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Thread: CPEC and Developments

  1. #61
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    Quote Originally Posted by DOR View Post
    The over –construction wasn’t in response to central government pursuit of overall GDP growth. It was local government’s seeking land sale revenue after the central government reworked the terms under which the two levels share revenue.

    In order to finance local government spending requirements set – but inadequately funded – by the central government, local governments put pressure on state-owned bank branches in their regions to lend to developers so that the developers could over-pay for land newly added to the city limits by local government decree.

    When there is insufficient demand for those developments, the SOE banks take the hit. And, since they are just local branches, they can pass the pain up the ladder to the central level.
    Are you saying that the local governments are corrupt? And why do you think the over construction was not in response to pursuit overall GDP growth? It does push up the GDP right?

    How can developers be forced to over-pay to acquire land? And if there is no demand, why would any developer build, just about anything. Was there no market research done? Considering the number of videos that are open source, it seems a hit of some $100 billions?

  2. #62
    Senior Contributor DOR's Avatar
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    Quote Originally Posted by Oracle View Post
    Are you saying that the local governments are corrupt? And why do you think the over construction was not in response to pursuit overall GDP growth? It does push up the GDP right?

    How can developers be forced to over-pay to acquire land? And if there is no demand, why would any developer build, just about anything. Was there no market research done? Considering the number of videos that are open source, it seems a hit of some $100 billions?
    1. Local governments corrupt? Tell me it ain't so! Ah, all our delusions shattered on the cold, hard anvil of reality.
    Yes, local governments are corrupt.

    2. How hard is it to convince your buddy (the CCP at the local level is sort of like a Masons Lodge: buddies helping each other out) to take free money to invest in what might be a profitable enterprise, but really has no downside?

    3. Market research? Let's see ... My Mason brother wants it; the money is provided by the SOE banks; and if it doesn't work, I'm off the hook.

    4. Each project is within the confines of local government investment approval, which has risen over time from $10 million to ... maybe a billion? I'm not too sure, but given the number of such projects (and they aren't all ghost cities), that's a quite reasonable estimate.
    Trust me?
    I'm an economist!

  3. #63
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    Quote Originally Posted by DOR View Post
    1. Local governments corrupt? Tell me it ain't so! Ah, all our delusions shattered on the cold, hard anvil of reality.
    Yes, local governments are corrupt.

    2. How hard is it to convince your buddy (the CCP at the local level is sort of like a Masons Lodge: buddies helping each other out) to take free money to invest in what might be a profitable enterprise, but really has no downside?

    3. Market research? Let's see ... My Mason brother wants it; the money is provided by the SOE banks; and if it doesn't work, I'm off the hook.

    4. Each project is within the confines of local government investment approval, which has risen over time from $10 million to ... maybe a billion? I'm not too sure, but given the number of such projects (and they aren't all ghost cities), that's a quite reasonable estimate.
    The structures, high rises, elegant designs in parks and public areas are top notch. You sure about just a billion dollars? Steel, concrete, glass, labor fees, land acquisition etc all costs money right.

    And does the Central Bank or the CPC not have any oversight on lending of those bank branches? It's like throwing money in a well. And what about the population being engaged in some form of construction work to keep unemployment low and not have a riot like situation. Not everything can be done by local buddies, unless someone higher up the chain gives the nod.

  4. #64
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    DE, what do you make out of Asad Durrani's comments vis-a-vis the CPEC?

  5. #65
    Senior Contributor DOR's Avatar
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    Quote Originally Posted by Oracle View Post
    The structures, high rises, elegant designs in parks and public areas are top notch. You sure about just a billion dollars? Steel, concrete, glass, labor fees, land acquisition etc all costs money right.

    And does the Central Bank or the CPC not have any oversight on lending of those bank branches? It's like throwing money in a well. And what about the population being engaged in some form of construction work to keep unemployment low and not have a riot like situation. Not everything can be done by local buddies, unless someone higher up the chain gives the nod.
    The billion is my guesstimate of the amount local governments can approve without getting the central government to sign off on the deal. It doesn't have much to do with the overall picture, because it isn't too difficult to divide a project into multiple sub-projects that are under the cap.

    The People's Bank of China has minimal oversight of the local banking system. The PBoC is responsible for making and implementation of monetary policy for safeguarding the overall financial stability and provision of financial services. The one you’re looking for is the China Banking Regulatory Commission, which took over banking oversight from the PBoC in 2003. And, most particularly one Hu Huaibang, head of the banking system anti-corruption pogrom.

    As for jobs for the boys, everything is done at the local level. China isn't a country so much as it is a continent. It can't be micromanaged from above. No one has the time or brain capacity for that. So, you don't look too closely at how much this SOE owes to that state bank.
    Trust me?
    I'm an economist!

  6. #66
    Turbanator Senior Contributor Double Edge's Avatar
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    Quote Originally Posted by Oracle View Post


    DE, what do you make out of Asad Durrani's comments vis-a-vis the CPEC?
    Didn't understand your question?

  7. #67
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    Quote Originally Posted by Double Edge View Post
    Didn't understand your question?
    Good terrorist, bad terrorist. National security interests of Pak in Pak and Afghanistan etc. How do you think these will play out in the future on CPEC? We have talked about this, I know, then I came across this video and thought of sharing it with you.

  8. #68
    Turbanator Senior Contributor Double Edge's Avatar
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    If their bad guys are not a threat to CPEC then it will be business as usual. This means good guys available to use on the neighbours who as we've seen are less willing to tolerate. How long this continues depends on the will of the neighbours to force a change at a higher level.

  9. #69
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    For Pakistanis, China 'friendship' road runs one way

    ASHKURGAN: The China-Pakistan Friendship Highway runs over 1,300 kilometres (800 miles) from the far western Chinese city of Kashgar through the world's highest mountain pass and across the border.

    For China, the two-lane thoroughfare symbolises a blossoming partnership, nourished with tens of billions of dollars of infrastructure investment.

    But for many Pakistani businessmen living and working on the Chinese side of the border, the road is a one way street.

    "China says our friendship is as high as the Himalayas and as deep as the sea, but it has no heart," said Pakistani businessman Murad Shah, as he tended his shop in Tashkurgan, 120 kilometres from the mountain pass where trucks line up to cross between China's vast Xinjiang region and Pakistan.

    "There is no benefit for Pakistan. It's all about expanding China's growth," Shah said, as he straightened a display of precious stones.

    The remote town of around 9,000 is at the geographic heart of Beijing's plans to build a major trade artery — the China-Pakistan Economic Corridor (CPEC) — connecting Kashgar to the Arabian Sea port of Gwadar.

    The project is a crown jewel of China's One Belt, One Road (OBOR) initiative, a massive global infrastructure programme to revive the ancient Silk Road and connect Chinese companies to new markets around the world.

    In 2013, Beijing and Islamabad signed agreements worth $46 billion to build transport and energy infrastructure along the corridor, and China has upgraded the treacherous mountain road better known as the Karakoram Highway.

    While both countries say the project is mutually beneficial, data shows a different story.

    Pakistan's exports to China fell by almost eight percent in the second half of 2016, while imports jumped by almost 29 percent.

    In May, Pakistan accused China of flooding its market with cut rate steel and threatened to respond with high tariffs.

    "There are all of these hopes and dreams about Pakistan exports," said Jonathan Hillman, a fellow at the Center for Strategic and International Studies in Washington.
    "But if you're connecting with China, what are you going to be exporting?"

    One answer is Nigerian "male enhancement" supplements: expired medications which Pakistani merchants in the oasis city of Hotan recently peddled to bearded Muslims walking home from Friday prayers.

    The products were typical of the kinds of small consumer goods brought by Pakistani traders into Xinjiang: medicine, toiletries, semi-precious stones, rugs and handicrafts.
    Pakistani businessmen in Xinjiang see few benefits from CPEC, complaining of intrusive security and capricious customs arrangements.

    "If you bring anything from China, no problem," said Muhammad, a trader in the ancient Silk Road city of Kashgar, who declined to give his full name.

    But he said tariffs on imported Pakistani goods are "not declared. Today it's five percent, tomorrow maybe 20. Sometimes, they just say this is not allowed".

    Three years ago, Shah was charged between eight and 15 yuan per kilo to bring lapis lazuli, a blue stone. The duty has since soared to 50 yuan per kilo, he said.
    Customs officials said the "elements influencing prices were too many" for them to offer a "definite and detailed list" of costs.

    While large-scale importers can absorb the tariffs, independent Pakistani traders have benefited little from CPEC, said Hasan Karrar, political economy professor at the Lahore University of Management Sciences.

    Alessandro Ripa, an expert on Chinese infrastructure projects at Ludwig Maximilian University Munich, said the highway "is not very relevant to overall trade" because "the sea route is just cheaper and faster".


    The project is better understood as a tool for China to promote its geopolitical interests and help struggling state-owned companies export excess production, he said.
    Traders also face overbearing security in China.

    Over the last year, Beijing has flooded Xinjiang, which has a large Muslim population, with tens of thousands of security personnel and imposed draconian rules to eliminate "extremism".

    Businessmen complain they are not allowed to worship at local mosques, while shops can be closed for up to a year for importing merchandise with Arabic script.

    In June, on the 300 kilometre trip between Kashgar and Tashkurgan, drivers were stopped at six police checkpoints, while their passengers had to walk through metal detectors and show identification cards. Signs warn that officials can check mobile phones for "illegal" religious content.

    Police officers interrupted an interview in Tashkurgan to demand a shopkeeper hand over his smartphone and computer for inspection, an event he said occurs several times a week.

    Shah said that when he first arrived in the town, the intrusive security made him nervous: "But now I'm used to it. I almost feel like I'm one of the police."

    As he spoke, an alarm sounded. He grabbed a crude spear, body armour and a black helmet off his counter and rushed into the street, where police had assembled over a dozen people for impromptu counter-terrorism drills.

    The exercises are held up to four times a day. Stores are closed for several days if they do not participate.

  10. #70
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    China only worried about CPEC,not Nawaz Sharif's future

    As the much anticipated findings of the joint investigation team (JIT) have implicated the Pakistan Prime Minister Nawaz Sharif and his family in the Panama gate Case and his disqualification and ouster is becoming inevitable day by day, his biggest friend and ally China is not concerned about him, but only concerned about the 'One Belt, One Road (OBOR)' initiative, that includes China-Pakistan Economic Corridor (CPEC) as its "flagship" project.

    As being widely reported in the Pakistani media, "Prime Minister Nawaz Sharif's disqualification or imprisonment by the full court bench sounds like the writing on the wall for not only concealing assets, but also for failing to reveal their sources of income and presenting a fake money trail," the political situation in Pakistan has become fluid and volatile making China upset about future of the China-Pakistan Economic Corridor (CPEC).

    "China is upset as the situation arises due to the Panamagate JIT as political instability in Pakistan is the major risk to China-Pakistan Economic Corridor (CPEC)," A B Mahapatra, Director of CASS-India told ANI in an exclusive conversation.

    As the political situation in Pakistan has become fluid and if the PM Nawaz is compelled to resign or dissolve the assembly or even if there is a change of leadership, China would be looking at Pakistan only from a business point of view and will engage with who so ever occupies the central leadership as Beijing just believes in the business first.

    PM Nawaz Sharif has also lost Chinese leaders faith because, "Some differences have emerged between Sharif and Chinese leadership: first on the issue of Karakoram toll tax collection and second on the tariff related to the coal power plants which China is constructing there. These issues emerged as major irritants in Sino-Pak relationship in the month of May in Beijing when Pakistani officials met Chinese leaders," says Mahapatra.

    According to Mahapatra, "China is upset with PM Nawaz Sharif as Beijing has been dragged into court for charging higher tariff for the power plants".

    Pakistan is of the view that when their government is providing security to the Chinese projects with manpower and maintenance support and also giving compensation to the owners of land that are being taken for the projects, then they are lawfully entitled to receive toll tax of the Karakoram Highway. But China contends that since it had built the Karakoram Highway in 1970s and is financing the current projects, they should receive the toll tax.

    China is engaged in building several Roads, Railway and the power projects under CPEC which includes the Khunjerab railway, a high-altitude line that would run roughly alongside the Karakoram and link north-eastern Pakistan with the Chinese city of Kashgar, which has become the present bone of contention.

    Another irritant in their relationship is the tariff related to the coal power plants which China is constructing in Pakistan and the matter has been moved to the court.

    There are 17 energy projects being completed under the CPEC including the Port Qasim coal plant in Sindh and ZTE Energy Pakistan PV power plant in Punjab.

    The National Energy Power Regulatory Authority (Nepra) had approved tariff for the project at 71 paise/unit, while the government's Private Power Infrastructure Board had filed a review petition on the tariff in order to address Chinese investors' concerns who were demanding 95 paise/unit.

    Minister for Planning and Development in the Pak government Ahsan Iqbal and Planning Commission Secretary Yousuf Nadeem Khokhar, who are the two point persons of Prime Minister Nawaz for CPEC projects, have expressed concern over the fixing of power tariff for CPEC-related power projects by the Chinese.

    However, Chinese leadership is not much impressed by the mere expression of such concerns by the PM Nawaz's team and expected better handling of the issue by his government.

    China is also not worried by the possibility of change of guard in Pakistan, which is facing serious internal security threat from the various jihadi groups including Tehrik-i-Taliban Pakistan (TTP), because China depends 80% on Pakistan Army and 20% on the civilian government for the fulfilment of their economic and strategic interests.

    China has entered into a deal with Pakistan Army to provide security to the CPEC projects and General Qamar Javed Bajwa has ensured to provide fool-proof security to the said projects.

    Observers in Islamabad believe that Pakistan will gradually become a colony of China and the civilian leadership should refrain from falling into the debt trap of Beijing as China has offered massive loans at six per cent interest rates to Pakistan, excluding insurance cost which is far higher than what is being offered by the world financial institutions. Pakistan will have to cough up $2billion to China annually to repay the loans.

    Pakistan is of vital strategic importance to China to fulfil its ambition of reviving the ancient Silk Road (21st-century Maritime Silk Road) trading routes through its "One Belt- One Road," China will remain benevolent towards Pakistan as Pakistan's geographical location helps China to enlarge its sphere of influence in Afghanistan, Central Asian Republics and to increase connectivity between the continents of Asia, Europe and Africa, no matter who leads the country.

    It's also obvious that any government of Pakistan cannot live without having the full support of China whether it is ruled by Nawaz or by Military.

    "Pakistan is also keeping an eye on imaginary external threat like India, as it considers that China will come to their rescue if India acts militarily against them and while Islamabad has antagonized Afghanistan, therefore Pakistan will always try to keep friendship with Beijing intact," Dr Ashok Behuria, South Asian expert working with New Delhi based Indian Defence Studies and Analysis (IDSA) said while talking to ANI.
    Chinese are known to bribe their way through or force coercion. I don't understand why this comes as a surprise to the Paks.

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    Slavery: A 21st Century Evil - Prison slaves



    DOR, your comments are welcome.

  13. #73
    Turbanator Senior Contributor Double Edge's Avatar
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    Quote Originally Posted by Oracle View Post
    China only worried about CPEC,not Nawaz Sharif's future



    Chinese are known to bribe their way through or force coercion. I don't understand why this comes as a surprise to the Paks.
    Already the haggling has begun..

    "China is upset with PM Nawaz Sharif as Beijing has been dragged into court for charging higher tariff for the power plants".

    Pakistan is of the view that when their government is providing security to the Chinese projects with manpower and maintenance support and also giving compensation to the owners of land that are being taken for the projects, then they are lawfully entitled to receive toll tax of the Karakoram Highway. But China contends that since it had built the Karakoram Highway in 1970s and is financing the current projects, they should receive the toll tax.

    Another irritant in their relationship is the tariff related to the coal power plants which China is constructing in Pakistan and the matter has been moved to the court.

    There are 17 energy projects being completed under the CPEC including the Port Qasim coal plant in Sindh and ZTE Energy Pakistan PV power plant in Punjab.

    The National Energy Power Regulatory Authority (Nepra) had approved tariff for the project at 71 paise/unit, while the government's Private Power Infrastructure Board had filed a review petition on the tariff in order to address Chinese investors' concerns who were demanding 95 paise/unit.

  14. #74
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    Quote Originally Posted by DOR View Post
    The billion is my guesstimate of the amount local governments can approve without getting the central government to sign off on the deal. It doesn't have much to do with the overall picture, because it isn't too difficult to divide a project into multiple sub-projects that are under the cap.

    The People's Bank of China has minimal oversight of the local banking system. The PBoC is responsible for making and implementation of monetary policy for safeguarding the overall financial stability and provision of financial services. The one you’re looking for is the China Banking Regulatory Commission, which took over banking oversight from the PBoC in 2003. And, most particularly one Hu Huaibang, head of the banking system anti-corruption pogrom.

    As for jobs for the boys, everything is done at the local level. China isn't a country so much as it is a continent. It can't be micromanaged from above. No one has the time or brain capacity for that. So, you don't look too closely at how much this SOE owes to that state bank.
    A mason friend who has a friend in the local bank and the communist office decides to use his contacts, takes a huge loan and builds some amazing infrastructure.

    #1. Does he not need to sign any collateral for that loan?

    #2. After building the infrastructure, those need to be sold. If there are no buyers, they aren't sold. So how does he make profit? What I mean is, say the local mason takes 100 yuan as loan. 10 bucks each goes to the bank staff and the local communist politician, so he is left with 80 yuan. He further takes out his cut, say another 20 yuan from the remaining 80 yuan. So, with 60 yuan the construction is done. All parties get their cut, but since there is no selling, there is no profit. Does it not raise red flags? OK, did it not raise red flag when it happened for the first time, and the many times it happened since? If it does not, then corruption might be high up the list in the CPC.

  15. #75
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    Quote Originally Posted by Double Edge View Post
    Already the haggling has begun..
    Check this, Nawaz Sharif's disqualification will not affect CPEC: China

    Excerpts:
    Despite the assurances it has received, the Supreme Court's ruling has put China in a "peculiar position", Arif Rafiq, non-resident fellow at the Middle East Institute, a US think tank, told the Post.

    Sharif stepped down after the Supreme Court disqualified him for failing to declare "receivable" salary from a UAE- based company of his son in his 2013 nomination paper. The court termed the salary which was not paid to Sharif as an "asset".

    "The Chinese are treading into new waters: this is the first civilian government in Islamabad Beijing has fully invested in. (But) while the Communist Party of China is deeply leveraged in the civilian government, military-to- military ties also continue to strengthen," Rafiq said.

    "Nonetheless, some CPEC projects are bound to be investigated because of existing allegations of corruption linked to the Sharifs," he said.

    "Some projects, such as the Port Qasim Coal Power Project, could come under greater scrutiny given the involvement of power brokers allegedly connected to Sharif family financial improprieties," Rafiq said.
    Anyone/party which does not get it's cut will try to gamble their luck on Chinese money. They are going to have a rough time.

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