Chinese President Xi Jinping and Prime Minister Shehbaz Sharif have agreed on health, industrial, digital and green corridors, ML-1 and Karachi Circular Railway (KCR) besides signing 21 documents of cooperation. Pakistan, China military-to-military ties are mainstay of neighbouring countries friendship. China Pakistan Economic Corridor (CPEC) has enhanced Pakistan’s exports and development capacity and is providing 1/4th of total electricity. Beijing will continue to provide what it can for Islamabad’s economic stability.
These views were expressed by Ambassador of China to Pakistan Nong Rong in an exclusive interview with The News and Daily Jang.
The News: The 20th National Congress of the Communist Party of China (CPC) was held in October last year. How do you assess the significance of the Congress and General Secretary Xi Jinping’s ‘Thought on Socialism with Chinese Characteristics for a New Era’ for world development?
Chinese ambassador: On October 16, 2022, the 20th National Congress of CPC was held successfully in Beijing. Pakistan’s President Arif Alvi, Prime Minister Shehbaz Sharif and other leaders from Pakistani political parties sent congratulatory messages, which fully demonstrates the iron relationship between China and Pakistan. In his report, General Secretary Xi Jinping mentioned Chinese modernisation for the first time, which has a positive impact on the peaceful development of Asia and the friendship and cooperation between China and Pakistan, and will bring certainty, stability, new dynamics and new opportunities for Asian countries, including Pakistan. China is willing to strengthen exchanges and mutual understanding with Pakistan on their respective concepts, experiences and initiatives for modernisation, so as to achieve common development and prosperity and move towards modernisation together.
TN: What is the present volume of China’s investment in CPEC? How much is direct investment by Chinese companies and what is the rate of return?
Ambassador: CPEC has brought a total of $25.4 billion direct investment to Pakistan, paid $2.12 billion of taxes and created 192,000 jobs for the Pakistani people all these years. Chinese companies and projects operating in Pakistan are transparent in doing business. A significant portion of the projects under CPEC are China-aided projects or enjoying preferential loans. CPEC energy projects also follow Pakistan’s electricity tariff policy. The policy was formulated before the construction of CPEC IPPs, and was publicly announced to the world to attract international investment. However, at that time, no investor from other countries showed interest except the Chinese enterprises only who made investments. CPEC IPPs provide nearly 1/4th of the electricity supply to Pakistan at its peak, greatly alleviating power shortage and laying a solid foundation for Pakistan’s socio-economic development.
TN: Pakistan is grateful to iron brother China for the gift of CPEC. Pakistan is already faced with the worst economic crisis, especially after massive, countrywide floods. Has China rescheduled (or rolled over) loans given to Pakistan for CPEC projects?
Ambassador: China shared with Pakistani brothers the same feelings on heavy floods and has pledged to give more than $160 million in aid to Pakistan, which is the highest amount pledged by any other country of the world. This aid has come not only from the Chinese government and military, but also from Chinese enterprises in addition to the Chinese community’s generous donation. With Pakistan entering the rehabilitation and reconstruction phase, the two sides are in close communication regarding the allocation of aid to the most needed areas. Through a long period of cooperation, China has provided what it can to secure Pakistan’s financial stability. Last year, China has rolled over 15 billion RMB commercial loans and two billion US dollars deposits to Pakistan. China will continue to provide what it can for the Pakistan’s economic stability.
TN: Did the Chinese government and Chinese banks give direct loans to Pakistan government? Did China ever give aid or grant to Pakistan? If so, what are the figures?
Ambassador: China has always supported Pakistan in developing its economy, improving people’s livelihood and maintaining financial stability, as our two countries have carried out pragmatic cooperation in the financial field. Pakistan is an important recipient of China’s international aid. Taking Gwadar as an example, the new Gwadar International Airport under construction is the largest single foreign aid project of China so far, and the completed Faqeer School, Boai Medical Emergency Centre, Pak-China Technical and Vocational Institute are all built with China’s aid, and Gwadar East Bay Expressway with preferential loans. The Chinese-aided Gwadar hospital will be completed this year, and the Chinese-aided Gwadar Desalination Plant is under construction and is expected to be completed in June. China has also provided a total of 7,000 sets of solar panels for households in Gwadar over the past two years. Another 10,000 sets of solar panels are under active preparation and will be allocated to poor people in Balochistan. At the same time, Chinese Embassy in Pakistan is also donating household solar units and other assistance to the people of Balochistan.
TN: Are some new projects coming under the CPEC banner following Shehbaz Sharif’s recent visit to China? What will be the total volume of new projects? And which types of projects are coming?
Ambassador: Prime Minister Shehbaz’s visit to China is the first foreign head of government to visit China after the 20th Party Congress. During the visit, the two sides issued a joint statement and signed 21 cooperation documents. The two sides agreed to advance the implementation of the ML-1 project at an early date in accordance with the leaders’ consensus besides actively promoting the KCR project. In accordance with the consensus of the two leaders on accelerating cooperation in agriculture, mining, information technology and social-livelihood areas, the two sides agreed to further build the health corridor, industrial corridor, digital corridor and green corridor. China also encourages Chinese investment in Pakistan’s renewable energy sector.
TN: Have Pakistan and China jointly achieved near-perfection level in the assembly/ manufacturing of combat and bomber aircraft which match latest air force technology of US, UK, France or Russia?
Ambassador: China and Pakistan are all-weather strategic cooperative partners, true friends and iron brothers that share weal and woe. China is willing to work with Pakistan to accelerate the building of a closer China-Pakistan community of shared future in the new era, join hands to promote the Global Development Initiative and Global Security Initiative. The military-to-military relations, serving as the mainstay of the China-Pakistan friendship, have played an important role in the development of bilateral relations for a long time. The two militaries have achieved fruitful results in fields such as high-level visits, joint training and exercises, anti-pandemic cooperation, equipment and technology, constantly enriching the connotation of bilateral strategic cooperation. The JF-17 and J-10CE fighter jets cooperation that China and Pakistan have continued to promote are progressing smoothly, which is an important achievement of the equipment cooperation between the two sides.
Going forward, under the guidance of the leaders of the two countries, the Chinese and Pakistan militaries stand ready to expand practical cooperation in various fields to a new level and inject a new impetus into the all-weather strategic cooperative partnership between the two countries, so as to make a new contribution to maintaining regional peace and stability.
TN: What are the reasons that expectations of Pakistanis do not stand fulfilled from CPEC so far? Common people in Pakistan were of the opinion that Beijing’s close partnership with Islamabad would help build new transportation and power infrastructure across the country, setting Pakistan’s economy on an improved trajectory but this destination is yet to be achieved. Kindly explain.
Ambassador: The first phase of CPEC has made remarkable achievements in the fields of energy, transportation and other infrastructure, adding 6,040 megawatts of electricity, 886 kilometers of transmission line and 510 kilometers of highways, laying a good foundation for Pakistan’s socio-economic development. The CPEC is entering the second phase to help Pakistan realise its transition of modern agriculture and industrialisation. “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime,” says the old Chinese proverb. China attaches importance to helping Pakistan expand employment and improve labour quality through cooperation, so as to better transform Pakistan’s geopolitical, resource and labour advantages into export competitiveness and economic growth. We also hope that the Pakistani side will provide a safe and stable business environment for Chinese enterprises to invest.
TN: According to a point of view, CPEC programme has sparked a rise in the country’s debt. The International Monetary Fund has also warned that CPEC has contributed to a widening current-account deficit in Pakistan, as the country imported billions of dollars of materials for the projects. Pakistan also experienced a balance-of-payments crisis and had to approach IMF for bailout.
Ambassador: China and Pakistan are all-weather strategic partners who are with each other through thick and thin, and share both the honour and disgrace. CPEC, with the spirit of win-win cooperation, is welcomed by the government and people of Pakistan. CPEC not only includes self-financing investments by Chinese enterprises such as IPPs, but also includes low-interest loans and aid projects provided by the Chinese government. Through cooperation, Pakistan has strengthened its development capacity and expanded its exports. For example, CPEC energy projects provide 1/4th of Pakistan’s electricity supply and secure sufficient energy for export industries in cities such as Lahore and Faisalabad. With the help of CPEC project, the Thar coal has started benefitting the country. Prime Minister Shehbaz’s publicly stated that the comprehensive development of Thar could save Pakistan $6 billion foreign exchange. To facilitate the development of Balochistan, China has completed Gwadar East Bay Expressway, and granted Gwadar New International Airport, Pak-China Technical and Vocational Institute, as well as China-Pakistan Friendship Hospital. China has also provided medical supplies, intelligent classrooms for primary and secondary schools in Pakistan under the framework of social-livelihood Joint Working Group under CPEC. CPEC also drives the development of related industries in Pakistan. Before Ceramics and other nine Chinese-invested enterprises stationed in Faisalabad M3 Industrial Park, Pakistan spent about two billion US dollars a year to import ceramic tiles. With this investment, Pakistan significantly reduced imported of high-quality ceramics, helping Pakistan to save foreign exchange reserves.
The second phase of CPEC will increase investment in industry, agriculture, science and technology and information technology, particularly the huge potential and growth of Pakistan’s agricultural exports surplus with China, which grew nearly 13 times in 2021.
This year, Pakistan’s agricultural exports to China are expected to exceed $1 billion. Among them, other agriculture and other new business models are fruitful, and Pakistan’s sesame exports to China have exceeded $100 million this year. At the same time, China provides loans to Pakistan for the purpose of financial stability and economic development, and the two sides have maintained good communication and coordination. China has never been compulsive in this regard. As far as we know, Western financial institutions are the largest creditors of Pakistan. We hope that all parties can help the Pakistani economy to strengthen its foundation and do something solid, rather than blaming the other party (China) which is doing the real things.
TN: Pakistanis are also concerned about the slow pace of completion of CPEC projects which were put on hold and then rebooted in a slimmed-down package.
Ambassador: CPEC has maintained its momentum even during the epidemic. Last year, Kalot hydropower plant, Thar TEL power plant, Gwadar East Bay Expressway have begun operation. The Sino-Pakistani joint statement issued during Prime Minister Shehbaz’s visit to China pointed out that the two leaders agreed to advance the implementation of the ML-1 project, actively promoting the KCR project, accelerating Gwadar Port and the Free Zone, building the Health Corridor, Industrial Corridor, Digital Corridor and Green Corridor with related cooperation. CPEC is making solid progress towards becoming a benchmark project for the high-quality development of the Belt and Road Initiative.
TN: China’s policy is of non-intervention plus shared prosperity. If China reconciles with India and then brokers peace between India and Pakistan, it can form a big bloc in Asia to counter United States’ hegemony. Do you agree?
Envoy: Both India and Pakistan are friendly neighbours of China and big developing countries at a critical stage of development. China is committed to growing friendly relations with both countries. China would also like to work with Pakistan and India to inject more positive energy into regional peace and stability as well as development.
TN: US-led West is now fully focused on Asia and the surrounding region where Russia and China are apparently their competitors/ adversaries/ challengers/ potential threat to the West’s hegemony. India and Australia are undeniably being nurtured and cultivated to be used against Russia and China. LEMOA, COMCASA and BECA agreements are clear manifestations. Confrontation is fraught with dangers of nuclear war. Your comments please.
Ambassador: China holds that any regional cooperation framework should conform to the trend of the times for peace and development and enhance mutual trust and cooperation among regional countries. It should not target third parties or undermine their interests, and should not be decidedly selective or exclusive.
China advocates the principle of extensive consultation, joint contribution and shared benefits, and holds that the future of the world should be decided by all countries together. Countries should build partnerships featuring equal treatment, consultation and mutual understanding. Major countries should take the lead in charting a new course of international engagement of dialogue and partnership rather than confrontation and alliance. Creating “small cliques” is reversing the course of history. Forging “small groups” is against the trend of history. The US creates the so-called “Indo-Pacific strategy” to rope in regional countries to encircle and contain China, and claims to “shape the strategic environment around Beijing”. This move to gang up on China will get no support and is doomed to fail.
TN: US Ambassador Donald Blome, in an interview, said investment in Pakistan, whether of United States or China, should be transparent and subjected to same scrutiny. Your views, sir?
Ambassador: China and Pakistan have had fruitful economic and financial cooperation. The Pakistani people know it best. Instead of passing unwarranted criticism against China-Pakistan cooperation, it is better to do something real and beneficial for the people of Pakistan.
