When Going Gets Tough the Wily One Dodges

On 9th Jun 2019, Vietnam’s customs department brought out that certain companies are importing goods from China and then removing or replacing the packaging on goods to describe them as “Made in Vietnam”. 

Vietnam authorities have issued a stern warning to companies that have been relabeling Chinese goods as Vietnamese to avoid US tariffs.  This development is an indicator that the South-East Asian country is fast emerging as a leading regional export hub in the escalating US-China trade war.

Echoes from Past

It was in 2017 when the then  US President Donald Trump began his trade blitzkrieg against China with unprecedented gusto. 

That time the customs department in the northern port of Haiphong found a company that had imported speakers and phone chargers from China that had “Made in Vietnam” printed on their packaging. 

Products Affected

Vietnamese customs officials said that the trans-shipment of goods under forged certificates of origin was happening most often in the areas of textiles, seafood, agricultural products, ceramic tiles, honey, iron steel, aluminium and pressed wood.

This photograph taken on May 24, 2019 shows a Ted Baker brand men’s shirt labeled “Made in Vietnam” in a factory in Hanoi

Vietnam is the Gainer

News of the relabelling of Chinese goods will add to growing scrutiny of Vietnam’s role as a beneficiary in the US-China trade war, as more Chinese, US, and other companies step up purchasing or manufacturing in Vietnam to avoid rising US tariffs on a plethora of Chinese goods.

Vietnam is indeed the largest beneficiary of import substitution as buyers around the globe shifted their buying from China.  Imports to the US from Vietnam grew by 40 percent in the first quarter of this year, about double the rate of imports from South Korea and Taiwan.

The US is now Vietnam’s largest export market, and its trade surplus with the US reached $39.5bn last year. Vietnam has drawn closer to the US in recent years because of their shared suspicion of China’s growing regional ambitions.

It hosted Mr. Trump at the nuclear summit with North Korea’s Kim Jong Un in Hanoi in February 2019.  In May 2019, Vietnam escaped being designated by the US Treasury as a currency manipulator. 


Amid the on-going trade war between two world’s largest economies, the United States and China trade tensions are raging.  Of late China has creatively figured out, how to avoid US tariffs.  Although Chinese companies have taken a beating from the trade war, the novel dragon way of circumventing the staggering tariffs is benefitting other countries.

Chinese goods have devised a way to reach American markets via countries such as Vietnam, Taiwan, and Mexico.  These countries are definitely winners here.  The Chinese manipulation has resulted in giving economies of these countries a significant boost.    

Exports from China to Vietnam in five key categories of products namely:

  • Machinery and parts
  • Electrical equipment
  • Furniture
  • Toys
  • Auto equipment and parts

Have been found to have increased by US$ 1.5 billion that is almost 20%.  The figure found to be US$ 1.4 billion amounting to  23% increase in the case of Taiwan.  The case of Mexico is even more interesting.  Exports from Mexico to the US has surpassed to that of from China to bag the sobriquet of “Single Largest Exporter to the US”. 

Meanwhile, China through its Ministry of Foreign Affairs (MFA) has reiterated that the only method to resolve trade row between the US and China is dialogue and consultation.

 Achieving a  win-win situation on the basis of mutual respect, equality and good faith.  the solution can definitely be found US and China relations are passing through a tumultuous time.  In this intriguing staring contest, the winner will be one who blinks last. 

12 Jun 19/Wednesday                                                           Written by Naphisa

EXPORTING BIG BROTHER! China’s export of state surveillance technology to Venezuela

The autocratic Maduro-led regime is rolling out a new, smart card ID known as the “Carnet de la Patria,” or “Fatherland Card”. The Radio Frequency Identification (RFID) based cards transmit data about the cardholders to government-controlled computer servers. Venezuela is aggressively linking the card to the provision of subsidized food, health and other social programs most Venezuelans who are forced to rely on them to survive. ZTE, a public company with major stakes held with a Chinese state company, is at the heart of the program. Presently, an economic meltdown in Venezuela is causing hyperinflation, widespread shortages of food and medicines, and a growing exodus of desperate citizens. Maduro has been sanctioned by the United States and is criticized by governments from France to Canada as increasingly autocratic. Reuters has already published a special report on the issue.

The Fatherland Card

As part of a $70 million government effort to bolster “national security,” Venezuela last year hired ZTE to build a Fatherland database and create a mobile payment system for use with the card, according to contracts which were reviewed by Reuters. The database, according to employees of the card system and screenshots of user data reviewed by Reuters, stores such details as birthdays, family information, employment and income, property owned, medical history, state benefits received, presence on social media, membership of a political party and whether a person voted. A team of ZTE employees is now embedded in a special unit within Cantv, the Venezuelan state telecommunications company that manages the database, according to four current and former Cantv employees.

The Fatherland Card is troubling some citizens and human-rights groups who believe it is a tool for President Nicolas Maduro, to monitor the populace and allocate scarce resources to his loyalists. According to some, Venezuelans with the cards now have more rights than those without.

China’s bigoted attempt to export a surveillance state

The Fatherland Card, they argue, illustrates how China, through state-linked companies like ZTE, exports technological know-how that can help like-minded governments track, reward and punish citizens. The technology is based on China’s existing “Social Credit System”. The system, part of which uses “smart citizen cards” developed by ZTE, grades citizens based on behavior including financial solvency and political activity. Good behavior can earn citizens discounts on utilities or loans. Bad marks can get them banned from public transport or their kids blocked from top schools.

Although ZTE is publicly traded, a Chinese state company is its largest shareholder and the government is a key client. ZTE has run afoul of Washington before for dealings with authoritarian governments. The company paid $1 billion, in 2018, to settle with the U.S. Commerce Department, one of various penalties after ZTE shipped telecommunications equipment to Iran and North Korea, violating U.S. sanctions and export laws. The Commerce action was sparked by a 2012 Reuters report that ZTE sold Iran a surveillance system, which included U.S. components, to spy on telecommunications by its citizens. U.S. lawmakers and other critics of Maduro’s rule are concerned about ZTE’s role in Venezuela. “China is in the business of exporting its authoritarianism,” U.S. Senator Marco Rubio told Reuters in an email.

Enforcing Big Brother

Maduro for the past year has urged citizens to sign up for the new card, calling it essential to “build the new Venezuela”. “With this card, we are going to do everything from now on,” Maduro said on state television last December. As many as 18 million people, over half the population, already have, according to government figures. To encourage its adoption, the government has granted cash prizes to cardholders for performing civic duties, like rallying voters. It has also given one-time pay-outs, such as awarding moms enrolled in the card a ‘Mother’s Day’ bonus of about $2. The payment, last May, was nearly a monthly minimum wage – enough to buy a carton of eggs, given the current pace of inflation. Maduro is also taking steps to force the card’s adoption. The government now says Venezuelans need it to receive public benefits including medicine, pensions, food baskets and subsidized fuel. In August, retirees protested outside social security offices and complained that the Fatherland rule limits access to hard-won pensions.

Benito Urrea, a 76-year-old diabetic, told Reuters a state doctor recently denied him an insulin prescription and called him “right wing” because he hasn’t enrolled. Like some other Venezuelan citizens, especially those who oppose the Maduro administration, Urrea sees the card with suspicion. “It was an attempt to control me via my needs,” Urrea said in his Caracas apartment.

Using the servers purchased from ZTE, the government is creating a database some citizens fear is identifying Venezuelans who support the government and those who don’t. Some of the information, such as health data, is gathered with card usage. Some are obtained when citizens enroll. Cardholders and local human rights groups have said that administrators ask questions about income, political activities and social media profiles before issuing the card. Civil servants are facing particular pressure to enroll, according to more than a dozen state workers. When scanning their cards during a presidential election last May, employees at several government offices were told by bosses to message photos of themselves at polls back to managers, they said. A Justice Ministry document even featured a list of state employees who didn’t vote.

Culpable China

With hunger increasing, the government in 2016 launched a program to distribute subsidized food packages. It hired Soltein SA de CV, a company based in Mexico, to design an online platform to track them, according to documents reviewed by Reuters. The platform was the beginning of the database now used for the Fatherland system.

ZTE, now in Venezuela for about a decade, has over 100 employees working in two floors of a Caracas skyscraper. It first worked with Cantv, to enable television programming online. Like many state enterprises in Venezuela, Cantv is starved for investment. ZTE has become a key partner, taking on many projects that once would have fallen to Cantv itself. In 2016, ZTE began centralizing video surveillance for the government around the country, according to current and former employees.

In its final push for the Fatherland cards, the government no longer considered RFID, according to people familiar with the effort. The location-tracking technology was too costly. Instead, it asked ZTE for help with QR codes, the black-and-white squares smartphone users can scan to get directed to websites. ZTE developed the codes, at a cost of less than $3 per account.

ZTE and China: Delivering the Venezuelan Big Brother?

Maduro introduced the cards in December 2016. In a televised address, he held one up, thanked China for lending unspecified support and said: “everybody must get one.”

Disaster soon struck. In May 2017, hackers broke into the Fatherland database. The hack was carried out by anonymous anti-Maduro activists known as TeamHDP. The group’s leader, Twitter handle @YoSoyJustincito, said the hack was “extremely simple” and motivated by TeamHDP’s mission to expose Maduro secrets. A Cantv manager, who later helped to migrate the database to ZTE servers, confirmed details of the breach. During the hack, TeamHDP took screenshots of user data and deleted the accounts of government officials, including Maduro. The president later appeared on television scanning his card and receiving an error message: “This person doesn’t exist”. Screenshots of the information embedded in various card accounts, shared by TeamHDP with Reuters, included phone numbers, emails, home addresses, participation at Socialist Party events and even whether a person owns a pet. People familiar with the database said the screenshots appear authentic.

Shortly after the hack, Maduro signed a $70 million contract with Cantv and a state bank for “national security” projects. These included the development of a “Centralized Fatherland Database” and a mobile app to process payments, such as the discounted cost of a subsidized food box, associated with the card. “Imperialist and unpatriotic factions have tried to harm the nation’s security,” the contract reads. It says an undisclosed portion of the funding would come from the Venezuela China Joint Fund, a bilateral financing program. A related contract also assigns the database and payment app projects to ZTE. The document doesn’t disclose how much of the $70 million would go to ZTE. ZTE has declined to comment on financial details of its business in Venezuela. Neither the Venezuelan nor the Chinese government responded to Reuters queries about the contracts.

In July 2017, Soltein transferred ownership of Fatherland data to Cantv, project documents show. A team of a dozen ZTE developers began bolstering the database’s capacity and security, current and former Cantv employees said.

In May, Venezuela held elections that were widely discredited by foreign governments after Maduro banned several opposition parties. Ahead of the vote, ruling party officials urged voters to be “grateful” for government largesse dispensed via the Fatherland cards. They set up “redpoint” kiosks near voting booths, where voters could scan their cards and register, Maduro himself promised, for a “Fatherland Prize.” Those who scanned their cards later received a text message thanking them for supporting Maduro, according to several cardholders. The prizes for voting, however, were never issued, cardholders and people familiar with the system said. Cantv employees claim that the database registers if, but not how, a person voted. Still, some voters were led to believe the government would know. The belief is having a chilling effect.

One organizer of a food handout committee in the west-central city of Barinas said government managers had instructed her and colleagues to tell recipients their votes could be tracked. “We’ll find out if you voted for or against,” she said she told them. Even State workers say they are a target.

With personal data now openly available to the government, Venezuelan citizens fear they can lose more than just their jobs. The opposition instituted a commission last year that investigated how the Fatherland card was being linked to the subsidized food program. The Maduro Government, the commission said in a report, is depriving some citizens of the food boxes because they don’t possess the card. “The government knows exactly who is most vulnerable to pressure,” she said.


The footprints of ZTE and the link to Chinese surveillance on both adversaries and allies are surfacing at an alarming rate. From embedding eavesdropping malware into consumer electronics to remotely controlling exported arms and seducing vulnerable economies into a debt trap, China is slowly and steadily being caught red-handed flouting international norms and acting like a rogue nation. China is openly advocating open market norms in global forums but has repeatedly sealed itself from outside scrutiny. This has enabled it to carry out its nefarious agendas to the detriment of the world community. Maybe it is time that affected nations like Pakistan, Sri Lanka, Myanmar and Bangladesh sit up and take notice before they too are irreparably affected.


15 Nov 18/Thursday         Written by Fahd Khan



The world is amazed, bemused and curious. It has never happened in the last 95 years old history of Interpol that its own chief is missing without any information. Meng Hongwei, the Interpol chief disappeared from world arena after entering his fatherland: China. The mystery was uncovered when the Lyon (France) based Interpol headquarters received an unusual email from its chief, Meng Hongwei that he has resigned from his post.

Later, the Chinese authorities informed through media that he has been “taken away” for questioning by “discipline authorities”. Apparently, they did not elaborate the reasons but it is the alleged corruption of Hongwei, while he was serving his own country: People’s Republic of China.

Primarily a politician, he was elected to the post in 2016 and was to remain in the chair till 2020. Kim Jong Yang of South Korea has been told to temporarily occupy the chair till permanent arrangements are made. This is the second instance when Interpol chief was detained on corruption charges. In July 2010, former INTERPOL President Jackie Selebi was found guilty of corruption by the South African High Court in Johannesburg for accepting bribes worth €156,000 from a drug trafficker.

This is happening at a time when China is celebrating the 40th anniversary of transparent policies heralded by Deng Xiaoping. A lot is happening in China that will have a very negative impact on the image of China and its “lifetime President”, Xi Jinping. The United States has imposed a total tariff of $250bn worth on Chinese goods. In lieu, China has also imposed the counter tariff of $60bn worth on US products as the retaliatory measure. However, China does not have much of leeway since its imports are one-third of its export to the US. The two countries already exchanged tariffs on $50bn worth of each other’s goods earlier this year. In last week of Sept, China summoned the US ambassador in Beijing and postponed joint military talks in protest against a US decision to sanction a Chinese military agency and its director for buying Russian fighter jets and a surface-to-air missile system. China also recalled its naval chief from the US.

The US wrath is compounded due to the alleged attack by Chinese IT spies on 30 top US companies. Bloomberg, a financial, software, data, and media company headquartered in New York City; in its investigative report has revealed the most evil design of Chinese spies. It has detected malware on Chinese products that have impacted America’s technology supply chain. Bloomberg affirmed about ‘Nested on the Servers & Mother Boards’, the testers found a tiny microchip, not much bigger than a grain of rice, that was not part of the board. Bloomberg further reports that this might have compromised even the data center of the department of defence, sending a chill down the spine of military establishments of the most powerful nation in the world. The US is angry and considers such act gross transgression with deceit.  The worst news for China came from Australia, when two months back, the latter blocked two Chinese telecom giants Huawei and ZTE from supplying 5G equipment. The weave of hostility is spreading in Europe too, where most of the countries have shown indifference to the proposals of BRI (belt and road initiative).

The worst nightmare of China today is that no one believes China. Most of the world looks at China with suspicion. Its ambition to overtake the US as number one power in the world may never come true in the future. Its hegemony in Asia has hit a roadblock. Even most friendly countries have downsized trade and businessCPEC in Pakistan initially proposed at $60 billion is gradually being downsized, after seeing the fate of Sri Lanka in the matter of high cost of debt repayment of Hambantota port. Finally, Sri Lanka had to give it on lease for 99 years to the Chinese; since it was not in a position to repay the debt. Pakistan is afraid it will fall in debt trap and will become a virtual colony of Chinese. Maldives, Myanmar, Bangladesh, and Nepal have lessons to learn before it is too late. The worst that has happened is that Mr. Xi Jinping has become vulnerable and may face resistance within.


22 Oct 2018/Monday         Written by Azadazraq


Last year, under pressure of $1 billion in debt to China, Sri Lanka handed over a port to companies run by the Chinese government. Presently Djibouti, home to an American Military base in Africa, is likely to hand over another key port to a Beijing-linked company. Americans are not very happy about the same 

US Secretary of State Rex Tillerson had said that Beijing ensures the target country to be totally dependent on him by using opaque contracts, loan practices which are predatory. They exploit corruption prevalent in the target countries to get favorable deals that undermine the target nation and throw it into a debt spiral. This all is aimed at undercutting their sovereignty and denying them their long-run independent growth. ”Chinese investment will have the potential to deal with Africa’s infrastructure gap, however, its approach has resulted in mounting debt and no or few, if any, jobs in most countries,” he had added. 

Some have even coined it as debt-trap diplomacy. Provide the honey of low-cost infrastructure loans, with the sting of default coming down if smaller economies can’t generate enough returns to pay their interest. In Sri Lanka, bitterness remains around Hambantota and has become a joke as “the world’s emptiest aerodrome.”

China has characterised its Belt and Road” initiative as a win-win for its aspirations to become a world trade leader and developing economies’ want funds for improving their transportation infrastructure. China definitely is trying to fill into the vacuum created by the exit of the US in Global establishments. However, like Western internationalist projects, China is facing accusations of imperialist behavior once the debt plans fail.

The Center for World Development, a non-profit organization doing research in this area, analyzed debt to China that may be incurred by nations taking part within the current Belt and Road investment set up. Eight nations can realize themselves liable to be above-average debt: Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan, and Tajikistan. The only reason why these countries were given these loans is to have two-pronged approach access to markets and Strategic control of the area around them. 


The researchers note that their estimate did not consider the impact of debt on growth, which requires a lot of data and simulations. They concentrated on previous research in the field and media reports. But they still say they have enough data to raise alarm bells on economic distress stemming from debt that might undermine development efforts altogether for these developing countries.  China in the past responded its debtors inconsistently and hasn’t followed best practices adopted by international lenders working for the development of poor countries. Sometimes, the debt has been written off; at times, the controversial part of territory or management of infrastructure has been demanded as remuneration

.They argue that China ought to work to bring different countries into their investment programs to unfold debt additional equally and adopt stricter standards and additional transparency concerning with treaties and sustainability of its support to poorer economies. Some countries aren’t waiting on China to require action: Nepal turned down Chinese infrastructure loans last year in favor of different sources of funding. Malaysia has refused loans recently

Malaysia has also cancelled Multibillion-dollar Chinese financed projects because they are not needed. As per the Malaysian PM Mahathir Mohammad, “These loans will saddle Malaysian economy with an unsustainable amount of debt.”

On 21st August 2018, Mr. Mahathir told Malaysian reporters that both Chinese President Xi Jinping and Premier Li Keqiang understood the reasons behind the cancellations and “accepted them.” China had previously defended the projects as investments that could bring tangible benefits to both the countries. The cancelled projects are comprising of $20 billion East Coast Rail Link and two energy pipelines worth $2.3 billion. He added, “It is all about pouring too much money which we cannot afford, we cannot repay and also because we do not need these projects for Malaysia at this moment of time.” He did not rule our starting the project in the future. He said the projects were canceled as Malaysia at present intends to reduce the national debt.

The fate of countries which are reeling under corrupt bureaucracy either by civilian or military will not be clear until the tipping point of debt defaults comes up. At present Pakistan is nearing the tipping point. Pakistan is controlled by its corrupt military. The deal of funding the OBOR is totally opaque and its text is tightly guarded secret. The signatories from the provinces themselves have not read the complete document. A few weeks back, US Secretary of State Mr. Mike Richard Pompeo had threatened the World Bank and IMF not to grant bailout package to Pakistan as it would be indirectly financing China. Pakistan had been warned in the past that the OBOR is unsustainable for Pakistan. However, within the country any opposition is crushed by the iron hand of its Military. Even head of democratically elected government was removed from power a year black. It is suspected that the Chinese heavily bribed Pakistan Military top brass for getting these favorable contracts and now even suspected of interfering into its recent elections.

It can be seen that all the eight countries which are on just about to reach the tipping point to debt spiral are at strategic locations which gives China additional strategic reach to influence its military capabilities.

  • Maldives due to its location is one of the pearls in “String of Pearls” which will provide naval outreach for PLA Navy. This will also increase Chinese military influence in the Indian Ocean.
  • Djibouti will provide access to its port which can aid in suppressing American military moves. This is another pearl in the string of pearls which is actually meant to encircle India.
  • Kyrgyzstan and Tajikistan give access to central Asian countries and also allows China to move closer inland to Europe. Thus also has a strategic interest of being in the center of Asia the largest landmass on our planet. Thus it can have strategic bases to turn its attention to the direction it so desires.
  • Laos is a landlocked country in the Indo-Chinese peninsula. But gives China the outreach to touch almost all the countries which do not have a border with China i.e. Cambodia and Thailand.
  • Mongolia is another landlocked country reeling under the pressure of Russia from the North and China from the South. China has cut it out from the rest of the world and wants absolute control. Thus it has not allowed it to draw even overdrafts from countries like India.
  • Montenegro is a country in Southeastern Europe on the Adriatic Sea. Access into Montenegro allows China to have an outpost in Europe and access to Mediterranean Sea which it desires for military supremacy over NATO. It also allows the Chinese the access to strict European markets.
  • Pakistan is one of the first pearls which is totally enslaved by China and is tipped over the debt spiral. If Pakistan cannot get a bailout package from IMF or World Bank then it will have to lease out its territory. Already some have coined the term Pak-Chin to denote the Sinification of Pakistan. The OBOR gives China its access to the Arabian Sea. The Gwadar port has already been handed to Chinese company as it is unviable to operate it economically. This will give China put its naval presence in Arabian sea encircling India and reaching out to Suez Canal to block US fleets to switch between oceans.

It is now up to the people of these countries to either allow their government to be enslaved by the Chinese government into becoming a Chinese trade and military colonies of modern era or fight back before it is too late.


23Aug 2018/Thursday            Written by 

                                                Mohd Tahir Shafi 


13 Dec 2017: In the First Essay on the topic titled “Is China True Friend of Pakistan?” was published on 22 Nov 2017. We have already established the hidden Chinese goal in the earlier article. We have already proved that China is not a True friend of Pakistan but it happened to be there when it was needed. Here we are reiterating the same once again using global economic scenario.

China Vs South Asia

China’s relationship with Asian neighbors, especially in South Asia, is the weakest. With Sino-Japanese tensions increasing over south-china sea encroachments of China all the neighbors have become more suspicious of Chinese true intentions. Thus these relations with smallest of the countries have come to prominence in 2017. South Asia has gained focus on China’s regional strategy, as can be seen with President Xi Jinping’s recent visit to the region. Within the region, China has an all-weather friend in Pakistan. However, in international politics past and present do not guarantee the future. Pakistan has been having testing times with common neighbor India which is one of the major trading partners of China. To see if Pakistan is of any importance to China in future we have to answer only one question which one is more important for China. This will also dictate the reverberating question across the corridors in Islamabad, “Is China True Friend of Pakistan?“.

The Choice

The Chinese government recently has shown maturity and showed international audience in “Doklam Crisis” that it favors economy over the military machine. The crisis was a misunderstanding between both the countries as can be seen and they resolved without firing a single shot. The Chinese generals also believe that there is no point in using the military force unless it runs out of options. With India which has no first use of force policy options are always open, China just had to open a door. The crisis between the two nuclear neighbors faded as days passed behind closed door negotiations. It was a win-win situation for both India and China.

Moreover, Indian GDP in 2013 was $1.9 trillion when compared to Pakistan at only $236 billion, roughly at 12% of Indian Side. In other words, India is the 10th largest economy in terms of GDP in 2013 and has moved up steadily to 7th position with $2.1 trillion in 2016. China is seen maintaining its second position behind the US. This year it is expected to grow at a rate of 7% above world average.  By 2050 India is expected to be a second largest economy.

The Chinese know that as India will ultimately become a major power on the international stage. The question hanging in front of China is “Will it (India) necessarily be friendly toward China?”. As Pakistan is embracing CPEC and its debt burden, Sino-Indian international cooperation far outweighs the disputes between two counties. Chinese top brass knows this. Its only Pakistan which wants to reign in China with the CPEC. The Chinese have already sensed that Pakistan is leeching on it for its own agenda in Kashmir. With deteriorating Sino-Japanese ties, Japan has proposed Asia-Pacific Quad between US, Japan Australia, and India. After resisting for many years India was persuaded by Japan and the Quad has been officially announced recently. China looks at this development as a snub to its regional dominance.

Influencing International Regimes

Recently during the US elections, Russian hand in creating manipulations in social media has been highlighted. However, Trump administration ignored the role of Chinese in manipulating its educational system for a long time. The educational institutions are largely turning towards Chinese for financing their projects. As Russians, the Chinese are also exerting their authoritarian influence on developing countries and are not targeting the US on a large scale. The US institutions are largely resisting Chinese pressures and showing academic integrity. However, there is a large gap between Chinese efforts and response from the US side. Recent retreat of Trump administration’s promotion US values, China has increased its efforts in this direction. In the same fashion, China is already trying to influence civilian government in Pakistan through Pakistan Army. This raises a serious question if China is a true friend of Pakistan?

Fall in Pakistan’s Rupee

Pakistan rupee dropped a record low on 12 Dec 2017. Falling 1.9 percent to 109.5 a dollar at 4:57 p.m. in Karachi. Though Islamabad promotes its currency as one of the most stable the real story is different as can be seen in the chart below. This is not due to a power play by an enemy of Pakistan but the State Bank of Pakistan initiated the devaluation.

The five-year chart shows that Pakistan’s Rupee eroding its value especially from 2008 till 2013. Then it stabilized in 2015 after a turbulent intermediate period. Investors and economists have called for the abandonment of central bank managed float after widened Pakistan’s current account deficit and dwindling foreign-exchange reserves this year. The situation got out of hand due to recent corruption charges and stoppage of CPEC loans by the Chinese authorities. The foreign exchange reserves have dwindled to 12.9 billion and an international debt of 2.5 billion has already been taken to boost it. The Chinese government knew this and could have stopped this devaluation had it not stopped the CPEC funding. This stoppage is also going to fuel and promote Pakistan Military’s engineering and construction company, Frontier Works Organisation (FWO). Had China been a true friend of Pakistan it would not have taken this step.

The Grand Plot

China has cited its concerns over corruption in the CPEC projects as the reason for the move, but apparently, it is “an effort to boost the Pakistani military’s stake in the country’s economy at a time when the Pakistan Army, in particular, is flexing their political muscle.” This also coincided with the Pakistani Army brokered a deal between the government and Sunni Muslim group. The immediate aftermath of this Hafiz Saeed declared that he is contesting general elections and former Military dictator announced the formation of the grand political alliance and praised the role of Lashkar-e-Taiba. This seems to be a grand plot to contain Indian growth and promoting Pakistan’s Military role in its country over the democratic alliance. All this aids Chinese on all fronts whereas it demonizes Pakistan as a state of evil in front of the global audience. Already Pakistan has lost its image in the eyes of the world as terror heaven. All this aims at Chinese reaching the top to become a global power and there is no place for Pakistan. Pakistan is just another step for it to reach the top. This is finally the grand plot of China where Pakistan is mere a ladder to success.

Who is True Friend of Pakistan?

This Grand Plot is nothing but a plot to ensure that China leaps forward in the future to be the unchallenged superpower in the world. This is no friendship but being a greedy merchant of Venice, who is extracting his pound of flesh from a friend. This again forces us to question our selves “Is China True Friend of Pakistan?“.Hence, the people of Pakistan have to decide on the course of our country in the next general election by answering the following questions before deciding on whom to vote: –

Is China True Friend of Pakistan

In this article is on a subject which the Pakistani Government is not going to tell its people. It has been trying to hide the true interest of Chinese government from its people, however with the recent developments in the neighbourhood it has come out in clear that true friend of Pakistan is not a friend but a Capitalist country which may or may not support if the Pakistani cause does not have the ability to fill its coffers.

 China is no communist country, unlike erstwhile USSR which was basically a communist country, with a basic hatred to all capitalist countries. We can say that it was communist at national and international level. However, China is a communist country with a different agenda. It is a country which has strong determination to dominate the world in all spheres. This blind thirst to be superior in the world by the Chinese Government sees no bound. Chinese leadership has four-pronged approach to world domination described below

 Government Regulations

The Chinese government has strict control of its population. People within its own country are not free to move around and do business freely. Minutest of opposition or questioning is crushed. Labour in rural areas cannot migrate to other areas to seek employment. Their control is total. Even Pakistanis visiting their country are subjected to full scrutiny and cannot deviate. Recently Chinese government undertook oppressive methods on people following Islam and ordered them to deposit Quran and display the Chinese Supreme Leaders Photograph in their Drawing rooms. It is a matter of controversy to see our country is supporting such country which follows blasphemy.

 Restrictions on own market

The Chinese government also restricts its market to foreigners by imposing travel restrictions and long delays in processing visa applications even to friendly countries like Pakistan. However, in contrast, a Chinese citizen can get longish multiple entry visas in 24 hours from Pakistani counterparts, the Chinese issue a visa for no more than three months with only 3 entry permits also to note is the processing of visa application which takes about 30 days. Such impediments for doing business in Chinese mainland is making the Chinese market inaccessible: a way to protect its wealth from leaking into another economy.

 Over Seas Acquisition by State Financing

Chinese firms of late have been continuously acquiring various industry leaders. Recently the world giant such as Lenovo, Nortel, and other firms have been acquired by Chinese firms. Thus, their access to Intellectual Property (IP)of these companies which were decades ahead of Chinese companies was acquired by just paying a paltry sum of money. Much of the money is paid to Chinese companies by their government in the name of research and development fund. Such funds are not available to any Pakistani company hence such acquisitions are a dream, thus no IPR will ever originate from Pakistani soil. The most recent one is Chinese firm trying to bid for Online Chat service provider Whatsapp, the US government had to intervene and pay up Facebook to outbid a Chinese company. In September this year (2017), Trump administration blocked the sale of Lattice Semiconductor, a leading chipmaker in the US, for $1.3billion to Chinese backed Capital Partners. The deal was being financed by the Chinese government to gain access to important Intellectual Property held by that company. The US administration has already launched an investigation in this regards. This shows that US government has now woken up from sleep to guard Intellectual Property Rights held by its country.

 Industrial Espionage

Although Chinese espionage targets the whole world for world dominance a major thrust is in gaining technological acquisition and military modernization. The technology required by Chinese is spotted and Chinese use every means to acquire the technology. First to use is the espionage, second is a partnership and last is acquiring the IPR holder. This enables them to undercut the expenditure in research and enable them to leapfrog to the forefront by overcoming the cultural disadvantage and leveraging the creativity of other nations. Here we should remember that the Chinese do not have freedom of opinion in their country due to its strict communist governance, thus curtailing creativity to a large extent.  This leapfrogging is enabling it to achieve one of the greatest wealth transfer. It is reported that the Chinese had successfully infiltrated into US defence research networks and were successful in exfiltration highly classified documents of F-35 project and incorporated the J-20 fighter.


Russian federation never used corruption openly in taking on the western capitalist countries. However, the Chinese are different if all the above steps fail they entice the target countries like Pakistan. It is a matter of fact our country has sold its Islamic soul to Chinese government. The fault lies in Pakistan Army as they were till date custodians of our country as democracy has always brought with it ultimate form of corruption. When such pristine organisation itself get corrupt who can save the protected from a foreign molester. How on earth can the Pakistan Army explain their 20-Billion-dollar stake in around 50 conglomerates stretching from Banks, Industrial Plants, Universities etc. They get prime plots in real estate projects and have all the amenities from these business houses where their investments are held. It looks like the Chinese are the internal force which wants Pakistan to fight with its neighbours like Afghanistan and India by fomenting ideas into our Generals in Pakistan Army and bribing them to spread such ideas. We have been fighting India tooth and nail from the day we got independence and China has been supporting us without any return. A purely business oriented country like China is having ulterior motives and it just wants to see two of its neighbours fighting while it is silently watching without spending a drop of blood.


Finally, the essence of this article is that the Chinese have corrupted Pakistani society and now are trying to buy the soul of Pakistan by bribing its Politicians, Generals, and Bureaucracy, to finally enslave it. A neighbouring country recently got a loan almost of the same amount at fraction of percentile and Pakistan gets a similar loan at a very high rate of interest, which finally will bind our country to follow China for many years to come. Being a citizen what can we do? Can we stand with high morals? When no Muslim is allowed to take interest or give interest on a loan in sharia, then how come Pakistan as a islamic country is giving interest to Chinese.  In this connection even our Maulvis and Mullahs are not debating and showing the true path to Pakistani citizens. 

 The author is pursuing research in Finance and Audit from Lahore.