CPEC - China Pakistan Economic Corridor News & Discussion

Mikesingh

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why cpec wont work............................................................
Not only land slides along the entire mountainous stretch, there's also the problem of long stretches of the road under several feet of snow during the winter months!

The Khunjerab Pass through which the PEC passes is one of the highest passes at an altitude of 15,500 feet above the sea level.

Under the protocol agreement signed by Pakistan and Chinese authorities, the border is usually closed on Nov 30 and reopened on April 1 every year in ideal circumstances. It could be closed upto 6 months in a year if these's a bad winter!

So that means no trade along the CPEC for 4 to 6 months a year! Check out what a small portion of the terrain near the Khunjerab Pass looks like. This pic was taken on 24 March 2016 where it shows miles of road under several feet of snow...



The effort required to clear the massive amounts of snow on this mountainous stretch is easier said than done!

Thus if there's no trade along the CPEC for almost six months in a year, what is the viability of the CPEC?
 

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the intentions of pakistan govt is to build a economical base .....
has they choosen the right partnern, thats the question....
 

Mikesingh

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The Gwadar Port And The CPEC Disillusion
Mei Xinyu
Chinese Academy of International Trade and Economic Cooperation


(Yicai Global) April 11 -- Pakistan’s Gwadar Port, a Chinese construction project, officially opened in November last year. It is undoubtedly a landmark project in trade ties between the countries and a key part of the China-Pakistan Economic Corridor. As the home of the port’s operating company, China hopes the port will play an important role in Pakistan’s sustainable development. However, the port has no links to China’s energy imports, both security and economic issues prevent the creation of the proposed China-Pakistan Oil and Gas Pipeline.

Advocates of the oil and gas line claim that resources from the Persian Gulf could be shipped to Gwadar Port and transported to China by land, shedding 85 percent of the distance covered by sea-only transport. The line could also break the ‘Malacca Dilemma,’ that casts a shadow over the security of China’s energy imports. Around Chinese New Year in 2015, an article titled Pakistan’s Third Largest Port Will Open in April, Shortening the Oil Transport Distance to China by 85 Percent spread online. The basic premise and conclusions of the argument were misleading. In fact, the Middle East-Gwadar-China transport route for gas and oil is unreasonable, both in terms of security and economic efficiency.

No Business Value

The conceptual error in the premise of this article’s argument, that “the pipeline shortens the oil and gas transport distance from the Persia Gulf to China by 85 percent”, lies in how it ignores the vast size of China and its unbalanced regional development. Its population, economic activity, and oil and gas consumption are mostly distributed around the eastern coast and central regions, far from Xinjiang. It also translates the arrival of resources shipped from the Persian Gulf to China as reaching the country’s major consumer market. If the oil and gas shipped to Xinjiang’s Kashi city through Gwadar Port, it still needs to travel between 4,000 and 6,000 kilometers by rail to reach China’s more populous areas. The actual transport distance could never be cut by as much as 85 percent.

At the same time, it also replaces low-cost, large-capacity sea transport with expensive land transport. The whole concept of the pipeline is inefficient, and that’s without considering the increased security costs. After building the required infrastructure, even for the pipelines built in regions with simple terrain conditions, the return on investment would be lower than when transporting by sea. For example, with a USD2 billion investment in pipelines, 1,000 kilometers of line could be built, transporting 30 million tons annually. If the same amount was injected into marine transport, 20 very large crude oil carriers could be built, transporting 40 million to 60 million tons a year and resulting in more liquid assets.

China has a complete fundamental infrastructure to transport oil and gas by sea, but such groundwork for the pipeline would be built from scratch. A stable electricity supply can’t even be guaranteed in the host country, Pakistan, a problem which is yet to be solved by a series of power generation projects under the China-Pakistan Economic Corridor framework. The pipeline would require ultra high-power pump stations as it has to pass through the Karakoram Pass, at an altitude of 5,000 to 6,000 meters above Gwadar and Kashi. Add in heating and insulation required for the section of piping on the plateau and the required investment climbs further.

After entering China, the pipeline section from Kashi to the major consumer markets in China has to travel thousands of kilometers through the Gobi Desert, where construction costs are much higher than the plains.

In terms of transport costs, the proposed China-Pakistan Oil and Gas Pipeline cannot compare to marine transport routes. Japanese scholars once described the transport costs of modern very large crude oil carriers as being so low that Saudi Arabian crude oil and be shipped to Japan at zero cost, and the Persian Gulf could be considered a ‘local’ oilfield to Japan. With today’s shipping costs, the same holds true for the east of China.

It costs just USD1.25 a barrel to ship oil 7,000 kilometers from Saudi Arabia’s Ras Tanura to Ningbo, in China’s eastern province of Zhejiang, according to The Reality and Strategic Consequences of Seaborne Imports: China’s Oil Security Pipe Dream, a research report from February 2010. Considering a ton as seven barrels, that’s USD8.75, or just over CNY60 based on exchange rates from November 2016. If oil and gas from Africa’s east coast could also be sent to China, it would come at a similar price. In contrast, the report forecast the cost of the CPOGP raising transport costs by USD100 per ton.

Combined with the costs of pushing oil from Xinjiang to China’s main consumer markets, the transport costs come in at nearly CNY1,000 a ton, more than 16 times the cost of sea transport from Saudi Arabia to Ningbo. Using figures from last November, Brent crude oil futures were USD49.09 a barrel. Counting seven barrels as a ton, that comes in at CNY2,363 per ton. Using the pipeline, transportation costs are around 42 percent of the selling price of crude oil, compared to just 2.5 percent when transporting by sea. The competitive advantage of shipping is quite apparent.

Also, with the growth of America’s oil and gas exports and the opening of the Panama Canal expansion, global trade routes have quietly shifted. As well as bringing in oil from the Persian Gulf and Africa, China’s eastern ports can accept oil and gas from the US and Venezuela with competitive transport costs. Brazilian subsalt oil and gas may also be used to enhance facility utilization and cut costs.

In its 2013 Outlook for World Energy, the International Energy Agency forecast that by 2035, Brazilian oil production would account for one-third of global supply. If the Nicaragua Canal is completed, transportation costs would be even more competitive, with the Gwadar route paling in comparison.

Concerns Over Strategic Value

From a security viewpoint, the Malacca Dilemma is a pseudo-concept, to a great extent. This concept was originally proposed in Japan during the Cold war. At that time, its oil and gas supply was highly dependent on the Persian Gulf, with allies in America and Britain controlling the gulf’s security. The only route for oil, gas and other goods to Japan that couldn’t be cut off by the Soviet Union, Japan’s quasi-enemy, was the Malacca Strait.

Today, China’s situation is very different. Our quasi-enemies are the navies of America, Britain and India. The US and UK control the security of oil around the Persian Gulf. The US Naval Forces Central Command and US Fifth Fleet are stationed in Bahrain, and the construction of a UK military base in Bahrain’s Mina Sulman Port began in 2015. They also have military bases in gulf countries, like Saudi Arabia. In order to cut off oil and gas supplies from the gulf to China, they just need to advise gulf countries to close oil wells, they don’t need the Malacca Straight. With the Diego Garcia Base in the Indian Ocean, they can also block export ports along the coast of that ocean. Supposing that China went to war with the US, UK and India to protect its oil and gas supplies, it would be easier for its enemies to use the Arabian Sea and the rest of the Indian Ocean.

Some believe the new pipeline improves security for China’s oil and gas imports, but it would actually introduce more security hazards. First, compared with the South China Sea, the Arabian Sea and Indian Ocean have fewer geographical advantages for the Chinese Navy. Secondly, land-route risks would emerge and quickly grow. With its formidable anti-government armed forces, Pakistan is plagued by wars. For example, there are strong separatist forces in Baluchestan province, where Gwadar Port is located. Taliban forces have existed for a long time in Khyber Pakhtunkhwa province, which is semi-independent of Pakistan. The nation’s government once sent out 100,000 soldiers to quell rebellion in Federally Administered Tribal Areas. Disputes between the Kashmir region and India cause frequent military conflicts. Considering all of this, it’s hard to imagine the pipeline being secure when crossing through these regions.

Some suggest a benefit of the CPOGP comes from access to the future Iranian oil and gas pipeline, but this is not the case. First, even if Iran’s resources are exported to China through pipelines, the central Asia-northern Xinjiang line, which has several ready-made pipelines, would be preferable over the China-Pakistan line, in terms of both security and economy. Secondly, Iran may not be happy to export its commodities via Pakistan. Saudi Arabia and other gulf countries, including Iran, have a negative attitude towards the advancement of the China-Pakistan Economic Corridor as it will lower then standing and influence over the country. These countries would prefer that China’s One Belt, One Road imitative focus more in East and Southeast Asia rather than countries to the west of the nation.

Further reviewing China’s energy security goal, the aim should not be to maintain ordinary energy consumption during times of war. It is wrong to invest in resources for such an irrational goal, China is the world’s largest country in both industrial development and exports. Such a vast quantity of exports cannot be maintained when at war, and as a result, a large amount of oil and gas energy usually consumed for production and transport of exports will decline sharply.

Even in extreme situations, e.g. marine transport of oil and gas from the Persian Gulf is interrupted, domestic production capacity and imports from other countries will be sufficient. In order to guarantee competitiveness in the downstream industrial market when not at war, it’s inappropriate to use expensive resources. Furthermore, China is home to the world’s most abundant coal resources. When at peace, cheap imported gas and oil should be used as much as possible, but during war, coal consumption can be increased to compensate for the lack of gas and oil.

The bear market for primary products, that could last 10 to 15 years from when it began in 2012, brings more benefits to India than Pakistan, which may sharpen the imbalance between the strength of countries in the subcontinent. For the sake of China’s international strategy, and in order to balance strength in South Asia and undermine extremist forces in Pakistan, China must offer support to Pakistan’s economy, mostly through commercial projects. The world’s largest country should remain objective when selecting projects, take full account of economic law and security concerns, and properly control investment amounts.

Given the issue, China should prevent domestic groups from attempting to make misleading national decisions. We should also stop opinions from pushing up the political and economic value of the China-Pakistan Economic Corridor, which could misdirect social understanding of the project.

Mei Xinyu, the author, is a researcher at the Chinese Academy of International Trade and Economic Cooperation for the Ministry of Commerce. The article was initially edited by Wang Yanchun and published in Caijing Magazine on Dec. 19, 2016.

The above very informative article was found by @Bharat Ek Khoj

https://www.yicaiglobal.com/news/gwadar-port-disillusion

 
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Mikesingh

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if the taliban don't do their job, mother nature will. :rofl:
You're spot on! The areas around the Khunjerab pass at > 14,000 ft through which the CPEC will run, is snow bound for 4 months a year with temperatures touching minus 20-30 deg C!! So the CPEC would be a lame duck from Nov to March every year with no trade or movement during this time!! Lol! Any Porki thought of that?
 

Kshatriya87

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You're spot on! The areas around the Khunjerab pass at > 14,000 ft through which the CPEC will run, is snow bound for 4 months a year with temperatures touching minus 20-30 deg C!! So the CPEC would be a lame duck from Nov to March every year with no trade or movement during this time!! Lol! Any Porki thought of that?
Allah will heat up the area naturally to protect CPEC


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SELVAM

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Actually chinese never said they will ship their goods via pakistan or import oil through pakistan. Pakis who r dreaming of collecting dollars in toll charges r waiting for rude awakening
 

Kshatriya87

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Actually chinese never said they will ship their goods via pakistan or import oil through pakistan. Pakis who r dreaming of collecting dollars in toll charges r waiting for rude awakening
Ever heard the story of Shah Jahan and the labours who built the Taj Mahal? Shah Jahan had the Taj Mahal built and then cut off the hand of the builders.

Regardless of whether the story is true or not, this is what is about to happen to pakis.


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SELVAM

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Ever heard the story of Shah Jahan and the labours who built the Taj Mahal? Shah Jahan had the Taj Mahal built and then cut off the hand of the builders.

Regardless of whether the story is true or not, this is what is about to happen to pakis.


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I am still amused by paki awam who believe this kind propaganda by paki establishment. China is importing trillions of gallon oil and gas from russia and other central Asian republics for last decade. Why would they need pakistan? As of now even pakis r using sea route to trade with chinese. The land route via Himalayas r not viable for any trade.

Gwadar port is biggest white elephant in Pakistan. They build this port using their own money. 10 years after opening gwadar port, still it has only one or two ship visits per month. That too chinese vessels which bring construction materials for road and power projects
 

SELVAM

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Ever heard the story of Shah Jahan and the labours who built the Taj Mahal? Shah Jahan had the Taj Mahal built and then cut off the hand of the builders.

Regardless of whether the story is true or not, this is what is about to happen to pakis.


Sent from my iPhone using Tapatalk
I am still amused by paki awam who believe this kind propaganda by paki establishment. China is importing trillions of gallon oil and gas from russia and other central Asian republics for last decade. Why would they need pakistan? As of now even pakis r using sea route to trade with chinese. The land route via Himalayas r not viable for any trade.

Gwadar port is biggest white elephant in Pakistan. They build this port using their own money. 10 years after opening gwadar port, still it has only one or two ship visits per month. That too chinese vessels which bring construction materials for road and power projects
 

Mikesingh

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I am still amused by paki awam who believe this kind propaganda by paki establishment. China is importing trillions of gallon oil and gas from russia and other central Asian republics for last decade. Why would they need pakistan? As of now even pakis r using sea route to trade with chinese. The land route via Himalayas r not viable for any trade.

Gwadar port is biggest white elephant in Pakistan. They build this port using their own money. 10 years after opening gwadar port, still it has only one or two ship visits per month. That too chinese vessels which bring construction materials for road and power projects
Firstly, Gwadar, the so called 'Mega Oil City' is nothing but a damp squib and will remain so due to the acute water shortage problem which will be extremely difficult to solve. It is a parched desert a glimpse of which can be seen here.......












And the quality of water....



Truth be told, Gwadar’s water emergency puts any gains to be made out of CPEC projects in jeopardy — after all, how can an industrial city survive without potable water? Are we being set up for a fall?

Despite being the centrepiece of CPEC, there is not a drop to drink in Balochistan’s city by the sea.

Muhammad Akbar Notezai


Secondly, the CPEC project has nothing to do with trade or even Pakistan. Gwadar is the future naval base for the PLAAN from where the Chinese will be able to dominate the Strait of Hormuz and the IOR. The CPEC is being built as a supply line for their PLAAN base.
 
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Mikesingh

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China should consult India on CPEC: Chinese scholar
China should not build a road through Pakistan-occupied Kashmir (PoK) as part of the China-Pakistan Economic Corridor (CPEC), as it is disputed territory, a leading Chinese scholar has said.

http://www.moneycontrol.com/news/wo...lt-india-on-cpec-chinese-scholar-2389529.html
Hmmmm...So there are a few sensible people in China, which is a rarity! Gobar times and the hawks in the CPC are going to throw a fit reading this. This Chinese scholar is probably going to be shoved into the cooler soon.
 

sorcerer

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Hmmmm...So there are a few sensible people in China, which is a rarity! Gobar times and the hawks in the CPC are going to throw a fit reading this. This Chinese scholar is probably going to be shoved into the cooler soon.
The "HINDU MARKET" appeasement talks are always done by chinese SCHOLARS and not POLITICIANS.
Thats the dual nature of chinese
 

Willy2

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why cpec wont work............................................................
I think some DFIan made this channel right ? IT's same that the comment section full of paki and chinki ( not sure are they paki under chinese name) troll...may be Indian ingenerel are't as interest in military stuff like Pakistani to take these gen channel seriously
 

LurkerBaba

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"Pakistani authorities have warned about delays and disruption in China Pakistan Economic Corridors (CPEC) related multi-billion dollars projects after outbreak of coronavirus, The News reported on Saturday.

A detailed report tabled before high-powered National Coordination Committee (NCC) states that Chinese companies working on CPEC projects will suffer delays and higher costs, and with supply-chain and worker related disruptions will be witnessed."

 

Mikesingh

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"Pakistani authorities have warned about delays and disruption in China Pakistan Economic Corridors (CPEC) related multi-billion dollars projects after outbreak of coronavirus, The News reported on Saturday.

A detailed report tabled before high-powered National Coordination Committee (NCC) states that Chinese companies working on CPEC projects will suffer delays and higher costs, and with supply-chain and worker related disruptions will be witnessed."

But here's what the Pak Ambassador to China Naghmana Alamgir Hashmi said while speaking on “World Insight” of China Global Television Network (CGTN).

"All the projects being completed under the China Pakistan Economic Corridor (CPEC) framework would meet their deadlines as all the preventives and control measures had been put in place against the spread of Covid-19.

“In consultation with the Chinese government and companies, we have put in place a double quarantine system for the Chinese workers returning to Pakistan after the New Year’s vacations to ensure that other workers don’t infected.”

Which I think is a lot of rubbish! The CPEC is as dead as a dodo....At least until next year.
 

ezsasa

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Just checked the progress on CPEC power projects, looks like all of them(coal, wind & solar) are completed and operational.
 

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