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  • The Chinese want profits...not losses

    Business with China | Dawn (Editorial) | Aug 29 2017

    The rhetoric coming from the Pakistani government had made the relationship sound like it was some sort of family affair. But those sections of the business community who have tried to build commercial ties with their counterparts in China are finding out that, over there, profits come first and sentiment second.

    One thing the business community has noticed is that their Chinese counterparts prefer dealing with the government rather than building private-sector partnerships, according to a report published on Monday in this paper that presented the opinions of a range of Pakistani businesses that have, or are seeking to build, ties with Chinese enterprises. They have noticed that the Chinese do not negotiate very much. They lay down their terms, and expect them to be fully met.
    Squeezing the pak gvt for concessions can yield higher benefits than individual companies, also easier to deal with just one set of people

    The Chinese are hard balling because they think its their money so the SOE's are setting the terms. Paks are good at business, push back and maybe get better terms

    Ever since the CPEC enterprise got under way, calls have been growing for more transparency in its execution. By now, there ought to be no further doubts that the CPEC enterprise goes far beyond roads and power plants, and is, in fact, about creating the right environment for Chinese investment to acquire large stakes in Pakistan’s economy.
    Get the feeling that this edit is pak business lobbying govt for better terms from the Chinese

    Answers to questions like what sort of dispute-resolution mechanism will govern the partnerships envisioned under CPEC, and what investments are being prepared for which areas, will help dispel the growing anxieties.

    It would be a sad but necessary end to the euphoria that has greeted the arrival of CPEC if the government were to learn the same lesson that the business community is busy learning these days, that in matters of business, brotherly relations have no role to play.
    hmm, so nobody knows what investments go where ...there could be very good reasons for that in the initial stages. Its like getting in on an IPO before the IPO

    But once the project gets going does it still remain opaque or not is the question.
    Last edited by Double Edge; 29 Aug 17,, 19:00.

    Comment


    • Hard hitting op-ed by a retired senator (Afrasiab Khattak)

      Deepening fault lines | Nation | Sept 02 2017

      Authority of the elected government faces constant challenges and civilian leaders are dubbed as security risks.

      No law regulates the functioning of the intelligence agencies.

      The generals both serving and retired can get away with anything.

      Take the case of General (retd.) Pervez Musharraf. He was arraigned before the special tribunal for abrogating the Constitution of the country. But the trial could not proceed as the security establishment literally blocked the path of judicial process.

      After leaving the country the former military dictator is now bragging about the support of former COAS for his escape from the trial.

      In the last few months he has said irresponsible things on nuclear proliferation and terrorism in Pakistan that if a civilian leader had uttered those words he/she would have been arrested or worse. But the former general enjoys a unique impunity.

      Accountability starts and ends at the elected Prime Ministers.
      Judiciary can prosecute and disqualify a sitting prime minister but it can’t prosecute terrorists (the verdict in Benazir Bhutto’s murder trial is a case in point).
      Even after dozens of military operations FATA remains a black hole and a no-go area where millions of Pashtuns are groaning under the draconian colonial Frontier Crimes Regulation (FCR).

      There is not even a word about looking for a political solution to the violent conflict in Balochistan.

      State patronage of “good Taliban” is a threat to economic development in the country and in the region. Pakistan’s Afghan policy continues to be an unmitigated disaster.

      CPEC and pro-Taliban policy cannot coexist. Pakistan will have to make a choice.

      Even close friends of Pakistan like China are frustrated over the failure in changing the course.

      Comment


      • Originally posted by Oracle View Post

        Pakistani 'terrorist' charity launches political party


        Backed by the PakMil, and approved by China. But, but, whoever digs a pit .................
        Earlier i said they struggle to get 10% but consider the opposite. They actually win. Now we have the equivalent of a hezbollah/hamas entity next door to deal with

        ECP refuses to recognise JuD’s political front | Dawn | Sept 08 2017

        The Election Commission of Pakistan (ECP) on Thursday refused to recognise the Milli Muslim League (MML) — a political front of the Jamaatud Dawa (JuD) — as a legitimate political party and warned electoral candidates not to use the party’s name in election campaigns.
        Not just yet anyway



        Chris has a more nuanced take on MML
        Last edited by Double Edge; 10 Sep 17,, 21:32.

        Comment


        • Trying to figure out China's motivations and you get this mixed picture

          What the World’s Emptiest International Airport Says About China’s Influence | NYT Magazine | Sept 13 2017

          Mattala Rajapaksa International Airport, the second-largest in Sri Lanka, is designed to handle a million passengers per year. It currently receives about a dozen passengers per day. Business is so slow that the airport has made more money from renting out the unused cargo terminals for rice storage than from flight-related activities. In one burst of activity last year, 350 security personnel armed with firecrackers were deployed to scare off wild animals, the airport’s most common visitors.

          Sadly, no travelers came, only the bills. The Mattala airport has annual revenues of roughly $300,000, but now it must repay China $23.6 million a year for the next eight years, according to Sri Lanka’s Transport and Civil Aviation Ministry. Over all, around 90 percent of the country’s revenues goes to servicing debt. Even a new president who took office in 2015 on a promise to curb Chinese influence succumbed to financial reality.
          If the idea was about making money the investments are in areas that don't seem very good. All won't succeed so is the reporting being selective or are there any shining examples.

          To relieve its debt crisis, Sri Lanka has put its white elephants up for sale. In late July, the government agreed to give China control of the deepwater port — a 70 percent equity stake over 99 years — in exchange for writing off $1.1 billion of the island’s debt. (China has promised to invest another $600 million to make the port commercially viable.) When the preliminary deal was first floated in January, protests erupted in response to the perceived sell-off of national sovereignty, a reminder of Sri Lanka’s colonial past under British rule. “We always thought China’s investments would help our economy,” says Amantha Perera, a Sri Lankan journalist and university researcher. “But now there’s a sense that we’ve been maneuvered into selling some of the family jewels.”
          Sri lanka is a bad example as you had a leader who got into the white elephant creating business. It could be repeated by leaders elsewhere as China is ever willing to oblige. They are in a hurry to spend. Why

          Begs the question whether OBOR will turn into the biggest white elephant the world has ever seen ?

          The great wall served a purpose once upon a time, maybe OBOR is all about keeping China afloat for just a little bit longer

          Every single whole digit drop in growth means around 20 million Chinese workers out of work. Ticking time bomb for the CCP.

          This line where Bush asks Hu, what keeps you up at night. his reply ? jobs

          Is OBOR about china taking over the world or keeping the Chinese from taking over the CCP ? that is the strategic bottom line here isn't it

          This is China’s long game. It’s not about immediate profits; infrastructure projects are a bad way to make money.

          So why is President Xi Jinping fast-tracking OBOR projects amid an economic slowdown at home and a crackdown on other overseas acquisitions? Economics is a big part: China wants to secure access to key resources, export its idle industrial capacity, even tilt the world order in its favor. But there is also a far greater cultural ambition. For centuries, Western liberalism has ruled the world. The Chinese believe their time has come. “China sees itself as a great civilization that needs to regain its status as leader of the world,” says Kadira Pethiyagoda, a fellow at the Brookings Institution Doha Center. “And America’s retreat gives China the space to do that.”
          This is the part we hear but why spend all that money..

          It’s tempting to see OBOR as a muscled-up Marshall Plan, the American-led program that helped rebuild Western Europe after World War II. OBOR, too, is designed to build vital infrastructure, spread prosperity and drive global development. Yet little of what China offers is aid or even low-interest lending. Much OBOR financing comes in the form of market-rate loans that weaker countries are eager to receive — but may struggle to repay. Even when the projects are well suited for the local economy, the result can look a bit like a shell game: Things are built, money goes to Chinese companies and the country is saddled with more debt. What happens when, as is often the case, infrastructure projects are driven more by geopolitical ambition or the need to give China’s state-owned companies something to do? Well, Sri Lanka has an empty airport for sale.
          Giving chinese state owned companies something to do. Sounds like a racket to keep Chinese working, funds flowing underwritten by the national bank of China who then takes on ever increasing debt.

          Is this the Chinese equivalent of Quantitative easing aka print print print ?

          the British and Dutch weaponized debt to take control of nations’ strategic assets. China insists it is nothing like a colonial power. Its appeal to developing countries, after all, is often based on a shared negative experience of colonialism — and the desire to have cooperative “win-win” trade and investment relationships. Unlike Western countries and institutions that try to influence how developing countries govern themselves, China says it espouses the principle of noninterference. If local partners benefit from a new road or port, the Chinese suggest, shouldn’t they be able to “win,” too — by securing its main trade routes, building loyal partnerships and enhancing its global prestige?
          Profits ? where are they

          Pushing countries deeper into debt, even inadvertently, may give China leverage in the short run, but it risks losing the good will essential to OBOR’s long-term success.

          For all the big projects China is engaged in around the world — high-speed rail in Laos, a military base in Djibouti, highways in Kenya — arguably its most perilous step so far may be taking control of the foundering Hambantota port.

          “It’s folly to take equity stakes,” says Joshua Eisenman, an assistant professor at the University of Texas at Austin. “China will have to become further entwined in local politics. And what happens if the country decides to deny a permit or throw them out. Do they retreat? Do they protect?”

          China promotes itself as a new, gentler kind of power, but it’s worth remembering that dredging deepwater ports and laying down railroad ties to secure new trade routes — and then having to defend them from angry locals — was precisely how Britain started down the slippery slope to empire.
          Why isn't this being considered ? Chinese say they don't interfere in local politics but what they're doing is going to neatly entrap them in exactly that.

          Couple this with China's assertive stance with its neighbours and one wonders what the CCP's long term thinking is. Am starting to doubt there is much. They seem just as mired in short term thinking like others.

          Hang onto power. Must make it to 2049 in one piece
          Last edited by Double Edge; 15 Sep 17,, 02:35.

          Comment


          • Originally posted by Double Edge View Post
            More MOU's signed

            Pakistan's $100B deal with China: What does it amount to? | Devex | Aug 24 2017

            thought the figure was 2%, now there is this 'as high as 5%' ? for commercial projects yes not g to g. And so the misleading perception is created that ALL chinese investment is at commercial rates
            There is no single authentic source claiming the real interest rate. Some Pak analysts say that it is as high as 17%.

            Originally posted by Double Edge View Post
            must be a translation issue
            Much of CPEC financed by Pak? They are going broke as we speak.
            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! || I am a far left millennial!

            Comment


            • Originally posted by Double Edge View Post
              How the Silk Road plans will be financed | FT | May 10 2016

              That bolded bit gets parroted still like its an article of faith.

              So why then does China want a decades long lease on Hambantota, if they can accept 80% losses why can't they just walk away. Why continue to invest in projects that are uneconomic to begin with...
              #1. Jobs for Chinese
              #2. Strategic use
              #3. More money
              #4. Debt clout

              $1 trillion ($890B) is a gamble the Chinese seem to be comfortable playing with. Btw, their forex reserves just went above $3 trillion as of yesterday.
              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! || I am a far left millennial!

              Comment


              • First of all, when you read articles which says Pak Govt, replace it with Pakmil. The Pak govt is a farce front to save the Pakmil's ass whenever they face a crisis. The shame narrative do hold a strong position in Pak, even when they know, the whole world knows about their most successful business venture, which is terrorism.

                Originally posted by Double Edge View Post
                The Chinese want profits...not losses

                Business with China | Dawn (Editorial) | Aug 29 2017
                I said it before, the first rule of business - protect your investment.


                Originally posted by Double Edge View Post
                Squeezing the pak gvt for concessions can yield higher benefits than individual companies, also easier to deal with just one set of people

                The Chinese are hard balling because they think its their money so the SOE's are setting the terms. Paks are good at business, push back and maybe get better terms
                The Chinese might throw a bone here and there, but they won't yield to Paks interests. That is not in Chinese interests. The sentiment is, it's Chinese money, which is being invested in a terrorism infested theologically disturbed state and the Paks should be grateful, not set terms. In a funny way it reminds me of the British era - Indians and dogs not allowed. Paks were Indians then. And Paks have worked very hard to maintain the same reputation even now.

                Originally posted by Double Edge View Post
                Get the feeling that this edit is pak business lobbying govt for better terms from the Chinese
                Yes, but the Pakmil won't pay any heed. Pakmil have only 1 veto in UNSC, which too, incase of overwhelming pressure from US would crumble.

                Originally posted by Double Edge View Post
                hmm, so nobody knows what investments go where ...there could be very good reasons for that in the initial stages. Its like getting in on an IPO before the IPO

                But once the project gets going does it still remain opaque or not is the question.
                How many business venture do you know where the Chinese have invested are opaque?
                Last edited by Oracle; 15 Sep 17,, 05:34.
                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! || I am a far left millennial!

                Comment


                • I have read Afrasiab Khattaks' articles, and I have to confess I like it for being honest. But, when it comes to Kashmir, all objectivity is lost. Even among the elites like Pervaz Hoodboy, the commentary about Kashmir is biased. I hope you get the point that there is no friend in Pakistan.

                  Originally posted by Double Edge View Post
                  Earlier i said they struggle to get 10% but consider the opposite. They actually win. Now we have the equivalent of a hezbollah/hamas entity next door to deal with

                  ECP refuses to recognise JuD’s political front | Dawn | Sept 08 2017
                  That was a Pakmil tactic to guage international opinion to mainstream the JuD, which for some reason they aborted. Behind the scenes US pressure, probably.

                  Originally posted by Double Edge View Post
                  Not just yet anyway

                  Who is the dude speaking in the video after CFair? He is bang on target.
                  WTF, ISI involved in 9/11? Didn't knew that before.
                  CPEC = Colonizing Pakistan to Enrich China. Hahahahaha!

                  Originally posted by Double Edge View Post
                  Chris has a more nuanced take on MML
                  Did China comment on it? I probably missed it.
                  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! || I am a far left millennial!

                  Comment


                  • Originally posted by Double Edge View Post
                    This article has said what I thought could go wrong with OBOR. What if nations saddled with debt expel the Chinese, nationalize those infrastructure assets and refuse to pay? What would the Chinese do? No country would want to fight China with weapons, so how do they weaken increasingly assertive Chinese ambitions? Take the money from Chinese hands. A lot of like minded intelligence agenices are probably working on it. I fear if that happens, there would be a global depression.

                    It also begs the question why India did not invest, and allowed that space to be taken over by China? India has more influence in SLanka than China, so why let China gain a strategic win? Funny, but the policy makers probably knew that it was not a viable business oppurtunity. Letting SL get into a debt trap is a stick with which India can beat China and scare its neighbours. Look at SL, we warned them about, .....

                    If and when the Sagarmala project becomes operational, tiny countries and their ports would go bankrupt. What I feel is that, while the Chinese are taking a long-term view of BRI, their actions are short term. It may not fail in the coming 5 years or even 10 years, but it sure will fail one day. Depending on how deep the neck is stuck, China would explode.

                    Originally posted by Double Edge View Post
                    If the idea was about making money the investments are in areas that don't seem very good. All won't succeed so is the reporting being selective or are there any shining examples.
                    It's not selective. I have read other articles in which locals in, IIRC, Kenya, are not happy about Chinese presence. The complaint is about China bringing materials and labour from China.

                    Btw, all won't succeed is a narrative that is being fed. Don't fall for it.

                    Originally posted by Double Edge View Post
                    Sri lanka is a bad example as you had a leader who got into the white elephant creating business. It could be repeated by leaders elsewhere as China is ever willing to oblige. They are in a hurry to spend. Why

                    Begs the question whether OBOR will turn into the biggest white elephant the world has ever seen ?

                    The great wall served a purpose once upon a time, maybe OBOR is all about keeping China afloat for just a little bit longer

                    Every single whole digit drop in growth means around 20 million Chinese workers out of work. Ticking time bomb for the CCP.

                    This line where Bush asks Hu, what keeps you up at night. his reply ? jobs

                    Is OBOR about china taking over the world or keeping the Chinese from taking over the CCP ? that is the strategic bottom line here isn't it
                    You have answered it yourself. It's to keep the Chinese from taking over the CPC, which is fuelling China's other ambitions that we have discussed earlier. Throw in a bit of nationalism with 'Its Chinas' time now'. Power is addictive, very addictive. It's like a dose of heroin for the junkies and a medium rare dry-aged prime rib steak for me. Talking of steaks, Peter Luger is on my bucket list of places to visit before I attain immortality.

                    Originally posted by Double Edge View Post
                    This is the part we hear but why spend all that money..

                    Giving chinese state owned companies something to do. Sounds like a racket to keep Chinese working, funds flowing underwritten by the national bank of China who then takes on ever increasing debt.

                    Is this the Chinese equivalent of Quantitative easing aka print print print ?

                    Profits ? where are they

                    Why isn't this being considered ? Chinese say they don't interfere in local politics but what they're doing is going to neatly entrap them in exactly that.

                    Couple this with China's assertive stance with its neighbours and one wonders what the CCP's long term thinking is. Am starting to doubt there is much. They seem just as mired in short term thinking like others.

                    Hang onto power. Must make it to 2049 in one piece
                    Yep. Long term vision and short term actions.
                    Last edited by Oracle; 15 Sep 17,, 04:35.
                    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! || I am a far left millennial!

                    Comment


                    • Pakistan seeks changes in free trade agreement with China

                      Radicalisation of our universities
                      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! || I am a far left millennial!

                      Comment


                      • No Chinese roads through POK otherwise Japanese funded ones in Arunachal. What's it to be ?

                        Like the sequencing here

                        Shinzo Abe's India visit: China warns against 'third party' involvement in Arunachal Pradesh | IT | Sept 15 2017
                        Last edited by Double Edge; 15 Sep 17,, 21:21.

                        Comment


                        • Originally posted by Double Edge View Post
                          No Chinese roads through POK otherwise Japanese funded ones in Arunachal. What's it t be ?

                          Shinzo Abe's India visit: China warns against 'third party' involvement in Arunachal Pradesh | IT | Sept 15 2017
                          Unnecessary spin. Let's get real here. Arunachal is ours and China ain't getting it back. For the same reason that India won't get back Aksai Chin and Shaksgam Valley. PoK is ours by law, but I can't say the same with confidence. The time for Pak to settle the Kashmir issue, that is both countries sit where they are and convert the LoC as the IB is gone. China can cry as much as it wants, the Japs or India doesn't feel the need to yield.
                          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! || I am a far left millennial!

                          Comment


                          • Originally posted by Oracle View Post
                            This article has said what I thought could go wrong with OBOR. What if nations saddled with debt expel the Chinese, nationalize those infrastructure assets and refuse to pay? What would the Chinese do? No country would want to fight China with weapons
                            OK, so the same game when they make incursions wherever and dare whomever to resist. Few can, some bandwagon aka Phillipines. China win

                            What disincentives do the Chinese have in place to prevent a country from refusing to pay ? they can stagger development where completion of projects means more to come or none. But if the payment terms are in decades why did Hambantota get taken over. It was developed only in 2010. So its not that.

                            The Chinese can't threaten war. What effect would imposing economic sanctions have ? all these countries they are in buy from them not the other way around. shooting themselves in the foot.

                            Would like a credible answer to what if one does not pay

                            My guess is state capture. Take over 20% and more of the debt and get state capture. There will not be a single refusal in that case as you own the decision makers. Exceptions are always possible though and then we will have a test case

                            so how do they weaken increasingly assertive Chinese ambitions? Take the money from Chinese hands. A lot of like minded intelligence agenices are probably working on it. I fear if that happens, there would be a global depression.
                            Can you explain further

                            It also begs the question why India did not invest, and allowed that space to be taken over by China? India has more influence in SLanka than China, so why let China gain a strategic win? Funny, but the policy makers probably knew that it was not a viable business oppurtunity. Letting SL get into a debt trap is a stick with which India can beat China and scare its neighbours. Look at SL, we warned them about, .....
                            India is investing with the help of the Japanese and by extending the chabhar road to central asia that then connects with the russians

                            It's not selective. I have read other articles in which locals in, IIRC, Kenya, are not happy about Chinese presence. The complaint is about China bringing materials and labour from China.

                            Btw, all won't succeed is a narrative that is being fed. Don't fall for it.
                            No narrative just me questioning the negativity. If all they talk is negative that tells me the majority could actually succeed. If all you hear is good news then its the opposite.


                            It's like a dose of heroin for the junkies and a medium rare dry-aged prime rib steak for me. Talking of steaks, Peter Luger is on my bucket list of places to visit before I attain immortality.
                            No one figured out how to do dry aged in the north east yet ? Only a matter of time what with no legal hassles to deal with.
                            Last edited by Double Edge; 15 Sep 17,, 22:56.

                            Comment


                            • Originally posted by Oracle View Post
                              That was a Pakmil tactic to guage international opinion to mainstream the JuD, which for some reason they aborted. Behind the scenes US pressure, probably.
                              The whole idea was to do a whitewash i thought as protection from any sanctions. Now how do they protect them ?

                              Who is the dude speaking in the video after CFair? He is bang on target.
                              http://soas.academia.edu/BurzineWaghmar

                              Parsi ? but he's saying what any Pak patriot should be.

                              Now i don't know how much hassle he got but Chris put this up. They didn't put up the entire lecture just excerpts so there could have been more. What she said didn't even come half way to what Burzine said.

                              WTF, ISI involved in 9/11? Didn't knew that before.
                              LT did point to a TOI article about it a while ago but the details were completely missing and we had a good argument about it. He just 'knew'

                              CPEC = Colonizing Pakistan to Enrich China. Hahahahaha!
                              Chris must use humour to keep her students awake.

                              Comment


                              • Originally posted by Oracle View Post
                                The Pak govt is a farce front to save the Pakmil's ass whenever they face a crisis.
                                Article i posted in the afghan thread where Asif questions whether terrrorists are a liability or asset. He's the FM. The Def minister came out with a very different line more in line with the PA.

                                The thinking is Asif holds a grudge against the mil for launching a judicial coup against his boss. He's doing it in public

                                Originally posted by Oracle View Post
                                How many business venture do you know where the Chinese have invested are opaque?
                                Depends on the laws of the country they invest in. If it isn't necessary then that's your reason. If Chinese investments in Pakistan appear opaque then maybe Pakistan should reform its laws to make all investments more transparent.

                                Originally posted by Oracle View Post
                                Arunachal is ours and China ain't getting it back. For the same reason that India won't get back Aksai Chin and Shaksgam Valley. PoK is ours by law, but I can't say the same with confidence. The time for Pak to settle the Kashmir issue, that is both countries sit where they are and convert the LoC as the IB is gone. China can cry as much as it wants, the Japs or India doesn't feel the need to yield.
                                Well the deal by Chou and Deng is exactly that. Since we refused to cede Aksai they claim Arunachal. Same trick played on Bhutan too. They claim two portions and then say swap. it's like you catch a crook who broke in and he says he will return your wallet but keep your coat.

                                Funny thing about Arunachal is the Chinese retreated in '62 because they couldn't defend it. The Tibetans ceded it to the British without requisite authority allegedly from Beijing. Neither the Tibetans or the Chinese could make use of Arunachal. It's just a bargaining chip.
                                Last edited by Double Edge; 16 Sep 17,, 11:58.

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