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Showing posts from October 11, 2018

Pakistan's IMF bailout adds to Belt and Road woes

By:  Colby Smith For the 13th time in 30 years, Pakistan needs the IMF.  This time around , the government is planning to ask for up to $7bn—it's largest request from the Fund to date—in order to sidestep a full-blown balance of payments crisis. For Pakistan, an IMF deal is a vital lifeline. For China, it represents another blunder for its $1trn-plus Belt and Road Initiative (known increasingly as BRI) at a time when many partnering countries are second guessing their involvement and even abandoning some projects. With sizable twin deficits and a paltry $8.4bn stash of foreign currency reserves (not enough for even two months' worth of imports), Pakistan badly needs outside funding. The central bank's efforts to weaken its overvalued currency through multiple devaluations over the past year (five and counting) as well as hiking interest rates have done little to bring down the country's financing needs. Exotix's Hasnain Malik now puts the figure the government

CPEC debt servicing to commence in year 2021, says official

The spokesman said Pakistan has opted for Chinese investments under CPEC due to the favourable financing arrangements By Mian Abrar October 11, 2018 ISLAMABAD : Pakistan on Thursday said that China-Pakistan Economic Corridor (CPEC) related debt servicing to China is to commence from the year 2021, while the benefits of these investments to the Pakistani economy far outweigh the scheduled payments. Talking to  Pakistan Today , the focal person of the CPEC project said that CPEC does not impose any immediate burden with respect to loan repayments and energy sector outflows. “CPEC outflows (debt servicing to China) would start from the year 2021 and spread over 20 to 25 years with a maximum in the year 2024 and 2025. The resultant benefits of these investments to the Pakistan economy would far outweigh these outflows (debt servicing),” the official said. Meanwhile, another official linked to the CPEC project said that only one project under the CPEC loan umbrella – the Pakistan C

Remodeling The Belt And Road: Pakistan Picks Up The Torch

OCTOBER 10, 2018 JAMES DORSey Imran Khan (Asianet-Pakistan via Shutterstock) by James M. Dorsey Pakistan, following in the footsteps of Malaysia and Myanmar, is the  latest country to balk at the China and infrastructure focus of Beijing’s Belt and Road -related investments. Preparing for his first visit to China as Pakistan’s prime minister, Imran Khan is insisting that the focus of the China Pakistan Economic Corridor (CPEC), a $60 billion plus crown jewel of the Belt and Road, shift from infrastructure to agriculture, job creation and foreign investment. “Earlier, the CPEC was only aimed at construction of motorways and highways, but now the prime  minister decided that it will be used to support the agriculture sector, create more jobs and attract other foreign countries like Saudi Arabia to invest in the country,”  said information minister Fawad Chaudhry. Khan’s determination to ensure that more benefits accrue to Pakistan from Chinese investment comes at a time that vario

Xinjiang and Uyghurs

Explainer on Xinjiang regulations  / China Law Translate “ Nothing in the Counter-terrorism Law or the amended Xinjiang Regulations themselves allows for prolonged detention. This will require further legislation. That said, it is not likely these regulations were put forward without consent from central authorities, and further legal basis may be forthcoming.” China's paranoia and oppression in Xinjiang has a long history  / CNN “ While the strategies Beijing is taking are new — and include a state-of-the-art surveillance regime — they echo a longtime paranoia about Xinjiang and a deep suspicion of its non-Han population among China's rulers which have historically resulted in oppression and rebellion.” Defying China, Malaysia releases Uyghur detainees  / Reuters via Channel NewsAsia “ Malaysia has freed from detention 11 ethnic Uighur Muslims who fled to the Southeast Asian nation after a Thai jailbreak last year, and sent them to Turkey, their lawyer said on Thursday O

Trade war, day 97: U.S. Treasury tightens investment oversight, warns against yuan devaluation The U.S. Treasury Department took two actions today that dialed up the financial stakes of the U.S.-China trade war. First, it initiated a toughened investment regime,  approved by the U.S. Congress this summer under the Foreign Investment Risk Review Modernization Act (Firrma). This act “expanded  the purview of the Committee on Foreign Investment in the United States” to be “able to review a much wider array of deals, including joint ventures and smaller investments by foreigners in American businesses that make technology deemed critical for national security reasons,”  according to the New York Times (porous paywall). The regime will remain  a “pilot program” for one month, and will become formalized on November 10. Second, it warned China against currency devaluations.  Steven Mnuchin, the Treasury secretary,  told the Financial Times  (paywall) “that the Treasury monitored currency issues ‘very carefully’ and noted that the Chinese renminbi had fallen ‘significantl

China explicitly acknowledges, tries to justify concentration camps in Xinjiang The South China Morning Post  reports  that Xinjiang “has revised its legislation to allow local governments to ‘educate and transform’ people influenced by extremism at ‘vocational training centres,’” where a significant proportion of the Uyghur and Kazakh populations  is being interned . “Governments at the county level  and above can set up education and transformation organisations and supervising departments such as vocational training centres, to educate and transform people who have been influenced by extremism” is the new language in the “Xinjiang Uygur Autonomous Region Regulation on Anti-Extremism.” The amendments took effect yesterday.  The earlier version of  was passed in March 2017 . It banned “a wide range of acts deemed manifestations of extremism, including wearing veils or having ‘abnormal” beards, refusing to watch television or listen to radio, and preventing children from receiving national education.”  You can read the amended law here  (in Chinese)

MERICS: China Update

Download PDF Frank N. Pieke (CEO MERICS) Kerstin Lohse-Friedrich (Director of Communications MERICS) TOPIC OF THE WEEK: Detention of Interpol president Meng Hongwei China risks international reputation with arrest of Interpol president The detention of the Chinese president of Interpol in China has raised doubts over Beijing’s international trustworthiness. The Ministry of Public Security confirmed on October 8 that Meng Hongwei is under investigation for corruption accusations.The former vice-minister of public security had disappeared on September 25 while traveling from the Interpol headquarters in Lyon to China. China’s anti-corruption body, the National Supervisory Commission, is handling the case.   The secretive detention of Meng has little precedence in international affairs.  Read more... CHINA AND THE WORLD Speech by US vice-president Pence increases tensions with Beijing Relations between the United States and China have soured further after an aggressive speech by