CPEC

Irfan Waheed Usmani

Outline
• Introduction
• Underlying Motives
• Features
• Depicted as Beneficial to both Pakistan and China
• Critical View
• Suggestions: How to make it more beneficial for Pakistan
• Questions on CPEC
Introduction: 2 postives+2 negatives+
suspended judgement
Overall thesis How is it being Problematize Challenges Suspended
statement{ begin by projected by pertaining to judgement
highlighting its Pakistan’s policy- negative
larger significance makers? perceptions of India
for Pakistan) and US …
Game-changer/ …. Opportunity that On the other hand, The negative The expected
game-changing can lead to the lack of perception of US returns from the
opportunity fostering…. Growth disclosure….may and growing project will have to
OR It presents which can address create doubts frustration of India be earned…/ OR The
embraces or offers a the issues of among public which can also pose … …benefits of the
game-changing economic and social may lead the challenges for project will not
opportunity. deprivation across development of Pakistan and China. occur on their
the country. negative consensus. own/… we have to
[…or earn them/ grab
the opportunity.
2Understanding the CPEC/What is the CPEC
• As part of China‘s larger one Belt One Road (OBOR) Initiative: have a
few words on China’s BRI project/initiatives
• The Importance of CPEC in BRI: why is it described as a “flagship”
project of the initiative?
Have a few words about the BRI: As part of China‘s larger One Belt One Road
(OBOR) Initiative/BRI(I): Also, say a few words on CPEC significance for BRI.
Ambitious Project of land
and maritime
connectivity/project of
infrastructure financing …
( How to define BRI)
Especially those located on
its western borders.
With the policy objective of
reducing China’s dependence
on the South China Sea…
The extent/degree of China’s
dependence on the South
China Sea : It
What is meant by Belt and Very brief introduction of The overarching Significance
Road : I China has salient features of BRI of CPEC in BRI
synergized two major
initiatives in BRI
SREB+MSR : 6 land-based and two The CPEC as the flagship (III) “Out of six proposed
(Overland)+ (Sea-based) maritime connectivity project of the BRI economic corridors the BRI, it
Maritime Silk Road initiatives. It is the first one… is CPEC that connects only two
(Ejaz Hussain, CPEC’s countries China and Pakistan.
Significance for BRI III, D.T., All other proposed corridors
July 2018. involve more than two
(I) It will be completed by countries and in certain cases,
two continents”. (Ejaz Hussain)
2030,
(II) It will help to
accomplish China’s
prime objective–
circumventing the
South China Sea.
As part of China‘s larger One Belt One Road
(OBOR) Initiative/BRI(II)
CPEC’s importance for China It serves both immediate and long-term objectives of
China .
It will come to fruition by 2030 whereas the other
projects would take further one or two decades more
to be completed.
2 The Underlying Motives
• (I)To Overcome the Problem of Over Production and to ward off
resultant Unemployment (Economist’s opinion) [ Dr Farrukh Salim]
• (II)To Ensure regular Supply of Raw Material and Food Imports
• (III)To Search for Alternative Route to Ship China’s Exports and
Imports (economist’s opinion) [To Reduce Fuel Costs and Save time]
• (IV)To meet China’s Energy Requirements
• (V)To Stimulate Economic Growth in the Xinjiang-Uygur Autonomous
Regions( Western Chania)
• (VI)It marks the fundamental reordering of China’s growth strategy
( economist’s opinion)
 (I) To Overcome the Problem of Over Production and to ward off resultant Unemployment:

What is the Main

Challenge China is The areas/industries in
facing or confronted China are faced with the The overall impact of Over- Underlying
with? problem of Overproduction A rather detailed explanation The overall impact of Overproduction Production Motive
Overproduction Steel Steel: 3.63 million workers Coal: China’s share in production: more than 50 Cite the specific example of Steel sectors: To dispose of the
Coal China’s share in world output of steel: percent. The choices China is left with: lay off a over production to
Cement The annual production in China Economist: 9 April 2016 : 3.3 bn tones in two years million steel workers or try to export $ profitable ventures
Aluminum exceeds 800 million tons. 100 worth of excess steel and locations
Flat glass Capacities… Domestic demand fell to 400 million The fear of resultant unemployment
tons by 2015

The nature of China’s crisis of Cement: China’s share in global cement Oil: (2014 and 2015) Financial Times:
over-production output… 60 per cent An estimate of overproduction capacities of Chinese
Domestic demand has gone down oil refineries: 200 million tons
sharply Percentage increase in China’s diesel exports: 31 and
79

China has to cut 390 million tones of Aluminum: 50 percent of total aluminum out put China is only left with two options: (I) to
cement capacity. go in for layoffs of the labour force—and
(II) to export excessive production to
profitable ventures and locations.
China is only left with two options: This first option could lead to
industrial unrest, which obviously
will have its political
repercussions.
(I) to go in for layoffs of the labour It may result in another Tiananmen
force—and (II) to export excessive Square-like incident in which the
production to profitable ventures Chinese government had to crush
and locations student revolt with an iron fist. The
last Chinese Communist Party could
afford was political instability
caused by industrial unrest.
China’s labour force Repercussions for China
800 million (I) Decline in GDP
(II) Large-scale lay-off of labor
force
What China wants to do through
projects like BRI
To divert over production to
profitable ventures and locations.
Dr FarrukhSalim The other instances of the crisis of over-production
Cement Aluminum
Coal Oil
The strength/ number of China’s labour force
• 700—800 million:
The unpalatable situation China is faced with
and how it wants to over come the crisis?
Either to resort to large scale lay-offs Or to export excessive production to profitable
ventures and location
Example: in the case of steel industry. It has to layoff Try $ 100 bn worth of excess steel.
0ne million workers.
What could be fall outs of such the policy:
(II)To Ensure Regular Supply of Raw
Materials and Food Imports
• First, you have to explain the gravity of China’s food crisis:
• Reasons: (I) colossal population, and (II) alarmingly low/less percentage of the
country’s arable area.
• (I)Comparison with the US in terms of population
• (II)arable area: China’s arable area is 1/6th of that of US
• US population: 350—400 million; China’s population is 1.5—1.6 billion
• What measures have Chinese governments taken to overcome the food crisis? And
what are their limitation? (I) GMO’s; (II) irrigation of Gobi desert…
• The prospective role of CPEC and BRI in overcoming China’s food crisis.
• Changes in China’s population policy: (I) One Child Policy, (II) Two-Child Policy, and
(III) it has moved to a three-child policy. (three children are not required here).
(II)To Ensure Regular Supply of Raw Material and Food Imports…
Main Reasons Behind the food
Crisis 2013
The growing requirements of
China’s population
Disproportionately less arable area
Comparison with US to highlight the China’s Food import bill
intensity of Food Crisis
3,7 million sq. miles square miles $ 111 bn:
US: 3.5 million $ 157—160 bn:
US Population: In 2012, China became the largest
China’s Population: importer of food/agricultural
China’s arable area is 1/6 of the US products..
'China has to feed such a large
population the arable area which
is !/6th of US.
Now, Chinse have moved to a two-
child policy
The Destinations for China’s Food Imports
Egypt US Latin American countries
China has changed its food import strategy by increasing
reliance on neighbouring countries through increasing
agricultural productivity capacity.
Why have the Chinese If China wants to increase
included the agricultural Pakistan’s share to 5 per
vision behind CPEC? cent then it’s the volume
of its agricultural imports
must increase 10 times
more
When China’s food import
bill was $ 111 bn
Pakatan's share in China’s
agricultural imports from
Pak 0.5percent.
What kind of measures China’s government
has taken to overcome food crisis NR
•Measures Chinse have been taking to overcome food Crisis
•The Agricultural Vision of BRI
•CEPEC and Pakistan’s Agriculture
•(I) GMOs– the unintended outcomes of GMOs
•(II) Irrigation of Gobi desert ( construction of great green wall; planting of 70 billion trees)
•What are the limitations of the measures?
•When China’s food import bill was $ 111 bn Pakatan's share in China’s agricultural imports from Pak
0.5percent.
•The share of Pakistan’s agriculture in China’s food import bill: 0.5 percent
•If China wants to increase to 5 percent..
•What is unique about BRI and CPEC
•Briefly describe the salient features of the second and phases of CEPEC.
What kind of Measures have Chinese
governments taken to overcome the food crisis?
(I) GMOs– the unintended outcomes of GMOs (II) Irrigation of Gobi desert

( construction of great green wall; planting of 70

billion trees)
The Limitations of Measures:
The unintended outcomes of the GMOs
The kind of health hazards they are creating.
Cancerous diseases:
The efforts to resolve the issue of desertification also
involve huge costs.
This is also not a very palatable option for China.
 (III) To Search alternative route to
ship China’s Exports and Imports

The underlying Motives The Route that Chinse have been using? Conceptualization of CPEC and BRI in Prospective Benefits to China particularly
East-west route context of development of alternative with the completion of CEPEC:
route

Reasons: (I) Economic: Economic and; The extent of China’s dependence on the It would cut this distance short to 1/3 Gwadar—Khunjrab highway will reduce
(II) Strategic South China Sea: Economic benefits: (i) reduction in fuel the distance to one third..
What is the underlying motive? costs; (II) inventory charges.
70 percent of global trade
And
80 per cent of petroleum products pass
through the South China Sea

The routes Chinse have traditionally used: The strategic benefits: in the case of It can help China to overcome the
East-West route the Malacca Straits blockage, China implications of disruption in the South
Further explanation: could divert its exports through the China Sea.
Distance: 12,000—13000 thousand km rear of China.
Time: 20—28 days
What are inventory charges?
• Inventory carrying costs refer to all the fees and expenses for keeping
items stored before they are sold. Carrying costs can vary based on the
type of product you sell and the costs of storage. This type of costs can
include fees such as taxes, insurance, labor wages, and warehouse
rent.Sep 14, 2022
BCIM: The
importance of
Myanmar in BRI
• Myanmar's western shores curve along the
Bay of Bengal, coming to a point at Cape
Negrais.
• The Irrawaddy delta and the southeastern
region's coasts frame the Andaman Sea’s
upper corner, joining at the Gulf of
Martaban. All of these bodies of water are
parts of the Indian Ocean.
(IV) To Reduce Fuel Costs and Save time

Transportation Costs Fuel Costs Inventory Chargers

 (IV)To meet China’s Energy Requirements

China’s growing energy Highlight the intensity of China’s CPEC as part of China's strategy You can also bring into discussion
requirements energy crisis to meet its energy requirements the issue of Malacca straits

2000: 1,280 terawatts hours (I) The construction of a Chnia’s 80 per cent of petroleum
2020: 7,600 terawatt hours dedicated oil city as part of imports and exports pass through
These are likely to increase the CPEC project. the Malacca straits.
further with the expansion of (II) The implementation of CPEC
industrialization in China from also enabled China to rope
its east coast to China’s mid- in Iran.
west and west.
Shahid Javed Burki: Dalian to (III) Saudi Arabia’s investment of
Guangzhou in the South $ 8 bn
• China has steadily increased its electricity generation over the past 20 years, reaching
7,600 terawatthours (TWh) in 2020 from 1,280 TWh in 2000, according to our recently
updated Country Analysis Brief: China. Despite COVID-19 mitigation efforts in 2020,
China still expanded its electricity generation by 5% in 2020.
• China has been increasing the share of non-fossil fuels in its electricity generation, but
coal remains a predominant source. In 2020, China generated 4,775 TWh from coal-
fired power plants, a 63% share of China’s electricity generation. In 2000, coal
accounted for 77% of China’s electricity generation (992 TWh). In the intervening 20
years, non-fossil fuels, including hydroelectric, wind, and solar generation, grew to
27% (2,058 TWh) of China’s generation mix, from 17% (221 TWh) in 2000. Solar has
been the fastest-growing generation source and grew by an average of 43% each year
from 2015 to 2020. Solar accounted for 6% of China’s electricity generation in 2020.
(V) To Stimulate Economic Growth in the Xinxiang-Uygur
Autonomous Regions ( Western part of China):
The Issue of Poverty in What remains to be
China done? To expand the
trajectory of
industrialization to
China’s west
Western China
The phenomenal success Most of China’s poor live
China has achieved in in China’s mid-west and
poverty alleviation: they West.
have been able to bring Large swathes of China’s
500 million people out of poor in the region.
the poverty line.
The target China has set In this sense, this motive
till 2050: a middle-income can also be ascribed to
country by 2050. China’s poverty alleviation
strategy.
The nature of Challenges
Xinxiang- Uyghur region
posse to China its
dimensions
(I)Economic :9/10 the of
Chinese poor live in
theses regions......
(II)Ethnic: Majority of
Chinse Han
Vast concentration of
/presence of Hui Chinse
Han—Hui ethnic conflict.
(III)Religious : Majority of
Hui are Muslims
Chinese efforts to The prospective benefits
overcome these of CPEC/the overriding
challenges in the past importance of CPEC
(I) Gwadar Port How and in what ways it
(II)String of Pearls will mitigate the effects of
Strategy, which has now ethnic and religious
become a part of MSR. conflict.
BRI and particularly CEPC It will complement Chinse
It wants to promote strategy to alleviate
textile led growth in the poverty.
region..
The benefits Chinse would
accrue though
connectivity of the region
to Middle East.
The concept of Middle Income country
• Middle Income Countries At-A-GlanceThe world's Middle Income
Countries (MICs), which are defined as having a per capita gross
national income of $1,086 to $13,205 (2022) are a diverse group by
size, population, and income level. Overview.
What are three kind of challenges China is
confronted in Xingiang?
(I) Poverty (II) Han-Hui Ethnic conflict (III) Religious comflict
China’s expectation from CPEC in the region:
the bottom line
• CPEC could usher in an era of economic prosperity in the region.
Conflicts and poverty could be mitigated by involving the stakes of
local in economic development.
(VI)It marks the fundamental re-ordering of China’s growth
Strategy(I):

• How Shahid Javed Burki contextualizes the issue?

• What growth strategy did Chinese follow previously? Why they felt
the need to bring change in their growth strategy?
• The importance of CPEC in the growth strategy?
• How would the political economy of the corridors work?
It marks fundamental re-ordering of China growth Strategy(VI):
[ new strategy]one driven by domestic consumption
• What does he mean by China’s re-ordering an export-oriented approach to development
strategy? Export-oriented approach towards development. [ which enabled her to
perform the role of cheap manufacturer of the West].
• IMP: How does he view China?: “a process of transition from an exports and
manufacturing-based economy to one driven by domestic consumption“.
What does the phrase “ driven by domestic consumption mean/ imply?
(I)Increase domestic demand( by increasing purchasing power) through poverty alleviation;
(II) to make Chinese the consumers and buyers of China’s own products,
And (III) export surplus production through corridors (supply lines/chains for imports and
exports).
• Relocation of industries to cheap manufacturing zones or belts through establishing SEZs.
It marks fundamental re-ordering of China
growth Strategy(II)
(I)Increase domestic demand through (II) to make Chinese consumers buyers (III)And export surplus production
poverty alleviation; of Chinese products. through corridors (supply line/chains
for imports and exports)
How has China catapulted 500 million Illustration through example: Relocation of industries to cheap
people out of the poverty line? manufacturing zones or belts through
The situation/dilemma the Chinese the establishment of SEZ’s.
face: China’s middle class has
increasingly become purchasers of
Western products [the phenomenon of
growing consumerism in China).
The manifestations of consumerism in
China?: (I) the popularity of Western
brands, (II) fast-food culture, and (III)
the beginning of cola-war in China.
Two things to remember
The strategy did China followed or pursued Now, one can witness a paradigmatic shift in China’s
previously? strategy.
Export-oriented approach to development. They are capitalizing/ relying on consumption and
China played the role of a cheap manufacturer of the trying to make the Chinese population increasingly
West. reliant on Chinese products.
What is the factor that enabled China to play such a
role? : The availability of “Cheap labour”– low-cost
production
World Bank’s study titled the “East Asian Miracle
highlighted the point”.
How Shahid Javed Burki
contextualizes the issue?
(I)Fundamental shift in China’s
growth strategy: transition from
an export and manufacturing-
based economy to one driven by
domestic consumption.
(II) The overall trajectory of
China’s industrial development.
It clustered around the Eastern
coast of China.
What growth strategy did The importance of CPEC in the How would the political
Chinese follow previously? Why growth strategy? economy of the corridors work?
they felt the need to bring
change in their growth strategy?
(I) Export-oriented approach
to development:
The kind of fundamental change
Chinese have brought in their
growth strategy: now they are
focusing on capitalizing domestic
demand by making Chinses
middle class buyer or purchaser
of Chinse products.
(II) They also want to extend
the trajectory of Industrial
development to China’s
mid-West and West.
Why need to arouse to bring about change in
growth strategy?
The shrinking It found The emergence of The increasing cost
population of West increasingly difficult other cheap of production in
to sustain such a manufacturers on China made it
high percentage of global scale increasingly tricky
growth. for China to keep
cost of production
lower.
De-population
How Shahid Javed Burki contextualizes the issue?(II)

• (I) Boarder context: To him it marks a fundamental shift in China’s

growth strategy…
What growth strategy did Chinse follow previously?(III)

• They followed export-oriented approach towards developmnet:Role

of China as cheap manufacturer/supplier of products for West.
• What kind of factors enabled China to play such a role?: cheap labour
cost …
• Example: what kind of study world bank conducted in 1993? It was
titled as The East Asian Miracle study
But now, the Chinese feel the need to change the strategy. /Why
did they feel the need to bring about Change in growth strategy?
(IV)NR
• Reasons:
• (I)The phenomenon of shrinking of western markets;
• (II)The rising cost of wages of labour in China…
• (III)The emergence of the other competitors
(I)The phenomenon of shrinking of western
markets;NR
• (I) de-population in EU
• (II)
Why are Chinese finding it difficult to play
such a role?: reasons(V) NR
• (I)The rising cost of wages of labour in China: unavailability of cheap
labour
• (II) The emergence of the other competitors:
It marks fundamental re-ordering of China growth Strategy(VI):
[ new strategy]one driven by domestic consumption NR
• What does he mean by China’s re-ordering an export-oriented approach to development
strategy? Export-oriented approach towards development. [ which enabled her to
perform the role of cheap manufacturer of the West].
• IMP: How does he view China?: “a process of transition from an exports and
manufacturing-based economy to one driven by domestic consumption“.
What does the phrase “ driven by domestic consumption mean/ imply?
(I)Increase domestic demand( by increasing purchasing power) through poverty alleviation;
(II) to make Chinese the consumers and buyers of China’s own products,
And (III) export surplus production through corridors (supply lines/chains for imports and
exports).
• Relocation of industries to cheap manufacturing zones or belts through establishing SEZs.
Two things to remember
The strategy did China followed or pursued Now, one can witness a paradigmatic shift in China’s
previously? strategy.
Export-oriented approach to development. They are capitalizing on consumption and trying to
China played the role of a cheap manufacturer of the make the Chinese population increasingly reliant on
West. Chinese products.
What is the factor that enabled China to play such a
role? : The availability of “Cheap labour”– low-cost
production
World Bank’s study titled the “East Asian Miracle
highlighted the point”.
It marks fundamental re-ordering of China
growth Strategy(II) NR
(I)Increase domestic demand through (II) to make Chinese consumers buyers (III)And export surplus production
poverty alleviation; of Chinese products. through corridors (supply line/chains
for imports and exports)
How has China catapulted 500 million Illustration through example: Relocation of industries to cheap
people out of the poverty line? manufacturing zones or belts through
The situation/dilemma the Chinese the establishment of SEZ’s.
face: China’s middle class has
increasingly become purchasers of
Western products [the phenomenon of
growing consumerism in China).
The manifestations of consumerism in
China?: (I) the popularity of Western
brands, (II) fast-food culture, and (III)
the beginning of cola-war in China.
Relocation of industries to cheap manufacturing zones or belts
though the establishment of SEZ’s.

• Why does China seem inclined to do so?: availability of cheap labour

coupled with low production cost.
Explaining the point of domestic
demand(VII)
(I) Increases in domestic demand through poverty
alleviation
To increase the purchasing power of population to
increase the size of Chinese middle class.
(II) The also want to make Chinese middle-class
purchaser or buyer of Chinese products
What usually happens in a country with the rise of
middle class? It usually becomes purchaser or buyer of
western products: Example: garments+fast food+
jeans
How does fare in CEPE? It marks the fundamental Re-ordering of China
Growth Strategy(VIII) transition from a manufacturing-based economy to one
driven by domestic consumption .
• (I) What is the importance of CPEC in the whole growth strategy?
• (II) China can not accomplish these objectives or goals on their own it
will need help from countries like Pakistan.
What is the importance of CPEC in the growth strategy?:
Connectivity[for imports and exports]+ cheap labour (It wants to want
to relocate their industries to cheap manufacturing belt SEZs).
NP: They also to expand the industrialization
towards China’s mid-west and west(IX)
What was the focus or (II) to make Chinse the
trajectory of China’s consumers buyers of
industrialization? Chinese products, and;
It took place around the Eastern coast of
China, between the Dalian and Guangzhou
regions.
Now, they want to expand its towards
China’s mid-west and West.
Even to accomplish the objective they need
the help of a country like Pakistan.
It marks fundamental Re-ordering of China Growth Strategy:
How would the political economy of the corridors work?(X)
• How would the political economy of the corridors work?
• (I) Raw material and foodstuff imported from neighbouring countries and
other destinations would be sent or supplied to SEZs for value-addition.
• (II) The industries located/established in Special Economic Zones (SEZ’)
would be linked or connected to their industrial headquarters in China.
These products would be sent to the headquarters for further value
addition.
• (III) From industrial headquarters, they would be sent to Chinese markets for
consumption. [for Chinse consumers].
• (IV) Surplus products would be re-exported through supply
chains[corridors].
NP:The Salient Features of the Project (I)
• (I)Portfolio/ Volume of investment: More than $ 70 billion / $63
• (II)The length of Gwadar—Kashgar Road: 3000—3200 km
• (III)Electricity Generation during the first phase : 11,000 Megawatt
• (IV)Development of Gwadar : Mohammad Asad Chaudhry, “CPEC
bringing prosperity to life of locals in Gwadar”, D.T. 23 January 2018.
• (V)Special Security Division: Baqir Sajjad Syed, “News report: COAS
vows to meet CPEC Security Challenges”, Dawn 12 March 2017:
• (VII) The CEPEC’s long-term Plan ( The next slide)
(IV)Development of Gwadar
Development of Modern The proposed Dedicated oil-city Water desalination plant
city development of largest
airport
290000 acres 4300 acres 80000 acres
160000 residential
(V)Special Security Division:
• The SSD consists of nine army battalions (9,229 personnel) and
six civil armed forces wings (4,502 personnel), raised at over
Rs5 billion.
• Functions: to provide security to Chinse working on CPEC and
non-Cpec projects in Pak
• The force will be deployed in accordance with Articles 147 and
245 of the Constitution and under the Anti-Terrorism Act 1997.
The CEPEC’s Long-term Plan(II): “CPEC Committee to
finalize long-term plan tomorrow”, Dawn 20 November 2017..
• Industrial Zones (9 industrial zones)
• Agriculture
• Tourism
• Digital Strategy
• Detailed Financial Strategy
 Industrial Zones

SEZ’s Myth or Reality ( Dawn) KPK 2 Punjab Sind 1 Baluch

1 istan

Five zones in four provinces+

One model zone in the capital
territory(6th)
Moqpandas in Gilgit-Baltistan (7th)
Mohmand Marble City in FATA
Bhimber Industrial Zone Azad (8th)
Kashmir
Industrial Park on Pak- steel mill(9th)
land at Port Qasim near Karachi
Agriculture:

Areas the in which two The other conspicuous The objectives the two
countries would features countries want to achieve
cooperate in the agriculture sector
Biological breeding ICT enabled agriculture To effectively boost local
and marketing of agricultural economy..
agriculture products.
Production,
processing ,storage and
transportation
Disease prevention and
control
Water resources
development and
utilization
Land development and
remediation
Tourism: What does Long-term Tourism Plan (LTP) Envisage? See

2+1+5 Tourism Underlying motive Application of new Pak’s assurance to

spatial structure concepts of China
urbanization to the
municipal
construction of
node cities
Two ports: (I) China’s vision of Construction of Give full play to
Karachi, and;(II) development of node cities along China’s advantage in
Gwadar. Pakistan’s costal CPEC. technology .equipm
(II) The costal areas : “more (I)Further details: ent and capital.
tourism belt as livable, business public
development axis friendly and tourist transportation
friendly”. system: OLMT
(II)Water supply;
and;(III) drainage
systems
Five tourist zones:
Digital Strategy
• (I)To establish Fiber optic connectivity: (I) between Xinjiang and
Gwadar; (II) from Gwadar to East Africa
•
• (II) To establish a submarine cable landing facility: the two functions
of Gwadar port are (I) as an economic port and (II) strategic
surveillance post.
Detailed Financial Strategy
• (I)To expand the role of the Yuan in the country’s economy.
• (To ask Pakistan): To Turn more to China for raising debt from markets
in Hongkong and dedicate increasing sources from its budget.
• Introduction
• Underlying motives
• Features ….
The Questions we have covered so Far
• BRI (Partially)
• CPEC win-win situation for Pakistan and China?
• CPEC’s benefits to Pakistan or CPEC as game-changer for Pakistan..
NP: Insights into CPEC’s Second Phase(I)
• Understanding /Highlighting the difference between the Phase and
the Second Phase of the Project
• The Salient Features of the Second Phase
• The Reasons behind delay
 Understanding /Highlighting the difference between the first Phase and the Second Phase of the Project

The Main Focus /Emphasis of the First The Second Phase Main Former Chinese Consul The Projects to be launched in The Difference between the first and second
Phase Focus/Emphasis: industrial General Wang Baluchistan phases of the project
cooperation+ development of industry Yu(August 2019)
and agriculture

Infrastructure: Special Economic Zones(SEZ’s) The Work on 27 CPEC Baluchistan holds 16 out of 22 The first phase required the leading role of
Road networks establishment of three SEZ’s projects approved.. government.
Fiber optic connectivity Names (22 in pipeline ) Whereas, as the second phase involves
The development of Gwadar port (I) KPK; (II) Faisalabad; (III) dhabajee Syed Nasir Hussain, “CPEC /demands the leading role of industrialists,
(Sind) Kernel”,DT,2 August 2019. private sector and business community.
The government’s role will be only of a
facilitator.
Energy: 11, 000 mw energy generation Projects in Gwadar Abdul Razak Daud: proactive of the private
projects ML- I: $ 6.8 BN sector.

Estimates of Volume of Investment: The other aspects: It will be less capital-intensive but more
aAafahan Subuhi: $ 40 bn complex…
Nasir Jamal: $ 25.5 bn and $ 29 bn

Chinse ambassador : S 25 billion Volume of Inverstment

Salient Features of the Project(II)

The (I)The (II) he Launching of (III) Two Hydel T(IV)The (V) The projects to
establishment of ML—I Project Projects announced development of be launched in or
the Three SEZ’s in AJK Gwadar Port: its are underway in
new dimensions Baluchistan
• (VI) Putting into practice CPEC’s industrial and agricultural vision.
The Reasons behind delay

Afshan Subuhi. “CPEC 2.0: Full speed ahead”, dawn Nasir Jamal , “Spread breakers and a long corridor”.
27 July 2020
The Reasons behind delay
• (I) The outbreak of Covid-19
• (II) Change of government in Pakistan:
• (III) Bureaucratic hurdles: Chinese have to navigate through
bureaucratic mine-fields(figuratively). The involvement of 37
ministries and departments.
• (IV) law and order situation in Pakistan: targeted killings of Chinses
NP: Depicted as beneficial to both Pakistan and China/ CPEC as win-win
situation for Pakistan and China

• CPEC: Benefits for Pakistan

• CPEC: Benefits for China
(I) The Project centrality for China’s BRI:
• (I) Flag-ship project; (II) may be instrumental in fulfilling all the
immediate and long-term objectives.
CPEC: Benefits to China
• (I) The Project centrality for China’s BRI: (I) Flag-ship project; (II) may be instrumental in fulfilling
all the immediate and long-term objectives.
• (II) It would provide a solution to the issue of over-production.
• (III) Create lots of opportunities for employment in the Chinese labour force: highly skilled
manpower
• (IV) Reduce fuel costs and save time
• (V) Provide possible opportunities for Chinese investors to have greater access to the growing
Pakistani middle class. (size of middle class)
• (VI) It would be immensely beneficial to cater to China’s present and future energy needs.
• (VII) It would be instrumental in overcoming the issue of chronic poverty in Xingang—Uygur
autonomous regions and addressing other religious-political crises the region is confronted with.
• (VIII) Provide China access to cheap raw materials and foodstuffs
• (IX) Greater Chinese control over the Indian Ocean: two functions of the Gwadar port.
(I) The Project centrality for China’s BRI:
• (I) Flag-ship project; (II) may be instrumental in fulfilling all the
immediate and long-term objectives.
The benefits China would accrue through
BRI(not to be didcussed in CPEC)
The increasing Establish Chinse China would be able to
dependence of member supremacy in Pan-Asian assert its soft power in
countries on China. Order the countries that would
become part of the CPEC
It would provide solution to the issue of over-
production.
Create lots of opportunities for employment
of Chinese labour force
• 850 million
Reduce fuel costs and save time
Provide possible opportunities for Chinese investors to
have greater access to growing Pakistani middle class.
• 3.5 crores to 8.5 crores:
• Abdul Qadeer: (2007): 7 to 8.5 crores
It would be instrumental in overcoming the issue of chronic
poverty in Xingang—Uygur autonomous regions
Provide China access to cheap raw material
and food stuffs
(I) The Project centrality for China’s BRI:
• (I) Flag-ship project; (II) may be instrumental in fulfilling all the
immediate and long-term objectives.
Greater Chinese control over Indian Ocean:
• The importance of Gwadar in the Maritime Silk Road (MSR)/String of
Pearls Strategy+ it would also function as forward surveillance post…
• The two tasks Gwadar would perform: (I) as commercial port, and;(II)
forward surveillance post (the kind of facility it would provide to
Chinese)
CPEC: Benefits to Pakistan

• It would lead to/ facilitate expeditious development of Infrastructure

• It would help to fill the investment gap
• It would help to mitigate the disastrous/crippling effects of the energy crisis
• It would create more opportunities for employment
• It would immensely contribute toward the development of the transportation and
logistics sectors
• It would provide a boost to the development of the tourism industry.
• Opportunities for Skill development
• Provide Pakistani entrepreneurs/bourgeoisie greater access to Chinese markets
• Enhance Pakistan’s importance as a transit economy
• The Benefits for the locals
(I) It would lead to/ facilitate expeditious development of
Infrastructure

What is infrastructure The state of The beneficial aspects of

infrastructure in Pakistan the development of
infrastructure for the
country
See Miftah Ismail’s, CPEC: Enhance the efficiency of
Misgivings and Reality, economy
The ET,26 April 2017: Make it investor-friendly
what does infrastructure country
include? : roads, railroads, Devotement of
railway tracks, and railway infrastructure projects in
signalling systems. node cities
(II) It would help to fill the investment gap: Miftah Ismail’s, CPEC:
Misgivings and Reality, The ET,26 April 2017

The two fundamental The inflow of the FDI in Imran Ali The cumulative impact
gaps in economy that Pakistan and how the
provide rationale for Chinese investment is
foreign aid: going to cerate a
difference?
Saving gap: 10—12 per What has been historic This is the second It may help Pakistan to
cent; trend? $ 1bn –1.25 $ instance in the history of develop into a trans-
And There are two major the Northwestern part of regional hub.
Investment gap: heads of financing under India that a major power
eventually, these two CPEC: (I) Investments, (II) will invest in the region.
gaps create a rationale for loans The previous instance: (I)
foreign aid. Major chunk of funding the development of canal
would come from colonies; (II) the
investments: 55—60 development of railways
If one divides all the
investments over the total
number of years, the
figure that comes out is $
4—5 bn.
(III)It would help to mitigate disastrous/crippling effects of energy crisis: See
Miftah Ismail’s, CPEC: Misgivings and Reality, The ET,26 April 2017

The intensity and The loss the country Its disastrous How and in what
magnitude of suffered in monetary impact on business ways the CPEC
energy crisis in terms environment and energy projects
Pakistan investors’ have enabled the
confidence country to address
the energy crisis

4500—5000 Electricity outages 19 projects

megawatts are estimated to cost 11,000
our economy about megawatts[ the
1.5% of GDP (or an projects have been
annual loss of about completed in the
Rs450 billion) first phase].
( Miftah Ismail).
[ 2017]
 (IV)It would create more opportunities for employment: (I)

Over all Jobs White-collar Jobs The facts and figures The importance of
about jobs after the job creation for the
completion of the country.
first phase of the
project

2,00000 jobs Shaheed 70, 000 jobs in the

Suhrawardy: Prof IR first phase:
University of
Peshawar 60,000
white collar jobs…
Afshan Subuhi, ( Looking at CPEC costs
amid Hype, Dawn 1 May 2017(II)
• “ Officials insist that over 80 pc jobs will be filled by locals in the initial
years”.
• “ However, if the multiplier effect over the next 10 years is taken into
account, the ratio will be no less than 1: 150; for each Chinese
national inducted in a job, 150 Pakistanis will be employed”.
• [ based on the profile of workforce engaged in projects.”
Talat Masood's Analysis(III)
• Example of Zong: 3100
(V)It would immensely contribute toward the development of
transportation and logistics sectors….

The Poor state of The assessment How many trucks The number of jobs Over-all impact
logistics and about the container would ply on of truckers the
transportation traffic in Pakistan Gwadar-Khunjrab project is expected
sector in the and how is likely to highway initially? to create?
country increase in the post- Their expected
CPEC era? increase in their
number once the
corridor becomes
full operational?
60,000 on daily Initially 1000 50,000 The number of
basis Later their number containers would
would increase to run into hundreds of
7000—8000 thousands if not
millions.
 (VI)It would provide a boost to the development of
the tourism industry: Nadeem Paracha, “China’s
Sunlight on Pakistan’s Tourism”, dawn 20 may 2017

CPEC and Tourism Dimensions of development What would it help Pakistan

of tourism to realize?

Salient Features: plan: 2+1+5
tourism development spatial
infrastructure.
“ long belt of coastal Its potential as a transit
enjoyment industry”.: special economy.
tourismzones,coastal tourism
belt,(I) spas; (II) hot spring
hotels; (III) nightlife; (IV)
aquariums; (V)
(VII)Opportunities for Skill development

• Ishrat Hussain, “Policy Imperatives”, Dawn, 10 April 2017.

• The greatest benefit of the CPEC to Pakistan:
• One of CPEC’s benefits would be the training and development
of skilled manpower. The project’s phases-- construction and
operational would open up opportunities for Pakistanis for the
development.
(VIII)Provide Pakistani entrepreneurs/bourgeoisie greater access to
Chinese markets

Main argument Supporting details It would lead to an

increase in the share of
Pakistan’s exports to
China.
Estimate the size Chinse
market
(IX)Enhance Pakistan’s importance as a transit economy: M.Zia ud Din “ Economy of
Corridors”.
It would help to realize
Pakistan potential as a
transregional hub…
How is Pakistan ideally
located to fulfil the
role/function? : (I) Egypt;(II)
Panama; (III) Dubai
Pakistan is ideally positioned
to play its role as a transit
economy.
Have few words of India In cumulative terms
certain aspects of Iran Pakistan would join the
Pakistan’s geo-strategic Afghanistan ranks of middle income
significance Russia countries
China
Pakistan’s permanent
geographical inertia makes
Pak an ideal state to develop
itself into a transit economy/
trans-national hub.
(X)The Benefits for the Locals

For the It would largely

regions The SEZ’s and depend upon the
located their vision of Pakistani
along prospective government to
For the Gwadar- role in make it more and
people of Khunjrab employment more beneficial to
Gwadar For Baloch Highway creation locals
Level of human
development
CPEC Critical View(I)
• Its potentially disastrous consequences for Pakistani Industry
• Put Pressure on Pakistan’s Balance of Payment Situation and Current
Account Deficit
• It could disturb the ethnic fault lines in Baluchistan
• It could exacerbate civil-military tensions
• Environmental Implications
• The lack of disclosure by the government of many crucial details may
create doubt among public would lead to the development of
negative consensus.
New Point: The Critical View(II)
• (I) Its benefits are contingent upon answers to several critical
questions: Qaisar Bengali
• Would it presage Chinese Imperialism or surgical Colonialism?
• It could escalate/flare up cultural conflict
• The prevalence of strategic vision: Its pitfall
 (1) Its Potentially Disastrous Consequences for Pakistani Industry

The rection of What is going to happen under CPEC How the development of Textile The potentially disastrous What would happen
Pakistanis towards industry in Xingang is going to consequences of China’s in the post-CPEC era?
CPEC create challenges for Pakistani economic penetration in
Textile industry? Pakistan even before the CPEC
era

The elements which Mergers of economies A potential rival for Pakistani Textile The example of BATA industry: The degree or level of
are optimistic about The apprehensions of Pakistanis: we They had been exceedingly Chinese intrusion
the CPEC and its would end up as losers. difficult to compete with would be much
prospects: Chinese businesses higher/greater?

But those who seem The advantages the Chinese industry Examples: Foot ware;
to be visibly enjoys or have over Pakistan: leather; stationery and
concerned? (I) Economies of Scale. garments
(II)The advantages of Specialization;
(III) Value-addition;
(IV) Cost of doing business is
substantially low in China, but in
Pakistan it is high.
(1) Its Potentially Disastrous Consequences
for Pakistani Industry
What is going to happen
under CPEC?
I) Economies of Scale ( sharah ki bachat)/
(padaish per paimana e Kabeer ki)
• The comparison of labour forces: 70—80 crores vs Pakistan’s population
• Meaning: Economies of scale refer to the cost advantages a business or organization can
achieve as it increases the scale of its operations. In simpler terms, the more a company
produces, the lower the cost per unit.
• The larger quantity of production brings down per unit cost.
This is because fixed costs, such as rent and salaries, can be spread out over a larger output,
leading to lower average costs incurred by small businesses.
Economies of scale can be achieved in various ways, including using specialized
equipment, negotiating better prices for raw materials, and spreading advertising and
marketing costs over a larger output. (imp)

• Illustration through an example: the economies of scale enable an industrialized country

to keep its cost of production lower.
(II) The Advantages of Specialization:
What is the What do we mean Examples Advantages Where does
characteristic by specialization : Pakistan stand in
feature of modern illustration though this regard?
industrial example of modern
production? automobile
industry.
Specialisation The concept of The modern Lowers/reduces the
It takes place under production under a automobile industry cost of production
specialized single roof has is divided into Improvement in
industries: become virtually several industries: product quality.
It is carried out redundant. (I) tyre and tube, (II)
/done through spare parts, (III)
specialized assembling.
industries. (II) Watch Industry
in Switzerland:
domestic industries
(III) Value-addition;
(I) Explain the concept of value Why China has / enjoys the Example
addition advantage over-Pakistan
Value-added is the additional Value addition fetches more profits.
features or economic value that a
company adds to its products and
services before offering them to
customers.
(II) Value added is the extra value
created over and above the
original value of something. It can
apply to products, services,
companies, management, and
others.
Uranium ORES --- THERMO
NUCLEAR WEOPN
IRON– RALIWAY ENGINE
Value-addition:(II)
• China, being an industrial giant, could produce value-added products which fetch
higher profits.
• On the other hand, Pakistan, an agricultural country, lags far behind in the domain.
• Pakistan is usually described as a single-crop economy.
• Illustration through example of cotton: (I) yarn;(II) cloth; (III) garment
• …..: (I) Iron ores are rocks and minerals from which metallic iron can be extracted.
There are four main types of iron ore deposits: massive hematite, which is the most
commonly mined; magnetite, titanomagnetite, and pisolitic ironstone. (NR)
On the other hand, highly industrialized nations could manufacture engines
out of iron ores.
•
(IV) Cost of doing business is substantially
low in China but in Pakistan it is high.
• (I) The Cost of doing business is substantially low in China, but in Pakistan,
it is very high.
• It has virtually brought Pakistani industries in a disadvantageous position.
• (II) What has happened in Pakistan? The challenges the growing intrusion
or penetration of China has posed to Pakistan’s small and medium-scale
businesses– they have virtually stopped production and changed the mode
of business operations to what one can describe as “stock-and-sale”.
• de-industrialization
• The increase in the cost of doing business eventually leads to an increase in
per-unit cost which makes a country’s exports uncompetitive in the world
market.
III) Value-addition;
• China, being an industrial giant, could produce value-added products which fetch
higher profits.
• On the other hand, Pakistan, an agricultural country, lags far behind in the domain.
• Pakistan is usually described as a single-crop economy.
• Illustration through example of cotton: (I) yarn;(II) cloth; (III) garment
• …..: (I) Iron ores are rocks and minerals from which metallic iron can be extracted.
There are four main types of iron ore deposits: massive hematite, which is the most
commonly mined; magnetite, titanomagnetite, and pisolitic ironstone. (NR)
On the other hand, highly industrialized nations could manufacture engines
out of iron ores.
•
Example of BATA
• The number of employees in BATA at the time of Pakistan’s
independence was 5000.
• Till 2007—2008, their number had decreased to 800.
• BATA’s increasing reliance on China.
• Instead of manufacturing all types of shoes, it now relies on imports
of shoes and their other parts from China.
(2) Put Pressure on Pakistan’s Balance of Payment Situation and
increase Current Account Deficit

Qaisar Bengali Ishrat Hussain Inflows Outflows The estimates

about the burden
put on the country’s
current account
till 2020
Inflows: investments The additional (I) Investments (I) Profit remittances $ 2 bn ( in forms of
and loans burden it would (II) Loans (II) Interest interest payment
Outflows: profit place on Pakistan's payments and profit
remittances and economy: $ 2 bn remittances)
interest payments
Balance of payments problem
primarily in the form of current
account deficit is one of the major
issues faced by Pakistan’s
economy.
It is the root cause behind the
inflation and growth problems.
The balance of payments (BOP)
transactions consist of imports and
exports of goods, services, and
capital, as well as transfer
payments, such as foreign aid
and ...
 (3)It could disturb the ethnic fault lines in Baluchistan(unplanned migration): exacerbate the issue of
ethnicity / lead towards politicization of ethnicity

The historic instances of

Consequences
politicization of ethnicity
Unplanned migration Two instances:
Its impact on Gwadar: non-Baloch would (I) 1947 and 1950 migration of Urdu-
out-number Baloch speaking migrants to Sindh
Fallouts on ethnic discord in Sindh
(II) Afghan Refugees: 3.5 million
How has it widened the Bethnic divide in
Baluchistan? Baloch-Pushtun divide
Implications
2017: 2,60000
What would happen in the post-CPEC era?
Non-Baloch would outnumber Baloch.
Its consequences…Bloch would turn into a
minority with in Bloch’s heartland.
Its impact on Baloch ethnicity.
(4)It could exacerbate civil-military tensions

• Main argument: How the military has virtually dominated major

policies of Pakistan….
• The paramount importance of CPEC for several areas of domestic and
international politics.
• Military’s dominating presence in the CPEC policy-making? Military
has already entered into CPEC on the pretext of providing security
• How could it become a potential avenue of tussle/ another source of
conflict/ between civilians and military?:
 (5) Environmental Implications/ impact / hazards: thesis statement
The share of thermal power plants
in the power generation portfolio/
projects is much larger
11000 MW--
Majority of coal-fired or thermal
plants
Oct 3, 2019 — Nearly 75 per cent
of the generation capacity of CPEC
power plants is coal-fired—Pakistan
National Electric Power Regulatory
Authority ...(2019).
The cumulative impact of fuel
Its potentially disastrous emissions as a result of flow of The consequences of following a
Deforestation in the middle consequences for ecology of traffic on Gwadar—Khunjrab short-sighted policy on the
completion of CPEC projects Northern areas Highway environmental front.
The specific instance of construction Global warming in Northern areas … See details on the next slide “open-gate”: that cause
of 107 km road of CPEC corridor Melting of glaciers environmental pollution “ dirty-
KPK: the cutting down 28,000 trees … industries”.
The catastrophic impact effects of
pollutant discharge or emissions:
The share of thermal plants in the power
generation projects
• Initially 8910 MW ( 6740 MW)
• 11000…. (…..)
Environmental Implications(II)
• Environmental cooperation is usually a significant part of such
agreements, but this component has yet to be addressed.
• rough estimate: This is a problem since it has been estimated that once
trade starts flowing/ once the route becomes fully operational, up to
7,000 trucks a day will pass through the ecologically sensitive Khunjrab
Pass and generate up to 36.5 million tons of CO2 emissions en route to
Gwadar annually.

• All experts agree that the emissions will melt the northern region’s
glaciers and negatively impact agriculture and the food and water
security of our growing population.
(7)The lack of disclosure by the government of many crucial details may
create doubt among public would lead to the development of negative
consensus.

• Issues: (I) the Future of Gwadar; (II) if Pakistan is unable to pay back
the loans; (III) detailed financial strategy; (IV) the role of Yuan in
Pakistan’s economy.
• It would create apprehensions about Chinese intentions: China is set
to exploit Pakistan.
• China is going to ruthlessly/ cynically exploit Pakistan…
• It could lead to a backlash against the Chinese: China will act as an
imperial power, not a friend.
• crucial details:
(8) Its Benefits are Contingent upon answers
to several critical questions…
Critical Questions (Anjum Altaf: 19 Qaisar Bengali : 11 questions Moonis Ahmer : (the other side of
March 2017) the CPEC)
Terms and conditions
Costs
Concessions
Exports
Jobs
Industrial Estates
Special economic zones
Baluchistan
The themes that one can add? CPEC
Authority; Gwadar fencing…
(9)Would it going to presage Chinese
Imperialism or Surgical Colonialism?
• Is China going to act as the second East India Company?: will act as an
imperialist power. Present-day China is not China of Moa Tse Dong or
Chou en Lia, where the Chinese leadership used to openly say that we
would defend Pakistan throughout the world. Today’s China is the
greatest beneficiary of the Neo-liberal economic order. If Pakistan fails
to pay back CPEC loans how would China react?
• Questions are also asked about the future of Gwadar: Is it going to
meet the same fate as what happened to Sri Lanka’s Hambantota
port? China constructed the port in 2014 but Srilanka could not meet
the obligations and took it for lease for 99 years.
(10)It could escalate/flare up cultural conflict: Nasser Janjua:

• How was Pakistan imagined? As a Security state

• The characteristic features of “Security state”: (characteristic features)
insular; nationalist and religious
• Now Pakistan is re-imagined as a “Transit state”: Liberal:
• Pakistan must undergo a difficult transition from “Security” to
“Transit” state..
• The sections of population and their reaction:
(11) The Prevalence of strategic vision: Its
pitfalls
• The kind of benefits the country expects to accrue from the project
could not be gained if the project remains under the control of the
military, which would imply that strategic vision dominates or prevails
over thinking.
• Examples:
• In this sense, the prospective benefits of the project might not accrue.
Questions on CPEC

• (I)CPEC Challenges and Opportunities

• (II)CPEC as a “game-changer” for the entire region?.. Next slides
• (III)BRI: following slides
• (IV)Would it presage the advent of Chinese Imperialism or Surgical
Colonialism? Next slides
• (V) What are China and Pakistan’s BRI/CPEC challenges?
• (VI) CPEC is beneficial to both countries but more beneficial to China
than to Pakistan. What should we do to maximize its benefits for
Pakistan?
CPEC Challenges and Opportunities
Suggestions: What should we do to maximize
its benefits for Pakistan?
• (1)Industrial Policy
• (2)Trade Policy
• (3)Skill Development
• (4)Pakistan should strive for transfer of technology.
• (5)How do you overcome environmental challenges?
• (6)Pakistan should try to enhance its comparative advantage.
• (7)We must formulate/devise a national policy to maximize the project’s benefits.
• (8)How do you address Baloch’s apprehensions?
• (9)What kind of projects should be launched?
• (10)What kind of vision should prevail?
• (11)What should public policy’s nature and direction be?
Industrial Policy(I):

Suggestions regarding SEZ’s Baluchistan

Level playing field to Pakistani firms. Some portion should be reserved for local investors
These should not be allowed to develop into wherever feasible.
“exclusive Chinse enclaves”.
Industrial Policy(II):
• LSE paper: we need to formulate CPEC-related industrial policy which
focuses on high-value exports.
(2) Trade Policy: What should be nature and direction of trade
policy

• (I)) Pakistan will have to face/ run into a current account deficit of $ 2
bn annually. [ remember about inflows and outflows]
Main suggestion: Exports must grow at least 15 per cent annually.
• (II) Renegotiation of the Free Trade Agreement (FTA) to preserve the
comparative advantage of Pakistani exports
• (III) Import tariff rates should be gradually reduced to enable Pakistani
companies to participate in the global supply chain.
(3)Skill Development

• (I)There is a need for planning to assess long-term manpower

requirements.
• There are two major phases of CPEC:(I) Construction, and;(II)
Operational phase.
• (II) Two kinds of training programmes could be offered:(i) formal
training and;(ii) internships and attachments.
• Suggestions about formal training:
Availability of trainers and the setting up of training facilities
(III) Whom should be trained? Youth from backward areas…
(4) Pakistan should Strive for Transfer of Technology

• (I) Our agreements with China should have a technology transfer component.
• (II) We should take a cue from the pattern/trajectory of India’s industrialization.
Example of India: The two major phases of India’s industrialization:(I) Protectionism
and (II) Liberalization
1947—1990: it followed the policy of protectionism and was able to expand its
industrial base. Examples: (I) Soviet Union– Steel Industry (II) America Union carbide
Plant ; (III) India's home-made car Ambassador
Since 1991: in the era of economic liberalization: Examples: (I) Indo-US nuclear deal;
(II) Indian industrialists purchased three major automobile companies; (III) IT sector
• (III) What could the benefits of technology transfer for Pakistan?: diversification of
exports; (II) broadening of industrial base; (III) creation of more job opportunities; (IV)
Export promotion industrialization [ development of LSM].
• IT sector exports from India reached at about 178 billion U.S. billion
dollars in the fiscal year 2022. Aug 22, 2023
(5) How to overcome environmental
challenges?
There is a need to conduct a
comprehensive study to
assess the CPEC’s effects on a
country’s environment.
Dr Qaisar Bengali
;Suggestions to overcome fuel Installation of emission Afforestation. A hybrid car uses more than
emissions enroute to Gwadar control devices like catalytic one means of
(I) Hybrid fuels/cars-- We convertors in automobiles. energy, combining a petrol or
should move toward hybrid diesel engine with an electric
fuel then electric motors/ motor, and the two systems
later electric motors work with each other to move
(II) electric motors [main the vehicle. This allows the car
requirements] to burn less gasoline,
achieving better fuel efficiency
. than a traditional engine that
solely uses fuel does.
(I)Fuel recharging satiations The explanation of hybrid fuel.
along the corridors.
(II)How can these plants be
supplied with electricity
through power plants that are
environment friendly.
[ hydro+solar]
Power generation capacity of
the power plants.
(6) Pakistan should try to enhance its comparative advantage in agriculture, raw material and
labour sectors as Pakistan can not follow the policy of protectionism against China. (crux)

• (I)Briefly introduce the background of the theory of comparative

advantage: Adam Smith (Absolute Advantage) and David
Ricardo(comparative Advantage). By looking at the trade between
Britain and Latin America
• (II) What did Ricardo propose? They should strive to gain/maximize
their comparative advantage in their own domains
• (III) The theory was disapproved by Development Economists in the
1950’s :
• (IV) This theory has become more relevant in the era of Liberalization
 (II) Pakistan should try to enhance comparative advantage(II)…

The domains in which the The domains in which the How is Globalization working, How?
industrial North enjoys underdeveloped South has and in whose favour?
comparative advantage comparative advantage?

Technology Agriculture Industrial North Imposing strict quotas on the

exports of the developing
countries.

Industry Labour How? Pressurizing the Third Placing ban on labour.

World to move towards a Zero-
tariff regime

On the other hand, they are not

giving the third world countries a
level playing field by not allowing
them to maximise their
comparative advantage in their
respective domains---
( Agriculture and Labour)
What should Pakistan do?(III)
To strive to The perusal of the
enhance/maximize policy becomes
comparative more imperative in
advantage in the view of Pakistan ‘s
following areas. the country’s
limitations
following policy of
protectionism
against China.
(I) Agriculture
(II) Raw material
(III) Labour
(7) We need to formulate/devise a national
policy to maximize benefits out of the project
• (I) We need to create synergies in our policies/ work synergistically: identifying areas and
dimensions…:(I) manpower requirements; (II) country’s comparative advantage; (III) available pool
or talents and through skill development endeavour to produce a labour force that can accrue
maximum benefits of the opportunities the CPEC is creating.
• (II)Suggestion: gaining efficiencies in supply chain management for competitive advantage in local
and global markets.
• Focus on supply-chain management, emphasizing time and cost saving during CPEC infrastructure
development.

• (III) The creation of a separate Ministry of Logistics and Transportation for CPEC
• (IV) We must protect Pakistan’s truck industry to modernize the trucking business and industry.
Excel Logistics: we should only allow more than/ above 450 excel load trucks to operate in
Pakistan; otherwise, it would lead to the collapse of Pakistan’s trucking industry.
Above –excel load
(V):Synergy(coordinated action): Meaning
and Examples
Meaning How to understand the meaning of synergy in
context of Globalization?
Interaction or cooperation of two or more agents Inventions: Telephone(Graham Bell)
to produce a combined effect greater than the sum Radio (Marconi)
total of their separate effects. Television (Beard)
Telegraph
If you say there is synergy between two more Computer
organizations or groups, you mean that when they The very example of a mobile phone shows
combine or work together, they are more synergyzining effects of all the inventions in one
successful than when they are on their own. device.
Co-ordinated action of muscles, organs or drugs…

Sentence: the synergies gained from the merger, Mobile Phone: Explicit example of synergy…
Parelli claimed, would create savings of about $
180 million over four years.
What is the concept of Synergy?
Industrial vision Resources Manpower Industrial potential
 (8) How to address the apprehensions of Baloch?
Ishrat Hussain More share of locals in jobs:
Proposals (I) There should be a specific
share of Baluchistan in
Gwadar port revenue ; (II)
Baluchistan's share in toll
collection in the areas
through which the Gwadar-
Khunjrab Highway passes.
Some portion What is Baluchistan's share
should be in Gwadar port revenues, if
reserved for local any?
investors Is the Gwadar-Khunjrab
wherever Highway a toll road? If yes,
feasible. what are the shares for
provinces through which the
Highway passes?
II Qaisar Bengali: the locals should be The passing of special Act of
recruited for the security units Parliament
deployed in the districts of
Baluchistan where the Gwadar-
Khunjrab highway passes.
The establishment of a water-
desalination plant in Gwadar.
What percentage of security units, What is the plan to ensure that
being raised for CPEC related Gwadar does not become a
protection, recruited from districts Baloch minority city?:
through which the Gwadar-Khunjrab Non-Baloch should not be given
Highway passes? voting rights say for the period of
What is the water provision plan for 99-years….
Gwadar? If desalinated, what is the
financing plan to cover the high cost?
(8) How do you address Baloch’s apprehensions?

• (I)Some portion should be reserved for local investors wherever feasible.

• (II) There should be a specific share of Baluchistan in Gwadar port revenue
• (III) Baluchistan's share in toll collection in the areas through which the Gwadar-
Khunjrab Highway passes.
• (IV) The locals should be recruited for the security units deployed in the districts of
Baluchistan where the Gwadar-Khunjrab highway passes.
• (V) The establishment of a water-desalination plant in Gwadar.
(VI) The passing of Special Act of Parliament to ensure that Gwadar does not become a
Baloch minority city?:
• (VII) Non-Baloch should not be given voting rights for a period of 99-years
• (VIII) Concerted efforts should be made to maximize job opportunities for local Baloch.
You may add some more suggestions
• Add the issues raised by “haqq do Tehrik”.
• (II) expeditious development of Western route
(10) What kind of projects should be
launched?(I)
• (I)Such projects that benefit both Pakistan and China: Example.. (I)
Khyber-Pakhtunkhwa Sustainable Donkey Development Project.
• (II)We should also develop specialization according to the demand of
the increasing number of Chinese diaspora/ population in Pakistan
• Hasan Khawar: “CPEC and Skill Development”:
2009: 10,000
2016: 60,000
• The projects that could be beneficial to Increase number of Chinese
citizens in Pakistan: illustration with examples… (4 examples)
(10) What kind of projects should be
launched?(II)
Food streets Recreational Language centers Schools Culinarily skills
centers /expertise
(11) What kind of vision should prevail?

• Economic not security.

(12) What should be the nature and direction of
public policy?

• In Pakistan public policy requires greater transparency and disclosure.

• Public should be kept in dark.
Summing Up
Repeat the On the surface Identify the Its marks/ Add one or two Ishrat Hussain
thesis more beneficial areas in which it represents a suggestions
statement to China could be paradigmatic
beneficial to shift in Pak—
Pakistan? China relations
Game-changer “the success of
or game- this initiative lies
changing in successful
opportunity. interaction
between
investment,
institutions and
policy”.
Toll collection: It provides Need to devise a
Pakistan with a national
platform for strategy.
development.