China Pakistan Economic Corridor (CPEC): Myths And Facts

[RiazHaq]

http://www.riazhaq.com/2018/02/china-pakistan-economic-corridor-cpec.html

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)

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


http://www.riazhaq.com/2018/02/china-pakistan-economic-corridor-cpec.html

 

[DrasticMeasure]

CPEC is just a road. It is given a fancy name CPEC to convince Pakistanis that something out of this world is happening in their country. Let me tell you CPEC is nothing but a road which will be used by Chinese trucks. That's all it is.

 

[Samlee]

http://www.riazhaq.com/2018/02/china-pakistan-economic-corridor-cpec.html

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)

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


http://www.riazhaq.com/2018/02/china-pakistan-economic-corridor-cpec.html

Riaz Sahib I Will Be Starting A Thread On CPEC With Complete Cost Benefit Analysis And Research To Back It Up.CPEC Is Great But It Is Not Being Managed Well And As Much As NS Dismissal Was The Correct Decision It Has Brought A Modicum Of Instability Which Has Somehow Affected It.

 

[Talwar e Pakistan]

CPEC is just a road. It is given a fancy name CPEC to convince Pakistanis that something out of this world is happening in their country. Let me tell you CPEC is nothing but a road which will be used by Chinese trucks. That's all it is.

What an idiot.

A road does not cost over 70 billion dollars.

 

[PAKISTANFOREVER]

http://www.riazhaq.com/2018/02/china-pakistan-economic-corridor-cpec.html

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)

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


http://www.riazhaq.com/2018/02/china-pakistan-economic-corridor-cpec.html

So according to some, China is the new East india company?????????........well then thank goodness the Chinese are not the English/British and Pakistanis are not indians. There goes that theory.

What an idiot.

A road does not cost over 70 billion dollars.

With many more billions earmarked for further investments in the coming years and decades.

 

[Cybernetics]

CPEC is not just a road, the road aspect is just a small portion of it. CPEC is laying the basic foundation for Pakistan's economic growth: Energy, transport, and information connectivity. It's not so much of an industrial project but a basic infrastructure project. Beyond the highways, eventually the transport aspect will encompass railways, metros, busses, etc.

CPEC is the gateway for FDI into Pakistan for the next few decades. Once Pakistan has the basic infrastructure it will become attractive for offshoring industries, something most developing countries lack and why some countries with cheap labour is unable to attract industries. The step after the current CPEC is industrial investment into Pakistan, then other higher value industries, over years hundreds of billions of dollars will flow into it. Basically China is applying the China economic model on Pakistan:

• Special economic zones (Gwadar is the first experiment for other reforms similar to Shenzhen)
• Extensive infrastructure development and factor in future decades of growth (energy, transport, information)
• Attract FDI through incentives
• Export orientation to ensure employment, build human capital, and allow industries to move up the learning curve (capture labour intensive market)
• Development of heavy industries as a stable industrial base (Pakistan is well suited for it due to natural factors)
• Develop a series of joint research centres/JV for innovation to boost productivity

Initially many labour intensive industries will move to Pakistan to ensure employment, it wouldn't necessarily be high end but will have a stabilising effect on society and decrease poverty. Some of China's auto industry will move there also for both domestic and export market. Due to the abundance of coal and ore in Pakistan and Afghanistan a robust heavy industries can be established for internal consumption and export. This is years down the road. For now to speed up the CPEC project many capital goods like machines, vehicles, and tools must be imported from China or the process will take too long, China did the same after reforms by importing machines from Germany and Japan for its production lines. On paper there is a large trade deficit but it's structurally temporary, its necessary for the initial capital formation of Pakistan.

China invests a lot in other countries too but nothing this comprehensive. It makes no sense for an "East India Company" to plan and implement such a comprehensive project in a country it wishes to exploit.

• Ties China and Pakistan's strategic imperatives. If India attempts to blockade SCS, China can get goods from Gwadar, and if it attempts to blockade Pakistan its also effectively blockading Chinese interests. The connection secures both countries from blockade or it would be war with both nations.
• Reward and build up the strength of allies. Some Chinese industries will offshore anyways due to increasing labour costs and will flow in all directions. With this government initiative, some investment can be strategically focused on Pakistan.
• Chinese leaders really believe in the concept of historic destiny (to a certain extend many Chinese people think that way too), it's why they plan for such long time horizons and big initiatives. They feel its their duty to fulfil a certain role in history, everyone is just a thread in a continuous fabric of history, to fulfil or progress towards the destiny is glorious and to not is shameful. Pakistan is part of this historic destiny vision.

For CPEC, we haven't seen anything big yet. Excited to see the progress unfold.

 

[Tanveer666]

CPEC is not just a road, the road aspect is just a small portion of it. CPEC is laying the basic foundation for Pakistan's economic growth: Energy, transport, and information connectivity. It's not so much of an industrial project but a basic infrastructure project. Beyond the highways, eventually the transport aspect will encompass railways, metros, busses, etc.

CPEC is the gateway for FDI into Pakistan for the next few decades. Once Pakistan has the basic infrastructure it will become attractive for offshoring industries, something most developing countries lack and why some countries with cheap labour is unable to attract industries. The step after the current CPEC is industrial investment into Pakistan, then other higher value industries, over years hundreds of billions of dollars will flow into it. Basically China is applying the China economic model on Pakistan:

• Special economic zones (Gwadar is the first experiment for other reforms similar to Shenzhen)
• Extensive infrastructure development and factor in future decades of growth (energy, transport, information)
• Attract FDI through incentives
• Export orientation to ensure employment, build human capital, and allow industries to move up the learning curve (capture labour intensive market)
• Development of heavy industries as a stable industrial base (Pakistan is well suited for it due to natural factors)
• Develop a series of joint research centres/JV for innovation to boost productivity

Initially many labour intensive industries will move to Pakistan to ensure employment, it wouldn't necessarily be high end but will have a stabilising effect on society and decrease poverty. Some of China's auto industry will move there also for both domestic and export market. Due to the abundance of coal and ore in Pakistan and Afghanistan a robust heavy industries can be established for internal consumption and export. This is years down the road. For now to speed up the CPEC project many capital goods like machines, vehicles, and tools must be imported from China or the process will take too long, China did the same after reforms by importing machines from Germany and Japan for its production lines. On paper there is a large trade deficit but it's structurally temporary, its necessary for the initial capital formation of Pakistan.

China invests a lot in other countries too but nothing this comprehensive. It makes no sense for an "East India Company" to plan and implement such a comprehensive project in a country it wishes to exploit.

• Ties China and Pakistan's strategic imperatives. If India attempts to blockade SCS, China can get goods from Gwadar, and if it attempts to blockade Pakistan its also effectively blockading Chinese interests. The connection secures both countries from blockade or it would be war with both nations.
• Reward and build up the strength of allies. Some Chinese industries will offshore anyways due to increasing labour costs and will flow in all directions. With this government initiative, some investment can be strategically focused on Pakistan.
• Chinese leaders really believe in the concept of historic destiny (to a certain extend many Chinese people think that way too), it's why they plan for such long time horizons and big initiatives. They feel its their duty to fulfil a certain role in history, everyone is just a thread in a continuous fabric of history, to fulfil or progress towards the destiny is glorious and to not is shameful. Pakistan is part of this historic destiny vision.

For CPEC, we haven't seen anything big yet. Excited to see the progress unfold.

So essentially, its a comprehensive infrastructure project to improve the competitiveness of pakistani goods in the international market. But what does china stand to gain from it?

 

[Thanatos]

CPEC is just a road. It is given a fancy name CPEC to convince Pakistanis that something out of this world is happening in their country. Let me tell you CPEC is nothing but a road which will be used by Chinese trucks. That's all it is.

Right, tell us more?

Come back to reality . If its only a road why is india panicking? Why did India establish a special unit of RAW to sabotage CPEC. I think just because indian themselves are fool, they think every body else posses the same IQ.
WHat about massive power projects, what about Lahore Metro train project , what about special economic zones? Oh you watch Republic TV they dont show this.

So essentially, its a comprehensive infrastructure project to improve the competitiveness of pakistani goods in the international market. But what does china stand to gain from it?

Strong and vibrant Pakistan is beneficial to China. Is that not a gain?

Summerize

CPEC is not just a road, the road aspect is just a small portion of it. CPEC is laying the basic foundation for Pakistan's economic growth: Energy, transport, and information connectivity. It's not so much of an industrial project but a basic infrastructure project. Beyond the highways, eventually the transport aspect will encompass railways, metros, busses, etc.

CPEC is the gateway for FDI into Pakistan for the next few decades. Once Pakistan has the basic infrastructure it will become attractive for offshoring industries, something most developing countries lack and why some countries with cheap labour is unable to attract industries. The step after the current CPEC is industrial investment into Pakistan, then other higher value industries, over years hundreds of billions of dollars will flow into it. Basically China is applying the China economic model on Pakistan:

• Special economic zones (Gwadar is the first experiment for other reforms similar to Shenzhen)
• Extensive infrastructure development and factor in future decades of growth (energy, transport, information)
• Attract FDI through incentives
• Export orientation to ensure employment, build human capital, and allow industries to move up the learning curve (capture labour intensive market)
• Development of heavy industries as a stable industrial base (Pakistan is well suited for it due to natural factors)
• Develop a series of joint research centres/JV for innovation to boost productivity

Initially many labour intensive industries will move to Pakistan to ensure employment, it wouldn't necessarily be high end but will have a stabilising effect on society and decrease poverty. Some of China's auto industry will move there also for both domestic and export market. Due to the abundance of coal and ore in Pakistan and Afghanistan a robust heavy industries can be established for internal consumption and export. This is years down the road. For now to speed up the CPEC project many capital goods like machines, vehicles, and tools must be imported from China or the process will take too long, China did the same after reforms by importing machines from Germany and Japan for its production lines. On paper there is a large trade deficit but it's structurally temporary, its necessary for the initial capital formation of Pakistan.

China invests a lot in other countries too but nothing this comprehensive. It makes no sense for an "East India Company" to plan and implement such a comprehensive project in a country it wishes to exploit.

• Ties China and Pakistan's strategic imperatives. If India attempts to blockade SCS, China can get goods from Gwadar, and if it attempts to blockade Pakistan its also effectively blockading Chinese interests. The connection secures both countries from blockade or it would be war with both nations.
• Reward and build up the strength of allies. Some Chinese industries will offshore anyways due to increasing labour costs and will flow in all directions. With this government initiative, some investment can be strategically focused on Pakistan.
• Chinese leaders really believe in the concept of historic destiny (to a certain extend many Chinese people think that way too), it's why they plan for such long time horizons and big initiatives. They feel its their duty to fulfil a certain role in history, everyone is just a thread in a continuous fabric of history, to fulfil or progress towards the destiny is glorious and to not is shameful. Pakistan is part of this historic destiny vision.

For CPEC, we haven't seen anything big yet. Excited to see the progress unfold.

You summarized it pretty well. However people with sole purpose of opposing the project wouldnt get it.

 

[Cybernetics]

So essentially, its a comprehensive infrastructure project to improve the competitiveness of pakistani goods in the international market. But what does china stand to gain from it?

Yes.

China gains a lot from this arrangement. Geographically Pakistan is one the most important partners for China and this is long term, unless China substantially weakens or Pakistan geographically detaches from the Chinese border. Current technologies can surmount the barriers of the Karakorum.

• Direct access to the Arabian sea (no other country provides it), thereby bypassing Malacca strait. Blockade of China in this route would mean a broader conflict, changing military calculations. Opening Pakistan will help develop China's interior/Western provinces. Military and economic.
• Oil & gas pipelines, rail, roads, and optic fibre network extension.
• Access to an emerging market and other markets in Africa and Middle East. Pakistan will be an export hub for some Chinese industries much like China was for Western companies. It is also geographically situated in the middle of the trade network.
• Stable Pakistan means a stable China, stable trade route and a bigger market.
• Strategic counter to India, if Pakistan is weak, likelihood of war increases. China prefers to have a stable region. Make money not war.
• Without a comprehensive infrastructure plan Pakistan cannot absorb many of China's industrial supply chains. Much like why even with lower wages, developing countries cannot develop or attract similar industries as China.

Eventually there will be a Myanmar-Bangladesh route but that depends on the relations of three countries which is more complex. China cannot upset either country too much right now. CPEC is very centralised and long term, it cannot depend on the whims of politicians. In the mean time private businesses will invest however they like.

Direct land borders matter and China doesn't have one with Bangladesh, only access points are through Myanmar and North East India. Until China can access Bangladesh directly a CPEC like plan is impossible. Though other strategies for Bangladesh will be developed.

 

[Tanveer666]

what about the funding of the project? I've seen many pakistanis on quora claiming that the MOST of the funding for the projects are either chinese grants to pakistan (which apparently pakistan does not have to repay), or money chinese companies are paying out of their own pockets. And some of it are low interest loans provided by china, so in essence, pakistan has very little to loose, from a financial stand point. Are these claims true?


Also, i've seen some indian on quora claiming that vital parts of the "road" remain closed ,due to heavy snowfalls and such, for 5-6 months which makes this route economically inviable .In fact he even claimed that it would be far cheaper to transport goods to gwadar via myanmar-bangladesh-india, is this true?He thinks that this route is a "contingency route" for china, in case of a naval blockade on malacca.

Nevertheless, IMHO pakistan seems to gain from CPEC but some misinformation regarding this grand project must be adressed.

 

[Metal 0-1]

Sorry to say but our Government may or may not be managing CPEC in a right way. Baloch's are still concerned about their province future. their concerns are right but their way of doing things are not right(talking about Balochs who picked up weapons). No offence did our government vetted the companies mining gold and copper in Balochistan. Again no political offence. They are stealing our gold. Half of the financial problems is going to resolve by these minerals if they are returned to Pakistan and of course Balochistan as well. Pakistan is exporting India our Pink Salt extracted from Khewra salt mines. Stop exporting them our salt. We can crush and pack by ourselves and can earn a lot of profit. If not put a high price on our salt than export to India.

THE MAIN QUESTION AND CONCERN IS WHAT'S IN PAKISTAN.