This article is actually compiled and somewhat recollected in my own style. Second portion is completely mine.
- China has made commitments to provide around $46 billion in development deals, which is equivalent to roughly 20 per cent of Pakistan’s annual GDP
- In total, the economic corridor project aims to add some 17,000 megawatts of electricity generation at a cost of around $34 billion.
- The economic corridor will shorten the route for China’s energy imports from the Middle East by about 12,000 kms as well as link China’s underdeveloped far western region to Pakistan’s Gwadar deep sea port on the Arabian Sea via Kashmir through a massive and complex network of roads, railways, business zones, energy schemes and pipelines.
- Some $15.5bn worth of coal, wind, solar and hydro energy projects will come online by 2017 and add 10,400 megawatts of energy to Pakistan’s national grid.
- A $44m optical fibre cable between the two countries is also due to be built.
- Every day, China spends around $18 million on import of 6.3 million barrels of oil as shipment costs from the Middle East, accounting for 80% of its all oil needs, routing through the Strait of Malacca covering a distance of 9,912 miles. By cutting a corridor directly from Kashgar to Gwadar, it will bring these costs significantly down to one third of the current levels as new distance will be 3,626 miles to Central China, whereas only 2,295 miles till West China.
- Even if China were to use PCEC only for 50% of its current level of oil supplies, it will save around $6 million every day, almost $2 billion every year
- In all likelihood, the $11-billion amount for infrastructure purposes is a Chinese loan whereas the $35 billion investment for the power sector is yet to be converted into a concrete term sheet.
- Consider this example. According to the Ministry of Finance, the
- Executive Committee of National Economic Council, in 2014, approved Karachi- Multan-Lahore Motorway Project – construction of Sukkur-Multan section (387 kilometres) –with a rationalised cost of Rs259.353 billion or $2.59 billion.
- Ten per cent cost of the project will come from the Public Sector Development Programme and 90% of the cost as credit financing through the government of China. This will be part of PCEC.
- In the form of PCEC, Pakistan will acquire a new asset in terms of infrastructure. However, it has to first mobilise its own industry and trade sectors to make the best use of the corridor. Else, it will be a road and pipeline largely meant for Chinese business –on Pakistan’s taxpayers’ cost –and now protected by the Pakistan Army on our cost.
- The proposed trade route of China-Pakistan economic corridor will reduce distance between China (more specifically Kashghar in Xinjiang Province, 4,376km away from Beijing) and the Persian Gulf to 2,500 km as opposed to the existing distance of
- 13,000 km from Beijing to the Persian Gulf and reduce shipping time from 45 days to 10 days.
Points of Concern
This is the overall briefing of CPEC. It’s actually CHINA Economic Corridor in Pakistan CEC-P. Because by completing this corridor China is going to get a forever personalise corridor while Pakistan has begged the solution of its biggest problem. If we look at it from close economic, strategic, and geographical view; this project is 70% beneficial for China and 30% beneficial for Pakistan.
- Small and middle level traders have no direct benefit from this CEC-P.
- There should have been Pak China Friendly Visa for traders and tourists.
- This CEC-P does not include anything regarding Education in Pakistan. If 10% of this CEC-P was allocated for education, we would have at least 5 international universities in Pakistan.
- Subsidy of this CEC-P should be given to students who go china to study, middle level business and traders who intend to visit china.
- Domestic Train Route from Pakistan to China, Universities, Scholarships, small business and middle level direct trade advantages should be included in this CEC-P
Abdul Ghani Shahzaib