CPEC committee JCC finalization of the long-term plan: CPEC enters the next phase

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CPEC committee to finalise long-term plan tomorrow


Khaleeq KianiUpdated November 20, 2017
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ISLAMABAD: The Joint Cooperation Committee (JCC) on China-Pakistan Economic Corridor (CPEC) will meet here on Tuesday (Nov 21) to review and finalise a long-term plan (LTP) 2017-30 envisaging key areas of bilateral cooperation over the next 13 years amid Islamabad’s policy adjustments to facilitate Chinese investment and financing.

A senior government official told Dawn that both senior officials meeting (SOM) and formal JCC meeting headed by ministers from the two countries would begin with discussions on the LTP in an attempt to sign a final agreement. He said the LTP draft, finalised after the 6th JCC meeting held in Beijing in December last year and shared with the provincial governments, had remained unchanged.

The official said a cabinet committee on CPEC headed by Prime Minister Shahid Khaqan Abbasi had already agreed in principle to offer a special incentive package under which all investments in the first phase of nine special industrial/economic zones to be made by end-2020 would enjoy complete tax holiday.

The 40-member SOM to be presided over by the planning and development secretary and his Chinese counterpart on Nov 20 will begin the day with discussions on the LTP and industrial and economic cooperation flowing out of it. All the six joint working groups on the LTP – industrial cooperation, Gwadar, transport infrastructure, energy and security – are led by federal secretaries and their Chinese counterparts.

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Any outstanding matter relating to taxes and exemptions based on the special package cleared by the prime minister would come up for discussion in the last session of the SOM for submission to the JCC the following day.

On the next day, the formal JCC session would also begin with the LTP and would be co-chaired by Planning and Development Minister Ahsan Iqbal and Vice Chairman of China’s National Development and Reforms Commission Wang Xiaotao.

China Development Bank (CDB), the main financier of the CPEC, will make a presentation on the LTP on behalf of the Chinese side based on the outcome of the SOM and will be responded to by the Pakistani side. The JCC will conclude with the signing of documents, including the LTP, subject to resolution of all outstanding issues on taxation and policy direction.

Challenges to CPEC
The draft LTP, seen by Dawn, finds geopolitical and security risks as possible challenges to the CPEC in view of inherent unstable geopolitical environment in South Asia and adjustment of policy towards the region by world powers, besides a mix of international, regional, national and extremist factors that could cause disruptive activities, challenging the CPEC building.

Besides the ongoing cooperation on road and rail networks, the LTP seeks to boost information connectivity through operation of local communication networks and broadcast and TV networks and “expedite Pakistan to adopt China’s Digital Terrestrial Multimedia Broadcasting (DTMB) standard” and border electronic monitoring and safe city constructions.

The two sides will strengthen cooperation in trade and industrial areas, expand bilateral economic and trade relations and enhance the level of bilateral trade liberalisation. They will promote the quality and efficiency improvement of the textile and clothing industry, expand the size of the textile industry and increase the supply of high value-added products and promote the Kashgar Economic and Technological Development Zone and Caohu Industrial Park to adopt the means like export processing to establish a regional cooperation and development model based on complementary advantages and mutual benefits.

The two sides will also expand cooperation in the appliance industry, promote Pakistan’s industries from assembling imported parts and components to localised production of parts and encourage various forms of Chinese enterprises to enter the Pakistani market to improve the development of energy efficient appliance industry in Pakistan, besides chemicals, engineering, agro, iron & steel and construction materials to meet the local demand and expand to export market.

They will cooperate in key construction areas such as biological breeding, production, processing, storage and transportation, disease prevention and control, water resources development and utilisation, land development and remediation, besides ICT-enabled agriculture and marketing of agricultural products so as to transition from traditional agriculture to modern agriculture in the regions along the CPEC to effectively boost the local agricultural economy.

The two sides will exploit the potential advantages of tourism resources in the regions along the CPEC, especially the China-Pakistan border areas, and “actively help Pakistan’s coastal areas become more livable, business-friendly and tourist-friendly”.

The LTP envisages construction of the “2+1+5” tourism spatial structure, which includes two centres, one axis and five zones: Karachi Port and Gwadar Port as the two centers, and the coastal tourism belt as the development axis, and five tourist zones of Jiwani & Gwadar, Jiedijiao, Olmara, Songminiya and Keti Bander.

Pakistan will apply international and China’s new urbanisation concepts to the municipal construction of node cities along the CPEC, such as the construction of the public transport system and water supply and drainage systems and “give full play to China’s advantages in technology, equipment and capital, and solve some prominent livelihood issues via pilot projects”.

The two sides agree to strengthen cooperation in financial regulation. They will continue to sign currency swap agreements and expand swaps size, enrich the scope of foreign currency from currency swap, assign the foreign currency to domestic banks through credit-based bids to support the financing for projects along the CPEC, besides creating bilateral payment and settlement system to reduce the demand for third-party currency and move to a bilateral foreign exchange reserve pool to form an effective mechanism for stabilising the exchange rate through cooperation of central banks and other financial sector regulators.

In the process, they plan to create a settlement platform for RMB cross-border trade and investment and a monitoring and early warning platform for cross-border cash flow and promote free flow of capital and facilitate cross-border transfer of legitimate funds, including those in financial markets.

Gwadar Port free zone will be developed on the pattern of Shanghai free trade zone and allow RMB offshore financial business. Both countries will encourage Chinese enterprises, private sectors and private sector funds of other economic entities to make various forms of direct investment, welcome Pakistan’s private capital in participating in the projects along the CPEC and establish various types of private financial institutions or infrastructure funds.

An assessment mechanism will be established to evaluate the implementation of major projects, assess the progress of the long-term plan in every aspect every five years, and then update and adapt the plan accordingly.

Published in Dawn, November 20th, 2017

 

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CPEC enters the next phase
Khaleeq KianiNovember 20, 2017
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THE two-day Joint Cooperation Committee (JCC) meeting of the China-Pakistan Economic Corridor (CPEC) sets the stage for the second phase of the multibillion-dollar cooperation between the two nations.

It attempts to formalise the future roadmap for industrial and economic collaboration involving special economic zones along the CPEC stretch in Pakistan and adopt a Long Term Plan (LTP) 2030.

The main focus of the seventh JCC will remain special economic/industrial zones even though all the five joint working groups (JWGs) — Gwadar, energy, transport infrastructure, special economic zones and planning — would meet on the first day (today) to remove any irritant and suggest the way forward.

The JWGs comprise secretary-level officials of the two countries. The new projects, mostly small to medium size, will be finalised by these groups for inclusion in the overall portfolio.

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Even though Pakistan had originally lobbied for its financing, it has already been settled in recent interactions that the $14 billion Diamer-Bhasha Dam would not be made part of the CPEC because of unacceptable demands from Beijing for the transfer of its ownership.

The key projects expected to formally become part of the CPEC are $8bn Main Line-I (the 1,875km railway line from Karachi to Lahore to Peshawar) and $3.5bn Karachi Circular Railway. The financial appraisal of these new projects has been completed and their future course of action will be approved.

On the second day, the JCC — led from the Chinese side by vice-chairman of the National Development and Reforms Commission (NDRC) and from the Pakistani by Minister for Planning Development and Reform Ahsan Iqbal — will meet all the four chief ministers, heads of regional governments and the Federation of Pakistan Chambers of Commerce and Industry.

Almost all the provincial and regional governments have submitted their feasibility studies, except Balochistan which has yet to complete the task

The JCC will take recommendations finalised by the JWGs, and formal agreements would be signed for most of the projects cleared by the sixth JCC meeting held in Beijing last year.

A cabinet committee on the CPEC presided over by Prime Minister Shahid Khaqan Abbasi has already cleared the proposals for the fresh projects and nine SEZs that would be offered 15- to 20-year tax holidays in case investment is made before 2020.

The Board of Investment would sign an overarching agreement with its Chinese counterpart for all the nine SEZs on behalf of the provinces and regional governments, ie Azad Jammu and Kashmir (AJK), Federally Administered Tribal Areas (Fata) and Gilgit-Baltistan (GB).

Under the road map, the Chinese side would start investing in the SEZs immediately after JCC’s clearance to avail benefits of tax exemption.

There is a strong possibility that Chinese institutions and the private sector will pick a dedicated SEZ or industrial park, most probably Rashakai near Nowshera owing to its compact feasibility and 100 per cent 1,000-acre land acquisition, and another at Maqpoondas in GB for its close proximity with Kashgar in Xinjiang.

There are indications that because of its feasibility study, the availability of relevant raw material and infrastructure access, the Chinese would offer to develop the Rashakai SEZ on their own for industrial units relating to fruit, textile and packaging.

Almost all the provincial and regional governments have submitted their feasibility studies, except Balochistan which has yet to complete the task.

The initial plan is flexible and is aimed at starting work immediately in those SEZs and projects which are ready and to chip in others as they get ready.

The special economic or industrial zones also include the Dhabeji economic zone in Sindh, for which 1,000 acres have been earmarked, whereas the development of an industrial park on 1,500 acres of Pakistan Steel Mills’ land at Port Qasim is awaiting land transfer.

Moreover, the 200-acre Bostan industrial zone in Balochistan, Allama Iqbal industrial city near Faisalabad, Mohmand marble city in Fata, ICT model industrial zone in Islamabad and a mix-industry special zone in Mirpur, AJK, are under process but have yet to take off.

One challenging aspect of the CPEC is the availability of portable water for Gwadar Port City, for which authorities are running from pillar to post. Against the requirement of 12 million gallons per day (MGD) for the port city, the authorities have been able to ensure around 1MGD for now. The supply would be increased to 5MGD with the installation of a desalination plant in six to 10 months.

As for the Long Term Plan, the draft has already been finalised by the two sides under which CPEC should take an initial shape by 2020, addressing major bottlenecks to Pakistan’s economic and social development, and for the CPEC to start boosting economic growth for both countries.

“By 2025, the CPEC building shall be basically done, the industrial system approximately complete, major economic functions brought into play in a holistic way, the people’s livelihood along the CPEC significantly improved, regional development more balanced and all the goals of Vision 2025 achieved,” says the LTP.

The LTP envisions the two countries striving for synchronisation and reciprocity of economic development.

China’s key objective is to gain the quality and efficiency improvement of the textile and clothing industry, expand its size and increase the supply of high value-added products, and in the process promote the Kashgar Economic and Technological Development Zone, and Caohu Industrial Park to adopt means like export processing.

On the Pakistani side, the key objective is to expand cooperation in the appliance industry, promote Pakistan’s industries from assembling imported parts and components to localised production of parts, and encourage various forms of Chinese enterprises to enter the Pakistani market to improve the development of energy efficient appliance industry.

It also envisages industrial capacity cooperation in sectors such as chemicals, engineering, agro, iron and steel and construction materials, and the of use efficient, energy-saving and environmental friendly processes and equipment to meet the demands of Pakistan’s local markets while further expanding into the international market.

Published in Dawn, The Business and Finance Weekly, November 20th, 2017




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What are provinces pitching at seventh JCC?: Punjab to pitch new SEZs
Nasir JamalUpdated November 20, 2017
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THE Punjab government is ready to pitch at least two under-construction industrial estates in the province for their inclusion in the list of the 27 priority special economic zones (SEZs) to be established across the country under the China-Pakistan Economic Corridor (CPEC).

The case for the two industrial estates in Faisalabad and Sheikhupura will be made at the seventh meeting of the Joint Cooperation Committee (JCC), scheduled to be held in Islamabad on Nov 20-21 to review progress on the projects already under way.

Punjab is said to be the largest beneficiary of the official and private Chinese investments being made under the CPEC project, especially in the energy and transport infrastructure.

Mujtaba Paracha, the provincial industries’ secretary, told this writer that Punjab has completed comprehensive feasibility reports regarding both the economic estates to be presented for their inclusion in the CPEC projects.

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The development of the Faisalabad industrial estate was at an advanced stage, he said, and hoped that it would be added to the list of SEZs under the corridor initiative that will connect China’s western-most region with the rest of the world through the Gwadar deep-sea port.

The province has completed comprehensive feasibility reports regarding both Faisalabad and Sheikhupura estates to be presented in this JCC

The new SEZs will be owned, controlled and operated by the provinces. But the federal government hasn’t announced the framework under which these zones will operate and what kind of benefits will be available to the investors.

Local businessmen as well foreign companies operating in Pakistan fear that these zones are being created exclusively for Chinese companies where they will enjoy extensive tax and labour law exemptions, creating an uneven field for existing domestic and foreign firms.

The local businesses as well as foreign companies have long been demanding that the SEZs not exclude them.

The government has not yet come up with any explanation. In fact, the new apparel park along the Lahore-Islamabad motorway near Sheikhupura is expected to be exclusively for Chinese investors.

Mr Paracha said the Punjab government also planned to raise the concerns of the business community from Punjab about their share in the future industrial cooperation between the two nations, as work on the trade route and SEZs gains momentum. “We will convey the sentiments of our businessmen that these economic zones should not be exclusive to China, and investors from Pakistan as well as other countries should also be allowed to invest there.”

In addition to pitching the two industrial estates for inclusion in the SEZ list, Iftikhar Ali Sahu, Punjab’s planning and development department secretary, said projects like the Lahore-Multan motorway and Multan-Sukkur motorway would also be discussed on the first day of the meeting between officials of the two neighbouring countries.

The secretary said the projects related to tourism and agriculture will be taken up at a later stage “because other sectors are our main priority at the moment”.

A provincial agriculture department official confirmed that no project related to agriculture was on the table at present.

Punjab Industries, Commerce and Investment Minister Sheikh Allauddin said the province will also pitch Chunian, Vehari and Rahim Yar Khan industrial estates for inclusion in the CPEC. But he too expected only the industrial estate in Faisalabad to be included on the list of SEZs at this stage

“The [$1.65 billion] Lahore Orange Line Metro Train project was discussed at the last JCC meeting in China. The delay in the completion of the project [because of cases against it pending in the courts] may also be taken up in the next review,” Mr Sahu said.

He explained that the JCC met every six months to review the progress on the ongoing projects under the trade route initiative as well as to discuss new ones.

“On the first day, Pakistani government officials meet their counterparts and on the second day the political leadership of both the countries hold discussions,” he said.

The six-month review of CPEC projects is a regular feature and it would continue till 2030.

“We will have four working sessions to discuss in detail the progress on the projects in seven sectors: infrastructure, energy, transport, Gwadar, banking, tourism and agriculture,” he said.

“We have outlined long-term plans for 2030, mid-term for 2025 and short-term (for two to three years). While reviewing the progress made so far, the meeting will analyse sector-wise development. If there are delays in any project we try to address the issue on a top priority basis so that it doesn’t linger on for another six months,” he said.

Punjab Industries, Commerce and Investment Minister Sheikh Allauddin said the province will also pitch Chunian, Vehari and Rahim Yar Khan industrial estates for inclusion in the CPEC. But he too expected only the industrial estate in Faisalabad to be included on the list of SEZs at this stage.

Hassan Khawar, who has done extensive research on the CPEC, told this writer that the most important thing to be discussed at the next JCC meeting was the long-term CPEC plan. “In the previous meetings, the long-term CPEC plan was neither presented nor discussed. This time it will be signed and discussed by both parties. After that this document will be available to the public.”

The long-term plan will actually reveal the direction of future bilateral cooperation between the two countries in the industrial and agriculture sectors.

Published in Dawn, The Business and Finance Weekly, November 20th, 2017

 

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Wake up Balochistan!

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What are provinces pitching at seventh JCC?: Nothing beyond Gwadar for Balochistan
Zahra AnumUpdated November 20, 2017
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Much has been said of the China Pakistan Economic Corridor’s (CPEC) role in boosting the country’s economy. While provinces have tried to grasp the opportunity to use the huge Chinese investment to develop their own industrial zones and enhance sectoral capacity, Balochistan, apart from Gwadar, has been slow on the uptake.

With the seventh Joint Cooperation Committee (JCC) meetings coming up, the province aims to propose six new projects, according to official information provided. A look at these shows a rigorous focus on progressing Gwadar’s development along with further logistic advancements.

The six projects that the province will present in the JCC are: Financial assistance from EXIM Bank for Gwadar; Construction of alternate harbour with allied facilities and establishment of necessary facilities for boat building industry on West-bay of Gwadar; Model Fisherman Residential village; Northern bypass (77 KM); Extension of airport road to New Gwadar International Airport; and Extension of Jinnah Avenue towards Koh-e-Batil and Northern bypass.

For work on CPEC projects to continue smoothly, the belief that the initiative is benefiting only a select few areas needs to be combated

Even though Balochistan led the way with 13 projects that were approved in the sixth JCC meetings in December last year, there has been criticism from various quarters that the thrust of the development has been focused on Gwadar leading to unequal growth in the province.

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Some officials spoken to were of the opinion that, along with Gwadar, until and unless the rest of the provincial economy was not integrated within the CPEC project, sustainable progress would not take place. There were multiple mentions of Lahore’s Rapid Mass transit projects as a first step towards this holistic growth.

When pointed out by this writer that the provinces were free to put forth plans that would bring about this integration, they lamented the fact that projects related to the socio-economic development of the province were not really of interest to the Chinese and were, therefore, rejected.

Projects focused on the afore-mentioned socio economic development, and which were supposed to be presented in the upcoming JCC, were the Quetta Mass Transit projects, the transportation of water from Pat-Feeder to Quetta project and the Bostan Special Economic Zone. All of these will now be postponed as the initial work for their presentation has not been completed.

On an enquiry into the reasons why the initial work had not been completed an official made a case for the province’s capacity constraints. He was of the opinion that the federal government should support the province by providing technical assistance and bemoaned the federal departments’ indifference.

When asked, Additional Chief Secretary (Dev), planning and development, Mr Qamar Masood stated that the government’s current focus in Balochistan was on Gwadar and developing communications channels.

Stating his point of view regarding the criticism that all development was Gwadar-centric with the rest of the province being neglected, he sounded weary, like a man tired of explaining the same thing multiple times to not very bright children “This is a misunderstanding. While port development and connectivity is the current focus, things are going step by step and development is taking place side by side.”

He said where economic expansion was concerned, it was a part of the CPEC and Balochistan was not going to be left behind; all investors wanted good labour, water and electricity but providing them was not a six or 10 month long issue. It would take time.

He referenced the Bostan Special Economic Zone as an example of simultaneous projects from which the entire province would benefit, stating that “while it has a lot of issues, consultants are working on the feasibility which will be completed around March. It is the most feasible project. Projects take different time frames for completion; this is not about politics but the nature of the project”.

Mr Masood also dismissed the case regarding the lack of aid from the federal government. He vociferously stated that this was “not true. The federal government has increased support, look at the figures, it has been very generous.”

Planning and Development Secretary Asfandyar Kakar, addressing the Quetta Mass Transit Project said “My department has taken up the task of hiring a consultant to complete the groundwork. Now we’re trying to increase our capacity and step up our game”.

Irrespective of everything Mr Kakar went on to say that in his opinion the CPEC “will definitely be a game changer if we keep the province’s interest in the forefront”.

Be it capacity constraints or a lack of a proactive approach one thing is certain, for work on CPEC projects to continue smoothly and for a semblance of equivalent development to be put forth, the belief that the project is benefitting only a select few areas needs to be combated.

A major step in this direction would be the approval of projects like the Quetta mass transit, Quetta water and to an extent the Bostan SEZ; all three of which have been postponed for another year that too based on their feasibility studies.

Published in Dawn, The Business and Finance Weekly, November 20th, 2017

 

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Special economic zones take centre stage as CPEC talks advance

Khaleeq KianiUpdated November 21, 2017
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ISLAMABAD: Representatives of Pakistan and China take part in the opening session of the CPEC Senior Officials meeting on Monday.—APP

ISLAMABAD: Amid some roadblocks on long-term plan (LTP), the Pakistan-China Senior Officials Meeting on Monday decided to formally move towards financing at least three special economic/industrial zones (SEZs) and some important rail, electricity and road projects in the China-Pakistan Economic Corridor (CPEC).

A senior government official told Dawn that Pakistan was not ready to allow Chinese yuan (renminbi) for free use in Gwadar or its treatment on a par with US dollar in the country and this was really disappointing for the visiting Chinese officials.

He said the use of yuan for common use in any part of Pakistan or exchangeable like dollar has to be reciprocal but hastened to add that the issue would be discussed again for some kind of institutional arrangement at the CPEC Joint Cooperation Committee (JCC) meeting on Tuesday to be co-chaired by Interior Minister Ahsan Iqbal, who is also Minister for Planning and Development Reforms, and Wang Xiaotao, vice chairman of National Development and Reforms Commission (NDRC) of China.

The official said the $3.5 billion worth of Karachi Circular Railway (KCR) was also unlikely to be cleared for inclusion in the CPEC at this stage because of some unsettled issues between the two countries. The project is likely to be dropped for now.

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Joint Cooperation Committee meetings to conclude tomorrow

Informed sources said the two sides appeared to have settled issues relating to $8.5bn Main Line-I (Karachi-Lahore-Peshawar Railway Line). The discussions were positive and two sides are also expected to sign agreements on actively promoted power projects like 1,280MW RLNG-based Rahimyar Khan project, 1,100MW Kohala (AJK) Hydropower Project and two wind projects of 50MW each in Sindh, an official said.

The two sides agreed to also include a few road projects mostly relating to much talked about Western Route between Gwadar, Nawabshah, Zhob-D.I.Khan-Hakla in the CPEC portfolio besides Karrakoram Highway (KKH) in the Gilgit-Baltistan.

The JCC will also clear for formal financing of Multan-Sukkur Motorway project under the CPEC. They agreed that Faisalabad in Punjab, Rashakai in Khyber Pakhtunkhwa and Dhabeji in Sindh to be made part of the CPEC financing in the first phase because of their preparedness.

An official statement said the the meeting was jointly chaired by Secretary Planning Shoaib Siddiqui and his Chinese counterpart as a kickstart before the actual commencement of the JCC. It was attended by the senior government officials, members of the Joint Working Groups (JWG) on Long Term Plan, Energy, Infrastructure , Gwadar, Industrial Cooperation and Security from China and Pakistan.

Secretary to the Prime Minister Fawad Hassan Fawad, federal secretaries of the relevant ministries, chairmen of Gwadar Development Authority and Gwadar Port Authority and representatives of the provincial governments also attended.

Pakistan welcomed the visiting delegation and reported that successful execution of the ongoing projects by now showed strong commitment and resolve of both China and Pakistan to execute every single project under the CPEC framework in letter and spirit.

The time-tested friendship has “further transformed the two countries into iron brotherhood and economic partnership…CPEC is a project of shared destiny and framework offering equal opportunities to the people of China and Pakistan”, said Mr Siddiqui.

The secretary planning said the pace of work and fast track execution of the projects was quite satisfactory since most of the projects underway were following the timelines agreed by the two sides and hoped the keeping with the momentum the completion of early harvest projects would be in time and on par with the international standards.

He said the economic corridor was entering into the next phase of industrial cooperation which would make Pakistan a manufacturing hub and epicentre for connectivity in the region.

The meeting noted that after the initial work the stage was now set for industrial cooperation to attain new heights. It said a lot of work had already been done as the energy and infrastructural projects have been completed to support industrial development.

In the initial phase, the Chinese side shared its experiences regarding planning and developments of SEZs. It was agreed that to initiate first phase of development of provincial SEZs.

Representatives of provincial governments, GB and Fata made interventions highlighting their priorities and current status of their SEZs.

Pakistani side also highlighted the importance of skill development for successful implementation of industrial projects and requested Chinese assistance for establishment of centres for vocational training at Islamabad and other cities on the CPEC route.

The two sides also agreed to enhance cooperation in various sectors such as petrochemical, steel, textile, leather processing and machinery etc with specific reference to relocation of industries from China to provincial SEZs. Chinese side will motivate their enterprises for setting up of their industries in SEZs. In this context they can leverage the province to province or sister city arrangements. Both sides agreed to have frequent face to face interaction preferably on a quarterly basis.

Published in Dawn, November 21st, 2017

Pakistan was not ready to allow Chinese yuan (renminbi) for free use in Gwadar or its treatment on a par with US dollar

Kind of disappointed in hearing this... I wonder if it is a move to appease America so they don't move against pskistan/CPEC???

The official said the $3.5 billion worth of Karachi Circular Railway (KCR) was also unlikely to be cleared for inclusion in the CPEC at this stage because of some unsettled issues between the two countries. The project is likely to be dropped for now.

I blame the gangster politics of Karachi for this...

 

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What does the next phase of CPEC look like?

Almost all provincial, regional govts have submitted feasibility studies, except Balochistan.
SPECIAL REPORTUpdated about 22 hours ago

• THE NEXT PHASE
• SINDH
• PUNJAB
• BALOCHISTAN
• KP

WHAT CAN WE EXPECT FROM THE JCC?
By: Khaleeq Kiani
The two-day Joint Cooperation Committee (JCC) meeting of the China-Pakistan Economic Corridor (CPEC) sets the stage for the second phase of the multibillion-dollar cooperation between the two nations.

It attempts to formalise the future roadmap for industrial and economic collaboration involving special economic zones along the CPEC stretch in Pakistan and adopt a Long Term Plan (LTP) 2030.

The main focus of the seventh JCC will remain special economic/industrial zones even though all the five joint working groups (JWGs) — Gwadar, energy, transport infrastructure, special economic zones and planning — would meet on the first day (today) to remove any irritant and suggest the way forward.

The JWGs comprise secretary-level officials of the two countries. The new projects, mostly small to medium size, will be finalised by these groups for inclusion in the overall portfolio.

Even though Pakistan had originally lobbied for its financing, it has already been settled in recent interactions that the $14 billion Diamer-Bhasha Dam would not be made part of the CPEC because of unacceptable demands from Beijing for the transfer of its ownership.

The key projects expected to formally become part of the CPEC are $8bn Main Line-I (the 1,875km railway line from Karachi to Lahore to Peshawar) and $3.5bn Karachi Circular Railway. The financial appraisal of these new projects has been completed and their future course of action will be approved.

On the second day, the JCC — led from the Chinese side by vice-chairman of the National Development and Reforms Commission (NDRC) and from the Pakistani by Minister for Planning Development and Reform Ahsan Iqbal — will meet all the four chief ministers, heads of regional governments and the Federation of Pakistan Chambers of Commerce and Industry.

Almost all the provincial and regional governments have submitted their feasibility studies, except Balochistan which has yet to complete the task
The JCC will take recommendations finalised by the JWGs, and formal agreements would be signed for most of the projects cleared by the sixth JCC meeting held in Beijing last year.

A cabinet committee on the CPEC presided over by Prime Minister Shahid Khaqan Abbasi has already cleared the proposals for the fresh projects and nine SEZs that would be offered 15- to 20-year tax holidays in case investment is made before 2020.

The Board of Investment would sign an overarching agreement with its Chinese counterpart for all the nine SEZs on behalf of the provinces and regional governments, ie Azad Jammu and Kashmir (AJK), Federally Administered Tribal Areas (Fata) and Gilgit-Baltistan (GB).

Under the road map, the Chinese side would start investing in the SEZs immediately after JCC’s clearance to avail benefits of tax exemption.

There is a strong possibility that Chinese institutions and the private sector will pick a dedicated SEZ or industrial park, most probably Rashakai near Nowshera owing to its compact feasibility and 100 per cent 1,000-acre land acquisition, and another at Maqpoondas in GB for its close proximity with Kashgar in Xinjiang.

There are indications that because of its feasibility study, the availability of relevant raw material and infrastructure access, the Chinese would offer to develop the Rashakai SEZ on their own for industrial units relating to fruit, textile and packaging.

Almost all the provincial and regional governments have submitted their feasibility studies, except Balochistan which has yet to complete the task.

The initial plan is flexible and is aimed at starting work immediately in those SEZs and projects which are ready and to chip in others as they get ready.

The special economic or industrial zones also include the Dhabeji economic zone in Sindh, for which 1,000 acres have been earmarked, whereas the development of an industrial park on 1,500 acres of Pakistan Steel Mills’ land at Port Qasim is awaiting land transfer.

Moreover, the 200-acre Bostan industrial zone in Balochistan, Allama Iqbal industrial city near Faisalabad, Mohmand marble city in Fata, ICT model industrial zone in Islamabad and a mix-industry special zone in Mirpur, AJK, are under process but have yet to take off.

One challenging aspect of the CPEC is the availability of portable water for Gwadar Port City, for which authorities are running from pillar to post. Against the requirement of 12 million gallons per day (MGD) for the port city, the authorities have been able to ensure around 1MGD for now. The supply would be increased to 5MGD with the installation of a desalination plant in six to 10 months.

As for the Long Term Plan, the draft has already been finalised by the two sides under which CPEC should take an initial shape by 2020, addressing major bottlenecks to Pakistan’s economic and social development, and for the CPEC to start boosting economic growth for both countries.

“By 2025, the CPEC building shall be basically done, the industrial system approximately complete, major economic functions brought into play in a holistic way, the people’s livelihood along the CPEC significantly improved, regional development more balanced and all the goals of Vision 2025 achieved,” says the LTP.

The LTP envisions the two countries striving for synchronisation and reciprocity of economic development.

China’s key objective is to gain the quality and efficiency improvement of the textile and clothing industry, expand its size and increase the supply of high value-added products, and in the process promote the Kashgar Economic and Technological Development Zone, and Caohu Industrial Park to adopt means like export processing.

On the Pakistani side, the key objective is to expand cooperation in the appliance industry, promote Pakistan’s industries from assembling imported parts and components to localised production of parts, and encourage various forms of Chinese enterprises to enter the Pakistani market to improve the development of energy efficient appliance industry.

It also envisages industrial capacity cooperation in sectors such as chemicals, engineering, agro, iron and steel and construction materials, and the of use efficient, energy-saving and environmental friendly processes and equipment to meet the demands of Pakistan’s local markets while further expanding into the international market.

Published in Dawn, The Business and Finance Weekly, November 20th, 2017


Click on the tabs below to explore provincial pitches for the JCC.

 

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Pakistan refuses to allow free use of yuan for CPEC projects
By PTI | Updated: Nov 21, 2017, 12.17 PM IST

Pakistan has refused to allow free use of the Chinese yuan on the lines of the US dollar in the country as officials from the two nations met to decide on a long-term developmental plan under the China-Pakistan Economic Corridor (CPEC).

The meeting of senior officials from Pakistan and China yesterday decided to formally move ahead despite hurdles and finance at least three special economic/industrial zones (SEZs) and some important rail, electricity and road projects.

The Dawn reported quoting a senior government official that Pakistan was not ready to allow the Chinese yuan (renminbi) for free use in Gwadar or its treatment on a par with the US dollar in the country and this was disappointing for the visiting Chinese officials.


He said the use of yuan for common use in any part of Pakistan or exchangeable like dollar has to be on a reciprocal basis.

The official also said the issue would be discussed again for some kind of institutional arrangement at the CPEC Joint Cooperation Committee (JCC) meeting today to be co-chaired by Interior Minister Ahsan Iqbal, who is also minister for planning and development reforms, and Wang Xiaotao, vice chairman of National Development and Reforms Commission (NDRC) of China.


The official said the USD 3.5 billion Karachi Circular Railway (KCR) project was also unlikely to be cleared for inclusion in the CPEC at this stage because of some unsettled issues between the two countries. The project is likely to be dropped for now.

Informed sources said the two sides appeared to have settled issues relating to $8.5 billion Karachi-Lahore- Peshawar Railway Line.

The discussions were positive and the two sides are also expected to sign agreements on actively promoted power projects.

They also agreed to include road projects such as the much-talked-about western route between Gwadar, Nawabshah, Zhob-D I Khan-Hakla under CPEC besides Karakoram Highway (KKH) in Gilgit-Baltistan.









Meeting of CPEC's Joint Cooperation Committee under way
November 21, 2017
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By GEO NEWS
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Pakistan

Interior Minister Ahsan Iqbal at the JCC meeting. Photo: Radio Pakistan
ISLAMABAD: The seventh ministerial-level meeting of Joint Cooperation Committee on China-Pakistan Economic Corridor (CPEC) began in Islamabad today (Tuesday).

The JCC is the apex decision-making forum on the CPEC and is jointly chaired by Pakistan's Planning and Development Minister Ahsan Iqbal and the vice-chairman of National Development and Reform Commission (NDRC) of China Wang Xiatao.

At least 150 high-level officials from both the countries are in attendance at the meeting, including Khyber Pakhtunkhwa Chief Minister Pervez Khattak, Sindh Chief Minister Murad Ali Shah, Balochistan Chief Minister Sanaullah Zehri, Gilgit Baltistan Chief Minister Hafeez-ur-Rehman, Azad Jammu and Kashmir Prime Minister Raja Farooq Haider and Punjab Minister for Planning and Development Malik Nadeem Kamran, among others.

Moreover, it is for the first time that officials from the private sector and representatives of commerce and industries of Pakistan are attending the meeting.

The JCC is the top decision-making body for projects to be carried out under the $55 billion CPEC umbrella.

The committee has the mandate to review progress on the schemes and take adecision to include new projects in the future. The meeting will review the long-term plan of CPEC.

On Monday, a Senior Officials Meeting (SOM) was held in which officials of various joint working groups of Pakistan and China discussed the long-term plan of CPEC, among other projects.

The SOM also prepared the draft discussion for today's JCC meeting.

Assistant Foreign Minister of China Kong Xuanyou and PM Abbasi Nov 21, 2017. Photo: Radio Pak
Earlier, Assistant Foreign Minister of China Kong Xuanyou called on Prime Minister Shahid Khaqan Abbasi in Islamabad.

According to Radio Pakistan, Chinese Ambassador Yao Jing and Foreign Secretary Tehmina Janjua were also present in the meeting.

Pak-China relations and matters pertaining to mutual cooperation between the two countries were discussed in the meeting.