It is deep indeed, very very deep. I hope you understand what I'm saying.deeper than deepest sea,
Your argument is very flawed. The corridor with rail ,roads and pipelines can serve western inland provinces only, not necessarily covering the eastern coastal (Shanghai etc.) too while being complementary to sea routes.How viable is the CPEC?
Calculations tell us that shipping through Gwadar port is costlier and more time consuming than transporting through seas, and distance between Pakistani cities and Chinese cities is as much as the distance between Pakistani cities and major European cities. Thus, if there is no land route trade happening between Europe and Pakistan, then certainly no trade will happen between china and Pakistan on a large scale. And anything which is cheaper and quicker is always preferred, which is not the case for transporting through Gwadar and Kashghar by road.
Cost comparison for viability of CPEC.
Distance between Shanghai and Kashghar = 5121 Km
Distance between Kashghar and Gwadar = 2747 Km
Average Trucking cost per Ton per Km in China = 7 cents. (at 2007 tariffs)
Average Trucking cost per Ton per Km in Pakistan = 3 cents.
So chinese Western inland province will develope a huge industrial base for prosperity. And they will have Pakistan as a captive customer thanks to cpec Pakistan will not be able to complete with even elementary Chinese product let alone heavy engineering industries. Pakistani govt can not play tariff game with china because of so called friendship.Your argument is very flawed. The corridor with rail ,roads and pipelines can serve western inland provinces only, not necessarily covering the eastern coastal (Shanghai etc.) too while being complementary to sea routes.
The landlocked hinterlands in addition to neighboring Central Asian stans can use Gwadar seaport as a gateway from/ to Mid East and Europe and Africa at lower costs than via eastern ports.
The whole East Coast of China is well developed already, not just a few big names like Hong Kong Shanghai and Dalian. Meantime owing to logistic restraints, the deep western inland part is generally lagging behind with untapped potential. That is why China is exploring Myanmar for pipelines and railways to SW China (Yunnan) and CPeC for NW (Xinjiang).
With completion of such sea gateways many industries such as crude refinery and chemistry can be deployed to inland with convenient supply chains of raw materials and finished products.
An automobile factory has been set up at the border with Myanmar.
Neither it has military connotations nor it is viable business model. China is dumping its money and getting higher returns and jobs for its people. Its called 'Sarmayedaari" in local language, lending money to earn interest. Pakistanis have no other option but to oblige as 'India enemy' straw-man has become main stream school of thought.How viable is the CPEC?
Calculations tell us that shipping through Gwadar port is costlier and more time consuming than transporting through seas, and distance between Pakistani cities and Chinese cities is as much as the distance between Pakistani cities and major European cities. Thus, if there is no land route trade happening between Europe and Pakistan, then certainly no trade will happen between china and Pakistan on a large scale. And anything which is cheaper and quicker is always preferred, which is not the case for transporting through Gwadar and Kashghar by road.
Cost comparison for viability of CPEC.
Distance between Shanghai and Kashghar = 5121 Km
Distance between Kashghar and Gwadar = 2747 Km
Average Trucking cost per Ton per Km in China = 7 cents. (at 2007 tariffs)
Average Trucking cost per Ton per Km in Pakistan = 3 cents.
This is the most conservative calculation not taking into account Hazard premium that nature of Terrain imposes on Pakistan (Karakoram Highway is rated world's fourth most dangerous highway The hazard premium that China has to pay for transporting good through Takla Makan Desert , Kulun Shan mountains range, and Altai Shan mountain range.
But still let us calculate cost of transporting a Ton of goods from Shanghai to Gwadar.
Cost incurred in Chinese territory = 0.07 X 5121 = $358.47
Cost incurred in Pakistani territory = 0.03 X 2747 = $82.41
So total cost from Shanghai to Gwadar for a ton of goods by road = $440.88 or approx Rs 50,000 PKR per ton.
(Since Pakistan doesn't export high value goods but mainly low value textiles, the cost of transportation itself will far more than the cost of production! Thus Pak exports to China via the CPEC will be a non starter!)
Now let destination port be Dubai.
Cost of Transporting 1 Ton via sea from Dubai to Shanghai via Malacca = $28.93
Cost of Transporting 1 Ton from via sea from Karachi to Dubai = $5.787
Therefore, total cost of Shipping a Ton from Shanghai to Dubai via Gwadar = $446.67.
But the total cost of Shipping directly by sea from Shanghai to Dubai via Malacca = $28.93 which is 16 times less than that of Transporting via Gwadar!!!
Heck, the total cost of Transport from Gwadar to the Chinese border is more than what would be required for Transport from Dubai to Shanghai by sea!
And then, eleven old coal fired plants are being transferred by China to Pakistan as part of the CPEC where the Chinese themselves are turning to renewal sources of energy like nuclear power and thus dumping these coal plants to Pakistan. The cost of power in Pakistan is presently Rs 7 PKR (average) per unit. The Chinese will peg that between Rs 18 - Rs 22 per unit as these private Chinese construction companies have borrowed heavily from the Chinese Central Bank and other lending institutions which they have to pay back with interest. It's the Pakis who would be paying for this not the Chinese who will only rake in the profits! Would the ordinary Paki be able to pay this kind of tariff? Not a chance in hell!
The truth is that the CPEC is basically meant as an alternative route to China in case of any disruption in the Strait of Malacca. However, more importantly, Gwadar is being developed by the Chinese to establish a PLAAN base there and the CPEC is being built basically for its logistics support.
A Chinese naval base at Gwadar will enable them to dominate the Strait of Hormuz as well as the IOR region. For Pakistan it would be an insurance policy against any Indian naval attack on its facilities due to the Chinese naval presence at Gwadar.
if India wanna dump goods to Pakistan or elsewhere, u don"t need Gwadar. there're many existing routes. Gwadar is part of the master plan alongside with infra and power projects.So chinese Western inland province will develope a huge industrial base for prosperity. And they will have Pakistan as a captive customer thanks to cpec Pakistan will not be able to complete with even elementary Chinese product let alone heavy engineering industries. Pakistani govt can not play tariff game with china because of so called friendship.
Conclusion== Pakistan will never be industrialized.
Paki will influx in Xinjiang for jobs in industrial areas and will then do what they do best ---sucide bombing :biggrin2:
Good going.
By the way gwadar port will also bring Indian goods from Dubai and middle East at much cheaper rates than Karachi. Further decimating paki industry
It is a fact due to strained relationship most of Indian goods are imported into Pakistan via Dubai. More ports means more import.if India wanna dump goods to Pakistan or elsewhere, u don"t need Gwadar. there're many existing routes. Gwadar is part of the master plan alongside with infra and power projects.
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No it doesn't when you have excellent transportation and favorable import regime with a giant like China which is wrestling with overcapacity issues.industrialization comes hand in hand with HSR and 24x7 power supply like China. jointly we are targeting ME and C. Asian markets and beyond.
Also eyeing extention to Iran.
if u do browse u'll find a Chinese industrial park in Lahore Pakistan for home appliance JVs.
How viable is the CPEC?
Calculations tell us that shipping through Gwadar port is costlier and more time consuming than transporting through seas, and distance between Pakistani cities and Chinese cities is as much as the distance between Pakistani cities and major European cities. Thus, if there is no land route trade happening between Europe and Pakistan, then certainly no trade will happen between china and Pakistan on a large scale. And anything which is cheaper and quicker is always preferred, which is not the case for transporting through Gwadar and Kashghar by road.
Cost comparison for viability of CPEC.
Distance between Shanghai and Kashghar = 5121 Km
Distance between Kashghar and Gwadar = 2747 Km
Average Trucking cost per Ton per Km in China = 7 cents. (at 2007 tariffs)
Average Trucking cost per Ton per Km in Pakistan = 3 cents.
This is the most conservative calculation not taking into account Hazard premium that nature of Terrain imposes on Pakistan (Karakoram Highway is rated world's fourth most dangerous highway The hazard premium that China has to pay for transporting good through Takla Makan Desert , Kulun Shan mountains range, and Altai Shan mountain range.
But still let us calculate cost of transporting a Ton of goods from Shanghai to Gwadar.
Cost incurred in Chinese territory = 0.07 X 5121 = $358.47
Cost incurred in Pakistani territory = 0.03 X 2747 = $82.41
So total cost from Shanghai to Gwadar for a ton of goods by road = $440.88 or approx Rs 50,000 PKR per ton.
(Since Pakistan doesn't export high value goods but mainly low value textiles, the cost of transportation itself will far more than the cost of production! Thus Pak exports to China via the CPEC will be a non starter!)
Now let destination port be Dubai.
Cost of Transporting 1 Ton via sea from Dubai to Shanghai via Malacca = $28.93
Cost of Transporting 1 Ton from via sea from Karachi to Dubai = $5.787
Therefore, total cost of Shipping a Ton from Shanghai to Dubai via Gwadar = $446.67.
But the total cost of Shipping directly by sea from Shanghai to Dubai via Malacca = $28.93 which is 16 times less than that of Transporting via Gwadar!!!
Heck, the total cost of Transport from Gwadar to the Chinese border is more than what would be required for Transport from Dubai to Shanghai by sea!
And then, eleven old coal fired plants are being transferred by China to Pakistan as part of the CPEC where the Chinese themselves are turning to renewal sources of energy like nuclear power and thus dumping these coal plants to Pakistan. The cost of power in Pakistan is presently Rs 7 PKR (average) per unit. The Chinese will peg that between Rs 18 - Rs 22 per unit as these private Chinese construction companies have borrowed heavily from the Chinese Central Bank and other lending institutions which they have to pay back with interest. It's the Pakis who would be paying for this not the Chinese who will only rake in the profits! Would the ordinary Paki be able to pay this kind of tariff? Not a chance in hell!
The truth is that the CPEC is basically meant as an alternative route to China in case of any disruption in the Strait of Malacca. However, more importantly, Gwadar is being developed by the Chinese to establish a PLAAN base there and the CPEC is being built basically for its logistics support.
A Chinese naval base at Gwadar will enable them to dominate the Strait of Hormuz as well as the IOR region. For Pakistan it would be an insurance policy against any Indian naval attack on its facilities due to the Chinese naval presence at Gwadar.