OBOR and CPEC : News, Discussions & Updates

Sweeter than Honey friend set to desert Pakistan!

ISLAMABAD: China is understood to be on the verge of putting on hold further investments under CPEC beyond what has already been done – a decision linked to the prevalent uncertain political situation in Pakistan and surging fears of turmoil in the months ahead.

The move, sounded out in a recent meeting of the new Chinese ambassador with the prime minister, will not affect the ongoing investments worth 29 billion dollars made so far out of 56 billion dollars committed by Beijing for impressive range of infrastructure projects in Pakistan, competent sources said.

The worrisome development is not entirely unexpected amid the chain of events unleashed in the wake of the ouster of former Prime Minister Nawaz Sharif through the July 28 verdict by a five-member Supreme Court bench and its wider implications for the very future of the country as it battles terrorism and confronts the perpetual hostility from a bigger neighbour and pressures from Trump-led US.

As things stand now, confusion and doubts abound regarding whether and how the nation will steer through the mess in order to maintain its deeply endangered march on the road to a stable democratic dispensation, through peaceful elections leading to a second smooth transfer of power from one elected government to another in the 70-year life of the country.

According to sources, the Chinese envoy has been in touch with authorities on the emerging scenario. The envoy is also understood to have broached the subject when he met with Nawaz Sharif at his Raiwind residence on Saturday.

The ambassador has already called on Prime Minister Shahid Khaqan Abbasi, who has often voiced concerns over the multi-dimensional fallout of the controversial court verdict including possible repercussions for the mega project which is crucial for Pakistan’s economy as well as regional connectivity.

The Chinese have conveyed that the CPEC would be on the back burner until the uncertainty goes and the next government is in place as a result of the elections, a top government official said, speaking on condition of anonymity.

In the face of India’s avowed mission to sabotage the corridor project, the uncertain domestic environment is generally considered all the more ominous.

Ahsan Iqbal, who spearheads CPEC talks from Pakistan side, said a delegation headed by Secretary Planning is leaving for Beijing on Sunday (today) for next phase of talks. “Portfolio is moving forward and new phase of talks is beginning the next week,” the minister told The News.

‘Political events in Pakistan have sent China in a watchful mood,” Ahsan Iqbal said. “I, however, don’t see any threat to CPEC but I am concerned if we continue to throw surprises to the outside world, then anyone can be forced to rethink their economic investments,” he said. “In such a scenario our prospects of getting maximum benefits may be compromised,” he said adding “we have to ensure 200 percent political stability.”

There is a clear national consensus on the importance and significance of CPEC for the county’s economic growth, further strengthening of relations with the great friend and ally to the north, in the interest of regional balance and security and tackling the grave problem of unemployment and opening up vistas of great commercial benefits.

The deep sea port being developed at Gwadar in Balochistan and the extensive road and rail network will no doubt transform the region, lifting the country to its richly deserved stature of economic power commensurate with its distinction of being the sole Islamic nuclear power. All players in national politics stand in unison for uninterrupted and flawless implementation of CPEC, overcoming all hurdles in the way.
 
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Power produced under CPEC will cost three times more than power produced in India.Chinese are swindling Pakistanis in broad daylight!


 
Finally India doing some talking in Bejing.



‘China should not ignore India’s CPEC concerns’

BEIJING: India's ambassador to China, Gautam Bambawale, has said Beijing should pay serious attention to New Delhi's concerns about the China-Pakistan Economic Corridor (CPEC) and not ignore them.
"The China-Pakistan Economic Corridor passes through Indian-claimed territory (POK) and hence violates our territorial integrity. This is amajor problem for us," he told China's state-run 'Global Times' in a hard-hitting interview. "We need to talk about it, not push it under the carpet. I believe the more we talk to each other, the easier it will become to resolve problems," he said.
Bambawale seemed to convey a stern message from New Delhi that Beijing could not hope to tap the Indian market and enhance economic ties if it continued to ignore Indian concerns over sovereignty. In an interview published on Republic Day, Bambawale said the 73-day border standoff at Doklam must be seen from the historical perspective. "I look at the Doklam standoff from such a long-term perspective. When you do so, the Doklam standoff is just one event in a much longer-term history. I believe that you are blowing it out of proportion. The people of India and China and our leaders are experienced enough and wise enough to overcome such momentary hurdles in our relationship." Bambawale conveyed India's desire to re-examine some of the differences while accelerating improvement in relations.

"India sells pharmaceuticals and IT products all over the world, but not in China. Why? For 20 years, we have been asking for the Chinese market to be opened for our pharmaceutical and IT products and services," he said, adding, "...To no avail. What do we make of this? We should discuss such issues frankly but also take steps to resolve them."

‘China should not ignore India’s CPEC concerns’ - Times of India
 
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Interview of Gautam Bambawale published in globaltimes.

Indian Ambassador to China optimistic about future of bilateral relations

Editor's Note:

Sino-Indian ties, which have been experiencing discord for years due to high economic competition in the region, were further challenged in 2017 by the months-long border standoff at Doklam. Though the two governments managed to put the conflict under control and push ties back on track by the end of last year by holding a high-level dialogue, there is still an undercurrent of uncertainties running between the two sides.

Global Times reporter Zhang Xin (GT) interviewed the newly-appointed Indian Ambassador to China, Gautam Bambawale (Bambawale), to talk about the potential impact of the Doklam standoff on the Sino-Indian bilateral relationship, the obstacles that lie in the way of boosting ties as well as what possible solutions could be adopted.


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Gautam Bambawale, Indian Ambassador to China Photo: courtesy of Embassy of India in Beijing


GT: How do you feel about being appointed as India's new Ambassador to China?

Bambawale: India and China are ancient civilizations. In the 21st century, we have re-emerged as major powers in the world from a geo-economic and geo-political perspective. The India-China relationship is important to both countries. Therefore, it is a great honor to be appointed as India's Ambassador to China. Naturally, there are also great responsibilities which go with this position. I am here to work with the Chinese people to move the India-China relationship forward.


GT: Last year's Doklam standoff has negatively impacted Sino-Indian ties. It is a very unpleasant memory. Although it has passed, it has made a deep impact. Some people believe the strategic trust between China and India has been further weakened by the incident. Do you agree? Can you tell us how you would like to see the development of bilateral relations as ambassador?

Bambawale: As I said earlier, India and China are ancient civilizations. We have had exchanges and interactions over several centuries. For the bulk of this period, India and China have interacted peacefully with each other. We have not merely exchanged goods but also ideas. I look at the Doklam standoff from such a long-term perspective. When you do so, the Doklam standoff is just one event in a much longer term history. I believe that you are blowing it out of proportion. The people of India and China and our leaders are experienced enough and wise enough to overcome such momentary hurdles in our relationship.

I believe that in the post-Doklam period, India and China need to be talking to each other and conversing with each other much more than in the past. This should be done at many different levels, including at the leadership level, the official level and the people-to-people level. We need to be talking and communicating with each other much more than we are doing. Such communication should be frank, candid and open. If we are able to do so successfully, we will understand each other much better and we will build trust and confidence in each other. With enhanced trust and understanding will come a stronger partnership between India and China. I would like to say that India and China are partners in development and progress. We are not rivals.

In our conversations and discussions, it is important to talk to each other and not talk past each other. We must be sensitive to the other side's concerns. Our interaction must be based on equality and mutual benefit. Also, in the India-China border areas, especially at some sensitive points, it is important not to change the status quo. We need to be clear about this.


GT: As India's Ambassador to China, what do you plan to do to enhance mutual strategic trust? To be specific, what are the options for the two sides to improve relations in 2018?

Bambawale: As I have said earlier, we should have more conversations, discussions, exchanges and cooperative ventures. This should be at the leadership level, at the official level and at the people-to-people level. In line with this thinking, India and China should work together in 2018 to have more summit-level meetings and official meetings. In addition, we should enhance exchanges of parliamentarians, business persons, journalists, academicians, students, sportspersons and film makers. We also need to enhance contacts and exchanges between military personnel of our countries. Yet another way to enhance understanding of each other is for us to increase tourism in both directions. China must import more Bollywood films so as to understand India better. This is my broad agenda for 2018. It is a very full agenda.


GT: It is natural for countries to have different interests and sometimes contradictions, but it's also important that countries cooperate, especially major countries. What do you think are the common interests between China and India? You are an expert in Asian affairs, which have seen quite a few conflicts recently and there have been complicated relations among different countries. Do you think India and China, as two influential countries in the region, should look forward and engage in greater cooperation?

Bambawale: You are correct. India and China share many common interests and goals. For example, both countries are currently focused inward on ensuring their own economic development and social progress. China is further down this road than India. However, I believe, there is a lot that we can learn from each other. For example, Prime Minister Modi has launched a 'Make in India' program for increasing the share of manufacturing in our GDP. We would like to learn from China how to do so and how to position ourselves within global value chains. You are aware that Chinese telecom companies have been very successful in India. We would like them to manufacture at least some of their products in India. Similarly, India has embarked on a program of 'Smart Cities'. Do you think it would be possible for Chinese companies to assist us in one or two of these new 'Smart Cities'? Perhaps, some Indian IT firms can assist with China's plans on big data.

India and China also have common positions on many international and global issues. The prime example is that of climate change. We have been working together on this subject in the past and under the new international circumstances it is especially important that we continue to work together. I would also like to avail of this opportunity to congratulate the city authorities of Beijing for the clean air that we have been experiencing in the city this winter. Again, both India and China are threatened by international terrorism. We must continue to work in tandem in our counter-terrorism efforts. I would even suggest that we need to expand our cooperation in counter-terrorism. India and China have benefited from globalization which provides a common platform for both our countries. We both should ensure that the global values and rules which have benefited us should continue to be upheld and promoted. Global rules of interaction among nation states must be maintained. So, you can see that there are many broad areas where India and China have similar if not identical interests. Let us work together on these issues for the benefit of our people.


GT: Many Chinese people don't understand India's anti-China mentality. They think the two countries share more similarities as the world's two biggest developing countries. How would you explain India's anti-China mentality?

Bambawale: I don't know where you have obtained this understanding. If you travel to India and meet the common people in our cities and villages, you will come to know that they do not have an anti-China mentality. In fact, the people of India have great admiration for what China has achieved in economic development over the past four decades. Similarly, when I meet hundreds of Chinese people, I can feel their warmth and friendship. It is because of these positive feelings that we have two successful examples of India-China cooperation last year. The first is the success of the Bollywood movie Dangal in China. The second example is the success of Chinese Xiaomi company in becoming the largest mobile telephone supplier in the Indian market.

However, there are a few issues about which, we in India, have been focusing attention on. The foremost is the large and growing trade deficit we face with China. In 2017, the deficit for India is likely to be US$ 55 billion. India sells pharmaceuticals and IT products all over the world but not in China. Why? For 20 years, we have been asking for the Chinese market to be opened for our pharmaceutical and IT products and services. To no avail. What do we make of this? What conclusions should we draw? We should discuss such issues frankly but also take steps to resolve them.

Secondly, the China-Pakistan Economic Corridor passes through Indian-claimed territory and hence violates our territorial integrity. This is a major problem for us. We need to talk about it, not push it under the carpet. I believe, the more we talk to each other, the easier it will become to resolve problems. Also, please don't forget, there are many subjects - the vast majority of issues - on which we are already working together and where we can expand cooperation.


GT: China and India enjoyed ties for decades before bilateral relations underwent recent twists and turns. Until now, many Chinese feel good about that history, on which I believe you share the same memory. How do you view the future of China-India ties?

Bambawale: You are absolutely right. I have repeatedly spoken of India and China as ancient civilizations which have enjoyed exchanges and interactions over centuries. Do you know the Tang Dynasty monk Xuan Zang is very well known in India even today? We read about him in our history books and there is admiration for the fact that he spent many long years in India learning and understanding Buddhism. Similarly, Damo or Bodhidharma, as we call him, is extremely well known in China as the Buddhist monk from India who brought with him the idea of 'Chaan' Buddhism. Let me clearly say to you and your readers that India, today, is focusing all its energies on economic development, social progress and national transformation. As a neighbor, we would like China to assist us in our efforts. India and China have similar approaches on many regional and global issues. Yes, we have some differences. We need to maturely work together. I believe the people of India and China have the wisdom to do so. Therefore, I am optimistic about the future of India-China relations.

Indian Ambassador to China optimistic about future of bilateral relations - Global Times
 
there is zero contribution of muslim countries viz a viz development of mankind , they can only sell out the resources and sponsor terrorism so as to built mass graves for the dead ultimately , their moto is garbing land ( dead or alive ) and destroying humanity ultimately . i am glad china proposed this failure of the century project to pakistan as both will become enemy at the e n d bec aus e oftrhis so called project .
 
‘Golden era’ of UK-China trade links in peril
A mutually proclaimed “golden era” in bilateral ties between China and the UK has been thrown into jeopardy ahead of Theresa May’s visit to Beijing next week amid disagreements over China’s overseas investment drive, according to government officials. The UK prime minister was due to hold roundtable discussions with British and Chinese business executives during the visit to discuss the investment programme, known as the Belt and Road Initiative. But the events are now at risk of being scrapped after Mrs May resisted giving a formal endorsement to the programme, the officials said. The Belt and Road Initiative (BRI), which aims to connect Asian and European trading countries to China through a series of infrastructure projects, is a signature policy of Xi Jinping, China’s president. Unless the differences are resolved, the row threatens to set back scores of bilateral commercial agreements launched since Mr Xi’s visit to Britain in 2015. “The main sticking point is over China’s insistence that the UK side give a formal endorsement for the Belt and Road Initiative,” said one official. Building commercial ties with China was a key foreign policy priority of David Cameron, Mrs May’s predecessor as prime minister, and his chancellor, George Osborne, who saw the fast-growing Chinese market as central to Britain’s export future. The bilateral economic relationship has been far more strained since Mrs May moved into Downing Street. Nick Timothy, the prime minister’s most powerful aide during her first year in office, eyed Beijing with suspicion and pushed for a review of China’s investment in Britain’s nuclear sector. Downing Street declined to comment on Mrs May’s reluctance to support BRI, which is China’s bid to build infrastructure and win allies in some 70 countries in Asia, the Middle East, Africa and Europe. It was formally supported last year by about 30 countries, including Russia, Italy, Greece and Hungary. Britain’s tensions with Beijing come at the same time that the US has ratcheted up its strategic and rhetorical opposition to mounting Chinese influence in Asia. Last month, the White House labelled China a “strategic competitor” and Donald Trump’s administration regards Mr Xi’s grand BRI design with suspicion. There are also misgivings in Europe, with Emmanuel Macron, French president, warning Beijing this month that the benefits of the project should be shared. Recommended US says China WTO membership was a mistake Emmanuel Macron targets deals during China state visit FT Series: China — the soft superpower Potential cancellation of the meetings between British and Chinese executives and Mrs May is only one of the complications mounting over the prime minister’s visit. According to people briefed on the planning, attempts to organise other parts of Mrs May’s schedule in China have been complicated by Chinese officials’ occasional refusal to return the phone calls of UK diplomats. “The Chinese side wants a formal endorsement for the Belt and Road Initiative from the UK because if the UK gives it then there is no reason why other countries should refuse,” said Yu Jie, head of China Foresight at LSE Ideas, a think-tank. Mr Osborne viewed China as a potential partner in boosting his Northern Powerhouse project and in Britain’s nuclear power revival, but the current prime minister has been less enthusiastic on both fronts. Jim O’Neill, the former Goldman Sachs chief economist who worked with Mr Osborne on China, quit soon after Mrs May entered Number 10, telling friends he was “baffled” by the prime minister’s approach to Beijing. Mrs May’s visit next week was “exceptionally important”, Lord O’Neill said, noting that it occurred at a time when the prime minister has stated a “desire to project a ‘global Britain’” as the UK departs the EU.
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‘Golden era’ of UK-China trade links in peril
A mutually proclaimed “golden era” in bilateral ties between China and the UK has been thrown into jeopardy ahead of Theresa May’s visit to Beijing next week amid disagreements over China’s overseas investment drive, according to government officials. The UK prime minister was due to hold roundtable discussions with British and Chinese business executives during the visit to discuss the investment programme, known as the Belt and Road Initiative. But the events are now at risk of being scrapped after Mrs May resisted giving a formal endorsement to the programme, the officials said. The Belt and Road Initiative (BRI), which aims to connect Asian and European trading countries to China through a series of infrastructure projects, is a signature policy of Xi Jinping, China’s president. Unless the differences are resolved, the row threatens to set back scores of bilateral commercial agreements launched since Mr Xi’s visit to Britain in 2015. “The main sticking point is over China’s insistence that the UK side give a formal endorsement for the Belt and Road Initiative,” said one official. Building commercial ties with China was a key foreign policy priority of David Cameron, Mrs May’s predecessor as prime minister, and his chancellor, George Osborne, who saw the fast-growing Chinese market as central to Britain’s export future. The bilateral economic relationship has been far more strained since Mrs May moved into Downing Street. Nick Timothy, the prime minister’s most powerful aide during her first year in office, eyed Beijing with suspicion and pushed for a review of China’s investment in Britain’s nuclear sector. Downing Street declined to comment on Mrs May’s reluctance to support BRI, which is China’s bid to build infrastructure and win allies in some 70 countries in Asia, the Middle East, Africa and Europe. It was formally supported last year by about 30 countries, including Russia, Italy, Greece and Hungary. Britain’s tensions with Beijing come at the same time that the US has ratcheted up its strategic and rhetorical opposition to mounting Chinese influence in Asia. Last month, the White House labelled China a “strategic competitor” and Donald Trump’s administration regards Mr Xi’s grand BRI design with suspicion. There are also misgivings in Europe, with Emmanuel Macron, French president, warning Beijing this month that the benefits of the project should be shared. Recommended US says China WTO membership was a mistake Emmanuel Macron targets deals during China state visit FT Series: China — the soft superpower Potential cancellation of the meetings between British and Chinese executives and Mrs May is only one of the complications mounting over the prime minister’s visit. According to people briefed on the planning, attempts to organise other parts of Mrs May’s schedule in China have been complicated by Chinese officials’ occasional refusal to return the phone calls of UK diplomats. “The Chinese side wants a formal endorsement for the Belt and Road Initiative from the UK because if the UK gives it then there is no reason why other countries should refuse,” said Yu Jie, head of China Foresight at LSE Ideas, a think-tank. Mr Osborne viewed China as a potential partner in boosting his Northern Powerhouse project and in Britain’s nuclear power revival, but the current prime minister has been less enthusiastic on both fronts. Jim O’Neill, the former Goldman Sachs chief economist who worked with Mr Osborne on China, quit soon after Mrs May entered Number 10, telling friends he was “baffled” by the prime minister’s approach to Beijing. Mrs May’s visit next week was “exceptionally important”, Lord O’Neill said, noting that it occurred at a time when the prime minister has stated a “desire to project a ‘global Britain’” as the UK departs the EU.
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Hope Britain withstand chinese pressure and show them the middle finger for OBOR.
 
Theresa May holds off backing China's £900bn Silk Road strategy
PM says UK is ‘natural partner’ but fails to sign off on Xi Jinping’s personal project



Theresa May has sidestepped a Chinese push for a formal endorsement of its $900bn Silk Road strategy, suggesting Britain still has concerns about China’s political objectives for the huge infrastructure project.

Government sources confirmed the UK did not sign a memorandum of understanding giving Britain’s official endorsement to the $900bn Belt and Road Initiative, which is President Xi Jinping’s personal project. Critics say it is designed to pull other countries in the region deeper into China’s sphere of influence and could give unfair preferential treatment to Chinese contractors.

In a press conference in Beijing on Wednesday with the Chinese premier, Li Keqiang, May said the UK was “a natural partner” for the project but stopped short of giving the scheme her unequivocal backing.

Instead, May, who is on her first bilateral trip to China, said the two countries would continue to work together “to identify how best we can co-operate on Belt and Road across the region and ensure it meets international standards”, indicating that agreement may not yet have been reached.

“There wasn’t a memorandum signed,” a UK government official said. “They both spoke positively about the potential impacts it could have, but it’s important it’s implemented in the right way. They are going to carry on talking.”

Beijing had hoped to seal the UK’s backing after the chancellor, Philip Hammond, attended the Belt and Road Forum for International Cooperation in Beijing last year. China still lacks a major western endorsement, with Australia, France, Germany, the European commission and the US yet to give it their unqualified backing.

On a visit to China earlier this year, the French president, Emmanuel Macron, said he had reservations and that the initiative should benefit the region, not be a “one way street”.

British reluctance to commit to signing the memorandum caused consternation ahead of the visit between UK and Chinese officials, with the Chinese even reportedly refusing to answer calls from their British counterparts. British officials said there was not a formal list of demands that the UK wanted met before the memorandum would be signed.

“It is generally about adhering to international standards, making sure there is transparency in the supply chain,” the official said. “It’s about ensuring the tendering process is fair and equitable.”

At the press conference, May also stressed the need to adhere to fair trading practices, and said she had raised concerns about intellectual property theft with Li, which is also a key gripe of President Donald Trump.

“As partners committed to global free trade we can work to ensure that as our companies innovate and develop new products, they are confident that their intellectual property and rights will be fully protected, including against cyber threats,” she said.

As the prime minister detailed her concerns, Li interrupted to raise steel dumping as another area where they had clashed, giving the prime minister a smile.

The prime minister thanked Li for “reminding us” that they had discussed overcapacity in global markets and the need to tackle unfair trading practices. Downing Street said China had already made a commitment to cut steel capacity by 200m tonnes by 2020, and had already cut 100m tonnes since 2016.

At her press conference with Li, May said a “significant number of major new commercial deals” were due to be agreed during her visit, expected to total over £9bn in value. In turn, Li made encouraging sounds about a future UK trade deal, as well as opening Chinese markets more generally to UK agricultural products.

“The two-way opening up between China and the UK will go even further and China will open even wider to the UK,” he said. “In line with our agreement China, will expand openness to UK products including agricultural products. China will import UK products that are needed in the Chinese market.”

The prime minister said they had agreed to carry out a joint trade and investment review to identify priorities for promoting growth in goods, services and investment. It included agreement by the Chinese to make progress over the course of the next six months on lifting the BSE ban on British beef exports.

May had also pledged to raise the issue of human rights abuses and the deterioration of Hong Kong’s democratic protections in her meetings with Li, which the premier said the pair had discussed alongside the threat from North Korea and the implementation of UN sanctions, as well as future trade.

The prime minister herself, however, made no mention of her concerns during the 30minute press conference in Beijing’s Great Hall of the People. On Thursday, she will hold a bilateral with President Xi, where Downing Street said it was expected that foreign affairs and security would be the focus of the discussion.

Joshua Wong, Hong Kong’s most prominent pro-democracy youth leader, urged May to confront Xi over his “relentless crackdown” in the former colony. “Theresa May should speak out on Hong Kong during her visit to China instead of having an empty talk with Emperor Xi,” Wong said on Wednesday.

Source : Theresa May holds off backing China's £900bn Silk Road strategy
 
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India may target CPEC installations, interior ministry tells GB

The Ministry of Interior has informed the Gilgit-Baltistan’s home department that India has made a plan to attack the installations of China-Pakistan Economic Corridor (CPEC) in a bid to sabotage the multi-billion mega project.the department had received a letter from the federal interior ministry recently in which it had warned of possible terrorist attacks on the CPEC route.

India had sent 400 Muslim youngsters to Afghanistan for receiving training to be able to carry out attacks on the CEPC installations, including bridges at Karakoram Highway (KKH) and other important points on the CPEC route.

In January last year, the GB police had claimed to have foiled a plan allegedly sponsored by Indian intelligence agency Research and Analysis Wing (RAW) to sabotage projects related to CPEC and generate anti-Pakistan feelings in Gilgit-Baltistan.
 
Work on $8.2b CPEC rail line unlikely to begin soon

ISLAMABAD: Pakistan has been raising false hopes of early start of work on the $8.2-billion Mainline-I (ML-I) rail track under the China-Pakistan Economic Corridor (CPEC) as it has not yet finalised the mode of financing because of its huge implications for the country’s external debt.

An internal agreement on the exact financing modalities was essential before making a request to China for processing a loan, said sources in the Ministry of Planning, Development and Reform.

The project had already faced a delay of at least two years and there was still disagreement between the Ministry of Railways and other ministries, they said.

The Ministry of Finance and a financing group, set up to firm up funding modalities for the ML-I project, are in favour of acquiring the loan with sovereign guarantees, show documents.

In the case of sovereign guarantees, the $8.2-billion loan will not become part of Pakistan’s ballooning external debt of $85 billion. The responsibility of loan repayment will lie on the Ministry of Railways.

Under the May 2017 framework agreement, the project will be solely funded by China.

However, Pakistan Railways wants the central government to acquire the loan, which will not only make it part of the external debt, but will also shift the loan-servicing responsibility on to the centre.

The ML-I project is aimed at upgrading the existing 1,872-kilometre mainline of Pakistan Railways from Karachi to Peshawar. The project was planned to be completed in two phases between 2016 and 2020.

Now revised timelines suggest that the project cannot be completed before 2022 provided the government is able to start work this year.

For the past one and a half year, the government officials concerned have been giving false deadlines for signing the financing agreement with China.

Last month, Planning and Development Minister Ahsan Iqbal announced that groundbreaking of the ML-I project was expected in March 2018 and it would be completed in four years in various phases.

However, the Ministry of Railways has not yet submitted a new PC-I for first phase of the project to the planning ministry for approval. Iqbal had set the October 2017 deadline for the railways ministry for submission of the PC-I. Cost estimates have also remained inaccurate.

The government has decided to split the project into two parts due to its high cost and the work that requires refurbishment and expansion of the main rail line.

The decision to obtain sovereign guarantees had actually been taken in November 2016 by the then minister of finance.

The Economic Affairs Division was of the view that in case the loan was acquired by the central government, the cost of borrowing for Pakistan Railways would jump to 9% whereas the government would pay around 2% in interest to China.

Such loans are covered by the relending policy, under which the federal government takes responsibility of repaying the money and bears the exchange rate risk in return for recovering a fixed interest from the borrower.

China has told Pakistan that it will consider only that loan request which covers the entire rail track from Karachi to Peshawar and not up to Lahore.

Officials of the Ministry of Railways insist that any loan request to China should be in line with the spirit of the framework agreement, which was the central loan. They pointed out that the agreement clearly mentioned that the loan would be given on highly favourable terms.

Project feasibility and the scope had been finalised and the railways ministry was trying to make the cost as realistic as possible, they said.
 
China’s ‘own courts’ for BRI rows raise eyebrows

China's recent announcement that it would establish courts under its own judicial system to handle international disputes arising from projects under the Belt and Road Initiative (BRI) has triggered apprehensions that this would lead to dispute settlement on its unilateral terms and conditions.

The courts, which are to be based in Beijing, Xi'an and Shenzhen, have been established under the authority of the Supreme People's Court of China, ET has learnt.

The Xi'an court will manage commercial disputes for the Silk Road Economic Belt, which connects China, West Asia and Europe. The Shenzhen court will manage commercial cases for the Maritime Silk Road, which connects China, Southeast Asia, Africa and Europe.

Chinese media has reported that the country will seek to promote the courts to resolve disputes that emerge from the BRI. Experts said that the courts could be similar to the International Commercial Court in Singapore and the International Finance Centre Courts in Dubai.

"It is unclear over which authority the Chinese have claimed jurisdiction over BRI disputes," said a recent brief on the issue by law firm Dezan Shira & Associates, which has been guiding foreign investors in India, ASEAN and China since 1992.

"There are existing mechanisms to deal with such matters, ranging from existing bilateral investment treaties to multilateral agreements such as those ASEAN has with China, the 2012 'Agreement on Dispute Settlement Mechanism of the Framework Agreement on Comprehensive Economic Cooperation'," said the brief, seen by ET.

Most bilateral treaties and the ASEAN treaty provide for similar conflict resolution processes: consultation, followed by mediation, followed by arbitration by an ad hoc arbitration tribunal, with no preset venue or choice of law, either procedural or substantive, according to the law firm.

The Chinese government is trying to force other sides to accept Chinese mediation and arbitration through its proposal to have these three courts rule on all BRI disputes, experts said.

The country's move to establish BRI-specific courts seems to alter that position, and move jurisdiction specifically to China on bilateral projects.

The memorandum of understanding (MoU) that China has signed with more 70 nations concerning cooperation on BRI projects does not appear to suggest any differing mechanisms for dealing with disputes, other than the usual terminology referring to "friendly consultations", though these may differ from case to case, according to Dezan Shira & Associates.

"The question concerning China's establishment of the BRI courts therefore revolves around the question of how this mechanism was agreed to between China and the BRI nations with which it has signed agreements," it said.

There are other existing alternatives to accepting arbitration in China. These include an agreement reached in September last year between the Singapore International Mediation Centre and the China Chamber of International Commerce Mediation Centre (CCOIC), which entered into an MoU to resolve BRI cross-border disputes.

"Despite these steps by China, the choice of arbitration venue and law, both procedural and substantive, should be left to negotiation between the concerned parties... third party jurisdictions with established rules and an experienced body of jurists are always preferable to those jurisdictions affiliated with one or the other of the parties to a contract," the law firm said.
 
To protect CPEC, China has been secretly holding talks with Baloch militants in Pakistan: Report

NEW DELHI: China has been secretly holding talks with Baloch militants in Pakistanfor more than five years to secure protection for its $60 billion worth China-Pakistan Economic Corridor (CPEC), reported British newspaper Financial Times (FT) on Monday.

Three people with knowledge of the talks told FT that Beijing had been in direct contact with militants in Balochistan, the restive province where several key CPEC projects are located.

"The Chinese have quietly made a lot of progress," a Pakistani official was quoted as saying by FT.

If true, it would explain a curious statement by China's envoy to Pakistan earlier this month. Yao Jing asserted without proof or explanation that Baloch militant organisations are no longer a threat to CPEC.

Activists in Balochistan allege China and Pakistan are aiming to change the demography of Balochistan. They also allege Pakistan has illegally occupied Balochistan and that it has been committing atrocities against Baloch people.

Last year 10 Pakistani workers were killed by unidentified gunmen while working near Gwadar port, a key part of the economic corridor.

"Even though separatists occasionally try to carry out the odd attack, they are not making a forceful push," said the Pakistani official.

More than one Pakistani official told FT the powers-that-be in Pakistan welcomed the talks between Baloch rebels and the Chinese.

"Ultimately, if there's peace in Baluchistan, that will benefit both of us," said one official in Islamabad.

What could explain Pakistan not being unduly worried about China's interference in its internal matters, is the fact that US-Pakistan relations are probably at the worst they've ever been. Last month the US suspended as much as $2 billion in security assistance to Pakistan, saying it isn't doing enough to end terror safe havens.

Pakistan's 'all-weather friend' China has been very supportive of Islamabad through its crisis with Washington. Beijing's direct dialogue with separatist militants in Pakistan might be seen as small price to pay for that support.

To protect CPEC, China has been secretly holding talks with Baloch militants in Pakistan: Report - Times of India
 
Heavy security and a ‘climate of fear’ surround China’s flagship port in Pakistan

For the thousands of attendees it was meant to be a conference to showcase China’s flagship Belt and Road project in Pakistan – the port in southwestern Gwadar that gives Beijing access to the Arabian Sea.

In the evenings the almost 8,000 delegates were wowed with cultural shows and a firework display at the newly opened five-storey Gwadar Exhibition Centre which was host to about 100 companies last month.

Yet what really caught the attention of some investors were the hundreds of Pakistani troops patrolling the roads and guarding high-end hotel lobbies.

“Nobody will come and invest in this climate of fear,” said Muhammad Zafar Paracha, director at the Pakistani partner of MoneyGram International Inc.

With national elections due in July, Pakistan’s government is keen to trumpet the commercial viability of the deep seaport in the once sleepy sea town of about 200,000 people in a province long racked by separatist insurgency. To secure Beijing’s funding of more than US$50 billion in infrastructure projects, Pakistan has raised a special 15,000 strong security force.

The port is scheduled to start transshipment on March 7. Yet for all the fanfare, some question Gwadar’s prospects amid heavy security. Balochistan is mostly off limits to outsiders and there’s no visible foreign presence beyond the Chinese. Journalists and visitors are closely monitored by Pakistan’s intelligence agencies.

“It doesn’t feel like a normal investment location or an enabling business environment if that level of protection needs to be provided,” said Andrew Small, who has written a book on Pakistan-China relations and is one of a handful of westerns to have travelled to Gwadar.

Beijing has become increasingly vocal over the risks in Pakistan. In December, its embassy in Islamabad warned of imminent terror attacks on Chinese targets. This month a Chinese manager at Cosco Shipping Lines Co, was gunned down in an upmarket area of Karachi. Following the murder, China called on Islamabad to take more measures to ensure security.
 
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