Chinese President Xi Jinping (L), U.S. president-elect Donald Trump (R). © / Reuters

By Pepe Escobar

Beijing and Moscow have arrived at the conclusion that President-elect Donald Trump is not an ideologue in the neocon sense of the term; he’s a pragmatist. Therefore, resets are inevitable, as well as surprises.

In yet another spectacular chapter of his running Marco Polo in reverse saga, Chinese President Xi Jinping made a strategic stop in Sardinia, Italy, on his way to the Asia-Pacific Economic Cooperation (APEC) summit in Lima, Peru.

Why beautiful Sardinia? Certainly not for a yacht cruise in the Costa Esmeralda. This is all about, once again, the Chinese-driven New Silk Roads.

Huawei is building its largest European HQ in Sardinia. The Chinese want to buy the port of Cagliari, together with its fabulous pecorino sardo – serious contender for best goat cheese on the planet. In powder form, it is already feeding millions of Chinese babies.

As a casual extra bonus “Marco Polo” Xi, on Chinese national TV, exhorted his compatriots to invest in a massive tourist invasion of Sardinia. Now this is what a stimulus package in Europe is all about.

Meanwhile, lame duck President Obama, also on his way to APEC, is in Germany passing the caretaker “leader of the free world” baton to a deer-caught-in-the-headlights Angela Merkel. The headlights go by the name Donald Trump.

TPP six feet under

The sight of an ebullient Xi side-by-side a dejected Obama, against the background of South America’s Pacific coast, will be priceless. Those were the days, in the go-go 1990s, when Bill Clinton ruled APEC, hammering home the American agenda. Now Asia-Pacific has to come to grips not only with protectionist Trumponomics, but also the fact that Obama’s cherished TPP – the mercantile arm of the “pivot to Asia” – is, for all practical purposes, dead.

Trump’s transition team, led by Mike Pence, has advised him to bury TPP (grouping the US, plus 11 Pacific Rim nations) for good within his first 100 days in office. And the road map goes still further, advising him to drop out of NAFTA as well if a long list of “concessions” is not agreed on.

Dejected US allies – mostly Japan, Singapore, Australia and New Zealand – who had all been counting on the ascension of Hillary and the enthroning of TPP, are bound to conduct “secret” meetings in Peru aiming at a revised deal. That would have to assume that the Republicans on Capitol Hill might agree with Trump having a go at some sort of renegotiation.

Then there’s the – far-flung - possibility of a cut rate TPP excluding the US. The US and Japan account for roughly 60 percent of the combined TPP group’s GDP. A TPP without the US is another beast entirely.

And that leads us to Beijing’s subtle counter-offensive; promoting the anti-TPP along the lines of the still-under-discussion Regional Comprehensive Economic Partnership (RCEP), which groups East Asia. Japan and Malaysia, as well as non-Asian Australia - three key players – all support RCEP.

As much as the Trump-China relationship may eventually land on the proverbial stormy seas, Beijing can now be confident that the China-excluding trade arm of the pivot to Asia is history.

Here’s the official spin, via Chinese Vice-Foreign Minister Li Baodong; “China believes we should set a new and very practical working plan, to positively respond to the expectations of industry and sustain momentum and establish a free-trade area in Asia-Pacific at an early date.”

By Pepe Escobar

Source Russia Today

Hira Hafeez

The China-Pakistan Economic Corridor (CPEC) is a deep-rooted tie between China and Pakistan. It is also a glaring and reflection of China-Pakistan friendship. The CPEC is an endorsement and continuation to the enhancing bilateral friendly relations between two countries. It is a commercial project and bilateral agreements which were signed between both China and Pakistan during the state visit of Chinese President Xi Jinping to Pakistan in April 2015. The CPEC is a mega project of 51 billion of US dollar of Chinese investment that incorporates infrastructure and energy projects. It has been said that the CPEC is a corridor of opportunity and in fact, it would also be a corridor of peace and prosperity among the regional powers too.

The term economic corridor was first used by Asian Development Bank in 1998 which defines it as important networks or connections between economic agents along a defined geography which links the supply and demand sides of markets. The Economic Corridors are the integrated transport networks of infrastructure within a geographical area which are designed to stimulate economic development. It facilitates not only the movement of goods and services. It also strengthens the exchange of information as well as people’s migration.

It provides important connections between economic nodes or hubs that are usually centered in urban landscapes. In real term, economic corridors are supposed to be functioned as a connector as well as purpose-built and to link connectivity, Logistic flows, production, development and commerce development and infrastructure within particular geographic structures. These physical infrastructures have to undertake a task of the center of economic activities.

On the one hand, an economic corridor has, as usual, an Urban-centered outlook and it benefits only to urban areas but on the other hand, it broadens benefits to rural areas as well through the development of transportation, inclusive development, broader economic policy and economic development as well as a connection for production activities.

In a long run, it paves the way for the financial integration, civilization integration, employment promoting, standardized trade facility and financial management. It also supports historical, social and economic complementariness and people to people cultural ties.

The CPEC project seeks to rapidly expand and upgrade infrastructure across the length and breadth of Pakistan as well as deepen and widen economic links with its ‘iron brother’ China. The CPEC is essentially a significant part of regional initiatives led by China known as the One Belt One Road (OBOR) economic development. The OBOR concepts consist of two ambitious development proposals. One arm is the land based known as New Silk Road Economic Belt (SREB) whereas another arm is the sea-based known as 21st Century Maritime Silk Road (CMSR).

Both China and Pakistan have agreed to build One Belt One Road project more commonly known as China-Pakistan Economic Corridor is expected to bring the new era of peace and prosperity in South Asian region. This corridor will incorporate 2,000-kilometer transport link between Kashgar in North-West China to Pakistan’s Gwadar port on the Arabian Sea near the border with Iran via roads, railways and pipelines.

There are many internal and external challenges for the Pakistani government to implement this multi-dollar project. However, it’s a game changer project which will transform the fate of Pakistan and will help to achieve economic gain. It will improve the economy and trade, enhances regional connectivity, develop infrastructure and establish people to people contacts on both sides.

 The CPEC is the part of China’s vision One Belt One Road and this is the Southern corridor of Silk Road project. China is the new emerging power in the world. The importance of the CPEC is beyond the imagination.

Gwadar to Kashgar route will not only decrease the distance between China and Middle East but will also provide a safe and secure way of oil to China. Basically, the CPEC is the name of multiple roads of one corridor.

Moreover, the importance of this corridor is also reflected in the statement of Xi Jinping during his visit to Pakistan in 2015, he said that “this will be my first trip to Pakistan, but I feel as if I am going to visit the home of my own brother’ Moreover, it is a combination of cross-sectional components, infrastructure, trade connectivity, transport, energy services, industrial cooperation and so on.

However, regional connectivity and economic development are two major aspects of the CPEC project. It consists of roads, energy stations, rail routes and oil and gas pipelines.

Gwadar port is actually the tail of the Silk Road which will connect Kashgar through different communication networks. Gwadar holds a central place in the project of the CPEC. Gwadar could play a key role in ensuring China’s energy security. It has been said that Gwadar will also put China and Pakistan in a strategically advantageous position along the Arabian Sea.

The CPEC from all counts will prove a game changer and will make China a real stakeholder in Pakistan’s economy, stability and security. It promises to boost Pakistan’s economy and provide employment and business opportunities for local. Foreign investors can be attracted to invest along the long route of the corridor. The CPEC projects have huge significance, it runs through one of the most important and vital geo-strategic locations of South Asia. It connects the whole region and gives Pakistan central importance for world trade. It holds promise to make Pakistan an economic power in the world in near future.

The CPEC is the ‘game changer’ project. There are many challenges for Pakistan in implementing of this project. At the same time, Pakistan will have many benefits from this corridor. The new great game will increasingly revolve around China’s one belt one road vision of land and sea connections between Asia, Europe and beyond. The CPEC is the first component of this ambitious vision.   The recent, inauguration of first  CPEC consignment shipment from the Gwadar deep sea port is the beginning of the new era of the economic prosperity and progress for the region in general and for Pak-China long-lasting friendship cum partnership in particular.

Writer has completed her Master’s in Political Science from the University of Karachi and a CSS aspirant.

By Jeff M. Smith

My previous article for The Diplomat examined Filipino President Rodrigo Duterte’s trip to Beijing and the security and economic implications of the deals he sealed with China to construct ports and artificial islands in the Philippines.

In Foreign Affairs this May, I wrote about the implications of China’s investments in the Sri Lankan ports of Colombo and Hambantota, which had not only plunged Sri Lanka into debt, but raised questions about the security and defense consequences of Beijing’s use of economic statecraft, including in rekindling Sino-Indian rivalry.

The emergence of new details about China’s endeavors in Sri Lanka merit revisiting what is quickly becoming a case study for China’s emerging One Belt One Road (OBOR) initiative.

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Rajapaksa Opens The Door

The Sino-Sri Lankan relationship was fundamentally transformed by the 2005 election of President Mahinda Rajapaksa. Unlike many South Asian capitals India had shielded from Chinese influence, Colombo established cordial, if limited, diplomatic ties with Beijing by the late 20th century, even importing arms from China in the 1990s.

Rajapaksa entered office two decades into a brutal conflict with the Liberation Tigers of Tamil Elam (LTTE), a hyper-violent separatist movement claiming to defend the interests of Sri Lanka’s Tamil minority. Colombo and the LTTE reached a ceasefire in 2002 but the violence continued and Sri Lanka’s foreign minister was assassinated shortly before Rajapaksa’s inauguration. Within weeks of taking office the president privately appealed to Delhi for military aid to underpin a major offensive he was planning to crush the LTTE.

In 2006 Delhi quietly gifted Rajapaksa five Mi-17 helicopters and aided efforts to target LTTE personnel, supplies, and floating arsenals at sea. However, with a politically influential Tamil minority of its own, Delhi balked at requests for more robust military support. Nor could Rajapaksa turn to the United States. Concerned about human rights violations in the LTTE conflict, Washington had “drastically reduced its foreign assistance package for Sri Lanka.”

China gladly filled the void in the defense realm. In 2007, Rajapaksa secured a $37 million deal for Chinese ammunition and ordinance. In 2008, China “gifted” Colombo six F7 jet fighters, and provided anti-aircraft guns and JY-11 radar. The ceasefire with the Tigers collapsed that year and in 2009 Rajapaksa launched a scorched-earth offensive that eliminated the LTTE, though not before claiming up to 20,000 civilians in the process.

At a parade celebrating Sri Lanka’s victory, “the majority of the hardware on display was Chinese-made.” And when Colombo faced international criticism over the civilian death toll during Rajapaksa’s offensive, China again proved its value by blocking the UN Security Council from addressing the issue. A senior Sri Lankan official later told U.S. officials on Capitol Hill, “We have the United States to thank for pushing us closer to China.”

Ports and Politics

What was China getting in return? Rajapaksa upgraded ties to a “strategic cooperative partnership,” opened Colombo’s doors to a wave of senior Chinese defense and political officials, pledged respect for China’s “core interests,” and enthusiastically supported China’s OBOR initiative. The real prize for China, however, were the ports of Sri Lanka, positioned as the island-nation is along the principal east-west sea lines of communication (SLOCs) connecting China to its energy suppliers in the Middle East and Africa.

A month before Rajapaksa signed the first arms agreement with China in 2007, he inked a separate deal to lease land to a Chinese consortium at Hambantota, where they planned to construct a $1 billion deep-water port. Poorly located in a desolate jungle, Hambantota was the president’s home district and the port his pet project. The $361 million first phase was completed in November 2010, funded by loans from China’s Ex-Im Bank. (India, the United States, and others were offered the Hambantota port contract and passed).

In 2010, Beijing lent Sri Lanka an additional $200 million to build a second international airport near Hambantota, and in 2012 offered $810 million for the second phase of the port project.

In November 2013, Chinese firms were contracted to build a $272 million railway in Sri Lanka, “the first new railway construction in Sri Lanka within a century.”

The same month, China offered to take a leading role in the development of a new mega project at Sri Lanka’s main port in Colombo. Various plans for a Colombo Port City Project (CPCP) had been percolating since 2004, but China had the capital and experience realize the vision. China Merchants Port Holdings had already constructed — and taken an 85 percent ownership stake — in the South Container Terminal at the Colombo port on a 35-year right of ownership agreement. A separate deal signed in 2009 had granted China an exclusive investment zone 34 miles from the Colombo port.

This was a more ambitious endeavor. The $1.4 billion CPCP was billed as the largest infrastructure project in the country’s history and would require reclaiming 233 hectares of land adjacent to the existing port. The new “mini-city,” to be built by China Harbor Engineering Company (CHEC), would include shopping malls, apartments, golf courses, hotels, and an F1 racing track.

Some in Sri Lanka and across the Palk Strait began voicing concerns about Colombo’s embrace of China and its growing indebtedness to Beijing. Since 2005, China had funded and/or constructed 70 percent of new infrastructure projects, overtaking Japan as Sri Lanka’s largest donor.

Chinese non-military aid soared from a few million dollars in 2005 to $1 billion in 2008. An additional $5 billion in aid and loans was distributed between 2009 to 2015. “Critics of the Rajapaksa regime fear that the Sri Lankan government will be unable to repay such large loans in time, giving the Chinese an opportunity to turn part of the loan into equity, making them part owners of vital projects and installations,” noted Indian defense analyst Nitin Gokhale.

That’s precisely what happened when Chinese President Xi Jinping visited Colombo in September 2014. At the time, the Chinese-funded Hambantota Port was hemorrhaging money. Only six vessels berthed at the port in 2011 and less than 100 in 2013. Meanwhile, Colombo was paying $30 million per year in interest payments alone. “The port that was touted as a competitor for Singapore has continued to bleed the government,” noted the South China Morning Post.

Xi agreed to “ease loan conditions” for the costly port. In return, Rajapaksa quietly signed an agreement granting Chinese companies operating rights to four of the seven container berths at Hambantota port on a 35-year lease. The deal was not publicly revealed until months later and the terms remain secretive.

Submarines and Subterfuge

That was not the only peculiar thing about Xi’s visit. A week before his arrival, Japanese Prime Minister Shinzo Abe was visiting Colombo when the Sri Lankan capital received an unexpected guest: a Chinese submarine and support ship docked at the Colombo port, the first appearance by a Chinese submarine at an Indian Ocean port in over a decade. Interestingly, “unlike other military ships which are mandated to dock at SLPA berths, the submarine had used the Chinese-run [South Container Terminal] in violation of protocol.”

Even before the port visit Delhi had grown uncomfortable with Rajapaksa’s embrace of China. In 2007, India’s national security adviser warned: “It is high time that Sri Lanka understood that India is the big power in the region and ought to refrain from going to Pakistan or China for weapons.”

The sudden appearance of Chinese submarines on its geopolitical doorstep proved a bridge too far for Delhi, given over 70 percent of the transshipment business at the Colombo port is India-related. Later that month, Indian Prime Minister Narendra Modi personally reminded Rajapaksa that Sri Lanka “was obliged to inform its neighbors about such port calls under a maritime pact.” Yet the same submarine resurfaced in Colombo in November, again without prior notice to Delhi.

Sri Lankan presidential elections were announced the same month, with Rajapaksa widely expected to win a third term. Yet he faced an unexpected challenge from a former ally, Maithripala Sirisena. On the campaign trail Sirisena criticized Rajapaksa’s embrace of Beijing and the billions in Chinese debt he accrued. “The land that the White Man took over by means of military strength is now being obtained by foreigners by paying ransom to a handful of persons,” his election manifesto explained. He insisted Sri Lanka “would not offer preferential economic or security access to any one country, but equally develop its strategic relations with all major Indian states.”

A New Sheriff in Town

In a surprise upset, Sirisena bested Rajapaksa 51 percent to 48 percent. Notably, the Sri Lankan station chief of India’s intelligence agency, RAW, was expelled shortly after the election. He was reportedly involved in organizing and uniting the political opposition, convincing Sirisena to defect and run, and persuading a former prime minister not to contest the election and diminish Sirisena’s chances. “The turning point in the relationship,” an Indian security official told Reuters, “was the submarines. There was real anger.”

In February 2015, Sirisena made India his first destination abroad as prime minister, reaching terms on Sri Lanka’s first-ever nuclear deal. One month later, Modi became the first Indian prime minister to visit Sri Lanka in 28 years. A week before his arrival Colombo suspended the CPCP on allegations of corruption during the bidding process and failure to obtain the necessary permits. Chinese firm CHEC was separately accused of illegally “funding the election campaign of former President Mahinda Rajapaksa” through 11 “suspicious” financial transactions totaling over $200 million.

Sirisena objected to several highly-questionable provisions in the “private and confidential” CPCP deal. Topping the list was a provision offering CHEC 20 hectares of land on a “freehold basis” (unrestricted ownership) beyond the 88 hectares it was granted on a 99-year lease.

Additionally, Sri Lanka’s Civil Aviation Authority warned that under the agreement, “the airspace over the Chinese-held area would be exclusively controlled by China,” while there was “no record of the mandatory environmental impact and feasibility studies needed for such a project, nor was there any document showing the government had cleared it.” “You cannot just jump into the Indian Ocean and start filling it up,” Sri Lanka’s finance minister explained.

Soon after, Sirisena’s foreign minister suggested Colombo would bar Chinese submarines from future port visits: “I really don’t know under which sort of circumstances that led to some submarines… to [visit] the port of Colombo on the very day the Japanese prime minister was visiting Sri Lanka. But we will ensure that such incidents, from whatever quarter, do not happen during our tenure.”

Not So Fast

Sirisena soon realized his room for maneuver was far more limited, and his country far more indebted to China, than he imagined. Of the $5 billion China issued between 2005-2012, only two percent took the form of outright grants; the rest were loans at or near “commercial interest rates as high as Libor plus six percent.” Meanwhile, the loans from China’s Ex-Im Bank were “mainly offered to buy Chinese products and services,” according to one Sri Lankan financial analyst, while the laborers and subcontractors are all Chinese and “all raw material is imported from China.”

Unsurprisingly, Sri Lanka’s foreign debt soared from 36 percent of GDP in 2010 94 percent in 2015. Today, more than a third of government revenue goes toward servicing Chinese loans, with total foreign debt-service reaching $8.2 billion annually. Meanwhile, Sri Lanka’s trade deficit with China has soared, with in imports ($3.8 billion) exceeding exports ($250 million) by a factor of 15. In 2016, Fitch downgraded the country’s credit rating and Colombo was forced to secure a $1.5 billion bailout from the IMF, its second since 2009.

In July 2015, Sirisena unexpectedly approved a feasibility study for the recently-disgraced CHEC to build an addition to the Hambantota port. Under the proposed terms, CHEC would control management and operations of the dockyard at Hambantota. “We have $1.5 billion sunk in the project and no revenue. We need to make use of it,” a Sri Lankan official told the South China Morning Post. The same month, China and Sri Lanka held their second-ever joint military exercise.

In October 2015 Sri Lanka’s finance minister appealed to Beijing to restructure Sri Lanka’s $8 billion in debt. Separately, Sirisena’s defense secretary told Reuters the country would give “due consideration” to requests for port visits by Chinese warships. Three months later, Colombo welcomed three warships from the People’s Liberation Army Navy (PLAN).

In December 2015, Sirisena completed the U-turn, reversing the suspension of the CPCP. CHEC and parent company CCCC were offered lucrative tax breaks to restructure the project and in turn agreed to drop a $143 million claim against Colombo for violating the initial contract. In April 2016, Prime Minister Ranil Wickremesinghe traveled to Beijing to seal the new deal, advance negotiations on a free trade agreement, and upgrade the relationship to an “all-weather partnership.”

The CPCP was re-labeled an “international financial outpost” with “its own economy, its own jurisdiction and… separate economic and commercial laws.” A joint venture “with Chinese majority holding” will oversee the land reclamation project that will house a new Colombo International Financial and Business District.

The CPCP was expanded from 243 to 269 hectares and the land granted to China on a 99-year lease was increased from 88 to 110 hectares. Colombo, however, stood firm in opposing the transfer of 20 hectares on a “freehold” basis, “as India has strongly protested against the move.” China also “will not be able to dock ships or planes without prior permission from [Colombo].”

Finally, Wickremesinghe requested an “equity swap” offering Beijing equity in Sri Lankan firms and infrastructure projects in return for debt relief. Sri Lanka’s international trade minister explained the goal was to “reduce the current debt that we have and open up the opportunity for us to take more funds from Chinese banks” (emphasis added). He also announced Colombo would issue up to $1 billion in bonds in China to “pay Chinese firms planning to build infrastructure projects.”

“It’s an opportunity for everyone to make money,” he later explained. “That’s what we do in Asia.”

Deja Vu at Hambantota

In October 2016, as Chinese dredgers returned to resume work on the CPCP, Colombo announced it was providing China Merchant Holdings an 80 percent equity stake in the struggling Chinese financed and constructed port at Hambantota. “The money from the deal,” Sri Lanka’s finance minister explained, “will be used to repay expensive foreign loans.”

A Chinese firm was also contracted to assume management of the $209 airport at Hambantota. Once envisioned as an international transport hub, on a trip there in 2016 Wade Shepard found a nearly-abandoned airport operating just one daily and one weekly flight with “10 to 20 passengers per day.” With elephants roaming the runways and unused terminals storing rice, Sri Lanka is still paying China $17 million per year for the airport.

Together with a 15,000 acre Chinese-led industrial zone nearby, Shepard says Hambantota “seems well on the way from being a Sri Lanka national project financed by China to a full-fledged Chinese enclave at a very strategic position on the Indian Ocean.”

Facing questions about the terms of China’s loans, this month China’s ambassador to Sri Lanka later blamed “outside forces” for stalling the Hambantota and CPCP projects. “The Sri Lankan people and the government,” he said, “should have a more thankful attitude towards China.”

“If you don’t like this [loan] why have you spoken to me about getting another one?”

Why, indeed.

By Sultan M Hali - Source Pakistan Today

An unfortunate display against our sole “all weather friend”  

Dr. Stephen P. Cohen — famous American political scientist, prominent expert on Pakistan, India, and South Asian security and a senior fellow in foreign policy studies at the Brookings Institution – was asked by a journalist during an interview if there is any example in the world (in his knowledge) where the cordial relations between the states are not entirely based on the mutual interests. Dr. Cohen replied that in his recollection, China-Pakistan relations can be described as the states’ relations which are above their personal interests.

Indeed, often described as “iron brothers”, China and Pakistan fit the bill of having ties which are beyond the realm of ethnocentrism or selfish, national interests. When China achieved its independence on October 1, 1949, it was battered and worn after a prolonged struggle to rid itself of foreign occupation and an internal struggle to defeat the “Kuomintang” (KMT). After suffering defeat at the hands of Chairman Mao Zedong’s Chinese Communist Party, the KMT retreated to Taiwan (formerly “Formosa”) in 1949, where it established an authoritarian one-party state under Chiang Kai-shek. Ironically, the West ignored the 583 million Chinese and genuine “People’s Republic of China” (PRC) and instead recognised Taiwan comprising 1.2 million KMT and some aborigines as “Republic of China” and even granted it a permanent seat at the UN Security Council – complete with veto power.

For 22 years, PRC was treated as a pariah state barred from any exposure to western technology, trade and commerce links. During this bleak period, Pakistan stood by China. For decades it was the only window for the recluse state, when Pakistan International Airlines (PIA) was the sole international air carrier operating to and from China to the outside world. Pakistan fought the case for PRC’s recognition at the United Nations and international forums and also facilitated the rapprochement between PRC and USA. Henry Kissinger’s clandestine visit to Beijing in 1971 was organised by Pakistan. This trip became the precursor of US President Richard Nixon’s historic visit to China, which finally thawed Sino-US relations.

China never forgot the gestures and, continuing to acknowledge Pakistan’s munificent support in those bleak years, has always stood by Pakistan in its every moment of trial and tribulation. Whether it was wars with India, natural calamities or manmade disasters, China has always been the first to reach its distressed brother Pakistan. During prolonged periods of sanctions imposed on Pakistan by the Occident, China continued to support Pakistan’s genuine defence requirements. Similarly, Pakistan has also endeavoured to provide all out support whenever PRC or its people faced any catastrophe.

On May 2, 2011, US Navy SEAL’s clandestinely stormed a residential compound in Abbottabad and eliminated the mastermind and creator of Al-Qaeda, Osama bin Laden. The whole world was chastising Pakistan, claiming that Pakistan had been harbouring the world’s most wanted terrorist for over a decade. The whole nation was morose and depressed owing to the serious allegations being hurled against Pakistan. It was only PRC that not only stood by Pakistan in its moment of agony but challenged the world to stop harassing Pakistan and instead acknowledge Pakistan’s sacrifices and efforts in combating terrorism. China’s unstinted support for Pakistan brought cheer to the people of Pakistan.

Whenever India has tried to have the United Nations or other international organisations declare Pakistan or any of its outfits blacklisted on the charge of terrorism, China has vetoed it. If this is not support and friendship beyond personal interests then what else is?

Over the years, astute planning and judicious use of its resources have propelled PRC to become the world’s second most powerful economy while on the other hand, Pakistan has sunk into a deep abyss of economic grief, compounded by acute power shortages and incessant terror attacks. Political wrangling and poor law and order situation have exacerbated the environment. International sports and trade teams have stopped visiting Pakistan, foreign investors have deserted the terror stricken country and to make matters worse and further isolate it, Pakistan is being accused of sponsoring terrorism by its arch rival India.

In this desolate milieu, China has chalked out development projects to enable Pakistan to climb out of the quagmire of economic dependency. President Xi Jinping has envisioned a mega project “One Belt, One Road” (OBOR), which is a revival of the ancient Silk Route and also has a maritime component. One of the constituents of the OBOR is the China Pakistan Economic Corridor (CPEC), which commences from the deep seaport of Gawadar (also constructed by China) and meandering through various parts of Pakistan, including the under developed provinces of Balochistan and Khyber Pakhtunkhwa, concludes at Kashgar in China. The OBOR fans out from Kashgar into Central Asia and reaches Europe. The OBOR and CPEC are not mere highways but comprise special economic zones envisaging industrial, commercial, trade, health, educational, energy, and information centers. Train, oil, gas, data, marine and air links complement the OBOR.

Cognizant of the outcome of the mega project in bringing prosperity to Pakistan, India is bent upon sabotaging the CPEC along with the deep sea port of Gawadar. Besides fomenting strife and insurgency in Pakistan’s province of Balochistan and wreaking havoc through terror attacks, India and some other countries backing it for their vested interests are bribing or influencing some Pakistani politicians to oppose CPEC and the ingress of Chinese investment in Pakistan.

Unwittingly, these politicians are biting the very hand that is trying to feed Pakistan and help it overcome the morass and building infrastructure. Chinese philosophy is: “give a poor man a fish, he will not starve for a day; teach him how to fish and he will not starve for life.” Operating on the same principle, China has established factories, power plants assembly lines in Pakistan with soft loans and also provided transfer of technology to enable us to stand on our own feet. The advent of the Asian Infrastructure Investment Bank (AIIB) was established by China to help finance emergent countries institute development projects by setting up the infrastructure themselves.

Besides finding imaginary faults with CPEC, criticising the priorities, these detractors are also creating despondency by comparing the advent of CPEC to the British East India Company, which had come to the Indian Subcontinent during the Seventeenth Century in the reign of the Moghul Emperor Jahangir and became the precursor of three centuries of British Rule in India. This was stated by none other than Senator Tahir Mashhadi, chairman of the Senate Standing Committee on Planning and Development.

It is highly derogatory to draw parallels with the East India Company and must have hurt the sentiments of Pakistan’s sole benefactor. There is no doubt that OBOR and CPEC will benefit China but it had other options too besides Pakistan, yet it chose us because of our special relationship. To find imaginary faults with it and presuppose the honourable intentions of Pakistan’s Iron Brother, all weather friend and strategic partner, is tantamount to making holes in the platter we eat in. If China were to discontinue CPEC (God Forbid), Pakistan would be left in a lurch, fending for itself against the very sharks that want to disintegrate us and devour us. Pragmatism demands that Pakistan’s interests must be safeguarded but the true Sino-Pak bonds must not be sacrificed at the altar of vested interests.

By Sultan M Hali - Source Pakistan Today

The US and China are already working together on the clean-energy project Sapphire Wind in Pakistan, where Beijing and Washington want Pakistan to grow its economy and undermine extremism. PHOTO: SAPPHIRE WIND

By MARC GROSSMAN

With Mr Donald Trump’s election, China and the United States could be on a collision course. The US President-elect promised during the campaign to label China a currency manipulator, instruct the US Trade Representative to bring cases against China in the World Trade Organisation and threaten 45 per cent tariffs if China does not renegotiate trade agreements with the US. Meanwhile, China pursues a military build-up in the South China Sea designed to diminish US influence in Asia.

As Mr Trump addresses trade and the other issues on the US-China agenda as president and not candidate, he may find it useful to look for areas where the two countries could work together.

One opportunity ready to be explored is the vision promoted by both Beijing and Washington of the need for more economic and infrastructure connections between East Asia, South and Central Asia, the Middle East and Europe.

Two concepts are in play: China’s One Belt, One Road, or Obor initiative, a multibillion-dollar programme to build ports, railways, roads, power plants in and around 60 countries and the more modest, but still important, American New Silk Road initiative, or NSR.

In July 2011, then-Secretary of State Hillary Clinton spoke in India about the benefits of linking Central Asian economies with those in South Asia, with Afghanistan and Pakistan in the centre. Increased regional economic connectivity, she argued, would promote sustainable economic growth, a crucial part of the effort to defeat extremism.

In September, the US convened a NSR ministerial meeting in New York and China expressed enthusiasm for the project.

Turkey hosted the Heart of Asia Conference in November 2011 and, supported by the US and China, the concept became a touchstone for regional cooperation.

Obstacles then emerged. The Chinese said the name New Silk Road “belonged to China” and “Historic Trade Routes” would be a better name for the US initiative.

In 2013, Chinese leaders responded with a Silk Road initiative of their own: One Belt, One Road consists of two main components — a land-based Silk Road Economic Belt and a sea-based Maritime Silk Road — which Chinese leaders believe will together change the geostrategic and geo-economic face of the region.

BENEFITS FOR AFGHANISTAN AND PAKISTAN

In August this year, Chinese President Xi Jinping announced that more than 100 countries and international organisations had committed to participate in Obor.

According to Chinese press reports, Obor is supported by US$40 billion (S$56.7 billion) from China’s Silk Road infrastructure fund, US$100 billion in Asian Infrastructure Investment Bank pledges, and an initial US$50 billion commitment from the New Development Bank of the Brics countries — Brazil, Russia, India, China and South Africa — with a promise to increase that to US$100 billion.

The US and Chinese projects are currently on separate trajectories. American officials maintain that they support Obor, though the US is rightly wary of projects that enhance China’s military capacity. And the US cannot match the dollars or yuan pledged or spent.

That said, there are several strategic, regional and commercial benefits to additional US-China cooperation around the Obor and NSR initiatives.

For example, the US-China Summit in Hangzhou in September highlighted Afghanistan as an “area of cooperation”.

The two countries share an interest in an Afghan state in which Al Qaeda and Islamic State find no havens, drug exports shrink and private sector–based economic activity increases.

A coordinated Obor-NSR effort to create what Afghan officials once called an “Asian Roundabout” to encourage a sustainable Afghan economy would promote these shared goals. The recent opening of a rail line from the eastern coast of China to the northern Afghan city of Hairatan, offers Afghan exporters an alternative route to Asia with dramatically reduced transit times.

Another area of potential cooperation is Pakistan, where China and the US want Pakistan to grow its economy and undermine extremism.

China’s US$51 billion commitment to the China-Pakistan Economic Corridor is designed to build highways, railways and energy generation in Pakistan, including a proposed rail link and highway between Pakistan’s port at Gwadar and China’s north-western region of Xinjiang, which would also connect the Obor to China’s Maritime Silk Road project.

Pakistanis hope the corridor will create 700,000 jobs by 2030 for some of Pakistan’s 190 million people, a majority of whom are under the age of 22.

Washington and Beijing are already working together in Pakistan on the clean-energy project Sapphire Wind.

The US Overseas Private Investment Corporation has provided US$128 million for this 50MW wind project, which uses General Electric turbines.

Under the umbrella of the US-Pakistan Clean Energy Partnership, the US will invest US$70 million on transmission lines to connect a 680MW wind project in Sindh to the national grid. China is also an investor.

Collaborative NSR-Obor efforts between the US and China can benefit US companies. The Wall Street Journal reported in October that General Electric, Honeywell and Caterpillar are already focused on the possibilities. According to the Journal, GE’s orders in Pakistan are more than US$1 billion today, compared with less than US$100 million five years ago.

Connecting US firms to Obor and keeping them aware of NSR opportunities require a concerted effort by the US government, including the Departments of State and Commerce, the US Overseas Private Investment Corporation and the Export Import Bank.

POTENTIAL CHALLENGES

Despite the obvious benefits, there are many challenges to creating an NSR-Obor nexus. China may be pursuing Obor to control rising wage rates at home by exporting employment and soaking up overproduction in industries like steel.

The Chinese might decide to go it alone, with the enormous resources they have promised against a small US investment in NSR. The number of American firms interested in Obor may be too small to reach critical mass and those that seek engagement may stand no real chance to work with Chinese companies, especially state-owned enterprises.

In September, representatives of 10 Chinese state-owned enterprises visited Washington and New York to promote US commercial interest in Obor opportunities, but more needs to be done by Beijing to welcome US private-sector participation and protect US commercial interests.

Another challenge is managing Indian anxieties about Obor. Many analysts in Delhi see Obor not as a development initiative, but as a strategic effort by Beijing to surround India with naval facilities in Gwadar in Pakistan, Colombo in Sri Lanka and Kyaukpyu in Myanmar.

The possibilities of joint efforts inspired by Obor and NSR present the incoming Trump administration with a strategic opportunity to improve US-China ties, advance common security interests and create economic opportunities for American business.

Success would bring tangible benefits to a region where further state failure would surely fuel extremism, a threat to both the US and China.

And, not least, there would be something positive on President-elect Trump’s already contentious agenda with China when he takes office in January.

Ambassador Marc Grossman is a Vice Chairman of The Cohen Group. A US Foreign Service Officer for 29 years, he was the US Special Representative for Afghanistan and Pakistan (2011-2012) and a Kissinger Senior Fellow at Yale in 2013. This article was first published in Yale Global Online.

Rian Maelzer 丨 CCTV.com

Former presidents and prime ministers joined with business leaders, academics and politicians at the World Chinese Economic Summit in Malaysia Thursday.

Optimism about the prospects for greater economic cooperation between China, ASEAN and beyond through initiatives like One Belt, One Road were tempered by worries about growing political tensions and concerns about the US’s possible backtracking on globalisation.

The line up of heavy hitters at the World Chinese Economic Summit included the former leaders of Indonesia, Pakistan, Australia and the Taiwan region.

They shared insights on China’s growing global stature, its economic outlook and the Belt and Road, and Asian Infrastructure Investment Bank initiatives.

But anxiety about the impact of Donald Trump’s victory in the US elections on trade liberalization was also a common theme.

“With the increasing likelihood that the Trans-Pacific Partnership or TPP will not be coming into existence it is even more imperative that the regional comp economic partnership, RCEP, with china as the main anchor be expeditiously concluded and possibly expanded.”said Prof. Surakiart Sathirathai,former Thai Deputy Prime Minister.

Former Indonesian President Susilo Bambang Yudhoyono urged China to exercise stronger leadership on global issues like climate change, UN reform and world trade.

“We all have much riding on the success of China's economic reforms recently undertaken by President Xi Jinping. China continues to be a driving force that is pulling the world economy today just as it helped pull the world out of the financial crisis in 2008.”said Susilo Bambang Yudhoyono,former President of Indonesia.

Speakers were universally enthusiastic about the Belt and Road initiative. But some cautioned that the benefits of individual projects must be seen to trickle down to ordinary people in participating countries.

Pakistan has been among the early beneficiaries of One Belt, One Road.

“The Pakistan-China relationship has always been our strongest and most enduring relationship. It is driven by peace harmony mutual respect and commonality of interests.” said Shaukat Aziz,former Pakistan Prime Minister.

Aside from sharing insights, the summit will also hope to have helped build business connections between the Chinese diaspora and China…ones that will lead to more trade and investment in years ahead.

Source CCTV

The China sponsored ‘One Belt One Road’(OBOR) project has caught India by surprise, said Srikanth Kondappally, Professor of Chinese Studies, JNU.

Delivering the valedictory address at the conference on ‘India, China and the new Silk Road Initiatives’ organised by the Mahatma Gandhi University, Prof. Kondappally said while the proposed global scale of the projects connecting Europe, Asia and Africa could provide an opportunity for expanding trade and investments it also challenged the national security of the country as the projects are passing through the India-claimed Kashmir regions currently held by Pakistan.

OBOR projects, if pursued vigorously are expected to connect the ‘heartland’ with the ‘rim land through continental and maritime routes and thus at one stroke make the rising China indispensable in the calculations of any country in the region, he said.

For India, regional and global leadership issues are also a consideration in the OBOR initiative. On the other hand, India also has its own initiative of Project Mausam of reviving commercial and cultural linkages with the Indian Ocean region and beyond, he noted.

Kandaswami Subramanian from Chennai Centre for China Studies, said that the global economic crisis leading to the collapse of exports has fuelled the rebalancing in China.

The earlier economic model had created excess capacity in major sectors like steel, transport, cement, metals. These excess capacities coupled with the management capability of Chinese public and private firms beg for opportunities abroad. These arrangements also seek to challenge the U.S. hegemony and the threat posed through its ‘Pivot Asia’ and TPP negotiations to dislodge China.

Another dimension of the OBOR may be related to China’s ‘going out’ policy, i.e. outward investment, beginning with the turn of this century.

M.J. Vinod, Professor, University of Bangalore, cautioned that while the Maritime Silk Road (MSR) is exclusively economic in orientation, yet it could still have strategic implications for India.

Though India cannot ignore the new Asian order that is fast emerging, the onus also lies on China in assuaging India’s concerns pertaining to the MSR.

K.B. Usha of the Centre for Russian and Central Asian Studies, JNU, pointed out that Chinese logistical initiative has expanded after the Ukraine crisis sharing the vision of Russia’s Eurasian Economic Union (EAEU).

Russia-China strategic partnership is thus growing, she said. Raju A. Thadikkaran, former director, ICCS, chaired the valedictory session.

‘It will connect the ‘heartland’ with the ‘rim land through continental and maritime routes.’

Source : The Hindu

by Bruce Pannier / Source Radio Free Europe

China’s massive One Belt, One Road (OBOR) project aims to connect the world like never before, using land and sea routes to form trade links across Asia and Europe and down to Africa. It’s an extremely ambitious project that will take many years to realize but already OBOR has many people excited about the economic possibilities to come.

Among the billions of people who could benefit immensely from OBOR are the roughly 65 million residents of Central Asia. But being part of OBOR is not necessarily a guarantee for a better future.

To look at OBOR in Central Asia, and some of the potential advantages and disadvantages, RFE/RL assembled a Majlis, or panel, to review the situation.

Moderating the discussion was RFE/RL Media Relations Manager Muhammad Tahir. From Exeter University in the U.K., senior lecturer and Central Asian expert David Lewis joined the discussion. From Geneva, journalist, researcher, and native of Kyrgyzstan Cholpon Orozobekova, who has written for the Jamestown Foundation and The Diplomat took part. I was just back from Washington, New York, and the CESS conference at Princeton and was raring to go, so I pitched in a few comments also.

As Lewis mentioned at the start of the Majlis, the numbers for OBOR are genuinely unprecedented -- $1 trillion of investment with routes potentially reaching some 44 countries with more than half the population of the planet. And, as Lewis pointed out, “This being the initiative of [Chinese President] Xi Jinping, it’s something that the Chinese leadership is committed to and it does involve significant funding for Central Asia in particular, and of course, governments, at least in Central Asia, are very enthusiastic about funding flowing into major infrastructure projects.”

OBOR has already started in Central Asia. Lewis recalled the oil pipeline from Kazakhstan, the natural gas pipelines from Turkmenistan, and a road network from Kyrgyzstan and Tajikistan already lead to China.

These projects and others were started, and some completed, before the autumn of 2013 when Beijing first articulated the OBOR project. As Orozobekova reminded, “In 2013, trade between China and the five Central Asian states was $50 billion already, while, for example, trade between Russia and these [Central Asian] countries was only $30 billion.”

That trend has only become stronger as Russia’s economy has weakened, limiting Russian investment potential. China, meanwhile, has continued to vigorously pursue OBOR. In February this year, the first cargo train from China arrived in Iran after passing through Kazakhstan and Turkmenistan along new railways in the latter two countries. In September, the first train from China to Afghanistan arrived after crossing through Kazakhstan and Uzbekistan.

According to the plan, the part of the route that runs through Central Asia should continue west through northern Iran into Turkey. Central Asia could benefit greatly from this new route for shipping goods to, and receiving goods from countries with access to the Persian Gulf and the Mediterranean Sea.

But already parts of Central Asia are seeing some of the negative aspects that come with these Chinese-funded projects.

“In Central Asia there are some concerns regarding the flow of migrants from China,” Lewis said. He explained: “Typically Chinese companies like to use their own people, bring in Chinese labor to get a job done. It’s often very effective but it doesn’t always give people local jobs and employ local specialists.”

That has led to problems in the oil fields of western Kazakhstan where Chinese employees work, in mining areas in Kyrgyzstan where Chinese employees work, and along various parts of the roads being constructed in Kyrgyzstan and Tajikistan where locals work alongside Chinese workers. Sometimes the problems are caused by rumors of the Chinese receiving better wages, sometimes the lack of the locals’ ability to communicate with the Chinese workers has led to fights.

Chinese farmers are also tending agricultural land in Tajikistan vacated by local farmers who left to find work in Russia. A proposal to lease farmland in Kazakhstan earlier this year sparked the largest protests seen there in some 20 years, when rumors spread that Chinese farmers would lease portions of Kazakhstan’s farmland.

Orozobekova said, “In Central Asia there are some concerns regarding the flow of migrants from China.”

Additionally, while Chinese workers are coming to Central Asia, Lewis said, “China just doesn’t offer that kind of labor migration, there’s no real option to go to China to work.” So Central Asia’s migrant laborers continue to mainly go to Russia.

And there are also environmental concerns. Chinese companies do not have a good track record when it comes to ecological considerations. Lewis explained, “In Kyrgyzstan and in Tajikistan recently, new cement plants developed by China are notoriously polluting industries and can have a really negative effect on local people.” Refineries in Kyrgyzstan and Tajikistan built or operated by Chinese companies have also received complaints from local administrations and residents.

Orozobekova also pointed out for Kyrgyzstan, OBOR is a competitor project. She said many in Kyrgyzstan “are overwhelmed with the EEU, the Eurasian Economic Union.” The EEU is the Russian-led organization that also includes Armenia, Belarus, Kazakhstan, and Kyrgyzstan. Kyrgyzstan officially joined in August 2015. Orozobekova said, “When it comes to OBOR and the EEU there’s a little bit of a clash between them because currently, Kyrgyzstan and Kazakhstan joined the EEU with Russia [and] there are so many problems within this organization [EEU].”

And Orozobekova reminded that since 1998, Kyrgyzstan is also a member of the World Trade Organization, so officials in Bishkek must do some furious juggling to try to simultaneously meet the regulations of all these organizations.

And Lewis noted, “We know there’s a slowdown going on in the Chinese economy and so these very ambitious plans, which require a lot of funding, may be more difficult than was considered.”

OBOR is a thick topic, and one the Majlis will address again in the near future. Participants in this latest Majlis session explored more deeply the benefits and detriments of being one of the first sections of OBOR, including potential security problems, now and in the future.

An audio recording of the discussion can be heard at:

China’s football strategy is about much more than just the sport itself

by Simon Chadwick

China is aligning its football investments with a strategy to secure West Asian minerals. Its ‘One Belt, One Road’ project could have major implications for the new world order of football, Simon Chadwick writes.

Many western observers probably still believe that Europe’s top clubs remain the most coveted football targets for China and its investors, their prospective purchase somehow symbolising the country’s sporting ambitions. And there are good reasons for such beliefs, not least the profile, presence, and power that owning a leading football club can bring.

The global discourse around China and football is becoming an increasingly well-rehearsed one, as well as one with which many of us are now familiar. But is it misplaced? Could it actually be the case that China’s football strategy is neither about the sport itself nor about Europe? Indeed, could it be that Iranian Gulf Pro League clubs Tractor Sazi and Perspolis are more important to the Chinese?

In February 2016, a freight train arrived in Tehran, having travelled directly to the Iranian capital from Beijing. Its arrival was both timely and telling; following the lifting of sanctions against Iran, the country is now opening-up to the world and establishing new trading relations. Indeed, speculation is even growing about the impact this will have on the sport and football industries in Iran.

An alignment of Chinese and Iranian sporting interests would therefore seem to be one obvious outcome of strengthening relations between the two countries. Indeed, we should probably expect sponsorships, commercial deals, and even club relationships involving the two countries.

This becomes an even likelier prospect given that Iran is a more accomplished performer at World Cups than China ever has been. The East Asian giant therefore has much to learn from its smaller West Asian partner. However, this still doesn’t account for the significance of the train, which in itself is evidence of China’s growing power across Eurasia.

The direct line from Beijing to Tehran is part of China’s ‘One Belt, One Road’ (OBOR) project, which is comprised of two parts: the Silk Road Economic Belt, and the Maritime Silk Road. Mirroring the ancient Silk Road routes, the project has been designed to foster trade in central Asia and to enable China to have a greater influence on international affairs. Among the countries that are part of the OBOR initiative are India, Qatar, Russia, as well as numerous others.

China has been seeking to utilise OBOR as means of securing raw materials and building the capacity of its manufacturing industries. At the same time, the country has also sought to break some established ties between countries in the region. Among China’s achievements include the construction of a gas pipeline that allowed Turkmenistan to break its dependence on Russia, and an oil pipeline running from Russia to China.

Aside from any speculation about Iranian football, we are already seeing how the sport and OBOR are becoming part of China’s broader strategic goals. The sale of a 13 per cent stake (worth £265 million) in English Premier League club Manchester City was in part motivated by mineral interests. City is still controlled by its majority owners from Abu Dhabi, but it is China’s broader relationship with the United Arab Emirates, an OBOR member, that is striking.

In 2014, China struck a major oil and gas deal with Abu Dhabi, the first of its kind, which broke the historic grip of Western oil companies on the Gulf nation. Quid pro quo: with the relationship established it is hardly surprising therefore that when President Xi visited Britain in late 2015, he headed straight for a visit to City (and not to United, which has long been rumoured to be his favourite football club).

This use of football for diplomatic purposes, specifically in relation to mineral trading, is hardly new and is increasingly being used. The likes of Russia’s Gazprom has proved to be highly adept at using a high profile portfolio of football sponsorships to further its interests. But with China gaining access via the OBOR project to multiple new markets allied to its growing focus on football, the mineral, energy and trade-driven diplomacy of international football is likely to intensify.

China-based broker of football club deals, Alexander Jarvis, has noted that, “Football is increasingly influenced by the minerals. I am sure it was a factor in the Chinese investment into City Football Group; venture capital firm Citic Capital, part of the consortium, has huge interests in the energy sector globally, while CEFC China Energy Company – which bought Czech football club Slavia Prague in 2015 – has close ties with local government in the country. We are seeing this type of activity across a range of countries, including Serbia, Russia, Kyrgyzstan, Kazakhstan and Uzbekistan, Iran and India.”

These are all OBOR nations, albeit sometimes with poorly-developed football. Even so, leaders of nations along the new Silk Road will be acutely aware of the political leverage that sport and football can provide, especially in their dealings with China.

The world will inevitably continue to focus on Wanda’s onward march through sport, Suning’s growing interests in football, and Marcello Lippi’s battle to get China to the 2018 World Cup. However, it is arguable that football’s new world order is more potently emerging in the nations through which China’s OBOR passes. Bishkek, capital of Kyrgyzstan, may not spring to mind as being a major influence on the future of football. Yet its mineral wealth and willingness to utilise sport as a means of engaging with China suggests it could be just as big an influence on China and football as La Liga and Serie A.

Source : Policy Forum