China's inroads into Pakistani economy points toward neo-colonialism- analysis

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Representative Image

Tel Aviv [Israel], April 11 (ANI): An analysis of industrial inroads made by China into Pakistan points toward greater designs of neo-colonialism.

Getting the CPEC (China-Pakistan Economic Corridor) Authority law passed in the National Assembly in February 2021 has made the Pakistan government's position more embarrassing as lack of progress on the mega-project has come under increased scrutiny in the eyes of media and public, reported The Jerusalem Post.

Fabien Baussart in an opinion piece in The Jerusalem Post wrote that the subtle signs of unease between the two countries over the future direction and subsequent funding of CPEC projects had already started surfacing earlier especially after the outbreak of the COVID-19 pandemic.

While the Pakistani President and Foreign Minister visited China at the height of the pandemic in March 2020, the scheduled visit of Chinese President Xi Xinping to Pakistan was deferred several times.

The annual meeting of the Joint Coordination Committee, which is the most awaited event for various stakeholders of CPEC projects, got postponed throughout 2020.

Similarly, the meetings of sectoral Joint Working Groups were delayed for months before being conducted for the namesake in a later part of the year, reported The Jerusalem Post.

The outcome of these meetings reveals significant scaling down of Pakistan's expectations regarding the inclusion of more projects under CPEC phase II, opined Baussart.

Islamabad has long portrayed the USD 6.8 billion Main Line-I project to be the main artery of Pakistan Railways and tried to convince China to finance the project, the Chinese side has tried to avoid any commitment for funding.

Also, Pakistan was unable to secure any favourable consideration, including the concessionary loan at an interest rate of 1 per cent, China instead offered a mix of commercial and concessional loans to fund the railway project, backed by suitable guarantees by Pakistan.

According to the Pakistani CPEC Authority, so far, 17 projects worth USD 13 billion. have been completed, while another 21 projects having an estimated cost of USD 12 billion are under implementation.

Construction of Gwadar Port, Eastbay Expressway, and the Thakot-Raikot section of the Karakoram Highway is facing delays due to lack of coordination among responsible agencies from both countries, reported The Jerusalem Post.

Despite high-decibel publicity by Pakistan, we have not seen any significant number of Chinese investors showing interest in setting up units in the special economic zones being established as part of industrial cooperation under the CPEC, said Baussart.

Trying to come to terms with the recent setbacks, Pakistan is now pinning hopes on the Chinese president visiting the country in 2021 and providing some financial impetus to the stalled projects.

Meanwhile, the hype created by the Pakistani government through projecting the CPEC as a panacea for all problems is rapidly losing steam.

The realization is gradually dawning upon various government agencies that Pakistan's economy has failed to achieve any real benefit from the CPEC, reported The Jerusalem Post.

Struggling local businessmen lament that Chinese investors are cornering key domestic industries, state assets and businesses to the detriment of Pakistani players and interests.

Interestingly, non-CPEC Chinese private investment in Pakistan is increasingly driven by cheap labour and by securing access to raw materials that are shipped back to manufacturing facilities in China.

China is also building factories in Pakistan to export finished goods directly to European markets, which deprives the Pakistani exporters of their share of opportunities to trade with these countries, reported the opinion piece.

Concerns of local businesses have parallels in the working-class population as well. The creation of jobs for the local youth is an important yardstick for assessing the benefit of any foreign investment in a developing country. However, the CPEC has been a visible failure on this count.

Also, China has preferred to use its own workers and engineers for skilled jobs in CPEC power projects. It has not hesitated in setting up special colonies for Chinese workers along with the project sites, and this trend is likely to continue.

Reports say that Chinese investors are keen to buy into various losing state-owned enterprises (SOEs) that the government is willing to sell. With SOE-related losses reaching 1.5 trillion rupees (USD 9.4 billion) recently, the government is left with little choice in the matter. The list includes prominent names such as Pakistan International Airlines and Pakistan Steel Mills.

Pakistani business owners and workers are wary of the Chinese style of functioning, which rarely involves partnerships or joint ventures with local businesses. Chinese investors prefer to establish fully controlled businesses that would mean further erosion in the status of local businesses and jobs.

One major target of Chinese policy has been the textile industry, which is the backbone of Pakistan's domestic economy and the major source of livelihood for the majority of workers in Pakistan.

Chinese private interests are investing heavily in textile production, a sector that contributes 8.5 per cent of gross domestic product and employs 45 per cent of the total industrial labour force.

While Islamabad is working on removing official hurdles for attracting more Chinese investment in CPEC phase-II, China is clearly shifting its focus beyond the mega-project - inroads made by China into Pakistan points toward greater designs of neo-colonialism.

With long gestation periods and uncertainty of financial returns, China now seems keen to enjoy the low-hanging fruits at the cost of future Pakistani generations. (ANI)