Pakistan, China revive CPEC Phase-II

[Communism]

Chinese supply chain is about costs and efficiency. There is nothing cost efficient about manufacturing in Pakistan and sending it over Trans-Karakoram railway

The only thing is how much is China willing to sacrifice some of its factory jobs for Pakistan. To this point the factories are going to SE Asia.

I'm dumbfounded at the total lack of awareness of this basic fact.


People on this forum have some delusional idea that Pakistan is a good place to manufacture anything other than labor intensive industries.


Every time I tell people on this forum this, they simply ignore it entirely.

 

[nahtanbob]

I'm dumbfounded at the total lack of awareness of this basic fact.


People on this forum have some delusional idea that Pakistan is a good place to manufacture anything other than labor intensive industries.


Every time I tell people on this forum this, they simply ignore it entirely.

I have not been to Pakistan. I could not confirm anything based on first hand experience. practically every pro-CPEC article in Pakistani media has some expectation that China would move manufacturing jobs to Pakistan

 

[Communism]

I have not been to Pakistan. I could not confirm anything based on first hand experience. practically every pro-CPEC article in Pakistani media has some expectation that China would move manufacturing jobs to Pakistan

They are, for the labor-intensive ones.


The ones that are going to Southeast Asia are either simply tariff evasion or due to the country basically paying them to set up a factory despite it making no economic sense to set up the factory there.


The people on this forum being jealous of those factories in other countries simply do not understand the basic economics involved.


This delusional idea that CPEC is the reason for Pakistan's problems was fostered by the Pakistani Military Establishment when they colluded with the U.S. to regime change Nawaz Sharif to install Imran Khan, the Western Agent.


I have already detailed the actual reasons for Pakistan's problems in many, many posts and do not feel like re-hashing a book full of information to people who refused to read those posts to begin with.

 

[Hakikat ve Hikmet]

Looks like the old fox Henry Kissinger's last visit to Beijing wasn't for nix. China has probably bartered her deal quite well. Insha'Allah Pak will come out winner.....

 

[RescueRanger]

CPEC infrastructure development is good so far.

 

[nahtanbob]

What ever is being traded between China and the GCC/MENA/Africa that could be value added should be looked at, for a step of it to be done in Pakistan.

Pakistan could also use its large domestic market as the basis to for Chinese firms to set up for the export market as well as the Pakistani market; petrochemicals, automotive (cars/motorcycles), agricultural products and processing, medical equipment, mineral processing, steel production.

Pakistan has to be a stable country to attract this kind of investment though. And Pakistan also wants to cut back on imported inputs for domestic consumption. So it’s more about management and good negotiating to grow the economy and make it win win for investors and Pakistan.

Not everything has the economy of scale to be produced. Plus every large country will demand its pound of flesh especially you run into full fledged US-China cold war.

Pakistan also has significant reserves of bauxite to make aluminum.

You need to do a lot of research before throwing out ideas

List of countries by bauxite production - Wikipedia

en.wikipedia.org

 

[khansaheeb]

Chinese supply chain is about costs and efficiency. There is nothing cost efficient about manufacturing in Pakistan and sending it over Trans-Karakoram railway

The only thing is how much is China willing to sacrifice some of its factory jobs for Pakistan. To this point the factories are going to SE Asia.

You obviously haven't paid a bit of notice to the CPEC justification and model.

 

[nahtanbob]

You obviously haven't paid a bit of notice to the CPEC justification and model.

Right now this is how it looks like - Chinese have built a lot of infrastructure in Pakistan at inflated prices using Chinese companies and Chinese labor. Pakistan has not done anything to exploit this infrastructure and is stuck with the bill of paying back the Chinese. In fact there is a good chance you won't be exploiting this infrastructure for few more years given the political instability.

Contrast this with India -- they have gotten the same infrastructure at a lower price with lot more domestic ownership and much less foreign debt, India's rollout of infrastructure is sustainable. Yours is not.

 

[HAIDER]

Loan rollover is destroying the Pakistani economy, we don t produce anything. Now Chinese rollover loan payment of 2 billion for the next few years with additional and new interest payment plans.... amazing minds ruling Pakistan.

 

[khansaheeb]

Right now this is how it looks like - Chinese have built a lot of infrastructure in Pakistan at inflated prices using Chinese companies and Chinese labor. Pakistan has not done anything to exploit this infrastructure and is stuck with the bill of paying back the Chinese. In fact there is a good chance you won't be exploiting this infrastructure for few more years given the political instability.

Contrast this with India -- they have gotten the same infrastructure at a lower price with lot more domestic ownership and much less foreign debt, India's rollout of infrastructure is sustainable. Yours is not.

200,000 jobs created so far by CPEC, power generation issues resolved, increased connectivity with a modern road, rail and port system, mega factories being setup in SEZs, increased trade and investor confidence etc. every investment has an initial cost and the expenditure is recovered in the future. As for India with 800 million impoverished people and a mushrooming population it isn't nearly developing fast as it should.

 

[etylo]

What ever is being traded between China and the GCC/MENA/Africa that could be value added should be looked at, for a step of it to be done in Pakistan.

Pakistan could also use its large domestic market as the basis to for Chinese firms to set up for the export market as well as the Pakistani market; petrochemicals, automotive (cars/motorcycles), agricultural products and processing, medical equipment, mineral processing, steel production.

Pakistan has to be a stable country to attract this kind of investment though. And Pakistan also wants to cut back on imported inputs for domestic consumption. So it’s more about management and good negotiating to grow the economy and make it win win for investors and Pakistan.

P.s. One potential product that could export well and be of use in the domestic market are Solar panels. Perfect for production in Gwadar and use first and foremost between Gwadar and Quetta. The copper from Reko-diq could go into the solar panels at economical prices. Tempered glass for the panels could be made in Pakistan, if the inputs can be locally sourced.

Pakistan has quartz for making silicon

https://www.researchgate.net/profile/Dr-Khan-17/publication/285404121_Extraction_of_Metallurgical_Grade_Silicon_MGS_from_Raw_Mineral_Quartz_available_in_Pakistan/links/565de29608aefe619b26cce2/Extraction-of-Metallurgical-Grade-Silicon-MGS-from-Raw-Mineral-Quartz-available-in-Pakistan.pdf?origin=publication_detail

Pakistan also has significant reserves of bauxite to make aluminum.

http://mrl.uop.edu.pk/JPMS/issues/jpms5/41-44.pdf

View attachment 943223

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All these development and private investments will happen only if there are political stability and social security nearly free of terrorist attacks in the long run.

 

[nahtanbob]

200,000 jobs created so far by CPEC, power generation issues resolved, increased connectivity with a modern road, rail and port system, mega factories being setup in SEZs, increased trade and investor confidence etc. every investment has an initial cost and the expenditure is recovered in the future. As for India with 800 million impoverished people and a mushrooming population it isn't nearly developing fast as it should.

You are still heading to the IMF. It looks like Pakistanis are not getting those 200,000 jobs. There is no SEZ worth mentioning.

 

[SD 10]

Its a lost cause... but we will never admit it. As long as there is no industrial base in Pakistan, which there never will be as long as military keeps on changing governments like its nothing .... then not even a 100 CEPCs can make this nation prosperous!

 

[FuturePAF]

All these development and private investments will happen only if there are political stability and social security nearly free of terrorist attacks in the long run.

And for that we need to permanently come to some kind of understanding with the Afghans and the Iranians so the borders can be secured and we can work on development and CT inside the country.

One reason I want to see IK back in power is to make an agreement with the afghans that can resolve most of our issues. Now I’m not saying IK is a genius and has the answers but he can be the face and lead negotiator, to get them to buy into it. Behind IK we will need operators; skilled diplomats and experts to work out the details.

Pakistan’s key utility in the global order, for a long time to come; will come if it can provide safe and guaranteed access to Central Asia. Secondly it will be a stable domestic political and economic arrangement that prevents capital and talent flight as well as attracts the cheapest FDI. The Chinese borrowed money from their own people at or below market levels. Pakistan’s public seems to not trust their money with this government, especially after Dar was threatening to seize the money from private bank accounts.

You need your population to be the first line to show they trust the government before foreign investor will loan at reasonable prices. Don’t have that trust and you will have to borrow above market rates or on some other unfavorable terms.


What we really need is for our best and brightest economists to debate and put forward a growth plan for the long term with a sustainable path. I have heard commentators say our current external debt is $100 billion and set to go to $150 billion in a year or less. We have to live within our means.

The people want a plan that provides for social services and preserves personal liberties as well as provides an equal playing field in most domains for average citizens while also building up our major industries to compete on the international field (not domestic domain). We need to remember that SMEs can be the back bone of employment if not profitability. SMEs can also innovate and create products our large companies can adopt and market globally.

We don’t need new oligarchs like Russia or Ukraine but Poland over the last 30 years. We need our elite to pay more in taxes and loan the country money to get it back on track. These elites will benefit soon enough as the country they invest in will be booming. We need the investments to be in our education, medical and infrastructure so our people can be more productive and we can grow out of this mess. If we have the tax revenue coming in from our well do to people and larger share of the middle class, we can show we are closing the gaps in literacy and health and can seek refinancing off our loans on the basis that we are spending it on development, women empowerment, and other aspects that benefit our society and the world, such as finally eradicating polio.

 

[migflug]

Reading the Tea Leaves: China’s Perspective on Ties with Pakistan and the CPEC's Prospects | ORF

In recent months, Pakistan has been grappling with what some analysts have referred to as a “polycrisis” —an “existential” economic crisis.

www.orfonline.org

Interesting Read!!