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Thread: CPEC and Developments

  1. #511
    Senior Contributor Oracle's Avatar
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    From time to time, I see Chinese people writing for the Pak press. It's about how Pak should use the CPEC to rapidly develop Paks economy and benefit Paks. Why is it even necessary for Chinese people to write these kind of articles in Pak press? There must be some push back. Where? Who? I don't know, but with time all will be revealed.

    My observations on Pakistan’s economy

    P akistan’s current fiscal and taxation policies are characterised by increasing tariffs, expanding the proportion of taxes, raising all kinds of living, production and material rates, resulting in a sharp rise in the production costs of enterprises and an increase in the burden of business operation. At the same time, the exchange rate of the Pakistani rupee against the US dollar has depreciated sharply recently. The consumption cost of the people has risen sharply in a short period of time. As a result, the market demand becomes weaker, and the inflation rate is higher. At the time of rising production costs, enterprises have encountered the double challenge of shrinking market demand, adding to their difficulties and worrying conditions. Some enterprises have stopped production or sought to withdraw from the Pakistani market to seek overseas development, thus increasing the unemployment rate in Pakistan.

    Due to poor economic performance and deviation of fiscal and taxation policy, Pakistan has encountered some serious problems, such as stagflation, sharp devaluation of currency, and high inflation rate. The direct result of stagflation is a sharp decline in people’s income and a sharp increase in unemployment, as well as major problems in social stability. It seems that Pakistan is entering a vicious circle of economic decline in investment, production, circulation, and consumption, which in turn leads to both financial and economic crises.

    At present, the response of the Pakistani government is limited to short-term solutions, lacking long-term strategic vision. The effect of the ‘treatment’ is not as desired. I would like to make a few observations:

    1) It is necessary for Pakistan to make good use of the China-Pakistan Economic Corridor (CPEC) so as to rapidly develop the Pakistani economy, benefit the Pakistani people, and improve the livelihood of the people. The smooth development of CPEC projects over the past six years has greatly changed the quality of life of the Pakistani people and led to the rapid development of the national economy. Therefore, CPEC in Pakistan is a project supported by the whole people, and it has become an important factor that can change the fate of Pakistan. As CPEC has reached a critical period, we shall make positive preparations for the healthy and rapid development of CPEC in a constructive direction.

    2) Pakistan shall always put national interests and national development in the first place. All government departments should have a sense of mission for the sake of national interests, cooperate with each other and coordinate efficiently, and should not attack each other and pass the buck for the sake of their own interests.

    3) Development needs to be carefully arranged and carried out in an orderly manner. At present, it is necessary to seriously study which industries are in line with Pakistan’s national conditions and market needs. The situation in provinces and localities is different. We should study, identify and consider which industries are in urgent need of the local market, which industries are conducive to the development of local resources and other factors, and rationally balance regional interests. We shall take a comprehensive approach, and formulate a targeted medium and long-term (5-10 years) development plan.

    4) We shall formulate an industrial plan in line with the development of Pakistan’s national conditions. We also need to seriously consider, carefully manage and cultivate the layout of the whole industrial chain. Only in this way can we really cultivate the manufacturing sector in Pakistan. It is necessary to consider the training of talents in relevant industries, from technical skills to management, organisation and arrangement, and to study what talents will be needed in these industrial chains in the future. Talents must be trained in a targeted, fixed and quantitative manner. In the early stages of talent training, Pakistan can consider seeking help from China and Germany. In the later stage, we can consider the joint training by government, schools and enterprises so that talents can quickly enter the working force, get the stage to display their talents and create more than expected value.

    5) The continuation of good policies is the cornerstone of national development. Let investors have no worries, rest assured that bold and active investment shall be made. Investment will bring advanced technology and good management experience, international markets. It will also provide a large number of jobs, promote business development, reduce dependence on imports, increase export opportunities, and increase national taxes, so as to bring the country into a virtuous circle. We shall study how the surrounding countries that have done a good job of attracting investment. We shall study and compare the comprehensive factors of various aspects so as to formulate a more attractive investment policy, more in line with the long-term development of the country to attract investment. And we shall introduce relevant policies and continue to push them forward.

    6) Fiscal and tax policies that meet Pakistan’s long-term interests should be formulated. I believe that the current top priority is to encourage economic development, not vice versa. The interest rate of bank deposits shall be lowered with appropriate macro-control policies so as to encourage some bank deposits to actively participate in market circulation and increase the proportion of investment. In this way, more jobs could be created, enterprises could get the capital to develop the industrial chain, and a virtuous circle of economic and financial development could be created. In terms of taxation, expanding the tax base and reducing the tax rate is the need of the hour. We shall inculcate individuals and enterprises the idea that paying tax is glorious, implement the step-by-step tax policy, and expand the tax base both by law and reasoning.

    In addition, in the current dismal business environment, the production enterprises should be given appropriate tax reduction support so as to help the products to enter the circulation as soon as possible, promote the market recovery, increase consumption, and increase the employment rate. If the Pakistan government can attract more overseas investment, it can get more tax revenue from the increase of the scale of production, operation and transportation of enterprises. Specific measures include reducing tariffs on raw materials and spare parts to help enterprises reduce production costs, simplifying the process of administrative examination and approval of enterprises, delegating responsibilities to relevant ministries, establishing one-stop services, and so on.
    One more -> Pakistan’s economy: some dos and don’ts

    Check out the sketch of her pic in the above article. 100% military.

    Got a better picture.
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    Born in Yangzhou, lives in Hamburg. Why would a PLAAF personnel living so far go through the trouble of writing articles for the Pak press?
    Last edited by Oracle; 04 Jul 19, at 03:55.
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  2. #512
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    Quote Originally Posted by Oracle View Post
    Born in Yangzhou, lives in Hamburg. Why would a PLAAF personnel living so far go through the trouble of writing articles for the Pak press?
    i was wondering what her background was as it didn't say. The advice seems good but she tends to use the word 'we' quite a few times and its not clear what that means.

    3) We shall take a comprehensive approach, and formulate a targeted medium and long-term (5-10 years) development plan.

    4) We shall formulate an industrial plan in line with the development of Pakistan’s national conditions.

    5) We shall study how the surrounding countries that have done a good job of attracting investment. We shall study and compare the comprehensive factors of various aspects so as to formulate a more attractive investment policy, more in line with the long-term development of the country to attract investment.

    6) We shall inculcate individuals and enterprises the idea that paying tax is glorious, implement the step-by-step tax policy, and expand the tax base both by law and reasoning.
    Who's the 'we' here or is it just a language thing. Next, she seems to be giving prescriptions almost commanding

    1) It is necessary for Pakistan to make good use of the China-Pakistan Economic Corridor (CPEC)

    2) Pakistan shall always put national interests and national development in the first place.

    6)The interest rate of bank deposits shall be lowered with appropriate macro-control policies so as to encourage some bank deposits to actively participate in market circulation and increase the proportion of investment.
    You get the impression CCP apparatchik telling them what to do
    Last edited by Double Edge; 04 Jul 19, at 15:50.

  3. #513
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    ^ Her profile pic in FB, and album pics don't match. Or maybe she has aged.

    Yes, the 'we' is the CPC.
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  4. #514
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    Politicians are elected to serve...far too many don't see it that way - Albany Rifles!

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  5. #515
    Turbanator Senior Contributor Double Edge's Avatar
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    ^
    Meanwhile, corruption keeps pushing the costs of the project higher by the day.

    As of 2019, the cost of CPEC projects is $62 billion, up from the original value of $46 billion back in 2014.
    So that's why the price escalated 50%

  6. #516
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    Politicians are elected to serve...far too many don't see it that way - Albany Rifles!

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  7. #517
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    Again, more pushback. Why can't the Chinese do anything without provoking the locals. Why don't they just pay up what it's due. This is certainly not the way a 14 trillion dollar economy should conduct itself, thug like.
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  8. #518
    Turbanator Senior Contributor Double Edge's Avatar
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    Quote Originally Posted by Oracle View Post
    wonder why

    According to the agreement, China “rents” the port for a century (99 years) and Tanzania does not have a say on who else can come and invest in the port once it is operational.

    Magufuli has alleged that the China has presented “exploitative and awkward” terms in exchange for financing. Chinese financiers set “tough conditions that can only be accepted by mad people,” Magufuli told local media.

    “They told us once they build the port, there should be no other port to be built all the way from Tanga to Mtwara south,” Magufuli told a delegation of business people at State House in Dar es Salaam on June 14.

    “They want us to give them a guarantee of 33 years and a lease of 99 years, and we should not question whoever comes to invest there once the port is operational. They want to take the land as their own but we have to compensate them for drilling construction of that port,” he said.
    At least they have a leader that isn't asleep at the wheel or on the take.

  9. #519
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    A Power Plant Fiasco Highlights China’s Growing Clout in Central Asia

    BISHKEK, Kyrgyzstan — Officials in Kyrgyzstan knew they could no longer put off the decision. An aging plant that provided nearly all the heat and electricity for the country’s capital was on its last legs.

    As the officials were weighing rival bids to reconstruct the plant, letters arrived at the Kyrgyz Energy Ministry and Foreign Ministry from the Chinese Embassy in Bishkek, the Kyrgyz capital. They strongly “recommended” a Chinese company called TBEA as the “only executor” for the project, worth hundreds of millions of dollars.

    It was more than just a recommendation. China was dangling the prospect of a loan to Kyrgyzstan, a Central Asian nation of 6.2 million people, but made clear that its favored contractor had to be chosen. Believing they had no option, the Kyrgyz officials selected TBEA, a company with grand ambitions but modest experience in building and repairing power stations.

    The 2013 decision to choose TBEA over a far more experienced Russian company led to disaster. Last year, soon after the overhaul was completed, the plant broke down, leaving much of Bishkek without heat or electricity in freezing weather.

    The public outcry and a trial underway in Bishkek have exposed Chinese business practices and local corruption to months of intense scrutiny from Kyrgyzstan’s boisterous news media and elected politicians. The scandal also highlights a tectonic shift underway in the economics and geopolitics of Central Asia, a vast, resource-rich expanse of desert, steppe and mountains that Russia has viewed as its turf for centuries.

    Fierce rivals during the Soviet era who fought a dangerous border conflict in 1969, Russia and China settled into something of a cold peace in subsequent decades. Lately, though, the two nations have made a great show of drawing together strategically and commercially, a relationship fueled primarily by tensions with the United States and its Western allies.

    China’s leader, Xi Jinping, and the man he recently described as his “best friend,” President Vladimir V. Putin of Russia, last month traded smiles and gibes about the United States during trips to Central Asia. They both attended a meeting in Kyrgyzstan of the Shanghai Cooperation Organization, a group of regional states established by China, and then met again in neighboring Tajikistan, where Mr. Putin gave the Chinese leader a birthday gift of ice cream.

    Despite the growing ties, however, a deep-seated rivalry remains between the two former adversaries, one that this case exposes.

    There is a big hidden fight going on between Russia and China for influence in Central Asia,” said Rasul Umbetaliev, a former Kyrgyz official and energy expert. Russia has more support from a Kyrgyz population that often speaks Russian and looks to Moscow as a place to work or study, he said, but “the Russians don’t have any money.

    The power of Chinese cash is at the center of the trial in Bishkek of a former Kyrgyz prime minister, Sapar Isakov, and other former officials accused of corruption relating to the TBEA contract. Prosecutors say rigged bidding and inflated pricing will cost Kyrgyzstan $111 million.

    Mr. Isakov denies that there was anything untoward about the contract, and says that neither he nor any other Kyrgyz official selected TBEA. The choice was made “by the government of the P.R.C.,” meaning the People’s Republic of China, he said in a recent statement issued from jail. That was China’s right, “since it financed the modernization project,” he said.

    The statement offered a rare insider’s acknowledgment that China, with the world’s largest foreign exchange reserves, can tilt the business playing field abroad to serve its interests no matter what local residents think or rivals offer.

    A commission created by the Kyrgyz Parliament found widespread irregularities in the awarding and execution of the contract. TBEA was not chosen after an open, competitive tender, but through a closed-door review of bids submitted by a few companies that had somehow learned a contract was available.

    Iskhak Masaliev, an opposition lawmaker on the parliamentary commission, says he believes that TBEA’s Russian rival, Inter RAO, never stood a chance. “The whole project smelled bad from the start, but if there had not been an accident, nobody would have noticed,” he said.

    Xiao Qinghua, China’s former ambassador to Kyrgyzstan, told the Kyrgyz news media that TBEA had been selected because it was an “authoritative” company with a “good global reputation.” He declined to comment on the findings of the Kyrgyz investigations.

    “We do not interfere with them,” he said. “We respect the sovereignty of Kyrgyzstan.” TBEA’s head office in China did not respond to repeated requests for comment.

    The power plant fiasco, the persistent troubles of a Chinese-funded refinery and Kyrgyz anger over China’s oppression of the Uighurs, a fellow Turkic Muslim people, have curbed Beijing’s ambitions somewhat, at least temporarily.

    But Russia has struggled to compete in what has become a new version of the so-called Great Game, the 19th-century struggle over Central Asia between Russia and Britain. Citing Russia’s “unfavorable economic situation” and inability to provide promised funding, Kyrgyzstan in 2016 scrapped an agreement to allow Russian companies to build a series of dams and hydroelectric plants in the north of the country.

    Russia still has large reserves of good will in the former Soviet republics, and it remains the region’s dominant security player. On a visit to Kyrgyzstan in March, Mr. Putin secured an agreement to expand an air base that Russian military forces have used since the Soviet era.

    But when it comes to building roads, refineries and power lines, China has left Russia far behind.

    Central Asia is a crucial part of China’s Belt and Road Initiative, the signature policy of Mr. Xi, who announced the gigantic infrastructure program on a visit to Kazakhstan in September 2013. Days later, Mr. Xi traveled to neighboring Kyrgyzstan and told officials in Bishkek that the Export-Import Bank of China could finance the reconstruction of the capital’s aging heating and electricity plant.

    The bank’s loans to Kyrgyzstan, just $9 million in 2008, have ballooned to more than $1.7 billion. Some estimates put the value of infrastructure projects financed by China at $2.2 billion, almost a third of the value of Kyrgyzstan’s annual economic output.

    Mr. Xi’s intervention turned the Bishkek power plant into an early test of Belt and Road. Anxious that Kyrgyz officials were not moving faster, the Chinese Embassy prodded them in November 2013 to get the project started, repeating the insistence that TBEA do the work and stressing that “this is the final position of the Chinese side.”

    The loan offer, the embassy said in a letter to the Kyrgyz Ministry of Energy and Industry, “was one of the fundamental results of the first visit by the head of the Chinese state and gave important meaning to the development of an energy project so significant for the Kyrgyz economy.”

    Construction started shortly afterward.

    Nurlan Omurkul, who was chief of the plant, said that he had harbored strong doubts about hiring a company with no track record of building power stations, but that he had been badgered by senior Kyrgyz officials to endorse a decision that he said had obviously already been made.

    “They just kept saying, ‘Agree, agree, agree,’ ” he said.

    Mr. Omurkul was fired after the breakdown last year, charged with negligence and sentenced this year to four years in prison. In an interview before his conviction, he said the case against him and other technical experts had been a smoke screen to hide corruption by senior officials.

    “I’ve worked my whole life in power and heating plants and knew all along that the Chinese price of $386 million was too expensive,” he said. Kyrgyzstan will pay about $470 million over 20 years, including interest and fees.

    Another Chinese company, China Machinery Engineering Corporation, offered a lower bid, $356 million, the parliamentary commission said in its report. But the Chinese Embassy insisted that its offer be dismissed. It is not clear why Chinese diplomats took sides so forcefully, but TBEA is based in Xinjiang, the Western region whose economic development is a priority for Beijing.

    The losing Russian bidder, Inter RAO, bid $518 million, but for very different terms. Rather than require Kyrgyzstan to borrow, the Russian company offered to invest its own money to build an entirely new plant in return for partial ownership and a share of future revenue.

    The minutes of government meetings about the project show that some Kyrgyz experts favored the Russian proposal, while others favored the cheaper Chinese option. But those views made no headway against the Chinese Embassy’s unequivocal support for TBEA.

    Mr. Omurkul, the fired plant director, said he began to fathom why TBEA’s price was so high after he started receiving reports listing items like $1,600 for fire extinguishers, $320 for pliers and tens of millions of dollars in unspecified consulting fees.

    “It was obscene,” he said. “We were all in shock.”

    Mr. Masaliev, the lawmaker on the parliamentary investigating commission, said that for all the strong-arm tactics of the Chinese, he believes it was Kyrgyz officials who were siphoning money off the project.

    The son of a senior Communist Party official during the Soviet era, Mr. Masaliev has known and worked with Russians for decades. But China, about which he knows little except that it has a lot of money and people, makes him nervous.

    “Of course we are afraid,” he said. “A small Chinese town has more people in it than our entire population.”
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  10. #520
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    As Chinese Flock to Siberia’s Lake Baikal, Local Russians Growl

    LISTVYANKA, Russia — When Andrei Sukhanov saw that the Chinese-owned hotel rising next door was about to obstruct the sweeping view of Lake Baikal from his small, rustic motel, he steeled himself with a shot of vodka, grabbed his chain saw and chopped down eight wooden pillars buttressing the construction.

    Nothing fell down, and far from being condemned, Mr. Sukhanov was treated as a hero for standing up to the Chinese, whose expanding presence around Lake Baikal is the source of deep resentment. His actions have become a rallying cry amid a growing stream of petitions, protests and court cases aimed at blocking the Chinese around the lake and surrounding areas.

    If we let them, the Chinese will take over,” said Mr. Sukhanov, 57, who fled St. Petersburg decades ago for a bucolic life by the Siberian lake, the world’s largest, deepest body of fresh water. “They will just steal all the money and the local people will get nothing.”

    President Vladimir V. Putin pivoted toward China five years ago, after the annexation of Crimea soured relations with the West. China became Russia’s new best friend, allied through trade, diplomacy and even military cooperation to counter American influence globally.

    Yet, this supposed new era of Sino-Russian friendship is exhibiting pronounced strains in Listvyanka, an old resort town on the lake, as an influx of Chinese tourists and businesses stirs recurrent Russian fears of a Chinese land grab and raises concerns about polluting the lake.

    At the same time the local authorities see in the flood of visitors the best hope they have for new jobs and economic development in an impoverished region.

    More than 1.6 million tourists, mostly Russians, visited the region last year, according to the Irkutsk Tourism Agency; the 186,200 Chinese were the largest foreign group.

    The number of Chinese jumped 37 percent over the previous year, and the surge is expected to continue, as Beijing is just a two-hour flight away, versus six hours to Moscow, 2,700 miles west.

    “People understand that China is a much more powerful country and its economy is producing numbers that Russia cannot hope to achieve,” said Yuri Pronin, the editor of Baikalskiye Vesti, an independent weekly published in Irkutsk, the regional capital. “We feel this breath.”

    Many Russians say Lake Baikal, which holds nearly 20 percent of the earth’s fresh surface water, is under siege.

    Framed by pine forests and distant mountain peaks, the picturesque lake draws visitors both summer and winter, when even trucks can navigate across its thick, intensely blue ice.

    But Listvyanka’s rudimentary infrastructure cannot cope with the sewage and trash generated by the current number of visitors, and residents shudder at the thought of tens of thousands of more Chinese.

    The local authorities have dragged into court the owners of at least 10 hotels constructed with Chinese financing, accusing them of building illegally on plots designated for single-family homes or other infractions.

    A district court ordered two hotels demolished earlier this year, and eight others are likely to face the same fate.

    The Chinese stand accused of not only running roughshod over local residents, but also of trying to siphon off the water itself.

    This winter, the construction of a new bottling plant to export water to China from a village near Listvyanka prompted more than 1.1 million Russians nationwide to sign an online petition denouncing it.

    A district court in Irkutsk cited environmental concerns in halting the construction of the plant in March.

    What may rankle the most, local people say, is that the Chinese are not paying business taxes.

    “They do not pay us a kopeck,” Mr. Sukhanov growled. “If they paid the 20 percent required to the local budget, we would get the infrastructure and the schools that we need.”

    Caught in the middle between the Chinese business interests and local residents is Aleksandr A. Shamsudinov, the mayor of Listvyanka, population 2,122.

    Mr. Shamsudinov spent much of 2018 under house arrest, accused of exceeding his authority by issuing housing permits for single-family plots in the village. Many of those plots soon mushroomed into illegal guesthouses for Chinese tourists.

    The three-story, 14-bedroom buildings with balconies rising on various plots were clearly not ordinary homes, Mr. Shamsudinov said. “They all said we need big houses, we have a lot of relatives who are planning to come visit,” he said.

    With the construction, the character of the village began changing as quaint blue wooden cottages with white gingerbread trim were obliterated. Huge billboards, some in Chinese, advertised venues like the Las Vegas Strip Club.

    The town has no central water or sewage system. Litter piles up, side roads remain unpaved and one main kindergarten is an old wooden barracks lacking indoor plumbing.

    Marina Rikhvanova, an environmentalist, said she no longer drank lake water near any hamlet. Pollutants seeping into the lake cause algae blooms.

    “It’s a microbe cocktail,” she said.

    The mayor, a retired police officer, said the federal government should have a development plan that balances the needs of visitors and residents.

    “Everybody shouts that Baikal is the pearl of Russia and a Unesco World Heritage site, but getting rid of the garbage and other environmental issues are left on the backs of the small-town mayors,” Mr. Shamsudinov said.

    Farther north, Olkhon Island also attracts tourists. Yelena Kopylova has been taking in guests for some 25 years, expanding from one bedroom in her house to 10 buildings with a total of 32 rooms.

    Her hotel, fully booked for the summer, accepts only Chinese groups that hire a Russian guide and local vehicles.

    “This is the main source of income for young families,” Ms. Kopylova said, adding, “We have to defend the interests of our local people.”

    Locals often grumble that the Chinese refer to Lake Baikal as the Northern Sea, its ancient Han name. Some are convinced that Beijing is secretly plotting to reclaim the lake and the huge, sparsely populated areas beyond, ceded to the Russian Empire in an 1858 treaty that China has long considered unfair.

    For years, the only Chinese in the area were poor vendors selling cheap goods in the Shanghai Market in Irkutsk. Now, the sight of Chinese tourists tossing wads of rubles around points to how China has surpassed Russia.

    The influx revived Karl Marx Street, Irkutsk’s once-derelict main shopping thoroughfare, where one jeweler is selling a gold and amber necklace for more than $6,500. A sign in Chinese promises a gift to anyone who spends more than $1,200.

    The Chinese tourists themselves, mostly oblivious to the grumblings, delight in Lake Baikal.

    Recently, a honeymooning couple from southern China, snacking on lake fish bought at a small outdoor market, happily declared that they had never felt so cold.

    Asked why they came, the couple used a smartphone to play a hit Chinese pop song “On the Shore of Lake Baikal,” about taking your love to the lake. It has inspired countless visits.

    A Chinese-born businessman, Alexei Dzhao, 37, and a Russian citizen, sings a different tune.

    Last year he built two large houses in the woods above Listvyanka. His Baikal Seal Guest House was originally meant to be a private home, he said.

    It is a pleasant complex with whimsical birdhouses nailed to the surrounding trees and cozy, pine-lined rooms.

    Mr. Dzhao said he would do anything to legalize the place, but his building permit was revoked and he expects a demolition order. Many Chinese owners are hoping to sell before the bulldozers arrive.

    “Things are not calm in Listvyanka,” said Mr. Dzhao, who plans to move to Moscow. “There is all this nationalistic tension.”
    Russians are pushing back.
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  11. #521
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    China’s Voracious Appetite for Timber Stokes Fury in Russia and Beyond

    After sharply restricting logging in its own forests, China turned to imports, overwhelming even a country with abundant resources: Russia.

    From the Altai Mountains to the Pacific Coast, logging is ravaging Russia’s vast forests, leaving behind swathes of scarred earth studded with dying stumps.

    The culprit, to many Russians, is clear: China.

    Since China began restricting commercial logging in its own natural forests two decades ago, it has increasingly turned to Russia, importing huge amounts of wood in 2017 to satisfy the voracious appetite of its construction companies and furniture manufacturers.

    “In Siberia, people understand they need the forests to survive,” said Eugene Simonov, an environmentalist who has studied the impact of commercial logging in Russia’s Far East. “And they know their forests are now being stolen.”

    Russia has been a witting collaborator, too, selling Chinese companies logging rights at low cost and, critics say, turning a blind eye to logging beyond what is legally allowed.

    Chinese demand is also stripping forests elsewhere — from Peru to Papua New Guinea, Mozambique to Myanmar.

    In the Solomon Islands, the current pace of logging by Chinese companies could exhaust the country’s once pristine rain forests by 2036, according to Global Witness, an environmental group. In Indonesia, activists warn that illegal logging linked to a company with Chinese partners threatens one of the last strongholds for orangutans on the island of Borneo.

    Environmentalists say China has simply shifted the harm of unbridled logging from home to abroad, even as it reaps the economic benefits. Some warn that the scale of logging today could deplete what unspoiled forests remain, contributing to global warming.

    At the same time, China is protecting its own woodlands.

    Two decades ago, concerns about denuded mountains, polluted rivers and devastating floods along the Yangtze River made worse by damaged watersheds prompted the Communist government to begin restricting commercial logging in the nation’s forests.

    The country’s demand for wood did not diminish, however. Nor did the world’s demand for plywood and furniture, the main wood products that China makes and exports.

    It is one thing for Chinese demand to overwhelm small, poor nations desperate for cash, but it is another for it to drain the resources of a far larger country, one that regards itself as a superpower and a strategic partner to China.

    The trade has instead underscored Russia’s overreliance on natural resources and provoked a popular backlash that strains the otherwise warm relations between the countries’ two leaders, Vladimir Putin and Xi Jinping.

    Protests have erupted in many cities. Members in Russia’s upper house of parliament have assailed officials for ignoring the environmental damage in Siberia and the Far East. Residents and environmentalists complain that logging is spoiling Russian watersheds and destroying the habitats of the endangered Siberian tiger and Amur leopard.

    “What we are doing now in Siberia and the Far East is destroying what is left of the original intact forest landscapes,” said Nikolay M. Shmatkov, director of the forestry program for the World Wildlife Fund in Russia. The group has documented the destruction using satellite images over a period that coincides with the Chinese logging boom in the country.

    “It’s not sustainable,” he said.

    ‘Nothing Will Be Left’
    China’s stunning economic transformation over the last four decades has driven its demand. It is now the world’s largest importer of wood. (The United States is second.) It is also the largest exporter — turning much of the wood it imports into products headed to Home Depots and Ikeas around the world.

    The total value of China’s timber imports — rough logs, timber or wood pulp — has increased more than 10 times since China began restricting logging at home in 1998, reaching $23 billion in 2017, the highest ever, according to IHS Markit’s Global Trade Atlas.

    The government extended a regional ban to the rest of the country at the end of 2016. It now allows commercial logging only in forests that have been replanted, a policy that environmentalists say other countries should emulate.

    The problem is that many have not, and Chinese companies have pursued these opportunities.

    More than 500 companies operate in Russia now, often with Russian partners, according to a report by Vita Spivak, a scholar on China for the Carnegie Moscow Center. Russia once delivered almost no wood to China; it now accounts for more than 20 percent of China’s imports by value.

    “If the Chinese come, nothing will be left,” Marina Volobuyeva, a resident of the Zamensky region south of Lake Baikal, told a television channel after a Chinese company secured a 49-year lease to log in the area.

    Russia sells such logging concessions at prices that vary by region and type of wood, but on average, they cost roughly $2 a hectare, or 80 cents an acre, per year, according to Mr. Shmatkov of the World Wildlife Fund. That is far below the cost in other countries.

    In 2017, China imported nearly 200 million cubic meters of wood from Russia.

    Artyom Lukin, a professor of international studies at the Far Eastern Federal University in Vladivostok, noted that government corruption, criminality and the lack of economic development in Siberia and the Far East have also made the crisis worse.

    “In many rural areas of the Russian Far East and Siberia, there are few other ways to make money, or to make a living, than stripping natural resources of the vast surrounding forests,” he said.

    Transformed by Timber
    For China, though, the trade has been a boon.

    Much of the wood from Russia crosses the border in Manzhouli, a former nomadic settlement that became a junction in the Trans-Siberian Railway at the turn of the 20th century. The trade has transformed what was once a sleepy border town into one of China’s main hubs for wood processing and production.

    In the last two decades, more than 120 mills and factories have sprung up. They process raw or rough-cut lumber into plywood, and manufacture veneer panels, laminated wood, doors, window frames and furniture.

    The factories cover dozens of acres on the city’s edge and have created more than 10,000 jobs in a city of 300,000 people, according to a municipal official.

    New construction has made the city an architectural homage to Russian culture. Many buildings have features like onion domes. There is even a replica of St. Basil’s Cathedral that is a children’s science museum, and a hotel in the shape of what officials claim is the world’s largest matryoshka, or nesting doll.

    Zhu Xiuhua’s career has traced the arc of the Russian trade.

    Now 50, Ms. Zhu moved to Manzhouli when China began restricting logging. She began brokering imports from Russia, then in 2002 began to seek the rights to log Russian forests directly. Four years later, she founded the company she owns today, the Inner Mongolia Kaisheng Group, one of the city’s biggest.

    Ms. Zhu now oversees three factories in Manzhouli, as well as concessions to log 1.8 million acres of Russian forests near Bratsk, a city next to Lake Baikal, and to transport them to China. “We are growing every year,” she said.

    When pressed, she declined to discuss her concessions in detail, but according to the company’s website, she had invested $20 million in Russia by 2015. China’s official Xinhua News Agency estimated the conglomerate’s assets at $150 million in 2017.

    In Ms. Zhu’s view, the trade is a classic case of supply meeting demand. She described it, perhaps overconfidently, as enduring.

    The next step will be to seek more concessions westward. “Krasnoyarsk,” she said, using first the Mandarin version of the name before pronouncing it in Russian. “You could not log all of it in 100 years,” she said.

    Laundering Logs
    There are international protocols that seek to control where and what kinds of trees are logged, and the United States extended the Lacey Act in 2008 to ban the import of wood obtained illegally anywhere, but such regulations are difficult to enforce.

    In some countries, like the United States and Canada, logging is strictly policed, but Chinese companies often exploit lax oversight elsewhere and log in protected forests, according to officials and environmentalists.

    In Russia, logging commonly encroaches on areas outside the allotted boundaries and companies that export wood to China are known to falsify records.

    Logging without contracts is also common, while arsonists are suspected of having set fires to forests, because scorched trees can be legally culled and sold.

    In 2016, the United States Justice Department accused Lumber Liquidators of illegally importing hardwood flooring that was mostly made in China using timber illegally harvested in Russia’s Far East.

    Accusations of corruption have stirred public anger in Russia. A question on the extent of illegal logging prompted an acerbic response from Mr. Putin in his annual news conference in December. He called Russia’s forestry industry “a very corrupt sector.”

    ‘Barbaric Deforestation’
    Protests against logging — and Chinese logging in particular — have erupted across Siberia and the Russian Far East. They have stoked ethnic tensions along a border that extends over 2,600 miles between Russians and Chinese who had long had mutual suspicions shaped by political and cultural differences.

    One protest last May in Ulan Ude, a regional capital near Lake Baikal, resulted in scuffles with the police and eight arrests. “Stop the barbaric deforestation,” a sign declared.

    The issue has become so politically volatile that in January the head of Russia’s forestry service, Ivan Valentik, faced pointed questioning in the upper house of parliament, which does not usually challenge Mr. Putin’s government directly.

    He defended the concessions, but also sought to shift blame to the Chinese companies for not fulfilling their contracts — by, for example, replanting forests. He suggested that Russia could be forced to end direct sales of timber to China.

    In China, the State Forestry and Grassland Administration did not respond to written questions. Officials have previously pledged that Chinese companies would adhere to local laws and be mindful of the environmental impact.

    Ms. Zhu initially said she did not worry about the protests inside Russia since everything her company did was done according to Russian laws. After the latest round of public hearings in Moscow, however, she sounded less sanguine.

    “Russia is changing now,” she said by telephone, and then declined to answer any more questions.
    Politicians are elected to serve...far too many don't see it that way - Albany Rifles!

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  12. #522
    Turbanator Senior Contributor Double Edge's Avatar
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    Should any Indian govt in the future agree to a BRI project in India, they are going to get taken to the cleaners by the opposition.

  13. #523
    Senior Contributor Oracle's Avatar
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    Quote Originally Posted by Double Edge View Post
    Should any Indian govt in the future agree to a BRI project in India, they are going to get taken to the cleaners by the opposition.
    BCIM is part of BRI. :D
    Politicians are elected to serve...far too many don't see it that way - Albany Rifles!

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  14. #524
    Senior Contributor Oracle's Avatar
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    The Problem With China's Investments -- From Malaysia To Sri Lanka, Pakistan, And Uganda

    China has been on an investment spree in recent years, at home and abroad. At home, investment has been one of the engines that, together with exports, have fueled its robust growth. Abroad, investments have served China’s ambitions to control the South China Sea and secure a waterway all the way to the Middle East oil and Africa’s riches.

    The trouble is that many of these projects aren’t economically viable; they are built at inflated costs; and leave the host countries heavily indebted to Beijing.

    They aren’t economically viable because they serve the needs of Beijing’s central planners rather than the needs of the local markets.


    “Chinese President Xi aims to realize the ‘great rejuvenation of the Chinese nation’ by projecting power overseas through the “Belt and Road” initiative, which covers both Southeast Asia and Africa,” says Xiaomeng Lu of Access Partnership. “This political economy effort is paired with China’s growing military might in the South China Sea and the African continent, posing a growing challenge to the U.S. security umbrella worldwide.”

    They are inflated because they are mostly built by Chinese state construction companies in partnership with local contractors rather than by private contractors under transparent bidding.

    And they leave host countries heavily indebted to Beijing, because they are financed by China’s state-owned banks.

    China’s investment in Sri Lanka is a case in point. “While some of China’s infrastructure projects benefited the island, others proved to be costly white elephants that forced Sri Lanka into a debt trap,” say Neil DeVotta and Sumit Ganguly in “Sri Lanka’s Post—Civil War Problems,” in the April issue of CURRENT HISTORY. Like the deep-sea Hambantota port project, the Colombo Port City complex, and the Mattala Rajapaksa International Airport.

    The result? “The overpriced projects left Sri Lanka owing $8 billion, or around 10 percent of the island’s debt,” explain Neil DeVotta and Sumit Ganguly. “That is close to what Sri Lanka owes Japan and India, but what rankles many is how Chinese loans have been used to fund questionable projects that generate little income. The situation has fueled accusations that China seeks to entice strategically located countries (others include Djibouti and the Maldives) into debt traps that it then leverages to seize control of key infrastructure.”

    China’s investment in Pakistan to build the China Pakistan Economic Corridor (CPEC), which stretches from Western China to the Indian Ocean is similar to those made in Sri Lanka.

    While CPEC helps Pakistan advance its plans to build a sound infrastructure, it adds to Pakistan’s corruption, which keeps pushing the costs of the project higher by the day.

    As of 2019, the cost of CPEC projects is $62 billion, up from the original value of $46 billion back in 2014.

    And that makes Pakistan more indebted to China, which has been financing the project. In fact, Pakistan’s external debt took off shortly after CPEC was launched; and sent Pakistan to IMF for a $6 billion loan to cope with the situation.

    Meanwhile, there’s South Africa, where China’s investments follow a similar pattern. “As a South African, I've seen China's activities on the continent up close. It's clear that China's primary goal with foreign investment is geopolitical, not economic,” says Ted Bauman, Senior Research Analyst at Banyan Hill Publishing. “The most consequential investments are undertaken by state owned companies, not by Chinese private capital. They tend to focus on infrastructure like highways, ports and dams, and on public networks like the electrical grid.”

    The reason? “These investments help to bind countries to China politically, and through debt obligations,” continues Bauman. “It creates a form of leverage that China can use to force these countries to support Chinese ambitions globally. In some cases, such as the Angolan oil sector or Congolese rare earth mining, Chinese investment helps to lock-in supply relationships with essential commodities.”

    In other cases, Chinese investments help make Chinese contractors rich at the expense of the host countries, as it has been the case in Uganda, where each kilometer of the four-lane expressway cost $9.3 million dollars.

    The bottom line: China’s investment projects may end up doing more harm than good to host economies.

    That’s why they should be carefully evaluated by host country governments, as Malaysia did recently.
    Politicians are elected to serve...far too many don't see it that way - Albany Rifles!

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    Senior Contributor Oracle's Avatar
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    Will CPEC survive the IMF bailout?

    The staff report released by the International Monetary Fund (IMF) last week must have provided some measure of comfort to the champions of the China-Pakistan Economic Corridor (CPEC) as well as China that chose Pakistan to be the first key destination for the Belt and Road Initiative (BRI), which aims to sustain its economic triumph and realise future ambitions.

    If this is just a coincidence, it is intriguing. After a long lull, there is light blipping again on the CPEC drawing board. Last Friday, a 55-member Chinese delegation of business executives met Prime Minister Imran Khan and reportedly committed to ploughing $5 billion investment over the next five years. “Probably the interaction with the Chinese delegations was already planned, but the fact that it did materialise as soon as details of the IMF deal were made public kindled new hope for the future,” commented a top leader of the government’s economic team.

    In its staff report following the approval of a three-year $6bn bailout programme, the IMF mentions the repayment of $14.68bn due for $21.8bn bilateral and commercial loans that Pakistan owes to China. This is almost 24pc of the country’s total $85.8bn external debt and liabilities. The document states that the Chinese commercial debt will be fully retired by the end of the programme in 2022 while the bilateral debt ($15.5bn) will be almost half of what the country owes at this point to $7.9bn.

    Sometime back, the United States explicitly expressed its dismay over the possibility that Pakistan could use the Fund’s money to pay back Chinese loans. The US stance exasperated the anxieties surrounding the multibillion-dollar China’s investment plan. The CPEC did stimulate growth and motivated economic drivers by removing infrastructure bottlenecks before the start of the current tumultuous phase in May last year.

    There is no formal word on the issue from China. The enthusiasm of the dependable friendly nation did somewhat wane for want of clarity on the post-election economic direction. There were concerns about the intent of the new set of rulers on the pledges by the PML-N government regarding CPEC-related projects. The initial statements by members of Prime Minister Khan’s economic dream team where they questioned the sealed deals must have added to the confusion. How far the visit helped to allay China’s reservations is anyone’s guess. But the optics are lacking if China is still as upbeat on the CPEC as before.

    China prefers to speak with its silence most of the times. However, people in the know of things in Islamabad said that China did remind the current government, at some point, of the grave consequences of reneging on the earlier signed contractual obligations.


    Approaching the relevant Chinese officers supervising the CPEC was a vain exercise as earlier efforts proved useless. It became apparent quickly that China feels neither keen nor obligated to share the details of its multiple deals. It sees no value in entertaining the prying journalists. Sometime back, a senior Chinese diplomat told this writer that whatever they wish to be known is put up on the CPEC website. He said their system does not allow free flow of information. “We need clearance from Beijing before sharing our opinion. It takes time and does not serve the calls of fast-paced media based in democratic traditions.”

    The relevant people in the federal government dismissed the perception that the ruling party knocks the wind out of the CPEC sail as being a figment of someone’s imagination. All provinces, except Khyber Pakhtunkhwa, endorsed the counter-narrative — the movement on the CPEC agenda has indeed slowed down under the watch of the current government.

    The focal person on the CPEC, Hasan Dawood Butt, sees the project progressing at the expected pace. He termed Pakistan “the buckle of the Chinese belt initiative”. “Prime Minister Khan is as much devoted and committed to the CPEC as anyone else. His successful meetings with the leadership in China hold testimony to his recognition of the project’s value to the country and its people. We are moving ahead in the next phase of economic cooperation that focuses on development of the social sector and economic cooperation,” he said over the phone from Islamabad.

    “We host Chinese experts and business delegations every other day. Recently, a delegation of the petroleum sector was in Islamabad to explore the avenues of joint ventures in special industrial zones,” he said. There are nine sites identified across Pakistan for special zones.

    Mr Butt attributed the relative lack of visibility of the Chinese in Pakistan to the completion of several early-harvest programmes in the first phase. “We are commencing the second phase of the CPEC where there are no big-ticket infrastructure projects that require Chinese technicians in big numbers. Instead, the focus now is on improving health, education and agriculture. There is discussion over agriculture co-branding etc. Once special zones become operational, perhaps the optics will improve,” he told Dawn.

    The sense in the provincial capitals was different. Generally, officers were reluctant to come on record, but said that if the progress on the CPEC is not halted altogether, it is too slow to be seen as moving at all.

    “Be it transport or industrial zones, I do not remember when it was last even mentioned in a high-level meeting. I don’t have a shred of doubt in my mind that the lack of interest right now is mutually shared between both partners. It could be the preoccupation of China with sour trade relations with the United States or the obsession of Prime Minister Khan’s team with the demands of the IMF. Whatever it is, it has pushed the CPEC down on the priority list on both sides,” a senior member of the hierarchy in Sindh said.

    “At long last, the Punjab government has identified and started the process of acquiring land for the planned industrial zones. If all goes as planned, it will take another two years to fix the infrastructure and arrange for basic utilities before gates are opened to investors,” a senior officer from Punjab told Dawn.

    Not everyone agrees. Dr Muhammad Amanullah, a senior officer from Punjab, defended the government. “In the second phase under the new government, the focus of the CPEC has moved towards industrial development, agriculture and socio-economic development. The perception of a slowdown, therefore, is wrong as currently provincial governments are working towards identifying and proposing projects for special economic zones. The exercise needs research and spadework with eyes on realising the full potential of this opportunity,” he said.

    KP Planning and Development Secretary Atif Rehman sounded optimistic. He said the work is in progress on the Rashakai Economic Zone. He was happy with the pace of progress.

    According to insiders, not all of the 22 projects in the first phase of the CPEC worth about $29bn have been completed yet. Some eight projects in the power sector that are completed are said to be in financial troubles for the non-payment of dues.
    Politicians are elected to serve...far too many don't see it that way - Albany Rifles!

    Loyalty to country always. Loyalty to government, when it deserves it - Mark Twain!

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