CHINA TRYING TO INFLUENCE POLLS IN PAKISTAN

China seems to be more than interested in influencing the out come of elections in Pakistan due on 25 July 2018. The Chinese have so much at stake that they cannot have an unfavorable Government in Pakistan or Balochistan for guarding their investments into CPEC.

 

As an emerging power in the region, China is closely watching all developments taking place in the South Asian region. It is in China’s best interests to have friendly governments in its neighborhood, and to a large extent, Beijing is successful. China, being cash rich has been meticulously trying to attract South Asian countries, by all means. Pakistan, by all means, is one of the friendliest countries in China.

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On May 2, 2011, when Osama bin Laden, Chief of al-Qaeda, was assassinated by U.S. forces in Pakistan’s garrison city of Abbottabad, Pakistan abandoned its dependence on the US and had to put all its eggs in China’s basket. As a result, there was a paradigm shift, Pakistan has put the highest priority on its friendship with China. For Pakistan, replacement if the United States with China or not is a separate debate. One thing is surely seen since 2011 i.e. China has increased its presence in Pakistan. It can readily be seen in the China-Pakistan Economic Corridor (CPEC), a multibillion-dollar project announced in 2014.

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Ever since the announcement of CPEC, it has been a topic of discussion from common people to businessmen, journalists, politicians, and those belonging to different walks of life.

“A majority of people in Pakistan view this multibillion-dollar CPEC project as key to Pakistan’s economic prosperity,” journalist Shezad Baloch tells The Diplomat. “All major political parties either take credit for initiating it or make promises to bring prosperity and development through CPEC while also safeguarding national interests of Pakistan.”

Politicians, including former Prime Minister Nawaz Sharif and his party members, take all the credit for CPEC at functions, seminars, and in the media. They are also highlighting CPEC in the campaign in general elections in Pakistan, which is scheduled for July 25, 2018.

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“The launch of CPEC is arguably one of the most popular public policy developments in Pakistan over the last few years. The PML-N party has been highlighting it on the campaign trail and point it as one of the great success stories of its term,” says Michael Kugelman, Deputy Director, Senior Associate and Asia Program for South Asia at Woodrow Wilson International Center for Scholars.

Meanwhile, Imran Khan, of PTI (Pakistan Tehreek-e-Insaaf), the arch-rival of Sharif, has been bashing the PML-N and its chief for taking credit for CPEC investments in Pakistan.

CPEC is factoring in local election campaigns as well. Gwadar in Balochistan is the epicenter of CPEC being the exit and entry port at sea. Unsurprisingly, it’s a topic of discussion for candidates in Gilgit.

Balochistan Awami Party, King’s Party

The BAP (Balochistan Awami Party) is a new political party with epicenter at Quetta, the capital of Balochistan province. According to analysts, it is being called as king’s party or the party of the establishment. It is expected to win the elections with great margins in Balochistan, this will, of course, will be pivotal for Chinese future investments.

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If the BAP com forms the government in Balochistan, it will be easy for some forces in China to make deals regarding not only CPEC but Reko Diq mine and other oil and gas deals in Balochistan. These political developments in the country in general and Balochistan, in particular, are meant to pave the way for Chinese investments and require Chinese to influence them in their favor.

In fact, China and CPEC were one of the major areas of dispute between the now-ousted Sharif and the establishment – the military and intelligence service. The Pakistan military typically deals with Chinese affairs in Pakistan, but Sharif and the PML-N wanted more of a stake in the CPEC projects.

According to Shezad Baloch, “CPEC is providing a handy slogan for all political parties. People of all political parties can get behind the promise to provide basic necessities, infrastructure, and development that CPEC offers.” However, he adds, “The man or woman on the street, however, is still not fully aware of the ramifications of this massive project, making it easy for any political party to exploit it.”

China tried to influence Sri Lankan Polls unsuccessfully

Average Pakistanis think that CPEC is going to change the fate of not only the country but also the entire South Asia region. On the contrary, educated Pakistanis are alarmed about the ramifications, particularly the high-interest loans coming from China. Those opposing are arguing that Gwadar could meet the same fate as Hambantota port in Sri Lanka, which was ceded to China due to Colombo’s inability to repay the loans that paid for the port’s construction.

Much like Pakistan, Sri Lanka had been heavily dependent on Chinese loans. Former Sri Lankan president Mahinda Rajapaksa was at the forefront of allowing China a greater role in his country. As a result, China increased its footprint in Sri Lanka. Unsurprisingly, then, Beijing was highly invested and interested in keeping Rajapaksa in power.

New York Times report by Maria Abi-Habib found that “In the final months of Sri Lanka’s 2015 election, China’s ambassador broke with diplomatic norms and lobbied voters, even caddies at Colombo’s premier golf course, to support Mr. Rajapaksa over the opposition, which was threatening to tear up economic agreements with the Chinese government. At least $7.6 million was dispensed from China Harbor’s account at Standard Chartered Bank to affiliates of Mr. Rajapaksa’s campaign,” Abi-Habib wrote.

Could China do the same in Pakistan?

As Pakistani columnist for Dawn, Khurram Hussain  “Now that Pakistan is approaching a moment that Sri Lanka passed in 2015, and Malaysia passed in May, perhaps an opportunity to more publicly evaluate the financials of these projects is opening up before us.” China will be hoping to prevent that very outcome, which could be led to public questioning of CPEC projects.

Undoubtedly, Beijing wants to see parties come to power that would welcome future Chinese investments. But according to Kugelman, China doesn’t have much to worry about. “I don’t think China is particularly concerned about the election outcome,” he says. “China knows that Pakistan Army and Deep State call the shots. There is also a strong political consensus in Pakistan for a continued deep Pakistan-China relationship and for continued efforts to build out the CPEC project. No matter what the next Pakistani government looks like, Beijing will be happy to work with it. And the next Pakistani government will be happy to work with Beijing. If not the days of the government will be numbered as Pakistan military wants it that way,” he concludes.

Oxford University professor and author Peter Frankopan predicts that “China will watch the elections in Pakistan closely. But what China concerned is that the election should produce a clear result. Investment and good relations require stability and knowing what to expect in the future. Already the military is coercing Political parties towards a clear winner.”

Elections are always momentous occasions; but given what is at stake Pakistan and China, more hangs on the decisions made by voters in Pakistan on July 25, 2018, than perhaps at any point in the last seven decades of democracy.

13 July 2018/Friday                                                             Written by Mohd Tahir Shafi 

IS CPEC FINANCIALLY VIABLE?

CPEC has been projected in Pakistan as a magic wand to resolve all the issues in that country as it would bring much needed foreign investment, business, and prosperity. Over 30 news channels of Pakistan have been assuring their audience that a golden age is just around the corner. In short, everyone in Pakistan – media, military, politicians, non-state actors (Hafiz Sayeed) are in love with CPEC.

But few sane minds are raising their voice in Pakistan about the economic viability of CPEC. Before we delve into the financial viability of the CPEClet’s check out the detailed analysis of the time and space aspects.

Calculating Container Shipping Time

Let’s assume that a driver drives for 12 hours per day. It would take him 91.57 hours to reach Kashgar from Gwadar, which would be equal to 7.7 days or 8.7 days taking pit stops into account.

Let’s assume that it takes only a day to transfer cargo from a Pakistani to a Chinese truck at Kashghar. That Truck would take 170 Hours to reach Shanghai from Kashghar. ie 14 days of driving and assuming two days for pit stops it would take16 days.

Now if we assume that Gwadar is as efficient as the port of Karachi, it would take 6 days to clear import formalities.

Thus the total time it would need to transport goods from Dubai to Shanghai via Gwadar would be 37 days compared to 15 days it would take to reach Dubai from Shanghai by sea via the Malacca Strait.

Calculations tell us that shipping through Gwadar port is costlier and more time consuming than transporting through seas, and the distance between Pakistani cities and Chinese cities is as much as the distance between Pakistani cities and major European cities. Thus, if there is no land route trade happening between Europe and Pakistan, then certainly no trade will happen between China and Pakistan on a large scale. And anything which is cheaper and quicker is always preferred, which is not the case for transporting through Gwadar and Kashghar by road.

Cost comparison for the viability of CPEC

Distance between Shanghai and Kashgar = 5121 Km

Distance between Kashghar and Gwadar = 2747 Km

Average Trucking cost per Ton per Km in China = 7 cents.

Average Trucking cost per Ton per Km in Pakistan = 3 cents.

This is the most conservative calculation not taking into account Hazard premium that the nature of Terrain imposes on Pakistan (Karakoram Highway is rated world’s fourth most dangerous highway. There’s a hazard premium that China has to pay for transporting goods through Takla Makan Desert, Kulun Shan mountains range, and Altai Shan mountain range).

But still, let us calculate the cost of transporting a Ton of goods from Shanghai to Gwadar.

Cost incurred in Chinese territory = 0.07 X 5121 =$358.47

Cost incurred in Pakistani territory = 0.03 X 2747 =$82.41

So total cost from Shanghai to Gwadar for a ton of goods by road = $440.88 or approx Rs 50,000 PKR per ton.

(Since Pakistan doesn’t export high value goods but mainly low value textiles, the cost of transportation itself will far more than the cost of production! Thus Pak exports to China via the CPEC will be a non starter!)

Now let destination port be Dubai.

Cost of Transporting 1 ton via sea from Dubai to Shanghai via Malacca = $28.93

Cost of Transporting 1 Ton via sea from Karachi to Dubai = $5.787

Therefore, total cost of Shipping a Ton from Shanghai to Dubai via Gwadar = $446.67.

But the total cost of Shipping directly by sea from Shanghai to Dubai via Malacca Strait = $28.93 which is 16 times less than that of Transporting via Gwadar!!!

Thus the total cost of Transport from Gwadar to the Chinese border is more than what would be required for Transport from Dubai to Shanghai by sea!

And then, what none of the Pak ‘experts’ ever discuss is the fact that the  CPEC will be non-functional for 4-5 months a year when the 15,500 ft Khunjerab Pass is closed due to adverse weather conditions.

Under the protocol agreement signed by Pakistan and Chinese authorities, the border is usually closed on Nov 30 and reopened on April 1 every year which could be extended depending on the weather conditions. Therefore, there would be no trade along the CPEC during this period resulting in a massive loss of revenue.

So what is this multi-billion dollar project all about?

The truth is that the CPEC is basically meant as an alternative route to China in case of any disruption in the Strait of Malacca. Despite increased imports through Russia and Kazakhstan, China remains heavily dependent on Middle Eastern oil, with up to 80 percent of its energy supply passing through the Malacca Straits.

However, more importantly, Gwadar is being developed by the Chinese to establish a PLA base there and the CPEC is being built basically for its logistics support.

A Chinese naval base at Gwadar will enable them to dominate the Strait of Hormuz as well as the Indian Ocean region.

For Pakistan, it would be an insurance policy against any Indian naval attack on its facilities due to the Chinese naval presence at Gwadar. 

 mohdtahirshafi@gmail.com

CHINA’S WORRIES FOR CPEC DEEPENS

21 Dec 17/Thursday   

With the latest decision of using Yuan, the Chinese currency, in bilateral trades in CPEC related projects; China has made it clear about its egoistic urgency to have an economic influence over USA. Priority for China-Pakistan Economic Corridor (CPEC) termed as the “flagship” project of ‘One Belt, One Road (OBOR)’ initiative, assumes far more importance for China, as the total cost of the project mounts to $62billion from initial estimate of $46billion.

Another aspect, that China is only bothered about the CPEC and no one else, emerges from the cold response given to Nawaz Sharif, on his disqualification as Prime Minister of the country after the Panama Gate fiasco. On the similar lines why China is saving Azhar Masood, the JeM chief, fully knowing that his outfit has been tagged as terrorist outfit by the UN? It’s because China cannot afford JeM terrorists lurking around the CPEC to avenge their leader, should he be declared a global terrorist by China too.

Even it has been opined that the house arrest of Hafiz Saeed is not because of USA but it may be China behind the entire game plan as he doesn’t want India-Pakistan relations to further deteriorate which may affect the progress of economic corridor.

CPEC, right from the word go, has not been a smooth sail for China. Issues like displacement of local residents along the proposed roads, Collection of Karakoram toll tax, Higher Tariff for the Power plants, Khunjerab railway line and China issuing fresh financial norms resulting in Pakistan pulling out of US$14 billion Diamer-Bhasha dam project, have been complicating the issue. Latest being the stoppage of funding of at least three major road projects in Pakistan, as part of CPEC.

 Another major worry of China is serious security threat from Tehrik-i-Taliban Pakistan (TTP) and other jihadi groups. Therefore China to a large extent depends on Pakistan Army for security.

With all these worries, the recent demarches issued to Pakistan and China by India, conveying its position on the construction of dams on the Indus river in Pakistan-occupied-Kashmir (PoK) by the Pakistani government with assistance committed to these projects by China, will certainly rake up the issue once again. India has vehemently objected to the CPEC as the infrastructures are being built in areas illegally occupied by Pakistan. Such activities are construed as violations of India’s sovereignty and territorial integrity.   

azadazraq786@gmail.com

CHINA’S U TURN ON CPEC

Amidst reports of China’s central bank warning of financial crisis and Pakistan turning down China’s offer of assistance for the $14-billion Diamer-Bhasha Dam in POK, the Chinese ambassador to India has proposed a face saving measure. In an interaction with experts and students, Beijing’s envoy Luo Zhaohui suggested the alternative routes, and said he was keen on accomplishing a bilateral friendship and trade treaty during his tenure in India. Speaking on sidelines during an event at the Centre for Chinese and South-East Asian Studies in the School of Language, JNU,  the Chinese Ambassador said,

“We can change the name of CPEC (China Pakistan Economic Corridor). Create an alternative corridor through Jammu and Kashmir, Nathu La pass or Nepal to deal with India’s concerns,”

Earlier India’s boycott of Belt and Road Forum sponsored by Chinese Government left China red faced in front of the world, who was sure of Indian participation. Since then in order to placate India, China has suggested change of name of POK portion of CPEC through many media channels. This is the first time a senior official has proposed a change in order to assuage Indian concerns.

Wary of Indo-Pacific Alliance, Chahabar Development and growing opposition to CPEC in Pakistan, the Chinese Government have intensified their efforts to engage India. China realizes that no economic activity in the region can be successful without India’s participation.

In November alone, two countries, Pakistan and Nepal, cancelled BRI infrastructure projects due to Beijing’s unacceptable conditions of full Chinese ownership and control. In Pakistan’s case, the now axed, US$14 billion Diamer-Bhasha dam project, represented approximately one-third of the total BRI investment in a country that has so far been the flagship for Xi’s plan. This confirms our previous assessment of CPEC being overly ambitious and unrealizable in nature.

The BRI which has been written, along with ‘Xi Jinping Thought’, into the CCP’s constitution at October’s party congress, has assumed gigantic proportions with CPC throwing its entire weight behind it. The recent developments are definitely a setback to BRI the dream project of Xi Jinping. China has realized for good, that India can no longer be excluded from any development in the Asia-Pacific, be it economic or security related.