I understand that most of the Pakistani brethren would assume by default that any Indian saying anything negative would be out of jealousy. Well you reserve that right to your view point. I see some positives for Pakistan, but a lot more negatives in the long run. Talking just economics here, a lot is murky in terms of benefits and longer term welfare gain for the people of Pakistan. Short term monetary details, I dont care about loans, debt or interest rates right now. But show me the long term gain for the common people.
- Pakistan’s Manufacturing sector: The first market that really opens up for Chinese goods is the biggest in that region aka Pakistan. Not Iran, not CIS. This development gives Chinese goods swifter and cheaper access than before. So how will Pakistan protect its local industry from dumping by China? They can dump products at dirt cheap prices halfway around the world, so dont tell me they cant. Same goes for exported goods. You would be in a dream if you think Pakistani manufactured goods can compete with Chinese ones exported out of that port. How many markets open up for Pakistani goods in reality? Remember that the ability of China to finance massive subsidies is far greater than the GDP of most countries.
- High paying jobs: Almost all the literature I read, most of the development contracts were with Chinese companies as well as the better paying jobs. Locals are being employed only in construction labor and other low paying jobs. This, does nothing to your long term welfare. This also includes sourcing. Everything from steel to equiment is being brought from China. Atleast if you had a better local sourcing regulation, Pakistan Steel Mills could have been revived at the very least.
- Power: A lot has been spoken about the huge thermal power plants being set up. In the short term, they will plug the peak deficit leading to lower load shedding. But if Chinese manufacturing causes your industries to close down (say) who consumes that much extra power? Generation capacity follows demand. Dont give a blind trust key to China just because they let you use their veto. Protect your manufacturing.
- Manufacturing shift: Over the longer term, say 10-15 years if CPEC is hale and running, Pakistan will become a dumping ground for Chinese manufacturing. Not cutting edge high tech stuff, low end highly polluting ones that the government of China would want to offshore given the current trends in China. They are moving up the value chain, incomes are continuously rising, plus there is an emphasis and mass consensus on environment there. Pakistan sits ideal in terms of access to both China and rest of the world then, plus cheap labor.
In the short term, it appears this would benefit the people of Pakistan. Its up to Pakistani people to ensure that they aren’t curing just the short term headache of a tumor with a short term analgesic, meaning just short term benefit, but are killing the real problem i.e. the tumor as well. I am not being critical here, I am not sure how much of a safety net pakistan is building for itself.
A good overview, however, there is a need to clarify some aspects. I will try to put some ideas in reply to each of your points:
1. Pakistan’s Manufacturing sector: Yes, CPEC will further open the manufacturing sector of Pakistan to China. But the question is, isn't Pakistan open already? Chinese products have already outperformed many Pakistani products, but, still, Pakistan is a very small market, given our limited purchasing power. Therefore, China won't capture much of the low Pakistani demand market. Therefore, thinking China's purpose is to capture such a small country is not much appealing. Pakistanis are smart enough to invest in products that won't compete with Chinese goods, for example, sports, leather, and items where Pakistan has a competitive edge. Various studies are available which points to the various products that won't face Chinese competition.
2. High-Paying Jobs: As for high-paying jobs, Chinese workers on average cost at least four times higher than their Pakistani counterparts. It is true that in CPEC, most of the high-paying jobs are reserved for the Chinese, however, the main reason is the lack of expertise (by Pakistanis) as well as a difficulty by Chinese officials in communicating with Pakistanis workers. Moreover, bringing Chinese workers to Pakistan would cost more than four times to the Chinese firms. Therefore, over time there will be more Pakistani workers in such firms.
3. Power: I agree with the notion that there is an oversupply of power. However, your argument is based on the assumption that Chinese firms would overwhelm Pakistani firms. Till now, we are hearing Chinese firms such as Huwei, Xiomi and such telecom giants are investing, which Pakistani firms they are intending to overthrow? This also holds true for Chinese car manufacturers where there is no Pakistani firm to compete with them.
4. Manufacturing shift: No country in the world shares cutting-edge technology with any other country. Why would the Chinese do that? It is also true that they will at maximum share their low-end manufacturing with Pakistan. What is wrong with it? Most of the presently developed countries were once the hub of assembling units, which over time transformed into high-tech manufacturing giants. So no harm in doing that.
CPEC is not a shortcut for development. However, it does provide the opportunity for Pakistan to make its headway towards development.
