$60B Pakistan-China CPEC Project Under Direct Threat

[nahtanbob]

No, I think you're making the classic mistake all readers make when viewing CPEC, they see it is as some monolithic megaproject or giant expressway from Gwadar to Khunjerab. It's not that at all, it's a big portfolio of investments, the impact spans many sectors, but most of them deal directly with the basic needs of Pakistanis, like mentioned a lot of the work is on infrastructure and energy production in the early harvest projects.

The financing aspect needs too be assessed to in order for you to get a better picture of China's motivations. If finances were China's primary motivations, they could easily have invested their cash elsewhere, at lower risk, and probably at better returns. Most of these CPEC projects have very low interest rates on sovereign guarantee, the rest is a mixture of still fairly cheap private debt or equity. And already they've shown willingness to restructure and help us with any debt burden issues without asking us to sign off any concessions. There's a lot of good will involved here from the Chinese side.

And besides just the money, there's a lot of political capital invested in CPEC from the Chinese side. Xi Jinping's legacy is heavily attached to BRI, the flagship project of which is CPEC. I see no reason to doubt the intentions of the Chinese, quite the opposite, we've only ever seen good will and reasons to be optimistic. So CPEC isn't a hegemonic project as you might think it is.

if finance is the primary motivation contracts would not signed in secrecy. Contracts would not be renegotiated.
Having said that the primary goal of CPEC and BRI projects are to deploy surplus Chinese finance, production capacity and labor. If CPEC is about economics Pakistan would see economic results by now. $60 billion is a lot of money for a puny economy like Pakistan

CPEC looks like a nice way to control Pakistan through debt

 

[Hakikat ve Hikmet]

Shouldn't India's primary concern be how to save her a$$ from China?!?! How can she even find time to talk about Pak???

What a strange land, Selucus...

 

[Pandora]

Son if some day you guys try to poach even a cm of Pakistani territory we will roast your balls and feed them to you as katakat Masal Dish. May be that way you will develop your brains that fell all the way down there. You guys might have a bigger military but remember this we developed our military solely to own your arse if you ever get out of line. Rest we will discuss when you Indians develop a third ball to give you courage to actually do something other than just talk.

 

[Dark1]

No, I think you're making the classic mistake all readers make when viewing CPEC, they see it is as some monolithic megaproject or giant expressway from Gwadar to Khunjerab. It's not that at all, it's a big portfolio of investments, the impact spans many sectors, but most of them deal directly with the basic needs of Pakistanis, like mentioned a lot of the work is on infrastructure and energy production in the early harvest projects.

The financing aspect needs too be assessed to in order for you to get a better picture of China's motivations. If finances were China's primary motivations, they could easily have invested their cash elsewhere, at lower risk, and probably at better returns. Most of these CPEC projects have very low interest rates on sovereign guarantee, the rest is a mixture of still fairly cheap private debt or equity. And already they've shown willingness to restructure and help us with any debt burden issues without asking us to sign off any concessions. There's a lot of good will involved here from the Chinese side.

And besides just the money, there's a lot of political capital invested in CPEC from the Chinese side. Xi Jinping's legacy is heavily attached to BRI, the flagship project of which is CPEC. I see no reason to doubt the intentions of the Chinese, quite the opposite, we've only ever seen good will and reasons to be optimistic. So CPEC isn't a hegemonic project as you might think it is.

In the next 3 months , xi will be replaced. Just bookmark this page . Under him China has become embroiled in too many controversies and the politburo does not like the attention straying so much from its core economic target.
The power projects under cpec are useful to Pakistan, i remember Pakistan had a horrible shortage of power generation a few years back. But other infrastructure projects like orange train, roads in uninhabited areas , should not have been under loans but BOT structures. Let the investor take the risk of his investment not the Pakistani people

 

[PAKISTANFOREVER]

if finance is the primary motivation contracts would not signed in secrecy. Contracts would not be renegotiated.
Having said that the primary goal of CPEC and BRI projects are to deploy surplus Chinese finance, production capacity and labor. If CPEC is about economics Pakistan would see economic results by now. $60 billion is a lot of money for a puny economy like Pakistan

CPEC looks like a nice way to control Pakistan through debt

Because indians like you have the best economy in the world where indians have the highest standard of living........

You indians know so much about CPEC because the Chinese had to brief and explain everything about it to india. That too after China had conquered & annexed over 38,000 square kms of indian territory........:

https://thekashmirwalla.com/2020/05...square-kilometres-to-china-in-a-month-report/

https://eurasiantimes.com/china-has...f-indian-land-in-ladakh-arunachal-india-govt/

 

[Jungibaaz]

if finance is the primary motivation contracts would not signed in secrecy. Contracts would not be renegotiated.
Having said that the primary goal of CPEC and BRI projects are to deploy surplus Chinese finance, production capacity and labor. If CPEC is about economics Pakistan would see economic results by now. $60 billion is a lot of money for a puny economy like Pakistan

CPEC looks like a nice way to control Pakistan through debt

I partially agree but you’re missing some details that is skewing your view in favour of the debt trap hypothesis.

Yes Chinese have huge surpluses and piles of cash. Yes, they need to invest it somewhere and are doing it in BRI, in Pakistan, in Africa, SL etc. But here’s something that might surprise you, for the equivalent termed UST, the yield on CPEC loans is considerably lower. The early harvest projects have a rate of 2%!!!

Let’s put that into perspective, SBP rates >10%, inflation >10%, the equivalent US treasury earns you more than CPEC loans and the treasury bill has no risk attached, whereas CPEC loans come with considerable risk. Also, Pakistan’s own T-bills and sukuks have ridiculously high yields. You tell me in what scenario is it possible for a country like Pakistan to finance key infrastructure projects with massive multipliers at such super cheap rates. That’s without even mentioning the Chinese willingness to restructure, ease debt burden, and their ability/willingness to write-off debts as shown in Africa.

So while this narrative is being peddled mostly in Indian circles, I completely reject the idea that CPEC is some Chinese debt trap. Quite the opposite, it’s a blessing.

In the next 3 months , xi will be replaced. Just bookmark this page . Under him China has become embroiled in too many controversies and the politburo does not like the attention straying so much from its core economic target.
The power projects under cpec are useful to Pakistan, i remember Pakistan had a horrible shortage of power generation a few years back. But other infrastructure projects like orange train, roads in uninhabited areas , should not have been under loans but BOT structures. Let the investor take the risk of his investment not the Pakistani people

Roads and infrastructure projects are just as important, they may seem unnecessary but they make a big difference. They massively boost economic and social mobility. And while they don’t generate immediate returns in comparison to the costs of these projects, over time they will more than pay for themselves, especially in a country like Pakistan that sees very little investment. Nobody’s arguing that a road is going to change our fortunes, but it’ll help grease the tracks and help us as we are going down that path. And as I’ve said before, the cost of these projects is very cheap, the debt burden is very exaggerated. Pakistan’s debt problem results from poor BoP and manifests itself in debt repayments made to multilateral lenders, not the Chinese.

 

[nahtanbob]

I partially agree but you’re missing some details that is skewing your view in favour of the debt trap hypothesis.

Yes Chinese have huge surpluses and piles of cash. Yes, they need to invest it somewhere and are doing it in BRI, in Pakistan, in Africa, SL etc. But here’s something that might surprise you, for the equivalent termed UST, the yield on CPEC loans is considerably lower. The early harvest projects have a rate of 2%!!!

Let’s put that into perspective, SBP rates >10%, inflation >10%, the equivalent US treasury earns you more than CPEC loans and the treasury bill has no risk attached, whereas CPEC loans come with considerable risk. Also, Pakistan’s own T-bills and sukuks have ridiculously high yields. You tell me in what scenario is it possible for a country like Pakistan to finance key infrastructure projects with massive multipliers at such super cheap rates. That’s without even mentioning the Chinese willingness to restructure, ease debt burden, and their ability/willingness to write-off debts as shown in Africa.

So while this narrative is being peddled mostly in Indian circles, I completely reject the idea that CPEC is some Chinese debt trap. Quite the opposite, it’s a blessing.

Chinese projects have not worked out in Sri Lanka, Maldives and Kenya.
The 30 year US Treasury rate is 1.45%. Having said that I won't complain about 2% interest rate.

 

[PAKISTANFOREVER]

Chinese projects have not worked out in Sri Lanka, Maldives and Kenya.
The 30 year US Treasury rate is 1.45%. Having said that I won't complain about 2% interest rate.

If what you say is true, could you post the evidence here?

 

[Dark1]

important, they may seem unnecessary but they make a big difference. They massively boost economic and social mobility. And while they don’t generate immediate returns in comparison to the costs of these projects, over time they will more than pay for themselves, especially in a country like Pakistan that sees very little investment. Nobody’s arguing that a road is going to change our fortunes, but it’ll help grease the tracks and help us as we are going down that path. And as I’ve said before, the cost of these projects is very cheap, the debt burden is very exaggerated. Pakistan’s debt problem results from poor BoP and manifests itself in debt repayments made to multilateral lenders, not the Chinese.

I am a project manager and how any project is started is through a capex , which includes -
1. User raises a capex for new infrastructure or equipment or facility
2. Expansion of present facility
3. Gives reasons why its required, like more present demand, load or future demand
4. Gives expenditure envisioned
5. Gives ROI and calculations , most important and if this cant be justified in a proper timeframe , no chance of the numbers men approving. Loss of interest on funds invested is covered.

Since this is a private sector process, it does not concern itself with strategic reasons for the investment only a profit loss statement.

When China invests in Pakistan through sovereign assured returns , its not doing you any favors. Its risk free for them. Its like gold nowadsys with interest rates in the west at zero. And the money invested here is money which is not being used elsewhere, but the loans with interests start being called in on a constant basis after a few years.

In India if you look for the ROI on our bullet train project, you wont find it. Its a vanity driven project, and i love trains , so its a big dilemma for me.
Infrastructure should be on the basis of Build operate transfer . Let the invester take the risk for a future demand project. Pakistan government should only invest , with its such limited resources, on immediate need projects, like i said electricity.

Google the wiki page of the sri lankan airport built for millions, exactly like this.
https://www.forbes.com/sites/wadesh...rt-sri-lankas-mattala-rajapaksa/#35a31f787cea

If you are filthy rich, no problem, but are you ?

 

[Gul_Khan_Peshawar]

I am a project manager and how any project is started is through a capex , which includes -
1. User raises a capex for new infrastructure or equipment or facility
2. Expansion of present facility
3. Gives reasons why its required, like more present demand, load or future demand
4. Gives expenditure envisioned
5. Gives ROI and calculations , most important and if this cant be justified in a proper timeframe , no chance of the numbers men approving. Loss of interest on funds invested is covered.

Since this is a private sector process, it does not concern itself with strategic reasons for the investment only a profit loss statement.

When China invests in Pakistan through sovereign assured returns , its not doing you any favors. Its risk free for them. Its like gold nowadsys with interest rates in the west at zero. And the money invested here is money which is not being used elsewhere, but the loans with interests start being called in on a constant basis after a few years.

In India if you look for the ROI on our bullet train project, you wont find it. Its a vanity driven project, and i love trains , so its a big dilemma for me.
Infrastructure should be on the basis of Build operate transfer . Let the invester take the risk for a future demand project. Pakistan government should only invest , with its such limited resources, on immediate need projects, like i said electricity.

Google the wiki page of the sri lankan airport built for millions, exactly like this.
https://www.forbes.com/sites/wadesh...rt-sri-lankas-mattala-rajapaksa/#35a31f787cea

If you are filthy rich, no problem, but are you ?

There is a reason why project managers are not given the task of strategic decision making, their job is to deliver the project in given resources.

Strategic decisions require much more than narrow vision of a project manager.

 

[nahtanbob]

I am a project manager and how any project is started is through a capex , which includes -
1. User raises a capex for new infrastructure or equipment or facility
2. Expansion of present facility
3. Gives reasons why its required, like more present demand, load or future demand
4. Gives expenditure envisioned
5. Gives ROI and calculations , most important and if this cant be justified in a proper timeframe , no chance of the numbers men approving. Loss of interest on funds invested is covered.

Since this is a private sector process, it does not concern itself with strategic reasons for the investment only a profit loss statement.

When China invests in Pakistan through sovereign assured returns , its not doing you any favors. Its risk free for them. Its like gold nowadsys with interest rates in the west at zero. And the money invested here is money which is not being used elsewhere, but the loans with interests start being called in on a constant basis after a few years.

In India if you look for the ROI on our bullet train project, you wont find it. Its a vanity driven project, and i love trains , so its a big dilemma for me.
Infrastructure should be on the basis of Build operate transfer . Let the invester take the risk for a future demand project. Pakistan government should only invest , with its such limited resources, on immediate need projects, like i said electricity.

Google the wiki page of the sri lankan airport built for millions, exactly like this.
https://www.forbes.com/sites/wadesh...rt-sri-lankas-mattala-rajapaksa/#35a31f787cea

If you are filthy rich, no problem, but are you ?

As long as Pakistanis are not paying out of their own pockets why do they care ?

 

[Dark1]

There is a reason why project managers are not given the task of strategic decision making, their job is to deliver the project in given resources.

Strategic decisions require much more than narrow vision of a project manager.

Read it again.
We just implement. We seldom internally raise a project need . Its the user who raises a request.
CPEC is a strategic requirement, but for China. Why is Pakistan assuring profit returns to the Chinese ? Let the Chinese invest and take the financial risk.

 

[vi-va]

Few weeks ago BJP India started the daydream drama of snatching GB and AJK from Pakistan. But it was interrupted when they wake up into reality as China occupied a small portion ( some say about 60 sqkm ) of land in Ladakh. Now India awakening to their worst nightmare of joint Pakistan-China two front war to recapture whole Jammu-Kashmir-Ladakh. Just think of the possibility if China-Pakistan do launch a coordinated war against India, upon success Pakistan will get the valley and China most part of Ladakh.

It's a nightmare of BJP if the joint Pakistan-China two front war happen, and it seems India didn't prepare for it, but over confident.
Modi did NOT think through, but too hurry to jump on the Americans boat to contain both Pakistan and China, so foolish.

If that joint two front war do happen, all Muslim land will go to Pakistan for sure. All land in the south of Himalayas will go to Pakistan for sure. It's against China's interest to take advantage. Chinese are no fools, we prefer a friendly Pakistan over land, while BJP prefer land over a friendly Pakistan and China. BJP and RSS are so blinded.

 

[Dark1]

As long as Pakistanis are not paying out of their own pockets why do they care ?

If its converted into aid then i have no case. But its its nearly all sovereign assured loans. The repayment will start in a few years. I dont have the repayment schedule.

 

[nahtanbob]

It's a nightmare of BJP if the joint Pakistan-China two front war happen, and it seems India didn't prepare for it, but over confident.
Modi did NOT think through, but too hurry to jump on the Americans boat to contain both Pakistan and China, so foolish.

If that joint two front war do happen, all Muslim land will go to Pakistan for sure. All land in the south of Himalayas will go to Pakistan for sure. It's against China's interest to take advantage. Chinese are no fools, we prefer a friendly Pakistan over land, while BJP prefer land over a friendly Pakistan and China. BJP and RSS are so blinded.

what makes you think USA will stay out of such a war ?

If its converted into aid then i have no case. But its its nearly all sovereign assured loans. The repayment will start in a few years. I dont have the repayment schedule.

I expect the Chinese to go easy on pakistanis