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  • Chinese ‘projects will not go on’: Mahathir blasts Najib’s ‘stupidity

    Malaysian Prime Minister Mahathir Mohamad on Tuesday demurred on whether there had been resolutions on his plans to cancel controversial Beijing-backed infrastructure projects in his country after meetings with top Chinese leaders, as he repeatedly slammed his predecessor Najib Razak’s “stupidity” for endorsing the deals in the first place.

    Mahathir’s five-day visit to China – capped by meetings with President Xi Jinping and Premier Li Keqiang – was in part meant to move along renegotiation talks on the projects, but the Malaysian leader said more time was needed to achieve his objectives.

    While that may have been one unchecked box after his highly anticipated trip, Mahathir said he was glad he was able to assuage anxieties about his policy towards China following his shock defeat of the Beijing-friendly Najib in May.

    The premier continued to demur on whether he was seeking to cancel or defer the US$20 billion East Coast Rail Link and two pipelines worth over US$2 billion. While stating that the projects had been cancelled outright, he also said they may be “deferred”.

    The 93-year-old leader in July suspended the projects citing their “lopsided” terms against Malaysia and high costs.

    His government alleges that large sums of loans the Najib administration took out from the Chinese Export-Import Bank for the projects had been drawn down by the Chinese companies involved in them, even though they are far from completed.

    “The projects will not go on. At the moment, the priority is reducing our debt … it will be deferred until such time when we can afford, then maybe we will reduce the cost,” Mahathir said before his departure for Kuala Lumpur.

    If we have to pay compensation, we have to pay. This is the stupidity of the negotiations before. We must find a way to exit these projects … this is our own people’s stupidity.

    On Tuesday, Mahathir, who is back in the political hot seat after a first stint as prime minister from 1981 to 2003, said: “We had no problems with foreign direct investment before. But this happened because the government of Dato Seri Najib overlooked all the previous practices and entered into agreements which are very detrimental to our interests.”

    Asked if the funds that had been drawn down by the Chinese companies could be recovered, Mahathir replied, “We will recover the money from Najib”.

    He was the one who entered [into these agreements] … What kind of stupidity is this? We agree to pay on time without any condition that work must be done.

    Mahathir said while the matter was between Malaysia and the Chinese companies building the projects, he had told the Chinese government his point of view on why he felt the deals were lopsided.

    “With the Chinese government, they don’t talk about the companies. They talk about the government. They see our point of view. I explained to all the three leaders why we have to do this,” he said. “They agreed.

    “The Chinese investors felt worried because I took over and people were saying I was anti-Chinese and all that. But I explained to them that we have to look after Malaysian interests.” he said. “They understand that as far as Malaysia being business-friendly, Malaysia Incorporated and all that, it is still on.”

    As for the Chinese government, Mahathir said there may have been some tension over his reascent to power prior to his visit. “Before I came, maybe. They didn’t understand what I was doing. My job is to explain myself.”

    Mahathir meanwhile said he did not ask the Chinese leaders about Jho Low, the fugitive Malaysian businessman who is suspected to be linked to the 1MDB financial scandal and is believed to be living in China.

    Beijing said it would take a “long-term” view to resolving the underlying tension with Kuala Lumpur.

    “When … two countries cooperate, it is unavoidable that various problems may emerge and we may take different views at different times,” Chinese foreign ministry spokesman Lu Kang said at a regular press conference on Tuesday.

    “We should approach these problems through friendly negotiations with the purpose of maintaining friendly ties and adopting a long-term view,” he said. “I can tell you that this is an important consensus reached during this visit by Malaysian Prime Minister Mahathir.”
    Last edited by Oracle; 28 Aug 18,, 18:16.
    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!


    • Criticism of China by Malaysia’s Mahathir resonates around East Asia, and with Beijing

      Over the decades, China’s leaders have been known to greatly respect the tell-it-like-it-is political instincts of Malaysian maestro Dr Mahathir Mohamad. But now you have to wonder how much love may have been lost of late.

      No one in Beijing or anywhere else doubts even today that the young country doctor who was to rise to prominence as the modernising leader of Malaysia is still one crazy smart Asian. Of the most remarkable figures I’ve met in a long journalistic career, Dr M – as I call him – is anything but the buttoned-up prime ministerial stereotype. Compare him, for instance, to Sir John Major, leader of the United Kingdom between 1990 and 1997 – so very much the English gentleman, dapper in tendering fair-minded and politely expressed opinion, charming even in disagreement. Dr M was – and is – nothing like that. Now 93 and prime minister of Malaysia for a second time, it is not even clear that he has mellowed much with age. Compare him to a sport and you’d have him more like Australian football than cricket.

      The former boss of all bosses of the massive, money-infested monster that was Malaysia’s oft-dominant party has since become the “young insurgent” toppling that party, and Dr M’s views have new sting since becoming leader anew. His first go as prime minister ran for 22 years, the Malaysian record, ending in 2003. But way back when, at least before the September 11 terror attacks, one of Islam’s craftiest, secular political minds was all but ignored by Western journalists. Asia then was an “Oriental” story, with the Asians in the spotlight usually crazy, poor and clueless … or communist. And this Malaysian Asian was, to some, either an authoritarian crank, an anti-Semite or a bizarre Muslim Machiavelli.

      That began to change in 1997, when Dr M lashed out at the International Monetary Fund, triggering regional applause. When the brutal Asian financial crisis hit, when currencies and economies from Thailand to South Korea were leaning over cliffs, and the cash-rich but cruel IMF only proffered loans with conditions reminiscent of a mafia loan shark, Dr M told the Washington-based organisation to bug off with its venomous bailout money. Instead, his government outmanoeuvred Western currency speculators, their short fangs drooling, and sent Wall Street wolves packing. (Hong Kong also out-foxed predators by working behind the scenes with premier Zhu Rongji.)

      The Mahathir play got Beijing’s respect. Largely buffered from the crisis (which lasted from 1997-1999) by having pointedly ignored Washington’s ideologically pious (but Wall Street-serving) advice to lift the currency curtain and let the good times roll, the Beijing expertariat never forgot this Malay man who could say no – judging him as craftily unbeholden to the West as anyone.

      Beijing, it was sometimes said, secretly favoured his Malaysia more than Singapore, in part because of the latter’s intimacy with Washington, of which Dr M could never be accused. But that was then and now we have something new: in his re-emergence as prime minister, the good doctor is now offering measured criticism of China. Like others in the region, Malaysia has maritime issues with Beijing, and concerns about previously negotiated bilateral development deals.

      Dr M has raised questions about its pushiness in the (increasingly appropriately named) South China Sea and perceived neo-colonial style, particularly in rolling out the ambitious (if potentially helpful) Belt and Road Initiative with peculiar financing and contracts. Dr M’s advice, as I decode it, is to slow down, stop bragging, be considerate of others’ interests and show flexibility.

      Zhongnanhai does not appreciate this sort of chatter – imagine the nerve of this tiny Asian deer of a country instructing the big elephant on what to do! China is legendary for not lusting for savage sovereignty over others, but seeking to conjure a less vulgar form of continuing influence – which the elegant French have a word for: suzerainty.

      One does not brazenly run over other countries with tanks or dictate their actual form of government (for example, the US invasion of Iraq or the US post-war imposition of an American-style government on Japan). The preferred way is to hover over semi-unobtrusively and earn near-worshipful respect as the de facto hoverer-in-chief with whom one does not ever mess.

      A widespread question around Asia these days is how low the hovering will go, for at too low a height, hovering can become smothering, rendering China more neo-colonial than neo-wonderful. And that is where the regional image of China seems to have settled in some minds, at least for the moment. Beijing should thus consider respecting this re-risen sage, but these days it is not seeing things as clearly and unemotionally as it might.

      The result is not that Mahathir has a problem; at 93, this proven politician is clearly having the time of what is left of his lengthy life by putting his chips on the table. It is Beijing that has a problem, not only because the Mahathir critique is not idiosyncratic and increasingly resonates in East Asia, but also because, in East Asia, is there a political figure (with the exception of Lee Hsien Loong, Singapore’s prime minister since 2004 and the late Lee Kuan Yew’s son) who has more earned the right to be listened to?

      Over the decades Mahathir has given us all much to think about, even when not enough of us thought so much of him. And now he is trying to cheer China on, to continue to become rich and Asian, but without becoming crazy – and driving everyone else crazy while doing it. There must be a way.
      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!


      • China embarks on belt and road publicity blitz after Malaysia says no to debt-heavy infrastructure projects

        Chinese state media have embarked on another publicity blitz for the country’s global infrastructure drive, this time just days after the Malaysian government halted three billion-dollar Beijing-backed projects.

        In a glowing feature on Sunday, state news agency Xinhua said the “Belt and Road Initiative”, a string of Chinese-backed projects across Europe, Asia, and Africa, had been well received internationally since it was launched by President Xi Jinping five years ago, describing the initiative as one that would “unify the dreams of every country and their citizens”.

        “The Belt and Road Initiative originates from China, but belongs to the world,” it said. “In the past five years, it has transformed from a proposal into concrete action, turning ideas into practice, and today has become the world’s biggest international cooperation platform, and the most popular international public product.”

        Xinhua also published a commentary about the “widespread recognition of the initiative” for “illuminating the dreams of millions of people”, and a report hailing the expanded train service between China and Europe as a “team of iron and steel camels” on the belt and road.

        The latest state media promotion comes hard on the heels of Malaysian Prime Minister Mahathir Mohamad’s announcement last week that the controversial the US$20 billion East Coast Rail Link and two pipelines worth over US$2 billion had been cancelled to avoid adding to the Southeast Asian country’s debt.

        It also comes amid rising fears over Beijing’s use of the belt and road to gain political leverage in the dozens of countries that have signed onto the trillion-US dollar drive.

        Concerns of “debt-trap diplomacy” were compounded in December after Sri Lanka relinquished control over its US$1.5 billion deep-sea port to a state-owned Chinese firm when it struggled to pay back debts to China.

        And in April, a nearly united front from the European Union reportedly condemned the belt and road for hampering free trade, giving an unfair advantage to Chinese companies, and pursuing “domestic political goals”.

        Beijing has consistently pushed back, denying it has used the initiative as a vehicle to gain political influence. On Thursday, Chinese Foreign Minister Wang Yi rejected comparisons between the belt and road and the Marshall Plan, the United States’ economic aid initiative after the second world war that has been criticised for furthering American geopolitical interests.

        In a meeting with Mongolian Foreign Minister Damdin Tsogtbaatar on Thursday, Wang said the belt and road was “not a geostrategic concept”, but a shared plan focused on transparent, high-quality projects that emphasised financial sustainability.

        “The Belt and Road Initiative is in accordance with historical trends, is full of vitality and energy, and as a result has quickly gained support worldwide,” the Chinese foreign ministry quoted him as saying.

        The latest Xinhua feature on the initiative said 88 countries and international bodies had signed agreements on belt and road cooperation. It also outlined the hundreds of shipping ports, railways, airlines, and energy deals that fall under the belt and road framework, as well as the accompanying spending from Chinese tourists and overseas students.

        The report claimed that in 2017, Chinese trade with countries along the routes made up 40 per cent of global trade. But it also said that only 23.6 per cent of foreign media and internet users in belt and road countries had positive attitudes towards the plan, albeit up from 16.5 per cent in 2013.
        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!


          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!


          • Originally posted by Aquila View Post
            Well I'm not the only one who thinks it's colonialism
            How many parts colonialism : )

            China is turning Sri Lanka into a modern day “semi-colony,” the same way Great Britain and Portugal turned south China into their own semi-colonies back in the mid of 19th century.

            Sri Lanka didn’t lose a war to China. It never ceded any of its territory officially to China. But it handed over economic control of its deep sea Hambantota port to China Merchants Port Holdings (CM Port).
            Semi colony doesn't equal colony. Why call it a colony then. Half right is still wrong.

            Ceding economic control isn't losing sovereignty. Implying Sri Lanka does have a say. Colony means no say.

            Sri Lanka – the prey of Chinese neocolonialism
            The total debt of Sri Lanka is about $70 billion and out of which $8 billion is owned by China
            So China only holds 10% of Sri Lanka's debt. Need above 20% for state capture.

            Much of the debt came up during the tenure of last President of Sri Lanka Mahinda Rajapaksa when he initiated several large scale and extremely expensive infrastructure projects with Chinese loans.
            Bad bad

            China has also been given 80% ownership of the Hambantota port in the south. Immediately after the BIMSTEC meeting in India, Sri Lanka handed over the equity control of the Hambantota Port to China whereby the Sri Lankan Port Authority would develop the port with Chinese credit. The relationship between Sri Lanka and China has been upgraded to what is being called an “all weather partnership“. More than a relationship of trust, it is seen as a relationship out of compulsion.
            So its like they've bought a plot that they own 80% through a debt equity swap. The lease is 99yrs. They can develop it and sell it. But there are no buyers. What do they do with it. Wait and see.

            In Hambantota project, China extracted 90% of its returns from Sri Lanka in the form of raw materials. This parking of funds earn China a strategic leverage, higher return on investment and reciprocity and permanence in foreign policy objectives from its ‘colonies’.
            They will need more than 10% of Sri Lanka's debt to control Sri Lanka's foreign policy

            Raw materials out of Africa, finished goods back to Africa.

            India & Australia sell lots of raw materials to China too. We both import finished goods from China too.

            I remember hearing years back that China was behaving like the East India company in Africa. The only way the brits could take over India was with standing armies. There is no such thing in Africa.

            China in Africa: win-win development, or a new colonialism?
            “The risk for African borrowers relates to the project’s profitability,” says Cari director Deborah Bräutigam. “Will they be able to generate enough economic activity through these projects to repay these loans? Or are the projects seen more as ribbon-cutting opportunities? The Chinese believe that ports and special economic zones are a ‘win-win’ development tool. It’s what they did at home at an earlier stage of their development.”
            Key question. Some will succeed others will take more time.

            Mahathir, China and neo-colonialism
            Chinese colonialism?
            Mahatir's been making some waves since he entered office.

            Hell that's not even all the links....just google China colonialism and enjoy
            Can come up with any terms, whether they have legs is the question. All opinion and easily challenged.

            I don't want to see like or similar to colonialism. Show me colonialism that's your assertion.

            Sovereign countries are responsible for their own decisions. Nobody forces them to take these loans but if leadership is corrupt then there is trouble to be had.

            This is the reason the IMF & World bank were created because these bilateral loans prior caused problems between countries. I'm reminded of Germany loaning to Greece at the turn of the 20th century.
            Last edited by Double Edge; 31 Aug 18,, 01:35.


            • Originally posted by Aquila View Post
              I replied where you linked to but I received a "wait for approval" message, so hopefully it will show up :)
              Listen to this

              If all goes well, both should start playing at the point i cued them to and stop when the point is made
              Last edited by Double Edge; 01 Sep 18,, 03:27.


              • Originally posted by Oracle View Post
                OR, the Paks may not get an IMF bailout, the Chinese lose their investment and Gwadar, and then Pak crumble and lose its nukes.

                Paks cannot forever put a gun to their head and threaten suicide if their begging bowl doesn't receive alms.
                An IMF bailout will have stronger implications for China than no IMF bailout

                Pakistan’s Economic Turmoil Threatens China’s Ambitions (Argument)| FP | Aug 16 2018

                The balance-of-payments crisis and likely IMF talks could undermine Beijing’s investments.
                BY JAMES SCHWEMLEIN | AUGUST 16, 2018

                "There’s no rationale for IMF tax dollars—and associated with that, American dollars that are part of the IMF funding—for those to go to bail out Chinese bondholders or China itself”

                warned U.S. Secretary of State Mike Pompeo about a potential IMF bailout of Pakistan, which Islamabad has contemplated requesting as it stares down another balance of payments crisis. Pompeo’s brash remarks on July 30 captured the concerns of Americans across the political spectrum about China’s increasingly assertive behavior throughout Asia. They also reflected the United States’ exhaustion with Pakistan.

                As Pakistan’s new government, led by legendary cricketer-turned-rookie Prime Minister Imran Khan, is seated on Saturday, the first items on its docket will not reflect Washington’s priorities in the region—stabilizing Afghanistan, restraining and dismantling the network of proxies maintained by Pakistan’s army, and restraining the rapid expansion of Pakistan’s nuclear arsenal—all of which fall primarily under the writ of the country’s powerful army. Rather, Khan and his team must grapple with Pakistan’s third balance of payments crisis in 10 years. And here, Pompeo’s warning misses the broader geopolitical implications of Pakistan returning to the IMF.

                China’s surging investment in Pakistan, known as the China-Pakistan Economic Corridor (CPEC), is the fastest-moving and largest portion of Chinese President Xi Jinping’s Belt and Road Initiative. CPEC is a 15-year investment program that aims to address energy shortages, build out Pakistan’s transportation network, develop a deep-water port at Gwadar, and eventually support Pakistan’s industrial development as a manufacturing hub within China’s growing sphere of influence. Since CPEC launched in 2013, Chinese firms have finalized $19 billion in investments in Pakistan, a significant injection of capital that has already served to improve the country’s electrical system and stimulate growth.

                As with all things related to Pakistan, the response in Washington has been complicated. On one hand, the U.S. government quietly promoted U.S. commercial participation in the venture, including in three large gas-fired power plants constructed by Chinese firms that use state-of-the-art turbines designed, assembled, and tested by General Electric in South Carolina. And U.S. and multilateral observers have assessed many of CPEC’s energy and transportation projects as worthwhile contributions to Pakistan’s peace and stability.

                On the other hand, Washington has also been skeptical of China’s role in Pakistan. The close military relationship between China and Pakistan stretches back decades and remains the bedrock of their “all-weather friendship,” as leaders from Beijing and Islamabad have referred to their relationship over the years. CPEC marked a dramatic upgrade in China’s economic position in Pakistan, but the United States’ concerns focus on China’s strategic intentions. First, China and Pakistan have each, over decades, tended to view their relationship as a means of countering India, an increasingly important strategic partner in what the Trump administration refers to as the Indo-Pacific region. Second, Washington is concerned that Beijing is not sufficiently focused on the destabilizing risks posed by Pakistan’s use of militant proxies in the region, particularly toward India and Afghanistan.

                As the contours of CPEC started to become clear, two specific components also drew skeptical looks: the potential use of Pakistani military bases to extend the operational range of the People’s Liberation Army Navy and the expansion of Pakistan’s nuclear capabilities, in particular the construction of a new nuclear power complex near Karachi, which Washington views as in violation of China’s commitments as a member of the Nuclear Suppliers Group. China’s counterterrorism record in Pakistan is also suspect. Although China appears to have encouraged Pakistan Army operations into North Waziristan in 2014 out of a desire to crack down on Uighur militants it alleged were present there, Beijing did not appear to take seriously concerns that some militants were forewarned of the operation and relocated beforehand. And although China did support subjecting Pakistan to enhanced monitoring in the Financial Action Task Force—an international group founded by the G-7 to combat money laundering—earlier this year, it continues to use its status as a permanent member of the U.N. Security Council to block sanctions against Pakistan-based terrorists.

                It is also clear that Pakistan views China as a foil to U.S. pressure. Indeed, China’s investment has only ramped up as Pakistan has flouted Washington’s core concerns related to its militant proxies and nuclear weapons program. When U.S. President Donald Trump started his new year with a tweet denouncing Pakistan’s “lies & deceit” and subsequently ordered the cancellation of U.S. security assistance, Pakistan’s then-prime minister, Shahid Khaqan Abbasi, took the stage at the World Economic Forum to highlight all the good things that would come from Chinese investment, even as “cooperation with U.S. companies continues on a secondary level.”

                With Chinese intentions already suspect in Washington, it is no wonder that, last week, 18 U.S. senators sent Pompeo and U.S. Treasury Secretary Steven Mnuchin a letter expressing concern about China’s “debt trap diplomacy.” The fear, highlighted in a Center for Global Development study, is that China is using its growing economic strength coercively to drive weaker states into its strategic orbit.

                But there is little evidence that the current crisis in Pakistan was spurred by its debt obligations to China. Chinese and Pakistani officials have claimed that the bulk of the borrowing related to CPEC was structured with long-term schedules for repayment (20 to 30 years) and a five-year grace period built in. While these deals do not reflect the full extent of Pakistan’s debt to China, scapegoating China for Pakistan’s current economic problems is wrong.

                Instead, the latest crisis was caused by the same set of factors that spurred previous ones:

                - serial fiscal irresponsibility by successive civilian and military governments

                - persistent overvaluation of the rupee, which is a drain on foreign reserves

                - growing trade deficits caused in part by declining export competitiveness and in part by Pakistan’s dependence on fuel imports

                - and a narrow tax base that habitually excludes most of Pakistan’s governing elite.

                Meanwhile, persistent electricity shortages, an unpredictable regulatory and legal system, and investor perceptions that Pakistan is too high of a security risk sap competitiveness. In its constant state of economic deterioration, Pakistan has repeatedly sought support from the IMF; it has been subject to 21 IMF programs over the last seven decades and it failed to complete 18 of them.

                The situation does not have to be this bad. During his victory remarks on July 26, Khan oriented his government’s agenda around human development, saying that “no country can prosper when there is a small island of rich people, and a sea of poor.” He’s right. After a huge population boom, 64 percent of Pakistanis are under the age of 29. To keep up with the growth, Pakistan’s economy must deliver an estimated 1 million jobs each year for the next 30 years. That requires an estimated GDP growth rate of at least 7 percent per year. Last year, Pakistan grew at 5.7 percent, its best year in over a decade. Even with China’s stimulus, in other words, Pakistan has been unable to grow enough to provide jobs for new workers or make progress alleviating poverty.

                The new government’s finance minister designee, a seasoned business executive named Asad Umar, has in the days since the election openly deliberated about how the government should address the economic crisis. His preference seems to be finding an easy way out—a quick injection of additional foreign exchange from China, which has already extended around $4 billion in loans to the State Bank of Pakistan over the last year, or Saudi Arabia, which recently pushed for a $4 billion credit facility through the Jeddah-based Islamic Development Bank to support oil purchases. These kind of capital injections buy time, but they don’t represent a solution to what ails Pakistan. Ultimately, Pakistan will have to return to what Umar has said is the “fallback option”—the IMF.

                Some in Pakistan have speculated that China may oppose an IMF program out of concerns that it would compel China to release the financing terms of many CPEC projects. But outside of situations where external debt restructuring is required, it would be exceedingly unusual for the IMF to make such a demand. Instead, the IMF would likely require confidential data on debt payment schedules and other financial information necessary to understand Pakistan’s full balance of payments situation. Such an exchange of data is routine across IMF programs, because as a lending institution the IMF demands assurance that it will be repaid. It seems unlikely that China would oppose a new IMF program for Pakistan on those grounds.

                That does not mean that China should not be worried. Pakistan’s recent election and the country’s potential return to the IMF will create three obstacles to China’s ventures in Pakistan:

                - domestic political demands for anti-corruption investigations into the previous government

                - IMF restrictions on Pakistan’s ability to authorize new sovereign guarantees, which are typically critical to underwriting large projects

                - and IMF fiscal austerity requirements, particularly related to Pakistan’s derelict state-owned enterprises.

                Anti-corruption and accountability investigations could come quickly. Khan focused his campaign on allegations that the previous government had made crooked bargains with China and other countries. The concern comes from the opaque terms of many of the public infrastructure projects that the previous government advanced, including CPEC projects. Nawaz Sharif, the former prime minister, and his team had argued that the standard processes were too slow and unwieldy. Rather than reform and modernize that system, though, they chose to pursue executive agreements aimed at resolving Pakistan’s energy crisis, improving urban transportation, and building new highways more quickly. Their sense of urgency was understandable, but their refusal to disclose basic contractual details rightly stoked worry. Public concern was heightened when Sharif’s foreign properties were revealed in the Panama Papers leak. The combination of factors fed tension between Sharif and the Army, and ultimately contributed to his disqualification from office.

                In line with Chinese President Xi Jinping’s high-profile anti-corruption drive, Chinese officials have pledged to make CPEC a “clean corridor.” China has already shown sensitivity to allegations of public corruption in CPEC projects. In December 2017, Beijing paused three road projects due to allegations that the Pakistani construction firm involved in the projects, which was a state-owned entity, had corrupt business dealings. But the exposure of additional details about CPEC projects may focus public attention on the dependence of many of the projects on Chinese imports, which local business groups allege are flooding the market and crowding out local firms. While China might not fear corruption investigations, in other words, it may well loathe any media attention that such investigations drum up.

                IMF restrictions on Pakistan’s ability to originate new sovereign guarantees are likely to be a second source of trouble. Sovereign guarantees are demanded by lenders facing heightened economic, security, or political risks in a project that serves a public good or has a government entity as a counterparty. A sovereign guarantee is a contingent liability; that is, it is calculated as part of a country’s overall debt picture but does not involve direct debt service payments. Most projects eligible for a sovereign guarantee are designed to ensure that project costs can be covered by tariffs, tolls, or other revenue collection schemes. But in Pakistan, such cost-recovery plans for state infrastructure projects have a sketchy record. It makes sense, then, that the IMF would pursue one of its standard methods for ensuring discipline in countries that get loans: restricting the promulgation of new sovereign guarantees.

                That is bad news for China, which has required sovereign guarantees to backstop its Belt and Road Initiative investments throughout Asia, including in Pakistan and even while demanding that Chinese firms lead most efforts. On its face, this is a questionable, almost predatory, practice. If an IMF program restricts Pakistan from issuing additional sovereign guarantees, it would delay China’s ability to start new projects and achieve its broader ambitions in Pakistan.

                The third disruption is likely to come from the IMF’s austerity requirements, and in particular how these requirements affect Pakistan’s state-owned enterprises. Most Pakistani estimates indicate that somewhere in the range of 20 percent of the total cost of CPEC projects come from Pakistan’s budget, though these estimates appear conservative. Although the bulk of China’s investments in Pakistan, including electricity projects and investments related to Gwadar Port, involve Chinese banks financing construction by Chinese firms, the transportation projects involve decrepit Pakistani state-owned entities.

                Consider, for example, the efforts to better link China and Pakistan via new highways and railways. For now, only a narrow road, known as the Karakoram highway, winds through the Hindu Kush mountains on its way between Pakistan with Xinjiang across the highest-altitude border crossing in the world. Pakistani and Chinese authorities have discussed a new rail line, known as the ML-1, to make direct transit commercially viable. The hypothetical ML-1 would involve an $8 billion loan to Pakistan Railways, Pakistan’s decrepit national champion. Under an IMF program, not only would Pakistan be prevented from issuing a sovereign guarantee to back such a loan, but Pakistan Railways would most likely be subject to restructuring or privatization as well. The IMF program would therefore be a direct impediment to China’s ambition for a land corridor through the Hindu Kush.

                Although China has not caused Pakistan’s current economic turmoil, it seems likely that CPEC could spur the next crisis unless conditions change. According to a 2017 IMF assessment, debt service obligations to the Chinese state, banks, and firms are projected to grow gradually, peaking in 2025 at between about $3.4 billion and $4.5 billion. These estimates likely undervalue the full repayment obligations Pakistan will have under CPEC, as they do not seem to include tariffs for power generated by Chinese firms, toll fees for Chinese built roads, or maintenance and operation expenses.

                Without reforms to improve Pakistan’s competitiveness, the country could well fall into a debt trap that it can’t escape. That, too, is a matter for Pakistani-Chinese discussion. China, already Pakistan’s largest trading partner, is indeed the primary cause of Pakistan’s growing trade deficit, accounting for 29 percent of imports. Pakistan only exports $1.62 billion in goods to China, less than it exports to either the European Union or the United States.

                Khan’s ascent to the prime minister’s office represents a historic moment to improve governance, expand economic opportunities, alleviate poverty, strengthen civilian institutions, and improve relations with Pakistan’s neighbors. Progress on any of these agendas will be hard fought. Despite the risks, the infrastructure installed under CPEC could be a boon to these goals.

                But CPEC’s excesses—including its opaque terms, its reliance on sovereign guarantees, and the long-term debt burden these projects could impose on Pakistan—actually put the whole Chinese project at risk. The discipline imposed by an IMF loan could help Pakistan avoid these risks and give cover to an effort on the part of the new government to negotiate a better deal with China, on terms more favorable to Pakistan. Watching China’s behavior toward Pakistan will be a revealing test of Beijing’s global intent through the Belt and Road Initiative. If it wants Pakistan to succeed, it will purchase more Pakistani goods, reduce the trade imbalance, and work with the government and international institutions like the IMF to promote meaningful reform. If its intention is somehow to leverage Pakistan to acquire assets or to build a new military platform, it could continue walking Pakistan right into a debt trap.
                Last edited by Double Edge; 03 Sep 18,, 14:01.


                • Originally posted by Oracle View Post
                  OR, the Paks may not get an IMF bailout, the Chinese lose their investment and Gwadar, and then Pak crumble and lose its nukes.

                  Paks cannot forever put a gun to their head and threaten suicide if their begging bowl doesn't receive alms.
                  In the event of no IMF bailout, see Venuezuela

                  China, Venezuela, and the Illusion of Debt-Trap Diplomacy | Asia Global Online | Aug 16 2018

                  Where's the intent. That's the part that is yet to be demonstrated if debt trap diplomacy is the MO. Debt trap is therefore lose lose for both.

                  If you cannot even make a clear cut case for debt trap diplomacy then how the heck do you throw around labels like colonialism !!

                  These labels are misleading and not informative at all.

                  ANALYSIS by Matt Ferchen, Carnegie-Tsinghua Center for Global Policy
                  August 16, 2018

                  China has often been accused of practicing “debt-trap diplomacy”—miring supposed partners, particularly developing countries, in unsustainable debt-based relationships. But this is a misreading of the issue, and nowhere is this more apparent than in China’s dealings with Venezuela.

                  In an article from early 2017, titled “China’s Debt-Trap Diplomacy,” geopolitics pundit Brahma Chellaney argued that China has sought to purposely ensnare some of its South Asian neighbors in unsustainable loans-for-infrastructure deals.

                  Since that article was published, the concept of debt-trap diplomacy has become increasingly popular among some journalists, researchers, and policymakers. These individuals are critical of China’s rapidly expanding provision of international infrastructure finance, especially through its ubiquitous Belt and Road Initiative (BRI).

                  Yet, the emerging conventional wisdom that China gains when the countries it lends to are unable to service their debts risks misunderstanding how China has and will become a victim of its own lending missteps and hubris. No Chinese debt-based relationship is more instructive in this regard than its dysfunctional ties to Venezuela.

                  A Concept Captures the Zeitgeist

                  The concept of debt-trap diplomacy, maybe more than any other, symbolizes the backlash against China’s increasingly high-profile and assertive foreign economic policies of recent years. What most of these critiques have in common is a shared certainty that China is effectively practicing a form of neomercantilism. This practice is designed to ensure that the country’s overseas trade, investment, and finance tools and initiatives, especially in developing countries, serve its broader aims of increased geopolitical influence.

                  Concerns about China’s debt-trap diplomacy have now explicitly found their way into U.S. foreign policy assessments. In a report issued earlier this year that explicitly employed the debt-trap concept, Peter Navarro’s White House Office of Trade and Manufacturing argued that “China uses a predatory ‘debt trap’ model of economic development and finance that proffers substantial financing to developing countries.” Another much-publicized report warning about sovereign debt risk for countries participating in BRI underscores how concerns about China’s predatory financial statecraft have only become more widespread in recent months.

                  Yet few, if any, of the claims about Chinese debt-trap diplomacy include a clear-cut case proving that Chinese firms, banks, or foreign policy officials came into such deals with a long-term, strategic plan to attain economic assets or political leverage via unsustainable loan deals. Moreover, claims about China’s debt-trap diplomacy unquestioningly assume that China’s own economic and geostrategic interests are maximized when its lending partners are in distress. Such assumptions need to be more carefully examined, and the case of Venezuela shows why.

                  China and Venezuela: Lose-Lose

                  It is perhaps no coincidence, then, that those most keen to highlight and warn of China’s debt-trap diplomacy, or of similar threats such as “creditor imperialism,” fail to mention the country with arguably the most unsustainable debt-based relationship with China: Venezuela.

                  Venezuela is no marginal case. Indeed, it is the single largest recipient of Chinese official finance, with the China Development Bank (CDB) extending the bulk of more than US$60 billion in loans since 2007.

                  Venezuela and China are, respectively, the site of the world’s biggest oil reserves and the world’s biggest oil importer. The original commercial rationale for the loans (or for “win-win” ties, in Chinese rhetoric) was to finance long-term oil partnerships between the two nations. It is certainly no coincidence that the majority of the loans were signed when Venezuela was led by Hugo Chávez. He offered an enticing diplomatic and even ideological partnership at a time when Chinese policymakers were looking at enhanced ties with Latin America as an opportunity to balance the United States’ “pivot” to Asia.

                  Yet, with Venezuela in the depths of an economic, political, and humanitarian crisis since the death of Chávez in 2013 and the collapse of oil prices in 2014, the China-Venezuela loans-for-oil relationship has gone badly wrong. Certainly Chinese loans to Venezuela, especially in the aftermath of the global financial crisis, facilitated deeply flawed economic decision-making at a time when Chávez may have otherwise had to adopt more practical polices to tap into international credit. In this sense, CDB lending to Venezuela both before and after Chávez’s death has fed into the Venezuelan government’s own disastrous appetite for unsustainable and unaccountable debt.

                  China’s lending to Venezuela stands in clear contrast to some other examples meant to highlight China’s debt-trap diplomacy. This lending has not only greased the wheels of Venezuela’s path to self-immiseration, but it has also clearly undermined China’s own economic and geostrategic interests. Specifically, the collapse of Venezuela’s oil sector, and with it the entire economy, has meant that the country has been unable to make loan repayments and oil shipments to China according to the original loan terms. If this weren’t enough to undermine Chinese energy security interests, the collapse of Venezuelan oil exports has contributed to recent rises in global oil prices, thus contributing to increases in China’s massive oil import bill.

                  Geostrategically, Venezuela has changed from the closest thing China had as an ally in Latin America and the Caribbean to a clear liability. Moreover, if Donald Trump’s U.S. administration deepens sanctions on Venezuelan oil, Chinese state-owned oil firms and banks could easily be caught in the crosshairs.

                  Tip of the Iceberg

                  China’s unsustainable debt relationship with Venezuela is a clear example of how misleading the concept of debt-trap diplomacy can be, especially if China can be caught in its own snare. Venezuela may be the most extreme case of a Chinese debt relationship gone wrong for both debtor and creditor alike, yet other examples are also emerging. China’s investment in and lending to neighboring Pakistan and Afghanistan, as well as the more distant South Sudan and Angola, have increasingly been scrutinized for the ways in which China’s economic and security interests may be undermined by deals gone wrong.

                  And as in the case of Venezuela, if China does seek to use more coercive methods to retrieve the money, oil, or ports it has financed, it risks contributing to the growing impression that all its rhetoric of “win-win” contributions to development cooperation is really just cover for more traditional zero-sum realpolitik.

                  This is where many of the concerns about China’s development financing binge converge. Whether Chinese business or foreign policy officials enter into unsustainable debt relations with developing countries on purpose or by accident, the result is that China appears well on the path to repeating mistakes made by Western governments, businesses, and multilateral financial institutions. What China is experiencing as it ventures out as a provider of global finance is in some ways similar to periods in the 1930s and 1970s when American firms, and subsequently the U.S. government, found themselves in unsustainable debt relationships that hurt debtors and creditors alike.

                  There is every reason the international community should pay close attention to the strategic economic and political elements of China’s role as a supplier of infrastructure and energy finance. But vitriolic claims of Chinese debt-trap diplomacy are likely to be far less effective than efforts to clearly demonstrate to Chinese officials, bankers and executives that their own interests are often being undercut through such unsustainable deals.

                  China, no less than any country or individual, is capable of making mistakes. The question is what lessons are learned and who pays the price.
                  And who pays the price ? The IMF. Could a raft of bad BRI deals around the world sink the IMF

                  How Debt Traps From China’s Belt and Road Initiative Could Upend the IMF | WPR | Aug 14 2018

                  Can't access the whole article but it gives an idea why Pompeo isn't so forthcoming to any country involved with BRI and needing a bail out
                  Last edited by Double Edge; 03 Sep 18,, 14:15.


                  • What Does a Chinese Superpower Look Like? Nothing Like the U.S.

                    What struck Wang Wen about Antarctica, beyond the brutality of the December cold, was the scale of U.S. operations in such an inhospitable environment and the American flag fluttering by the sign that marks the geographic South Pole. Observing the academic mission of hundreds of U.S. scientists in a region rich in resource potential, he was determined that China must catch up.

                    The report Wang wrote this summer for the Chongyang Institute for Financial Studies at Renmin University of China in Beijing, where he’s executive dean, reflects China’s growing dilemma as it muscles its way into an international system it didn’t create.

                    For the first time in its long history, China has in President Xi Jinping a leader with a truly global vision. So, inevitably, Beijing looks to the U.S., the sole superpower, for a yardstick as to what that requires—be it a blue water navy or more research stations in Antarctica.

                    Yet Communist Party leaders also recoil at being seen as the next global hegemon and are reluctant to shoulder the expense that goes with it. They studiously avoid the word “superpower” and see the American version of it as ideologically unacceptable and spent.

                    Whether China does become a superpower and whether it could sustain the costs involved are questions that will impact the world for decades. They will shape terms of trade, a changing global order, and issues of war and peace. “We don’t know,” Wang said over dinner a few floors below his institute, when asked what Chinese great power will look like. “Anything but America.”

                    Yet to misquote Leon Trotsky, even if China isn’t interested in becoming a superpower, superpower may be interested in it. The U.S., too, began its journey on the world stage determined not to replicate earlier colonial empires. Today, 11 carrier groups and a network of military bases span the globe to protect its interests.

                    China may be heading down a similar path. An aircraft carrier construction program is underway. Its first overseas military base opened last year, in Djibouti on the Horn of Africa. Spending for diplomatic service is up sharply. Xi’s “Made in China 2025” economic project aims to displace the U.S. as the world’s technological power, while another plan calls for dominance in Artificial Intelligence by 2030.

                    The country raised defense spending from $21 billion in 1990 to $228 billion last year, according to the Stockholm International Peace Research Institute, more than three times Russia’s budget. The ease with which it did so—the military’s share of overall government spending actually fell—suggests China can be any kind of power it wants.

                    Already there are signs a Chinese model for development, based on an authoritarian political system and state-directed market economy, could gain traction against the more liberal ideals long promoted by the U.S. and post-war institutions like the International Monetary Fund. Some countries, including Cambodia, now follow Beijing’s direction, attracted by China’s deep pockets.

                    Still, Beijing’s crackdown on free speech and other social liberties doesn’t suggest a self-confident regime. A budding trade war with the U.S. has helped shave about 20 percent off Chinese equities since January, triggering a domestic debate over whether Xi has already overreached by bidding so openly to challenge the U.S.

                    Consider, too, that the average Chinese remains less wealthy than the average Mexican at a time when the population is already starting to age. Some investors wonder about the health of big Chinese banks, whose lending for decades provided the investment-led growth on which the party relies for its legitimacy. If this is a superpower in the making, it may be a fragile one.

                    To Paul Dibb, a former deputy secretary for intelligence in Australia’s defense department, it’s telling that Beijing spends more on internal security than defense. “China will have to choose not between guns and butter,” he said, “but between guns and elderly care.”

                    Wang, 32, is among the loyalists who’ve come to prominence since Xi took power in 2013. Like his boss (Wang is also the Chongyang Institute’s party secretary), he exudes limitless confidence in China’s future.

                    It took four days to travel from Beijing to Antarctica. On the final leg, flying low over the vast icy expanse, Wang and others sucked oxygen from masks in the plane’s decompressed cabin. He is repelled by stories of colonist-era explorers like Robert Scott, who raced to plant their flags and stake territorial claims. Yet he also admires their “fearless spirit” and willingness to sacrifice.

                    “Should we contemporary Chinese be ashamed?” he wrote on his return, in the Chinese language Global Times.

                    An ice sheet with a mean depth of 1.6 miles (2.6 kilometers) has protected Antarctica’s resources from exploration. Still, Wang’s report says that below the surface is an estimated 500 billion tons of coal, as much as 100 billion barrels of oil, and 5 trillion cubic meters of natural gas. Despite a 1959 treaty which freezes all territorial claims, at least for now, Wang sees a “fierce” geopolitical struggle underway. He fears that, without a stronger voice and presence, China will lose out.

                    “President Xi Jinping has repeatedly emphasized that China must participate more actively into rule-settings in new areas, including deep sea, polar regions, outer space and the Internet,” his report concludes.

                    In practice, that would mean building infrastructure to accommodate tourists and beefing up Beijing’s research presence, the key determinant of influence in Antarctica’s multinational administration.

                    The U.S. budget request for the Office of Polar Programs in 2019 is $534 million. From 2001 to 2016, according to Wang’s report, China invested 310 million yuan ($45 million) in its Antarctic program. Beijing could easily afford the difference, but Antarctica is just one challenge China faces as it asserts its interests around the globe.

                    In January, China published its first white paper on the other pole, the Arctic, outlining its ambition for a “Polar Silk Road.” It proposes building new-design icebreaker vessels and bases, essential tools in an area with fewer barriers to territorial claims than the southern polar cap.

                    Silk Road is another name for the Belt and Road Initiative, into which China has already sunk hundreds of billions of dollars. In Africa alone, China loaned about $86 billion between 2000 and 2014 to governments and state-owned enterprises, and in 2015 Xi pledged another $60 billion under the initiative. Meanwhile, to match the U.S. on defense spending, China would need to find another $400 billion a year. Even for China, these are large costs.

                    Xi grasps the core lesson of the former Soviet Union’s failure—its over-reliance on military strength, according to David Shambaugh, a professor at George Washington University and author of numerous books on China. Beyond weapons, superpowers require technology, strong economies and soft power influence to sustain themselves. “China understands that,” he said.

                    China has modernized its army while spending a relatively small share of annual GDP—officially as little as 1.5 percent, or 1.9 percent according to the Stockholm International Peace Research Institute. Either figure would see China risk criticism from the U.S. for underspending, if it were part of the NATO alliance. Even so, a scorecard run since 1996 by the Rand Corporation, a U.S. research institute, found that last year, for the first time, China would have air power parity with the U.S. in any conflict over Taiwan.

                    The latest budget increases spending on the diplomatic service at twice the rate of the military. More than 500 Confucius Institutes now teach Chinese language and culture across the globe.

                    For all that, China still has few real allies and remains at best a partial superpower, according to Shambaugh. Its soft power is undercut by its militarization of the South China Sea and concerns its offshore infrastructure loans are just debt traps that will bind smaller nations to its will. Its culture, while rich and deep, has little equivalent to Hollywood, or the ideals of individual freedom.

                    “Their military is still regional, they have almost no power projection capability,” said Shambaugh, adding the same is true of diplomacy, where China has yet to take the lead on a major international agreement. “They are really a very self-interested power,” he said. “They’re not interested in shaping the global order.”

                    That isn’t quite right, according to Henry Wang, founder and president of the Center for China and Globalization in Beijing. True, China doesn’t want to destroy the world order that the U.S. shaped, as it has benefited from it. But it does want to create what he calls globalization 2.0, by adding new international structures including the Asian Infrastructure Investment Bank.

                    “People get scared” by China’s size, according to Wang. China just wants globalization that’s more inclusive, he says.

                    “There’s not a magnanimous bone in the Chinese body politic. It’s all about China,” counters Jim McGregor, chairman for greater China at the consulting firm APCO Worldwide. “Name a country that’s a true friend of China.”

                    More worrying for China’s global ambitions are signs its economic engine could stall. China would, for example, be the first superpower to start getting old before it got rich. According to United Nations projections, its 1.4 billion-strong population is likely to decline and age sharply from as soon as 2023. The number of working age Chinese has already begun to shrink.

                    “I can’t find a single example of a superpower growing when its population was falling,” said Zhang Jian, associate professor at Peking University’s School of Government. The British Empire and the U.S. rose to prominence when their populations were exploding. Xi “needs to take care about the domestic situation and worry less about being a great power,” said Zhang.

                    Nor is China as flush as commonly assumed. Adjusted for purchasing power parity, which accounts for the greater buying power of a dollar spent domestically, China has a larger gross domestic product than the U.S. But that’s a poor measure of international buying power, where dollars are just dollars, according to Tom Orlik, chief economist at Bloomberg Economics.

                    “One way to measure the additional money China has to spend around the world is to look at nominal GDP in U.S. dollar terms. In the five years before the financial crisis, that averaged close to 23 percent annual growth,” said Orlik. “In the last five years, it’s averaged 7 percent—including a year of zero growth in 2016.”

                    China’s GDP per capita is around $9,000 compared to $60,000 for the U.S.. That could mean more room for catch-up growth, but to get there China will have to avoid the middle income trap that keeps many emerging economies stuck below a GDP per capita of around $15,000. To date, no large economy has made the transition without liberalizing.

                    Western economic laws don’t apply, according to Xi loyalists; the strategic smarts of the party will let China blow through the middle income trap—even without the independent judiciary and property rights that fostered innovation elsewhere.

                    Xi has urged China’s scientists to trust a socialist system that stunned the world by producing nuclear and space programs during the 1960s. “By tightening our belts and gritting our teeth, we built ‘two bombs and one satellite!’” Xi said in an April speech. “The next step is to do the same with science and technology.”

                    Under Xi, the party has swallowed the more technocratic government, taking over many of its functions. Major companies have party cells within them. That’s a good thing, in the view of the president’s followers, because it ensures control by a 90 million-strong organization that has developed as a relatively efficient meritocracy.

                    Criticism of China’s heavy corporate debt burden at home—about two and a half times GDP last year—and potential defaults on white elephant infrastructure projects overseas are misplaced, the thinking goes. That’s because clever party officials choose the projects that get big loans. APCO’s McGregor points out the U.S. itself relied on central planning to supercharge its economy, in World War Two.

                    “We’re kind of full of ourselves,” he said of the West. “We talk all this stuff about the superiority of free markets, but how did the U.S. become an economic superpower?”

                    Xi’s consolidation of power has some worried that the scope for bad decisions that go unchallenged is growing. At the National Museum of China in Beijing, a permanent exhibit tells China’s history since the 1839-42 Opium War as a morality tale of colonial oppression, followed by uninterrupted party success. It skips over Mao Zedong’s Great Leap Forward and Cultural Revolution, which caused tens of millions of deaths and vast economic damage.

                    Joerg Wuttke, until last year president of the European Chamber of Commerce in Beijing, notes that sycophancy tends to grow with one-man-rule. He worries also that the party is draining talent from the very bureaucracy on which China’s leaders are depending to deliver sustained prosperity.

                    “The party that was so successful for the last 30 years,” says Wuttke, “is the same party that left behind a trail of destruction for the previous 30 years.”

                    All of this, according to Wang Wen, is to fundamentally misunderstand China by trying to fit it into western experience. He cites the doom-laden warnings of Chinese over-leverage and over-planning that have proved wrong for decades.

                    “Our country has entered a very interesting phase that the Western social sciences can’t explain,” said Wang, singling out conventional economics as especially inept. “If you use Western theory, you cannot understand China’s foreign policy.”
                    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!


                    • Whoever first used the term superpower for China might have been high on Chinese opium. Money they have, but look at their military. Can't take over Taiwan by force, don't want to fight Vietnam, doesn't want to antagonize India, how do they fight the US? And above all, none of their actions remotely resemble the world order shaped by the victors post WWII. It's a highly insecure bully. That's it.

                      Xi Jinping insists on PLA's absolute loyalty to Communist Party

                      And then we have this kind of news coming out in the press for over 4-5 times now, since the Emperor's coronation.
                      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!


                      • Myanmar to trim Chinese loans to avoid debt trap
                        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!


                        • From time to time, everyone needs a good laugh. So here it is - Assault on CPEC
                          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!


                          • China's BRI faces slowdown following US trade measures
                            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!


                            • Believe it when i see it.

                              Mahatir can renegotiate deals because Malaysia & China only have an economic relationship with each other. There is no strategic dimension. China does not provide security to Malaysia. This applies to all countries that only have an economic relationship with China. Course bad choices & mismanagement can result in sub-optimal results as happened with Hambantota.

                              However, this is not the case with Pakistan where the strategic or security partnership dominates the economic one.

                              Pakistan rethinks its role in Xi’s Belt and Road plan | FT | Sept 09 2018

                              Islamabad seeks to review deals at heart of China’s global infrastructure drive

                              Jamil Anderlini, Henny Sender and Farhan Bokhari in Islamabad SEPTEMBER 9, 2018

                              Pakistan plans to review or renegotiate agreements reached under China’s Belt and Road Initiative, joining a growing list of countries questioning the terms of their involvement in Beijing’s showpiece infrastructure investment plan.

                              Pakistani ministers and advisers say the country’s new government will review BRI investments and renegotiate a trade agreement signed more than a decade ago that it says unfairly benefits Chinese companies.

                              The projects concerned are part of the $62bn China-Pakistan Economic Corridor plan — by far the largest and most ambitious part of the BRI, which seeks to connect Asia and Europe along the ancient silk road.

                              They include a huge expansion of the Gwadar port on Pakistan’s south coast, as well as road and rail links and $30bn worth of power plants.

                              “The previous government did a bad job negotiating with China on CPEC — they didn’t do their homework correctly and didn’t negotiate correctly so they gave away a lot,” Abdul Razak Dawood, the Pakistani member of cabinet responsible for commerce, textiles, industry and investment, told the Financial Times.

                              “Chinese companies received tax breaks, many breaks and have an undue advantage in Pakistan; this is one of the things we’re looking at because it’s not fair that Pakistan companies should be disadvantaged,” he said.

                              Wang Yi, Chinese foreign minister, who visited Islamabad at the weekend, indicated that Beijing could be open to renegotiating its 2006 trade deal with Pakistan. “CPEC has not inflicted a debt burden on Pakistan,” he told reporters. “When these projects get completed and enter into operation, they will unleash huge economic benefits.”

                              But Islamabad's second thoughts follow other recent setbacks for BRI, which is seen by many as a bid by China’s President Xi Jinping to extend Beijing’s influence throughout the world. Governments in Malaysia, Sri Lanka, Myanmar and elsewhere have already expressed reservations over the onerous terms of Chinese BRI lending and investment.

                              Imran Khan, the former cricket star who was elected Pakistan’s prime minister last month, has established a nine-member committee to evaluate CPEC projects. It is scheduled to meet for the first time this week and will “think through CPEC — all of the benefits and the liabilities”, said Mr Dawood, who sits on the new committee.

                              “I think we should put everything on hold for a year so we can get our act together,” he added. “Perhaps we can stretch CPEC out over another five years or so.”

                              Several other officials and advisers to the Khan government concurred that extending the terms of CPEC loans and spreading projects out over a longer timeframe was the preferred option, rather than outright cancellation.

                              Pakistan is in the middle of a financial crisis and must decide in the coming weeks whether to turn to the IMF for its 13th bailout in three decades, as pressure on the Pakistani rupee makes the burden of servicing foreign currency debt more onerous.

                              Asad Umar, Pakistan’s new finance minister, told the FT he was evaluating a plan that would allow Islamabad to avoid an IMF programme, which several people close to the government say would involve new loans from China and perhaps also from Saudi Arabia.

                              Mr Umar and Mr Dawood both said Pakistan would be careful not to offend Beijing even as it takes a closer look at CPEC agreements signed over the past five years. Mr Khan was elected on a platform of anti-corruption and transparency and has pledged to publish details of existing CPEC contracts.

                              “We don’t intend to handle this process like Mahathir,” Mr Umar said, referring to the newly elected nonagenarian Malaysian prime minister who has warned about the risk of Chinese “neo-colonialism”. Malaysia has cancelled three China-backed pipeline projects and put a showpiece BRI rail link under review.

                              The rethink in Islamabad comes as Mr Xi has doubled down on the increasingly controversial BRI. Last week he hosted a ceremony celebrating five years since he first unveiled his plan for the “silk road economic belt” across Eurasia and “21st century maritime silk road” covering ports and sea lanes between China and Europe.

                              “The broad support for the BRI shows aspiration from countries involved, developing countries in particular, for peace and development”, and affirms China’s vision of a “community of shared destiny for humanity”, Mr Xi said at the ceremony.
                              Interesting bit i heard about BRI is when it was mentioned years back it got laughed at in China. Slowly things started to change as people saw chances of career advancement by getting behind it.


                              • Condemned to succeed

                                According to some estimates, China has already become the largest economy in the world.
                                Keep on wanking to China' accomplishment, coz' that is what failed terrorists states are all about.
                                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!