Chinese investment neither loan nor grant: Nawaz Sharif
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LONDON: Prime Minister Nawaz Sharif has said the money being spent by China in Pakistan is not a loan or grant but an investment, according to the state-run Radio Pakistan website.
Talking to reporters, before leaving for Islamabad from London, the premier said that China's investment in Pakistan under China-Pakistan Economic Corridor project covers construction of motorways and installation of energy projects.
Read: China-Pakistan corridor: Visibility of the game changer
He said new Gwadar city will be built with the cooperation of China and its benefits will be reaped by the entire country.
On the end of his five-day visit to the United Kingdom Prime Minister Nawaz Sharif said Britain is a friend country which plays an important role in the field of education in Pakistan.
"Relations between the United Kingdom and Pakistan are very good," he said adding that Britain appreciates Pakistan’s efforts against terrorism.
He said a neck-and-neck contest is expected during the upcoming elections in Britain.
Prime Minister Nawaz Sharif had reached London on April 24 on the invitation of Britain's Prime Minister David Cameron where he held meetings with British leaders and business executives.
He also held official talks on bilateral, regional and global issues with his British counterpart.
Answering a question about the recently held local government elections in cantonment areas he said, "The results of have been good." He added that he expected a much better result in the next general elections.
Responding to another question about Pakistan Tehreek-i-Insaf's (PTI's) allegations of poll-rigging the premier said, "If the proof of rigging is in the ballot bags then what do the accusers have with them."
He also referred to the increase in the Pakistan Muslim League - Nawaz's lead over the PTI after the opening of ballot-bags in a constituency of Lahore, where poll-rigging had been alleged.
Talking about the murder of Sabeen Mehmud in Karachi, he said it was a deplorable act and that the government was making all efforts trace and apprehend the culprits behind the incident.
Read more
On DawnNews
Comments (81) Closed
Apr 29, 2015 01:50pm
Gwadar will be the new Singapore or Dubai or Hongkong.
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Apr 29, 2015 02:05pm
The Iranian port of Chabahar that is being built by India, is bound to overshadow Gwadar. Besides, the ongoing insurgency Baluchistan would be further intensified due to the Gwadar project.
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Apr 29, 2015 02:08pm
China's investment is great achievement of this govt., but why Karachi is intentionally being excluded from the great economic corridor is deplorable. Why is Sindh govt silent on this.
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Apr 29, 2015 02:11pm
How much employment for locals in Baluchistan?
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Apr 29, 2015 02:12pm
Investment? but for how many years we have been leased to these squint-eye guys
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Apr 29, 2015 02:17pm
It is an investment by China for which Chinese workers, architects and engineers will be used. China will reap the benefits of this investment and Pakistan provides security for all Chinese nationals while they are here
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Apr 29, 2015 02:22pm
Neither loan, når grant - meaning trade.
Exactly what two good neighbors should do :)
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Apr 29, 2015 02:22pm
It is a win win deal for both Pakistan and China. It will reduce Chinese cargo to reach Europe and middle east in one third of the time as compared to its long sea route. Let us built Pakistan and be the partners in growth with China, our good old friend.
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Apr 29, 2015 02:26pm
well done PTI for taking them out of their comforts and make them work.
nevertheless, our PM statement is as dubious as it can be and shrouded in darkness about china money which is being termed as "Investment" but who will pay for this and at what rate ?... why nation is not being advised as to what kind of investment we will be having and how Gwadar's uplift will benefit entire country ?.
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Apr 29, 2015 02:32pm
Investment is huge but alas! nothing for Karachi!!
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Apr 29, 2015 02:40pm
So far a good going by the government. But he must be careful as the opponents are spreading rumors and false maps to stop the chinese investment.
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Apr 29, 2015 02:50pm
How would he define investment
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Apr 29, 2015 02:57pm
No one let alone another country invests without expecting a good return on their investment......
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Apr 29, 2015 03:05pm
So what is the rate of return on this investment?
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Apr 29, 2015 03:11pm
Great investment but is there anything for Karachi???
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Apr 29, 2015 03:18pm
You can call it what you want, the whole world knows the truth.
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Apr 29, 2015 03:21pm
@DawnAdmirer Please speak with PPP or MQM they have been leading Sindh for years but done nothing for it.
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Apr 29, 2015 03:28pm
@DawnAdmirer PPP don't want interests of current government in Karachi otherwise PPP will lose the voters and I believe this is the deal between N & A.
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Apr 29, 2015 03:34pm
If it is investment, China must be looking to make it at least 60 B USD from 45 B USD, then what will be there for entire country ?
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Apr 29, 2015 03:40pm
"Chinese investment neither loan nor grant: Nawaz Sharif:"
That's correct. Chinese investment is for the future of China.
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Apr 29, 2015 03:47pm
The ceded port Gwadar will only benefit the Chinese. Like Hongkong the entry will be restricted and conrtoled.
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Apr 29, 2015 03:54pm
The Chinese are clever in business. They are hugely benefited by it - transit route for their exports and imports.
But god save that they don't gobble up the whole country.
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Apr 29, 2015 03:57pm
So what are the benefits to China as investor and to Pakistan as facilitator? Not in generalities but in soecific terms.
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Apr 29, 2015 03:59pm
Chinese co.s will be given loans by Chinese Banks of a RoR of 18% tied against USD (not PKR). This RoR is tied to sovereign guarantee. Against PKR this would easily cross 30-35% against due to downward FX pressure. Plus, there is no competitive bidding so equipment could come at highly inflated costs (Railway Engines from China are example in case). None of the Chinese companies could be taken to court. The Chinese has enough screws to tighten (have tootie in hand) by route of defense equipment to impress upon what they want. Time would tell whether this is a win or a sell-out. This is definitely not like the US aid that had almost no condition attached and little leverage!
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Apr 29, 2015 04:08pm
Neither Loan nor a Grant, just a windfall for some!
Destroying environment by investing in Coal plants in the age of clean energy.
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Apr 29, 2015 04:11pm
Chinese relationship with Pakistan is simple and uncomplicated. Sell and buy stuff at rates decided entirely by the Chinese. Any shortage or interruption to their revenues and incomes will be additional burden on the people of Pakistan. The leaders meanwhile make few millions on the side for the selves.
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Apr 29, 2015 04:12pm
Then it's aid?
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Apr 29, 2015 04:34pm
@Sadhu Rate of return on investment means in return China would have access in Arabian sea, short route for business. It will benefit to entire region not only Pakistan & China but Afghanistan, CIS and India also.
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Apr 29, 2015 04:35pm
How does one "invest" in a road - where is the profit? Further - if China invest in a power plant then what rate will they charge for the power and since that rate has to be approved by the govt why isn't the govt disclosing the deal? Why all the secrecy?
The govt has terrible reputation for not being forthright on it's dealings and China investment is following the same pattern as the LNG debacle - little information and disingenuous statements.
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Apr 29, 2015 04:37pm
Did he talk about two suspected murderers of Imran Farooqi in UK?
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Apr 29, 2015 04:55pm
No complaints for a change thank you very much Pakistan would be agreat economy soon the only comparable economy would be Turkey
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Apr 29, 2015 05:02pm
If neither loan or grant, then why can't Pakistanis do the job themselves? Clearly the middle man is required for accepting and distributing the "gifts".
Pakistan has got the technical expertise.
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Apr 29, 2015 05:15pm
@DawnAdmirer Quetta is also excluded. So is Peshawar. So are many other cities.
Whatever benefit is coming, in the end, is coming to Pakistan. Pakistan belongs to every Pakistani - even Karachites.
So no, Karachi is not being neglected.
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Apr 29, 2015 05:19pm
is not a loan or grant!!!! what is it !!!! i did not hear it !!!investment... so in other words, we provide our land our resources and the property remains in the hand of china...They take the profit ...what is in it for us. We know that NS is not a statesman but he is not a good business either...Some thing is not right... we need to explore this investment agreement... it should be made public... the general public should know about this venture...something is washy washy...
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Apr 29, 2015 05:44pm
@Sadhu
"So what is the rate of return on this investment?"
18% with Sovereign guarantee. That is Pakistan will pay minimum 18% profit for the Chinese companies.
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Apr 29, 2015 05:49pm
There have to be Detailed Project Reports (DPR's) somewhere which justifies these investments.. the DPR's will detail out the source, rate and tenure of returns planned on the "investment projects" to China...The values obviously make a lot of sense to China who must also be satisfied by the safeguards Pakistan Govt will provide them against all kinds of risk.. technical, commercial, logistical and last but not the least "collection and repatriation"
Someone in Pakistan must know the revenue details (which is basically what Pakistan will pay back to China for these investments) and also the cost that Pakistan will additionally pay for providing the above safeguards.
And the last part would be to quantify the "tangible Benefits" Pakistan would derive from these Investments..
If the numbers "Add up" well... kudos to your NS Govt. for making this happen.. and if "Does not".. the story would be clear.
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Apr 29, 2015 05:51pm
@Tahir A Your suggestion is good as Pakistan has all the expertise for development of road network than why Pakistan not do by themselves. Dear, since this is matter of "investment i.e., money" Pakistan cannot do it presently. The idea for this road was floated many years before but neither Pakistan nor China had money for heavy investment. Now China has huge reserve they can do such investment for their future business.
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Apr 29, 2015 05:53pm
Looks like we just sold Pakistan down the river!
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Apr 29, 2015 05:59pm
@khanm Major amount of investment would be used on Energy for people of Pakistan. Road can be used by any one after payment of Toll Tax which means benefit to Pakistan, China and other countries in the region.
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Apr 29, 2015 06:16pm
I wonder why people are confused; the investment s will belong to China, and that includes the infrastructure investment s, plants and whateve . As owners, they expect to mskr a profit and Pakistan will pay for using tje highways and other goods and services provided by the monopoly provided by a foreign Capitalist who would get State protection and privileges that no local investor can even dream of. Colonialism comes to mind, a nee avatar of yhe East India Company building Railways and bridges in yhe Subcontinent -all investments, with the locals having np voice in the manner these facilitirs are built and run besides what happens to yhe profits. GOOD DEAL FOR THE INVESTORS INDEED. NOT A GRANT AND NOT AN AID INDEED?
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Apr 29, 2015 06:20pm
Zia also said similar things when Americans started sending arms, money to Pakistan. Musharraf did the same. Miya Nawaz, they are investing billions for their trade. How that is going to bring help us? Are we again getting into security trap? securing such a countrywide corridor is not easy under the security situation we are subjected to. We are still struggling about Iran gas pipeline. After 15 years Gwadaar is still a dud.
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Apr 29, 2015 06:22pm
@woody profits come from tolls collected from the users or theroad.Simple - we know who will use the highways - it won't be the Indians!
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Apr 29, 2015 06:37pm
how come the investment plan has been approved by the government without discussing in the NA, and not disclosing the terms and conditions of investment to the country and citizens who are supposed to repay the chinese ? What is going on ? This seems to be a business deal between NS and China and not Pak and China. Lay clear the terms of the deal. It is not small amount.
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Apr 29, 2015 06:52pm
@woody The typical route for recouping investment in road construction is levying tolls. But in this case, the roads and other infrastructure will pay for themselves as far as China is concerned (much shorter transit routes, and not vulnerable to a blockade by India unlike the Malacca Strait).
But the picture is not so clear with regard to the power projects. One figure I came across (I think it was in WSJ) is USD 33 billion for the power projects with a total capacity of 16.5GW. Even disregarding the required equity investment from Pakistani companies, that amounts to about USD 2 billion per GW. Coal plants typically cost about USD 1 billion per GW of capacity, so this figure is highly inflated. In order to recoup their investment, these plants will have to sell power at exorbitant prices. The government needs make the details of the PPAs public.
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Apr 29, 2015 07:07pm
@riaz
Do you know sea travel cost only one-sixth than road transport. Most of the Chinese facilities are in east .It makes no sense at all to transport it more than 4000 km via a difficult terrain and then ship it.
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Apr 29, 2015 07:44pm
This is a project which is mainly in China's interest and hence Mr. Sharif is correct that this will be an investment and not a loan. The problem will be that China will push for expedient implementation but Pakistan will be governed by internal processes and ground realities. Hence, we should expect some irritants. But, China should be supported in this venture because a prosperous China will help the whole region
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Apr 29, 2015 07:58pm
@Mohammad Saleemn . So what do you suggest, we should not develop the Gawadar port because India is building a port in Iran?
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Apr 29, 2015 08:25pm
pak should charge the transit fee but miss the golden chance in MOU.
realise later.
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Apr 29, 2015 08:43pm
@riaz
Dude! Chinese goods are already going up to Madrid by the overland route.
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Apr 29, 2015 08:43pm
@shamain why not Beijing?
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Apr 29, 2015 08:59pm
look, china investing in Pak not as a loan or grant? my dear friends, they intend to fire from your shoulder at your cost to others, including India, and country will be commanded from china, pak may have little benefit, but Later suffer similar to British era on sub continent, as you are a slave, please cautious.
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Apr 29, 2015 09:08pm
If it will benefit local Pakistani than it will really good. still Pakistan need to see Chinese intention behind this. Chinese always works on their interest. Currently poverty is increasing day by day in India and Pakistan. Both country are spending heavy amount in army and deals. Who's getting benefit from this. US,Russia, China and Europe. They are making us fool.
on the sake of Kashmir , Our own people are suffering . They are not even receiving basic needs.
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Apr 29, 2015 09:17pm
Please check with the Balochs before making tall claims about Gwadar!
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Apr 29, 2015 09:22pm
"Gwadar trade corridor" is nothing but a mirage to fool common Pakistanis. It will never be a reality.
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Apr 29, 2015 09:49pm
It is sad, that GOP does not do its homework. They are overjoyed that 46 Billions is being invested. Fine. They need to work out the income, that could be generated to repay the investment. Do not expect that Chinese companies would send their export goods by thousands of trucks to fill a ship at Gawadar port. It is too far a distance and just not feasible, besides high road transport cost. We have the example of ISB - Lahore/Faislabad motor, for the last 20 years, with hardly any traffic and most likely, not yet paid-off. Try to find out the reasons for the dismal utilization.
Same way, there is already a Gawadar port, which we have not been able to utilize. How do we expect pouring more money, will help utilization?
Solar power is another example. 1,000 MW is huge to repay, with those V. high agreed unit prices. That will be another circular debt, in the making. GOP, just can not afford to pay back on solar elect. power.
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Apr 29, 2015 10:01pm
Surprised by Pak readers comments. Few days back they were going gaga over the same investments. When Indian readers were highlighting the same things, they were accused of being jealous. Anyway, good if they woke to the realities. I fear the next generation of Pak will be burdened big time and cause more conflicts internally and especially to their neighbors.
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Apr 29, 2015 10:18pm
@riaz You said win win deal and than you went on explaining how China will benefit from its own investment. Can you please enlighten us so as to how Pakistan will be benefit or reap benefits?
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Apr 29, 2015 10:19pm
@DawnAdmirer Well, Karachi is not in Punjab. Period.
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Apr 29, 2015 10:22pm
@Blue Saffron Well, I would recommend you to read Ms. Shaneeza's comment on some other column, but on the same china Pakistan corridor, in Dawn. This will clearly clear your thoughts and give you right perspective of the investment and who will benefit how.
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Apr 29, 2015 10:31pm
Depends who provides the steel and cement for the corridor, seems like investment to sharif brothers only, not to the country. Whenever sharifs come in government they do these projects that involve cement and steel which they provide themselves. Yellow cabs went to their steel factories
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Apr 29, 2015 10:40pm
@ZAK So what does Pakistan get out of it?
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Apr 29, 2015 10:52pm
@shamain In how many years from now?
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Apr 29, 2015 10:59pm
@shamain
In 100 years. You won't see it. The Janitors have to clean up the Mess in Pakistan before construction of all that can begin. All those big hotels and skyscrapers and public parks will have Karachi for a neighbor.
The Chinese build state of the art hotels and skyscrapers. They designed and built the Shanghai tower - only Pakistan will have to protect them and their construction sites. The denizens of Karachi would steal all the building materials in one night.
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Apr 29, 2015 11:18pm
Ministries of Finance and Planning.... Please caculate China and Pakistan's IRR (Internal Rate of Return) for us based on a 20 year cash flow analysis.
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Apr 29, 2015 11:30pm
seeing is believing Pakistan would first have to take permission from the American to out allow the Chinese to invest so heavily in Pakistan
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Apr 29, 2015 11:41pm
Chinese will be employed and settled, very few benefits will come to Pakistan.
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Apr 29, 2015 11:48pm
@Sadhu : Its return will go to the Chines , whatever rate they decide.Pakistan is giving then land as East India Co. Now it is East Chinese CO in Pakistan.
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Apr 30, 2015 12:02am
@Mohammad Saleemn : Chabahar without an economic corridor to Central Asia through Afghanistan would be just a dead-horse.
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Apr 30, 2015 12:18am
Im little astonished by looking at the recent developments in Pakistan. Economic growth is good but not at the cost of a countries sovereignty. Chinese entered Pakistan with a clear strategy ,1) containing USA and India in Indian ocean waters. 2) Easy import of gulf oil via gwadhar port 3)make use of cheap Pakistan labour and use it as a production unit for domestic needs( as it is moving away from saving-investment model to consumerism driven economy due to increased incomes and labour charges domestically) 4)Dump Pakistan with its substandard goods(as it happened with India earlier) 5) use Pakistan as a gateway to reach other Asian nations.
My dear brothers its u, a common man going to get cheated by leasing away ur country.politicians are gonna make fortunes from this corridor. Chinese didn't do this with India bcoz we have strict land laws and other institutions governed by stringent laws which make them liable in case of damage or violation of domestic laws.Hope best 4 Pak .
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Apr 30, 2015 02:47am
Where will the water for Gwadar come from? It'll remain a small city for this reason. If the USA can't afford desalinization plants, I really doubt we can.
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Apr 30, 2015 02:48am
@DawnAdmirer
Sindh government couldn't attract the chinese. Why couldn't the PPP offer karachi as a better alternative to Gwadar? It would not have been hard, but the PPP is so incompetent that karachi was never even seriously considered.
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Apr 30, 2015 04:00am
From now cancel all the loan of IMF but Shareef gov will not do it.
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Apr 30, 2015 05:04am
The Chinese money is neither loan nor grant but investment.This categorization of investment is only for Chinese to benefit and not for
Pakistan.The only benefit accruing from this investment is some sort of employment for the people of Balochistan and for this benefit also,if any,the comments of Pakistanis hailing from different parts of Pakistan indicate thinking of selfishness for their own people and province and not for the country of Pakistan as a whole.This is not a good omen for the projects involved in the investment.God help people of Pakistan.
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Apr 30, 2015 05:51am
Yes it is not a loan or a grant, Chinese are investing in Pakistan for their own interests. They are building their naval base in Gwadar to monitor the Gateway to Asia. Also China will improve and expand Silk road to Gwadar for their trade and to have access to warm-water, deep-sea port.
I am wandering what is there for Pakistan.
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Apr 30, 2015 05:59am
I think its good for the region, presence of Chinese trade and infrastructure will enable China to influence both Pakistan and India to simmer down on fighting. It might not result in any golden Kashmir solution but there will be less (or may be no) violence.
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Apr 30, 2015 06:00am
In a democratic country any major agreement but
be presented in the Parliament for scrutiny and debate same can not be said for autocratic societies.
Prime Ministers come and go in a democratic society unless supported by the army.
I had thought that Pakistan had become an open government accountable to the peoples of Pakistan.
Where is the Opposition to the present Government in all this?
This is the difference between democratic states and Pakistan for there is no accountability to the people who have elected this or any government into power.
It same as the secret deal of Islamic Nuclear Bomb
between KSA and Pakistan.
I hope that some or a group be fearless and will ask the questions that will affect this deal for generations to come
regarding this deal.
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Apr 30, 2015 06:20am
Heard on TV. There are 2 corridors on paper. One is for public. The other is decent and the PML higher ups who are privy to the real corridor have started buying cheap land around it with this secret knowledge while general public unaware of this are buying the land along the fake corridor.
You can imagine who is going to be duped.
You
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Apr 30, 2015 06:24am
Pakistan has mortgaged its future generations.... any country could have invested at these attractive terms.leasing your country Land for 40 yrs is gross exploitation of your weaknesses. Friends give help ... friends dont exploit.
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Apr 30, 2015 06:55am
"The Chinese are clever in business. They are hugely benefited by it - transit route for their exports and imports.
But god save that they don't gobble up the whole country."
It's possible!
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Apr 30, 2015 05:34pm
@ravi China does not take land and is honourable unlike India that occupies Kashmir and always speaks with a fork tongue, the Chinese honour their agreements India does not and is in breach of international laws including UN resolutions !.
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Apr 30, 2015 05:37pm
@Harish Yes Chinese are clever and also very Honourable and Honour their agreements with friends.!
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