China Watch

CHINA WATCH [FEBRUARY 7- 13] – CHINA BLOCKS MOVE AGAINST AZHAR

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Highlights:

China blocked the move at the United Nations (UN) to sanction the head of Pakistan-based Jaish-e-Muhammad (JeM), Masood Azhar. Pakistan has said that it supports China on all the major issues and opposes any attempt to undermine its sovereignty. The Senate Standing Committee on Communications raised the issue of the western route of the China-Pakistan Economic Corridor (CPEC). Around twelve energy generation projects will be completed by the end of 2018 under the early harvest projects of CPEC. Pakistan has decided to take a loan of $600 million from China. Beijing has revealed its plan of investing $24.8 billion to develop a highway network in its Xinjiang region for the purpose of improved connectivity with Pakistan. Three of China’s warships are part of the Pakistan Navy-led international exercise Aman-17 being held in the Arabian Sea.

China Blocks Move against Azhar:

China yet again blocked the move at the UN to sanction the head of Pakistan-based JeM, Masood Azhar.[1] The move was initiated by the United States and supported by the United Kingdom and France as an effort to show solidarity with India.[2] New Delhi has accused JeM and its leader of carrying out attacks on Indian territory and consequently ramped up its efforts to get the Azhar banned by the UN. However, China, most probably at the behest of Pakistan, has foiled the move time again. The move can remain in place for six months – extendable to three months – and can be converted into a block to dismiss the proposal altogether. In a protest against Beijing’s move, New Delhi soon issued a demarche to China.[3] Though China’s action has been primarily motivated by friendship with Pakistan, the efforts to protect the leader of a militant group have confounded analysts and world leaders.

Support against Separatists:

Pakistan has said that it supports China on all the major issues and opposes any attempt to undermine its sovereignty.[4] The assurance for support was made in a meeting between Special Assistant to the Prime Minister on Foreign Affairs Tariq Fatemi and Chinese State Commissioner for Counter-Terrorism and Security Cheng Guoping. Mr. Fatemi said that Pakistan will support China’s efforts to combat the evils of terrorism, extremism and separatism. The Chinese State Commissioner, in return, thanked Pakistan for its consistent support to China on the issues of core interest.[5] China has been very sensitive to the threat of separatist and terrorist elements that have targeted its western region of Xinjiang. Islamabad has not only supported Beijing’s crackdown on these forces but also taken serious steps to stem the flow of cross-border extremism.

Western Route:

The Senate Standing Committee on Communications raised the issue of the western route of CPEC.  Chairman of the committee Muhammad Daud Khan Achakzai said that “[W]henever we ask about the progress on the western route, we hear the excuse that the funds and workforce are not available.”[6] He said that it meant that the route existed only on papers and the reality was different from what was being portrayed. On the other hand, a bench of Peshawar High Court directed the federal government to positively file comments till March 2 in a writ petition filed by KP government seeking response from the federal government with regard to the controversy over western route.[7] The issue of the western route has dogged the CPEC project since the beginning. KP government had expressed some satisfaction after the Chief Minster Pervez Khattak attended the Joint Coordination Committee meeting in Beijing. However, it seems the issue still persists and needs to be dealt with effectively for the sake of national consensus behind CPEC.

Early Harvest Energy Projects:

Around twelve energy generation projects, including Sahiwal coal fired project, Port Qasim power plant and Karot Hydro power station will be completed by the end of 2018 under the early harvest projects.[8] According to official reports these energy production related projects will generate over 5,000 MW of electricity. Under CPEC, energy sector has been earmarked the largest chunk of funding, i.e. $36 billion. The reason is that Pakistan has been suffering from the acute shortage of energy supplies. The deficit between energy production and consumption has exceeded 7,000 MW and is estimated to cost around 2 percent of the GDP annually.[9] Therefore, CPEC can be very crucial in meeting Pakistan’s energy demands, thus paving the way for country’s economic development.

Loan from China:

To boost its dwindling foreign currency reserves, Pakistan has decided to take a loan of $600 million from China.[10] Pakistan’s foreign currency reserves have seen a steep decline of $1.7 billion since the completion of an International Monetary Fund’s program for the country in 2016. The loan will come this month from the Bank of China on commercial terms. It is expected to be provided for a period of three years at an interest rate ranging between 3.1% and 3.2%. The loan might be helpful for now but its long-term consequences for the country’s economy cannot be ignored. Questions have already been raised whether Pakistan would be able to maintain balance between the outflows – of the money to be paid back to China for CPEC funding – and the income reaped from these projects. Additionally, by getting such loans the government averts the impending economic disaster which gives it an opportunity to sidestep the essential economic reforms that have been long overdue.

Miscellaneous:

Beijing has revealed its plan of investing $24.8 billion to develop a highway network in its Xinjiang region for the purpose of improved connectivity with Pakistan.[11] India is set to join Russia-Pakistan-China trilateral talks on Afghanistan – also to be attended by Kabul – on February 15 in Moscow.[12]  The Board of Investment established a CPEC- Special Economic Zone (SEZ) Cell to help stakeholders on CPEC and SEZs.[13] China invited British Prime Minister Theresa May to attend the summit on “One Belt One Road” imitative to be held in May.[14] Three of China’s warships are part of the Pakistan Navy-led international exercise Aman-17 being held in the Arabian Sea.[15]

This report is compiled and written by Abdur Rehman Shah, Research Associate at the Center for Research and Security Studies (CRSS), Islamabad.   

[1] TNN. (2017, February 8). China blocks US move to get Masood Azhar banned. Retrieved on February 10, 2017, from http://timesofindia.indiatimes.com/india/china-blocked-us-move-to-get-masood-azhar-banned-by-un/articleshow/57029498.cms

[2] Dawn.com. (2017, February 07). China blocks US move to designate Jaish chief Masood Azhar a terrorist at UN. Retrieved February 10, 2017, from http://www.dawn.com/news/1313303

[3] Dawn. (2017, February 10). India lodges protest with China for blocking US-led ban on Jaish chief Masood Azhar. Retrieved February 12, 2017, from http://www.dawn.com/news/1313966/india-lodges-protest-with-china-for-blocking-us-led-ban-on-jaish-chief-masood-azhar

[4] Agencies. (2017, February 07). China assured of support in fight against separatists. Retrieved February 12, 2017, from http://www.dawn.com/news/1313134/china-assured-of-support-in-fight-against-separatists

[5] Our Correspondent. (2017, February 06). Islamabad stands solidly behind Beijing. Retrieved February 12, 2017, from https://tribune.com.pk/story/1318996/threat-sovereignty-islamabad-stands-solidly-behind-beijing/

[6] Reporter. (2017, February 11). Senate committee dissatisfied over CPEC. Retrieved February 13, 2017, from https://www.dawn.com/news/1314142/senate-committee-dissatisfied-over-cpec

[7] Bureau Report. (2017, February 09). Centre directed to file comments in petition on CPEC. Retrieved February 13, 2017, from https://www.dawn.com/news/1313622/centre-directed-to-file-comments-in-petition-on-cpec

[8] Radio Pakistan. (2017, February 8). Early harvest energy projects under CPEC to be completed next year. Retrieved February 13, 2017, from http://www.radio.gov.pk/08-Feb-2017/early-harvest-energy-projects-under-cpec-to-be-completed-next-year

[9] Aziz, Rashid. (2015, June). Pakistan’s power crisis. Retrieved February 12, 2017, from http://www.usip.org/sites/default/files/SR375-Pakistans-Power-Crisis-The-Way-Forward.pdf

[10] Rana, Shahbaz. (2017, February 09). Pakistan to borrow $600m from China. Retrieved February 13, 2017, from https://tribune.com.pk/story/1322240/pakistan-borrow-600m-china/

[11] APP. (2017, February 07). China to pump over $24bn into Xinjiang road projects for better connectivity with Pakistan. Retrieved February 13, 2017, from http://www.dawn.com/news/1313294/china-to-pump-over-24bn-into-xinjiang-road-projects-for-better-connectivity-with-pakistan

[12] Jacob, J. (2017, February 07). India set to join Russia-Pakistan-China trilateral meet on Afghanistan. Retrieved February 13, 2017, from http://www.hindustantimes.com/india-news/india-set-to-join-russia-pakistan-china-trilateral-meet-on-afghanistan/story-ek0kV3dGHfx4HusZm32yZN.html

[13] APP. (2017, February 08). BoI sets up CPEC-SEZ cell. Retrieved February 13, 2017, from https://www.dawn.com/news/1313316/boi-sets-up-cpec-sez-cell

[14] Reuters. (2017, February 08). China invites Britain to attend new Silk Road summit. Retrieved February 13, 2017, from http://www.dawn.com/news/1313516/china-invites-britain-to-attend-new-silk-road-summit

[15] Patranobis, S. (2017, February 08). China, Russia dispatch warships for Pak naval drill in Arabian Sea. Retrieved February 13, 2017, from http://www.hindustantimes.com/world-news/china-russia-dispatch-warships-for-pak-naval-drill-in-arabian-sea/story-mlWmJDczHvNxFa9etsVxuJ.html

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