Wednesday, May 31, 2017

The Silk Road to Nowhere

http://carnegie.ru/commentary/?fa=70061

24.05.2017

The Silk Road to Nowhere

Russia in the Asia-PacificChina’s Way 瞭華

Alexander 
Gabuev

It will take years for Russia to increase trade with China. To do so, Russia will need to strengthen its institutions, overcome non-tariff barriers to the Chinese market, and enhance its reputation among Chinese investors.

On May 14–15, 28 heads of state, including Vladimir Putin, attended the Belt and Road Forum for International Cooperation in Beijing, an event that was supposed to showcase the success of Chinese leader Xi Jinping’s Silk Road revival.

It didn’t. 

The joint declaration issued at the conclusion of the forum is rife with platitudes about supporting the common good and opposing evil that were included to assuage fears that China is using the initiative to drag other countries into its sphere of influence. Instead, Beijing came off as disingenuous.

Perhaps most importantly, the Belt and Road Initiative suffers from a lack of performance criteria. Although Xi Jinping did announce five broadly defined areas of cooperation in 2013, Beijing never set any concrete goals. Chinese planners simply shrug off questions about key performance indicators, saying that the Silk Road incorporates too many countries and involves too many variables over which Beijing has no control.

While China’s partners think this uncertainty is problematic, it’s seen as a good thing inside China, including by Xi Jinping himself.  After all, the lack of performance criteria allows the government to declare anything a success.

Beijing isn’t doing anything new with the Belt and Road Initiative. Long before plans to revive the Silk Road were made public, Chinese companies built infrastructure in other countries, ran pipelines and fiber-optic networks across Eurasia, and handed out loans, while Beijing invested billions in enhancing its soft power. It’s not surprising, then, that many of China’s old projects, like the construction of Gwadar Port in Pakistan, which began in 2002, are touted as the Belt and Road’s flagship achievements.

Developing transcontinental routes between Europe and China is in fact the only new and large-scale vector of the Silk Road initiative that Xi Jinping has discussed. Beijing has numerous reasons for devoting resources to this effort, one of which is geopolitical: Chinese military officials want to create land routes for cargo shipments (primarily oil) to bypass the Strait of Malacca in light of the current tensions over the South China Sea.

Other factors are purely economic: EU-China trade volumes are incredibly high, totaling 1.5 billion euros per day. Labor costs are increasing in coastal provinces but still low inland, making it an attractive place for investment. China has been constructing infrastructure in these areas since 2000 as part of the government’s program to develop the country’s western regions.

What’s more, land shipments save time: they take twelve to sixteen days, as opposed to thirty days or more by sea. If China concentrated on working out its land routes to Europe, it would hardly find a faster route than through the Eurasian Customs Union (Russia, Kazakhstan, and Belarus).

Still, actual trade numbers have thus far failed to live up to expectations. For now, overland and maritime transit costs are about equal, but sea transit is expected to again be at least 1.5 times cheaper than land in the future. And at the end of the day, delivery time, which Chinese officials love to talk about when they advertise the Silk Road, is not as important to businesses as the cost of shipping.

In the past three years, projects facilitating transportation links between China and Europe have received much less Chinese investment than many analysts, including this one, expected. This is particularly true in the post-Soviet states. Beijing has thus far failed to act on the list of 40 potential transportation projects prepared by the Russian government and the Eurasian Economic Commission. The Chinese have also slowed down the construction of a high-speed railroad between Moscow and Kazan, insisting that the project be commercially viable, which is rather unlikely.

What changed? Why is China, which once generously invested heavily in dubious construction projects all over the world, calculating its risks more carefully now?

This change has to do with Beijing’s reassessment of bad debt levels in China’s financial system, which began to rise two years ago. The Chinese stock market crashed in the summer of 2015, reducing market capitalization by $4.5 trillion. China managed to avoid a serious financial crisis, but the authorities did launch a comprehensive audit of the country’s entire financial sector, including state banks and leading development institutions like the China Development Bank and the Export-Import Bank, which had been seen as important sources of financing for the Silk Road initiative.

At the same time, Beijing started cleaning up debt pyramids accumulated by local governments, which had reached almost $4 trillion by the end of 2014. Money was borrowed through nontransparent mechanisms used to finance money-losing and superfluous infrastructure projects, which created economic growth, jobs, upward mobility for government officials, and, of course, opportunities for graft. By the end of 2015, it had become clear to Chinese authorities that it would be extremely dangerous to continue down a similar path internationally.

The work of the Silk Road Fund (SRF), with its $40 billion in capital, clearly illustrates this policy change. Created in 2014, the fund was slated to become the main driver of investment in the Silk Road project, but has closed only six deals in the past three years. Instead, Beijing now uses the SRF as a political purse: it is not linked to the global financial system and can therefore finance politically controversial projects. In fact, the Chinese used the SRF to invest in Yamal SPG and Sibur, which are co-owned by the head of the Russia-China Business Council, Gennady Timchenko, a close friend of Putin’s who is on Western sanctions lists. These two politically motivated investments are arguably the only tangible results of Russia’s participation in the Belt and Road Initiative.

This doesn’t mean that Russia should shy away from attracting Chinese investment and increasing trade with China. In 2016, Chinese companies invested over $225 billion overseas, twice as much as in 2014. Just as before, most of this investment went to European, American, and Australian markets, while Russia received only 2 percent of the money. To compete for Chinese money and increase trade with China, Russia will need to improve its investment climate.

It will be particularly difficult to do so now, as Moscow picked all the low-hanging fruit following the annexation of Crimea in 2014. Russia now needs to strengthen its institutions and overcome non-tariff barriers on China’s market (and be ready for stiff competition once it gets there). Russia also needs to enhance its reputation among Chinese investors. It will take years of persistent work to accomplish this—work that is unlikely to bring swift victories or praise for government officials and businessmen. Still, it is the only realistic way forward.

The New Silk Road has led nowhere so far. The idea of a Great Eurasian Partnership (a union of the SCO, EAEU, ASEAN, and even the EU), which Vladimir Putin spoke about in Beijing, is no less futile. It would be a mistake to spend the government’s limited human resources on this pipe dream instead of directing them to specific small-scale projects for Russian and Chinese businesses.

This article originally appeared in Russian in Vedomosti.

V0ICE 0F BAL0CH LATEST

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Pakistan to acquire 3 AEW&C to boost counter terror operations in BALOCHISTAN

🔴 Pakistan to acquire 3  airborne early warning and control system (AEW&C) from SAAB, it provides access to a detailed situational awareness that for example can be uvsed for border surveillance, search and rescue operations and for tackling terrorism and organised crime.

Pakistan  would use this against Baloch rebels in restive province of Balochistan.

QUOTE: China is an economic sugar daddy

🔴 China is an economic sugar daddy that hides behind the principle of non-interference and a flawed economic win-win proposition.

How German Freighter DHL Was Literally A Trailblazer For China's New Silk Road

https://www.forbes.com/sites/wadeshepard/2017/05/31/the-companies-building-the-new-silk-road-dhl/#260053cd62da

MAY 31, 2017 @ 08:56 AM456 

Wade Shepard ,  

 CONTRIBUTOR

I travel to emerging markets around Asia and report on what I find.  

A cyclist rides his bike past a DHL Worldwide Express advertisement in Shanghai, China, on Monday, Nov. 26, 2007. Photographer: Qilai Shen/Bloomberg News.

The New Silk Road — the matrix of emerging transportation routes, development projects, trade deals, customs unions, and political initiatives to better connect countries from China to Europe — is at root an inter-governmental affair. But while governments are assembling a skeletal framework of enhanced trans-Eurasian trade the meat of the project must come from the private sector. If all of those new rail lines, ports and special economic zones are to really come alive, companies looking to make a profit must be enticed to jump in.

DHL, the German freight forwarding giant, was one of the New Silk Road’s earliest adopters, blazing new intermodal transport routes across Eurasia long before Chinese President Xi Jinping starting talking about belts and roads. DHL got in on trans-Eurasian trade development back in 2008, at a time when the continent-spanning trade network was dubbed the Eurasian Land Bridge.

What DHL found was that they had a large amount of customers who wanted to ship their cargo between China and Europe faster than sea freight but didn’t want to pay the expensive costs associated with sending it by air. So DHL began pioneering new and innovative ways to get goods from one side of Eurasia to the other — a distance in the ballpark of 9,000 kilometers. In 2011 and 2012 alone, the company did over 200 trial shipments between Asia and Europe, eventually setting up the parameters of what would soon become multiple regular services.

Then in 2013 Xi Jinping announced the Belt and Road initiative. This, according to Zafar Engin, DHL’s head of value added service for China, was exactly what DHL was waiting for. With the emerging trans-Eurasian rail network as its vanguard, the Belt and Road initiative promised the predicability and stability that DHL needed to provide their customers with faster transit times and fixed departure times.

BEIJING, CHINA - MAY 14: Chinese President Xi Jinping speaks during the opening ceremony of the Belt and Road Forum at the China National Convention Center (CNCC) in Beijing, Sunday, May 14, 2017. (Photo by Mark Schiefelbein-Pool/Getty Images)

Since then, the trans-Eurasian block train network has exploded, with over 39 lines connecting 15 cities in Europe with over 20 cities in China. With each passing year, transit times are improving — with 10 days between Chengdu and Lodz, Poland now reality. Cargo volumes are also on the rise, doubling last year alone — a scenario that is expected to happen once again this year, according to Engin.

The trans-Eurasian rail option is expected to account for roughly 10% of air freight and 2% of ocean freight, of which DHL has a 20% market share of. These may seem like small numbers at a brief glance, but we have to consider the fact that the total quantity of cargo being measured against is absolutely massive, as well as the fact that the type of cargo being shipped by rail is typically high value -- all containers are not equal.

DHL

DHL multimodal route between China and Turkey.

DHL is very active along each of the three China-Europe overland trade corridors, with routes shooting north from China to Russia's Trans-Siberian railway, across Kazakhstan, as well as a new one which crosses the Caspian Sea en route to Turkey, while countries such as Japan and Taiwan have been linked into these routes by sea.

The experiences and advances in trans-Eurasian overland trade that companies like DHL had been cultivating since 2008 were fundamental to the success of the newly emerging “Belt and Road” rail network, as the New Silk Road starts bringing in more private investors and showing glimmers of life.

I'm the author of Ghost Cities of China. I'm currently traveling the New Silk Road doing research for a new book

Setback in Sri Lanka for China’s silk road

http://www.atimes.com/article/setback-sri-lanka-chinas-silk-road/

Police clash with demonstrators during a protest against the launching of a Chinese industrial zone by China Merchants Port Holdings Company, in Mirijjawila, Sri Lanka January 7, 2017. Photo: Reuters

SRI LANKAOBOR

Beijing needs to take to heart the lessons from opposition to its 'win-win' largesse

By DÁNIEL BALÁZSJUNE 1, 2017 8:46 AM (UTC+8)00

China’s ambitious Belt and Road Initiative sets the bar high. It strives to connect Asia, Africa and Europe with the aim of achieving mutual development. Sri Lanka, with its valuable position in the heart of the Indian Ocean, is a crucial participant in Beijing’s newest endeavor.

But China-Sri Lanka ties seemed to reach a low point when in January 2017 violent protests erupted in which people expressed opposition to an industrial zone project funded by Beijing. This turbulent and unpredictable bilateral engagement provides China a valuable lesson for building the Belt and Road.

China tries its best to convince the rest of the world that it is a fundamentally different kind of great power. This idea is partly underpinned by the ‘Five Principles of Peaceful Coexistence’ that guided China’s post-1949 foreign policy. One of the core concepts of this engagement is non-interference with other countries’ internal affairs. A further pillar of China’s self-perception of being a benign great power is ‘win-win’ cooperation that is beneficial for all partners.

An archetypical manifestation of this thinking is the Belt and Road. China’s proposal entails deepened financial, political, infrastructural, commercial and cultural ties between Beijing and the more than 60 other participants. The main idea is that China shares the fruit of its development for the sake of mutual progress. According to the official narrative, the project is not a geopolitical tool to extend Beijing’s influence. Everybody is a winner under the novel cooperation framework.

Against this background, it is hard to believe that anything could go wrong. Yet in Sri Lanka — one of China’s flagship participants — public discontent erupted in a violent protest. The case of Sino-Sri Lankan relations proves that if non-interference equates to an ignorance of domestic dynamics, then China’s hands-off foreign policy can cause more harm than good.

In order to make sense of the recent developments in bilateral ties, one has to take a step back and look at the aftermath of the nearly three decades long Eelam War. The bloody conflict left Sri Lanka in ruins, forcing the little island nation to rely on external actors to rebuild itself. Sri Lanka’s post-civil war history has been chiefly shaped by the duality of the Beijing and Washington Consensus. While Washington’s helping hand comes with rigid conditionality, Chinese aid and investments seem to come with no strings attached.

In 2009, the civil war came to a brutal end at the hands of Mahinda Rajapaksa, who subsequently became the subject of allegations of human rights violations, corruption and nepotism. Given its dubious reputation, the Rajapaksa regime quickly ran out of friends and the Beijing Consensus was a convenient and reliable source of funds. China-Sri Lanka relations reached new heights. Chinese signature projects such as the Mattala airport, Hambantota port and Colombo port city were built with billions of dollars of Chinese funds.

This engagement, also known as the Colombo Consensus, was indeed a win-win cooperation. Rajapaksa could rely on the steady flow of Chinese money to solidify his power and Beijing gained access to one of the most valuable geostrategic positions in the Indian Ocean.

All of this led observers to believe that Rajapaksa had cemented his power for a very long time to come. Yet such assumptions proved wrong. In a surprising triumph of democracy, Maithripala Sirisena, a former ally of Rajapaksa, gained power in January 2015. The novel leader’s promises included a revision of ill-famed Chinese projects, including the Colombo Port City, a massive initiative costing more than a billion dollars.

But it is hard to keep such promises once one is bound by legal contracts. Sri Lankan debt exceeds US$60 billion, more than 10% of it owed to the Chinese. Beijing was irked by the new government’s attitude and played hard during negotiations over the Hambantota Port project, squeezing out a deal that would have given China Merchants Port Holdings 80% of the stakes in the project and control over the adjacent industrial zone covering 6,000 hectares of land.

Now Beijing’s strongman approach has backfired. The new conditions of the Hambantota project met strong opposition from the Sri Lankan public. As a result, new negotiations started that decreased China’s stake by approximately 20%.

The case of Sri Lanka leaves Beijing with one key takeaway that is worth pondering as it embarks on an initiative that covers the majority of the planet. While there is nothing wrong with the idea of not meddling with other countries’ internal affairs, it does not mean that Beijing should be insensitive toward the domestic dynamics of its partners. Simply channeling exorbitant amounts of money into other countries is not going to be enough for realizing the New Silk Roads. The implementation of the initiative calls for something more — understanding and adapting to the internal processes of participants.

🔴Beijing has already burnt itself in Myanmar, Thailand and Laos, where the public is becoming hostile to Chinese projects. Like a chain, the Belt and Road is as strong as its weakest link and public perceptions toward China can become an existential issue for Beijing’s ambitious initiative.

Dániel Balázs is a recent graduate of International Relations at Tongji University in Shanghai. The views expressed are his own and do not represent the views of his affiliated institution.

The article first appeared on East Asia Forum. Read it here.

Letter , quote of the day

http://dailytimes.com.pk/letters/01-Jun-17/support-needed-in-balochistan


Sir: The executive director of Higher Education Commission (HEC) Dr Arshad has urged the universities to benefit from various HEC initiatives like Technology Development Fund, National Research Programme for Universities and University-Industry Technology Support Programme and underlined the significance of university-industry linkages. He also stressed on the need for planned collaboration among both the sectors.

The businessmen and industrialists stated that they can make arrangements to train and provide internship opportunities to the university students and final year students may be sent to the industry for training. However, in Balochistan around 13 different minerals are being extracted and all of them are exported in raw form without domestic processing and extracting a mineral and exporting it in raw form requires 80 per cent investment and the profit is only 20 per cent whereas transforming a raw mineral into a finished product requires 20 per cent investment and profit is 80 per cent.

We should focus on processing the raw material domestically to achieve maximum gains out of it. Balochistan has precious stones and this industry needs to be flourished with the help of universities.

BABA FAIZ

Turbat

Balochistan is more peaceful now, claims CM

http://nation.com.pk/national/01-Jun-2017/balochistan-is-more-peaceful-now-claims-cm


World No Tobacco Day


June 01, 2017

QUETTA -  Balochistan Chief Minister Nawab Sanaullah Zehri said Wednesday that province was more peaceful than past on account of government’s untiring efforts.

Addressing a media conference at Chief Minister’s House he said in past peace scrapers were stronger than the peacekeepers but situation was different now.

“We have dismantled the largest network of terrorism in Balochistan by apprehending a notorious operative, Saeed Ahmed, in a recent operation,” claimed Sanaullah Zehri.

On the occasion, head of Hasni tribe, Sardar Sherbaz Khan Muhammad Hasni and Mir Haider Muhammad Hasni joined the ranks of Pakistan Muslim League-Nawaz (PML-N). Zehri was flanked by provincial ministers and MPAs.

Commending the newcomers, the chief minister hoped that they would utilise their energies to convey party message to every nook and corner of the province.

“There is no room for terrorists in Balochistan,” said the chief minister. He said substantial decline in violence had been observed because of sustained efforts of the provincial government to maintain law and order.

He said every walk of society, stretching from common citizens to lawyers, from teachers to tribal elites, were victimised by terrorists but vision of rulers was peaceful and literate Balochistan for which every sacrifice would be rendered for achieving it.

“Our aim is only a literate and peaceful Balochistan,” reiterated the chief minister. We will not sit calm unless make certain the fullest implementation of peaceful environment in the province.”

Chief Minister claimed that government’s writ had been restored in the province and happening of rare terror incidents was not a matter of taking so much pain or stress.

Federal Minister for States and Frontier Regions, (SAFRON), Abdul Qadir Baloch, addressing on the occasion extended an olive branch to angry Baloch people to lay down arms and join the national mainstream aiming at spearheading their role for Balochistan’s prosperity and development.

He added that China-Pakistan Economic Corridor (CPEC), Reko Diq, Saindak and exploration of gas and oil in the province will usher in new era of progress and development in the area. Qadir Baloch hoped that Balochistan would prove to be a stronghold of PML-N after joining of new leaders.

Responding to a journalist query, the chief minister said government and police were working for the early recovery of Chinese abducted couple. He added that DSP and SHOs had been suspended over negligence and inquiry had been ordered against them while disciplinary action will be taken after finalization of the inquiry report.

To another question, Nawab Zehri said they were waging war against terrorists and the law enforcement agencies were working hard to maintain law and order in the province.

Zehri also noted that inquiry had been ordered against a concerned doctor who failed to reach well in time for the treatment of injured DSP Umar Rehman

Is China about to gobble up Pakistan?

http://www.indiawest.com/blogs/is-china-about-to-gobble-up-pakistan/article_96f3b27a-44ca-11e7-b65f-27dd6583daf9.html


Last week China convened an historic gathering. It was barely noticed in our media.

World leaders gathered in Beijing to hear about China’s One Belt One Road initiative. It is a new land and maritime Silk Route to connect the world, with China at its hub. Nearly 70 country heads participated, including Russia’s Putin, Turkey’s Erdogan and most of Asia and Africa. The next gathering in Beijing is slated for 2019. China is flexing its economic might and is budgeting more than a trillion US dollars towards this ambitious plan which it hopes will result in a new paradigm for the world.

Pakistan – A Major Satellite for China’s Ambitions

A key ingredient of China’s initiative is CPEC – the China Pakistan Economic Corridor. China will inject more than $60 billion dollars into building a massive corridor connecting Kashgar, the Himalayan Chinese town in the Muslim majority Xinjiang province, across all of Pakistan to the Arabian Sea port of Gwadar. See map below. The highway starts out as the Karakoram Highway through Pakistani Kashmir (blatantly ignoring India’s legal claim on this disputed land!) and hits all of Pakistan’s major cities before ending up at Gwadar, which is a “node” in the maritime Silk Route.

But China is not just building a giant corridor through Pakistan. It is virtually rebuilding Pakistan. Here are some of the proposed projects:

Complete overhaul and rebuild of Pakistan’s Electric Energy generation. This includes the largest hydroelectric power plant in Kashmir at the Neelam/Jhelum rivers, a huge wind farm in Baluchistan, 1000 MW of PV solar, several 1000 MW nuclear plants (one of which is already operating under Chinese supervision) and coal based power plants that will supply 1/4 of Pakistan’s power needs!A fibre optic high speed internet backbone to provide world-class levels of broadband access and also terrestrial distribution of broadcast TV with a healthy dose of Chinese propaganda.Massive industrial penetration of most sectors of Pakistan’s economy – cement, ceramics, textiles, industrial parks.A virtual takeover of Pakistan’s agriculture by annexing huge amounts of acreage and instituting new crops, agricultural methods and seed research. Much of this for food export to China.The operation and complete control of the port of Gwadar which gives China direct access to the Persian Gulf and shipping lanes to Europe without having to go through the long transit through the Indian Ocean.According to the article giving details in Pakistan’s Dawn newspaper (a must read) a couple of days ago:A full system of monitoring and surveillance will be built in cities from Peshawar to Karachi, with 24 hour video recordings on roads and busy marketplaces for law and order. A national fibreoptic backbone will be built for the country not only for internet traffic, but also terrestrial distribution of broadcast TV, which will cooperate with Chinese media in the “dissemination of Chinese culture”.The plan envisages a deep and broad-based penetration of most sectors of Pakistan’s economy as well as its society by Chinese enterprises and culture. Its scope has no precedent in Pakistan’s history in terms of how far it opens up the domestic economy to participation by foreign enterprises. In some areas the plan seeks to build on a market presence already established by Chinese enterprises, eg Haier in household appliances, ChinaMobile and Huawei in telecommunications and China Metallurgical Group Corporation (MCC) in mining and minerals.

Pakistan will become a Chinese neo-colony – another North Korea

China is virtually taking over the governance of Pakistan. They have insisted that no visas will be required for Chines people to travel freely in Pakistan – something they will not reciprocate for Pakistanis traveling to China. Chinese personnel will oversee all projects approved under CPEC.

China will be responsible for Pakistani security both internal and external. The Pakistani civil authorities, like the police, town administrations etc will be directly monitored by Chinese officials who will have sweeping powers. Even the vaunted Pakistani military will take direction from the Chinese. The port of Gwadar will be protected by Chinese authority in control of all security, access, administration and economic issues.

Economically the injection of Chinese capital is expected to modernize Pakistan at a rapid clip and make its projected GDP growth in the 8% range, faster than India. Pakistanis are thrilled at the prospect and Nawaz Sharif, their Prime Minister, who was in Beijing for the One Belt, One Road launching has made giddy statements about the 30 year Sino-Pak pact. However, many thoughtful commentators are seeing this for what it is – a blatant modern-day colonization of a major (but troubled) nuclear power by China. It will create another quasi-autonomous Chinese region like Xinjiang (where the muslim Uighurs live) and the Buddhist Tibet.

The South Asian culture of Pakistan will slowly be strangled. China is not a colonial master that allows much diversity – just look at Tibet. In the Uighur regions, such as Kashgar, that I visited in 2009, I saw first hand China’s phasing out all Uighur language, literature, and customs.

Here is an “informational” video developed by the Chinese about the Pakistani initiative.

China is actually doing all this on the cheap! Much of the money that China will spend will be in soft loans, from institutions like the Asia Development Bank (ADB). Pakistan will have to pay this money back and it will put them in a position of permanent economic slavery to China. China has huge surplus manufacturing and construction capacity that is sitting idle not generating any income. By this ingenious initiative they will be able to deploy their idle construction companies in Pakistan, obtain huge strategic and geopolitic advantages, get fresh sources of precious raw materials and create a new counterweight to India in the region.

A Major Paradigm Shift

In the eyes of many observers this is the start of a major paradigm shift in the world order that has existed since European and Western dominance in the 20th century. Historians will look back thirty years from now and see the launching of One Belt, One Road (OBOR) in 2017 as the turning point of history. China has shown a keen eye to Globalization and great leadership in promoting this as a humanity-befitting world effort.

And yet, we in America, are scant noticing this. Our news coverage is obsessed with trivia. We keep promoting out-dated isolationism, protectionism and nationalism. Watching today’s headlines on American news there is nothing about OBOR. Sad!

(Ashok Vaish is the principal and founder at Balanced Growth Fund. His blog was first published here: Aye, Capitalist: The Capitalist Muse, musings on money matters and other topics: https://ayecapitalist.com/2017/05/21/is-china-about-to-gobble-up-pakistan/)

Pakistani, Chinese workers hired in CPEC projects

http://pakobserver.net/pakistani-chinese-workers-hired-cpec-projects/

Gwadar Port being equipped with huge warehouse, exhibition

Amanullah Khan

Karachi

Brushing aside the perception that only Chinese workers are engaged in CPEC projects, Wang Dong Director General of Linyi Trade City has said that they are already working in Gwadar on a project where they have built an Exhibition Center of 6000 sq. m and a Warehouse of 140,000 sq. m.

Wang Dong, leading a high powered Chinese Delegation said this during the visit of Federation of Pakistan Chamber of Commerce and Industry in Karachi.
He disclosed that the project at Gwadar Port is towards completion and the workforce includes Chinese and Pakistani men, and perception spread that only Chinese have been hired by Chinese companies working on CPEC projects and in Gwadar is a devoid of truth.
Mr. Wang Dong showed his interest in signing MoU with FPCCI for mutual cooperation in Trade, Investment and increasing import and export between the countries. He also invited the Pakistani businessmen to participate in China (Linyi) International Trade and Logistics Fair (CLITLF) being organized from 23-25 Sep. 2017.

Chinese leader said that Pakistani products would be in high demand in Chinese markets and also emphasized that Pakistan must work on non-traditional commodities to trade and export. This exhibition and Linyi Trade city offers enormous opportunities as thousands of buyers from around the world shall be attending this fair and it could be a window of opportunity for Pakistani products to export not only to China but to take orders from other countries, Dong added.

Mr. Wang Dong thanked the President FPCCI Mr. Zubair F. Tufail for the warm welcome that he received and said that China Pakistan friendship is eternal, and it is beyond economic and trade cooperation.

Explaining the role of his organization and importance of Linyi city he said that it is a city in Shangdong province and it’s a new Business hub in Southeast of China, the city is also called capital of logistics and has number of Exhibition Centers, Warehouses, Retail parks, Whole sale markets, Manufacturing plants and thousands of companies from China and rest of the world are already operating and taking their share.

Mr. Zubair F. Tufail has agreed to visit Linyi Trade City China in July this year along with a delegation from Pakistan and its participation in the Trade Fair in September 2017. The meeting was also attended by Mr. Zahid Umer, Chairman Pak-China Business Council (PCBC), Mr. Zafar Saeed, and Former Chairman PCBC Mr. Jawed Khalili.

Saqib Fayyaz Magoon, Vice President FPCCI and members of Pakistan China Business Council of FPCCI welcomed the delegation

Let’s be wary of China’s New Silk Road

http://m.thehindubusinessline.com/opinion/india-should-be-wary-of-chinas-new-silk-road/article9716986.ece

Updated: May 31, 2017 21:34 IST | G PARTHASARATHY

Now’s the time for India to join hands with Japan, the US and the EU to promote alternatives to Chinese economic exploitation

✔China has got accustomed to violating India’s territorial integrity in Jammu & Kashmir and Arunachal Pradesh.

✔It transgresses international norms by supplying Pakistan with know how and designs of nuclear weapons and missiles.

✔Its provocative behaviour includes protests over visits by Indian dignitaries to Arunachal.

🔴China, meanwhile welcomes political figures from POK and Gilgit-Baltistan on official visits. Beijing also seeks to undermine India’s relations with South Asian neighbours such as Sri Lanka, Nepal, the Maldives and Bangladesh, backing politicians and political parties known to be less than friendly to India.

Finally, a studied reaction

New Delhi is, however, now reacting in a more measured manner to China’s policy of “strategic containment”. Ignoring warnings from China, India reinforced its claims to Arunachal Pradesh by encouraging a high profile visit to the State by the Dalai Lama, who acknowledges it as an integral part of India. The Dalai Lama pointedly visited Tawang, which has special spiritual significance for Tibetans.

But the proverbial last straw on the Indian camel’s back is the China-Pakistan Economic Corridor (CPEC) involving an investment of around $51 billion. The CPEC challenges Indian sovereignty by traversing Gilgit-Baltistan as part of Beijing’s larger Eurasian ‘One Belt One Road’ (OBOR) project. India cannot ignore the security threat that this project poses, as an integral part of a China-Pakistan axis to contain India, across the Indian Ocean region. Accompanying this project has been the laying of a fibre-optic cable connecting China’s People’s Liberation Army in Kashgar, Xinjiang province, and the Pakistan army’s GHQ in Rawalpindi. The CPEC enhances communications between the armies of China and Pakistan. It provides Beijing the road link to the port of Gwadar, which has been handed over to it by Pakistan. China has also agreed to provide Pakistan with a large number of frigates and submarines.

Smart routing

Gwadar is significantly located alongside the maritime routes for oil supplies to India from the Persian Gulf. China’s Maritime Silk Route, which complements the OBOR, traverses India’s shores in the Indian Ocean, from the Straits of Malacca to the Gulf of Aden. China is evidently seeking to surround India with a “string of pearls”, comprising base facilities in Kyaukpyu in Myanmar, Hambantota in Sri Lanka, Gwadar in Pakistan, Mombasa in Kenya and Djibouti in the Gulf of Aden.

🔴The Chinese modus operandi is clear from what transpired in Sri Lanka. China undertook financially unviable projects in President Rajapakse’s constituency and pushed Sri Lanka into a debt trap. Sri Lanka was compelled to hand over both the port and the neighbouring industrial area to China in a debt/equity swap. Despite this having triggered protest riots in Sri Lanka, China sought to berth a submarine in Colombo when Narendra Modi was visiting the island.

After carefully graduating its response to the CPEC, India finally made a statement, objecting to not just the fact that the CPEC violates our territorial integrity, but that it appears to be a project, whose exploitative terms would render the recipients bankrupt. The external affairs ministry’s spokesperson suggested, prior to the OBOR summit in Beijing, that the project was not based on “universally recognised international norms”, adding that it appeared to violate international norms of “openness, transparency and equality”. The statement also suggested that the project does not meet the principles of financial responsibility, which require avoidance of creating unsustainable debt in recipient countries. India noted that connectivity projects should involve transfer of skills and technology and respect “sovereignty and territorial integrity”.

×

Like its decision on taking the Kulbhushan Jadhav case to the International Court of Justice, the Government’s decision not to attend the OBOR summit in Beijing, was predictably criticised by the same critics. Ominous warnings were voiced that India would now find itself “isolated” by taking on an all-powerful China.

What transpired was somewhat different. Only 20 countries, mostly from South and South-East Asia and Africa, attended the summit. Given his dependence on China, President Vladimir Putin was the only major world leader present. This, despite the fact that 🔴 Russian academics and others had expressed serious reservations on OBOR cutting through the Eurasian belt, major portions of which have historically been regarded by the Russians, as their backyard.

Chinese pettiness and petulance were evident when they expressed their displeasure by not inviting the respected prime minister of Singapore, Lee Hsien Loong, who had the courage to say that territorial disputes in the South China Sea should be settled according to international law. The navies of India and Singapore held joint exercises in the South China Sea shortly thereafter. Moreover, within the OBOR conference, the Europeans and some others were quite vociferous.

The EU has strongly criticised China’s international trade and economic assistance policies. Senior EU leaders have made it clear that they believe that the OBOR project lacks a formal structure and that China has shown a lack of transparency. The EU is sceptical about China’s motives and its terms of trade and economic cooperation. EU functionaries feel Chinese policies are mercantilist.

Financial risks

The UN Economic and Social Commission for Asia and Pacific has meanwhile warned of high financial risks in several OBOR projects. There are now apprehensions that Pakistan will be forced to go the Sri Lanka way. More importantly, there is growing realisation internationally that China is not a 21st-century Santa Claus and that the OBOR project is predominantly an effort by China to rebalance its economy and provide jobs for its vast labour and construction industry.

🔴It is now time for India to work with Japan, the US and the EU to actively promote alternatives to Chinese economic exploitation in Asia and Africa. Moreover, Russia needs to be co-opted bilaterally and through funding by institutions such as the Brics Bank and the Asian Infrastructure Development Bank, to construct transport corridors through Iran to Afghanistan, the Caspian and Central Asia. The US has meanwhile renewed its proposal for a ‘New Silk Route’ across Asia, which India had welcomed. Finally, India and Japan should jointly build a transportation and industrial corridor to the shores of East Africa, where Modi’s visits have set the stage for expanding economic, industrial and energy cooperation, across the Indian Ocean.

〰〰➡China will have to learn that true economic development comes from transparent multilateral cooperation and not bilateral economic exploitation.👍👍👍👍

The writer is a former High Commissioner to Pakistan

China lauds commissioning of 1st power plant under CPEC in Pakistan

http://indianexpress.com/article/world/china-lauds-commissioning-of-1st-power-plant-under-cpec-in-pakistan-4683339/


By: PTI | Beijing |Published On: May 31, 2017 11:45 Pm

China on Wednesday welcomed the inauguration of the first unit of Sahiwal Coal Power Plant in Punjab Province. (Reuters/ File Photo)

China on Wednesday welcomed the inauguration of a coal-fired power plant under the multi-billion dollar China-Pakistan Economic Corridor in electricity-starved Pakistan, saying it will benefit the people in the country. “It is estimated that most of the power projects will be completed preceding the year 2019, easing lack of energy in Pakistan, which will benefit the people,” Chinese Foreign Ministry spokesperson Hua Chunying told reporters at Beijing.

She welcomed the inauguration of the first unit of Sahiwal Coal Power Plant in Punjab Province.

At present 17 priority projects were under construction under the China Pakistan Economic Corridor (CPEC).

The power plant, which is the biggest electricity power station in the area generating over 90 billion kilowatts of power, is an important project under the CPEC framework, she said.

Prime Minister Nawaz Sharif attended the inauguration ceremony. He highly appreciated the fact that the work has completed in 22 months, Hua said.

She said the energy projects were a game changer for the people along the CPEC route.

“We have also seen the benefits brought by the CPEC projects and Belt and Road Initiative,” Hua added

BNM Mengal Group established two death squad camps ?

Sources in Balochistan say BNP Mengal group Aktar Mengal's party established two death squad camps for searching and killing of Baloch freedom fighters.

One death squad camp is established in Dasht Goran, Kalat district under headship of Kamber Khan Mengal who is senior member of BNP . Another camp is established in Jahoo , Awaran District under headship of Mula Baksh Mahmmad Hassani he is also important member of BNP .

🔷In return the  ISI will reward Akhtar Mengal  next Chief Ministership of Balochistan .

Pakistan: Abuses in mineral-rich Balochistan province

http://www.bbc.com/news/world-south-asia-13567079?ocid=wsnews.chat-apps.in-app-msg.whatsapp.trial.link1_.auin


30 May 2011

 From the sectionSouth Asia

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Image captionLike most Baloch people, Habibullah is deeply immersed in local culture and traditions

The deaths of at least 1,000 people since March 2008 in the ongoing nationalist insurgency in the volatile Pakistani province of Balochistan have often been overshadowed by the country's other troubles. Yet as the BBC's Syed Shoaib Hasan discovered, the suffering there is every bit as acute.

Getting to the vast Baloch tribal settlement of New Kahan is not easy. It is tightly guarded by a ring of checkpoints.

We slip quietly past through a gravel path with help from a local guide.

New Kahan is home to thousands of tribal Baloch people. The Baloch rebel anthem plays as children gather for assembly.

Desperate poverty

Habibullah, an 11-year-old recites passionate and tragic lyrics: "We are the sons of the Baloch... we are the sons of lions... we are the protectors of the orphans and the destitute… our blood is our nation's salvation."

The children are eager to learn but provisions here are poor.

Habibullah and his friends take their classes sitting on the floor. Most of the parents are labourers and the school building is a two-room structure of baked clay.

There is desperate poverty here. Locals blame the government for the lack of facilities.

It is a situation reflected across Balochistan.

Nationalists say that despite the province's vast mineral wealth, it remains the most under-developed area of the country.

The government has responded to the insurgency by suppressing all dissent - and locking up any young men suspected of harbouring nationalist sentiments.

They have become part of the missing - people who have been arrested without charge by the state.

Gul Baloch is an angry young woman who has experienced the consequences of this policy and her tone is edged with bitterness.

Her brother Iqbal, along with his friends, was taken away by security forces two years ago.

The friends were released after a year - Gul says they were tortured during this time.

Ms Baloch says she knows that even if her brother comes back, he will never be the same again.

When her friends were taken away, they were blindfolded. When they came back, they could not stand sunlight for two to four months.

"There are marks on their bodies," Ms Baloch says.

"If one of them sits down and tries to get back up, it's difficult and very painful.

"That's how it is with them…. and when they are asleep, they wake up in panic, as they feel the torture is happening again - sometimes they even start screaming. "

'All our enemies'

Such treatment has left Balochistan's young men with few choices. Maqbool is one of them - a fiery young Baloch nationalist.

Image captionNew Kahan is a vast tribal settlement which is often inaccessible to outsiders

He spoke to me in New Kahan about how they view the Pakistani state, and especially its dominant Punjab province.

"The Baloch youth... know quite well that, for the last 63 years, the Pakistani state has been deceiving and inciting them using various methods," he said.

"But now the Baloch youth have become enlightened.

"They know this very well - that the Punjabi army, the Punjabi judiciary, the Punjabi parliament as well as the Punjabi media - they are all our enemies."

People here are frustrated that Balochistan is so poor, even though it has vast reserves of oil, gas and gold which remain largely untapped.

But the province is also this crisis-ridden nation's biggest human rights disaster.

The anthem reverberating around New Kahan evokes the strong sense of injustice felt here.

'Baseless and unfounded'

But Akram Hussain Durrani - Balochistan's home secretary and top civilian security official - denies allegations that the security forces have been involved in extra-judicial killings.

Image captionBaloch nationalism seems to be on the rise throughout the province

"This type of allegation... is baseless and unfounded," he said.

"Most of these people are killed in their own tribal feuds and their families later put the blame on the federal government."

As far as eyewitness accounts of security forces being involved in kidnappings are concerned, he says there is a set procedure under the criminal code to register such cases.

"But the families don't co-operate in the collection of evidence and therefore we can't get to the bottom of the killings."

The protestations of the provincial government do not cut much ice among the Baloch, however.

Maqbool says the resistance is no longer about a few unruly tribes and not confined to just one place.

"If today someone is killed in one region of Balochistan, you can see political protests across [the rest of] Balochistan… you see the response of the resistance everywhere," he says.

The Baloch say they are being treated like slaves, rather than citizens. Many feel it is time to break away and win outright independence.

Meanwhile, Gul is still waiting for her brother to return.

But there will be no homecoming for the hundreds who are found in shallow graves across Balochistan every week.

Their mounting numbers have swelled support for the insurgents and prompted the judiciary to order an investigation into abuses committed during the country's longest-running insurgency.

Increasingly there is only one demand on Baloch lips - freedom or death

China’s pension fund to join the new Silk Road investment spree

http://m.scmp.com/business/global-economy/article/2096245/chinas-pension-fund-join-new-silk-road-investment-spree



The National Social Security Fund says it has a pipeline of deals, but is under growing pressure to expand its assets amid an ageing population

Daniel RenUPDATED : Wednesday, 31 May 2017, 8:14AM

 1

China’s 2 trillion yuan (US$290 billion) national pension fund will hop onto the country’s new Silk Road bandwagon, joining other state-backed institutions to seek lucrative deals along the route.

Wang Zhongmin, a vice-chairman of the National Social Security Fund (NSSF), said the fund would take a go-slow and low-key approach, but he conceded that a bag of investment deals are in the pipeline.

“We will do investments along the route,” he told the South China Morning Post . “We are resolute in going abroad, but I can’t disclose details of the projects and investment figures.”

The NSSF, a reserve fund used to supplement local pension pools, will follow on the heels of the country’s powerful institutions including China Development Bank, the US$54.5 billion Silk Road Fund, Import and Export Bank of China and other financial juggernauts to fund the grand project officially known as the Belt and Road Initiative.

We are resolute in going abroad, but I can’t disclose details of the projects and investment figures

WANG ZHONGMIN, NSSF

The vice-chairman would not shed light on the tactics and models of the investments .

Technically, the NSSF, known as a giant fund of funds, could mandate part of its assets to other asset managers such as private equity funds to seek investment returns.

In early May, NSSF chairman Lou Jiwei told the pension fund’s council that investments via offshore private equity funds would be “closely studied” this year, an indication that a major breakthrough in allocating part of its assets abroad could be expected.

 

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Chinese President Xi Jinping proposed in 2013 to build the "Belt and Road Ininiative" with 65 countries in Asia, Europe and Africa, which have a combined economic output of US$21 trillion.

China is expected to invest at least 780 billion yuan via the state funds and banks to finance projects, in an ambitious drive to lead a new global economic order.

Xi’s US$113b pledge ‘more seed fund than credit pipeline’

“It will be a gradual process,” Wang said. “Chinese institutions should do businesses little by little.”

China, the world’s second-largest economy, has yet to consolidate a solid foothold with strong local business operations in overseas markets, despite efforts in the past decade to increase its economic might globally.

“We found it difficult to find a Chinese bank to act as our custodian in overseas market before,” Wang said. “It was not until recently that we could appoint overseas branches of Chinese banks to do so.”

India and Russia tipped to be the big winners from China’s massive ‘Belt and Road’ investment

Founded in August 2000, the NSSF had an initial capital base of 20 billion yuan.

Government subsidies, lottery sales, free transfer of state assets and investment returns are major sources of funds for the NSSF.

The fund is of strategic importance to China where an ageing population is ratcheting up pressure on the government to replenish the underfunded pension pool.

At the end of 2016, the NSSF had total assets of 2.04 trillion yuan, after reporting a 1.7 per cent investment return, it said in a recent statement.

We found it difficult to find a Chinese bank to act as our custodian in overseas market before

WANG, ZHONGMIN, NSSF

Among the 2.04 trillion yuan, 226.3 billion yuan of funds are managed by the NSSF on behalf of provincial-level pension pools, which are in charge of paying out the pensions to retired workers in their own regions.

According to its annual report for 2015, 113.5 billion yuan of funds were slated for investment outside the mainland, or 5.93 per cent of its total at that time.

Tan Jialong, director of Zendai Group’s investment division, said the national pension fund would tap on globally renowned private equity funds to invest in lucrative projects along the Belt and Road route that could generate strong returns and stable cashflow.

“At present, it seems unlikely that the pension fund would directly participate in Belt & Road construction projects, which will be mainly supported by state-backed policy lenders and specialised funds,” he said.

“The state-backed institutions focus on long-term, stable cashflow, rather than investment returns from their investments, but the pension fund will certainly need to chase high returns.

China to support Silk Road, other projects

http://wap.business-standard.com/article/international/deutsche-bank-to-pump-3-bn-in-china-to-support-silk-road-other-projects-117053100955_1.html


AFP | PTI | Frankfurt Am Main May 31, 2017 04:19 PM IST

The logo of Deutsche Bank is seen at its headquarters ahead of the bank's annual general meeting in Frankfurt, Germany.

Deutsche Bank, Germany's biggest lender, said on Wednesday it would support three billion dollars' worth of development projects in partnership with China Development Bank (CDB).

"CDB and Deutsche Bank agreed to work together over the next five years with an aim of supporting projects worth $3.0 billion," the group said in a statement, published as Chinese premier Li Keqiang visits Berlin.

The two banks signed a memorandum of understanding expressing "interest in promoting the renminbi's internationalisation and in financing economic cooperation between China, Germany and other Belt and Road Initiative countries," the statement read.

Chinese President Xi Jinping launched the "Belt and Road" project in 2013 aiming to reinforce infrastructure linking Asia with Europe and Africa, echoing the Silk Road across central Asia plied centuries ago by caravans.

"CDB and Deutsche Bank will finance projects that are beneficial to clients of both banks, including through joint lending and project finance," the two banks said

CPEC: Hope for a prosperous tomorrow

http://pakobserver.net/cpec-hope-prosperous-tomorrow/



Iqbal Khan

IT will be an oversimplification to say that current era is of geo-economics, at best geo-economics are striving to find a reasonably safe passage through planet’s overly geo-politicized and securitized landscape. Even though one wishes that geo-economics take precedence over geo-politics, requisite processes have a long way to go. One belt one road (OBOR) is struggling to find its way to envisioned destinations. An early operationalization of China-Pakistan Economic Corridor (CPEC) last year, a flagship project of OBOR, has provided stimulus for early completion of remaining OBOR, which is a multi-trillion dollar programme spread over, may be, a century.

Some Western diplomats have expressed unease as they perceive the initiative as a venture to promote Chinese influence globally. It has been reported that probably attendance by Russian President Putin and some other leaders whose countries have a poor human rights track record, like the Philippines and Central Asian States, may have induced reluctance amongst leaders from the Western countries to skip the event. China has rejected these views, saying the scheme is “open to all, is a win-win, and aimed only at promoting prosperity”. “We will not export our system of society and development model, and even more will not impose our views on others,” President Xi said.  “What we hope to create is a big family of harmonious co-existence,” he added.

United Nations General Assembly adopted the 2030 Agenda for Sustainable Development; Sustainable Development Goal 9 (SDG 9) aims to “build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.” OBOR-CPEC combine is in line with this goal, leading towards joint cooperation. While attending the OBOR summit, Prime Minister Nawaz Sharif said on May 14 that the CPEC under the OBOR was open to all countries in the region that the project “must not be politicized.” “Let me make it very clear that CPEC is an economic undertaking open to all countries in the region. It has no geographical boundaries. It must not be politicized.”

However, geopolitical galore, India boycotted the global event citing reservations on the CPEC route passing through Gilgit-Baltistan, India claims to be a disputed territory. The Prime Minister’s statement was apparently a response to Indian concerns and opposition. Event was attended by 29 heads of state and government as well as over 1500 delegates participated.

Peace and development go hand in hand, and economic development facilitates peace and security through multilateral and multidimensional cooperation. OBOR-CPEC would be an important process leading towards a win-win situation for all participants. However, this point is not home to India because its China and Pakistan policies are hinged on zero-sum calculus. And for this India is being handsomely rewarded by America and its allies because their perceptions are driven by geo-political considerations.

OBOR would promote “inclusion and tolerance” and have positive impact on life style of poor and disadvantaged segments of societies of three continents that OBOR envisions to connect, as a bonus point it would dilute the extremist and terrorist tendencies. Unfolding of the programme has already begun to radiate the message of inclusion, tolerance and acceptance. CPEC aims to connect the catchment areas of South Asia, West Asia and Central Asia. And if India joins it then East Asia would, as well, have the chance to connect. Pakistan is poised to become a pass way as well as destination for cross-regional, a prospect which is not easy for India to digest. According to the Director General of United Nations Industrial Development Organization (UNIDO), Li Yong, the Belt and Road Initiative is the most impressive development project of the century, creating significant potential for joint cooperation between China and the United Nations. The initiative “aims to build communities of political mutual trust, economic integration and cross-cultural accommodation through peaceful and active development and collaborative economic partnerships along the Belt and Road,” Li said in an interview. The initiative reflects the “pillars of inclusive and sustainable development and plays an important role in promoting the construction of infrastructure”, Li added.

Outreach of Belt & Road initiative spans around 65 countries representing 60 percent of the world population and around a third of global gross domestic product. It is a vehicle for promoting industrialization in developing and least developed countries through international industrial capacity cooperation. Its key features are: solving the problem of financing infrastructure and reflecting the spirit of inclusive and sustainable development. Pakistan admires China’s vision and ingenuity in developing corridors across regions.

Infrastructure development requires substantial capital investment. Asian Infrastructure Investment Bank, Silk Road Fund and BRICS Development Bank etc have already indicated their willingness for sufficient financial undertaking. And during the summit, President of China Xi Jinping committed US $124 billion for the OBOR. He also announced additional 100 billion Yuan for “Silk Road Fund”, alongside Yuan 380 billion loan from two Chinese banks, plus 60 billion Yuan in-aid to “developing countries and international institutions in new Silk Road countries”. He also pledged Yuan 300 billion to enable financial institutions to “expand their overseas Yuan fund businesses”. China will launch 100 “happy home” projects, 100 poverty alleviation projects and 100 health care and rehabilitation projects in countries along the Belt and Road. For smooth handling of CPEC related financial matters, Bank of China is setting up its first branch in Pakistan.

While the things are progressing well with regard to forward movement of CPEC programme, the worrisome point is gradual relapse of Balochistan into CPEC related violence. Recent cold blooded murder of labourers working for Gwadar port project indicate that foreign funded subversive elements continue to have the capability of carrying out such attacks, more intriguing were the recent comments by Daniel Coats, Director of National Intelligence during his Congressional testimony: “The emerging China-Pakistan Economic Corridor will probably offer militants and terrorists additional targets.”

A Chinese man and his wife who teach Chinese at a local language centre were abducted from Quetta. It shows that even Chinese personnel not related to core CPEC projects stand vulnerable for abduction to create pressure points and to send across a message of insecurity to Chinese government and people.  Last year, a Chinese engineer was injured in a bomb attack in southern Pakistan and a separatist group, the Sindhudesh Revolutionary Army, claimed responsibility for the attack, saying they were targeting the CPEC. Pakistani government has deployed 15,000 military personnel to CPEC related activities. The CPEC is like every other investment programme where opportunities and risks co-exist.

In the meanwhile, Beijing on May 25 dismissed a UN body’s report which warned that the CPEC could create tension with India and fuel political instability.  China said the report by Economic and Social Commission for Asia-Pacific (ESCAP), a development arm of the United Nations (UN), wasn’t specifically on the CPEC and had evaluated the BRI in a very positive way.  The report has said that CPEC could lead to “further political instability” in the region and “create geo-political tension with India” as it passes through PoK.  India skipped the Belt and Road Forum in Beijing two weeks ago primarily because of “sovereignty” issues over CPEC passing through PoK. Foreign Ministry spokesperson Lu Kang dismissed the UN’s concerns. “As for CPEC passing through the controversial territory, I have said this many times, it is an economic initiative and it will not affect our position on the Kashmir issue,” Lu said. Though Prime Minister’s participation in the summit alongside four chief minsters is a heartening signs indicating that at the domestic level difference stand resolved, the external doubters haven’t given up nor are they likely to give up any time soon. There is need to deny the space for local tools of external saboteurs

Joint exploration in South China Sea: Proposal for third silk route

http://asianjournal.com/editorial/joint-exploration-in-south-china-sea-proposal-for-third-silk-route/






By AJ Press
Published: May 31, 2017 | No Comments

By: Former Speaker Jose C. de Venecia, Jr.

In Beijing, we said we were honoured to be asked to speak before the great Beijing Forum, for we subscribe to the founding principle of President Xi Jin Ping’s historic revival and expansion of China’s legendary Silk Road—which links today’s Europe, the Middle East, and Asia much as its history and legend had linked them during the classical period.

From their beginnings—in the glory days of the Han Dynasty in the East and the Roman Empire in the West—the linkages between our countries and even those of parts of Africa had ranged beyond the exchange of material goods.

Commerce, culture, civilization

From the beginning, East-West trade transcended the limits of commerce. From the beginning, it was also East-West cultural exchange; and the two-way technology transfer stimulated by that trade has been substantial enough to influence the course of either civilization.

Even long-distance travel on the ‘Silk Road’ had its beneficial effects. Notably, the Venetian Marco Polo’s account of his Silk Road travels inspired the Genoese Christopher Columbus’s voyages to the Americas’ ‘New World.’ Marco Polo started out overland, crossing the Central Asian desert to the court of Kublai Khan, stayed a dozen years, and returned to Venice by sea on the maritime route of the Silk Road. Marco Polo’s voyage took him down the South China coast to Sumatra, southeast India and today’s Sri Lanka. From there, he crossed the Indian Ocean to the Black Sea, reaching Constantinople and finally, Venice after two years at sea.

China’s rebuilding of the Silk Road

The value of China’s rebuilding of the Silk Road—in both its overland and maritime linkages—is obvious; and indeed it would redound to all those nations which gathered in Beijing.

Consider how already the Central Asian states are awakening to the possibilities of modernization—as Silk Road arteries begin to link them, westward, all the way to London and eastward to Beijing, encompassing Budapest, Hamburg, Moscow and Warsaw, yes, freight to 28 European cities, moving them by sea, and by air.

We were privileged to be invited to speak at the “High-Level Dialogue in China’s Belt and Road Forum for International Cooperation” in Beijing last May 15, 2017 together with more than 40 heads of state and government and former presidents, former premiers and heads of international congregations, indeed a great achievement for President Xi Jin Ping and the Chinese people. China’s leader launched since 2013 revival of the centuries-old silk route and its 21st Century Maritime Route by sea.

Today modern infrastructure is bringing together Kunming in Yunnan with Phnom Penh and Singapore in the beginnings of a Southeast Asian “Growth Triangle.” And the long-distance trains are moving great cargoes between Asia and Europe, back and forth.

We said that in 2005, the Philippines, China and Vietnam went so far as to venture on a three-way joint seismic survey, which we helped initiate, of disputed areas in the Spratlys chain—to assess the area’s potential for hydrocarbons exploration and development. Scientists of the three nations pronounced the prospects “promising”, and it is obvious as members of the ASEAN family that today, with China, we must now find ways and means to jointly develop the area’s hydrocarbons potential to help lessen our common dependence on distant petroleum sources in the Middle East.

And look at the potential for peace, for economic development in the heartland of the South China Sea, once rid of conflict, a landscape and seascape of small seaports, airports, oil pipelines, small tourism townships, and fishing villages, can rapidly rise in the contested areas once converted into a Zone of Friendship, Commerce, Navigation and Development, and become the passage way, untrammeld, for all global shipping, carrying more than 50% of the sea freight of the world.

We in the International Conference of Asian Political Parties (ICAPP) representing more than 340 ruling, opposition, and independent political parties in Asia, have held yearly conferences in various capitals in Asia, in Beijing and in other cities of China, to help bring our peoples in Asia closer together in fraternal understanding.

Our newly organized sister organization, the International Association of Parliamentarians for Peace (IAPP), representing individual members of parliaments, from all the continents of the world are one with ICAPP in supporting China’s Belt and Road initiative, a historic and inspiring force for peace, friendship and development, encouraging simple, practical people-to-people understanding.

The people-to-people bonds in the Belt-and-Road Initiative are the first and principal keys to achieving good relations among nations, trade facilitation, joint-ventures, networking, and policy coordination, as we endeavour to connect highways, railways, electricity grids, rivers and lakes to the great arteries of the world. Indeed, the people-to-people bonds are the first prime catalysts in the forging of trade, tourism, economic and social development and in the framing of peace and unity among nations.

We said that, inspite of difficulties a durable peace today is not impossible even in some of Asia’s troubled areas. For indeed it is most desirable if we, among ourselves, discard occasional enmity and exaggerated pride, and if we respond to the Sermon on the Mount and the hallowed spirit of China’s storied Silk Road, we could all together embark on a journey that today could lead towards the dream of a thousand years of peace and prosperity for all our nations and for all our peoples.

For the revival of the Silk Road is a vision that reflects the shift of the center of gravity from West to East, a global rebalancing whose time has come. It should help bind peoples and countries to a common future and rekindle the grandeur and glory of the old and new Asian civilization and serve as harbinger of real and expanding growth in the 21st Century.

Global potential of new expanded route

And in Beijing, we said that: in order to expand, deepen and strengthen the cultural, geo-political, geo-economic, trade, and people-to-people linkages of the historic Silk Road, we now propose consideration of the development of a “third route,” to complement and extend China’s great “Belt and Road” Initiative.

For from Hainan island off Guangdong province in southern China, the route could also pass first through the Philippines, then Malaysia, Indonesia and the small island nation of Timor Leste onwards.

Already in Northwestern Philippines, as part of an extended Belt and Maritime Road plan, on the banks of the South China Sea, an agri-tourism belt and large petro-chemical and industrial complex, much needed in the region, is being planned for implementation by pioneering Chinese and Philippine groups. And from Timor Leste to Australia’s Gold Coast to Sydney, and New Zealand, the extended route could move across the south Pacific, and enter Latin America: Chile, Argentina, Brazil, and the tourism-rich Caribbean islands, then Mexico, all the way to the U.S. as in the old days of the Galleon Trade from Manila to Acapulco, Mexico, which sailed for 250 years.

It is not far fetch: for there are already multiple large Chinese investments in South America. And at some point, we said the Latinos should also bring their trade to the south Pacific and into Asia.

Yes, our proposal in Beijing for the 21st Century “third route”, hopefully an enlargement of the Silk Route would make China’s celebrated ‘Belt and Road initiative” almost globally inclusive and create a linkage with two more continents — Australia and Latin America — in a new circumnavigation, in a revivable of the Age of Exploration, and new spirit in the Age of Globalization

Deutsche Bank to invest in Belt and road initiative

https://www.twst.com/update/deutsche-bank-ag-china-development-bank-and-deutsche-bank-sign-3-billion-us-dollar-cooperation-agreement/

Deutsche Bank (XETRA: DBKGn.DE / NYSE:DB) China Development Bank (CDB) and Deutsche Bank signed a Memorandum of Understanding at a ceremony in Berlin. The two parties expressed their interest in promoting the renminbi's (RMB) internationalization and in financing economic cooperation between China, Germany and other Belt & Road Initiative (B&R) countries.

The Belt & Road Initiative is a development strategy proposed by Chinese President Xi Jinping. It focuses on cooperation between Eurasian countries, primarily China, the land-based Silk Road Economic Belt and the oceangoing Maritime Silk Road. Many Chinese state leaders, including Premier Li Keqiang who is currently visiting Germany, have promoted this policy initiative across the world over the past several years.

As part of the Memorandum of Understanding, CDB and Deutsche Bank agreed to work together over the next five years with an aim of supporting projects worth 3 billion US dollars.

CDB and Deutsche Bank also agreed to establish a joint team in order to cooperate on projects that promote the B&R Initiative. Subject to applicable laws and regulations, CDB and Deutsche Bank will finance projects that are beneficial to clients of both banks, including through joint lending and project finance.

Garth Ritchie, Head of Deutsche Bank's Corporate & Investment Bank, said: 'We are pleased to work with China Development Bank in support of the Belt & Road Initiative. Expanding infrastructure links between China and Europe is a positive opportunity for the people and economies of both.'

Werner Steinmüller, Deutsche Bank Asia Pacific CEO, added: 'Deutsche Bank is proud of its unique and long-standing role in connecting the Chinese and European economies. We are confident that the depth of our network and experience in Europe will provide a critical anchor to this important China-led policy initiative.'

For further information please contact:

Deutsche Bank AG
Media Contact

Frank Hartmann
Phone: +49 69 910 42744
E-mail: frank.hartmann@db.com

Christian Streckert
Phone: +49 69 910 38079
E-mail: christian.streckert@db.com

Chinese firm gets nod for setting up power plant

https://tribune.com.pk/story/1423301/chinese-firm-gets-nod-setting-power-plant/


By Our Correspondent

Published: May 31, 2017

PHOTO: REUTERS

ISLAMABADA Chinese company has got initial approval for setting up a 300-megawatt imported coal-based power plant in Gwadar, which is part of the $57 billion China-Pakistan Economic Corridor (CPEC) comprising scores of energy and infrastructure projects.

The Private Power and Infrastructure Board (PPIB) has issued a Letter of Interest to China Communications Construction Company (CCCC) for developing the power project in the port city of Balochistan.

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In this regard, PPIB Managing Director Shah Jahan Mirza and CCCC Vice President Xu Jun signed a document.

Now, the company will seek tariff approval from the National Electric Power Regulatory Authority (Nepra) and start construction work after achieving financial close. CPEC’s Joint Cooperation Committee and the PPIB board have already approved the power project for further processing.

Gwadar is blessed with a warm-water, deep-sea port situated on the Arabian Sea. The port features prominently in the CPEC framework and is considered a crucial link between the ambitious One Belt, One Road and Maritime Silk Road projects. Economic activities foreseen at Gwadar in the near future will require a reliable power supply.

With the addition of 300MW Gwadar project, the number of power generation projects being processed by the PPIB has increased to nine coal-based projects of 8,220MW and three hydroelectric power projects of 2,714MW under CPEC.

Among CPEC projects, Prime Minister Nawaz Sharif last week inaugurated the first unit (660MW) of the 1,320MW coal-fired power project in Sahiwal. Its second unit of the same 660MW is expected to come on stream by the end of December this year.

PPIB works as a leading institution of the government for bringing additional electricity generating capacity in order to improve the energy mix through a blend of imported and domestic fuel/resources for the upcoming independent power plants (IPPs).

A number of hydel and local coal-based power projects are at different stages of development to cater to electricity needs of the country over the long run, while imported coal-based projects are being processed as a reliable base load solution.

Pakistan’s repayments on CPEC to peak at $5b in 2022: chief economist

The government has repeatedly pledged that it will end load-shedding next year with the addition of 10,000MW power projects and more later.

Published in The Express Tribune, May 31

Gwadar’s water woes

http://dailytimes.com.pk/editorial/31-May-17/gwadars-water-woes


31-May-17by DailyTimes


 

Balochistan is suffering once more. Water shortages have yet again hit the port city of Gwadar, pushing residents on to the streets to protest the government’s failure in tackling the crisis. Where the civvies failed the big boys of the Pakistan Navy were on hand to save the day, supplying some 1,200 tonnes of drinking water.

Gwadar is a port city. By definition it is surrounded by sea. Yet in today’s Pakistan — the poorest of all the country’s provinces has been robbed of self-determination to such an extent that it is dependent on having water being trucked in from other areas.

Sadly, this is nothing new. The Pakistani state, over the years, has done little to address Gwadar’s water crisis. Indeed, it has provided only a single desalination plant for the populations of the city and adjoining areas. In 2008, the then provincial government had decided to install four desalination plants in Gwadar, but work on the plants could not be completed on time. What is the government waiting for? Rendering these desalination plants functional should be undertaken on a priority basis.

This goes to show that the state apparatus is not serious about investing in Balochistan, despite all the tall claims of massive development in the city under the China Pakistan Economic Corridor (CPEC). If it were, it wouldn’t leave women and children with no option but to travel for miles in the scorching heat, armed with buckets in the hope of collecting a few drops of water.

The current government touts Gwadar as a major investment hub under CPEC — yet the ground reality speaks for itself. How will it ever be possible to turn Gwadar into a ‘mega city’ when residents do not even have access to the fundamentals? It is time to stop believing the hype

Tuesday, May 30, 2017

LoI issued for 300MW coal project at Gwadar

http://nation.com.pk/business/31-May-2017/loi-issued-for-300mw-coal-project-at-gwadar


ISLAMABAD - Pakistan Power and Infrastructure Board (PPIB) on Tuesday issued Letter of Interest (LOI) to China Communications Construction Company Limited (CCCC) for development of 300MW imported coal-fired power project at Gwadar.

The documents in this regard were signed by PPIB Manging Director Shah Jehan Mirza and CCCC Vice President Xu Jun. Under the plan, M/S CCCC would develop the 300MW power project utilising imported coal at Gwadar, Balochistan. The estimated cost of the project is $600 million and it is part of flagship China-Pakistan Economic Corridor (CPEC). Gwadar Port Authority (GPA)/Gwadar Development Authority (GDA) is the supervising agency. It was agreed that the company will obtain tariff approval from Nepra and start construction after achievement of financial closing. The said project has been approved by the Joint Cooperation Committee (JCC) of CPEC and PPIB Board for further processing.

With the addition of 300MW Gwadar Power Project, the portfolio of power generation projects being processed by PPIB has number to nine coal based projects of 8220MW and three hydro based projects of 2714MW constituting aggregate total of 12 projects of 10934MW under the CPEC.

The economic activities foreseen at Gwadar in the near future would require a reliable power supply which is possible only with the installation of energy generation plant locally, however instead of using environment-friendly fuel the government has decided to run it on dirty fuel. While the world is busy saying good bye to coal based electricity, the government of Pakistan is bent to install coal power plant at Gwadar port.

It is pertinent to mention here that Federal Minister for Planning Ahsan Iqbal had earlier ordered the switching over of Gwadar coal power plant to oil/LNG. In this regard, Ahsan also showed discontent over the Ministry of Water and Power for making delay in formulating plan for switching the proposed Gwadar coal based power plant from coal to cleaner fuel. The minister had even directed the concerned ministry’s officials to finalise the conversion plan from coal to oil/LNG within one week.

As per the earlier stand of the government, the move of switching over the power plant from coal to cleaner fuel was taken because the proposed power plant is of subcritical coal technology which will pollute the environment of the new developed port. The coal power plant of 600MW is being developed with super critical technology which is relatively environmentally safe; however 300MW power plants don’t come in super critical technology. However, all of the sudden the decision was changed and now once the government claims that environment-friend technology will be installed at Gwadar.

Globally there is move against the use of coal in power generation and the number of coal-fired power plants in pre-construction stage fell by almost 48 percent in 2016. Several countries, particularly China and India, dropped hundreds of coal based projects. Earlier in 2016, China has cancelled or put on hold 100s of under construction/planned coal fired projects. Over all, china use of coal is on decline since 2013. Similarly, the United States has shifted to gas, wind and solar as the country has retired 13 gigawatts in 2015. In India, banks have refused to finance the coal fired projects and resultantly the government has to put around dozen coal fired projects on hold.

However, a good was seen here in Pakistan too as in February Pakistan and China agreed to remove coal projects from the CPEC portfolio. The projects which were dropped includes Muzaffargarh Coal Power Project (1,320MW), Salt Range Mine Mouth Power Project (300MW) including mining, Gaddani Power Park (1,320MW

New Silk Road: Is there a China plan for M’sia?

http://m.malaysiakini.com/news/383919

Dennis Ignatius
30 May 2017, AM 8:38 (Updated 30 May 2017, AM 9:10)

 china editorspick

 

COMMENT | The leaked China-Pakistan Economic Corridor (CPEC) Long Term Plan invariably invites questions about China’s plans for Malaysia.

Given the detailed and comprehensive planning that went into CPEC, it is more than likely, given the country’s strategic location and its critical importance to the success of the One Belt One Road (OBOR) initiative in Southeast Asia, that a similar master plan for Malaysia has been crafted.

What are we to make of the profusion of projects (many of dubious value), the huge infrastructure proposals, the purchase of key national assets, the billions of loans and investments being offered, the new cities that are being built and offered for sale primarily to China nationals, the burgeoning military and security cooperation, and China’s increasing political involvement in our domestic affairs?

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Is it merely a natural evolution in bilateral cooperation or is it part of some wider strategy? 

Discerning the game plan

While we do not have leaked documents to fall back on, there is already sufficient information based on public statements, policies and actions to make some assumptions about China’s Malaysia strategy.

It is, for example, safe to conclude that China’s interest in Malaysia, as with Pakistan, is as much about geopolitics as it is about economics. 

As in Pakistan (and Cambodia and Laos as well), a key goal appears to be the creation of a pliant government, one that is sensitive to, and fully supportive of, China’s wider geopolitical interests.

Political influence also makes possible the achievement of another equally important objective: the integration of the local economy into China’s supply chain and access to markets for Chinese technology, skills, products and labour.

This is a major preoccupation of the Chinese Communist Party as its legitimacy depends on maintaining steady growth rates and creating new jobs; a massive challenge given the millions of young people who enter the labour market each year. It is not unusual, for example, for up to 10,000 applicants to vie for a single job.

Keeping China’s factories running at optimal capacity, securing new contracts and job opportunities overseas, ensuring a steady supply of raw materials and market access undergirds the whole OBOR initiative.

While such a preoccupation is, of course, not unique to China, its size, proximity and power presents unique challenges for smaller economies.

Exploiting vulnerabilities

In Malaysia, internal weaknesses (the 1MDB scandal, corruption, ethnic, religious and political division, declining productivity, mismanagement, etc) have provided China with extraordinary opportunities to maximise its leverage.

China has, for example, been quick to capitalise on the 1MDB imbroglio to expand its influence over the administration, push for maximum political and economic concessions and leapfrog other countries to become primus inter pares among Malaysia’s partners.

China’s economic and diplomatic strategy has already yielded impressive dividends as Malaysia shifts significantly closer to China, upending the more cautious and nuanced approach to big power relations that has long been the hallmark of Malaysia’s foreign policy.

In short order, Malaysia has moved to purchase naval vessels from China, open its ports to Chinese warships and submarines and invite the People’s Liberation Army to participate in joint land exercises, something that would have been unthinkable not so long ago.

Prime Minister Najib Razak has hinted that a new mutual defence partnership with China might be in the offing as well.

In keeping with the new closeness to China, the Najib administration appears to have also opted for a policy of benign neglect in respect of China’s territorial claims in the South China Sea. It is not inconceivable that both sides are quietly discussing shared sovereignty and joint exploitation of oil, gas and fishery resources. Such an agreement would be a major concession to China.

The new ‘Kapitan Cina

In the meantime, Chinese embassy officials are staking out a role for themselves in our domestic politics in contravention of established bilateral principles and diplomatic norms.

Embassy officials now regularly accompany government politicians on constituency visits and to meetings of local trade and clan associations where they openly enjoin Malaysian citizens of Chinese origin to support the Malaysian Chinese Association (MCA) and laud the Najib administration’s pro-China policies. The Chinese ambassador himself has emerged as one of the MCA’s strongest supporters and has criss-crossed the country speaking in its favour.

His active involvement in domestic politics has earned him the nickname ‘Kapitan Cina’ (a colonial-era appointee vested with significant power to act and speak on behalf of the Chinese community).

How far China will go to protect its increasing interests in Malaysia and ensure that pro-China personalities, political parties and policies remain in place is a key question.

Rapidly growing economic influence

At the economic level, China appears to have used its new-found influence to rapidly embed itself in key sectors of the economy. It has, for example, become the second largest independent power producer in the country through its takeover of the 1MDB-linked Edra Energy and, in time, could emerge as the largest automobile manufacturer thanks to the recent deal between Proton and Geely.

Many of the infrastructure projects given to China on a preferential basis, will further strengthen China’s influence over the economy while at the same time significantly increasing the nation’s indebtedness to China for decades to come.

While many insist that there is nothing sinister about China’s participation in the economy, the lack of transparency and governance standards is troubling and raises questions about whose interests are being served.

Whether it is purchasing submarines from France or contracting China to build railways, a lack of transparency invariably gives rise to all sorts of suspicions, particularly in a country like Malaysia which is riddled through and through with corruption.

Furthermore, it is more than passing strange that all of a sudden Malaysia has to upgrade all of its ports, build some new ones as well as invest in two, maybe three, new railway projects - all with China’s assistance. It is a godsend for China, of course, but the case that it is in Malaysia’s interest has not yet been made.

It doesn’t help either that independent reviews of projects such as the East Coast Railway suggests that it is massively overpriced, of dubious economic benefit and heavily skewed in China’s favour.

How is it that China keeps coming out ahead time and again in all these mega projects?

Malaysians, who already have good reason to be distrustful of their government, cannot but view these developments with grave concern.

Where are we headed?

Of course, none of these developments in themselves suggest that Malaysia is now a client state.

However, when a bilateral relationship shifts so dramatically, when a foreign power makes such rapid political and economic inroads, when it suddenly acquires a monopoly of major infrastructure projects, when it begins to involve itself in domestic affairs, it does raise questions about where the relationship is ultimately headed.

And, while OBOR itself may bring some benefits to Malaysia, the way both governments are going about pursuing it leaves much to be desired. Without greater political and economic transparency and accountability, closer relations with China will always be dogged by suspicion and controversy.

Next: Demons within, dragons without

Part 1: Pathway to prosperity or slippery slope to subjugation?

DENNIS IGNATIUS, a former Malaysian ambassador, firmly believes that we should put our trust not in the leadership of politicians but in the sanctity of great institutions - our secular and democratic constitution, a democratically elected parliament, an independent judiciary, a free press and a government fully accountable to the people. He blogs here.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini