CPEC in all dimensions

Introduction :
Conceptualization of term CPEC, a flagship of obor:
What is OBOR:

 China’s multibillion-dollar One Belt, One Road (OBOR) infrastructure development project
linking the old Silk Road with Europe, is a manifestation of China’s growing geopolitical
ambitions.
 A brainchild of President Xi Jinping, perhaps, the most powerful Chinese leader after Mao
Zedong, OBOR has now been under development for four years, spanning 68 countries and
accounting for up to 40 per cent of global GDP.
 China Development Bank says it will invest around $890bn (£579bn) into more than 900
projects across 60 countries

Why OBOR:
  China is spending roughly $150bn a year in the 68 countries that have so far signed on to the
plan. According to Chinese government figures, around $1 trillion have already been
invested in OBOR, with several more trillions due to be invested over the next decade.
 This way Beijing hopes to find a more profitable avenue for the country’s vast foreign
exchange reserves, mostly invested in low-interest-bearing US government securities.

The recipients of OBOR initiatives:

 The recipients of OBOR initiatives in Africa are Kenya, Tanzania and Zimbabwe.
 Eastern Europe presents the farthest geographic stretch of OBOR, and of China’s reach in
historically more advanced capitalist economies.
 In Poland, a railway project was inaugurated in 2013.
 Hungary has become the first EU member-state to initiate a Chinese high-speed rail project
under OBOR. Russia and China are collaborating on the massive Power of Siberia gas pipeline
project.
 In Southeast Asia, one of the most recent OBOR rail projects to be launched is the high-
speed railroad (costing $6 billion) connecting the Laotian capital of Vientiane to China.
 A rail project has also been completed in Indonesia.
A rail project in Afghanistan is ongoing

SIX ECONOMIC CORRIDOR UNDER OBOR

(1)The New Eurasia Land Bridge Economic Corridor

 The New Eurasia Land Bridge, also known as the Second Eurasia Land Bridge, is an
international railway line running from Lianyungang in China’s Jiangsu province through
Alashankou in Xinjiang to Rotterdam in Holland.
 The China section of the line comprises the Lanzhou-Lianyungang Railway and the Lanzhou-
Xinjiang Railway and stretches through eastern, central and western China.
 After exiting Chinese territory, the new land bridge passes through Kazakhstan, Russia,
Belarus and Poland, reaching a number of coastal ports in Europe.

Capitalising on the New Eurasia Land Bridge:

 China has opened an international freight rail route linking Chongqing to Duisburg
(Germany);
 a direct freight train running between Wuhan and Mělník and Pardubice (Czech Republic);
 a freight rail route from Chengdu to Lodz (Poland);
 and a freight rail route from Zhengzhou to Hamburg (Germany).
All these new rail routes offer rail-to-rail freight transport, as well as the convenience of “one
declaration, one inspection, one cargo release” for any cargo transported. 

(2)The China-Mongolia-Russia Economic Corridor

 In September 2014, when the three country’s heads of state met for the first time at
the Shanghai Co-operation Organisation (SCO)  Dushanbe Summit, agreement was reached
on forging tripartite co-operation on the basis of China-Russia, China-Mongolia and Russia-
Mongolia bilateral ties.
 At the same meeting, the principles, directions and key areas of trilateral co-operation were
defined.
 The three heads of state also agreed to bring together the building of China’s Silk Road
Economic Belt, the renovation of Russia’s Eurasia Land Bridge and the proposed
development of Mongolia’s Steppe Road.
 This commitment will strengthen rail and highway connectivity and construction, advance
customs clearance and transport facilitation, promote cross-national co-operation in
transportation, and help establish the China-Russia-Mongolia Economic Corridor.
 In July 2015, the three leaders held a second meeting in the Russian city of Ufa. This second
summit saw the official adoption of the Mid-term Roadmap for Development of Trilateral
Co-operation between China, Russia and Mongolia.

(3) China-Central Asia-West Asia Economic Corridor

 The China-Central Asia-West Asia Economic Corridor runs from Xinjiang in China and exits
the country via Alashankou to join the railway networks of Central Asia and West Asia before
reaching the Mediterranean coast and the Arabian Peninsula.
 The corridor mainly covers five countries in Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan,
Uzbekistan and Turkmenistan) as well as Iran and Turkey in West Asia.
 At the third China-Central Asia Co-operation Forum, held in Shandong in June 2015, a
commitment to “jointly building the Silk Road Economic Belt” was incorporated into a joint
declaration signed by China and the five Central Asian countries.
 Prior to that, China had signed bilateral agreements on the building of the Silk Road
Economic Belt with Tajikistan, Kazakhstan and Kyrgyzstan.
 China had also concluded a co-operation document with Uzbekistan on the building of the
Silk Road Economic Belt. This was aimed at further deepening and expanding mutually
 beneficial co-operation in such areas as trade, investment, finance, transport and
communication.
 The national development strategies of the five Central Asian countries – including
Kazakhstan’s “Road to Brightness”, Tajikistan’s “Energy, Transport and Food” (a three-
pronged strategy aimed at revitalising the country), and Turkmenistan’s “Strong and Happy
Era” – all share common ground with the establishment of the Silk Road Economic Belt.

(4)China-Indochina Peninsula Economic Corridor

 During the Fifth Leaders Meeting on Greater Mekong Sub-regional Economic Co-operation,
held in Bangkok in December 2014, Chinese Premier Li Keqiang put forward three
suggestions with regard to deepening the relations between China and the five countries in
the Indochina Peninsula.
 The suggestions included:
 to jointly planning and building an extensive transportation network, as well as number of
industrial co-operation projects;
 creating a new mode of co-operation for fundraising; and
 promoting sustainable and co-ordinated socio-economic development.
 Currently, the countries along the Greater Mekong River are engaged in building nine cross-
national highways, connecting east and west and linking north to south.
 A number of these construction projects have already been completed. Guangxi, for
example, has already finished work on an expressway leading to the Friendship Gate and the
port of Dongxing at the China-Vietnam border.
 The province has also opened an international rail line, running from Nanning to Hanoi, as
well as introducing air routes to several major Southeast Asian cities.

(5) Bangladesh-China-India-Myanmar Economic Corridor

 In a series of meetings during Premier Li Keqiang’s visit to India in May 2013, China and India
jointly proposed the building of the Bangladesh-China-India-Myanmar Economic Corridor.
 In December 2013, the Bangladesh-China-India-Myanmar Economic Corridor Joint Working
Group convened its first meeting in Kunming.
 Official representatives from the four countries conducted in-depth discussions with regard
to the development prospects, priority areas of co-operation and co-operation mechanisms
for the economic corridor.
 They also reached extensive consensus on co-operation in such areas as transportation
infrastructure, investment and commercial circulation, and people-to-people connectivity.
  The four parties signed meeting minutes and agreed the Bangladesh-China-India-Myanmar
Economic Corridor joint study programme, establishing a mechanism for promoting co-
operation among the four governments.

(6) China Pakistan economic corridor :

A flagship project of one belt one road in order to renew the historical silk route to connect south
east asia to western europe including middle east.

 The China Pakistan Economic Corridor (CPEC) is a bouquet of projects, presently under
construction, at a cost started from $46 billion now it is 62 bn and has a possibility to reach
at 72 bn dollars which aims to improve Pakistani infrastructure and to deepen the economic
and political ties between China and Pakistan.
 It aims over 15 years to create a 2000-mile economic corridor between Gwadar Port to
China’s North Western region of Xinjiang through 2,700 km long highway from Kashgar to
Gwadar, railway links for freight trains, oil and gas pipelines and an optical fibre link. The
actualisation of this project will create nearly 7, 00,000 new jobs and will add up to 2. 5% to
Pakistan’s annual growth rate.
 Presently China is some 13,000 Km from Persian Gulf with a long shipping time of about 45
days. CPEC will shrink this distance to merely 2500 Km (80% reduction). The shipping time
will reduce to 10 days (78% reduction).
 Bulk of China’s trade is through the narrow sea channel of the Strait of Malacca. Top security
analysts are of the opinion that in the event of a future war in Asia, United States’ Navy can
block the Strait of Malacca which will suffocate China’s trade route. CPEC, besides providing
an alternate route, will reduce the shipping time, from China to Europe, from 45 days 10
days.
 Reasons behind CPEC
CHINA’s PERSPECTIVE:
1. Secure shipping lanes:

 As the world’s largest importer of oil and gas, China needs to ensure that its shipping routes
are not vulnerable at the choke point – the Malacca Straits from US , india and its East asian
islands.
 Hence, Corridors 1 and 2 of OBOR have immense strategic value for China, not just for fuels
and minerals, but also to access Central Asia, the Middle East and Africa.

2. Develop Western China:

 While the coastal areas are largely developed, Western China is somewhat neglected.
 For political harmony, policymakers need to focus on Western China, which explains why
Corridors 1, 2 and 3 of OBOR originate out of the Western provinces.

3. SHORT RUOTE:
 Every day, China spends around $18 million on import of 6.3 million barrels of oil as
shipment costs from the Middle East, accounting for 80% of its all oil needs, routing through
the Strait of Malacca covering a distance of 9,912 miles.
 By cutting a corridor directly from Kashgar to Gwadar, it will bring these costs significantly
down to one-third of the current levels as new distance will be 3,626 miles to Central China,
whereas only 2,295 miles till West China.

4. Use China’s spare capacity

(the ability of a factory, company, or industry to produce more of a product than is now
being produced):

 Building physical infrastructure has fueled China’s economic growth.

 With growing concerns that policymakers may have over-invested, China’s installed capacity
in steel, cement, bulk chemicals and heavy machinery, is now under-utilised(to fail to utilize
fully).
 Building infrastructure in neighbouring countries would be a convenient way to use this
spare capacity.

5. Create new export markets:

 China perhaps realises that exports to the member countries of the Organisation for
Economic Co-operation and Development (OECD), which have been driving its economic
growth, may continue to fall.
 In effect, it needs to cultivate new markets in Africa and Central Asia, which have significant
growth potential.

6. Create goodwill with neighbouring countries:

 OBOR entails building infrastructure , railway and road tacks, and establishing training
institutes and schools in participating countries, which should support the project and be
mutually beneficial.

GLOBAL PERSPECTIVE BEHING CPEC:

1. CARs REGIONS(ACCESS TO WARM WATERS)
 The past economy can not materialize regional trade of Central Asia with Pakistan ,as the
countries are landlocked nations.
 They do not have any warm water ports for trade ,which Pakistan will eventually become a
beneficiary of leading to similar agreements like the case with Afghanistan whose trade
transit from Pakistan.

2. RUSSIA(ACCESS TO WARM WATER)

  Russia has been for a long time ,been looking for Warm Water Ports to achieve a year
around trade scenario ,
 which it will achieve through Gawadar ,of which the beneficiary will again be Pakistan.

3. CHINA(SHORTEN ITS ROUTE)

 China has been trading through the Strait of Malacca ,which in modern times has become a
liability ever since it laid claim to the South China sea ,
 so Pakistan not only a shorter and cheaper route for its Imports and Exports but will also
become a vital route in case of any major confrontation.

4. Pakistan-Iran-Turkey

 will be connected by pipelines ,modern trade route and railways,

 plus through this trade Route Iran and turkey will be able to connect to China.

5. Saudi-Pakistan-China :
 will also connect through this route in recent times Saudi has started to diversify its
economy and sees china as its major trade partner

6. Nepal-China-Pakistan:
 with Nepal becoming a victim of Indian blockade various times which leads to economic and
political constrains ,the Route is also vital for Nepal ,to connect it self to the world.

PAKISTAN PERSPECTIVE BEHIND CPEC:

Trasportation problems:
 In 2011, the Government of Pakistan (GoP) estimated that the transport sector constituted
around 10 percent of the country’s GDP, contributing towards up to 6% increase in
employment in the country.
 However, due to poor transport network and logistics, the inefficiencies have cost the
economy more than 4%of its GDP per annum.
 In addition, the State Bank of Pakistan (2011) has estimated that logistical bottlenecks
increase the cost of production of our goods by about 30 percent
 RAILWAYS NETWORKS and losses:Obsolete infrastructure, technology and equipment
cause the railway network to experience severe delays and safety hazards.
 It is estimated that the total freight carried has decreased from 7.7 million tons (1995) to 4.6
million tons (2013). 
 These inefficiencies have cost the economy about Pkr Rs.150 Billion per annum, severely
reducing the country’s regional competitiveness.
ENERGY PROBLEMS:
According to State minister for water and power, Abid sher Ali:

 the total electricity demand in Pakistan stood around 16,000 MW while the total generation
was 12,000 MW, leaving behind 4,000 MW shortage.
 “The prevailing shortfall has been caused by a drop in the hydel generation which was
producing only 1,600 MW out of its total capacity of 7,000 MW,”
 He said since 2013 up to 4,200 MW electricity had been added to the national grid by the
incumbent government.
 the country’s electricity generation capacity will increase to over 18,000 megawatt by the
month of July and up to 26,000 MW by March, 2018.

the Ministry of Finance estimates that energy shortages have reduced annual economic growth by
two percentage points, on average, over the last nine years.

The energy crisis has cost the national economy dearly, not only the loss to GDP in terms of missing
energy due to the demand-supply gap but also the loss to industrial and commercial activities due to
load-shedding and flight of capital from the country. Safe estimates suggest that it has cost the
national economy over $100 billion.

JOBS AND REMITTANCE FALLED:

 Pakistanis based in Saudi Arabia sent $3.17bn remittances in July-Jan against $3.36bn a year
ago, showing a decline of 5.65pc.
 Remittances from the United States declined 9.1pc to $1.34bn in Jul-Jan.

 The State Bank of Pakistan (SBP) reported on Friday workers’ remittances during the first
seven months (July-Jan) of the fiscal year fell to $10.94 billion, down 1.87 per cent from a
year ago.

INFRASTRUCTURE:
 Improper railway and road tracks for transformation of goods
 Lack of surveillance system to keep monitor citizen and terrorist activities
 Improper irrigation system for agricultural sector
 Traditional and old machineries for the industrial sector

ECONOMY:
 Have a look on economic crisis lecture:
  Sadly, this is no longer true. Pakistan’s economic growth was over 6pc per annum over the
30 years, 1960-90, which enabled its GDP to grow six-fold and per capita income to grow by
3pc per annum.
 Since 1990, the GDP growth has declined considerably and has averaged less than 4pc per
annum over 2007-17, with per capita income growing less than 2pc per annum.

AGRICULTURAL:
Have a look on agricultural problem notes

 THE announcement of sector-wise growth numbers provides confirmation of some of the

problems facing agriculture in Pakistan.
 A negative growth rate of 0.19pc, on the back of a 28pc drop in cotton production, is
worrying not just because it chops off nearly 0.4pc from overall GDP growth, but because
nearly 40pc of the labour force is associated with the farm economy.

SOIL EROSION:

 One being no mechanism has been adopted to eradicate the soil erosion and even after
harvesting nothing is done to restore the soil energy.
 Therefore, the fertility of soil is decreasing day by day.
 The thickness of fertile layer of soil in Pakistan is more than 6 inches but the average yield is
lower than other countries where the layer of fertile soil is only 4 inches.

LACK OF WATER:

 Water in Pakistan's rivers has gone down to perilously low levels. The reason for this is not
just lack of rains.
 India is restricting water flow of rivers that originate from her and then flow into Pakistan,
especially the Indus, Chenab and Jhelum rivers that pass through Indian held Kashmir.
 Pakistan has raised objections to Indian water projects, but a World Bank-appointed and
supposedly "neutral" expert rejected most of the Pakistani objections, while also advising
India to make some changes to the dam's height.
 Pakistani commentators, pressure groups and leaders are convinced that India is controlling
the river waters to strangulate Pakistan's agriculture, which would definitely affect Pakistani
exports and increase its dependency on food imports.

NO IRRIGATION SYSTEM:

 Despite being the fifth richest country in water resources , Pakistan is estimated to be losing
13 million cusecs [approximately 368,119 cubic meters/second] of water every year from its
rivers into the sea, as it does not have enough reservoirs or dams to store water.
 The archaic method of flood irrigation is still in practice in whole of the country which wastes
almost 50 to 60 percent of water.
 A new irrigation system called drip irrigation system has been introduced in many parts of
the world.
  This not only saves water but also gives proper quantity of water according to the needs of
plants. However, this system is yet to implemented in our country if we are to maximize our
water utility. 

TRADITIONAL METHODS OF HARVESTING AND CULTIVATING:

 Furthermore, owing to traditional methods of cultivation and harvesting, Pakistan has low
yield per acre that means the average crop in Pakistan is just 1/4th of that of advanced
states.
 Where as Nepal, India and Bangladesh are using modern scientific methods to increase their
yield per acre.
 For this purpose, these states are using modern machines to improve their yield. Also, the
small farmers are increasing in our country as the lands are dividing generation by
generation. So, there are large number of farmers who own only 4 acres of land.
 These small farmers do not get credit facilities to purchase seeds, pesticides, fertilizers etc.
Additionally, a large portion of land is owned by feudal and the farmers who work on their
lands, are just tenants.
 This uncertain situation of occupancy neither creates incentive of work hard nor attracts
capital investment.

Monopoly of Foreign Companies: 

 Along with these issues, the monopoly of Foreign Big Wigs and false policies of government
must not be ignored.
 The pesticides companies are sorting partnership with "World Bank". These companies are
selling adulterated and expensive pesticides to poor farmers thus leaving them helpless.
 These pesticides are not only hazardous for health but also filling the pockets of companies.
By moving according to the world bank these companies are gaining their own aims.
 Moreover there is a conflict of interests. It is not ensured that either the company
conducting the agreement is basically trying to get access to international market or just
working according to their aims.

INDUSTRIAL:
Have a look on Pakistan industrial problems notes

BALOCHISTAN ISSUE:
 The sense of deprivation, discrimination and lack of proper management and allocation of
resources would be tackled under CPEC.
 The people would have economic progress and would get opportunities to trade and invest.
  The oil and mineral resources of the Province would be explored and the establishment of
Gwadar Port, Gwadar International Airport and Special Economic Zones (SEZ) would further
enhance the significance of the strategic and economic location of Balochistan.
 CPEC would open job opportunities for the Balochi youth that would acquire modern
innovative skills in the future – being part of CPEC.

SURVEILLANCE ISSUE:
 Lack of surveillance system in major cities to monitor people in order to reduce crime rate
 Terrorist attacks kill 1,079 people in year 2015: PIPS report(Pakistan institute of peace
studies) because of uninstalled surveillance system

CPEC AND PAKISTAN

1. AGRICULTURAL TARGETS :
 For instance, “due to lack of cold-chain logistics and processing facilities, 50% of agricultural
products go bad during harvesting and transport”, it notes.

The plan discusses those engagements in considerable detail. Ten key areas for engagement are
identified along with seventeen specific projects.

They include the construction of one NPK fertilizer plant as a starting point “with an annual output
of 800,000 tons”.

LEASING:

Enterprises will be inducted to lease farm implements, like tractors, “efficient plant protection
machinery, efficient energy saving pump equipment, precision fertilization drip irrigation
equipment” and planting and harvesting machinery.

PROCESSING PLANTS:

 Meat processing plants in Sukkur are planned with annual output of 200,000 tons per year,
and two demonstration plants processing 200,000 tons of milk per year.
 In crops, demonstration projects of more than 6,500 acres will be set up for high yield
seeds and irrigation, mostly in Punjab.
 In transport and storage, the plan aims to build “a nationwide logistics network, and
enlarge the warehousing and distribution network between major cities of Pakistan” with a
focus on grains, vegetables and fruits.
 Storage bases will be built first in Islamabad and Gwadar in the first phase, then Karachi,
Lahore and another in Gwadar in the second phase, and between 2026-2030, Karachi,
Lahore and Peshawar will each see another storage base.
  VEGETABLE PROCESSING PLANTS:
 Asadabad, Islamabad, Lahore and Gwadar will see a vegetable processing plant, with annual
output of 20,000 tons, fruit juice and jam plant of 10,000 tons and grain processing of 1
million tons.
 A cotton processing plant is also planned initially, with output of 100,000 tons per year.

2. INDUSTRIAL TARGETS:
For industry, the plan trifurcates the country into three zones:

 western and northwestern,

 central
 southern.

The western and northwestern zone: Covering most of Balochistan and KP province,
MINERAL EXTRACTION:

GOLD AND DIAMONDS:

 is marked for mineral extraction, with potential in chrome ore, “gold reserves hold a
considerable potential, but are still at the exploration stage”, and diamonds.

MARBLE

 Already, China is Pakistan’s largest buyer of processed marble, at almost 80,000 tons per
year.
 The plan looks to set up 12 marble and granite processing sites in locations ranging from
Gilgit and Kohistan in the north, to Khuzdar in the south.

The central zone:

is marked for textiles, household appliances and cement.

1. CEMENT:
 Four separate locations are pointed out for future cement clusters: Daudkhel, Khushab,
Esakhel and Mianwali.
 The case of cement is interesting, because the plan notes that Pakistan is surplus in cement
capacity, then goes on to say that “in the future,
 there is a larger space of cooperation for China to invest in the cement process
transformation”.

For the southern zone:

DEVELOPMENT OF INDUSTRIES: KARACHI
  the plan recommends that “Pakistan develop petrochemical, iron and steel, harbor industry,
engineering machinery, trade processing and auto and auto parts (assembly)” due to the
proximity of Karachi and its ports.

FOR AUTO INDUSTRIES:

 This is the only part in the report where the auto industry is mentioned in any substantive
way, which is a little surprising because the industry is one of the fastest growing in the
country.
 The silence could be due to lack of interest on the part of the Chinese to acquire stakes, or to
diplomatic prudence since the sector is, at the moment, entirely dominated by Japanese
companies (Toyota, Honda and Suzuki).

Gwadar, also in the southern zone,

 “is positioned as the direct hinterland connecting Balochistan and Afghanistan.” As a CPEC
entreport,
 the plan recommends that it be built into “a base of heavy and chemical industries, such as
iron and steel/petrochemical”.

3. FIBEROPTIC and Surveilance targets:

An MoU for such a link was signed in July 2013, at a time when CPEC appeared to be little more than
a road link between Kashgar and Gwadar.

But the plan reveals that the link goes far beyond a simple fibreoptic set up.

REASONS:

 China has various reasons for wanting a terrestrial fibreoptic link with Pakistan, including its
own limited number of submarine landing stations and international gateway exchanges
which can serve as a bottleneck to future growth of internet traffic. This is especially true for
the western provinces.
 “Moreover, China’s telecom services to Africa need to be transferred in Europe, so there is
certain hidden danger of the overall security” says the plan.
 Pakistan has four submarine cables to handle its internet traffic, but only one landing
station, which raises security risks as well.
So the plan envisages a terrestrial cable across the Khunjerab pass to Islamabad, and a submarine
landing station in Gwadar, linked to Sukkur. From there, the backbone will link the two in
Islamabad, as well as all major cities in Pakistan.

Digital Television Terrestrial Multimedia Broadcasting (DTMB):

 The expanded bandwidth that will open up will enable terrestrial broadcast of digital HD
television, called Digital Television Terrestrial Multimedia Broadcasting (DTMB).
 This is envisioned as more than just a technological contribution.
 It is a “cultural transmission carrier.
 The future cooperation between Chinese and Pakistani media will be beneficial to
disseminating Chinese culture in Pakistan, further enhancing mutual understanding between
the two peoples and the traditional friendship between the two countries.”

ELECTRONIC MONITORING AND CONTROL SYSTEM:

 It also seeks to create an electronic monitoring and control system for the border in
Khunjerab, as well as run a “safe cities” project.
 The safe city project will deploy explosive detectors and scanners to “cover major roads,
case-prone areas and crowded places…in urban areas to conduct real-time monitoring and
24 hour video recording.”
 Signals gathered from the surveillance system will be transmitted to a command centre, but
the plan says nothing about who will staff the command centre, what sort of signs they will
look for, and who will provide the response.

PILOT SAFE CITY(Surveilence)

 “There is a plan to build a pilot safe city in Peshawar, which faces a fairly severe security
situation in northwestern Pakistan”
 the plan says, following which the program will be extended to major cities such as
Islamabad, Lahore and Karachi, hinting that the feeds will be shared eventually, and perhaps
even recorded.

4. TOURISM AND RECREATION Targets:

Development of a “coastal tourism” industry:

It speaks of a long belt of coastal enjoyment industry that includes yacht wharfs, cruise homeports,
nightlife, city parks, public squares, theaters, golf courses and spas, hot spring hotels and water
sports.

The belt will run from Keti Bunder to Jiwani, the last habitation before the Iranian border.

International cruise clubs in gawader:

that “provide marine tourists private rooms that would feel as though they were ‘living in the
ocean’”. And just as the feeling sinks in, it goes on to say that “for the development of coastal
vacation products, Islamic culture, historical culture, folk culture and marine culture shall all be
integrated.” Apparently more work needs to be done here too.

For Ormara:

the plan recommends building “unique recreational activities” that would also encourage “the
natural, exciting, participatory, sultry, and tempting characteristics” to come through.

For Keti Bunder :

it recommends wildlife sanctuaries, an aquarium and a botanical garden.

For Sonmiani, on the eastern edge of Karachi,

“projects like a coastal beach, extended greenway, coastal villa, car camp, SPA, beach playground
and a seafood street can be developed.”

5. Finance and risk targets

 In any plan, the question of financial resources is always crucial.

 The long term plan drawn up by the China Development Bank is at its sharpest when
discussing Pakistan’s financial sector, government debt market, depth of commercial
banking and the overall health of the financial system.
 It is at its most unsentimental when drawing up the risks faced by long term investments in
Pakistan’s economy.

BIGGEST RISK ;POLITICS AND SECURITY:

 “There are various factors affecting Pakistani politics, such as competing parties, religion,
tribes, terrorists, and Western intervention” the authors write.
 “The security situation is the worst in recent years”.

The next big risk: INFLATION:

 is inflation, which the plan says has averaged 11.6 per cent over the past 6 years. “A high
inflation rate means a rise of project-related costs and a decline in profits.”
 Efforts will be made, says the plan, to furnish “free and low interest loans to Pakistan” once
the costs of the corridor begin to come in. But this is no free ride,

RESPONISIBILTY OF GOVTS: It asks for financial guarantees:

 it emphasizes. “Pakistan’s federal and involved local governments should also bear part of
the responsibility for financing through issuing sovereign guarantee bonds, meanwhile
protecting and improving the proportion and scale of the government funds invested in
corridor construction in the financial budget.”
 To provide credit enhancement support for the financing of major infrastructure projects,
enhance the financing capacity, and protect the interests of creditors.”
MORE FDI STRESSES TO ECONOMY:

 Relying on the assessments of the IMF, World Bank and the ADB, it notes that Pakistan’s
economy cannot absorb FDI much above $2 billion per year without giving rise to stresses in
its economy.
 “It is recommended that China’s maximum annual direct investment in Pakistan should be
around US$1 billion.”
 Likewise, it concludes that Pakistan’s ceiling for preferential loans should be $1 billion, and
for non preferential loans no more than $1.5 billion per year.

EXCHANGE RATE RISK:

 The other big risk the plan refers to is exchange rate risk, after noting the severe weakness in
Pakistan’s ability to earn foreign exchange.
 To mitigate this, the plan proposes tripling the size of the swap mechanism between the
RMB and the Pakistani rupee to 30 billion Yuan, diversifying power purchase payments
beyond the dollar into RMB and rupee basket, tapping the Hong Kong market for RMB
bonds, and diversifying enterprise loans from a wide array of sources.
 The growing role of the RMB in Pakistan’s economy is a clearly stated objective of the
measures proposed.

6. TRANSPORT TARGETS
Under CPEC road portfolio there are currently 4 main projects planned or are under way;
 Northern,
 Western,
 Central Alignments
 Peshawar-Karachi Motorway.

These four main networks are made up of 53 different road projects (7,302 KM) which include up-
gradation, expansion, complete overhauls and brand new constructions (NHA, 2017).

The aim of these projects

is to provide the infrastructure needed to support the CPEC initiative and provide a viable
transportation network to all regions under CPEC.

The Gwadar-Quetta 650km long road was completed by December 2016 transforming what was
previously a two day journey to merely eight hours.

7. ENERGY TARGETS
 According to the new agreement after obor summit, there shall be 15 CPEC prioritized
energy projects with the installed capacity of 11,110MW.
 The Three Gorges Pakistan Second Wind Power Project (50MW),
 the Three Gorges Pakistan Third Wind Power Project (50MW),
 the Hubco Coal Power Plant (1,320MW)
 Oracle local coal power plants (1,320MW) are included in the prioritized list.
 Chinese stance in this regard is very clear: “We come to Pakistan not for profits only. We
attach more importance to development of local industries, helping them to become more
sustainable”.
 By now many of these energy projects have shown considerable progress. The energy
projects include one solar, four wind, and four coal power plants, which are all anticipated to
complete by 2019 with the capacity of 6810 MW.
 Over 12,568 Megawatts of electricity would be added to the national grid after completion
of a number of power generation projects by year 2018.
 Under a long term plan, the country would have an additional generation capacity of 30,948
MW by the year 2022 through Neelum Jhelum, Chashma nuclear, wind, hydel, LNG,
Jamshoro Coal and Bagasse power projects, according to a senior official of the Ministry of
Water and Power here.
 Around 8,630 MW would be generated under the prioritized China Pakistan Economic
Corridor (CPEC) projects in the same period.
 Under the Power Generation Policy 2015, several initiatives were taken including
Transmission Lines Investment Policy; focus on Coal Based Power, LNG Based Power, CPEC
power generation projects of 8630 MW, production through LNG – 3600 MWs and the
CASA-1000 project.
 Giving a breakdown of power generation by year 2022, he said, a total of 30,948 MWs would
be generated; of which 38% would be obtained from Hydel, 14% from Renewable, 16% from
imported coal, 13% from indigenous coal, 12% from imported LNG and 7% from nuclear.
 Under the CPEC, the work was in progress on the $ 36 billion power projects and the
completion of these projects will make the country self-sufficient in power sector.
 He clarified that the inflow of foreign capital in power projects under CPEC was investment
and not loan.
 Under the Prime Minister’s direction, transparency was being ensured in all power projects
including wind, hydel, coal and solar.
 He said, in 2016 the estimated investment in the power sector was estimated to be US$
3,617 million. In 2017 it was expected to be US$ 11,420 million and by 2019-22 it would be
US$ 36,084 million.

IMPACTS OF CPEC
 (GLOBAL AND POSITIVE PERSPECTIVE)
GLOBAL CONNECTIVITY

RUSSIA-CPEC:
 The last CPEC channel to be discussed is that between Pakistan and its northern partners in
Russia and Central Asia.
 Moscow and its regional allies obviously don’t need to go through Pakistan in order to trade
with China, but they do need to utilize CPEC if they are to gain market access to East Africa,
South Asia, and ASEAN.
 Russia doesn’t currently have many economic interests in Africa, but its government is keen
to develop the country’s commercial ties with India and ASEAN, neither of which are
exclusively dependent on CPEC but could be greatly assisted by it.
 In connection with this, Russia could potentially access Pakistan via the narrow border that it
shares with China between Altai and Xinjiang, through which Moscow is already
countenancing the possibility of energy and waterpipelines.
 If Russian decision makers continue to pay attention to this strategic corridor, then it’s likely
that they’ll eventually realize that it could also be used for connecting Siberia to the Indian
Ocean by means of CPEC and thus facilitating the country’s trade with India and ASEAN.

CENTRAL ASIAN REGIONS AND CPEC:

 As for the Central Asian republics, they’re not under any such diplomatic pressure to publicly
distance themselves from CPEC, and it’s very likely that they’ll take advantage of this project
in order to achieve access to the wider global economy and the valuable marketplaces of
East Africa, South Asia, and ASEAN.
 Additionally, CPEC could also potentially open up another avenue for Central Asian-EU trade,
as well as commercial interactions with the Mideast, so it’s improbable that the landlocked
countries will avoid using it.
 Given the Central Asian countries’ close relationship with China, there’s a greater likelihood
that they’d defer to using CPEC as opposed to the North-South Corridor for conducting their
extra-regional trade, though the latter could still be exploited one day to uncontrollably push
Indian goods onto their markets in a desperate bid to displace China’s influence.

CPEC AND EAST AFRICA:

China is constructing four ultra-strategic infrastructure corridors along the eastern part of the
continent which could directly link up with CPEC after their cross-oceanic journey to Gwadar.

From north to south,

these are the

(1) Ethiopia-Djibouti railway; the LAPSSET Corridor between Ethiopia, South Sudan, and Kenya;
(2) the Standard Gauge Railway (SGR) across Kenya and Uganda;
(3) and the Central Corridor (CC) from Tanzania to Rwanda and Burundi.
(4) there’s also the 1970s legacy project of the TAZARA railway which has recently been
modernized and connects the coastal country to its landlocked and copper-rich neighbor of
Zambia.
 It should also be said the SGR, CC, and TAZARA have the very real possibility of laying the
foundation for an interoceanic North and South Trans-African Railway bridging the
continent’s Indian and Atlantic coasts.
 Due to physical constraints, all bilateral trade must cross the Indian Ocean for some length
of distance or another, so it only makes sense that this will be expedited via CPEC and its
conveniently located northern oceanic port of Gwadar.
 In terms of the bigger picture, this means that Pakistan is poised to become the geographic
interface through which Chinese-African trade is conducted, which could thus make
Islamabad a future player in East African affairs.
 Being the most powerful Muslim country and the origin of some British-era colonial
descendants, Pakistan can leverage its religious and ethnic links along the majority-Muslim
East African coast in order to prospect new networking and investment opportunities that
simultaneously work out to its own and China’s strategic benefit through the overlapping
complementarities of Isla

CPEC- MIDDLEEAST:
TURKEY AND LEVENTINE COUNTRIS:
 Turkey and the Levantine countries could conduct their trade with China just like the
Europeans do through the Mediterranean, Suez Canals, and Bab El Mandeb en route to
CPEC.
 If the geopolitical situation allows them to, however, they could also transport their goods
overland through Iraq and onwards to the Persian Gulf, from where they could then trade
with China just like most of the Gulf Kingdoms do by crossing the Strait of Hormuz and
accessing CPEC.
 The UAE, Oman, and Yemen importantly avoid any of these three chokepoints by having
direct maritime connectivity to CPEC, thus giving them the highest degree of flexibility in
trading with China and potentially positioning them to function as alternative overland
‘detours’ in the event that the bottlenecks become unpassable.

IRAN:
1. CHABAHAR:

 Iran is in a somewhat interesting place by theoretically having three potential avenues for
conducting trade with China.
 All of the country’s ports except for Chabahar are in the Persian Gulf and thus dependent on
the Strait of Hormuz chokepoint.
 As for the far eastern port in the province of Sistan and Baluchestan, it’s relatively
underdeveloped despite India’s commitment to modernize it as part of its ambitious efforts
to streamline the so-called North-South Corridor.
 Chabahar also remains largely disconnected from the rest of Iran’s road and rail networks,
making it very difficult for the country to rely on it in times of dire need.
 Similarly, because of Chabahar’s distance relative to the rest of the country and its economic
heartland, it’s unlikely that Iran will properly utilize the commercial possibilities of the
neighboring CPEC port of Gwadar anytime soon, though that doesn’t necessarily mean that
Tehran’s participation in the project should be ruled out.
 Iran recently expressed interest in CPEC, and it’s possible that if India follows through on its
promises and helps to develop this corner of the country, that it could inadvertently allow
Iran to strengthen its connectivity with CPEC.

2. RIMLAND RAILROAD:

 This is very important because Iran can’t rely on the Rimland Railroad which has yet to even
materialize into a concrete proposal, and even if it ever does, Central Asia will always remain
a Hybrid War hotspot.
 Furthermore, although there’s already a roundabout rail route connecting Iran with China
via the peripheries of Kazakhstan and Turkmenistan, it’s not economically dependable at this
time and is also much longer than simply shipping goods from the country’s western
economic heartland across the Persian Gulf to Gwadar and then northwards to China.
 It’ll take a lot of time before the Rimland Railway becomes a practical option for Chinese-
Iranian bilateral trade, so in the meantime, Iran might just have to depend on either entirely
maritime routes to China or the shortcut through CPEC. At this point, it’s pertinent to talk
about the CPEC-Iran channel and how it could reasonably develop in the future.

3.GAS PIPELINES:

 Readers should be made aware that the bulk of Iranian-Chinese trade is through energy
resources, and that it’s in this sphere where Tehran could potentially be most useful for
CPEC.
 A $2 billion partially-Chinese-financed Iran-Pakistan gas pipeline is already under
construction which will one day transport gas across Gwadar and to Nawabshah, from where
it’ll then enter Pakistan’s internal gas distribution network and help power the rest of the
country. 
 following the eventual completion of the Iran-Pakistan and North-South gas pipelines,
 these successful confidence-building projects could be used as the launching pad for a
grander multilateral connectivity initiative aimed at more closely integrating Russia, China,
Pakistan, and Iran.
  Russia, with its globally renowned professional expertise in the gas sector, could modernize
and develop an expanded CPEC-parallel pipeline for shipping Iranian gas to China.
 There’s a lot of technical planning that would be involved with this and it probably wouldn’t
see the light of day until midway through the next decade at the absolute earliest, but it’s a
promising idea which should at the very least be casually entertained by the expert and
professional communities in case it becomes viably attractive in the future. 

CPEC AND EUROPEAN UNION:

it’s expected that European and Chinese companies will come to increasingly rely on this
geographically pivotal vector of their relationship.

HYBRID WAR RISKS:

Although an increasing amount of trans-continental overland trade will inevitably be conducted
across the Eurasian Land Bridge and Rimland Railroad, neither project is expected to enter into full
operation anytime soon, and even when they do, Hybrid War risks and political sensitivities might
render them inoperable or make certain states avoid them.

CHINA’s Greek port and BALKAN SILK ROAD:

 Being the prudent long-term strategists that they are, the Chinese aren’t taking any chances
by assuming that either of these two projects will ever replace the EU’s maritime trade with
the People’s Republic,
 which explains why Beijing bought the Greek port of Piraeus (one of the largest in Europe)
and is constructing the Balkan Silk Road high-speed rail route from the Mediterranean to
Central and Eastern Europe.
 REASON behind investment:
The intention behind this initiative is to allow China to conveniently trade with these regions
via a newly charted southern access route as opposed to having to lengthily circumnavigate
the European peninsula and offload goods to them from the Baltic Sea.
 Beijing wouldn’t be pursuing the Balkan Silk Road if it had full confidence that the Eurasian
Land Bridge would mostly replace the EU’s maritime trade with China, so the very fact that
the given project is in existence and progressively moving forward should be taken as a sign
that China expects more of its EU trade to transit through CPEC instead.

CPEC AN ALTERNATIVE:

 All maritime trade between the EU and China is greatly assisted by CPEC because of the
comparatively lesser physical, financial, and strategic costs that it entails as compared to the
circuitously longer route through the bottlenecked chokepoint of the Strait of Malacca and
the contentious South China Sea.
  Just like the Eurasian Land Bridge won’t ever fully replace the EU’s maritime trade with
China, so too will CPEC never fully replace this mode of trade’s historic reliance on the Strait
of Malacca and the South China Sea.
 Rather, the Pakistani-traversing project offers an alternative route to China which is less
susceptible to external interference, while ironically remaining just as dependent on the
Suez Canals and Bab El Mandeb.
 However, the key difference between these western chokepoints and their eastern
counterparts is that they’re controlled by Egypt and the GCC, respectively, both of which are
on very friendly terms with Pakistan and China, which makes it considerably less likely that
they’ll agree to go along with the US’ geopolitical blackmail against either.

A MYTH, CPEC , AN EAST INDIA COMPANY:

EIC BRUTALLY USED FORCE:

 First of all, the method used by the East India Company (EIC) was entirely different.
 The EIC came to the subcontinent primarily with the intention of doing trade but usurped
power through the brutal use of force,
 which the renowned British historian William Dalrymple described as “probably the most
bloody episode in the entire history of British colonialism.”
 By contrast, China and Pakistan enjoy an exemplary friendship based on mutual trust and
respect.

EIC was influenced by resources of the region:

 In other words, the subcontinent was by far more prosperous than the EIC. In case of China
and Pakistan, the story is the other way around.
 As an economic power, China is second only to the United States and sits on the largest
foreign exchange reserves in the world ($3.20 trillion).
 With Beijing’s deep pockets and passion for spending, economic ties with China are even
prized by the wealthy countries of the West like Britain and Germany.
 On the other hand, Pakistan presents little, if any, economic attraction for foreign
investments. Uncongenial security conditions, failing state institutions, and corruption are
some of the many maladies that have dogged Pakistan and dissuaded others from investing
in this country.
 Perhaps no other country would dare take the risk of investing so much money in Pakistan as
China has ventured. Pakistan needs China more than the other way around.

LIMITED ACCESS TO CHINESE FIRMS:

 Pakistan might be depending Chinese largesse at the moment, but it retains a fairly
independent political and institutional structure.
 Consider just a few examples: NEPRA’s disapproval of Chinese investors’ demand for an
increase in power tariffs; the Supreme Court’s rejection of a Chinese company’s plea to be
allowed to participate in the bidding process for the Dasu hydro project, and a local court’s
ruling barring a Chinese firm from controlling Sost dry port.
 Despite its preeminent position under CPEC, there is a limit to China’s influence and
interests in Pakistan.
 Mughal emperors did not enjoy any of these advantages vis-a-vis the highly assertive EIC.

Negative Perspective:
1. Debt-trap diplomacy
 Analysts have for some time warned that Beijing’s massive initiative is essentially aimed at
helping China transition from a manufacturing nation into a consumer economy, get rid of
excess capacity, reduce the disparity between its western and eastern provinces and, most
importantly, project Chinese geostrategic power throughout the neighbourhood and
beyond.
 Foreign policy analyst Brahma Chellaney called the OBOR China’s “debt-trap diplomacy”,
arguing that it intentionally puts partner countries in debt to increase Beijing’s leverage.
 Ratings agency Fitch warned in a report earlier this year that OBOR does not address the
most pressing infrastructure needs of partner countries and could easily result in unviable
projects and smaller nations saddled with large debts.

EXAMPLES:
In Sri Lanka, China helped build a large port and airport near Hambantota but with little
economic activity emerging from either project, the loans are mounting and that debt is
turning into equity, giving Beijing more control over key assets on the island country.
TAJIKISTAN: 1100 km land ceded to china due to inability to pay debt

2. SECRECY IN PROJECT :

 Many economists have questioned the CPEC project’s lack of transparency and
accountability. The agreement, in its present form, is shrouded in secrecy and the lack of
information has severely impeded a proper cost-benefit analysis of the project.
 A lack of transparency regarding the terms and conditions and other financial details of
CPEC projects has been the main source of concern.
 The situation is such that the governor of the State Bank of Pakistan stated, “I don’t know
out of the $46 billion [in CPEC deals] how much is debt, how much is in equity, and how
much is in kind.”
 He added that “CPEC needs to be more transparent.” Similarly, the International Monetary
Fund (IMF) also has cautioned against the potentially unfavorable economic fallouts of CPEC.

3. PROPAGANDA AGAINST PAKISTAN SOVERIGNTY:

 the Nawaz Sharif government’s approach toward CPEC is like the former Sri Lankan
President Mahinda Rajapaksa’s attitude toward Chinese investment.
 Rajapaksa took billions of dollars in loans from China for projects in his own constituency,
Hambantota, without bothering about the fact that there was little commercial justification
for them. To the dismay of the next (current) government in Colombo, the Chinese told Sri
Lanka that, as Forbes put it, “We want our money, not your empty airport.”
 At the end of the day, Sri Lanka was left at the mercy of IMF loans to pay back China’s hefty
loans.
 Interestingly, similar to CPEC, there was a lack of information about the interest rates on
loans for Hambantota projects. Like CPEC, Hambantota is part of China’s Maritime Silk Road
Strategy.

4. NO LOCAL PARTICIPATION:

 Some economists based in Pakistan feel that the Chinese strategy is to bring rich dividends
back to its own country. The Chinese approach of not partnering with local companies will
not help Pakistan create job opportunities for millions of its youth.
 There are suspicions that the agreement may be heavily skewed in favor of China. This
apprehension comes from the way the projects are being handled — for example, all
materials (except cement, which is sourced from Pakistan), equipment, and manpower are
being brought from China, with little or no participation by the local communities.

5. Further damage India -Pakistan relations and South Asia peace:

 United Nation’s Economic and Social Commission for Asia and Pacific, in a recent report, has
also concluded that the economic corridor may further damage India -Pakistan relations.

The report raised two major concerns:

 first, the CPEC may create further tensions between the two countries, and in the process
create political instability in the South Asia; and,
 second, the political tension in Afghanistan may severely impede the benefits of transit
corridors in South Asia.

6. DEBT ESTIMATION:

 the debt service outflows will be about $1 billion and the return on equity will be $646
million if it is kept at 17 percent. Add to that $1.9 percent as repayment of principal. That
means an annual net outflow of $3.546 billion per year once the corridor becomes fully
operational.”
 Prominent local economists have also expressed serious concerns over Pakistan’s ability to
service the debt. Hafiz Pasha, a former finance minister, and Ashfaq Hassan, a former adviser
to the Finance Ministry, have estimated that CPEC loans will add $14 billion to Pakistan’s
total public debt, raising it to $90 billion by the fiscal year ending June 2019.

7. TERRORISM WILL INCREASE VIA PROXY WARS:

 There is direct evidence that the ISI knew of Bin Laden’s presence in Abbottabad, Pakistan.
The Haqqani Network is the veritable arm of Pakistan's ISI and was blamed for assault on US
embassy in Kabul in 2011. Pakistan has been snubbed for its double standards.
 The Al-Qaeda supreme leader Osama Bin Laden having been captured and killed in Pakistan
indicates the level of duplicity.
 Mullah akhtar mansoor , Tehreek Taliban Afghanistan leader was also died in balochistan
from US drone attack.
 US is unhappy with Pakistan endorsement to CHINA via providing land route because China
will be crossing US economy in next decade and will become most powerfull economy of the
world.
 US will strive hard to fail this project in order to maintain its hegemony in the ASIA
 US is supporting india via transferring F-16 manufacturing technology and india is also
helping US to open its naval and air bases in its territory.
 3 Chinese citizens, who were teaching Chinese language also killed in gawader by ISIS.
 India could go at any extent against this project as its spy kalbhusan yadav also affirmed
RAW has planned to destabilize the CPEC and balochistan.
 Thus, major international power like US and India are against this project and they can use
all possible ways to destabilise the region to fail this project.

8. EAST INDIA COMPANY:

 The lack of transparency would enable china’s firm to swathes Pakistan territory and
stole its resources without any permission
  If Pakistan unable to reimburse the debt, China would ask Pakistan to cede its land
to her.

9. RESTRICTION IN FOREIGN POLICIES:

 Pakistan may not be able to govern its foreign policies due to enormous presence of
foreign country’s trade offices in gawader.
 Huge influence of china and international communities that would not let Pakistan
to go against their interests
 Pakistan would become international transport hub for CARS, AFRICANS, MIDDLE
EAST, EUROPEAN, CHINA, ASEANS and RUSSIA..

10. CHINA’s HEGEMONY IN PAKISTANI MARKETS

 Local markets and businesses would suffer from china’s cheap manufactured goods
 People would buy goods from cheap china’s markets rather than local expensive
material.
 No protectionism policy is given by government to save local markets.

11. AMULGAMATION IN CULTURE AND LANGAUGE:

 Pakistan has already amalgamated culture due to invasion of Arabs, Turks, Hindus,
Afghans, Persian, British, Mughal
 Now china is coming in this territory to further amalgamate this region with its
culture and language as England did in past . As a result, still Pakistani child are
taught in English languages in school when they are unable to learn their own
mother tongue.

12.COAL POWER PLANT:

 World is focusing on renewable resources to create energy but Pakistan is still

focused on Coal power plant which could increase the rate of carbon in air.
 China herself is focusing on solar energy projects in her territory and preferring
Pakistan towards coal power plant in sahiwal , port qasim etc

13.PARTICPATION IN PAKISTAN MAIN SECTORS:

 CMPAK: launching 5g technology and already invested in 3g and 4g technology
 Karachi Electric: has been given to china to provide electricity to whole Karachi.
  STOCK EXCHANGE:
 AIRFORCE JF-17 technology:
 NUCLEAR POWER PLANTS:
 GAWADER ECONOMIC ZONE:
 SURVEILLANCE SYSTEM IN MAJOR CITIES:
 FIBER OPTICS:
 IRRIGATION SYSTEM:
 RAILWAY AND ROAD TRACKS:

Pakistan is becoming totally dependent on China’s firms , that would harm Pakistan sovereignty in
future .

PAKISTAN’S PERSPECTIVE:
BENEFIT OF ELECTRICITY:

 China and Pakistan attempted to address this dire problem together and in November 2014
came up with some early harvest energy generation projects based on coal, solar, wind and
hydel power.
 The reason why the energy projects with a total capacity of 10,400MW at the cost of $15.5
billion were given priority (categorized in early harvest scheme) is obvious.
 And after 2018 further 6,600 megawatts, at an additional cost of $18. 3 billion, will be added
which would double Pakistan’s current electricity output.
 CPEC at the moment covers 12 early harvest energy generation projects including Sahiwal
coal fired project, Port Qasim power plant and Karot Hydro power station.
 It is also strongly believed that these projects will be completed by 2017-18 which would
help to meet energy requirements of the country sufficiently.
 With the formal commissioning of its second unit later this month, the Sahiwal power plant
will become one of Pakistan’s clean coal power plants with the largest installed capacity of
generating 9 billion kWh of electricity per year. The electricity produced by the plant will
meet energy needs of nearly 10 million people.

REDUCED IMPORT BILL AND IMPROVED EXPORT BILL:

 The CPEC initiative has the potential to eventually reduce import bill by USD $5 billion and
improve export bill significantly.
 However, this can only be done if there is an efficient supply chain network to facilitate the
movement of goods by road, rail and port.
 Not only will the CPEC initiative help our local businesses to grow and tap previously
inaccessible resources and markets, but it will also create more than 700,000 jobs (The
Nation, 2016).
  A proper, efficient transportation network will lower costs and improve our regional
competitiveness and drive future investment. Having a good foundation is crucial to our long
term prosperity.

Pakistan’s global rank in supply chain infrastructure :

 CPEC has already shown that it will have a positive impact on Pakistan’s transportation
network. CPEC has improved Pakistan’s global rank in supply chain infrastructure around 12
points from 105 (2017) to 93 (2012) out of 136 countries.
 Pakistan has closed its gap with China around 22 points in overall infrastructural
development in the last half decade.
 It will make trading quicker and cheaper by reducing cost of transportation and the burden
on economy.

TELECOM TECHNOLOGY:

 CMPak, a China Mobile subsidiary in Pakistan, has established 6,951 3G base stations and
5,223 4G base stations in the country as of the end of 2016, according to science news site
stdaily.com.
 China-Pakistan cooperation is creating a boom in the telecom industry as the two countries
work together to push forward the CPEC. 
 "Pakistan will be the first South Asian country to test fifth generation cellular services."

CHALLENGES AGAINST CPEC:

Economic Challenges:
INTERNATIONAL NORTH SOUTH ECONOMIC CORRIDOR:

WHAT IS INSEC:
Counterpart of CPEC, an initiative by india
WHY CHABAHAR PORT IS IMPORTANT:

 As an economic enterprise, for the CPEC, the greatest challenge comes from competitors.
The most significant is the Iranian port of Chabahar.
 India intends to invest significantly ($85 million) in the development of Chabahar, which lies
a few miles away from Gwadar and is part of its efforts for access to landlocked Afghanistan
and Central Asia while bypassing rival Pakistan.
 Chabahar will effectively be a way station for energy imports coming from the Gulf region
and destined for Afghanistan and Central Asia. It will also be a gateway to the Middle East,
and possibly Europe, for exports originating from Afghanistan and Central Asia.
 While the Chabahar project is not yet started due to ongoing talks on the Iranian nuclear
issue, the Gwadar port has already become functional. However there is no need for
contention between these two ports. Iran has a stake in the CPEC through the proposal to
link the Iran–Pakistan gas pipeline with China, which has been described as a “common
interest” between the three countries.
 Also the Indian involvement in Chabahar is linked to Pakistan’s refusal to allow India access
for transit to and from Afghanistan, so India sees Iran as the next-best option. If Pakistan
extends transit permissions to India, then India may not be interested in building up
Chabahar.
 In recent years India has been particularly active in engaging Central Asian states for the
sake of pursuing energy deals.
 India can be easily accommodated via the CPEC itself through eastern interface in Punjab
and Sind and transformed into a stakeholder in the success of both Gwadar and the CPEC.

POLITICAL CHALLENGES:
INTERNAL PROVINCIAL PROBLEMS:

 Recently a new course of action has been initiated by some sub-nationalist parties that are
alleging a change in the routes by the Federal government, that would only favor the eastern
provinces of Pakistan and deprive the western provinces.
 Despite this allegation meeting no facts on the ground, the Pakistani and Chinese
governments have tried to allay the fears, by interacting with the political parties that are
making the allegations.
  There is also a stark need to engage the common man on the ground to stop the public from
taking part in acts such as agitation that could halt work on the CPEC.

INDIA- US ALLIANCE:

 Political challenges also exist on the International front. There is talk of India approaching a
diplomatic route to stop the construction of the CPEC in Gilgit-Baltistan, which it considers to
be an integral part of its territory.
 The USA also has been apprehensive of Chinese strategic access to the Arabian Sea and its
presence in the region. It has reportedly tried numerous times to dissuade Pakistan from
involving China in the development, including advocating the port authority of Singapore as
a suitable operator for Gwadar, at one time.
 Its significance as a provider of military and financial aid to Pakistan, as well as the second
largest export destination after the European Union, could make it difficult to ignore. There
is a stark need to engage in a diplomatic campaign to hold off any such attempts by foreign
governments.
1. STRIKES AND PROXIES:
Barring a suicidal “surgical strike” campaign by India or an unthinkable “limited intervention”
aimed at cutting CPEC in half through Gilgit-Baltistan (both of which might frighteningly
seem attractive to the pro-American Hindutva extremists currently running New Delhi at the
moment), the US and India will resort to operating through proxies in order to achieve their
grand strategic objective of sabotaging this project.
2. SPIKING FEAR ABOUT SAFETY :
It’s unrealistic to think that either of them could fully stop CPEC at this point, but what they
intend to do is raise the economic and security costs of doing business by spiking fears about
the route’s safety and thereby scaring away potential companies which might otherwise be
eager to utilize this strategic shortcut to China.

POLITICAL TURMOIL INSIDE PAKISTAN:

 What the American and Indian intelligence agencies are depending on is that they can
succeed in stirring up enough domestic political disturbances inside of Pakistan that the
military is unable to totally commit to protecting CPEC due to much more urgent and
immediately prioritized problems, such as dealing with a Color Revolution outbreak in the
country’s main cities for example. Concurrent with this, unconventional warfare operatives
could provoke violence in Balochistan and the Federally Administered Tribal Areas (FATA)
using their in-country proxies and Afghan-based terrorists.

SECURITY CHALLENGES:
Terrorist groups:
 Security concerns remain the most primary challenge to the CPEC as yet.
 An arc of militancy stretches from Xinjiang to Gwadar consisting of groups like the East
Turkestan Islamic Movement (ETIM), Tehreek-e-Taliban Pakistan (TTP), Lashkar-e-Jhangvi
(LeJ), Daesh (ISIS),Balochistan Liberation Army (BLA), Balochistan Liberation Front (BLF) and
militant wings of political parties.

Intelligence agencies involvement (RAW):

 Most of these groups may not have an enmity with China itself but rather intend to use
attacks on Chinese interests like the CPEC as a means to deal with the Pakistani state.
 There are also indicators of foreign intelligence agencies engaged in espionage against the
CPEC.
 In fact, reports of formation of a specific desk to deal with the CPEC at the Research and
Analysis Wing (RAW) have been widely circulated.

ETHNIC TENSIONS IN CHINA(ETIM):

 Inside China, Xinjiang has been classified as the soft belly of China due to low development
and ethnic tensions primarily concerning the Muslim Uyghur population.
 For the Chinese the ETIM is a manifestation of the three evils of terrorism, extremism and
separatism.
 The ETIM has been further augmented by training from ISIS where instances of Uyghur
militants being inducted in training camps have been seen.
 The Xinjiang Uyghur Autonomous Region (XUAR) emerged as a major trouble spot
domestically for China following violent riots and terrorist attacks within Xinjiang and as far
away as Kunming and Beijing.

Sindhi separatist group Sindhudesh Liberation Army :

 (also known as the Sindh Liberation Army) claimed responsibility for the Bin-Qasim attack.
The group’s one-point agenda is to establish the independent state of Sindhu Desh. Pakistan
routinely accuses it of receiving Indian funding.
 While this may or may not be the case — our state apparatus must take note. Meaning that
it must at least be willing to hear the concerns of those who call for separation from the
Centre.
ISIS in balochistan: Baloch ethno-nationalist:

 Especially given that militant strikes on foreigners are no more the exclusive domain of
Islamist extremist groups such as ISIS. The latter, of course, claimed responsibility of the
recent abduction and killing of three Chinese citizens in Balochistan.
 These separatists remain the keenest opponents of Chinese investments in the province. In
2006, three Chinese engineers lost their lives in an attack claimed by the BLA in Hub, a town
west of Karachi. A week before the Chinese president’s visit, at least 20 laborers were killed
in cold blood by BLF gunmen in Turbat. Separatists routinely attack power and energy
transmission lines asides from other acts of terrorism inside Baluchistan.

TENSIONS WITH IRAN AND AFGHANISTAN:

 China has assured Pakistan that once the CPEC becomes operational, it would be able to
cover these payments over the long term, but China has not given any guarantee to this
effect. 
 Iran has a stake in the CPEC through the proposal to link the Iran–Pakistan gas pipeline with
China, which has been described as a “common interest” between the three countries.
 Considering tensions with Afghanistan and Iran, it’s unclear how long the Pakistani
government will be able to secure the projects from terrorist strike.
 Some of the projects are located in sensitive areas, which are now seeing increased attacks
by Islamic State and the Taliban.
 If tension further escalates, Pakistan would find it extremely difficult to increase its exports
through this corridor, which is a sine qua non for servicing its debt.

WAY FORWARD:
Special security devision:

 In order to specifically counter security threats to the CPEC, the Pakistani government plans
to establish a ‘Special Security Division’ under Pakistan army for the security of project and
chinese workers.

 To maintain security, check and balance in the port area against terrorist insurgencies.
DIALOGUE WITH TERRORIST AND NATIONALIST:

 However more could be done to improve security measures. Balochistan is the key to the
success of the CPEC and the strategic goals associated with it.
 The government must engage the local dissidents in a dialogue process, and bring them back
into the national mainstream.
 A combination of Diplomacy, Intelligence networks, Economic measures and Military tools
can be used to counter foreign designs.

Grand Dialogue with India :

 Include india in CPEC with complete trust and faith

 Table talk with india , where multilateral OBOR countries can benefit india without any
discrimination
 Allow india to use gawader port and land route of Pakistan

GRAND DIALOGUE WITH USA:

 Despite of the part of world economic race, the major powers need to maintain good
relations and work together instead of collision as Thucydides trap.
 Allow US to use Gawader port to transfer its goods to ASIA in order to maintain peace in the
region

INTELLEGENCE AND TECHNOLOGY SHARING:

 China and Pakistan are needed to cooperate and share intelligence data in order to maintain
the security of port and road and railway tracks
 Do naval , arm and airforce exercises to remain active against any sort of attack
 Share weapons and technology to tackle the aggravated situation.

34MORE RESERVATIONS:
No doubt, CPEC is a regional game changer;it brings with itself bulks of F.D.I., jobs and oppurunites
to improve our ailing economic sector and increasing the geo-strategic importance of our
motherland. However, the CPEC projects brings with themselves expensive pricetags in the form of
massive loans, which we, as a nation, would have to bear collectively.

According to a rough estimate, the total worth of CPEC projects (infrastucture, railways, power
houses, etc.) has surged from $46 billion to $62 billion.
CPEC is a massive investement. The funds which have bernpouring into Pakistan by the Chinese
comes in forms of FDI, soft loans and commercial loans. Interestingly, according to some renouned
economic analysts, it would take more than 40 years for Pakistan to return these loans.;
additionally, the loans and funds which have been coming for CPEC-related projects comes at a very
high interest rate. The more the worth increases, the higher we get traped into debt-traps. Let us
also not forget the situation of the Hambantota port and Mattalla International Airport (just five
flights take off every week) of Srilanka that had been built with Chinese investment. Unfortunately,
both the projects failed drastically to bring the expected economic fruits which the Srilankan
government had thought off. Now, Srilanka is struggling to repay that money, and so has signed an
agreement to give a Chinese firm a stake in the port and airport as a way of paying down that debt.
This agreement is form of debt-to-equity swap that will convert the debt of SriLankan government
into equity of Chinese firm, which may, finally, lead to their full ownership.

Therfore, our government should,very rationally, plan the economic policies of our country, keeping
in view the pros and cons of such mega foreign-invested projects.

Furthermore, the government should keep all the expected results and repercussions in their mind
while managing and planning the CPEC related projects and the loans and funds that comes in their
wake,keeping in view that according to latest figures, we have to repay additional money of
$40billion as interests,which makes the total cost of the project more than $90 billions. Our
developing and poverty stricken country of 207.77 million people cannot afford to sink any further
into the oceans of debts.If not properly managed, CPEC could turn into another East India Company.

The next point raised was to have a high-level joint coordination committee to redress the
grievances and complaints of the Chinese companies. The existing joint working groups operate at
the government-to-government level but there is no platform available for the Chinese companies or
their Pakistani joint venture partners to approach. Continuous federal-provincial-local government
coordination is essential to move the projects along till completion. Land acquisition is a provincial
local subject and the process takes too much time.

This explains why the Americans tried their best to deny China more authority in the affairs of the
World Bank and IMF when they demanded it. But now China has established the Asian Infrastructure
Investment Bank (AIIB) which will finance most of the projects of OBOR. Along with that, the New
Development Bank (the ex-BRICS Development Bank), has also been established. Exim Bank of China
and China Development Bank are also lending huge amounts of money for CPEC and other
infrastructural projects around the world. This has brought about a direct confrontation between the
already existing imperialist institutions of the world.

Another allegation of the IMF is that the Chinese are spending carelessly, which can lead to a default
of fragile economies like Pakistan, eventually putting their own huge loans at risk. The Financial
Times has repeatedly warned China that Pakistan's economy is not worthy of such huge investments
and it is a big risk. They have cited the example of Venezuela where China invested more than $65
billion to secure oil supplies for a long time. But a sharp slump in oil prices has brought all this
investment near to a default and now Venezuela is neither in a position to pay its debt, nor are its oil
reserves worth that money. But the Chinese ruling class is ignoring all these warnings related to
CPEC and has continued with this project with all the risks involved.

On top of this, Chinese contractors have taken most of the contracts for the construction of projects
related to CPEC. This was an important part of the deal. They have also brought most of their
employees from China which include most of the engineering and technical staff. Initially unskilled
labor was being hired from Pakistan but now that also is being brought from China. On some
projects prisoners from Chinese jails are working for which Chinese contractors pay only a small
amount to the Chinese government. And Pakistan has to bear the increased cost of security for these
prisoners. These prisoners live in horrible conditions and their working hours are unlimited. The only
growing demand in Pakistan at present is for translators who are getting high wages, while Chinese
language course centers have started to mushroom in the big cities. Already, the government has
announced that soon the Chinese language will be part of the curriculum in government schools.
This will be yet another language to be learnt for most students who already have to learn English,
Arabic and Urdu while they speak their mother tongues in their daily routine.

Along with contractors and labour, most of the machinery and raw materials for these projects is
also imported from China, mostly duty free, which has widened the deficits of Pakistan.

These huge investments by the Chinese government have also encouraged Chinese companies
which are investing huge amounts in various sectors of the economy. A Shanghai based consortium
has bought a 40 percent share in the Pakistan Stock Exchange PSX for $85 million and will soon take
charge of its management. The size of market capitalization of the PSX currently is around $100
billion but the Chinese aim to increase it in the coming period. New incentives such as CPEC bonds
and derivatives will be introduced to attract investors from other countries including China.

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Other Chinese companies are investing in areas ranging from telecoms to air lines and automobile
manufacturing. Pakistan Steel, the largest government owned steel mill of the country, is also being
privatized and being handed over to a Chinese company. From Chinese banks to food chains,
everywhere the Chinese presence is growing in the country. Even special counters have been
established for Chinese travellers at bus stands across the country. According to one estimate,
Pakistan may issue 15 million visas to Chinese between now and 2020.

In reality this is a big illusion and rather than reducing poverty it will increase the misery and
exploitation of the downtrodden masses of this country. If huge investments and infrastructural
projects could have reduced poverty and misery under capitalism there should be no poor inside
China. Hundreds of billions of dollars were invested by companies from all over the world and the
Chinese economy attained a growth rate of more than ten percent for many years. But still millions
and millions are living in extreme poverty and huge layers of the population struggles for one proper
meal a day. If such investments could not eliminate poverty in China, how could this investment
alleviate the people of Pakistan from it. All investments under capitalism are made to maximize
profits through the exploitation of the resources

In the meantime China has emerged as a key player in the whole situation. the Chinese presence in
the Indian Ocean is not limited to Gwadar only, but it has also built a huge port in Hambantota in Sri
Lanka and has now announced investments of  more than $20 billion in Bangladesh. Just like CPEC
they are keen to build the Bangladesh China India Myanmar (BCIM) Corridor . This is a project that
will link Kunming in the Chinese province of Yunnan with Kolkata in India through a network of 2800
km of roads and railway lines passing through Bangladesh and Myanmar. Yunnan was also recently
linked with Shanghai through a high speed railway line.