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CPEC enclaves

Updated Mar 09, 2017 08:00am

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A SMALL line in a news story a few days ago caught my eye. The setting was a hearing in the Senate Standing Committee on Planning and Development at which high officials from the Planning Commission were answering questions about the China-Pakistan Economic Corridor (CPEC). The line that caused me to do a double take was this one: “The committee was informed that only Chinese industrialists would be allowed to set up their industries in the proposed economic zones along the corridor.”

Surely this was a mistake, I thought, so I called some people, including members of the committee, to ask whether this had indeed been said. They confirmed that, yes, the officials from the Planning Commission had indeed said this.

So what’s going on? Under the CPEC umbrella, there are nine Special Economic Zones planned. One each in Punjab, Khyber Pakhtunkhwa, Balochistan and Islamabad, two in Sindh and one each in Fata, Azad Kashmir and Gilgit-Baltistan. Going by the CPEC website, work does not appear to have begun on any of them yet. The relative size of each is also not disclosed, nor are there any details about the special infrastructure requirements for each.

Editorial: CPEC transparency

The website claims that these are Chinese-financed projects, though it doesn’t tell us what the terms are, whether the financing is concessional or on commercial terms. We also don’t know how the energy and water requirements of these zones will be met. Will there be new transmission and distribution lines, grid stations for electricity, gas pipelines and compressors, water pipelines, and if so, where will the water be sourced from?

If gas will be supplied from the grid, what will be the merit order placement of these industries in the gas load curtailment plan? Or will they be required to import their own LNG, in which case what third-party access rules will apply for the transport of that gas from the regasification terminal to the economic zone?


What is the plan for these Special Economic Zones here in Pakistan? Will only the Chinese have access to them?


We know nothing about the security arrangements inside the zones, and if they are for Chinese investors only, then presumably a large number of Chinese personnel will be living in or near them. Will the CPEC security force be patrolling inside the zones, or will they only guard the perimeter, leaving patrolling and other routine policing functions to the provincial police forces?

We have some indication that industries set up in these zones will not be paying direct taxes. But will their imports be dutiable? If they procure from a local source, will they be liable to sales tax? Will taxes be applicable on the power and gas bills? And if they are going to be largely immune from local taxes, then will those Pakistani parties who procure their output have to pay a sales tax on the transaction?

Take the example of Habantota port in Sri Lanka. The Chinese built it, the Sri Lankans found they could not afford the repayment obligations, so they agreed to give the Chinese an equity stake and have them run the port. As an aside, the Chinese insisted on building a large industrial zone of around 15,000 acres (6070 hectares) next to the port for their investors and for housing their personnel. And then claims began to circulate in the Sri Lankan media, echoed by important lawmakers, that along with the land the government had also given policing powers to the Chinese government inside the housing colony, meaning a little Chinese enclave could now be built inside Sri Lanka that would effectively be a mini Chinese colony.

I have scoured the Sri Lankan media coverage of this affair that had led to large protests this January, and cannot find confirmation or any denial of the claim that a mini Chinese colony is being built in Habantota, so we have little more than the word of the protesters to go by for now.

But what is the plan for these Special Economic Zones here in Pakistan? And what is our contingency plan in the event the repayment obligations connected with all the investments coming under the CPEC umbrella prove too burdensome for the economy, like what happened with Sri Lanka? We know the Chinese are averse to rescheduling or forgiving debts owed by foreign governments and, in any case, it is a bad idea to take on debt with the intention of later asking for the repayments to be rescheduled.

In the event of difficulties in making repayment, one possibility is that Pakistan could be asked to grant land for Chinese investments and residential colonies, and delegate law enforcement and governance over these enclaves to federal or perhaps even Chinese authorities. In some measure, enclaves look like they are already planned if it is true that the Special Economic Zones, for which energy and water supplies will have to be supplied from Pakistani resources, will be open only to Chinese investors.

Perhaps it would be a better idea to allow access to investors of all types to these Special Economic Zones and, if that is not the case, the government should explain why they thought it was a good idea to sign agreements for special zones to which only Chinese investors will have access. How is this expected to help Pakistan?

Will our role be only to consume the output of these zones, or will these zones also create employment for Pakistanis, and contribute tax revenue to the exchequer, and foster backward and forward linkages to generate more investment?

It bothers me that something as large as this is being done with so little information known publicly. If it hadn’t been for this hearing at the Senate, we might never have known that the government has agreed to allow Special Economic Zones to which only one category of investor will be allowed in.

If there are perfectly reasonable answers to the questions asked here, it would be helpful for the Planning Commission to release them.

The writer is a member of staff.

khurram.husain@gmail.com

Twitter: @khurramhusain

Published in Dawn, March 9th, 2017

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The views expressed by this writer and commenters below do not necessarily reflect the views and policies of the Dawn Media Group.



Comments (105) Closed



mazhar memon Mar 09, 2017 02:46am

As this project is not making any economic or social sense only thing one can suspect is that there is some hidden deal involved, are our leaders paid under the table or will they get some projects in their cronies names? is another panama in making?

RAJAB SATHIO Mar 09, 2017 03:11am

“The committee was informed that only Chinese industrialists would be allowed to set up their industries in the proposed economic zones along the corridor.” It is true that all the details about CPEC are vague, even our economists are not clear about it. Either we are going to be Chinese colony or going to develop our economy, no body is sure about it. All the things can't be taken granted on mere hopes, facts and figures can only bring satisfaction on the issue.

Akil Akhtar Mar 09, 2017 03:37am

India and US are against the CPEC and we know why.......as usual our liberals are tripping over each other to keep them happy

Pakistan need to increase exports Mar 09, 2017 03:55am

What is so surprise about country specific economic zones? For example in Bangladesh there are Korean export processing zones where only Korean investors have established industries. These zones are fenced and guarded by private security guards. Of course they follow local law but police do not enter fair unless serious issue like murder or violence etc inside. There are some housing or apartment hotels, recreational clubs etc inside for mainly overseas management personnel. These zones are mainly for exports so they do not pay any local taxes for their inputs and outputs. If any products from these zones are used for local consumption then of course are taxed similar like imports from Korea. The main benefit of these zones beside export earnings are local employment, skill development, local infrastructure sometimes local raw materials as input if available but most of the cases all raw materials are also imported tax free.

Pakistan need to increase exports Mar 09, 2017 03:55am

For Pakistan case, If Chinese export processing zones are successful then surely other nations like Korean, Japanese etc will follow. There can be export processing zones also for Pakistani industrialist as well for near similar pattern. Main thing is Pakistan need to increase exports earning. Bangladesh was able to increase exports two fold with these initiatives and Pakistan lag behind.

Rahul Mar 09, 2017 05:03am

Chinese Debt Trap diplomacy is well known around the world. Chinese take advantage of naïve Governments who want to show a short term burst of development by lending money at usurious rates of interest for essentially white elephant projects. The Chinese will reveal what they are really after once the trap has been sprung.

ANALYST Mar 09, 2017 05:54am

One thing is sure. A BIG fat white elephant is in the making.

Another Hambantota.

Alba Mar 09, 2017 05:59am

The idea of special economic zones in Pakistan is the same idea as the special economic zones in China. Coordination without duplication of effort.

Vimal Mar 09, 2017 06:25am

Sad

Nasir H. Khan Mar 09, 2017 06:27am

Excellent article. Pakistan is heading towards disaster if CPEC agreements stay in a shroud of secrecy. We are lucky that we can learn from Sri Lanka's experience but that would happen only we had sincere leaders who are not willing to sell the country for their kickbacks. I suggest that people concerned read the book "Confessions of an Economic Hit Man" by John Perkins, which shows how nations were trapped into debt and then blackmailed.

Genuine question Mar 09, 2017 06:29am

How it is different from Hambantota??

sachin Mar 09, 2017 07:12am

Attracting FDI is a noble cause from an industrial development standpoint. The benefits are amazing and proven overtime. However just like in any other investment FDI too must be a portfolio. A portfolio creates diversity and healthy competition. From an investor standpoint of a host nation has limited avenues to source FDI then it lends it amazing negotiateing power. Investment scarce nations are deseperate to showcase some development and movement and h ence could end up signing clauses which lend an amazing political value. Industrial corridors are resource guzzlers and if supply chains are not designed right it can cause a severe mismatch in that specific region. Input prices shoot up benefiting owners but creates islands of inflation. On the availability side - the creation of Taj Mahal created a grain shortage in the production region as most of it was diverted to construction site. Rather than a big bang approach allow natural alignments of demand and supply to develop.

my Comments Mar 09, 2017 07:15am

Very pertinent questions raised by this knowledgeable author here. Naturally, if Chinese friends finance CPEC and benefit from it year after year, a common man in Pakistan is going to ask, Whats in it for me? Its better that 'terms of this deal be fully clarified, no assumptions and no ambiguity left to chance. Regardless which political party in power, terms and conditions for investment and right to use Pakistani territory must be fully documented to reflect a win-win situation between to friendly nations. Hope its not too late.

Kumar Mar 09, 2017 07:53am

How can Pakistani government or officials give so much to Chinese without worrying about local employment and tax revenue???

AHA Mar 09, 2017 08:35am

Why do we want burn our finger (not just once) to learn each and every lesson. Also can we know who in Pakistan have access to T&Cs of CPEC?

A Sharma Mar 09, 2017 08:48am

Honestly speaking , Chinese don't have a very good reputation as an investor. They swamp the host market with Chinese products and Chinese labours (e.g Africa ), exploit the very resources (host) at fullest. So clarity of t&c is not something, could be taken at granted.

A Mar 09, 2017 08:54am

Welcome to china's world....the iron brother

China is making fool out of innocent pakistanis. Pakistanis (like Indians) are emotional people...they believe in friendship...

but chinese, they are hardcore businessman...no emotions in business...

They are going to control every thing in pakistan in coming decades....

Pakistan might be called as greater china...

viv Mar 09, 2017 08:55am

@AHA it seems only four people in whole country know the terms and conditions of CPEC.Both Sharifs,planning minister and finance minister.

Khan RK Mar 09, 2017 09:04am

Dont worry, once complete CPEC will solve everything and Pakistan will be richest country with every country begging to join. the Ostrich leads a blissful life!

khaled Mar 09, 2017 09:16am

An eye opener.

Satyameva Jayate Mar 09, 2017 09:20am

"CPEC is a game changer." - Indeed. "Andher nagari Chopat raja'.

Ahsan Mar 09, 2017 09:19am

CPEC will be the spinal chord in reshaping the economic activities between the friendly nation of Pakistan and China. All aspects and strategies should be viewed for a long term prosperity.

vivid Mar 09, 2017 09:24am

Pakistan has no options but to submit on ever increasing Chinese demands. It is unfortunate that China is in no mood to give up its way of doing business despite its economy has already reached at a comfortable level.

talha tasadduq Mar 09, 2017 09:33am

Definitely a concern for every Pakistani highlighted in this article. I hope our government knows that sovereign nation defends their land and resources.

Zak Mar 09, 2017 09:39am

Who else will invest in any case..

Ahmad Mar 09, 2017 09:55am

A lot of question but no answers. The point of reading news is to gets answers and not to confuse oneself with questions only. Total lack of research.

salman Mar 09, 2017 10:12am

LOL this guy keep making anti CPEC topics. I remember I saw his article in 2015 dismissing any such investment by China under CPEC as hogwash but look what, CPEC is reality and being implemented at full pace.

Aaron Parayil Mar 09, 2017 10:21am

@Ahmad The point of journalism is to ask the right questions. Getting the answers is for the authorities. Do you think the Government will openly allow media persons to enter every area of CPEC and freely get all answers? Then your idea of journalism is very poor to say the least.

R.Kannan Mar 09, 2017 10:27am

The questions asked are spot on. In what way does Pakistan benefit from the CPEC? We have a lot of shrill noise but it would be useful if the questions are dealt with in a transparent manner.

mangoman Mar 09, 2017 10:29am

@Ahmad It's not lack of research, the information is simply not been released by the government. That's the problem. Try doing the research yourself and I guarantee, you will hit a brick wall, like everyone else who tried.

ashar Mar 09, 2017 10:34am

Perhaps it would be a better idea to allow access to investors of all types to these Special Economic Zones and, if that is not the case, the government should explain why they thought it was a good idea to sign agreements for special zones to which only Chinese investors will have access. How is this expected to help Pakistan? This was the way East India Company was formed and later converted into rulers of India.

SATT Mar 09, 2017 10:33am

Eat mangoes,don't count trees.If there won't be CPEC than what Pakistan would do,Pakistan has no option.

R.s. Menon Mar 09, 2017 10:38am

@KHAN RK

The Reliance Industries alone have invested about 35 Billion USD in Gujarat during the last 10 years. There are other big Corporates and MNCs who have also invested huge sums in Gujarat. Still Gujarat has not turned out to be the richest state in India. Can an investment of 54 Billion USD in Pak can make the country richest in the world.

R.S. Menon, Bangalore

Vikram Mar 09, 2017 10:40am

Typical Chinese model. I have travelled across Africa and found similarities to above story, when Chinese came they will show huge investment or purchase, second day they will ask host government to award all construction contract to Chinese company & day 3 they will ask to amend laws to accommodate chinese nationals. Well at the end of 4-5 years, you will have good roads, buildings, ports but no employment for locals. Governments of the day tom-toming these investment numbers will disappear and forgotten.

bAlwantsinh rathod Mar 09, 2017 10:47am

no one give free only mother-father give you free. loan is not concessional pure business Pakistan people pay cost enemy relation with India. search India tack loan how much percent India pay and how much Pakistan pay

Oracal Mar 09, 2017 11:01am

Well come to the Chinese Mahajandari system. I see that new projects given to Chinese engineering to build huge hydro electric projects on Indus. Is it for the people or is it to supply cheap subsidized electricity to the to the Chinese to build more widgets with the cheap Pakistani laborers while the Chinese labor is getting expensive. Also the Chinese want to produce knowledge based items in their country but keep on producing the widgets else where at huge profits for market in countries of Africa.

Humsafar Mar 09, 2017 11:02am

@salman wanted to buy share of CPEC if it enlisted with stock exchange in near future as every 100 buck invest on CPEC would be treated as a loan and would be repay by the Pakistan govt along with interest to Chinese banks that's too on higher interest rate. And icing on the cake is that every year 20% of the invested money would be paid by as a profit to China by Pak govt as a guaranty profit and that's too in American dollar. For a investor CPEC is a golden opportunity

Zia Mar 09, 2017 11:08am

@viv how do they know? They dont even know chinese language, they kept on agreeing on everything and imagining their foreign accounts being blotted. "Those who do not remembee their history are condemned to repeat it."

Imran Ali Mar 09, 2017 11:30am

An incorrect article. Gwadar Special Economic Zone is open for Pakistani Companies. A Pakistani firm has installed a E Car assembly plant. Gwadar locals have got jobs. security is extremely effective. Chinese are very cooperative. The whole scenario is so promising.

SAM Mar 09, 2017 11:34am

To all my Indian friends it is too late now CPEC is here to stay and Pakistan and China are all geared up to crate a Union which the world have never seen more powerful then NATO and EU. The only thing now left for India is to do some soul searching and ask themselves the big question that if you cant beat CPEC then join them.

GK Mar 09, 2017 11:41am

I have not come across any analysis on how it can/will change the picture after few other countries join CPEC. Will it not be in favour of Pakistan ?

Nine SEZ planned will also attract investment / collaboration from far off countries. .And how can one.....rather why in the first place, compare Pakistan's CPEC project with Habantota port in Sri Lanka or India & Iran joint venture. CPEC is a composite project covering many things and large stretch and reach.

Some analysis from a wider angle ......not just confining to servicing of debts, and benefits to China although it cannot be ignored.There are others who are of the extreme view/opinion that entire CPEC is to serve China's Military interest & ambitions.

Just Me Mar 09, 2017 11:41am

Is there a problem ? Even if the Chinese investors hire only Chinese workers, they are bound to get some services and raw material from Pakistanis and the land and use roads and pay road tax, which would also be used by cattle class. If they don't come, all this land would go underutilised as of now. Policing and enforcing law and order in the Chinese enclaves ? You tell me, how secure is the Pakistan, being policed by the locals, and for the simpleton foreigners, people with the invitation to come and mug them written all over their faces, who will protect them ?

cameran Mar 09, 2017 11:43am

i was thinking that it will be a 'Tit for Tat' but it is not.chines are making their foot strong in our country,they came inGB the naive Highlanders treated them well but their response is clumsy. They works in their fixed narrative

AhMAd Mar 09, 2017 11:58am

@Imran Ali Keep saying that to yourself. Because what you are saying is no where can be find. Author is talking about SEZ which are yet to be completed but you are talking about something else.

PAKISTAN NEED TO INCREASE EXPORTS Mar 09, 2017 12:10pm

What is so surprise about country specific economic zone. For example in Bangladesh there are Korean export processing zone working for last decade. These are high fenced, secure area with good utilities service for gas, electricity, water etc. They do not pay any local tax for their input or output as they are mainly for exports. There is no provision to sell products from these zones to local market and if any they treated as import from Korea.Those areas have some residential facilities or apartment hotel as well as recreational clubs etc for management personnel. They also have private security guard though manned by locals and follow local laws but police do not enter faire unless some serious issues. The main advantage of special economics zones are local employment, technology transfer and skill development as well local raw material as input if suitable. Through these export processing zone Bangladesh was able to double their yearly export.

Ali Vazir - Congo Mar 09, 2017 12:15pm

Excellent article. Clearly shows the lack of transparency and definitely lack of honesty in this and all such dealings. When a team is led by individual loathed with corruption and dishonesty, what else can one expect. However, our responsibility increases many fold to keep a close eye and keep demanding answers.

citizen Mar 09, 2017 12:21pm

@Akil Akhtar : Dont worry..Once CPEC rolls out, both US and India has to beg us for investment and loans. CPEC is a game changer and thrust us in to the club of richest nations in the planet...Wait, bro..

iaj Mar 09, 2017 12:30pm

It seems after years of sitting in America's lap and doing its bidding Pakistan is now planning to do the same with respect to China.For once I hope leaders of Pakistan would think of Pakistan first.When they do that a lot of things will become clear.

Random Mar 09, 2017 12:32pm

Special Economic Zones are tax free. Chinese investing in undervalued economy of Pakistan will reap a tax free golden harvest when Pakistan's economy becomes full valued.

PAKISTAN NEED TO INCREASE EXPORTS Mar 09, 2017 12:30pm

@ How it is different from Hambantota?? Current state of Gwadar port is similar to Hambantota, it was completed near 10 years ago but no activities. Because there are not enough export volume as well as no convenient transport connectivity with rest of the country. Though Gwadar port was constructed with $25o million with chinese concessional loan and no major impact on Pakistan government finance. The recent investment in power generation along with with Gwadar port, CPEC and Export processing zones will compliment the full eco system and has much greater chance to success.

Zakfan Mar 09, 2017 01:04pm

My dear Pakistani friends seem to turn a blind eye to the effects of CPEC just because India and USA are against it. Their reasoning is that it should be good for Pak if India and USA are against. If you set aside this ingrained prejudice for a while and ask what are you getting out of this? The answer could be shocking...Practically nothing beneficial but a huge debt burden. Best of luck.

Qasim Mar 09, 2017 01:42pm

@Pakistan need to increase exports .agreed with ur view. However why we are not providing all these facilities to local investores.Why Govt put hurdles for local and give more tax relief to foreign investments .

Pluralist Mar 09, 2017 01:58pm

I think there is need to start writing positive things about the CPEC, as with every negative reporting Pakistan and China is redoubling their efforts and going full throttle to complete CPEC related products...ironic isn't it.

So writing positively about CPEC might makes it happen...CPEC might be looked as not that promising...but comes with lot of caveats.

So what do we do...to be or not to be is the question.

AN Mar 09, 2017 02:14pm

@Akil Akhtar It would be so much nicer had you countered facts with facts rather than impute motives to a respected writer and analyst. Please desist from slander and enlighten us if you have facts. Thank you.

Raja Mar 09, 2017 02:33pm

@Zakfan. But India and US are not against it..this is a common misconception. India is opposed due its route over disputed land and Chinese navy presence in Gulf. Otherwise in the bigger scheme of things this is too small for themto be worried. Whatever progress and development this may bring is good for thewhole region. Increased Chinese interests will also bring about peace.

Maxx Mar 09, 2017 02:57pm

@Zakfan How much do you know about CPEC related projects. Most of the investment/funding is in the power sector with almost 38 billion USD of 52 billion USD projected capital, and they are vital and important as Pakistan is facing acute power shortages...so benefits are huge. Projects can be Google searched. It excludes the 10 billion USD 2x1100 MW nuclear power plants on fast track construction.

Also there are EEZ or exclusive economic zones all over the 3000 KM long corridor whose benefits cannot be over emphasized.

Then there is Gwadar port related development, many economic zones around it, new airport construction. The actual investment after the infra is completed will be in excess of 150-200 billion USD. Also Pakistan has long term strategic partnership with China in defence related production.

https://tribune.com.pk/story/1181580/megaproject-cpec-set-attract-150b-investment/

Silvester Mar 09, 2017 03:44pm

@Pakistan need to increase exports Really good one.

Tanveer Mar 09, 2017 03:58pm

@Akil Akhtar Discuss the merits/demerits of the argument. Don't fell prey to conspiracy theories. Liberals are far better Patriots and sensible than the so-called defenders of Pakistan

DeepaK Mar 09, 2017 04:41pm

@Kumar - Because everybody thinks CPEC will solve all their problems.. It will definitely help in some way but China will make most of it.. and CHina will have more control on Pakistan... so all future decisions / Investment will be influenced by China

Pervez Mar 09, 2017 04:40pm

@Akil Akhtar - Do you have a logical point by point rebuttal to the author? Or you just love making wild acquisitions?

Pervez Mar 09, 2017 04:45pm

Every nation tries to protect its own home industry. Here we are giving concessions to foreign player to kill it completely. We are unique in the World. Even Sri Lankans and Bangladeshis have more sense than us.

common & immaterial Mar 09, 2017 04:59pm

@SAM Congrats with all your thoughts but can you tell me why India should join CPEC & what purpose will it serve? We've separate access's for both pakistan (wagha border) & china. Why take longer route? If you want us to put some industry over there then what is the incentive?

zeea Mar 09, 2017 05:03pm

this is a very problematic news for all of us pakistanis and somehow I feel betrayed by our authorities for not letting us know the truth. If this is going to happen then it means that our people are not going to get any employment in CPEC, we are going to share our resources with Chinese, without being paid a direct tax and there will be a residence area only for Chinese, where they will be able to make their own laws and maybe even widen their residual schemes without any check and balances. This needs to be seriously condemned

common & immaterial Mar 09, 2017 05:17pm

I think it's ok as long as local pakistani can get employment in these exclusive zones for chinese companies

UKumar Mar 09, 2017 05:20pm

@Pakistan need to increase exports Chinese and Koreans did not have exclusive zones when they were developing. Exclusive zones are like exclusive colonies that came about during nineteenth century. Sovereign countries must do careful cost benefit analyses of these projects.

UKumar Mar 09, 2017 05:24pm

@Raja Very well said.

Najam Mar 09, 2017 05:38pm

You are doing us huge favor by writing on statist policies.

jansher alam Mar 09, 2017 05:46pm

@RAJAB SATHIO Indeed let us hope that the information will be forthcoming. Perhaps we should ask Mr Ahsan Iqbal the Minister of Planning who has been projecting himself as the spokesperson for the Chinese project to kindly provide some details (if he has any).

salim Mar 09, 2017 06:25pm

@sachin You are right but then the politics starts: my area etc. This is the biggest issue

my Comments Mar 09, 2017 06:49pm

@RAJAB SATHIO Its all confusing and mixed up deal. If Chinese industries would be allowed along the CPEC route, why not Pakistani Industries? Would chinese industries be paying any taxes on their production a and what about the export tax or revenue earnings tax payable to Pakistan? Its better that all details be discussed and documented. Otherwise, if there is a change of political ruling party, there would be big argument between two friendly neighbours ending up in the supreme court. So, its better to protect the rights of the people of Pakistan, the real land owners of the Pakistani territory, not the investors.

Sameer Mar 09, 2017 06:57pm

The public was never met to brought on baord. Our corrupt rulers know exactly whats best for the country so we should turn a blind eye and stay silent to whatever attrocities await us.

BAXAR Mar 09, 2017 07:27pm

@my Comments "So, its better to protect the rights of the people of Pakistan, the real land owners of the Pakistani territory, not the investors."It the job of your elected representatives to protect the rights of the people, not the investor's. have you elected them accordingly? If you don't care while electing them, why should the investors care?

BAXAR Mar 09, 2017 07:33pm

@DeepaK "Because everybody thinks CPEC will solve all their problems." CPEC is the manifestation of the Chinese positioning in the changing world, so it is for their benefit. Nobody is stopping anyone to devise their own project. Get a project of your own, and present it to the world, whether CPEC solves any problem or not.

Vijay B. Mar 09, 2017 07:36pm

@Oracal "It has been said that a smart man learns from other people's mistakes. Sri Lanka's port in Hambantota, built with Chinese money turned out to be an economic disaster. Sri Lanka's inability to repay the debt payments led to it ceding a big chunk of land to China to build an exclusive Chinese industrial zone over there. China got an economic and military foothold in Sri Lanka at Sri Lanka's expense. China couldn't have asked for a better deal. China discovered a great formula for extending its influence over other countries, at that countries expense, and decided to implement it on a much grander scale in Pakistan. That was the birth of your CPEC. There is very little in it for Pakistan and a lot for China.They will build a transportation system that they need badly and you will pay for it with high interest rates. They will build power plants at your expense and then use that power to run their exclusive industries on your soil. And if you default they will usurp your land.

PAKISTAN NEED TO INCREASE EXPORTS Mar 09, 2017 07:40pm

There are many misconceptions about chinese projects in Pakistan...As usual people without information indulge in conspiracy theories. Watch this video to get some info about chine projects in Pakistan: https://www.youtube.com/watch?v=VpVNaFUpuPA

shafique ur rehman Mar 09, 2017 07:40pm

very nice and valid question rasied by sir,,,,,,,,,,,,,,,,,,,,,,and we do not know who are the planners and what kind of planning is being made by our country think tanker to tackle all the concerns of public

Shail Sapra Mar 09, 2017 07:47pm

How exactly is this different from what the British did in India of keeping excess profits for themselves?

Anbu Mar 09, 2017 07:51pm

China's neo-colonialism has begun! Wake-up and act, before it reaches an irreversible state

Umair Hasan Mar 09, 2017 08:48pm

It's funny to see comments from nationalists when they themselves protested and created a controversy that they are not getting anything.They fought very hard so that these economic zones are included in their provinces as well. Now their oppostion is quite hypocritical.

Vijay B. Mar 09, 2017 08:53pm

Referring to Hambantota port in Sri Lanka built with Chinese money : Colombo had hoped to raise about a billion dollars from the deal to repay the money China lent it to build the $1.4-billion harbour. The port, built during the former president Mahinda Rajapakse, has become a white elephant with revenues insufficient even to pay salaries of staff.

72v Mar 09, 2017 10:26pm

Very well researched article sir. Wish you are safe

mad mamluk Mar 09, 2017 10:36pm

@A Sharma nothing of this will happen..this has been refuted numerous times by ahsan iqbal.

LAHORI KID Mar 09, 2017 11:09pm

I have said it several times, this CPEC may look great on paper or when you hear about it, but there is something very scary about the whole thing, and my main point has been, the Chinese aren't investing $50 BILLION here because they love us, its in their best interest to invest, they will get unbelievable return on their investments while Pakistan will get a little "choonga" Surly our leaders have given up serious tax revenue in return, given up rights and power to the Chinese and Chinese firms in return. If this is a win win for both China and Pakistan than I'm all for it, but I doubt very seriously that is the case.

Pakistan need to increase exports Mar 10, 2017 12:42am

@Vijay B. Referring to Hambantota port in Sri Lanka built with Chinese money

Hambontota is just a port and Srilanka is a small economy not much export volume, so it was not sustainable. Though Chinese had proposed export processing zone there earlier but government changed before those plan realized. Gawader is in similar situation till now without much activities. But with CPEC and connectivity with central Asian counties and China as well as investment in infrastructure, power and special economics zone it is different ball game. Only worry is if government is stable and committed to this vision then success will come.

IMTIAZ ALI KHAN Mar 10, 2017 03:31am

CPEC is good in the longer run it will be good for both countries. China knows very well how much Pakistanis like China, I don't think they want to give up this immense popularity for few billion dollars. Last I checked they amassed over trillion of dollars in sovereign funds. Long live Sino-Pak relations, time tested friendship higher than our Sacred Himalayas itself.

Vijay B. Mar 10, 2017 03:50am

@Pluralist The Chinese and their Pakistani co-conspirators are like home burglars. The reason they keep expediting CPEC and related projects as more and more people have started questioning the viability, the modus operandi, and the stone walling being applied, being "Let us steal all we can before the homeowners wake up.".

KP Mar 10, 2017 04:00am

@Akil Akhtar Even if what u are assuming is true, want u need to know the facts regarding such huge projects? Or, would u let your hatred guide your economic decisions!

Pakistan need to increase exports Mar 10, 2017 04:07am

@UKumar Chinese and Koreans did not have exclusive zones when they were developing.

I have to say that you are not very familiar with history of China and Korea development. China started developing its economy during 80s by establishing free trade zone and special economic zones in east coast near Hongkong and welcoming foreign investments. These zones had different rules and regulation than rest of the country. Korea used the same model using American and Japanese investments. Please get familiar with South East Asian economics you may learn some.

KP Mar 10, 2017 04:06am

@Pervez U mean wild accusations!

Desi lad Mar 10, 2017 05:50am

Imagine a 'tax-free' SEZ factory with foreign workers and a 'local' factory. Both can produce 10 Pens for 1 Rupee.

Local factory pays - sales tax, company tax etc. 5 Pens now take 1 Rupee to manufacture.

SEZ factory decides to export pens to local market, but instead of paying taxes, it buys out corrupt officials, under-reports manufacturing, and floods market with 8 Pens for 1 Rupee.

Who will buy pens from local factory?

Now expand this to everything that can be manufactured in the tax-free zone.

If smuggling exists now, If corrupt officials exist now, If smuggled products are sold in the markets now, is everyone putting their bets on a corruption free officialdom when these factories go live.

Mohammad S. Khalid Mar 10, 2017 07:23am

At present India is trying its level best to isolate and devastate Pakistan. In such circumstances China is the only country daring to stand with Pakistan. USA, UK, France, Germany, Japan, Korea; all should com forward and establish their own Industrial zones. Every one is welcome. Even Pakistani industrialist should establish their own Industrial zones. Unfortunately, Pakistani Industrialists can not think beyond a sugar mill. In such scenario Chinese investment is a blessing. they will definitely involve local labor, local raw materials, and vendors. They will train the locals and transfer technology. gradually. At this stage, we should welcome Chinese with open heart and open arms. Otherwise, we will miss this opportunity also.

A.M. Khawar Mar 10, 2017 07:20am

The Senate Standing Committee on Planning and Development, at a senior level Senate hearing, about the China-Pakistan Economic Corridor (CPEC) made a very disturbing statement as follows: “The committee was informed that only Chinese industrialists would be allowed to set up their industries in the proposed economic zones along the corridor.” The article has raised a range of very pertinent questions about the proposed economic zones that cannot go unanswered even in a reasonably well functioning system of government. The author concludes the article with the following sentence: “If there are perfectly reasonable answers to the questions asked here, it would be helpful for the Planning Commission to release them.” The answers must be forthcoming soon. Undue secrecy is lethal for our young democracy. I hope the Dawn/media keeps the issue alive in the press until satisfactory answers from the government become available.

aga Khan Mar 10, 2017 09:23am

You are asking too many questions- what is your problem, Sir. We are happy with the BIG number of $64 Billions, the Chinese has told us that they will spend. Even if they make their own colonies, it should be OK. And we can also live peacefully, even if they eat pork - their main dish in their own houses. We can kick them out from our land any time, we will wish. Thus in a nut shell, do not ask so many questions and make us nervous and scared. Just keep talking about the big money and make us feel good.

Joe Mar 10, 2017 09:40am

However way one analyses CPEC, it is more of a strategic/security project for Pakistan while China benefits both economically (selling Chinese goods, development of Chinese landlocked west) and strategically (access to warm waters/gulf). For Pakistan, this was an attractive way of hedging against any adventurism from India from a security standpoint. While there may be some development along the corridor, most benefits will go to Chinese firms.

The side benefit of CPEC may be more stability due to Chinese involvement. China wont allow Pakistan to play the good/bad terrorist game which will significantly enhance security and possible help growth. Also, since India is objecting CPEC as it goes through territory claimed by India, China may nudge Pak to resolve Kashmir issue - likely accepting status quo which may in turn benefit both Pak and India. Assuming China plays its cards right, the effect of CPEC is going to be stabilizing the region and thereby fueling growth.

kevin Mar 10, 2017 11:22am

@Pervez Of course Bangladesh is far far better than Pakistan. Their economy is growing fast and their export is USD40 B.

KSU Mar 10, 2017 11:43am

@Imran Ali, just read this article. You will have better idea: http://herald.dawn.com/news/1153685/cpec-hopes-and-fears-as-china-comes-to-gwadar

SID Mar 10, 2017 12:45pm

@Pakistan need to increase exports : How can you increase export when Chinese will get special tax benefit using Pakistan own land ? Do you think Pakistan domestic player can compete with Chinese manufacturing giant who will enjoy tax benefit ?? Or just collecting toll tax, Pakistan will be trillion dollar economy .

SID Mar 10, 2017 12:47pm

@Pakistan need to increase exports : Korean export zone in Bangladesg still under construction for last 17 years without any significant progress.

Vijay B. Mar 10, 2017 02:29pm

@A.M. Khawar Just wait and see. When they finally pull the cat out of the bag, if they do at all, everyone will be horrified and flabbergasted. Were that not the case, why all the secrecy? Because they have a lot to hide?

Abdul rahman Mar 11, 2017 02:24am

can we are in that in condition to ask to our inept politicians or leaders to clear it out cpec transparacy and how much we take advantage from it and how much china and one think i know we are owing them...

deva Mar 11, 2017 05:03am

@Akil Akhtar answer the questions raised by liberals and go transparent.

Mehran Mar 11, 2017 06:05pm

Don't you worry, all will be good for the people of pakistan. It is a match made in heaven!! Enjoy... CPEC will make pakistan the strongest country in the world... So much so that world will come and invest in pakistan!

Hassan N Ansari Mar 11, 2017 08:36pm

Dear Mr Khurram Husain - Good evening! The information you have is incorrect; at best incomplete. You may like to please contact us at KP Economic Zones Development and Management Co. if you need accurate and up to date information on SEZs and EZs under CPEC or otherwise. - Warm regards, Hassan N Ansari, Chief Strategy & Business Planning, KPEZDMC.

Imran Ahmed Mar 12, 2017 03:08pm

"If it hadn’t been for this hearing at the Senate, we might never have known that the government has agreed to allow Special Economic Zones to which only one category of investor will be allowed in." Should plans for the CPEC enclaves not be minutely examined and debated by the public, the press and all our parliaments affected by them, or are our concerns again to be bulldozed by our rulers? I actually think the author is wrong in that these Special Economic Zones are to be open to other investors. If you have 50 acres of land you can get it declared a special economic zone. No custom duty sales tax on imported machinery and a ten year income tax holiday. Perhaps our Pakistani legislators are not too free with sharing such information with the public because of vested interests.

Imran Ahmed Mar 12, 2017 06:44pm

@Hassan N Ansari Please correct the confusion in the minds of us the confused electorate. Are there some enclaves reserved for the Chinese? Some others for Turks? Are there some open to other nationalities and to Pakistanis? What is the expected effect on Pakistan's balance of trade?