CPEC: Strategic Motives and Benefits
CPEC: Strategic Motives and Benefits
The Main Challenge China The areas/industries China A rather detailed The overall impact of The overall impact of Over- Underlying Motive
is faced or confronted is faced with the problem explanation Overproduction Production
with? of Overproduction…
Overproduction Steel Steel: 3.63 million workers Coal: China’s share in Cite the specific example of To dispose of the over
Coal China’s share in world aluminum production: Steel sectors: production to profitable
Cement output of steel: more than 50 percent. The choices China is left ventures and locations
Aluminum The annual production in Economist: 9 April 2016 with: lay off a million steel
Flat glass Capacities… China exceed 800 million workers or try to export $
tons Domestic demand: 100 worth of excess steel
The fear of resultant
unemployment
Aluminum: 50 percent of
total aluminum out put
To Ensure Regular Supply of Raw Material and Food Imports
Main Reasons Comparison with US China’s Food import Measures Chinse The Agricultural CEPEC and Pakistan’s
Behind the food to highlight the bill have been taking to Vision of BRI Agriculture
Crisis 2013 intensity of Food overcome food Crisis
Crisis
Overpopulation 3 million sq.kms $ 111 bn GMO’s The share of
$ 157—160 bn Irrigation of Gobi Pakistan’s agriculture
desert in China’s food
import bill: 0.5
percent
If China wants to
increase to 5
percent..
Disproportionately US Population: In 2012 China What is unique about Briefly describe the
less arable area China’s Population: became the largest BRI and CPEC salient features of
China’s arable area is importer of the second and
1/6 of US food/agricultural phases of CEPEC.
Now Chinse have products..
moved to two-child
policy
To Search alternative route to ship China’s
Exports and Imports
The underlying Motives The Route that Chinse Conceptualization of Prospective Benefits to
have been using? CPEC and BRI in context China particularly with
of development of the completion of CEPEC:
alternative route
Reasons: Economic The extent China’s Gwadar—Khunjrab
Reasons: Economic and dependence on South highway will reduce the
Strategic China Sea: distance to one third..
70 percent of global trade
And
80 percent of petroleum
products pass through
South China Sea
The Issue of Poverty in What remains to be The nature of Challenges Chinese efforts to The prospective benefits
China done? Xinxiang- Uyghur region overcome these of CPEC/the overriding
posse to China its challenges in the past importance of CEPEC
dimensions
Western China Economic :9/10 the of Gwadar Port How and in what ways it
Chinese poor live in String of Pearls Strategy, will mitigate the effects of
theses regions...... which has now become a ethnic and religious
part of MSR. conflict.
The phenomenal success Ethnic: Majority of Chinse BRI and particularly CEPC It will complement Chinse
Chinse have achieved in Han It wants to promote strategy to alleviate
poverty alleviation: 500 Vast concentration of textile led growth in the poverty.
were able to bring 500 /presence of Hui Chinse region..
million people out of Han—Hui ethnic conflict.
poverty line.
The targets Chinse have Religious : Majority of Hui The benefits Chinse would
set till 2050: a middle- are Muslims accrue though
income country by 2050.. connectivity of the region
to Middle East.
It marks fundamental re-ordering of China growth Strategy(I)
Areas the in which two The other conspicuous The objectives the two
countries would features countries want to achieve
cooperate in the agriculture sector
Biological breeding ICT enabled agriculture To effectively boost local
and marketing of agricultural economy..
agriculture products.
Production,
processing ,storage and
transportation
Disease prevention and
control
Water resources
development and
utilization
Land development and
remediation
Tourism: What does LTP Envisage?
The Main Focus /Emphasis of the First The Second Phase Main Former Chinese Consul The Projects to be launched in The Difference between the first and second
Phase Focus/Emphasis: industrial General Wang Baluchistan phases of the project
cooperation+ development of industry Yu(August 2019)
and agriculture
Infrastructure: SEZ’s The establishment of three SEZ’s Work on 27 CPEC Baluchistan holds 16 out of 22 The first phase required the leading role of
Road networks Names projects approved.. government.
Fiber optic connectivity (22 in pipeline ) It demands the leading role of industrialist,
The development of Gwadar port Syed Nasir Hussain, “CPEC private sector and business community.
Kernel”,DT,2 August 2019. The government’s role will be only of a
facilitator.
Energy: 11, 000 mw energy generation Projects in Gwadar Abdul Razak Daud: proactive
projects ML- I: $ 6.8 BN
Estimates of Volume of Investment: The other aspects: It will be less capital-intensive but more
aAafahan Subuhi: $ 40 bn complex…
Nasir Jamal: $ 25.5 bn and $ 29 bn
Volume of Inverstment
Salient Features of the Project(II)
The establishment The Launching of Two Hydel Projects The development of The projects to be
of the Three SEZ’s ML—I Project announced in AJK Gwadar Port: its launched in or are
new dimensions underway in
Baluchistan
The Reasons behind delay
Afshan Subuhi. “CPEC 2.0: Full speed ahead”, dawn Nasir Jamal , “Spread breakers and a long corridor”.
27 July 2020
Depicted as beneficial to both Pakistan and China
The two fundamental The inflow of the FDI in Imran Ali The cumulative impact
gaps in economy that Pakistan and how the
provide rationale for Chinese investment is
foreign aid: going to a difference?
Saving gap The second instance in It may help Pakistan to
And history… that a major develop into a trans-
Investment gap power is going to make regional hub.
large investment in the
region.
The previous instance:
It would help to mitigate disastrous/crippling effects of energy
crisis: See Miftah Ismail’s, CPEC: Misgivings and Reality, The
ET,26 April 2017
The intensity and The loss the country It disastrous impact How and in what
magnitude of suffered in on business ways the CPEC
energy crisis in monetary terms environment and energy projects
Pakistan investors’ have enabled the
confidence country to address
the energy crisis
It would create more opportunities for employment: Afshan
Subuhi, ( Looking at CPEC costs amid Hype, Dawn 1 May 2017
Over all Jobs White-collar Jobs The facts and The importance of
figures about jobs job creation for the
after the country.
completion of the
first phase of the
project
It would immensely contribute toward the development of
transportation and logistics sectors….
The Poor state of The assessment How many trucks The number of jobs Over-all impact
logistics and about the container would ply on of truckers the
transportation traffic in Pakistan Gwadar-Khunjrab project is expected
sector in the and how is likely to highway initially? to create?
country increase in the post- Their expected
CPEC era? increase in their
number once the
corridor becomes
full operational?
It would provide boost to the development of
tourism industry.
CPEC and Tourism Dimensions of What would it help
development of tourism Pakistan to realize?
Salient Features: plan
Opportunities for Skill development
The rection of What is going to happen under CPEC How the development of Textile The potentially disastrous What would happen
Pakistanis towards industry in Xingang is going to consequences of China’s in the post-CPEC era?
CPEC create challenges for Pakistani economic penetration in
Textile industry? Pakistan even before the CPEC
era
The elements which Mergers of economies… A potential rival for Pakistani Textile They had been exceedingly The degree or level of
are optimistic about The apprehensions of Pakistanis: we difficult to compete with Chinese intrusion
the CPEC and its would end up as losers. Chinese businesses would be much
prospects… higher/greater?
But those who seem The advantages the Chinese industry Examples: Foot ware;
to be visibly enjoys or have over Pakistan: leather; stationery and
concerned? Economies of Scale; garments
Economies of Specialization;
Value-addition;
the cost of doing business ,
Specialization
What is the What do we mean Examples Advantages
charactered feature by specialization
of modern
industrial
production ?
Specialization The concept of Modern automobile Lowers/reduces the
production under a industry is divided cost of production
single roof has into a several Improvement in
become virtually industries: product quality
redundant. Watch Industry in
Switzerland:
domestic industries
2 Put Pressure on Pakistan’s Balance of Payment Situation and
Current Account Deficit
The share of The deforestation in Its potentially The cumulative The consequences
thermal plants in the mid of disastrous impact of fuel of following short-
the power completion of CPEC consequences for emissions as a sighted policy on
generation projects projects ecology of Northern result of flow of environmental
areas traffic on Gwadar— front.
Khunjrab Highway
11000 MW; The specific instance Global warming in See details on the “open-gate”: that
Majority of coal- of KPK: the cutting Northern areas … next slide cause
fired or thermal down of 28,000 Melting of glaciers environmental
plants trees pollution “ dirty-
industries”.
Environmental Implications(II)
• Environmental cooperation is usually a major part of such agreements
but this component has yet to be addressed.
• This is a problem since it has been estimated that once trade starts
flowing up to 7,000 trucks a day will pass through the ecologically
sensitive Khunjrab Pass and generate up to 36.5 million tons of Co2
emissions en route to Gwadar.
• All experts agree that the emissions will melt the northern region’s
glaciers and negatively impact agriculture and food and water security
of our growing population.
The lack of disclosure by the government of many crucial details may create
doubt among public would lead to the development of negative consensus.
Its Benefits are Contingent upon answers to
several critical questions…
Critical Questions (Anjum Altaf: 19 Qaisar Bengali Moonis Ahmer : (the other side of
March 2017) the CPEC)
Terms and conditions
Costs
Concessions
Exports
Jobs
Industrial Estates
Special economic zones
Baluchistan
The themes that one can add? CPEC
Authority; Gwadar fencing…
Would it going to presage Chinese
Imperialism or Surgical Colonialism?
• Is China going to act as the second East India Company?
It could escalate/flare up cultural conflict
The domains in which The domains in which the How is Globalization working How?
industrial North enjoys underdeveloped South has and in whose favour?
comparative advantage comparative advantage?
Ishrat Hussain More share of locals in jobs II Qaisar Bengali The passing of special Act of
Proposals Parliament
What is Baluchistan's share What percentage of security units, Non-Baloch should be given
in Gwadar port revenues, if being raised for CPEC related voting rights say for the period of
any? protection, recruited from districts 99-years.
Is the Gwadar-Khunjrab through which the Gwadar-Khunjrab
Highway a toll road? If yes, Highway passes?
what are the shares for What is the water provision plan for
provinces through which the Gwadar? If desalinated, what is the
Highway passes? financing plan to cover the high cost?
What is the plan to ensure that
Gwadar does not become a Baloch
minority city?
What kind of projects should be launched?
• Such projects that are beneficial to both Pakistan and China:
Example.. Khyber-Pakhtunkhwa Sustainable Donkey Development
Project.
• Hasan Khawar: “CPEC and Skill Development”…
• 2009: 10,000
• 2016: 60,000
What kind of vision should prevail?