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Thread: CPEC and Developments

  1. #181
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    Quote Originally Posted by Skywatcher View Post
    They should just take that $14 billion and buy offshore windfarms or something.
    And who will give Pak $14 billion?

  2. #182
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    Pakistan rejects use of Chinese currency

    So Pak still bets on the US $ more than RMB.

  3. #183
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    Pakistan rejects use of Chinese currency

    So Pak still bets on the US $ more than RMB.

  4. #184
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    Quote Originally Posted by Oracle View Post
    And who will give Pak $14 billion?
    They'll have a lot easier time convincing Beijing to loan them that money for offshore windfarms, which at least is a viable business proposition, unlike that dam.

    Though granted, I doubt that even Karachi needs $14 billion of wind energy.

  5. #185
    Turbanator Senior Contributor Double Edge's Avatar
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    Quote Originally Posted by Oracle View Post
    Pakistan rejects use of Chinese currency

    So Pak still bets on the US $ more than RMB.
    No, its about economic sovereignty as the article begins with

    Pakistan has turned down China’s demand to allow its currency to be used in the Gwadar Free Zone under the China-Pakistan Economic Corridor framework, arguing any such move would compromise its ‘economic sovereignty’.
    Dollars aren't used there, Pak rupees are.

    “China wants to introduce its currency in Pakistan as part of its policy to internationalise the renminbi (RMB) – the official name of its currency,” according to the Pakistani officials.

    The Chinese authorities wanted to avoid currency exchange risks attached with the use of the US dollar and the Pak rupee.
    Are the Chinese wanting to be paid back in dollars ?

    The signing of the final draft of the LTP by China and Pakistan on Tuesday (today) is still subject to settlement of some pending issues.
    LTP hasn't been made public so far because it was still in the drafting stage


    The LTP is the most critical element of the China-Pakistan economic relationship, as it lays the foundation of cooperation in all economic and financial areas for decades to come.

    However, Pakistani authorities told The Express Tribune that the decision to make the LTP public would be taken on Tuesday by the political leadership of both the countries, as there were some sensitivities involved in it.
    So, we will have to see what is released and what is withheld and hopefully the conspiracy theories will kept to a minimum after

    Good article

  6. #186
    Turbanator Senior Contributor Double Edge's Avatar
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    Quote Originally Posted by Double Edge View Post
    - All China has to do is make a few adjustment so CPEC doesn't pass through disputed territory, let the roads pass further north. Work out with the Paks that India can get access to Central Asia and that is how China gets India on board OBOR.
    Quote Originally Posted by Oracle View Post
    Not going to happen. Forget it.
    China proposes alternative routes for CPEC via J&K, Nepal | Hindu | Nov 18 2017


    Envoy keen on a treaty of friendship and free trade

    China may consider alternative routes through Jammu and Kashmir to address India’s concerns regarding the China Pakistan Economic Corridor (CPEC) that passes through Pakistan-occupied Kashmir (PoK).

    In an interaction with experts on Chinese affairs and students, Beijing’s envoy Luo Zhaohui suggested the alternative routes, and said he was keen on accomplishing a bilateral friendship and trade treaty during his stint in India.

    “We can change the name of CPEC [China Pakistan Economic Corridor]. Create an alternative corridor through Jammu and Kashmir, Nathu La pass or Nepal to deal with India’s concerns,” said the envoy in a speech at the Centre for Chinese and South-East Asian Studies in the School of Language, JNU, on Friday.

    The Ambassador made a detailed presentation of the expectations on both sides and said that while the Dalai Lama’s presence and activities remain an issue for China, Beijing recognised that India’s expectations on the CPEC and Masood Azhar were also issues that both sides need to be deal with.

    Dynamic situation
    Referring to the dynamic situation in the world, Ambassador Luo said, “There is widespread change in world affairs since the coming to power of President Donald Trump of the U.S.” and said that the recent visit of President Trump to Beijing has proved that China is a reliable partner.

    “President Trump sealed $250 billion worth of trade deals with China during his trip. Would that be possible if China was a threat,” he asked, arguing that China and India as growing economies must cooperate with each other.

    “One of my goals is to have a treaty of friendship and free trade with India,” he said, elaborating that both sides need to find more areas to collaborate like the Delhi smog. “Beijing also has smog and two sides can jointly deal with this issue,” he said

    It was the first time that the Chinese ambassador was meeting Indian scholars and China experts five days after India held the first official-level meeting on the quadrilateral grouping with Japan, U.S., and Australia but the envoy declined to answer The Hindu’s question on the issue. However, he indicated his approval when a faculty member of the centre said that the quadrilateral was not a serious grouping as it could not produce a joint statement following the first meeting.

    Untapped potential
    Ambassador Luo said China and India have untapped economic potential that needs to be explored and highlighted that there is a need for balanced trade between two sides. He also announced that China plans to hold major commemorative events next year to mark the 40th anniversary of China’s economic reforms where India is expected to feature prominently.
    So says China's ambassador to india. How bout that : )
    Last edited by Double Edge; 22 Nov 17, at 16:24.

  7. #187
    Turbanator Senior Contributor Double Edge's Avatar
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    Many questions, very few answers

    China’s road through Pakistan | Dawn | Nov 23 2017

    Why are the Chinese interested in making the yuan legal tender in Gwadar? What purpose does such a step serve, and how are Pakistan’s interests advanced by it? If this is about helping make the yuan an international currency, which is a major policy priority for China, then why only ask for it to be legal tender in Gwadar? Why not all of Pakistan? Most other efforts to make the yuan a global currency are focusing on making it into a reserve asset through yuan-denominated bonds and currency swap arrangements between the central banks of China and other countries. Pakistan too has such a swap arrangement for many years now. But reserve asset is one thing, legal tender is a different ball game altogether.
    By itself the proposal doesn’t tell us much, except that whatever plans the Chinese have for Gwadar are a lot bigger than what we have been told. Thus far, there are two countries that have officially allowed the yuan to be legal tender: Angola and Zimbabwe. In the case of Zimbabwe, the decision was aided by the fact that its own currency had collapsed in 2009, with an inflation rate of 500 billion per cent (yes, five hundred billion). They shifted to the US dollar and the South African rand as legal tender, then in 2015 allowed the yuan in.

    By itself there is nothing inherently wrong with countries discussing and possibly mulling monetary arrangements whereby their currencies can acquire the status of legal tender in other countries. But in this case, a few sources of concern arise. First, it appears the demand is for one city only, which is odd, unless there is a plan to extend the coverage to the rest of Pakistan soon, in which case it is still odd to begin with one city, especially one so remote from the centres of economic activity in the country, for now anyway.

    There is one fact that is becoming increasingly clear: CPEC involves a fundamental and profound reshaping of our economy and policy landscape in order to create the space for Chinese capital and enterprises to acquire stakes and participate in the economic life of the country. When this newspaper ran details from the LTP back in May, the minister planning referred to that document as a “live document”, meaning it was up for changes. Then, before the JCC meetings got going, he told us that the LTP under consideration is the same document. The time to come clean on all this has arrived. Let’s see the plan, as you promised, Mr Minister!

  8. #188
    Turbanator Senior Contributor Double Edge's Avatar
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    The China angle in Mugabe's fall

    'Treacherous shenanigans' - The inside story of Mugabe's downfall | Reuters | Nov 26 2017

    A number of Zimbabwean generals already in China plotting the coup

    Chief of army staff goes to China 4 days before launching the coup
    Chiwenga’s trip to China culminated in him meeting Chinese Defense Minister Chang Wanquan in Beijing on Nov. 10.

    Two sources with knowledge of the talks told Reuters that Chiwenga asked if China would agree not to interfere if he took temporary control in Zimbabwe to remove Mugabe from power. Chang assured him Beijing would not get involved and the two also discussed tactics that might be employed during the de facto coup, the sources said.

    Reuters could not establish whether Mnangagwa met Chang
    Ousted by Mugabe for disloyalty, Vice president Mnangagwa lands up in China shortly after escaping from Zimbabwe

    Mugabe’s spies suspected old allies had turned against the aging president. An intelligence report, dated Oct. 30, said Beijing and Moscow both supported regime change out of frustration at Zimbabwe’s economic implosion under Mugabe.

    “China and Russia are after change,” the report said. “They are after change within ZANU-PF as they are sick and tired of Mugabe’s leadership.”

    “The two countries are even ready to clandestinely supply arms of war to Mnangagwa to fight Mugabe.”

    China has long taken an interest in Zimbabwe, having supported Mugabe’s forces during the liberation struggle. After independence it developed connections there in mining, security and construction.

    Russia has also had ties to Zimbabwe since the early 1980s, and in 2014 a Russian consortium entered into a partnership to develop a $3 billion platinum mining project in the country.
    Last edited by Double Edge; 28 Nov 17, at 18:01.

  9. #189
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    It was hilarious, and almost a little sad, how much everyone in the end hated good ole Bobby Mugabe.

    The fact that they're allowing him and his family to stay in Zimbabwe for the moment (as opposed to bundling the whole clan to Malaysia or Singapore) shows how little threat he poses to them, and low popular support he possesses.

  10. #190
    Turbanator Senior Contributor Double Edge's Avatar
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    The China - Pakistan relationship is

    higher than the mountains
    deeper than the oceans
    stronger than steel
    sweeter than honey

    Bad terms: Pakistan’s raw deal with China over Gwadar port | Asia Times | Nov 29 2017

    As details emerge of agreements reached, it seems likely China will profit and Pakistan will pay. Critics say Pakistan's bureaucrats have blundered

    China will bag a 91% share in gross revenues from Gwadar port, in Pakistan’s Balochistan province, and 85% from the surrounding “free zone,” under a 40-year deal finalized by Pakistani authorities with the China Overseas Port Holding Company.

    The numbers were revealed by Pakistan’s federal minister for ports and shipping, Mir Hasil Bizenjo, in the Pakistan Senate last Friday. He also disclosed that Pakistan will pay back US$16 billion in loans obtained from Chinese banks for the development of Gwadar port, the free-trade zone and all communications infrastructure, at rates of over 13%, inclusive of 7% insurance charges.

    The project forms part of the US$56 billion China-Pakistan Economic Corridor (CPEC). Business figures say China will recoup its entire CPEC expenditure in the first four years out of earnings from Gwadar port –which was inaugurated a year ago – and the free zone.

    Bizenjo added that the Chinese port holding company will operate the port over the next 40 years through a BOT (build-operate-transfer) arrangement. Pakistan will take over the port’s operation, along with responsibility for infrastructure maintenance, after the expiry date.

    The minister’s disclosure comes on the heels of persistent demands from lawmakers for details of the long-term agreements inked with the Chinese authorities to be revealed, amid accusations that the federal government had attempted to sweep them under the carpet.

    Most senators are of the belief that the long-term agreements are heavily tilted toward China. Raza Rabbani, who is chairman of the Pakistan parliament’s upper house, bowed to pressure from lawmakers and directed the Senate Standing Committee on CEPC to look into whether Pakistan’s national interests are undermined by financial obligations entered into via the agreement with China.

    Pakistan Tehreek-e- Insaaf Senator Mohsin Aziz, who could not be reached for comment by Asia Times, is of the view that the long-term contracts entered into in relation to CPEC most certainly do undermine the national interest. “Such deals need input from the private sector and the government should have involved the trade organizations before signing deals of national significance,” he told the Senate, adding that the private sector would have been able to negotiate better deals for Pakistan than its bureaucrats.

    Business leaders are indeed skeptical of the agreement’s 40-year term, stressing, in particular, that the infrastructure, roads, machinery and plant is unlikely to remain in workable condition in four decades. By the time Pakistan takes over responsibility for its maintenance, they say, it will need significant upgrading.

    Muhammad Ishaq, a leading importer and one-time director of the Khyber Pakhtunkhwa Board of Investment & Trade (KPBOIT) told Asia Times: “The hefty share in the revenue of port and free economic zone is not the only issue which will deal a severe blow to economy. The government also allowed contractors and sub-contractors associated with China Overseas Port Holding Company an exemption from income and sales taxes, and federal excise duties, for a period of 20 years, besides a 40-year tax holiday granted for imports of equipment, material, plant, appliances and accessories for port and special economic zone.”

    He added that major shares of the earnings from the port and free zone would go to Chinese companies, while Pakistan will struggle to service costly loans obtained from Chinese banks. The 2,282-acre free zone, he said, will include factories, logistics hubs, warehousing facilities and display centers that will all be exempt both from customs duties and from provincial and federal taxes.

  11. #191
    Turbanator Senior Contributor Double Edge's Avatar
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    Heh. that article was only about Gwadar

    $56bn - something for Gwadar = remaining CPEC

    something for gwadar = $16bn payback from Pakistan

    So far only tip of the iceberg has been mentioned, where is the rest. This so called LTP, when is that coming out so all the details can be made public

    It isn't even clear to me as yet whether the Paks have actually signed on the dotted line for this Gwadar deal. Is it a done deal at Gwadar ?

    Last edited by Double Edge; 30 Nov 17, at 23:30.

  12. #192
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    Who's afraid of american sanctions ?

    China pumps billions into Iranian economy as Western firms hold off | Reuters | Dec 01 2017

    China is financing billions of dollars worth of projects in Iran, making deep inroads into the economy while European competitors struggle to find banks willing to fund their ambitions, Iranian government and industry officials said on Friday.

    Freed from crippling nuclear sanctions two years ago, Iran is drawing unprecedented Chinese funding for everything from railways to hospitals, they said. State-owned investment arm CITIC Group recently established a US$10 billion credit line and China Development Bank is considering lending US$15 billion more.

    “They [Western firms] had better come quickly to Iran otherwise China will take over,” said Ferial Mostofi, head of the Iran Chamber of Commerce’s investment commission, speaking on the sidelines of an Iran-Italy investment meeting in Rome.

    The Chinese funding, by far the largest statement of investment intent of any country in Iran, is in stark contrast with the drought facing Western investors since US President Donald Trump disavowed the 2015 pact agreed by major powers, raising the threat sanctions could be reimposed.

    Iranian officials say the deals are part of Beijing’s US$124 billion Belt and Road Initiative, which aims to build new infrastructure – from motorways and railways to ports and power plants – and link China with Europe and Africa to pave the way for an expansion of trade.

    A source in China familiar with the CITIC credit line, which was agreed in September, called it “an agreement of strategic intent”. The source declined to give details on projects to be financed, but Iranian media reports have said they would include water management, energy, environment and transport projects.

    An Iranian central bank source said loans under the credit line would be primarily extended in euros and yuan.

    The China Development Bank signed a memorandum of understanding for US$15 billion, Iranian state news agency IRNA said on September 15.

    The bank itself declined to comment, in line with many foreign investors and banks, including from China, who were reluctant to discuss their activities in Iran for this story. The web sites of banks and companies often carry little or no information on their Iran operations.

    With a population of 80 million and a large, sophisticated middle class, Iran has the potential to be a regional economic powerhouse. But with the risk of sanctions hanging in the air, more and more foreign investors want Tehran to issue sovereign guarantees to protect them in case the projects are halted.

    Economic ties between Iran and Italy, its biggest European trade partner, have been affected.

    Italy’s state-owned rail company, Ferrovie dello Stato, is a consultant in the building of a 415-km (260-mile) high-speed north-south rail line between Tehran to Isfahan via Qom by state-owned China Railway Engineering Corporation.

    The Italian firm is separately contracted to build a line from Qom west to Arak, but it needs 1.2 billion euros (US$1.4 billion) in financing. Though backed by the state’s export insurance agency, it says it needs a sovereign guarantee.

    “We are finalising the negotiations and we are optimistic about moving forward,” said Riccardo Monti, chairman of Italferr, the state firm’s engineering unit, adding that the financing should be finalised by March next year.

    Former prime minister Matteo Renzi’s promise in Tehran last year to oil the wheels of trade with a €4 billion credit line from Italy’s state investment vehicle is effectively dead, a source in Italy familiar with the matter said.

    Cassa Depositi e Prestiti (CDP) risked losing the confidence of its many US bondholders who could sell down their holdings if the credit line went ahead, the source said.

    A few European banks have deepened trade ties with Iran this year – Austria’s Oberbank inked a financing deal with Iran in September.

    South Korea has also proved a willing investor, with Seoul’s Eximbank signing an US$9.5 billion credit line for projects in Iran in August, according to Chinese state news agency Xinhua. But China is the stand-out.

    Valerio de Molli, head of Italian think tank European House Ambrosetti, reckons China now accounts for more than double the EU’s share of Iran’s total trade. “The time to act is now, otherwise opportunities nurtured so far will be lost,” de Molli said.

    Iranian officials attending this week’s meeting in Rome sought to goad European firms and their bankers into action by talking up the Chinese financing and investments. “The train is going forward,” said Fereidun Haghbin, director general of economic affairs at Iran’s foreign ministry. “The world is a lot greater than the United States.”

    Some Iranian officials remain concerned that investment could become lopsided and are looking at creative ways to maintain investment links with the West, however.

    The Iran chamber is encouraging Western firms to consider transferring technology as a way of earning equity in Iranian projects rather than focusing on capital.

    It was also seeking approval to set up a €2.5 billion offshore fund, perhaps in Luxembourg, as an indirect way for foreigners to invest in Iran, especially small and medium-sized Iranian enterprises, Mostofi said. The fund would issue the financial guarantees that foreigners want in return for a fee, effectively stepping in where banks now fear to tread. Most of the fund’s capital would come from Iran, Mostofi said.

    For now, however, big Western firms remain stuck.

    Italian power engineering firm Ansaldo Energia, controlled by state investor CDP and part-owned by Shanghai Electric Group, has been in Iran for 70 years.

    Its chairman, Giuseppe Zampini, told Reuters at the Rome conference there were many opportunities for new contracts but his hands were tied for now, partly because Ansaldo bonds were also in the hands of US investors.

    “My heart says that we are losing something,” Zampini said.

  13. #193
    Turbanator Senior Contributor Double Edge's Avatar
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    hiccups, go slow, hump ahead

    Three CPEC projects hit snags as China mulls new financing rules | Dawn | Dec 05 2017

    China has temporarily stopped funding of some projects particularly those related to the road network under the China-Pakistan Economic Corridor (CPEC) till further decision regarding ‘new guidelines’ to be issued from Beijing, a senior government official told Dawn on Monday.

    The decision could affect over Rs1 trillion road projects of the National Highway Authority (NHA). It was not clear how wide the impact of the delay will be, but initial reports confirm that at least three road projects are going to experience a delay.

    The decision of Chinese government was conveyed to Pakistan in the JWG meeting and the existing procedure for release of funds had been abolished. Under the previous procedure, the projects were to be approved by six different forums after which the funds were released.

    “In fact the Chinese authorities informed us that the previous procedure of release of funds was meant for early harvest projects only and new guidelines will be issued for future projects of the CPEC,” the official said.

    This suggests that the impact of the new procedures could be much wider than just the three roads mentioned by the official.

    The official said the Pakistani side was left “stunned” when told of this development since it was the first time they were hearing it.

    He, however, claimed that Chinese side was quite disturbed with increasing news reports being published in Pakistan regarding corruption in CPEC projects and that was the reason China has temporarily halted release of funds for the corridor.

  14. #194
    Turbanator Senior Contributor Double Edge's Avatar
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    Interesting twist

    Japan to help finance China's Belt and Road projects | Nikkei Asian Review | Dec 06 2017

    Emphasis on bilateral cooperation in energy, logistics

    TOKYO -- The Japanese government intends to financially support private-sector partnerships within China's Belt and Road Initiative in a nod to improving ties.

    Japan will provide backing, such as loans through government-backed financial institutions, to promote cooperation among Japanese and Chinese private companies working on initiatives in third-party nations.

    The assistance will focus on the "green" sector, industrial modernization and logistics, according to guidelines put together by the Cabinet Secretariat, the Foreign Ministry and others. Government officials will explain the guideline to the business community.

    Projects developing solar, wind and other alternative energy sources are among the envisioned candidates for financial backing, as well as joint efforts to develop technology that eliminates carbon emissions at coal-burning power plants.

    The modernization of industrial parks and power grids may entail large-scale infrastructure projects managed jointly by Chinese and Japanese private companies.

    Logistics channels between China and Europe are also seen as a promising area for cooperation. The rail lines connecting the two regions will be outfitted with a digital customs clearance system and other innovations that will benefit Japanese corporations with factories in China.

    Next year marks the 40th anniversary of Japan and China signing a peace and friendship treaty. Tokyo will seek to advance bilateral relations, with the guidelines forming the core of the economic cooperation package. This move is also expected to serve as a springboard for reciprocal state visits by Japanese Prime Minister Shinzo Abe and President Xi Jinping of China.

    But some in Abe's government have voiced concerns, particularly with the murkiness of Chinese development support, and the potential for the fruits of those efforts being repurposed for military applications.

    (Nikkei)

  15. #195
    Contributor anil's Avatar
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    Whisper talk says that globalisation already peaked and the oil prices are an indication of the coming change



    As it would turn out, the rise of e-commerce retail has allowed local and regional manufacturers to promote and distribute their goods more easily. This is cutting into sales of imported goods.

    Distributors of imported goods can rent shelf spaces in stores and malls but they can't do the same on e-retail sites.
    Last edited by anil; 10 Dec 17, at 07:45.

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