Vyom's Musings : The Illusion of CPEC Prosperity - The Debt Trap

[Shot-Caller]

Nope, not mine, numbers are everyone's... its just that it's like electricity in Pakistan... not everybody gets it.

I suggested a college nearby. Verify yourself. if proved wrong I'll withdraw the article.

If you were so bright you would have thought for a second about how many Indians live without electricity before being sarcastic about Pakistan.

 

[bloo]

Keep writing self pleasuring articles. Only shows how much you think about CPEC.

Read the post before making a premature evaluation. The various Chinese investment model, and the ultimate fine print of the CPEC deal proves how much of an "asset" it actually is.
Vyom's analysis is brilliant and an eye opener for people who quote CPEC everywhere else without a smidgen of knowledge about it.

 

[Rasengan]

1. It doesn't fit the definition of an Economic corridor. An economic corridor [sic] “connects hubs or nodes of economic activity along a defined geography” (Asian Development Bank). Hence, an empty road through a barren landscape connecting strategically important point A with strategically important point B 3,000 kilometers away does not fit the description. To be truly an economic corridor, the envisaged roads will need to connect demand (markets) with supply (production centers and clusters). The markets as well as production centers can be per-existing ones, or new ones that will spring up as the ‘network effects’ of the economic corridor take root. The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines (500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)

Clearly your knowledge on the Economic Corridor between Pakistan and China is unfortunately disappointing, because the concept encompasses many different elements. For instance the Government of Pakistan has proposed 29 industrial zones and 21 economic mineral processing zones across all four provinces. This will generate new markets opening up previously economically unconnected regions of the country and increasing access and trade between the business communities of both China and Pakistan. Already a number of companies have shown an interests to relocate their factory units in Pakistan. For instance, a Chinese cement company has invested $350 on a factory situated near the Salt Ranges, which is one of the proposed industrial zones of Punjab. Last month the Chinese Textile Association spoke to the CM of Punjab, where they articulated the desire to shift their production units to Faisalabad another proposed industrial zone. SinoSteel a couple of weeks ago advocated quite clearly that it has an interests to move some of its units to Pakistan. There are four distinct phases of CPEC and the focus between 2015-2020 is on power projects so that sustainability of industry is uninterrupted due to power cuts. Millions of jobs will be created in these proposed industrial zones because they will become major metropolitan centers with complete brand new infrastructure facilities. Already I have a friend who is currently talking to some of the biggest property developers from Changsha and Guangdong who have an interests to invest huge in developing houses around these zones.

Furthermore the construction of roads will immensely benefit Pakistan, because one of the main reasons why the mineral industry in the province of KPK and Baluchistan has been stagnant is because the basic infrastructure was not available. However, CPEC clearly does not just revolve around roads because two separate railways links between Kashgar and Gwadar have already been proposed.

1) Kashgar-Hotan-Gilgit-Abbottabad, Havelian-Rawalpindi-Gujranwalan-Lahore-Sahiwal-Multan-Bahawalpur-Rohri-Spezand-Mastung-Kalat-Hosab-Turbat and Gwadar

2) Kashgar-Hotan-Gilgit-Abbottabad-Havelian-Jand-Miyanwali-Darya Khan-Zhob-Bostan-Quetta-Spezand-Mastung-Kalat-Hoshab-Turbat- Gwadar


The $46 billion investment revolves around Phase 1 in which $11 billion has been deposited aside for infrastructure works on the corridor, while the residual $35 billion will be directed towards energy projects. CPEC also includes investments in energy projects including the construction of coal-fired power plants. The first group of power plants, which will cost $15.5 billion, will contribute 10,400 megawatts of electricity to Pakistan’s grid by 2018. A second group of power plants, costing $18.3 billion, will be built after 2018, and will add an additional 6,600 megawatts to the grid. These in total will double Pakistan’s current electricity supply and alleviate the country’s daily electrical shortages. China is also helping Pakistan to build 6 nuclear reactors in Pakistan, supplying 3,400 MW. This is part of Pakistan's plan to use nuclear energy to generate 8,800 MW by 2030 and roughly $9-13 billion are being invested into the project which is separate from CPEC. Just last week China Three Gorges Dam Corporation has offered to invest $50 billion by reviewing 35,000 MW and completing the most important hydro projects in Pakistan. So things are changing for the better and the project is not just based on roads and power projects, although they play an important part.

 

[Vyom]

If you were so bright you would have thought for a second about how many Indians live without electricity before being sarcastic about Pakistan.

Yup I know, Every year the total power capacity of a Pakistan equivalent gets commissioned here. Shortages will be history by 2018.

So yes I took the unlawful liberty of calling a joke too soon.. come 2018 that will still hold true

 

[AnnoyingOrange]

So I have been reading through some literature regarding CPEC and this is what I found how Pakistan is getting itself into a circular debt cycle. which I hope will not turn into a spiral dept trajectory. also interestingly I found Pakistani negotiators missing on obvious points like they did on the FTA with China that resulted in decimation of local Pakistani Manufacturing as it could not compete with prices of Chinese products.

So Here are my observations.

1. It doesn't fit the definition of an Economic corridor. An economic corridor [sic] “connects hubs or nodes of economic activity along a defined geography” (Asian Development Bank). Hence, an empty road through a barren landscape connecting strategically important point A with strategically important point B 3,000 kilometers away does not fit the description. To be truly an economic corridor, the envisaged roads will need to connect demand (markets) with supply (production centers and clusters). The markets as well as production centers can be per-existing ones, or new ones that will spring up as the ‘network effects’ of the economic corridor take root. The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines (500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)

Given the timeline for completion, these power projects could possibly add reasonable generation capacity to the Pakistan national grid by 2017-18, but they would hardly provide any relief in terms of the fast-growing demand for electricity. And there is no silver lining for consumers as far as the cost of the electricity is concerned.

2. It won't create local employment and capacity building. Chinese documents have already stated that the projects would cost more than a similar project in China because of the increased cost of bringing Chinese labour to Pakistan. Means all the wages and machinery deployment costs will flow back to Chinese pockets. The same way they have been doing it in Africa.

3. The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy but can anyone produce cheaper than China? Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].

4. The Karakorum Highway Route is Seismically active, snow laden for a little less than 6 months, and is very very very far away from China's consumption centers which lie in the far east. Its way cheaper to import via Ships to those areas, as for its energy requirements, China has gas pipeline links with central Asia, is making a super massive one from Russia. It is not going to be as dependent on gulf oil in the near future. So if the Chinese have any sense of economics and cost vs risk analysis, they will only keep this route as a fire escape. Highly expensive and risk laden.

Pic 1 China population centers. :

​

Pic 2 China-Central Asia Oil&Gas Pipelines

​

5. So how is proposed "investment" planned. it could have been made sweeter by allowing Pakistan to trade in rupees and then arrange fro currency swaps that would help in Pakistan in increasing its Forex and increase trade footprint at the same time. Whereby Pakistan gets to pay in rupees rather than in US dollars or renminbi. Interestingly it has already been agreed that payments will be in US Dollars.

6. The idea of becoming a 'trading' hub already has a competitor, its Dubai that allows trans shipments to all countries and is already established a business hub. For Gwader to become a competitor it will have to provide services at par with Dubai and better it, from day one. good luck. In view of the economic landscape cities have become prosperous like Singapore and Dubai is their location on sea trading routes which they have cultivated over decades. In view of the Iran Deal, West will get trading access to Central Asia Via Bandar Abbas and other Iranian ports (Chahbahar is not even in question here) by circumventing the instability, and insurgency of Afghanistan which they might go to... at a later date if the dust settle downs there. All possible from Iran.

No country has become prosperous by converting itself into a big toll booth. good luck.

7. China is making investments on which Pakistan has given sovereign guarantee of 18% return, meaning on investment of Rs 100 Pakistan will pay them back Rs 118 (that's in Compounded interest). In some cases its about 27.2 %.

Example :-
Sinosure is charging a fee of 7pc for debt servicing, which will be added to the capital cost of a project. For instance, the capital cost of a 660MW project at Port Qasim is $767.9m. But it goes up to $956.1m by adding Sinosure’s fee of $63.9m, its financing fee and charges of $21m, and interest during construction of $72.8m; a 27.2pc return on equity is guaranteed. Ironically, interest during construction is allowed at the rate of 33.33pc for the first year; 33.33pc for the second; 13.33pc for the third; and 20pc for the fourth year.

How exactly this helps Pakistan? Beside the projects will be run on turnkey basis by Chinese companies who will employ Chinese manpower to accomplish it. Pakistan on the other hand will have to provide the Chinese security at its own cost. And all this is promised on whether the investments will materialize in the first place.

I think Pakistan is better off running these projects by itself only then it will derive the benefit of the investments. If China can not provide aid money then it should provide loan, let Pakistan execute these projects. Also the interest should not be 18% it should be 5%. Apparently domestic lending rates in Pakistan is Cheaper than that of being given to that to China, If the government gave this incentive to local banks and businesses the benefit would have been much greater.

In the end with 2016 of the repayment of International loans coming up. and with these debts to pay back Pakistan's coffers don't give much of a confidence.

@GURU DUTT @Bang Galore @SpArK @Srinivas @Chanakya's_Chant

Pakistanis know this.. but the country is so short of friends and investors... they don't have much options.

 

[ryzvonusef]

I understand OP's point, but as Ahsan Iqbal has repeatedly said, CPEC is not just a container transport project.

China is not stupid. CPEC (and BCIM, which OP must have been referring to obliquely) are one of six-seven other major corridor projects that China is investing on, in addition to other minor projects.

Now ignoring any military implications of Gwadar for china, from an economic point of view, there are no IMMEDIATE benefits from CPEC... that's because it is a LONG term project. (Compared to, say the BCIM which is more of an immediate project, linking Guangdong to Bay of Bengal via Kunming, Burma, Bangladesh and Kolkatta)

To see full potential of CPEC, you will have to wait 10-15 years.

----

But to give a preview, The Eastern seaboard is extremely congested, and there is a GDP imbalance between eastern and western provinces of China. Also, there is a population congestion and pollution problem in the eastern provinces of china.

Projects like CPEC will allow the economy to move westward and relieve pressure. Obviously that will take time, hence the long-term nature of it. We effectively provide China with a western seaboard.

Also, countries like Iran (especially after sanctions end) and Russia are interested, as well as landlocked but resource rich CIS states, creating a pan-regional economic network. Just recently, UK gave funds for a small piece of CPEC road project.

How Pakistan will benefit from it is that, we are developing our own economic infrastructure, and take advantage of the chinese infrastructure to link up with the greater economy. (Behti ganga mein haath dhona, to use an urdu proverb)

----

Please join us on SSC if you want to have a discussion on CPEC, we love collecting facts and figures on projects and discussing their implications:

PAKISTAN | China Pakistan Economic Corridor (CPEC) | Infrastructure | U/C - SkyscraperCity

 

[Shot-Caller]

Yup I know, Every year the total power capacity of a Pakistan equivalent gets commissioned here. Shortages will be history by 2018.

So yes I took the unlawful liberty of calling a joke too soon.. come 2018 that will still hold true

If its according to your analysis then I highly doubt it.

Read the post before making a premature evaluation. The various Chinese investment model, and ultimate fine print of the CPEC deal proves how much of an "asset" it actually is.
Vyom's analysis is brilliant and an eye opener for people who quote CPEC everywhere else without a smidgen of knowledge about it.

Yea sure all the research about it has been done by Indians and we are falling into a trap that will leave us penny less. Go worry about your own problems nobody needs Indian warnings. You are not the concerned party.

 

[Rasengan]

Given the timeline for completion, these power projects could possibly add reasonable generation capacity to the Pakistan national grid by 2017-18, but they would hardly provide any relief in terms of the fast-growing demand for electricity. And there is no silver lining for consumers as far as the cost of the electricity is concerned.

2. It won't create local employment and capacity building. Chinese documents have already stated that the projects would cost more than a similar project in China because of the increased cost of bringing Chinese labour to Pakistan. Means all the wages and machinery deployment costs will flow back to Chinese pockets. The same way they have been doing it in Africa.

Pakistan's current electricity capacity will double in size once the projects in phase 1 are fully completed by 2021. However the effects will be noticed straightway because half of these projects will be completed by 2018. We should also not forget that China Petroleum Pipeline Bureau which is a subsidiary of China National Petroleum Corporation will invest $2 billion on the gas pipeline from Iran. The company been tasked to build 435 miles of pipeline from Gwadar to Nawabshah. Actually majority of the roads and power projects have equal distribution of workers from Pakistan and China. In fact the vast majority of workers are Pakistani's and evidence of this can be observed in the Sahiwal coal power project and the construction of roads.

 

[Chanakya's_Chant]

China has gas pipeline links with central Asia, is making a super massive one from Russia. It is not going to be as dependent on gulf oil in the near future.

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 - these savings are peanuts to the Chinese economy, however, the greater gain may lie in the strategic outreach via Gwadar as its Maritime Silk Route.

3. The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy but can anyone produce cheaper than China? Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].

Ironically, in Pakistan itself, there is growing cynicism about the CPEC’s prospects and feasibility because of security-related concerns and inter-provincial political discord on route preferences.

The Balochistan insurgency began a decade ago and is now the most violent and long-lasting of five rebellions that have broken out in Pakistan’s largest, most thinly populated and least developed province since its independence in 1947.

There have been occasional kidnappings and killings of Chinese workers in Pakistan in recent years, including in Balochistan. In March Baloch separatists attacked tankers carrying fuel to a Chinese company working on a mining project. Gwadar port, which was recently put under the management of a Chinese state-owned company, is a particular target. An attack by Balochs in January on the electricity grid knocked out power in 80% of Pakistan, including Islamabad.

The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines (500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)

China has pledged investment before in Pakistan that has not proved as large as promised. The much hyped $46 billion investment is to be made in a span of 15 years - 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. The term-sheet for Chinese investment in the power sector does not seem very promising at the moment.

Nevertheless, given the Chinese determination to find a route to oil-rich West Asia through Pakistan, and the Pakistani desperation to provide every possible assurance to China about safeguarding its investments, the project is likely to be implemented, even if its scope may be limited. The Chinese decision to strike deals worth US$ 22 billion out of a total of $28 billion with private players rather than the Pakistan government has been touted as an indication of Chinese seriousness in investing in Pakistan. One has to remember that China and Pakistan have weathered geographical and logistical extremes in the past to build the highest metalled road on one of the toughest terrain, i.e. the Karakoram Highway. Moreover, the Pakistani decision to raise a special security division to protect Chinese workers and interests in Pakistan, consisting of 10,000 security personnel, including 5,000 from the elite special services group (SSG) of the Pakistan Army who are specially trained for counter-terrorism and security, indicates its resolve to implement the project in all earnestness.

However, Pakistan 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 their cost only. This corridor is more about China than Pakistan - China stands to benefit more than anyone else through CPEC and in the meanwhile to think CPEC as a cure to all problems Pakistan is suffering from, which some overenthusiastic members often suggest is nothing but a delusion. Anyways best of luck to both CPEC.

BTW an excellent analysis - if only I could give you a positive rating!

 

[bloo]

If its according to your analysis then I highly doubt it.

Yea sure all the research about it has been done by Indians and we are falling into a trap that will leave us penny less. Go worry about your own problems nobody needs Indian warnings. You are not the concerned party.

How successful it actually is remains to be seen.
And chill dude, people here are only voicing their opinions like people always do because it is a "FORUM", so who are you tell anybody to go?

 

[Vyom]

Clearly your knowledge on the Economic Corridor between Pakistan and China is unfortunately disappointing, because the concept encompasses many different elements. For instance the Government of Pakistan has proposed 29 industrial zones and 21 economic mineral processing zones across all four provinces. This will generate new markets opening up previously economically unconnected regions of the country and increasing access and trade between the business communities of both China and Pakistan. Already a number of companies have shown an interests to relocate their factory units in Pakistan. For instance, a Chinese cement company has invested $350 on a factory situated near the Salt Ranges, which is one of the proposed industrial zones of Punjab. Last month the Chinese Textile Association spoke to the CM of Punjab, where they articulated the desire to shift their production units to Faisalabad another proposed industrial zone. SinoSteel a couple of weeks ago advocated quite clearly that it has an interests to move some of its units to Pakistan. There are four distinct phases of CPEC and the focus between 2015-2020 is on power projects so that sustainability of industry is uninterrupted due to power cuts. Millions of jobs will be created in these proposed industrial zones because they will become major metropolitan centers with complete brand new infrastructure facilities. Already I have a friend who is currently talking to some of the biggest property developers from Changsha and Guangdong who have an interests to invest huge in developing houses around these zones.

Furthermore the construction of roads will immensely benefit Pakistan, because one of the main reasons why the mineral industry in the province of KPK and Baluchistan has been stagnant is because the basic infrastructure was not available. However, CPEC clearly does not just revolve around roads because two separate railways links between Kashgar an5% of that money will flow back to Chiand Gwadar have already been proposed.

1) Kashgar-Hotan-Gilgit-Abbottabad, Havelian-Rawalpindi-Gujranwalan-Lahore-Sahiwal-Multan-Bahawalpur-Rohri-Spezand-Mastung-Kalat-Hosab-Turbat and Gwadar

2) Kashgar-Hotan-Gilgit-Abbottabad-Havelian-Jand-Miyanwali-Darya Khan-Zhob-Bostan-Quetta-Spezand-Mastung-Kalat-Hoshab-Turbat- Gwadar


The $46 billion investment revolves around Phase 1 in which $11 billion has been deposited aside for infrastructure works on the corridor, while the residual $35 billion will be directed towards energy projects. CPEC also includes investments in energy projects including the construction of coal-fired power plants. The first group of power plants, which will cost $15.5 billion, will contribute 10,400 megawatts of electricity to Pakistan’s grid by 2018. A second group of power plants, costing $18.3 billion, will be built after 2018, and will add an additional 6,600 megawatts to the grid. These in total will double Pakistan’s current electricity supply and alleviate the country’s daily electrical shortages. China is also helping Pakistan to build 6 nuclear reactors in Pakistan, supplying 3,400 MW. This is part of Pakistan's plan to use nuclear energy to generate 8,800 MW by 2030 and roughly $9-13 billion are being invested into the project which is separate from CPEC. Just last week China Three Gorges Dam Corporation has offered to invest $50 billion by reviewing 35,000 MW and completing the most important hydro projects in Pakistan. So things are changing for the better and the project is not just based on roads and power projects, although they play an important part.

Please avoid ad-ad hominem counters.

Yes I am aware of that, of every point that you have mentioned, But this is partnership of Unequals, how many JV in heavy industries have you got ? How many Chemical plants ? How many Automotive industry? All "infrastructure" projects are "Turnkey". Its like buying something off the self. And everything will be done by Chinese manpower and Machinery. 95% of that Money Will flow back to China.

Infrastructure Building is a continual process and that learning is being not granted to Pakistan at 18% sovereign guarantee (who on earth charges that much interest ???!! and that too in Dollars not RMB or Rupee ) . That is like being robbed. Steel plants are huge business and China has enough to meet the demand of the world for the next decade for the Entire Planet, they are running at 70% capacity now. You guys need Shanghi electric to set up Turbo-Generators manufacturing, Super critical Boilers manufacturing. Wanxiang Group Corporation to start making cars there. if its not happening read the plot differently.

There are no offset clauses in the agreement. that is the big point. The second half of your post is just the repeat of what I have read number of times. but how does that augment your capacity to make new plants. you can't keep buying things forever... rest its my take. Lets see how it pans out in 5-6 years.

China is doing a rerun of its Africa Model, you need financial maneuvering

 

[Rasengan]

The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy but can anyone produce cheaper than China? Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].[/USER]

The Economic Corridor has many purposes, although I agree wholeheartedly that the project would grant China access to the Gulf as an alternative to the vulnerable sea route in the South China Sea. However, the implementation of CPEC will have far-reaching positive effects across Central Asia, whose resources are currently landlocked and Gwadar provides a possible solution for them to have access to the global markets. Today Iran has made it clear that it has the desire to be part of CPEC, which is fantastic news.

 

[Vyom]

well trolling to mai kerta nahin but thinking serouslli about it

Trolling nahi hai bhai (Shayad Title me ahi thoda sa ) . Valid point hai.. came back from Africa yesterday... Loot machai hui hai wahan. everything is Chinese. Unimaginable.

 

[GURU DUTT]

Trolling nahi hai bhai (Shayad Title me ahi thoda sa ) . Valid point hai.. came back from Africa yesterday... Loot machai hui hai wahan. everything is Chinese. Unimaginable.

sirji when a nation deu to its own misplaced paranoia and priorities always shoots itself in the foot and never learn from there past mistakes no ammount of loot can open its eyes

do you forgot how the same muslim nawabs/feudal elite that is now ruling pakistan did to stop marathaas gave undeu credits and advantages to "company bahadur" in late 18th centuarry which resulted in east india raj in sub continent that resulted in 1857 revolt

and then to save there jageers in feudalism free independent india orcastrated partition of india

and after independence deu to there hate and disghust obsession against "hindu" india brought first the americans when they were unable to fight india and then saudies and now chinese ... rest you know better than me

 

[Vyom]

The Economic Corridor has many purposes, although I agree wholeheartedly that the project would grant China access to the Gulf as an alternative to the vulnerable sea route in the South China Sea. However, the implementation of CPEC will have far-reaching positive effects across Central Asia, whose resources are currently landlocked and Gwadar provides a possible solution for them to have access to the global markets. Today Iran has made it clear that it has the desire to be part of CPEC, which is fantastic news.

Central Asia is more easily linked to Iran And China than through Pakistan,

The article is Iran agrees to consider being part of CPEC - The Express Tribune is a bit misleading, the body gives much clear idea. Iran other than to link up with China by bypassing Afghanistan may not not have much incentives there on. rest post Iran Deal, Using Bandar Abbas is much more a stable route than of course Afghanistan And Karakorum. and more or less we are in the middle of a Geo economic and politic realignment things will be more clear few months down the line lets see how that pans out. But to tell the truth China benefits more in this than Pakistan.