The week of July 25-31 was dominated by the Punjab CM’s visit to the China during the Punjab-Qingdao Business Seminar, news of a CPEC project running aground, and CPEC gaining additional traction in the international community.
Provincial Concerns
Federal Minister for Planning Ahsan Iqbal, while addressing the Senate last week, said that the grievances of Khyber Pakhtunkhwa (KP) and Balochistan regarding the China-Pakistan Economic Corridor (CPEC) had been successfully addressed.[1] This is a highly subjective statement, as the grievances may be considered addressed by the government, but not by the other stakeholders. In fact, continued statements from provincial leaderships continue to claim that they are being treated unfairly under the CPEC initiative. KP Chief Minister Pervaiz Khattak will also visit China soon[2], and his statements and stance preceding and following that meeting will be of great significance.
Senators last week also made the call for the government to make the CPEC agreement with China public, as it would also improve transparency and accountability.[3]
Work on CPEC
To make matters worse, it was reported that a power project under the CPEC had run aground as the government was prioritizing projects in Punjab.[4] “The $2.1-billion, 878-kilometre-long Matiari-Lahore Transmission Line was planned to supply 4,000 megawatts of electricity produced from coal in Sindh to cities in Punjab,” said one report. “This scheme was among the priority projects that China and Pakistan wanted to complete by December 2018 in the first phase of the CPEC construction.” Ahsan Iqbal was quick to try and quell any qualms, saying that any issues would be resolved soon. He argued that transmission lines will not matter much if there is no power to run through them, and while a compelling argument, this will undoubtedly cast a long shadow on the government’s ability to handle CPEC related projects.
A major piece of news last week was the signing of a total of seven agreements and seventeen Memorandums of Understanding (MoU) between Pakistan and China, to promote the industrial estates and infrastructural development.[5]
Railways Minister Khawaja Saad Rafique, in a meeting at the Railways Headquarters this past week, stressed that projects need to be prioritized based on impact on and proximity to CPEC.[6] This is not surprising, as part of CPEC is also the up-gradation of the crumbling railway infrastructure in Pakistan. Work on the Kundal section of CPEC was also inaugurated last week, and projected to complete in 18 months, according to the NLC.[7] Pakistan also presented the idea of including Diamer-Bhasha Dam in the projects’ list of the China-Pakistan Economic Corridor (CPEC). However, the Chinese government appeared to be reluctant toward this idea as they did not find it profitable.[8] The government has also taken the important step to ban all new power plants based on imported fuel.[9]
Finally, committed to the timely completion of CPEC, the Economic Coordination Committee of the Cabinet (ECC) allowed exemption on the imports of all sort of material and equipment necessary for the completion of the CPEC projects, e.g., projects of Karachi-Lahore Motorway and Karakoram Highway.[10]
Economy
The massive Chinese investment into CPEC is also boosting personal investment from Chinese businessmen in the country, reported The Nation last week.[11] This is a good development, as it implies that foreign investors and business owners have better faith in Pakistan, its security situation and institution to invest.
In addition, an increasing number of foreign diplomats are publically cognizant of the fact that the CPEC project is the equivalent of a new life for Pakistan. A Brazilian diplomat, Claudio Lins, has emphasized on the implication of the CPEC. In his interview, he said that the project has global significance and it would promote the regional economic stability.[12] Similarly, a member of the Italian Association of Banks (IBA) recognized that since the launch of CPEC, Pakistan has become attractive destination for foreign investments.[13] He further underlined that the Italian government is very keen to promote the bilateral economic relations.
The fringe benefits of this new era of bilateral cooperation may also have unintended positive side-effects. Business Recorder reported last week that according to a new World Bank report, the inflation of China’s apparel market would create over 220,000 new job opportunities in Pakistan.[14] During CM Punjab Shabaz Sharif’s visit, it was revealed that the Chinese were also interested in setting up an auto unit in Pakistan.[15] The CM also stated that Chinese investors may be facilitated with free land in Punjab, during his address at the Punjab-Qingdao Business Seminar.[16]
Security Cooperation
Pakistan and China also held joint border patrols near India-occupied Kashmir, following Indian deployment of tanks in the region of Ladakh.[17] This activity sent a very clear message. Simultaneously, Zheng Xiaosong, leader of the Communist Party of China, arranged a dinner for the Chief Minister of Punjab, Shahbaz Sharif, where both leaders emphasized the worth of bilateral relations.[18]
Adviser to the Prime Minister on Foreign Affairs Sartaj Aziz, and the Foreign Minister of China, Wang Yi attended the 23rd ASEAN Regional Forum (ARF) meeting. In this meeting, Mr. Wang Yi admired the counterterrorism efforts of Pakistan in the context of regional peace and stability.[19] This continued outpouring of appreciation from Chinese officials is a testament not only to the continued efforts of Pakistan’s law enforcement agencies to fight terrorism, but also a reminder that the fight is far from over. This sentiment was appreciated by Chief of Army Staff (COAS) General Raheel Shareef, who emphasized significance of the CPEC and its regional implications. Moreover, in his address at the Chinese Embassy, he assured the timely completion of the CPEC.[20]
General
For the endorsement of research and promotion of Chinese language in Pakistan, a Chinese study center was established at the University of Peshawar (UoP). This center would offer its services from September 2016.[21] This is a fairly important step, as Pakistan has very little cultural exchange with China, an area that needs significant overhaul and improvement.
[1] Staff Reporter. (2016, July 22). RESERVATIONS OF KP & BALOCHISTAN ON CPEC HAVE BEEN ADDRESSED SUCCESSFULLY: SENATE INFORMED. Retrieved August 2, 2016, from http://www.radio.gov.pk/22-Jul-2016/provinces-carrying-out-feasibility-studies-for-establishment-of-special-economic-zones-under-cpec
[2] Staff Reporter. (2016, July 25). KP delegation to visit China in August. Retrieved August 2, 2016, from https://www.thenews.com.pk/print/137392-KP-delegation-to-visit-China-in-August
[3] Khan, A. I. (2016, July 28). Senators urge govt to make CPEC agreement public. Retrieved August 2, 2016, from http://www.dawn.com/news/1273679/senators-urge-govt-to-make-cpec-agreement-public
[4] Rana, S. (2016, July 25). Power project under CPEC runs aground. Retrieved August 2, 2016, from http://tribune.com.pk/story/1148561/power-project-cpec-runs-aground/
[5] Staff Reporter. (2016, July 27). Pakistan, China sign 24 agreements, MoUs. Retrieved August 2, 2016, from http://nation.com.pk/national/27-Jul-2016/pakistan-china-sign-24-agreements-mous
[6] Din, I. (2016, July 23). SAAD RAFIQUE DIRECTS OFFICERS TO FOCUS ON CPEC IN POLICIES. Retrieved August 2, 2016, from http://www.brecorder.com/pakistan/politics-a-policy/310341-saad-rafique-directs-officers-to-focus-on-cpec-in-policies.html
[7] Siddiqui, R.S. (2016, July 25). WORK ON KUNDAL SECTION OF CPEC INAUGURATED. Retrieved August 2, 2016, from http://www.brecorder.com/top-news/pakistan/310409-work-on-kundal-section-of-cpec-inaugurated.html
[8] Mustafa, K. (2016, July 28). China not interested in including Diamer-Bhasha Dam in CPEC. Retrieved August 2, 2016, from https://www.thenews.com.pk/print/138262-China-not-interested-in-including-Diamer-Bhasha-Dam-in-CPEC
[9] Mustafa, K. (2016, July 29). Govt bans new power plants based on imported fuel. Retrieved August 2, 2016, from https://www.thenews.com.pk/print/138539-Govt-bans-new-power-plants-based-on-imported-fuel
[10] Rana, S. (2016, July 27). ECC allows tax breaks for two CPEC projects. . Retrieved August 2, 2016, from http://tribune.com.pk/story/1150212/duty-waiver-ecc-allows-tax-breaks-two-cpec-projects/
[11] Staff Reporter. (2016, July 23). Chinese companies boost investment in Pakistan. Retrieved August 2, 2016, from http://nation.com.pk/business/23-Jul-2016/newsbrief
[12] Ahmad, M. (2016, July 26). Brazilian envoy says CPEC game changer for region. Retrieved August 2, 2016, from https://www.thenews.com.pk/print/137562-Brazilian-envoy-says-CPEC-game-changer-for-region
[13] Staff Reporter. (2016, July 27). ‘Pakistan has become lucrative destination after CPEC’. Retrieved August 2, 2016, from https://www.thenews.com.pk/print/137973-Pakistan-has-become-lucrative-destination-after-CPEC
[14] Din, I. (201, July 25). CHINA’S APPAREL PRICE SURGE TO CREATE 220,000 NEW JOBS IN PAKISTAN: WB. Retrieved August 2, 2016, from http://www.brecorder.com/pakistan/business-a-economy/310547-chinas-apparel-price-surge-to-create-220000-new-jobs-in-pakistan-wb.html
[15] Staff Reporter. (2016, July 27). Chinese interested in setting up auto unit in Pakistan. Retrieved August 2, 2016, from http://tribune.com.pk/story/1150073/business-ties-chinese-interested-setting-auto-unit/
[16] Staff Reporter. (2016, July 29). Punjab offers free land for Chinese investment. Retrieved August 2, 2016, from http://nation.com.pk/lahore/29-Jul-2016/punjab-offers-free-land-for-chinese-investment
[17] Gupta, P. (2016, July 23). Pakistan-China Hold Joint Border Patrols Near Pakistan-Occupied Kashmir. Retrieved August 2, 2016, from http://thediplomat.com/2016/07/pakistan-china-hold-joint-border-patrols-near-pakistan-occupied-kashmir/
[18] Staff Reporter. (2016, July 25). CHINA ACCORDS GREAT IMPORTANCE TO TIES WITH PAKISTAN. Retrieved August 2, 2016, from http://www.radio.gov.pk/25-Jul-2016/china-accords-great-importance-to-ties-with-pakistan
[19] Shaohui, T. (2016, July 26). Chinese FM meets advisor to Pakistan’s PM on foreign affairs. Retrieved August 2, 2016, from http://news.xinhuanet.com/english/photo/2016-07/26/c_135540086.htm
[20] Staff Reporter. (2016, July 29). Will leave no stone unturned to complete CPEC on time: COAS. Retrieved August 2, 2016, from http://worldnewsviews.com/pakistan/will-leave-no-stone-unturned-to-complete-cpec-on-time-coas/
[21] Staff Reporter. (2016, July 29). Chinese centre to become functional at UoP in Sept. Retrieved August 2, 2016, from https://www.thenews.com.pk/print/138442-Chinese-centre-to-become-functional-at-UoP-in-Sept