The CPEC investment and its spin-off effects have also generated thousands of jobs.

GT: How do you see the current challenges and opportunities facing the CPEC in 2022? What's there to be built in the second phase?

Haque: It is a matter of great satisfaction that despite the challenges posed by COVID-19 pandemic in the last two years, the CPEC cooperation and work on all projects continued unhindered. The recently held 10th meeting of the Joint Cooperation Committee reviewed wide-ranging cooperation under the CPEC framework and identified more areas of cooperation including establishment of a Joint Working Group on Information Technology and Industry, which is expected to support high-quality development of the CPEC as envisioned by the leadership of the two countries.

While the first phase of CPEC was mainly focused on infrastructure and energy projects to cater to the immediate needs, the high-quality CPEC phase-II is much broader in scope and focuses on industrial relocation, agricultural modernization, science and technology cooperation, job creation and our people's socio-economic well-being. We are also making rapid progress on the development of the Gwadar Port and Free Trade Zone, which would promote regional connectivity and economic integration.

GT: What is the current level of third-party participation in the construction of the CPEC?

Haque: As the CPEC aims to promote regional integration and win-win cooperation, Pakistan and China have agreed to welcome and encourage high-quality investments and introduction of advanced technologies and expertise in the CPEC from third-party partners who are ready to work with us for common development.

The two countries are jointly working to finalize a mechanism for third-party cooperation under the CPEC framework before formally processing such requests.



GT: Regional cooperation is a key word for 2022 and BRI construction is also progressing rapidly. How do you see Pakistan's and CPEC's role in this direction?

Haque: Pakistan is one of the earliest supporters and participants of the BRI. We emphatically endorse the spirit and philosophy of the BRI, which seeks to transcend national boundaries and lay bridges for a win-win cooperation and closer economic integration for a shared future.
Riaz Haq said…
CPEC Results According to Wang Wenbin of China

https://twitter.com/bilalgilani/status/1677391745112477696?s=20

Bilal I Gilani
@bilalgilani
CPEC projects are creating 192,000 jobs, generating 6,000MW of power, building 510 km (316 miles) of highways, and expanding the national transmission network by 886 km (550 miles),” Foreign Ministry spokesman Wang Wenbin told reporters in Beijing."


Associated Press of Pakistan: On July 5, Prime Minister Shahbaz Sharif while addressing a ceremony to mark a decade of signing of the China-Pakistan Economic Corridor (CPEC), said that CPEC has been playing a key role in transforming Pakistan’s economic landscape. He also said that the mega project helped Pakistan progress in the region and beyond. What is your response?

Wang Wenbin: The China-Pakistan Economic Corridor (CPEC) is a signature project of China-Pakistan cooperation in the new era, and an important project under the Belt and Road Initiative. This year marks the 10th anniversary of the launch of CPEC. After ten years of development, a “1+4” cooperation layout has been formed, with the CPEC at the center and Gwadar Port, transport infrastructure, energy and industrial cooperation being the four key areas. Projects under CPEC are flourishing all across Pakistan, attracting USD 25.4 billion of direct investment, creating 192,000 jobs, producing 6,000 megawatts of electric power, building 510 kilometers of highways and adding 886 kilometers to the core national transmission network. CPEC has made tangible contribution to the national development of Pakistan and connectivity in the region. China and Pakistan have also explored new areas for cooperation under the framework of CPEC, creating new highlights in cooperation on agriculture, science and technology, telecommunication and people’s wellbeing.

China stands ready to work with Pakistan to build on the past achievements and follow the guidance of the important common understandings between the leaders of the two countries on promoting high-quality development of CPEC to boost the development of China and Pakistan and the region and bring more benefits to the people of all countries.

https://www.fmprc.gov.cn/eng/xwfw_665399/s2510_665401/2511_665403/202307/t20230706_11109401.html
Riaz Haq said…
The mega undertaking (China-Pakistan Economic Corridor or CPEC) has created nearly 200,000 direct local jobs, built more than 1,400 kilometers (870 miles) of highways and roads, and added 8,000 megawatts of electricity to the national grid, ending years of blackouts caused by power outages in the country of 230 million people.


https://www.voanews.com/a/top-china-official-visits-pakistan-marking-cpec-milestone/7204256.html


Chinese Foreign Ministry spokesman Wang Wenbin told reporters in Beijing earlier this month that CPEC projects "are flourishing all across Pakistan," making a "tangible contribution" to the national development of the country and to regional connectivity.

But critics say many projects have suffered delays, including several much-touted industrial zones that were supposed to help Pakistan enhance its exports to earn much-needed foreign exchange.

The country's declining dollar reserves have prevented Islamabad from paying Chinese power producers, leading to strains in many ties.

Pakistan owes more than $1.26 billion (350 billion rupees) to Chinese power plants. The amount keeps growing, and China has been reluctant to defer or restructure the payment and CPEC debts. All the Chinese loans – both government and commercial banks – makeup nearly 30% of Islamabad's external debt.

Some critics blame CPEC investments for contributing to Pakistan's economic troubles. The government fended off the risk of an imminent default by securing a short-term $3 billion International Monetary Fund bailout agreement this month.

Security threats to its citizens and interests in Pakistan have also been a cause of concern for China. Militant attacks have killed several Chinese nationals in recent years, prompting Beijing to press Islamabad to ensure security measures for CPEC projects.

Diplomatic sources told VOA that China has lately directed its diplomats and citizens working on CPEC programs to strictly limit their movements and avoid visiting certain Pakistani cities for security reasons.

"They [Chinese] believe this security issue is becoming an impediment in taking CPEC forward," Senator Mushahid Hussain, the chairman of the defense committee of the upper house of the Pakistani parliament, told VOA in an interview earlier this month.

"Recurring expressions of concern about the safety and security of Chinese citizens and investors in Pakistan by top Chinese leaders indicate that Pakistan's promises of 'foolproof security' for Chinese working in Pakistan have yet to be fulfilled," said Hussain, who represents Prime Minister Shehbaz Sharif's ruling party in the Senate.

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