Page 2 of 11 FirstFirst 1234567891011 LastLast
Results 16 to 30 of 153

Thread: CPEC and Developments

  1. #16
    Turbanator Senior Contributor Double Edge's Avatar
    Join Date
    11 Sep 10
    Location
    Bangalore
    Posts
    5,970
    Quote Originally Posted by Oracle View Post
    Local group you say.

    Did Pakistani Spies Kill 11 French Naval Engineers?

    I don't want to be a conspiracy theorist, but, just give it a thought.
    The story there is commissions promised in the mid nineties fail to materialise in the early 2000s with the coming of chirac leading to the death of French engineers in 2002. There doesn't seem to be much movement here from the French side till date.

    Your point is if Chinese projects don't materialise the same fate awaits Chinese engineers with the connivance of the PA? Maybe if cpec gets completely cancelled.

    Otherwise there are many projects planned in numerous sectors. Some will materialise where others do not.

    The Chinese have chosen not to publicise the death of that Chinese couple. Otherwise it could affect people to people relations between the two countries.

  2. #17
    Turbanator Senior Contributor Double Edge's Avatar
    Join Date
    11 Sep 10
    Location
    Bangalore
    Posts
    5,970
    Quote Originally Posted by Oracle View Post
    Right. Covert means.
    Fomenting rebellion in xianjiang. Americans will keep the Paks onside for a long time.

    I was not talking about tomorrow. The way PLAN is modernizing, that would be effective in a decade. I do agree the IN won't be a cake-walk for the PLAN, but the motive is very clear even if the Chinese don't admit it. You have to agree, that whatever the western experts say about Chinese technology, 100 Chinese warships against 50 Indian warships would overwhelm the Indian Navy.
    I think the purpose of Chinese in gwadar is to reassure the Paks over their growing naval disparity into the future with India. We are the threat here not the PLAN. The presence of PLAN at Gwadar is to act as a deterrent to the IN. Am not convinced it will be sufficient even into the future but if it helps the Paks sleep sound then great. Though let's not parrot out their rhetoric : )

    A 100 destroyers there means a 100 not available elsewhere. The American border begins at the limits of Chinese EEZ wherever its designated along their eastern seaboard. The US & China are practically neighbours.

    It's not conventional warfare. It's asymmetric. Paks don't need any permission for that. When the PA and ISI get caught pants down, they deny it outright. They will continue this trick. It worked vis-a-vis the US, it will work vis-a-vis China too.

    China expects to lose 80% of the CPEC money in Pakistan. They don't care. It's the Paks dying, not Chinese, until now.
    80% of how much? 46billion? No. Much less, maybe. But there is no need for China to lose. They can win and by extension counter the US by persuading the Paks not to go down that path. One way to do that is state capture.

    To understand how that works consider what Russia is doing in East Europe. This can serve as the future model for the Chinese to extend their influence via OBOR that is until the two collide at some point. Already happening in central Asia where the two vye for influence. So the Russians got us into SCO. An Indian presence adds another player into central Asia. They will cooperate with us in the north south corridor. Iran, Russia, Central Asia.

    What the Russians do is invest in strategic sectors. Finance, energy, media, real estate & infrastructure. If 10% of a country's gdp is due to these investments then the sponsor has become influential. If it crosses 20% then it's bordering on state capture where whatever recipient govt will defend the sponsors interests over its own. Case in point here is Bulgaria. A nato ally which Russia has significant control over. The way they hook players is offer way above what the market will offer for projects and keep doing it and if a problem arises threaten to go public in the country concerned. Blackmail. So not quite losing 80%. Some suspect Trump is similarly ensnared. That the Russians are keeping his businesses from bankruptcy. Lot of excited Americans these days. Comprehending the American political scene has become as difficult as Pakistan.

    If the Chinese can replicate this in Pakistan and other countries then they create buffers along the way. It's a big ask but possible if many things come together.

    Unless something terrible happens in India, like say a repeat of 26/11 of much higher magnitude, and P4 agrees (minus China), India won't move it's army inside PoK or G-B. And I don't think P4 will agree to a military move by the GoI. At most, they would (P5 in this case) agree on sanctions against Pak. I am afraid both Pak & China know this fact.

    What you are saying could be possible by say 2030, if the economy keeps growing and military modernization is fast tracked on an urgent basis. By say 2025, India can come out in the open, challenging the one China policy in various forums vis-a-vis Chinese policies on Kashmir and Arunachal. And why just G-B? We'd take PoK and Aksai Chin too. If everything goes right, India won't need any permission from any 3rd country to defang the PA and take back its' rightful lands, including Aksai Chin.
    Reclaiming lost territory. Not encroaching on others. We're never giving up our claims.

    Define too far. Attacks on military installations? Ambushing IA soldiers? Attacks on metros killing 100s? For the last 70 years, it's we who have been pushing it far. Next time an attack happens, India won't keep quiet - has been the most glorifying statement dished out by the politicians. Attacks are continuous, but India remains silent.
    But we've shown a willingness to go beyond the usual. Won't be the last time. Not like earlier when the odds we would cross the border were much lower. As to the effect it will take time. It might look like nothing has changed.

    Coming back to your question, no, I don't think so. It keeps India busy on 2.5 fronts. The Chinese are interested, yes, but only for Xinjiang. Since the Uri attack, whenever the PA aided by terrorists kills 2 of our soldiers, IA kills 4 in retaliation. Pak posts are razed to the ground frequently nowadays. Do you see any change in pattern from the Paks? No. The pattern of retaliation has changed though from the IA.
    See previous reply. We have become less predictable. If Chinese influence grows in pakistan they would prefer we stick to our side of the border. They do not see us as a threat on the Chinese border as they haven't built up their military infrastructure to the point it is on their east.


    The right way to go about CPEC would be to cultivate assets in G-B, PoK, Sindh and Balochistan to the point of training, arming and funding them. It needs time. But if we start now, by 2025 we can cause significant damage to both the Paks and Chinese, and a couple of years down the line we can have the IA march inside Pak and liberate all mentioned areas just like 1971. China would have lost 100s of billions by then and Pak relegated to Pak Punjab. Not impossible, it can be done if properly planned.

    Btw, in what sense can India wreak havoc? Asymmetric?
    Conventional
    Last edited by Double Edge; 16 Jun 17, at 02:25.

  3. #18
    Senior Contributor
    Join Date
    12 Jul 13
    Location
    Bangalore, India
    Posts
    2,325
    Quote Originally Posted by Double Edge View Post
    If one considers the purpose of SCO was to counter US presence in Afghanistan. SCOs origins were security which has presently moved into trade
    Wasn't it formed due to China's insecurity vis-a-vis the Russians?

    Quote Originally Posted by Double Edge View Post
    The story there is commissions promised in the mid nineties fail to materialise in the early 2000s with the coming of chirac leading to the death of French engineers in 2002. There doesn't seem to be much movement here from the French side till date.
    And there won't be much movement. Would be solved by China diplomatically.

    Quote Originally Posted by Double Edge View Post
    Your point is if Chinese projects don't materialise the same fate awaits Chinese engineers with the connivance of the PA? Maybe if cpec gets completely cancelled.

    Otherwise there are many projects planned in numerous sectors. Some will materialise where others do not.
    No, that's not my point. CPEC will not get cancelled. If CPEC gets cancelled, all Chinese go back to China. PA doesn't have any gain in that. The trick is to keep the Chinese invested, the money flowing and creating enough distractions to have the Chinese invested and more money flowing. The idea is for PA to control the whores and let the Chinese run the whorehouse.

    First of all we have to understand why the Chinese have committed 62 billions dollars (which I'm sure will go up) in a highly unstable Islamic country prone to terrorist attacks by 20 different Islamic terrorist groups. Trade is what China wants, 100%. What else?

    Just like the SCO, security is China's main concern now w.r.t. Xinjiang. A restive China can forget trade and development as well as it's hegemonic designs in the ECS and the SCS. About Taiwan, about Arunachal etc. As also by-passing the IOR. String of pearls etc. We have talked about this earlier. Any unrest in Xinjiang will spread to mainland China sooner than later. A bone here and there keeps intel from Pak flowing, just what the Americans have been doing, as also the PA remains in service 24X7. Trade, jobs, security, and a shortcut to the warm waters of Gwadar. The American presence in Afghanistan is a concern too. But this is probably what China thinks. I think, a stable China creates problems everywhere else, and it's their time to feel the heat.

    PA and ISI would take kickbacks in some way or the other, and yes the same fate awaits some Chinese businessmen who do not follow the established protocols. Not that Chinese businessmen won't pay up, but the ISI is a hydra, having deep state within a deep state, within a deep state. With billions flowing into Pakistan, everybody, even the peon in the ISI, would try to milk the Chinese. The Chinese would have to keep the feudal lords happy. The different political and Islamic parties happy.

    Then there are the small businesses in Pak which are on their last legs and would get decimated later due to the flow of Chinese goods. These businesses have already aired their concerns to the GoP and are not happy at all. You do know guns are cheaper than smartphones in Pakistan, and mercenaries can be hired for as low as 10K Pak rupees. Then there are the Balochis, Sindhis. And probably more unsatisfied groups waiting for their share of the blood money. There are too many mouths to feed in Pakistan, and the Chinese' reliance on only the PA would be short-lived.

    Quote Originally Posted by Double Edge View Post
    The Chinese have chosen not to publicise the death of that Chinese couple. Otherwise it could affect people to people relations between the two countries.
    They both (Pak and China) did a little bit, blaming SKorea and religion (Christianity) in an indirect way.
    Last edited by Oracle; 16 Jun 17, at 18:17.

  4. #19
    Senior Contributor
    Join Date
    12 Jul 13
    Location
    Bangalore, India
    Posts
    2,325
    Quote Originally Posted by Double Edge View Post
    Fomenting rebellion in xianjiang. Americans will keep the Paks onside for a long time.
    Right. Add to it a mainland stir demanding democracy. Allah-hu-Akbara.
    See, US doesn't actually need the PA & ISI to do that. The deep state within the deep state in the ISI can do the same.

    Quote Originally Posted by Double Edge View Post
    I think the purpose of Chinese in gwadar is to reassure the Paks over their growing naval disparity into the future with India. We are the threat here not the PLAN. The presence of PLAN at Gwadar is to act as a deterrent to the IN. Am not convinced it will be sufficient even into the future but if it helps the Paks sleep sound then great. Though let's not parrot out their rhetoric : )
    Reassure. Okay. But I would not discount the strategic importance of Gwadar for the time being for the PLAN. The way I see it, the Chinese are stretching themselves all over the place. Not a good call.

    Quote Originally Posted by Double Edge View Post
    A 100 destroyers there means a 100 not available elsewhere. The American border begins at the limits of Chinese EEZ wherever its designated along their eastern seaboard. The US & China are practically neighbours.
    PLAN is not USN. It doesn't have the capability to fight 2 wars at the same time. They are building up, because they are scared of the USN primarily, and the other alliances that navies of other nations are getting into in the Pacific and IOR.

    Quote Originally Posted by Double Edge View Post
    80% of how much? 46billion? No. Much less, maybe. But there is no need for China to lose. They can win and by extension counter the US by persuading the Paks not to go down that path. One way to do that is state capture.
    62 billion as of now, which would go up in the course of time. Nobody can persuade the Paks not to go down that path. State capture the Chinese way is debt-trap, in which China itself would wrangle.

    Quote Originally Posted by Double Edge View Post
    To understand how that works consider what Russia is doing in East Europe. This can serve as the future model for the Chinese to extend their influence via OBOR that is until the two collide at some point. Already happening in central Asia where the two vye for influence. So the Russians got us into SCO. An Indian presence adds another player into central Asia. They will cooperate with us in the north south corridor. Iran, Russia, Central Asia.
    Apart from China, India, Russia, which other member country in SCO has an economy to speak of? Those are insignificant countries. SCO doesn't add anything strategically for India, other than a small volume of trade.

    Quote Originally Posted by Double Edge View Post
    What the Russians do is invest in strategic sectors. Finance, energy, media, real estate & infrastructure. If 10% of a country's gdp is due to these investments then the sponsor has become influential. If it crosses 20% then it's bordering on state capture where whatever recipient govt will defend the sponsors interests over its own. Case in point here is Bulgaria. A nato ally which Russia has significant control over. The way they hook players is offer way above what the market will offer for projects and keep doing it and if a problem arises threaten to go public in the country concerned. Blackmail. So not quite losing 80%.
    I don't know how much the Russians charge as interest, but India charges 1% and even less in some cases. Soft loans. Not the same with China. Plus with Chinese loans, Chinese equipment have to be bought from Chinese companies, low skilled jobs go to Chinese labor imported from China. China does it so that their people have jobs and companies have orders and the returns are highly significant. Pak people won't gain much from CPEC. It's all about Chinese interests. They can get away doing that in Sri Lanka, Africa, but not in Pakistan.

    Read this,Chinese loans may put Bangladesh in debt trap . In this case, it would be India pushing the Bangladeshis not to fall in Chinese debt-trap.

    I will try to get another article about how the Chinese go on about their business in other countries. I have got like 1000s of links in my bookmarks, and it's a headache to get to the article I need. Do you know any application that can help?

    Quote Originally Posted by Double Edge View Post
    Some suspect Trump is similarly ensnared. That the Russians are keeping his businesses from bankruptcy. Lot of excited Americans these days. Comprehending the American political scene has become as difficult as Pakistan.
    Hahaha. I also suspect this and also that he knows he probably won't be in the job much longer, so making laws that support businesses like his.

    Quote Originally Posted by Double Edge View Post
    If the Chinese can replicate this in Pakistan and other countries then they create buffers along the way. It's a big ask but possible if many things come together.
    I'm sure the CIA is taking a lot of interest.

    Quote Originally Posted by Double Edge View Post
    Reclaiming lost territory. Not encroaching on others. We're never giving up our claims.
    Yeah, but I heard a rumor that during Vajpayee days the Kashmir issue was almost solved. Kashmir remains with India, and PoK remains with Pak, how much of this is true? The Indian Army is stretched in Bhutan too, keeping an eye on the PLA.

    Quote Originally Posted by Double Edge View Post
    But we've shown a willingness to go beyond the usual. Won't be the last time. Not like earlier when the odds we would cross the border were much lower. As to the effect it will take time. It might look like nothing has changed.
    Agree. Casualties, civilian as well as Army, police are announced on the media, but on the other side the ISPR claims only civilian deaths. And then goes to UN and complains about it. Keeping the relevance high. Which army does that? Professionalism has given way to a Jihadi narrative in the PA.

    Quote Originally Posted by Double Edge View Post
    See previous reply. We have become less predictable. If Chinese influence grows in pakistan they would prefer we stick to our side of the border. They do not see us as a threat on the Chinese border as they haven't built up their military infrastructure to the point it is on their east.
    That will not work with the Paks. I am telling you again. We can agree to disagree and let time decide that.
    Btw, in the Indo-China border, even God cannot build a Shanghai like infrastructure. Whatever the Chinese could, they have already done. We have troops and tanks, and our soldiers are acclimatized in that thin oxygen environment, the Chinese are not.

    Quote Originally Posted by Double Edge View Post
    Conventional
    We are not going to go for a war with the Paks. Not yet.

    Unless,
    #1. Pushed too far
    #2. Pushed far and Modi's ratings fall, even then those probably would be SoF actions, aided with air-strikes in PoK terror camps and some PA military infrastructure. That's it.
    Last edited by Oracle; 17 Jun 17, at 16:36.

  5. #20
    Senior Contributor
    Join Date
    12 Jul 13
    Location
    Bangalore, India
    Posts
    2,325

    A red flag

    IN recent months, several insightful analyses have been written about the China-Pakistan Economic Corridor (CPEC), raising pertinent questions about the lack of transparency around Chinese investments. This being Pakistan, questions were also raised about the patriotism and loyalty of those raising valid issues. An op-ed by a minister went so far as to claim that “China has never invaded any country nor harboured any imperial designs”.

    The truth is that like any nation with a deep history, China has had numerous imperial successes and failures. Sir Halford Mackinder recognised this fact, albeit in racist terms, in his 1904 article ‘The Geogra*phical Pivot of History’. Mackinder posited that if China were to combine its oceanic access with an ability to dominate its western land mass, it could be “the yellow peril to the world’s freedom” in the modern era.

    We can cast aside Mackinder’s racism but the fact is that the Chinese-led Belt and Road initiative, with a focus on the country’s periphery and a total investment outlay of $1.4 trillion, is going to transform China into a great land and sea power.

    For the clear majority of its history, China has stood at the top of the international pecking order. States beyond the Chinese realm were expected by imperial Chinese rulers to acknowledge China’s cultural, political and military superiority. While China did not always rely on military dominance to maintain superiority, the country’s experience in the 19th and 20th centuries has led elites to conclude their country must, at the very least, maintain political and military equality with other great powers in the 21st century.

    Historically speaking, social chaos and internal fragmentation in China has been accompanied by foreign aggression and intervention. This has led to a belief that a strong, centralised government not only prevents internal chaos but allows China to deter foreign aggression while dominating and influencing other nations on its periphery.

    To achieve this, China has historically relied on developing client-patron relations with periphery states, resulting in a pragmatic and benevolent relationship between China and its client states. Even during periods of turbulence, these client states continued to show symbolic respect to Chinese superiority.

    China has followed this pattern in expanding its influence with neighbouring states such as Pakistan, where there is broad domestic support for China. CPEC is promoted as a gesture of Chinese benevolence to a strategic and special friend.

    Chinese interests in CPEC, however, are not benign and are a critical part of China’s emerging grand strategy. These interests are fuelled by China’s imminent need to secure its global energy and food supplies. CPEC and Gwadar are key to this as they will enable the flow of vital energy and food supplies into China through an alternative route while allowing China to have a military and naval presence close to American military assets located in the Gulf. Recent reports suggesting that China may soon establish a naval base in Gwadar indicate that this strategy is in full motion.

    A more visible and expanded role by Chinese diplomats in Afghanistan is also part of this strategy as a stable Afghanistan will not only reduce American military presence in the region, but also unlock energy and mineral assets in the landlocked country. The direct outcome of this can be a more confrontational approach with the US in the region like what we have seen in the South China Sea, where the development of artificial islands is already leading to hostility with America.

    It is true that the pro-China view within both elite and non-elite circles in Pakistan make this a truly unique relationship. Having said that, Pakistanis have historically not responded well to the development of foreign bases in their country and a Chinese military presence in the country could lead to a decline in China’s standing in Pakistan.

    States such as South Korea offer a lesson in how China can use its outsized influence to hurt nations who do not toe the line. The placement of the Terminal High Altitude Area Defence in South Korea led to a Chinese backlash against the country, shutting down some of South Korean company Lotte’s retail facilities in China, blocking online trade in South Korean goods, and banning all group travel to the country in a bid to hurt its economy.

    Pakistan’s elites have historically cast aside the opinions and views of their citizens in their bid to punch above their weight in the international arena, leading to negative repercussions in the future. Given the outsized role China is playing in Pakistan’s economy, it is important for the government to make Pakistanis aware of what they are signing up for and the leverage China can and will possess in determining Pakistan’s domestic and foreign policy positions.
    The writer is a South Asia analyst at Albright Stonebridge Group in Washington D.C.

    A red flag

  6. #21
    Turbanator Senior Contributor Double Edge's Avatar
    Join Date
    11 Sep 10
    Location
    Bangalore
    Posts
    5,970
    Quote Originally Posted by Oracle View Post
    First of all we have to understand why the Chinese have committed 62 billions dollars (which I'm sure will go up) in a highly unstable Islamic country prone to terrorist attacks by 20 different Islamic terrorist groups. Trade is what China wants, 100%. What else?
    ok, lets go further back. Why BRI at all. How to fund it. If you recall the Chinese have a few trillion in foreign reserves. A lot of it in dollars. This makes that stash vulnerable to the vagaries of US policy and its currency. So a better plan would be to get out of this cycle of dependency on US currency. Make the yuan compete with the dollar along the route. Also decreases vulnerability in the event of US led sanctions. To do that the Chinese have to spend big. The problem with yuan is its only accepted in China so countries have to develop interests in China to spend their yuan there. Not so easy to replace the dollar but if it decreases China's downsides then why not. Everything else accrues as added benefits.

    Thing is there are a lot of unknowns here at the start which increase as time goes on. One analyst put it that BRI was good for every other country involved but China. It's Xi's baby. He remains in office till 2023. Whether there is followup after remains to be seen. There will be tranches coming along over the years.

    No, that's not my point. CPEC will not get cancelled. If CPEC gets cancelled, all Chinese go back to China. PA doesn't have any gain in that. The trick is to keep the Chinese invested, the money flowing and creating enough distractions to have the Chinese invested and more money flowing. The idea is for PA to control the whores and let the Chinese run the whorehouse.

    Just like the SCO, security is China's main concern now w.r.t. Xinjiang. A restive China can forget trade and development as well as it's hegemonic designs in the ECS and the SCS. About Taiwan, about Arunachal etc. As also by-passing the IOR. String of pearls etc. We have talked about this earlier. Any unrest in Xinjiang will spread to mainland China sooner than later. A bone here and there keeps intel from Pak flowing, just what the Americans have been doing, as also the PA remains in service 24X7. Trade, jobs, security, and a shortcut to the warm waters of Gwadar. The American presence in Afghanistan is a concern too. But this is probably what China thinks. I think, a stable China creates problems everywhere else, and it's their time to feel the heat.

    PA and ISI would take kickbacks in some way or the other, and yes the same fate awaits some Chinese businessmen who do not follow the established protocols. Not that Chinese businessmen won't pay up, but the ISI is a hydra, having deep state within a deep state, within a deep state. With billions flowing into Pakistan, everybody, even the peon in the ISI, would try to milk the Chinese. The Chinese would have to keep the feudal lords happy. The different political and Islamic parties happy.

    Then there are the small businesses in Pak which are on their last legs and would get decimated later due to the flow of Chinese goods. These businesses have already aired their concerns to the GoP and are not happy at all. You do know guns are cheaper than smartphones in Pakistan, and mercenaries can be hired for as low as 10K Pak rupees. Then there are the Balochis, Sindhis. And probably more unsatisfied groups waiting for their share of the blood money. There are too many mouths to feed in Pakistan, and the Chinese' reliance on only the PA would be short-lived.

    They both (Pak and China) did a little bit, blaming SKorea and religion (Christianity) in an indirect way.
    The Chinese are in a mood to spend. The Paks can play both the Chinese and Americans off each other and get paid in the process.

    Reassure. Okay. But I would not discount the strategic importance of Gwadar for the time being for the PLAN. The way I see it, the Chinese are stretching themselves all over the place. Not a good call.
    Its really hard to see any strategic importance of Gwadar to PLAN. It seems like the Chinese got arm twisted into the whole affair. Road freight is much more expensive than sea freight.

    Can see 100% advantage to the Paks as it allows them to develop a backward and forgotten area. The road building actually happens here to link up with the rest of the country, punjab has roads already so its just widening along the GTR. Developing Baluchistan means less militancy provided the locals see the benefits and not see it all vanish into the Punjab. So the Chinese pay for this bit. There may be minerals to exploit too but due to no infrastructure was not feasible. So for the PLAN to benefit requires a lot of things to go right so they can replenish there, at Gwadar, in the middle of nowhere.

    SCO doesn't add anything strategically for India, other than a small volume of trade.
    Central Asia has hydrocarbons and nuclear fuel too.

    I don't know how much the Russians charge as interest, but India charges 1% and even less in some cases. Soft loans. Not the same with China. Plus with Chinese loans, Chinese equipment have to be bought from Chinese companies, low skilled jobs go to Chinese labor imported from China. China does it so that their people have jobs and companies have orders and the returns are highly significant. Pak people won't gain much from CPEC. It's all about Chinese interests. They can get away doing that in Sri Lanka, Africa, but not in Pakistan.

    Read this,Chinese loans may put Bangladesh in debt trap . In this case, it would be India pushing the Bangladeshis not to fall in Chinese debt-trap.

    I will try to get another article about how the Chinese go on about their business in other countries. I have got like 1000s of links in my bookmarks, and it's a headache to get to the article I need. Do you know any application that can help?
    Way i understand it is the Banglas get 40 years to pay back, another ten years grace period, across the board 2% interest. No technical assistance program. This isn't harder than what the Banglas have already entered into with others in fact its more attractive.

    That will not work with the Paks. I am telling you again. We can agree to disagree and let time decide that.
    The Paks will try their tricks. But you disagree that the Chinese can exercise a moderating role here. On the contrary you think their presence will only embolden the Paks. Heh, then we better make sure that perception does not take hold when we retaliate for whatever.
    Last edited by Double Edge; 02 Jul 17, at 02:40.

  7. #22
    Senior Contributor
    Join Date
    12 Jul 13
    Location
    Bangalore, India
    Posts
    2,325
    Quote Originally Posted by Double Edge View Post
    ok, lets go further back. Why BRI at all. How to fund it. If you recall the Chinese have a few trillion in foreign reserves. A lot of it in dollars. This makes that stash vulnerable to the vagaries of US policy and its currency. So a better plan would be to get out of this cycle of dependency on US currency. Make the yuan compete with the dollar along the route. Also decreases vulnerability in the event of US led sanctions. To do that the Chinese have to spend big. The problem with yuan is its only accepted in China so countries have to develop interests in China to spend their yuan there. Not so easy to replace the dollar but if it decreases China's downsides then why not. Everything else accrues as added benefits.

    Thing is there are a lot of unknowns here at the start which increase as time goes on. One analyst put it that BRI was good for every other country involved but China. It's Xi's baby. He remains in office till 2023. Whether there is followup after remains to be seen. There will be tranches coming along over the years.
    That actually makes a lot of sense. If the Chinese start selling off US treasury bonds all at once, the dollar will plummet and a financial crisis will shatter markets world-wide including theirs. So they are selling those in tranches and putting this money in BRI.

    Quote Originally Posted by Double Edge View Post
    The Chinese are in a mood to spend. The Paks can play both the Chinese and Americans off each other and get paid in the process.

    Its really hard to see any strategic importance of Gwadar to PLAN. It seems like the Chinese got arm twisted into the whole affair. Road freight is much more expensive than sea freight.

    Can see 100% advantage to the Paks as it allows them to develop a backward and forgotten area. The road building actually happens here to link up with the rest of the country, punjab has roads already so its just widening along the GTR. Developing Baluchistan means less militancy provided the locals see the benefits and not see it all vanish into the Punjab. So the Chinese pay for this bit. There may be minerals to exploit too but due to no infrastructure was not feasible. So for the PLAN to benefit requires a lot of things to go right so they can replenish there, at Gwadar, in the middle of nowhere.
    String of pearls. I do however wonder, with military technology of the 90s, what are they trying to accomplish? There is not a single country that China gets alongwith other than rogue regimes like Pak and Nkorea. Things will get more interesting if US bombs NKorea and Korea is unified.

    Quote Originally Posted by Double Edge View Post
    Central Asia has hydrocarbons and nuclear fuel too.
    Yeah, but I was talking about general trade and strategic importance of those Central Asian countries.

    Quote Originally Posted by Double Edge View Post
    Way i understand it is the Banglas get 40 years to pay back, another ten years grace period, across the board 2% interest. No technical assistance program. This isn't harder than what the Banglas have already entered into with others in fact its more attractive.
    I read somewhere that Bangladesh is negotiating for better terms. Surely something scares Bangladesh too. Afterall, India has played the Sri Lanka debt trap to its advantage and let the whole world that deals with China know about it.

    Quote Originally Posted by Double Edge View Post
    The Paks will try their tricks. But you disagree that the Chinese can exercise a moderating role here. On the contrary you think their presence will only embolden the Paks. Heh, then we better make sure that perception does not take hold when we retaliate for whatever.
    Both Pak and China have different objectives w.r.t. CPEC. China dominates the world in manufacturing, it is now securing it's interests world wide, and wants to dominate. Pak civilian govt. wants business, infrastructure and some kick backs. PA wants Chinese military bases in its soil. However, PA controls most of Paks economy. Do you see the conflict of interest here? Numerous PA run companies will also be hit.

  8. #23
    Senior Contributor
    Join Date
    12 Jul 13
    Location
    Bangalore, India
    Posts
    2,325
    Chinese Killings in Pakistan - very much linked to CPEC

    As, also, China’s meddling in Australia — and what the U.S. should learn from it

    China is getting the attention it deserves. I hope the powers that be understand that China is the #1 threat to the stable global order right now.

  9. #24
    Turbanator Senior Contributor Double Edge's Avatar
    Join Date
    11 Sep 10
    Location
    Bangalore
    Posts
    5,970
    Understanding the way this $50 bn is structured is key to what debt burden will be like. $35bn is FDI and commercial loans, on projects that offer a return of 17% which is adequate to cover these loans. This makes up the bulk and won't appear as external debt. This basic fact appears missing in articles claiming enslavement

    Financing burden of CPEC | Dawn |Feb 13 2017

    The remainder will be govt to govt for infrastructure over a period of two years at 2% which shouldn't cause too much distress.

    Interestingly, the pak finance ministry has a rebuttals section where they respond to critiques from various sources

    http://www.finance.gov.pk/rebuttals.html

    Should help with FUD
    Last edited by Double Edge; 03 Jul 17, at 21:29.

  10. #25

  11. #26

  12. #27
    Turbanator Senior Contributor Double Edge's Avatar
    Join Date
    11 Sep 10
    Location
    Bangalore
    Posts
    5,970
    She goes on about debt but the only efficiently run desalination plant in Gwadar is privately operated. From an op-ed linked from her article, a former baloch senator wrote

    Compared to Balochistan, the nature of projects in Punjab have a different level of impact on the economy and social development of the province.

    Only the 27-km length Orange Line Metro will initially benefit around 250,000 passengers a day which will be increased to 500,000 passengers a day by 2025. The metro line will increase mobility, accessibility, efficiency and productivity. It has already generated 10,000 direct and indirect jobs and a massive boom to central Punjab’s small and medium enterprises.

    In addition, the large number of power projects under the CPEC in Punjab will have an immense impact on elevating the socio-economic conditions of targeted areas and population, more importantly central and northern Punjab.

    No such project has been initiated in Balochistan. Coal-powered projects designated under the CPEC have already been shelved, apparently due to lack of interest by Chinese companies.
    Apparently the chinese commercial entities know where to put their money for assured returns.

    Let see how the Paks manage their repayments, so far three of the worlds rating agencies say Pakistan has met its debt obligations.

    There does seem to be an almost reflexive need to pan this project before its even taken off.
    Last edited by Double Edge; 09 Jul 17, at 02:43.

  13. #28
    Senior Contributor DOR's Avatar
    Join Date
    08 Mar 11
    Location
    London
    Posts
    2,401
    Quote Originally Posted by Double Edge View Post
    ok, lets go further back. Why BRI at all. How to fund it. If you recall the Chinese have a few trillion in foreign reserves. A lot of it in dollars. This makes that stash vulnerable to the vagaries of US policy and its currency. So a better plan would be to get out of this cycle of dependency on US currency. Make the yuan compete with the dollar along the route. Also decreases vulnerability in the event of US led sanctions. To do that the Chinese have to spend big. The problem with yuan is its only accepted in China so countries have to develop interests in China to spend their yuan there. Not so easy to replace the dollar but if it decreases China's downsides then why not. Everything else accrues as added benefits.
    Double Edge,

    There is no plausible scenario where the US would adjust its economic, monetary or fiscal policies for the purpose of inflicting damage on another nation. The last time we did that was World War II, and I don't consider WWIII plausible. WWWI, perhaps, but cyberwar is a whole different subject.

    Any policy that hurt China by way of its holding of US dollars would hurt the US at least as much, if not more. The world uses dollars to trade, which takes them out of US control.

    .

    In addition, don’t confuse China’s foreign reserves with the government’s money.
    It doesn’t belong to the government any more than your own personal bank deposit belongs to the bank.
    That’s just a place it’s being held.

    What you’re looking for is fiscal or budgetary capabilities.
    Can China raise more in taxes?
    Can one government borrow more domestically than the other?
    What about international borrowing? Who’s more credit-worthy?

    All of these point to China having a vast edge, but none of it has anything to do with foreign exchange reserves (except, international borrowing, but that’s difficult when you’re buying heavy arms).

    ADD: Oracle,

    Anything China does with its foreign reserves will have to be very, very slow and long-term. Otherwise, it only hurts itself -- through a collapse in bond prices -- and helps the US, by making it ever cheaper to borrow.

    Cheaper US$? Wow, is that going to hammer China's exports!
    Last edited by DOR; 09 Jul 17, at 10:42.

  14. #29
    Senior Contributor
    Join Date
    12 Jul 13
    Location
    Bangalore, India
    Posts
    2,325
    Quote Originally Posted by Double Edge View Post
    She goes on about debt but the only efficiently run desalination plant in Gwadar is privately operated. From an op-ed linked from her article, a former baloch senator wrote

    Apparently the chinese commercial entities know where to put their money for assured returns.

    Let see how the Paks manage their repayments, so far three of the worlds rating agencies say Pakistan has met its debt obligations.

    There does seem to be an almost reflexive need to pan this project before its even taken off.
    Paks meet their debt obligations by procuring more debt, in the latest case by borrowing $1 billion from China, which they've shown as FDI. Also the money that is involved in CPEC is shown as FDI. The point is this money isn't reflected on the register of the national bank of Pakistan because this money doesn't reach Pakistan, this money is disbursed in China, directly to Chinese companies building infrastructure in Pak. This and the rating agencies make it confusing.
    Last edited by Oracle; 09 Jul 17, at 12:28.

  15. #30
    Senior Contributor
    Join Date
    12 Jul 13
    Location
    Bangalore, India
    Posts
    2,325
    Quote Originally Posted by DOR View Post
    Double Edge,

    There is no plausible scenario where the US would adjust its economic, monetary or fiscal policies for the purpose of inflicting damage on another nation. The last time we did that was World War II, and I don't consider WWIII plausible. WWWI, perhaps, but cyberwar is a whole different subject.

    Any policy that hurt China by way of its holding of US dollars would hurt the US at least as much, if not more. The world uses dollars to trade, which takes them out of US control.

    .

    In addition, don’t confuse China’s foreign reserves with the government’s money.
    It doesn’t belong to the government any more than your own personal bank deposit belongs to the bank.
    That’s just a place it’s being held.

    What you’re looking for is fiscal or budgetary capabilities.
    Can China raise more in taxes?
    Can one government borrow more domestically than the other?
    What about international borrowing? Who’s more credit-worthy?

    All of these point to China having a vast edge, but none of it has anything to do with foreign exchange reserves (except, international borrowing, but that’s difficult when you’re buying heavy arms).

    ADD: Oracle,

    Anything China does with its foreign reserves will have to be very, very slow and long-term. Otherwise, it only hurts itself -- through a collapse in bond prices -- and helps the US, by making it ever cheaper to borrow.

    Cheaper US$? Wow, is that going to hammer China's exports!
    DOR, China plans to invest $900 billion in BRI. $150 billion per year. That makes it 6 years, assuming BRI would be up and running smoothly from next year by the mercy of Allah (peace be upon him), even though many smaller projects have started. I am no economist, so what are your views about $900 billion in 6 years, fast or slow? Also, would it hurt the bond market if the Chinese announce the sale of bonds with the explicit reasoning that it is for infrastructure building in BRI?

    As about cheaper dollars and the subsequent exports from China - I think these things are momentary and would not affect Chinese exports much, as no Manufacturing company would shift it's factory back to US/Europe just because a match lighter became 50 cents costlier. By the way, as part of BRI, $1.1 billion investment in a port in Sri Lanka has made SLanka fall into a debt trap.

    The $900bn question: What is the Belt and Road initiative?

    What is China’s belt and road initiative?
    Last edited by Oracle; 09 Jul 17, at 12:17.

Thread Information

Users Browsing this Thread

There are currently 13 users browsing this thread. (0 members and 13 guests)

Similar Threads

  1. Syrian Civil War Developments
    By tankie in forum The Middle East and North Africa
    Replies: 2482
    Last Post: 16 Oct 17,, 20:35
  2. Developments in Yemen
    By tantalus in forum The Middle East and North Africa
    Replies: 25
    Last Post: 02 May 15,, 00:10
  3. Uzbekistan, and other developments in Central Asia
    By cyppok in forum Central and South Asia
    Replies: 11
    Last Post: 01 Aug 13,, 12:31
  4. Top Ten Chinese Military Modernization Developments
    By oneman28 in forum East Asia and the Pacific
    Replies: 96
    Last Post: 23 Jun 08,, 06:49
  5. Iran And Possible Developments
    By Gazi in forum The Middle East and North Africa
    Replies: 2
    Last Post: 26 Feb 06,, 16:02

Share this thread with friends:

Share this thread with friends:

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •