The real face of CPEC : Destroying Pakistani Industry

[arbit]

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....

Midea has acquired Carrier air-conditioning. I was unaware of the fact till i went to purchase a carrier air conditioner. I already had two Hitachis for my parents house and I thought that a change in brand would be good. I just went and ordered two units of Carrier because one of its example was installed in my uncle's house since i was a kid. And it was phenomenal. Just kept on working.
Huge mistake. Absolutely pathetic quality. They have given a two tonne AC with 4" remote! Cant even hold it properly. Suckers have killed the brand. Even LG and Samsung have better ACs now.

Good because we should better be careful in accepting any such figures without a credible source as you know anti-CPEC lobby is very active and lying and false propaganda is the first step.

@Tripoli Is it just me or does any one else find it surprising that though figures like 18% are doing the rounds. NO ONE knows whats the real rate of interest is !!!!!!!!!!!

I mean , Japanese got to fund our HSR and we all know at what ROI they provided. Is this ambiguity deliberate on part of Pakistan's or they are just that incompetent or worse, complicit in some sort of scam??

 

[randomradio]

I mean , Japanese got to fund our HSR and we all know at what ROI they provided. Is this ambiguity deliberate on part of Pakistan's or they are just that incompetent or worse, complicit in some sort of scam??

The Japanese are good for loans. I mean, who gives such large sums at 0.1%.

 

[manojb]

What industry are we talking about?
Pakistan has no major industry that China has, hm may be leather industry, next world cup football may be mfgd in China other than that pak has nothing to offer, accept land. So fear not. As many posted this is nonsense article

 

[Tripoli]

What industry are we talking about?
Pakistan has no major industry that China has, hm may be leather industry, next world cup football may be mfgd in China other than that pak has nothing to offer, accept land. So fear not. As many posted this is nonsense article

Thanks for the harsh truth. But at least its better than nothing. Oh and you missed the textile industry.

 

[Mrc]

So the indians where right all the time...

Omg ...china is our enemy .....so is islam....they are out to destroy us....

Our real friends are india...america and israel....

Get serious guys

 

[Tripoli]

Midea has acquired Carrier air-conditioning. I was unaware of the fact till i went to purchase a carrier air conditioner. I already had two Hitachis for my parents house and I thought that a change in brand would be good. I just went and ordered two units of Carrier because one of its example was installed in my uncle's house since i was a kid. And it was phenomenal. Just kept on working.
Huge mistake. Absolutely pathetic quality. They have given a two tonne AC with 4" remote! Cant even hold it properly. Suckers have killed the brand. Even LG and Samsung have better ACs now.




@Tripoli Is it just me or does any one else find it surprising that though figures like 18% are doing the rounds. NO ONE knows whats the real rate of interest is !!!!!!!!!!!

I mean , Japanese got to fund our HSR and we all know at what ROI they provided. Is this ambiguity deliberate on part of Pakistan's or they are just that incompetent or worse, complicit in some sort of scam??

It is obviously not 18 percent. LOL

This should give you an idea. The loans aren't too bad but they aren't good either.
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 Chinaand 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]

 

[arbit]

It is obviously not 18 percent. LOL

This should give you an idea. The loans aren't too bad but they aren't good either.
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 Chinaand 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]

Ofcourse it won't be 18%.
Wikipedia is an open source of information, is there any other official source, a bulletin by government etc., a statement by ministry perhaps? Anything which will bring it out of the purview of speculation.

@randomradio absolutely. Whether 0.1 or 1.0. The issue is transparency and easy flow of credible information. Which in CPC case is conspicuously missing.

 

[Tripoli]

Ofcourse it won't be 18%.
Wikipedia is an open source of information, is there any other official source, a bulletin by government etc., a statement by ministry perhaps? Anything which will bring it out of the purview of speculation.

There isn't any such thing to my knowledge.

There would be nothing wrong with this CPEC project if only Pakistan had patriotic, sincere leaders.
If this project is played correctly(maximized benefits and reduced losses) it could bring great benefits to Pakistan and if it is played wrong it can destroy Pakistan( economically and socially)

 

[arbit]

There isn't any such thing to my knowledge.

There would be nothing wrong with this CPEC project if only Pakistan had patriotic, sincere leaders.
If this project is played correctly(maximized benefits and reduced losses) it could bring great benefits to Pakistan and if it is played wrong it can destroy Pakistan( economically and socially)

I understand. Corrupt leaders have been the bane of both our countries for last many decades. We got a good one now, hopefully you will get yours as well. fingers crossed.

And this CPEC business is fishy my friend. To prosper you need to ship stuff OUT from Pakistan, so take care to not become the dumping ground of cheap chinese stuff. Chinese have been parasitic in nature elsewhere.

 

[Tripoli]

I understand. Corrupt leaders have been the bane of both our countries for last many decades. We got a good one now, hopefully you will get yours as well. fingers crossed.

And this CPEC business is fishy my friend. To prosper you need to ship stuff OUT from Pakistan, so take care to not become the dumping ground of cheap chinese stuff. Chinese have been parasitic in nature elsewhere.

Completely agree. Instead of letting the Chinese dump, Pakistan should turn itself into a highway of Chinese goods going into the Arabian sea while at the same time building up its own domestic industry. That's what I would ideally want but it is easier said than done.


I don't think Pakistan will be getting a good leader. Some nations just don't deserve them.

 

[Hakikat ve Hikmet]

Exactly....Indians will definitely like to create controversies regarding CPEC. Irrespective of what others do......

We have consensus in Pakistan that it should be built at any cost.

We should exploit CPEC to our fullest advantage, also keeping our local businesses intact.

It depends more on us than Chinese.........

I have read news below, is it anyhow related to CPEC?

http://tribune.com.pk/story/1126610/unprecedented-china-eases-rules-pakistans-banks/

@Kaptaan @Viper0011. What do u guys suggest, how should we protect our local businesses?

Aziz Kardeshim, I have the following observations:

• CPEC is a strategic project to cater for both military and economic power projections. At the center is Pak. Now weak Pak isn't in the Chinese interest since a strong Pak will be the knob to contain India by channeling all of her obsessive compulsive disorders vis-a-vis Pak. Instead of India containng China, China contains India via supporting a growing and strong Pak. Clever move. Look at NSG example.
• China wants to be like the USA economy wise, which is the ultimate goal of the US businesses too to make the next level of profits. It means financial markets, innovation, services, high end research and products, and advanced consumer market. But unlike the USA she doesn't want to lose the "global factory and supply chain" status. Hence relatively cheap labor in Pak gets into picture. In the yellow race culture loyalty runs supreme and memory is sharp. They may be bossy and pushy but looks after you. Pak fits these trust and loyalty bills perfectly with a good track record.
• So far association with China has proved to be good for Pak be it strategic balance or a domestic fighter jet. So, future associations will bring good for Paks too inshaAllah by using Newton's method of induction - if something is true for n=1, and you can prove it to be true for n=2, then it can be projected that it is true for n=3,4,..etc.
• Now Pak has to come up with her own story vis-a-vis CPEC. With such a long supply chain and transportation channel at your disposal I don't think it's tough. What you need to do is to roll the wheel of your business acumen and see wonders coming. I am pretty sure many folks from around the world are already eying CPEC for such opportunities. Business world is dynamic with some industries dying and others being born in a continuous fashion. To stick to status quo is like death.

 

[GURU DUTT]

Completely agree. Instead of letting the Chinese dump, Pakistan should turn itself into a highway of Chinese goods going into the Arabian sea while at the same time building up its own domestic industry. That's what I would ideally want but it is easier said than done.


I don't think Pakistan will be getting a good leader. Some nations just don't deserve them.

but that could have olny happened if pakistan from the start had invested that ammount from its own pocket or even took lone from IMF/WB and made it itself by its own initiative but instead your militarry , beurocratic and political elite simply took the easier way and just leasted the land and gave chinese the full rights to make and oprate the corridoar with obligation only to give it security now you can speculate what will be china doing as a smart & shrewd buisnessman

 

[arbit]

Completely agree. Instead of letting the Chinese dump, Pakistan should turn itself into a highway of Chinese goods going into the Arabian sea while at the same time building up its own domestic industry. That's what I would ideally want but it is easier said than done.


I don't think Pakistan will be getting a good leader. Some nations just don't deserve them.

A little off topic but i think Benazir was a terrific leader. Pakistan was doing well till her time so she got complacent and thought a few dollars here and there won't make a difference to the overall Pakistan economy and so she turned blind eye to the corruption of a few.
This probably is the reason for her image as a corrupt leader. But she was inspirational, what Nawaz intends to do but can't, she could have implemented on the ground. She would have also injected some dynamism into the regional politics. Its a shame she was assassinated. I was excited to see her enter politics again.
Also she could deal with your partners on an equal footing without being drowned in a mountain of gratitude, which seems to be the case with current Pakistan's leadership.
But I wish you guys well (don't be shocked ) Good luck.

 

[Syed Hussain]

At both Gawadar and CPEC(China 'Punjab' Economic Corridor), Pakistan will only win military support from China up to a level of direct intervention on the name of "saving its vital assets", for our Economy it doesn't have any trump card as we have literally sold these projects to China to be exploited as they wish.

 

[GURU DUTT]

At both Gawadar and CPEC(China 'Punjab' Economic Corridor), Pakistan will only win military support from China up to a level of direct intervention on the name of "saving its vital assets", for our Economy it doesn't have any trump card as we have literally sold these projects to China to be exploited as they wish.

now thats is the most sane post on the thread by a pakistani yet ... congrats & cheers mate