Skip to main content

PEC structured as a resource extraction exercise: Expert

China Pakistan Economic Corridor. Photograph:( Zee News Network )


ANI Washington DC, US Aug 04, 2019, 11.56 AM (IST)

China Pakistan Economic Corridor (CPEC) is not an investment into Pakistan but is structured as a resource extraction exercise, a US based frontier, and emerging market analyst has said.

In an article published by, Farooq Tirmizi wrote that the majority of Chinese investment in Pakistan is self-proclaimed and is not benefitting the local economy.

"China announces that it has invested in a project in Pakistan worth, let's say US $1 billion. That US $1 billion, however, is required to mostly be spent on Chinese equipment, and labor, a significant portion of which is to be imported from China as well, with very little by way of supplies coming from the local economy," Tirmizi said.

That said amount, therefore, never hits Pakistan's economy as an investment, and goes from the Chinese government or state-owned company to a state-owned company within China to pay for equipment. 

Even Chinese labor gets its salaries deposited into bank accounts within China.

"The money, in other words, stays completely within China and so never shows up as foreign investment into Pakistan", said Tirmizi.

The analyst believes that the majority of people in Pakistan are willing to join hands with Washington rather having faith in Beijing.

"If ever there was thought within Pakistan`s leadership political, military, and business that Beijing could replace Washington as the foreign capital with the most influence in Islamabad, that idea is now firmly dead. We just have not gotten around to telling China yet," Tirmizi added.

"Over the past few weeks, Profit has spoken to several sources in both Pakistan's business elite circles as well as people who are familiar with the thought process of the military leadership and the picture emerging is not a favorable one of the relationship with China: the more Pakistanis learn about the true costs of the China Pakistan Economic Corridor (CPEC), the less inclined they are to want to participate any further than we already have," the article read.

The analyst also believes that there is a growing imbalance in trade between Pakistan and China.

"Pakistan's imports from China have dramatically increased since 2013 when CPEC was first announced. Prior to 2013, Pakistan`s imports from China had been rising because of the 2007 China Pakistan Free Trade Agreement but had stabilized to around $6.6 billion a year. After 2013, the rise has been very steep," the article added.

Since 2013, China's net investment into Pakistan has been US $2.5 billion, which is much higher than the US $813 million China invested in Pakistan in the 10 years prior to 2013, but still a relatively small sum compared to the wild projections and promises that the Pakistani press and government wanted to believe when it was first announced.

While Pakistan's civilian and military leadership is prone to making bad decisions, they are not completely stupid. 

They can see these numbers, and they are privy to far more details than have been told to the public about the specific terms of the agreements with China for CPEC projects.

 And it is becoming increasingly clear that they are becoming deeply uncomfortable with the direction this has taken Pakistan.

"Neither the civilian politicians nor the military leadership wants to accept the blame for what is clearly a massive blunder on the part of the government of Pakistan in negotiating the CPEC contracts. If any lawyers reviewed them, it is unclear if they understood them, or if their views were taken into consideration at all by the decision makers", said the analyst. 

"The deed is done now, however, and Pakistan cannot easily extricate itself from these arrangements. But, sources familiar with the military leadership's thinking tell Profit, the leadership in the military has decided to start following the first rule of being in a hole: stop digging" he added.

"A public renunciation of CPEC would be too embarrassing for the government both the politicians and the Army but they are certainly not willing to undertake any further agreements with the government of China", the analyst concluded.


Popular posts from this blog

SSG Commando Muddassir Iqbal of Pakistan Army

“ Commando Muddassir Iqbal was part of the team who conducted Army Public School operation on 16 December 2014. In this video he reveals that he along with other commandos was ordered to kill the innocent children inside school, when asked why should they kill children after killing all the terrorist he was told that it would be a chance to defame Taliban and get nation on the side. He and all other commandos killed children and later Taliban was blamed.
Muddassir Iqbal has deserted the military and now he is  with mujahedeen somewhere in AF PAK border area”
For authenticity of  this tape journalists can easy reach to his home town to interview his family members or   ISPR as he reveals his army service number”
Asalam o Alaikum: My name is Muddassir Iqbal. My father’s name is Naimat Ali. I belong to Sialkot divison (Punjab province), my village is Shamsher Poor and district, tehsil and post office  Narowal. Unfortunately I was working in Pakistan army. I feel embarrassed to tell you …

China's Raise as a Maritime Power

China's Rise as a Maritime PowerOcean Policy from Mao Zedong to Xi JinpingTAKEDA Jun’ichiSenkaku IslandsApr 23, 2014 PDF Download1. IntroductionThe international community has been viewing China's recent moves relating to the seas as representing "maritime expansion," and the Chinese themselves have come to talk about making their country a maritime power. In the political report he delivered in the autumn of 2012 to the eighteenth National Congress of the Communist Party of China, which stands at the top of the country's power structure, General Secretary Hu Jintao declared, "We should enhance our capacity for exploiting marine resources, develop the marine economy, protect the marine ecological environment, resolutely safeguard China's maritime rights and interests, and build China into a maritime power."1 This was Hu's final report as the top leader of the CPC; after delivering it he stepped down from his posts as general secretary and chairm…

Guardians of the Belt and Road

Guardians of the Belt and RoadThe internationalization of China's private security companiesby Helena Legarda and Meia NouwensFollowing the build-up of infrastructure and investment projects along China’s extensive Belt and Road Initiative (BRI), private security companies from China are also increasingly going global – to protect Chinese assets and the growing number of Chinese nationals living and working in countries along the BRI, in sometimes unstable regions. Out of the 5,000 registered Chinese private security companies, 20 provide international services, employing 3,200 security personnel in countries like Iraq, Sudan and Pakistan.The impact of this newly developing Chinese activity abroad is analyzed in this MERICS China Monitor. Chinese private security companies’ international activities pose a challenge to European interests as they are often largely unregulated and their security staff are often inexperienced in dealing with serious conflict situations and combat. EU …