Govt presses China on Gwadar plan

[SoulSpokesman]

@Michael

It seems increasingly likely that PAK will return to the US camp.

Regards

 

[hydrabadi_arab]

As for the CPEC as a whole, the Chinese government will not terminate or cancel it. However, it is currently subject to significant restrictions.
Analyzing numerous official reports, the Chinese government is taking numerous actions to reduce the functionality of CPEC (by opening more channels to reduce its effectiveness).

In the original CPEC plan, the Chinese government did intend to develop Gwadar into a core node city along the CPEC trade corridor. However, due to certain unforeseen circumstances, they were forced to adjust the plan.

My observation:

During the current Pakistani government (Public government and shadow government):
1. China will not launch any new major long-term investment projects;
2. Already launched major long-term investment projects will be adjusted based on actual conditions. Some will be suspended, while others will continue;
3. Small and medium-sized projects and asset-light projects will not be affected.
There are slight differences between private and state-owned enterprise projects, but the general direction is essentially the same.

I have no intention of interfering in Pakistan's internal affairs, nor do I intend to intervene in the struggles between Pakistan's various political factions. However, China-Pakistan relations are indeed experiencing a continuous decline. This change has absolutely nothing to do with India. This is a matter between China and Pakistan.

CPEC projects are basically loans. There is nothing to cancel about. Are you going to cancel what exactly here?

The idea was that China will invest in phase 2 of CPEC to increase exports. That is happening in slow manner so loans from phase 1 pilled up.

Now many of power plants on imported coal and gas are not producing anything but Chinese companies are getting paid capacity charges and guaranteed 20% ROI/annual in USD.

 

[Taimoor]

This rant doesn't matter to me. I don't believe in democracy to begin with.

Do you believe in constitution of Pakistan? The "state" has nothing to do with Army as per constitution, let alone its incumbent Chief, they are only tools of the state. You are basically supporting a retired usurper, who used the raw power to assume the role of state for himself. No democracy, no constitution, no rule of law, this isn't a normal functioning nation, and these ideas are suicidal.

 

[Michael]

CPEC projects are basically loans. There is nothing to cancel about. Are you going to cancel what exactly here?
The idea was that China will invest in phase 2 of CPEC to increase exports. That is happening in slow manner so loans from phase 1 pilled up.

You can read my perspective carefully.
1. Some major long-term investment projects that have not yet started will be suspended.
2. Decisions on major long-term investment projects that have already started and are underway will be made after reassessment.
3. Small and medium-sized projects and asset-light projects will see minimal changes.
As for loans, these will change in line with these projects.
For a long time to come, China will continue to reduce its investment in Pakistan.
Note:
This is a reduction, not a cancellation!

Now many of power plants on imported coal and gas are not producing anything but Chinese companies are getting paid capacity charges and guaranteed 20% ROI/annual in USD.

I know this matter has been hyped up a lot in Pakistan. There's a strong whiff of political manipulation involved. I won't comment on the specific incident; I'll just offer a few reflections:

1. The spirit of the contract. Why didn't anyone raise any objections when these contracts were signed? After the contracts were signed and operational, you reneged and blamed the Chinese investors?

2. Under Chinese business rules, no company in the real economy can achieve a net profit of more than 20%. Most companies have a net profit between 5% and 10%, with a few reaching as high as 15%. Most small and medium-sized enterprises have a net profit below 5%. Any company with a net profit of 20% will quickly go bankrupt.

3. Investing in a business inevitably generates a return on investment. You need to conduct a more comprehensive study of this issue. How much did they invest upfront? How much return have they received? What are their operating costs? ......

You can list the names of these companies. If they are listed companies in China, their financial statements are easy to find.

 

[hydrabadi_arab]

You can read my perspective carefully.
1. Some major long-term investment projects that have not yet started will be suspended.
2. Decisions on major long-term investment projects that have already started and are underway will be made after reassessment.
3. Small and medium-sized projects and asset-light projects will see minimal changes.
As for loans, these will change in line with these projects.
For a long time to come, China will continue to reduce its investment in Pakistan.
Note:
This is a reduction, not a cancellation!

Here is reality. Pakistan have cancelled half dozen power plants, hydro or others. Chinese companies are willing to invest because of guaranteed ROI.

China isnt willing to provide loan for ML1 railway because its with 2-4% interest.

Chinese investment in export industry is slow hence the point of this thread. Again no guaranteed 20% ROI/annual here.

 

[SoulSpokesman]

@hydrabadi_arab

Hydra bro,

Does it make sense for the Chinese to invest in PAK with 2-4% ROI or no guaranteed return at all?

Regards

 

[hydrabadi_arab]

@hydrabadi_arab

Hydra bro,

Does it make sense for the Chinese to invest in PAK with 2-4% ROI or no guaranteed return at all?

Regards

Its not really investment but loan for railways.

The so called investment in power plants are with guarantees of 20% ROI/annual. Which Pakistan will keep paying for another 10-15 years..

But there were more contracts signed.

“fulfil their contractual obligations by submitting a time-bound business plan for industrialisation, aiming to make the jewel of the China-Pakistan Economic Corridor (CPEC) fully operational.“

Here the progress is slow.

 

[PAKISTANFOREVER]

I have a different take than most on this thread. If anything, the Chinese-Pakistani relationship is further strengthening. In order to kick start the Pakistani economy, the focus is on developing the Pakistani defence industries now and getting a better return. Once the law and order situation in Balochistan improves, CPEC development will increase and expand.

 

[PAKISTANFOREVER]

As for the CPEC as a whole, the Chinese government will not terminate or cancel it. However, it is currently subject to significant restrictions.
Analyzing numerous official reports, the Chinese government is taking numerous actions to reduce the functionality of CPEC (by opening more channels to reduce its effectiveness).

In the original CPEC plan, the Chinese government did intend to develop Gwadar into a core node city along the CPEC trade corridor. However, due to certain unforeseen circumstances, they were forced to adjust the plan.

My observation:

During the current Pakistani government (Public government and shadow government):
1. China will not launch any new major long-term investment projects;
2. Already launched major long-term investment projects will be adjusted based on actual conditions. Some will be suspended, while others will continue;
3. Small and medium-sized projects and asset-light projects will not be affected.
There are slight differences between private and state-owned enterprise projects, but the general direction is essentially the same.

I have no intention of interfering in Pakistan's internal affairs, nor do I intend to intervene in the struggles between Pakistan's various political factions. However, China-Pakistan relations are indeed experiencing a continuous decline. This change has absolutely nothing to do with India. This is a matter between China and Pakistan.

The Pakistan-Chinese relationship is further increasing but is focused mainly in the military/defence domain rather than in commercial projects. Once the law and order situation in Balochistan improves then CPEC and other commercial ventures can begin to further expand and advance.

 

[hydrabadi_arab]

I have a different take than most on this thread. If anything, the Chinese-Pakistani relationship is further strengthening. In order to kick start the Pakistani economy, the focus is on developing the Pakistani defence industries now and getting a better return. Once the law and order situation in Balochistan improves, CPEC development will increase and expand.

USA and China are very different powers. USA will go all the way to develop strategic partner economy, see India almost 40% of exports goes to US.

China will rather save 5% by setting up factory in Vietnam then in Pakistan.

On military levels relations with China are all time high. But economically don’t expect them to favour you if they can save some penny in Vietnam and Bangladesh.

 

[SoulSpokesman]

@hydrabadi_arab

Hydra bro,

fulfil their contractual obligations by submitting a time-bound business plan for industrialisation

Would these industrial projects have guaranteed returns?

Regards

 

[PAKISTANFOREVER]

USA and China are very different powers. USA will go all the way to develop strategic partner economy, see India almost 40% of exports goes to US.

China will rather save 5% by setting up factory in Vietnam then in Pakistan.

On military levels relations with China are all time high. But economically don’t expect them to favour you if they can save some penny in Vietnam and Bangladesh.

Which is why Pakistan needs to bring in the reforms and processes to improve then develop our economy and industries by ourselves.
One way Pakistan can start to improve it's industrial base is in trying to become an exporter of military hardware, a key defence manufacturer.

 

[hydrabadi_arab]

@hydrabadi_arab

Hydra bro,

fulfil their contractual obligations by submitting a time-bound business plan for industrialisation

Would these industrial projects have guaranteed returns?

Regards

No such guarantees for industrialization.

 

[SoulSpokesman]

@hydrabadi_arab

Hydra bro,

No such guarantees for industrialization.

Thanks. In such circumstances, does it make sense for Chinese businesses to invest in PAK.

USA will go all the way to develop strategic partner economy, see India almost 40% of exports goes to US. China will rather save 5% by setting up factory in Vietnam then in Pakistan.

If this is correct, is it more beneficial for PAK to align with West or with PRC?

Regards

 

[hydrabadi_arab]

@hydrabadi_arab

Hydra bro,

No such guarantees for industrialization.

Thanks. In such circumstances, does it make sense for Chinese businesses to invest in PAK.

USA will go all the way to develop strategic partner economy, see India almost 40% of exports goes to US. China will rather save 5% by setting up factory in Vietnam then in Pakistan.

If this is correct, is it more beneficial for PAK to align with West or with PRC?

Regards

Pakistan will align with West on Iran/GCC/central asia security and counter terrorism.

Pakistan will align with China against India.

You can't give guaranteed ROI for factory.