The Great Game Changer: Belt and Road Intiative (BRI; OBOR)

[war&peace]

CPEC will only benefit Pakistan i.e. no tangible risks. The reports of CPEC destroying local industry are vastly exaggerated since it is a trade route and not just for importing Chinese good into Pakistan. While cheap Chinese goods are already flooding Pakistani markets and it is a fact regardless of the existence of CPEC. To protect industry, govt can take some measures and industry should try to be competitive in quality and price. You cannot keep selling antiquated design and poorly engineered good forever. They will need to be innovative and creative instead of using the same old tactics.

 

[PaklovesTurkiye]

CPEC will only benefit Pakistan i.e. no tangible risks. CPEC destroying local industry are vastly exaggerated for since it is a trade route and not just for importing Chinese good in Pakistan. While cheap Chinese goods are already flooding Pakistani markets and it is a fact regardless of the existence of CPEC. To protect industry, govt can take some measures and industry should try to be competitive in quality and price. You cannot keep selling antiquated design and poorly engineered good forever. They will need to be innovative and creative instead of using the same old tactics.

Agreed, bro. We should fight all propaganda flooding internet regarding CPEC. We all know who opposed this wonderful project.

 

[ahojunk]

What, are you kidding me?
The ADB wants a piece of the CPEC pie.
If that is the case, CPEC must be doing well.

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ADB to invest in CPEC, Gwadar city projects
THE EXPRESS TRIBUNE > BUSINESS
By Shahbaz Rana | Published: June 21, 2016

Gwadar Port - it's going to be a beauty!

ISLAMABAD: The Asian Development Bank (ADB) has expressed keen interest in investing in the China-Pakistan Economic Corridor (CPEC) and in the Gwadar city to complement efforts made by both the countries, but it has not yet received a formal request from the federal government.

“The CPEC, Special Economic Zones and other initiatives have huge financial needs and the ADB can complement Pakistan and China’s efforts,” said ADB Vice President Wencai Zhang while speaking to media at the conclusion of his five-day visit to Pakistan on Monday.

The ADB has provided Pakistan loans amounting to over $27 billion over a period of 50 years and the purpose of the VP’s visit was to find new areas of cooperation and to get first-hand information about economic cooperation.

“I visited Gwadar for the first time and was so impressed by the quality and potential of the Gwadar port, located at such an important place,” said Zhang while sharing his feelings.

“The port needs a lot of investment in coming years. Authorities have named a few projects for transport, city development, water supply and road and rail to link Gwadar with other cities for which they seek the ADB support,” he added.

He said the authorities would first have to talk to the central government for the ADB support and that the bank had so far received no formal request from the government.

However, he added the bank – one of the two largest lenders to the country – would “certainly complement what China and Pakistan are doing along the economic corridor”. “The ADB will not duplicate what the two countries have already agreed to,” he maintained.

Present on the occasion, ADB Country Director Werner Liepach said the bank was actively looking at how to leverage the potential the CPEC offered. “If you only built the road; it’s only for transit, but the CPEC opportunity has to be realised,” he said.

“We are in talks with the government to find ways to develop the economic corridor.”

The ADB vice president said he had also discussed a plan to invest in the Pakistan Railways on a medium to long-term basis. “The railway minister mentioned three main lines but we have not yet picked any line for investment.”

He said the bank was keen to support the railways but first wanted to see a clear roadmap for sector’s reform, one that showed that the sector would be economically and financially viable in the years to come.

“Pakistan has achieved a lot of macroeconomic and financial stability, but the challenge of how to achieve higher economic growth remains,” he said, adding in order to take the current 4-5% growth rate to 7%, Pakistan needed more investment as the investment-to-GDP ratio was still very low.

“Export diversification remains another challenge the country needs to address,” he added.

The ADB distanced itself from the on-going GDP growth fudging allegations levelled by the parliamentarians and independent economists.

“The 4.7% growth estimate for 2015-16 was in line with the projections made by the international financial institutions,” the country director stated.

Zhang said the ADB had invested a lot in the energy sector to support reforms and remove bottlenecks, and it would continue with its heavy investment in the sector.

He said the lender was “overall satisfied with the progress in the energy sector and the government is broadly on track”. The two-year deadline to end load-shedding is realistic but depended on a lot of factors.

The ADB and Pakistan also signed an agreement for a $100 million loan to build the remaining 64km section of the motorway (M-4) connecting Shorkot and Khanewal in Punjab.

Published in The Express Tribune, June 21st, 2016.

 

[grey boy 2]

Good news pal, thanks for sharing

 

[Tiqiu]

CPEC will only benefit Pakistan i.e. no tangible risks. The reports of CPEC destroying local industry are vastly exaggerated since it is a trade route and not just for importing Chinese good into Pakistan. While cheap Chinese goods are already flooding Pakistani markets and it is a fact regardless of the existence of CPEC. To protect industry, govt can take some measures and industry should try to be competitive in quality and price. You cannot keep selling antiquated design and poorly engineered good forever. They will need to be innovative and creative instead of using the same old tactics.

I can't comment on how CPEC will affect your local industry as I really don't know your country well. However, we can study and look at some of the cases in history as a precedent for a judgement. When China opened up some 40 years ago, it incurred lots of debts from literally zero national debt to build hotels,roads, power plants and etc. As a result, business people from outside could come,live and invest in China, which in turn taught the Chinese people how to compete with the rest of the world and how to innovate. So for Pakistan, CPEC will lay down the foundation so Pakistani can compete,innovate and change the rest of the world.

 

[TaiShang]

A cooperation agreement has been reached between the European Bank for Reconstruction and Development (EBRD) and the Silk Road Fund, established to implement China's Belt and Road initiative, inspired by the ancient Silk Road connecting China and Europe.

This is vey critical in terms of OBOR's Eurasian expansion which aims eventually to connect China's east to Europe's west.

A potential cooperation agreement with EBRD was being mentioned last year but that was basically between EBRD and AIIB. I am pleasantly surprised that the SRF is also included in the scheme.

 

[ahojunk]

Belt and Road news from Kazakhstan......

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China, Kazakhstan Pledge to Align Development Strategies
2016-06-24 16:16:37 | Xinhua Web | Editor: Guo Jing

Chinese President Xi Jinping (R) meets his Kazakh counterpart, Nursultan Nazarbayev (L) in the Uzbek capital Tashkent on June 24, 2016. [Photo: Xinhua]

Chinese and Kazakh leaders vowed here Friday to seek synergy between their respective development strategies amid efforts to boost bilateral cooperation.

The two sides should speed up and well plan the aligning of the China-proposed Silk Road Economic Belt initiative and Kazakhstan's new economic policy named the Bright Road, and strengthen cooperation in a wide range of areas, according to Chinese President Xi Jinping and his Kazakh counterpart, Nursultan Nazarbayev.

They made the pledge during a meeting on the sidelines of an annual summit of the Shanghai Cooperation Organization (SCO) in the Uzbek capital Tashkent.

Xi reviewed the bilateral cooperation since the two countries established a comprehensive strategic partnership five years ago, saying that rapid progress and fruitful results have been achieved.

"China and Kazakhstan have become a community of common interest and shared future in a real sense," he said. "The Chinese side is willing to work with Kazakhstan to lift our cooperation to a higher level."

Xi suggested that the two countries keep close high-level contacts, support and coordinate with each other on major issues of their respective concern, and always plan for cooperation from a strategic height and a long-term perspective.

He called on the two countries to make the best use of the new model the two countries have created for industrial capacity cooperation, to push for the early implementation of related projects as well as cooperation in agriculture, energy, local affairs, cultural and people-to-people exchanges, and environment protection.

China supports Kazakhstan in hosting a "China Tourism Year" in 2017, Xi said.

The president also said that China is willing to enhance cooperation with Kazakhstan in the United Nations and other multilateral platforms.

China will offer strong support to Kazakhstan after it takes over the rotating chair of the SCO following the Tashkent summit, to jointly contribute to the greater development for the organization, Xi added.

Nazarbayev extended his warm congratulations on the 95th anniversary of the founding the Communist Party of China, which falls on July 1.

He said that it is a priority in the foreign policy of Kazakhstan to develop a relationship with China featuring good-neighborliness, mutual trust and friendship.

Kazakhstan firmly supports China's Silk Road Economic Belt initiative, and wants to initiate bilateral industrial capacity cooperation projects at an early date, such as in auto and chemical engineering industries, and to increase cooperation in trade, agriculture, logistics, infrastructure and tourism, Nazarbayev said.

The Kazakh side stands ready to make joint efforts with China to ensue a sound development of the SCO, he added.

 

[qwerrty]

this project probably won't go anywhere, because china can do it all by themselves using experience from building the y20, c919, cseries and many airbus planes. it will get cancelled just like the joint asian regional jet when china quit and all solo with their arj21.. from previous reports, all sub-components will be western, then later on with russian or chinese just like mc21 and c919. why 50/50 share your huge market that will grow even more bigger with russia when you can do it all yourself?

 

[Beidou2020]

this project probably won't go anywhere, because china can do it all by themselves using experience from building the y20, c919, cseries and many airbus planes. it will get cancelled just like the joint asian regional jet when china quit and all solo with their arj21.. from previous reports, all sub-components will be western, then later on with russian or chinese just like mc21 and c919. why 50/50 share your huge market that will grow even more bigger with russia when you can do it all yourself?

I'd also prefer China to do this by itself. But I guess these kind of projects can help the relationship.

 

[Lucky Breeze]

.I have seen no proof of this 18% rate of interest.....Pakistani members disagreed with that too.......Don't know form where our Indian friends bring this number........from propaganda office?

Loans to the Pakistani Government
Approximately $11 billion worth of infrastructure projects being developed by the Pakistani government will be financed by concessionary loans, with composite interest rates of 1.6%, after Pakistan successfully lobbied the Chinese government to reduce interest rates from an initial 3%.The loans are subsidised by the government of China, and are to be dispersed by the Exim Bank of China and the China Development Bank. For comparison, loans for previous Pakistani infrastructure projects financed by the World Bank carried an interest rate between 5% and 8.5%, while interest rates on market loans approach 12%.

The loan money would be used to finance projects which are planned and executed by the Pakistani government. Portions of the approximately $6.6 billion Karachi–Lahore Motorway are already under construction. The $2.9 billion phase which will connect the city of Multan to the city of Sukkur over a distance of 392 kilometres has also been approved,with 90% of costs to be financed by the Chinese government at concessional interest rates, while the remaining 10% is to be financed by the Public Sector Development Programme of the Pakistani government.In May 2016, the $2.9 billion loan were given final approvals required prior to disbursement of the funds were given by the Government of the People's Republic of China on May 4, 2016, and will be concessional loans with an interest rate of 2.0%. The National Highway Authority of Pakistan reported that contractors arrived on site soon after the loan received final approval.

The China Development Bank will finance the $920 million towards the cost of reconstruction of the 487 kilometer portion of the Karakoram Highway between Burhan and Raikot. An addition $1.26 billion will be lent by the China Exim Bank for the construction of the Havelian to Thakot portion of this 487 kilometer stretch of roadway, to be dispersed as low-interest rate concessional loans.

The long-planned 27.1 km long $1.6 billion Orange Line of the Lahore Metro is regarded as a commercial project project, and does not qualify for the Exim Bank's 1.6% interest rate. It will instead by financed at a 2.4% interest rate after China agreed to reduce interest rates from an originally planned rate of 3.4%.

The $44 million Pakistan-China Fiber Optic Project, a 820 km long fibre optic wire connecting Pakistan and China, will be constructed using concessionary loans at an interest rate of 2%, rather than the 1.6% rate applied to other projects.

Interest-free loans for Gwadar projects
The government of China in August 2015 announced that concessionary loans for several projects in Gwadar totalling $757 million would be converted 0% interest loans.The projects which are now to financed by the 0% interest loans include: the construction of the $140 million Eastbay Expressway project, installation of breakwaters in Gwadar which will cost $130 million, a $360 million coal power plant in Gwadar, a $27 million project to dredge berths in Gwadar harbour, and a $100 million 300-bed hospital in Gwadar. Pakistan will only repay the principle on these loans.

In September 2015, the government of China also announced that the $230 million Gwadar International Airport project would no longer be financed by loans, but would instead be constructed by grants which the government of Pakistan will not be required to repay.

Loans to private consortia
$15.5 billion worth of energy projects are to be constructed by joint Chinese-Pakistani firms, rather than by the governments of either China or Pakistan. The Exim Bank of China will finance those investments at 5–6% interest rates, while the government of Pakistan will be contractually obliged to purchase electricity from those firms at pre-negotiated rates.

As an example, the 1,223MW Balloki Power Plant does not fall under the concessionary loan rate of 1.6%, as the project is not being developed by the Pakistani government. Instead, it is considered to be a private sector investment as its construction will be undertaken by a consortium of Harbin Electric and Habib Rafiq Limited after they successfully bid against international competitors.Chinese state-owned banks will provide loans to the consortium that are subsidised by the Chinese government. In the case of the Balloki Power Plant, state-owned banks will finance the project at an interest rate of 5%,while the Pakistani government will purchase electricity at the lowest bid rate of 7.973 cents per unit.

 

[Beast]

this project probably won't go anywhere, because china can do it all by themselves using experience from building the y20, c919, cseries and many airbus planes. it will get cancelled just like the joint asian regional jet when china quit and all solo with their arj21.. from previous reports, all sub-components will be western, then later on with russian or chinese just like mc21 and c919. why 50/50 share your huge market that will grow even more bigger with russia when you can do it all yourself?

Its more of Russia keen for the joint venture rather China. The announcement of the joint venture is more of a symbolic political gesture than real meaningful project. I bet there will be a similar project going on and 100% Chinese.

 

[qwerrty]

Its more of Russia keen for the joint venture rather China. The announcement of the joint venture is more of a symbolic political gesture than real meaningful project. I bet there will be a similar project going on and 100% Chinese.

the y20 is huge aircraft. china has no problem designing large airframe. avic already made a large diameter fuselage structure for widebody jet for testing.. the composite material skin and structure on russian mc-21 and c919 are made by facc, a subsidiary of china's avic. according to reports, this joint widebody jet will use western sub-systems first including engines just like c919. can you see here? why do they even need russia?

 

[ahojunk]

PRESS RELEASE
Putin-Xi Press Conference Reaffirms Commitment to Their Joint One Belt, One Road/Eurasian Economic Union as Global Alternative

June 26, 2016 (EIRNS)—At the close of their June 25 summit in Beijing, presidents Xi Jinping of China and Vladimir Putin of Russia emerged to issue summary statements to the press.

President Xi began by referring to his discussions with "my old friend President Putin," and noted that

"President Putin and I have unanimously decided that the more complicated the international situation, the more determined we should be, guided by the spirit of strategic cooperation and the idea of eternal friendship."

He went on to explain that

"the two sides have the confidence and opportunity to expand regional economic cooperation, to overcome the global economic challenges and to maintain the positive dynamics of economic development through deepening practical cooperation and aligning our interests, in particular by converging the national development strategies One Belt, One Road and the Eurasian Economic Union."

Xi added that the "all-encompassing partnership and strategic interaction" of Russia and China included a commitment to

"sustaining the aims and principles of the UN Charter and the basic provision of international law, ensuring a global strategic balance... We oppose the use of force and threats of using force, casual introduction of sanctions and threats of sanctions."

President Putin noted that "Russia and China have very close or almost identical views on international development," and then centered most of his remarks on economic cooperation.

"The global economic crisis, instability on commodity markets and foreign exchange markets could not but affect our bilateral relations,"

Putin stated, and pointed out the joint measures that the two countries are adopting:

"To reduce dependence on foreign exchange markets, we are expanding the use of national currencies in mutual settlements. The share of payments in Russian rubles is three percent, and the share of the Chinese yuan is even greater at nine percent. The latter figure should rise significantly after Russia establishes a clearing and settlement center for the yuan. Our focus is on building up industrial cooperation, launching joint projects in infrastructure, resource development, and development of agriculture.... Cooperation in peaceful nuclear energy is growing.... We are expanding close cooperation in aircraft building and the space industry."

Putin also emphasized that the countries’ approach is centered on

"the concept of aligning the Eurasian Economic Union and the Silk Road Economic Belt. Today, an official start was announced for talks on a trade and economic cooperation agreement between our integration projects. It promises a new level of partnership, which presupposes the creation of a common economic space on the entire Eurasian continent."

 

[ahojunk]

It is good that Hong Kong wants a piece of the belt and road pie. But it has to create its own opportunities.

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Hong Kong is in prime position to benefit from China’s one belt, one road economic strategy

As a major connector in the region and globally, the city can capitalise on the opportunities presented by the Silk Road Initiative

PUBLISHED : Tuesday, 21 June, 2016, 2:08pm
UPDATED : Tuesday, 21 June, 2016, 2:08pm
John Cremer

With its bold vision and extensive geographical reach, China’s one belt, one road initiative has the scope to transform patterns of trade, investment and thinking over the coming decades.

So far, all the talk suggests Hong Kong is in prime position to play a full part in whatever transpires and will be able to benefit accordingly.

However, it is equally true that any industry, multinational, consultancy, entrepreneur or service provider with hopes of capitalising on the opportunities can’t simply sit and wait.

Contracts will not just flow their way. Hong Kong’s banks and businesses will have to prove they are up to the challenge and be ready to fight for every dollar.

“Many Hong Kong contractors are ranked very high on a global scale and have the qualities and resources to pursue infrastructure opportunities along the belt and road,” says Agnes Chan, Hong Kong and Macau managing partner for EY.

“As a ‘superconnector’, Hong Kong is also well-placed to be a platform for financing. For example, the sector’s experience can be utilised to raise funds for the Asian Infrastructure Investment Bank (AIIB) via bond offerings, developing yuan products, or providing project financing for individual companies. This will help boost Hong Kong’s international status as a fund-raising centre and an offshore hub for trading renminbi.”

Having long acted as a bridgehead for mainland China to the rest of the world, the essential task now is to redirect as necessary, deploying existing skills and professional expertise in markets which remain largely untouched or untapped.

And selling what Hong Kong can offer requires new ideas, detailed planning and specific action. The city’s wealth of legal, financial and engineering know-how, its global networks, entrepreneurial spirit and all-round efficiency are a given. Impressing in future will take something more.

“For example,as an investment platform, Hong Kong’s treaty network is still not comprehensive enough,” Chan says.

“We need to speed up the pace in concluding more double-taxation treaties with other countries in the belt and road region.”

In today’s digital world, she adds, it is also important to do more to develop and retain talent. At a time of increasing mobility and changing expectations about the work in general and the workplace in particular, business models, accepted practices, collaboration and the presumed appeal of overseas assignments require regular review.

And in other respects, while Hong Kong as a whole can clearly claim a good under-standing of China, its economic strengths and investment environment, the same can hardly be said of countries such as Kazakhstan, Tajikistan and Turkmenistan.

“How well do we know them?” Chan says. “We need a better understanding and a strategy to prioritise the roles of the business sector and the government. Hong Kong has to be innovative, leverage its strengths, and make full use of its soft power to develop a multi-pronged approach and make our ‘systems’ even more user-friendly and efficient.”

Public-private partnerships (PPP) may well point the way, where government is the enabler and private sector companies then get the job done. The model has a track record in areas like transport, infrastructure and even technology.

“Take the Silk Road Fund as an example,” Chan says. “It is state-owned money used to foster investment along the belt and road, allowing corporate investors to reduce their risks and be more courageous in their plans.”

Julian Vella, KPMG’s Asia-Pacific regional head for global infrastructure, notes that there are already significant PPP opportunities in China’s domestic market and growing demand for information about different models.

“Outbound PPPs in overseas markets are a very active part of our business,” Vella says. “The key is how risk can be shared between public and private sectors and how to reflect this in financing options, but we see real opportunities in [newer] markets.”

For Andrew Weir, KPMG’s regional senior partner in Hong Kong and the firm’s global chair of real estate and construction, there is a clear role to play as a service centre for the offshore aspects of the belt and road scheme, but there is no reason to stop there.

“This is such a broad economic development and policy initiative, there are many cross-sector aspects and opportunities,” Weir says. “Companies need to look closely at how best to position themselves and how to contribute.”

In principle, it is not just the big names in financing, construction and legal services that stand to benefit. Professionals in diverse areas like design, quality control, high-tech electronics and arbitration should also be assessing the possibilities.

“As businesses, we need to articulate and share Hong Kong’s already strong story and major role as a connector in the region and globally,” Weir says. “Some practical matters are the ongoing development of tax treaties and information sharing, as well as understanding the emerging trade and investment agreements.”

 

[ahojunk]

There are multiple rail routes from China to Poland, France, Spain, Czech Republic, Germany and Netherlands.
Probably, there are more to come.

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China-Europe freight rail route boosts Silk Road trade
2016-06-19 08:56 | Xinhua | Editor: Feng Shuang

When Zeng Minping and his family arrived in Warsaw, they were surprised to see so many Chinese-made products in their local Ikea store.

A salesclerk told them that the goods were shipped to Poland by rail and Ikea staff in the freight department often drove 140 km away to Kutno railway station in Lodz to fetch the goods.

The Yuxinou (Chongqing-Xinjiang-Europe) Railway stretches from Chongqing in southwest China to Duisburg, close to Germany's border with the Netherlands. Since January 2011, over 600 cargo trains have carried Chinese products to Europe.

Kutno is a key railway hub in Poland and central Europe and in 2014, the first China-bound cargo train departed from there.

Since then, the Yuxinou Railway has attracted cargo from neighboring countries to Kutno, with businesses keen to transport all kinds of products to China in the most efficient possible way.

Passing across the Chinese frontier through the Alataw Pass in Xinjiang, Europe-bound trains cross Kazakhstan, Russia, Belarus, Poland and reach Germany after about 14 days.

In 2015, Zeng with his wife and daughter spent about three months to travel over 11,000 km through the route and reached the terminal in Duisburg.

During the journey they witnessed the rise of China's influence along the route, not just Chinese products but local people who can even speak some simple Chinese phrases and more and more people have heard of the Silk Road Economic Belt.

The Silk Road Economic Belt and the 21st Century Maritime Silk Road, more commonly known as the Belt and Road Initiatives proposed by China, will see Chinese companies expand their presence abroad and greater regional integration and development in terms of infrastructure and trade.

The ancient Silk Road linked China and Europe, and people along the road traded not only commodities but exchanged their cultures and civilizations. Today, China is European Union's second largest trading partner and EU is China's largest trade partner.

Cargo trains were a logical development, opening a new channel for the transfer of goods to and from China's central and western regions to compete with the traditional maritime route from the east coast. A total of 16 cities now have regular cargo trains to Europe.

From Harbin in northeast China, Yiwu in the east, Wuhan and Changsha in central China, cargo trains carry IT equipment, automobiles and other products to Poland, Germany, Czech Republic and Spain, and bring the best of Europe to Chinese customers.

"The volume of our business is increasing by 50 to 60 percent every year," said Liu Lei, general manager of Shanghai Seacoast International Logistics Company, a shipping agent dealing with cargo trains leaving from Zhengzhou in central China's Henan Province.

Liu's company started their cargo train business over two years ago. As the route becomes more regular, freight volume keeps increasing and the cost has fallen by a half.

Rail freight is slower than air and more expensive than shipping, but Liu said its advantages attract specific clients and they are increasing.

The cargo is generally high added-value items and clients have strict demands on delivery requirements or have urgent orders, said Liu, whose clients are mostly German companies with factories in China.

Trains from Zhengzhou arrive in Poland, the gateway to the EU from the east. "Poland is now a major manufacturing base in the European Union with relatively low labor costs," said Liu.

"My business directly originated from Yuxinou route," said Yang Jie, executive president of HeKa International GmbH who has a mall for German products in Chongqing.

Born in Chongqing and now living in Germany, Yang sells Chinese products to Germany. Knowing that cargo trains from China often returned empty, Yang decided to transport German products back to hometown.

In November 2015, the 50,000 square meter "German Life Mall" opened in Chongqing. Yang expects annual sales to reach 5.5 billion yuan (835 million U.S. dollars).

Since the Belt and Road Initiatives began to take shape, over 1,700 trains have passed from China to Europe along 39 lines. Earlier this month, the government and China Railway Corporation (CRC) unified these routes under the China Railway Express brand.

A CRC press release hypothesized that the move would strengthen the overall competitiveness of Chinese railway transportation in the world.

"The rail route has promoted trade and economic exchanges along the Silk Road, and helped and driven the development of China's open economy," said Li Pumin, secretary general of China's National Development and Reform Commission.