CHINA WATCH [April 25- May 2] – Long Term Plan (LTP) for China Pakistan Economic Corridor (CPEC)

Summary:

A Chinese diplomat has confirmed that Pakistan and China were working towards the early finalisation of an LPT for the CPEC. Iran has reiterated that it was keen on joining the CEPC. The federal planning, development and reform ministry requested the Peshawar High Court (PHC) to dismiss the petition filed by Khyber Pakhtunkhwa (KP) government. Chinese ambassador to Pakistan Sun Weidong said that since Pakistan was not producing the goods needed in China, it had trade deficit with China. Chief of the Naval Staff Admiral Zakaullah has said that the navy was ready to face any challenge in the Indian Ocean after the completion of the CPEC. Under the revised priority list of the CPEC, Pakistan and China have set the electricity generation capacity at 11,000MW.

‘LTP’ for CPEC:

The political and Press Counsellor at the Chinese embassy in Islamabad Jian Han has confirmed that Pakistan and China were working towards the early finalisation of an LPT for the CPEC.[i] It is believed that the concerned ‘LPT’ could be finalised during the Belt and Road summit to be held in Beijing on May 14 and 15. According to Mr. Jian the LPT “would set the focus for CPEC construction in the future.” On the other hand, CPEC’s Project Director Hassan Daud Butt said that the plan would serve as a blueprint for further progress in CPEC from present till 2030.[ii] He added that under Early Harvest Projects, to be completed in 2018, about 7,000 MW of electricity would be added to the national grid and linkages of eastern and western routes would be completed. While China seems to be interested in the construction of CPEC as a launching pad for its grand strategy of ‘Belt and Road Initiative’, Pakistan’s incumbent government is in the rush to cash on the completion of projects for electoral gains in the next general elections. Beyond all the glowing official narratives, many questions and reservations loom large over the different aspects of CPEC which the two governments have yet to address.

Foreign Governments Interested in the CPEC:

Pakistan’s neighbouring country, Iran, has reiterated that it was keen on joining the CEPC. In a meeting with Pakistan’s National Assembly Speaker Sardar Ayaz Sadiq at Tehran, Iranian President Hassan Rouhani showed immense interest in Iran’s joining the CPEC.[iii] It is not the first time that Tehran expressed its desire to join this multi-billion dollar project. In fact, Iran seems so much interested in the idea that its President has directly conveyed the willingness of his country to join project. In addition to Iran, the Swiss Consul General in Karachi, Philippe Crevoisier, said that the Swiss government wants to help Swiss companies in exploring the opportunities offered by the CPEC.[iv] He added that “as the project (CPEC) has advanced, many opportunities are coming up for other countries to be part of the corridor.” Any interest by such foreign countries in the CPEC plays to the advantage of both Pakistan and China. It makes China’s goal of making the project as global more achievable. Simultaneously, the participation of foreign countries and firms will weaken Indian’s opposition of CPEC. However, little progress has so far been made to pave the way for the inclusion of these foreign actors in the CPEC.

Plea on the Western Route:

The federal planning, development and reform ministry requested the Peshawar High Court to dismiss the petition filed by KP government which seeks multiple direction for the federal government to develop the western route of the CPEC.[v] KP government has long lamented that the central government has ignored the construction of the western route passing through the province and instead focalised most of the resources and projects on the eastern rout. Accordingly, the Speaker of KP Assembly Asad Qaisar filed a petition in Peshawar High Court last year. Even though the centre and KP government have recently developed a good spirit of mutual coordination on CPEC projects, KP Chief Minster Pervez Khattak defended the petition by saying it would hang like a sword over the federal government.[vi] However, the KP government has toned down its protestations with regard to the development of western route.

Trade Deficit:

In unusually candid remarks, the Chinese ambassador to Pakistan Sun Weidong argued that Pakistan was not producing the goods needed in China and which was the main reason behind the trade imbalance between the two countries.[vii] But he went on to say that the situation will change when the Chinese companies will start producing such products in Pakistan. He added that “Pakistan can enhance its exports to $35 billion for which serious efforts are needed.” Pakistan’s exports are dominated by textile and agricultural products which put the country at a disadvantage while trading with China. China already enjoys an ascendent position in trade with Pakistan as latter’s trade deficit with China has swollen to more than $6 billion. That is why some quarters in Pakistan are rather sceptical whether the increasing trade ties under CPEC could really boost Pakistan’s position vis-a-vis China.

Miscellaneous:

Chief of the naval Staff Admiral Zakaullah has said that the navy was ready to face any challenge in the Indian Ocean after the completion of the CPEC.[viii] Pakistan’s enjoy to the US has said that “Pakistan was a bridge for the US to China and remains so for common good.”[ix] Under the revised priority list of the CPEC, Pakistan and China has set the electricity generation capacity at 11,000MW.[x] Co-chairman Pakistan People’s Party Asif Ali Zardari said that the government had ‘stolen the CPEC project form KP’ and claimed to take it back and hand over to Pakhtuns.[xi]

This report is compiled and written by Abdur Rehman Shah, Research Associate at the Centre for Research and Security Studies (CRSS), Islamabad. He tweets @abdur_shah

[i] Staff Reporter. (2017, May 2). Pakistan, China finalising long-term plan for CPEC. Retrieved on May 2, 2017, from https://www.dawn.com/news/1330502/pakistan-china-finalising-long-term-plan-for-cpec

[ii] News Desk. (2017, May 2). China-Pakistan Economic Corridor: ‘Long-term plan’ to be inked soon. Retrieved on May 2, 2017, from https://tribune.com.pk/story/1398662/china-pakistan-economic-corridor-long-term-plan-inked-soon/

[iii] Radio Pakistan. (2017, April 24). Iran shows interest in joining CPEC. Retrieved on May 2, 2017, from http://www.radio.gov.pk/24-Apr-2017/iran-shows-interest-in-joining-cpec

[iv] Staff Reporter. (2017, April 28). ‘Swiss companies interested in CPEC’. Retrieved on May 2, 2017, from https://www.dawn.com/news/1329661

[v] Bureau Report. (2017, April 28). PHC requested to reject plea on corridor’s western route. Retrieved on May 2, 2017, from https://www.dawn.com/news/1329745/phc-requested-to-reject-plea-on-corridors-western-route

[vi] Bureau Report. (2017, April 30). CM defends petition for CPEC’s western route. Retrieved on May 2, 2017, from https://www.dawn.com/news/1330187/cm-defends-petition-for-cpecs-western-route

[vii] PPI. (2017, April 30). ‘Pakistan not producing gods China needs. Retrieved on May 2, 2017, from https://tribune.com.pk/story/1397093/pakistan-not-producing-goods-china-needs/

[viii] Newspaper Correspondent. (2017, April 30). “Navy ready to face CPEC maritime challenges’. Retrieved on May 2, 2017, from https://www.dawn.com/news/1330133/navy-ready-to-face-cpec-maritime-challenges

[ix] Iqbal, Anwar. (2017, April 29). Better US-China ties create opportunities for Pakistan. Retrieved on May 2, 2017, from https://www.dawn.com/news/1329965/better-us-china-ties-create-opportunities-for-pakistan

[x] Rana Shahbaz. (2017, April 26). CPEC generation capacity to be kept at 11,000MW. Retrieved on May 2, 2017, from https://tribune.com.pk/story/1393583/cpec-generation-capacity-kept-11000mw/

[xi] Web Desk. (2017, April 24). Zardari claims to hand CPEC project over to Pakhtuns. Retrieved on May 2, 2017, from https://www.thenews.com.pk/latest/200445-Zardari-claims-to-hand-CPEC-project-over-to-Pakhtuns

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