China-Pakistan Sign in to start second-phase of
CPEC.
~Preet
Pakistan and China signed a new agreement on 4th of February 2022, to start the second phase of the USD 60 billion China-Pakistan Economic Corridor (CPEC), with Prime Minister Imran Khan praising the controversial projects, saying they are strategic for both countries and will provide tangible benefits to the people.
On Friday, Khan held a virtual meeting with He Lifeng, Chairman of China's apex planning body, the National Development and Reform Commission (NDRC), to discuss the expansion of Chinese investments in Pakistan. Khan arrived in China on Thursday for a four-day visit to attend the opening ceremony of the 2020 Beijing Winter Olympics and meet with top Chinese leadership.
According to Pakistan's state-run Associated Press of Pakistan news agency, State Minister and Chairman of the Board of Investment Muhammad Azfar Ahsan and He signed the Framework Agreement on Industrial Cooperation, which aims to attract Foreign Direct Investment (FDI), promote industrialisation and development of economic zones, and initiate, plan, execute, and monitor projects in both the public and private sectors.
Khan, who was a critic of the China Pakistan Economic Corridor (CPEC) before coming to power because of its secrecy and unequal investments that ignored some areas of the nation, said the project is essential for both countries and provides real advantages.
He stated that the CPEC's early-harvest projects have reshaped Pakistan's economic landscape, creating a solid basis for long-term economic growth.
Both parties evaluated the status of existing CPEC projects and discussed preparations for future initiatives during the meeting, according to the statement.
In response to Chinese complaints of project delays, Khan, who had previously ordered the repeal of 37 restrictions impeding the CPEC projects' progress, restated the two countries' commitment to completing them on time.
The ambitious CPEC is a 3,000-kilometer infrastructure project that connects China's northwest Xinjiang Uygur Autonomous Region with the Gwadar Port in Pakistan's western Balochistan region.
India has lodged a protest with China against the CPEC, which is being built across Pakistan-controlled Kashmir (PoK).
Foreign Minister Shah Mahmood Qureshi, Finance Minister Shaukat Tarin, Planning Minister Asad Umar, Information Minister Fawad Chaudhry, National Security Advisor Moeed Yousaf, Commerce Advisor Abdul Razak Dawood, and Special Assistant on CPEC Khalid Mansoor are among Khan's high-level delegation in China.
He is scheduled to meet with President Xi Jinping and Premier Li Keqiang of China.
The need for a comprehensive Framework Agreement became critical when CPEC reached its second phase, which focuses on the development and industrialization of Special Economic Zones (SEZs), according to the research.
According to a report published last year by the US-based international development research lab AidData, a significant portion of Chinese development finance under the CPEC consists of loans at or near market rates rather than grants.
According to the study, Pakistan received roughly half of all Chinese development funding in the form of "export buyer's credit," or money granted to Pakistan by Chinese institutions to support the purchase of equipment and commodities by Chinese implementation partners.
According to the research, up to 40% of China's loan to Pakistan does not show on the government's records "for the most part."
Dawn wrote in an editorial on the AidData study that the nature of Chinese finance for infrastructure programmes under the CPEC initiative necessitates greater openness in the projects that have been carried out here since 2015.
"In reality, even in opposition, the PTI (Khan's ruling Pakistan Tehreek-e-Insaf) advocated complete openness in CPEC investments."
"However, now that it is in office, it has done nothing to make public the costs or terms of the CPEC arrangements with China's government, enterprises, and banks, keeping the topic completely under wraps, just as its predecessor had done," the editorial added.
"That the majority of Chinese finance for CPEC plans consists of pricey commercial loans isn't the only concerning feature," it continued. What's more alarming is that up to 40% of Chinese loans have been issued in a fashion that blurs the line between private and state debt, obviating the necessity for it to be disclosed as public debt."
"Furthermore, in the form of sovereign guarantees or guaranteed returns on equity, Islamabad has provided 'explicit or tacit... government liability protection' to Chinese investors."
"Then, about half of all Chinese finance has come in the form of 'export buyer's credit,' or money lent by Chinese institutions to Pakistan to facilitate the purchase of equipment and goods to be purchased by Chinese implementation partners," the editorial continued, "along with awarding contracts to Chinese without competitive international bidding."
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