The real face of CPEC : Destroying Pakistani Industry

[Ryuzaki]

The fact is that CPEC is neither a gift not a blessing or anything as such from China...the entire 46 billion Chinese investment is a loan on 18% interest..and which is in turn being paid back to Chinese contractors..Pakistan could have raised capital in the international market or offshore banks on much better terms...

The only thing deeper than the oceans and higher than Himalayas is the Chinese finger being given in Pakistani behind!



Chinese free zone will employ Chinese workers..and they will use he Chinese port..it will generate peanut revenue for the national treasury at a vast expense of Pakistani nation..just wait and watch...very soon Pakistani unemployed and starving youth will be joining Ughair terrorist or kidnapping Chinese citizens for ransom...

Patwari mindset wants to turn Pakistan simply into a duty collecting trade hub of Chinese exports!

You have got to congratulate the Chinese,they will successfully turn a nation of 200 million(and rising) into a country of traders!

 

[Perpendicular]

that's the spirit ,keep it up till the last.

Smart a

The only thing deeper than the oceans and higher than Himalayas is the Chinese finger being given in Pakistani behind!

Already been 5 mins since I read that post, am still laughing.

 

[Genesis]

There is no problem with CPEC..problem is Pakistani government sucking Chinese balls and giving it concessions which should otherwise not be given...a separate terminal needs to be established to for tighter scrutiny of Chinese goods..and this re branding strategy of Chinese exporters must be bought to an end as it supports counterfeiting.,...All Chinese exporters must be registered in a database and apply for trade mark registration before their product can make way into Pakistan markets...

Pakistan is a poor nation, there I said it. Non counterfeit products, your people can't afford. Everyone likes a Gucci, a Tom Ford, but those are upwards of 5000 USD, about 3 years salary for a average Pakistani man.

Let me ask you, what do you want China to do. To play fair? We are, but we are Lebron and you are, well, not. Subsidies is part of it, but infrastructure and experience as well as a host of other qualities that we developed over the years is not something easily duplicated. Blaming it on subsidies is in fact lazy and hardly the truth. This is the same Indian excuse, which is hardly accurate because we are the manufacturing powerhouse of the world, not to India, or Pakistan.

The hard truth of Pakistan is you have limited amount to offer, take advantage of everything. I remember like yesterday, American documentaries in 90s and early 2000s talked of how Americans were takiing advantage of China, kicking us out of our homes and getting preferential treatment.

Fast forward 2016, a totally different narrative has emerged. China challenging the West in science and higher tier goods and services, as well as exploiting Africa.

You can't come into the league as a rookie and expect to get the same calls as Lebron, become Curry, win a title and 2 MVPs and then we'll talk.

China and Pakistan are partners, the fact you would question China's commitment to Pakistan shows perfectly that Pakistan is very much a partner and not a benefactor in this arrangement.

@somebozo It is indeed interesting to note that some members are berating a perfectly understandable piece.

I fully agree with your posts till now. India has a substantially larger manufacturing base, yet we can hardly service a small percentage of our domestic consumer market and have tremendous amount of imports from China which are cheaper and preclude setting up a competitive domestic manufacturing substitute due to high cost of finance for start ups, one of the reasons wherein Rajan was under criticism. It is interesting to see the members actually calling it, the CPEC,a boon.

China remains a nation of manufacturing based exports with production far exceeding the domestic consumer market. The steel example is one which has led to China dumping steel in EU and US with closure of plants over there due to high labor costs and non competitive pricing. And Chinese steel manufacturing plants are so numerous that the slowdown in demand in these nations has led to backwages accumulating and some plants being forced to close or civil disturbances in China itself.

For China, CPEC remains its conduit to reducing cost of export, cost of import of raw materials and a strategic alternative to the increasing hostilities in SCS. If anyone is under impression that local industries in Pakistan will gain, they are mistaken. The only area you will see a spurt of growth will be in service provision. Until and unless Pakistan takes steps to protect itself and encourage local manufacturing at competitive pricing and quality, there are foreseeable closure of established businesses in Pakistan ahead.

If you are going to take the approach of protectionism, how are you going to compete globally. Pakistan, but especially India, needs to be international to be competitive and create growth.

Are you going to tell America, EU, Africa to tax Chinese goods but let yours through? They would listen to you?

China is the manufacturing leader, because we took the challenge and we won, you want something, take it, but don't build a wall, cover your ears and hear no evil. That's the Soviet's approach. I don't have to tell you where they went.

Do protectionism if you want, but all you will do is create a highly inefficient industry thatch about as competitive internationally as Chinese football is.

 

[raj76]

Pakistan is a poor nation, there I said it. Non counterfeit products, your people can't afford. Everyone likes a Gucci, a Tom Ford, but those are upwards of 5000 USD, about 3 years salary for a average Pakistani man.

Let me ask you, what do you want China to do. To play fair? We are, but we are Lebron and you are, well, not. Subsidies is part of it, but infrastructure and experience as well as a host of other qualities that we developed over the years is not something easily duplicated. Blaming it on subsidies is in fact lazy and hardly the truth. This is the same Indian excuse, which is hardly accurate because we are the manufacturing powerhouse of the world, not to India, or Pakistan.

The hard truth of Pakistan is you have limited amount to offer, take advantage of everything. I remember like yesterday, American documentaries in 90s and early 2000s talked of how Americans were takiing advantage of China, kicking us out of our homes and getting preferential treatment.

Fast forward 2016, a totally different narrative has emerged. China challenging the West in science and higher tier goods and services, as well as exploiting Africa.

You can't come into the league as a rookie and expect to get the same calls as Lebron, become Curry, win a title and 2 MVPs and then we'll talk.

China and Pakistan are partners, the fact you would question China's commitment to Pakistan shows perfectly that Pakistan is very much a partner and not a benefactor in this arrangement.




If you are going to take the approach of protectionism, how are you going to compete globally. Pakistan, but especially India, needs to be international to be competitive and create growth.

Are you going to tell America, EU, Africa to tax Chinese goods but let yours through? They would listen to you?

China is the manufacturing leader, because we took the challenge and we won, you want something, take it, but don't build a wall, cover your ears and hear no evil. That's the Soviet's approach. I don't have to tell you where they went.

Do protectionism if you want, but all you will do is create a highly inefficient industry thatch about as competitive internationally as Chinese football is.

but buddy if we wont protect our industries there wont be any left to compete against chinese, in india we want make in india because unlike us or europe we have large labour force which can only be utilised by manufaturing sector , service industry can never create so many jobs, so please look at things with full spectrum not just as chinese

 

[Grevion]

The only way Pakistan can benefit from the CPEC is if it can use the infra developed for its own benefits to boost its export and cheaper import.
Apart from that maybe a right tax collection system avoiding the loopholes would be benificial.

 

[SQ8]

A trade corridor came in 2015..but where is our industrial development from 1947 to 2015?

We ate it, or our parents and grandparents did. What did they achieve in change other than letting corrupt men rule? Dictators and Political Messiah's alike?

 

[war&peace]

Just a general but on the topic note, NO country in the world will watch or care for your interests unless and until you do it yourself. Even the mother does not feed the infant until he/she cries. China is a friend, but still it will mind its business interests first, however, the friendship means that if Pakistan raises its concerns, the response should be positive and accommodating and which I'm sure China will act like one but unfortunately we lack good leadership. And Ishock Dark has already said that he is borrowing debt for CPEC...a pretty frightening statement since we have been lead to believe that CPEC is Chinese investment and it should be the case since its China that will benefit a lot from CPEC.

 

[Genesis]

but buddy if we wont protect our industries there wont be any left to compete against chinese, in india we want make in india because unlike us or europe we have large labour force which can only be utilised by manufaturing sector , service industry can never create so many jobs, so please look at things with full spectrum not just as chinese

If protection worked, you wouldn't have needed to liberalize in 91. If it worked we wouldn't have had to liberalize in 79.

Truth of the matter is Chinese quality is going up and price isn't changing much. Protecting one sector of Indian industry is just going to hurt another. American anti dumping on Chinese steel is hurting the American industries that need steel badly, because all the nations that doesn't do protectionism can still access our steel, and their cost are still low.

If you are fat, you switch to a healthy lifestyle and exercise, you don't double down on donuts and never look at a mirror. That's not how the world works.

Just look at your successful industries, you let them compete on their terms, and you win. China has some harsh protectionist industry they are as competitive internationally as our soccer team.

Have faith in your country man that in the face of adversity they won't lay down and die, and if they will, they'll die anyways.

 

[RiazHaq]

http://www.riazhaq.com/2014/12/pak-china-industrial-corridor-to-boost.html


Beyond the initial phase, there are plans to establish special economic zones in the Corridor where Chinese companies will locate factories. Extensive manufacturing collaboration between the two neighbors will include a wide range of products from cheap toys and textiles to consumer electronics and supersonic fighter planes.

The basic idea of an industrial corridor is to develop a sound industrial base, served by competitive infrastructure as a prerequisite for attracting investments into export oriented industries and manufacturing. Such industries have helped a succession of countries like Indonesia, Japan, Hong Kong, Malaysia, South Korea, Taiwan, China and now even Vietnam rise from low-cost manufacturing base to more advanced, high-end exports. As a country's labour gets too expensive to be used to produce low-value products, some poorer country takes over and starts the climb to prosperity.

Once completed, the Pak-China industrial corridor with a sound industrial base and competitive infrastructure combined with low labor costs is expected to draw growing FDI from manufacturers in many other countries looking for a low-cost location to build products for exports to rich OECD nations.


http://www.riazhaq.com/2014/12/pak-china-industrial-corridor-to-boost.html

 

[somebozo]

Just a general but on the topic note, NO country in the world will watch or care for your interests unless and until you do it yourself. Even the mother does not feed the infant until he/she cries. China is a friend, but still it will mind its business interests first, however, the friendship means that if Pakistan raises its concerns, the response should be positive and accommodating and which I'm sure China will act like one but unfortunately we lack good leadership. And Ishock Dark has already said that he is borrowing debt for CPEC...a pretty frightening statement since we have been lead to believe that CPEC is Chinese investment and it should be the case since its China that will benefit a lot from CPEC.

• Though Pakistan’s installed capacity is 22,800 MW to meet current demand of 19,000 MW, it produces only 12,000 MW
The question is...why are we not producing power to full capacity??? Because Islamic brotherhood with Arabs means we installed HFO fired power plants which are hell expensive to operate...

http://www.riazhaq.com/2014/12/pak-china-industrial-corridor-to-boost.html


Beyond the initial phase, there are plans to establish special economic zones in the Corridor where Chinese companies will locate factories. Extensive manufacturing collaboration between the two neighbors will include a wide range of products from cheap toys and textiles to consumer electronics and supersonic fighter planes.

The basic idea of an industrial corridor is to develop a sound industrial base, served by competitive infrastructure as a prerequisite for attracting investments into export oriented industries and manufacturing. Such industries have helped a succession of countries like Indonesia, Japan, Hong Kong, Malaysia, South Korea, Taiwan, China and now even Vietnam rise from low-cost manufacturing base to more advanced, high-end exports. As a country's labour gets too expensive to be used to produce low-value products, some poorer country takes over and starts the climb to prosperity.

Once completed, the Pak-China industrial corridor with a sound industrial base and competitive infrastructure combined with low labor costs is expected to draw growing FDI from manufacturers in many other countries looking for a low-cost location to build products for exports to rich OECD nations.


http://www.riazhaq.com/2014/12/pak-china-industrial-corridor-to-boost.html

I will tell you what the Chinese will do...turn Made in Pakistan into a medicore brand of shame!

 

[barbarosa]

The great destruction of Pakistani Industries is WAPDA load sheeding not CPEC. We destructed our country ourselves not by enemy.

 

[somebozo]

50% of Chinese exports are counterfeit garbage which gets no entry from Custom authorities...
Shut this down and Chinese economy will go back light years!

The only quality manufacturing done is China is usually foreign factories under their own quality control..Even major Chinese brands like Midea and Haier only started appearing recently....and have a long way to go in improving their quality....

Pakistan is a poor nation, there I said it. Non counterfeit products, your people can't afford. Everyone likes a Gucci, a Tom Ford, but those are upwards of 5000 USD, about 3 years salary for a average Pakistani man.

Let me ask you, what do you want China to do. To play fair? We are, but we are Lebron and you are, well, not. Subsidies is part of it, but infrastructure and experience as well as a host of other qualities that we developed over the years is not something easily duplicated. Blaming it on subsidies is in fact lazy and hardly the truth. This is the same Indian excuse, which is hardly accurate because we are the manufacturing powerhouse of the world, not to India, or Pakistan.

The hard truth of Pakistan is you have limited amount to offer, take advantage of everything. I remember like yesterday, American documentaries in 90s and early 2000s talked of how Americans were takiing advantage of China, kicking us out of our homes and getting preferential treatment.

Fast forward 2016, a totally different narrative has emerged. China challenging the West in science and higher tier goods and services, as well as exploiting Africa.

You can't come into the league as a rookie and expect to get the same calls as Lebron, become Curry, win a title and 2 MVPs and then we'll talk.

China and Pakistan are partners, the fact you would question China's commitment to Pakistan shows perfectly that Pakistan is very much a partner and not a benefactor in this arrangement.




If you are going to take the approach of protectionism, how are you going to compete globally. Pakistan, but especially India, needs to be international to be competitive and create growth.

Are you going to tell America, EU, Africa to tax Chinese goods but let yours through? They would listen to you?

China is the manufacturing leader, because we took the challenge and we won, you want something, take it, but don't build a wall, cover your ears and hear no evil. That's the Soviet's approach. I don't have to tell you where they went.

Do protectionism if you want, but all you will do is create a highly inefficient industry thatch about as competitive internationally as Chinese football is.

The great destruction of Pakistani Industries is WAPDA load sheeding not CPEC. We destructed our country ourselves not by enemy.

That is also a major factory..you are absolutely correct!

 

[Genesis]

50% of Chinese exports are counterfeit garbage which gets no entry from Custom authorities...
Shut this down and Chinese economy will go back light years!

The only quality manufacturing done is China is usually foreign factories under their own quality control..Even major Chinese brands like Midea and Haier only started appearing recently....and have a long way to go in improving their quality....

All that says is why China sucks not how Pakistan can be competitive.

BTW, we became a 11 trillion dollar economy by making 100% crap, how about that, we must be the most popular people in the world for people to pay money for crap.

 

[somebozo]

Open source for the so-called "18%" interest
OR its nothing but "bad breath" coming out from a wannabe Arab boots licker

Actually you may be right..i mixed up something..

Loans to the Pakistani Government[edit]
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%,[183] after Pakistan successfully lobbied the Chinese government to reduce interest rates from an initial 3%.[184] The loans are subsidised by the government of China, and are to be dispersed by the Exim Bank of China and theChina Development Bank. For comparison, loans for previous Pakistani infrastructure projects financed by the World Bank carried an interest rate between 5% and 8.5%,[185] while interest rates on market loans approach 12%.[186]

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[74] Karachi–Lahore Motorway are already under construction.[187] 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,[188] 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.[189] 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%.[63] The National Highway Authority of Pakistan reported that contractors arrived on site soon after the loan received final approval.[63]

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.[190][191] 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,[61][192] to be dispersed as low-interest rate concessional loans.[63]

The long-planned 27.1 km long $1.6 billion Orange Line of the Lahore Metro is regarded as a commercial project project,[178] and does not qualify for the Exim Bank's 1.6% interest rate. It will instead by financed at a 2.4% interest rate[129] after China agreed to reduce interest rates from an originally planned rate of 3.4%.[193]

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.[194]

Interest-free loans for Gwadar projects[edit]
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.[195] 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.[196] 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.[184]

Loans to private consortia[edit]
$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.[138]

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.[197] 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%,[198] while the Pakistani government will purchase electricity at the lowest bid rate of 7.973 cents per unit.[197]

Asian Development Bank assistance[edit]
While the E-35 expressway is considered to be a crucial part of the route between Gwadar and China, the E35 will not be financed by CPEC funds. The project will instead be financed by the Asian Development Bank.[108]

The N70 project is not officially a part of CPEC but will connect the CPEC's Western Alignment to the Karachi-Lahore Motorway at Multan. The project will be financed as part of a $195 million package by the Asian Development Bank announced in May 2015 to upgrade theN70 National Highway and N50 National Highway.[100] In January 2016, The United Kingdom's Department for International Developmentannounced a $72.4 million grant to Pakistan for roadway improvements in the province of Balochistan, thereby reducing the total Asian Development Bank loan from $195 million to $122.6 million.[199]

The M-4 Motorway between Faisalabad and Multan is not to be financed by the Chinese government as part of CPEC, but will instead be the first infrastructure project partially financed by the Asian Infrastructure Investment Bank, and will be co-financed along with the Asian Development Bank for a total of approximately $275 million.[84] Portions of the project will also be funded by a $90.7 million grant announced in October 2015 by the government of the United Kingdom towards the construction of the Gojra-Shorkot section of the M4 Motorway project.[107]

All that says is why China sucks not how Pakistan can be competitive.

BTW, we became a 11 trillion dollar economy by making 100% crap, how about that, we must be the most popular people in the world for people to pay money for crap.

What Chinese export to the world is markedly different than what they dump in the Asian countries.
So far...anything i have encountered from China in the Pakistani market happens to be ...Cheap counterfeit junk...And that s why manufacturers are still sticking to European and American made components..the prime reason of CPEC is to bring industrial revolution..it is failing at that due to trust issues on Chinese quality...and rather will become a consumer dumping route..

I did not praise the Pakistani manufacturers either..the are addicted to protectionism rather than competition and only churn out cheap junk...actually opening of trade in high quality goods to drive our cheap manufacturers from the market is good...Pak Suzuki , Indus Corolla, Altas Honda they all need to go bankrupt..

Had Pakistani industry kept up..it would have paved the way for its own innovation..but what do Pakistani industries produce?? High priced junk..with designed not evolved since 1970s!

 

[war&peace]

CPEC is Chinese loan at 18% interest and it only propelled because a lot of people are making kick backs..

• Though Pakistan’s installed capacity is 22,800 MW to meet current demand of 19,000 MW, it produces only 12,000 MW
The question is...why are we not producing power to full capacity??? Because Islamic brotherhood with Arabs means we installed HFO fired power plants which are hell expensive to operate...




I will tell you what the Chinese will do...turn Made in Pakistan into a medicore brand of shame!

That's frightening and what is that figure 46 billion usd investment for?...I would appreciate if you backup this claim with a credible source. I can believe the kickbacks part though.

As far as energy crisis is concerned, it is partially artificial and partially it is the mess up of past many govts and it all started with the coming into power of the most corrupt couple in the history of Pakistan BB and her equally or even more corrupt husband...signed the deals and provided sovereign guarantees for installing the fossil fuel based power generation plants at an exorbitant price/unit as they made billions through kickbacks.
The later governments did not address the issue in time including NS, Musharraf, NS and now Khwajasra has made billions in many of the projects ...while the renewable energy potential is sufficient to cater for all current and even future needs for generations to come..i.e. hydel, solar, wind, biomass and nuclear.