China Pakistan Friendship and CPEC
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The document discusses the China-Pakistan Economic Corridor (CPEC) project. It provides background on the long-standing relationship between China and Pakistan. CPEC is a major investment program that involves developing transportation and energy infrastructure connecting China and Pakistan. The project aims to benefit Pakistan through increased trade, investment, and job creation, while providing China with improved access to Middle Eastern and Central Asian markets. CPEC could also offer opportunities to boost trade for other regional countries like India, Afghanistan, and Central Asian nations.
China Pakistan Friendship and CPEC
- 1. Sino-Pak Friendship & China Pakistan Economic Corridor
- 2. Presenter: Zeeshan Akhtar Chinese Culture: Ma’am Yin Xiaojing
- 3. Contents: 1. Sino-Pak relationship Background 2. Diplomatic, Economic & Military relations 3. Chinese role in Pakistan Nuclear Program 4. What is CPEC 5. Catalysing Growth with CPEC a) Benefits to Pakistan b) Benefits to China c) Benefits to region 1. Sino-Pak relationship Background
- 4. Sino-Pak Relation: • Pakistan has a long and symbiotic relationship with China. which is based on mutual support • Pakistan And China Relationship Began In 1950 as Pakistan is the First Muslim Country To Establish Relations With China • PAKISTAN helped china to build a relation with the Muslim world • Due to Pakistan , china became a member of UN • The two countries had regularly exchanged high-level visits resulting in a variety of agreements
- 5. Diplomatic relations: • Diplomatic relations between Pakistan and China were established on 21 May 1951 • In Sino-Indian war 1962, China and Pakistan joined hands against India • One year after Sino- India war, Pakistan built the Karakoram Highway to China to improve diplomatic relations • AS, Pakistan opened a gate for China to the West ,that made possible Nixon US president visit to China in 1972. China in turn provided extensive economic aid and political support towards Pakistan • after 9/11, Pakistan has increased the scope of Chinese influence and support by agreeing to a number of military projects, combined with extensive economic support and investment from the Chinese • China supports Pakistan on Kashmir while Pakistan supports China on the issues of Xinjiang ,Tibet, and Taiwan
- 6. Economic relations: • Economic Co-operation Began In 1979 • Economic trade between Pakistan and China is increased in recent years. China greatly increases its investments in Pakistan • China is helping to develop Pakistan's infrastructure through the construction of power plants, roads and communication nodes • Zong (1st3G and 4G mobile network operator in Pakistan) is the first overseas setup and it relates to china • China sponsored a wide variety of a) Saindak Copper project in Baluchistan. b) The machine tool factory of Karachi. c) Dawood wind power project at Sindh. d) Coal fired power plant(GW), Karachi Sahiwal and Jhelum.
- 7. Military relations: • China enjoys strong defense ties with Pakistan • China provided a lot of military equipment's to the Pakistan Army, helping in establishment of factories, providing technological facilities. as well as financial support 1) Heavy mechanical complex 2) Aeronautical complex (kamra) • The armies had also scheduled a joint military exercises • china helped Pakistan when there is no hope of external support E.g. in 1965,1971 wars. • Some joint ventures of Sino-Pak.
- 8. China's role in Pakistan's nuclear power • China helped Pakistan in developing its nuclear power plants . • China gave technical and material support in completing Chashma nuclear power plant I, II, III ,IV V. That played a major role in uranium production. • Chinese helped in building the Khushab reactor, which is playing a key role in Pakistan's production of plutonium.
- 9. Contents: 1. Sino-Pak relationship Background 2. Diplomatic, Economic & Military relations 3. Chinese role in Pakistan Nuclear Program 4. What is CPEC 5. Catalysing Growth with CPEC a) Benefits to Pakistan b) Benefits to China c) Benefits to region 4. What is CPEC
- 10. What is CPEC: •The China Pakistan economic corridor (CPEC) is being developed as part of strategic partnership between the Governments of Pakistan and China. CPEC was announced during the visit of Pakistani premier to China in July 2013. China Pakistan economic (CPEC) corridor is a long term plan having a time frame of 2014 – 2030. Total Investment of China on CPEC is about $ 46 billion.
- 11. CPEC via Gawadar Port will act as a funnel for Western China, Northern India, Central Asia and Afghanistan South Asia remains one of the least integrated regions in the world
- 13. Need of CPEC for China:
- 14. CURRENT ROUTE
- 16. Future routes of china for Trade:
- 17. Contents: 1. Sino-Pak relationship Background 2. Diplomatic, Economic & Military relations 3. Chinese role in Pakistan Nuclear Program 4. What is CPEC 5. Catalysing Growth with CPEC b) Benefits to China c) Benefits to region 5. Catalysing Growth with CPEC a)Benefits to Pakistana)Benefits to Pakistan
- 18. Page 18 Literacy Rate 2014 Infant Mortality Life Expectancy Pakistan is falling behind in all social indicators in South Asia
- 19. Page 19 GDP (US$) Source: World Development Indicators, World Bank GDP Per Capita (US$) Pakistan’s GDP and GDP per Capita is among the worst in South Asia
- 20. Page 20 Source: World Development Indicators, World Bank FDI (US $) Investor Confidence via FDI
- 21. Page 21 Energy Crisis- Electric Power Consumption Source: World Development Indicators, World Bank Unavailability of electricity is a barrier to growth
- 22. Page 22 Political Instability Ranking: Political Stability and Absence of Violence Source: Worldwide Governance Indicators, World Bank Ranking: Ease of Doing Business 2015 1:Easiest to 189:Most Difficult Source: Doing Business, World Bank Pakistan’s political instability over the years has hurt the confidence of investors
- 23. Page 2323 Energy Demand/Supply Forecast 2016 2017 2018 Due to the energy initiatives under CPEC, Pakistan is expected to meet its electricity demand by 2018
- 24. Page 24 Sustainable Growth Source: BMA Capital Management Limited, Investor 360
- 26. Page 26 Employment Source Jobs Study 2013 , IFC World Bank
- 27. Contents: 1. Sino-Pak relationship Background 2. Diplomatic, Economic & Military relations 3. Chinese role in Pakistan Nuclear Program 4. What is CPEC 5. Catalysing Growth with CPEC a) Benefits to Pakistan c) Benefits to region 5. Catalysing Growth with CPEC b) Benefits to Chinab) Benefits to China
- 28. Page 28 Short Distance and Low Cost •Europe to Western China Route – Distance will be reduced by 50% – Cost of transportation will be lowered by 50-65% – Time cut by 50% •Middle East to Western China Route – Distance will be reduced by over 80% – Cost of transportation will be lowered over 75% – Time cut by over 85% Safer Route – 60 percent of China’s imported oil comes from the Middle East, 80 percent of that is transported to China through the Strait of Malaaca – CPEC will allow China an alternative route, to move energy and goods to inland China without going through the Strait of Malacca (bypassing an entire region influenced by the US and India) Benefit to China
- 29. Page 29 Existing Trade route Distance Europe to Western China 19132 miles Middles East to Western China 12537 Miles
- 30. Page 30 Trade route- CPEC Europe- Western China Distance will be reduced by 50% Cost of transportation will be lowered by 50-65% Time cut by 50% Middle East- Western China Distance will be reduced by over 80% Cost of transportation will be lowered over 75% Time cut by over 85%
- 31. COMPARISON OF SHIPPING COST BETWEEN CURRENT AND CPEC ROUTE
- 32. COMPARISON OF TRANSIT TIME BETWEEN CURRENT AND CPEC ROUTE
- 33. OVERALL IMPACT OF CPEC (in billions) This table shows that supply chain can save about $41 billion dollars per year
- 34. Page 34 Economic Advantages to China Europe- Western China Existing Route Post CPEC Savings to China Total route 19,132 miles 16,507 by sea 2625 by land Total route=9,597 miles 7847 by sea 1750 by land Distance is reduced by 50% Freight charges and time for a unit (40 ft container) from Hamburg to Shanghai range Cost= 2500-3000 USD Time=50 days Cost= 1000 USD Time=25 days Cost of transportation are lowered by 50-65% Time is cut by 50% Middle East- Western China Existing Route Post CPEC Savings to China Total route 12,537 miles 9912 by sea 2625 by land 2295 miles 545 miles by sea 1750 by land Distance is reduced by over 80% Freight charges and time for a unit (40 ft container) from Abu Dhabi to Shanghai range Cost= 2000 USD Time=16 days Cost= 200-250 USD Time=1 day Cost of transportation are lowered over 75% Time is cut by over 85%
- 35. $50-200 Bln China Int. Trade
- 36. Contents: 1. Sino-Pak relationship Background 2. Diplomatic, Economic & Military relations 3. Chinese role in Pakistan Nuclear Program 4. What is CPEC 5. Catalysing Growth with CPEC a) Benefits to Pakistan b) Benefits to China 5. Catalysing Growth with CPEC c) Benefits to regionc) Benefits to region
- 37. OPPORTUNITIES FOR INDIA • Gravity Model* suggests a potential increase of 10-15 times of the current trade with central Asia if routed through Pakistan & Afghanistan. • CPEC will double the Indian trade with china. • After improvement in bilateral relations, India can secure 2.6 billion USD trade in addition to the current 3 billion USD with Pakistan. • Pakistani Ports will be the convenient transit for North western India as compared to Mumbai and Calcutta. • Central Asian fuel will cater growing Indian energy needs. 212121 /* −− = DGDPGDPtrade λβα
- 39. OPPORTUNITIES FOR CENTRAL ASIA • Gwadar will be a gateway for Central Asia. • Central Asia can be connected to CPEC via Tirmiz, the southern city of Uzbekistan. • CPEC and its related future projects can cater both Turkmenistan and Uzbekistan’s liquid cargo through pipelines and Kazakhstan and Kyrgyzstan’s dry cargo via road. • Can increase energy market share in Western China and India. . • For Landlocked countries, distance coefficient of gravity model is 5.5% (every 1% decrease in distance from port increases the trade by 5.5% and CPEC will decrease this distance by 22%.)
- 41. OPPORTUNITIES FOR AFGHANISTAN Afghanistan can be connected to western alignment of CPEC from Chaman and eastern alignment with Peshawar from Jalalabad. • CPEC will provide shortest and most cost effective route for landlocked Afghanistan to China, India and Indian ocean. • Approx. 600km less as compared to the other nearest port of Chabahar. • CPEC will also help in making Afghanistan a transit route for energy rich Central Asia and energy starved South Asia. • Improve Geo-Political scenario for early completion of CASA 1000 and TAPI
- 42. $600M lnto$6Bln
- 43. CONCLUSION CPEC is a game changer for the region not only Pakistan and China will get benefits but all other countries will also be benefited as well. Definitely the companies of other countries which export goods and services to China would like to use the proposed route because of less shipping cost and transit time. Land locked central Asian countries (Afghanistan, Kyrgyzstan,Kazakhstan,Tajikistan, Turkmenistan, Uzbekistan and Russia) would also get benefits of shortest way to sea port of Gwadar which is only at a distance of 2500 km as compared to Iran (4500 km) and Turkey (5000 km) This route not only serves China but also European countries, Middle Eastern countries and land locked central Asian countries.
- 44. References: • https://www.google.com/ • https://www.slideshare.net/shahroze11/china-pakistan- • https://www.icap.org.pk/safaconference/presentations/S • https://www.bahria.edu.pk/.../china-pakistan-economic .
Editor's Notes
- #19: Current CIA World Factbook
- #22: recent
- #23: Decade FDI
- #25: BMA Capital management limited pakistan Investor 360 Forbes
- #27: Direct/ indirect/ induced: 12900 Growth related: 100,000 For energy total: 3.9 million Direct/Indirect/ induced: 40,000 Total: 400,000 Total : 4.3 million Total: 28.8
- #29: China’s stake in Gwadar will also allow it to expand its influence in the Indian Ocean, a vital route for oil transportation between the Atlantic and the Pacific. Another advantage to China is that it will be able to bypass the Strait of Malacca. As of now, 60 percent of China’s imported oil comes from the Middle East, 80 percent of that is transported to China through this strait, the dangerous, piracy-rife maritime route through the South China, East China and Yellow Seas
- #35: o We assume that land transport in China (us being conservative and to simplify) is 30-35% more efficient cost and time wise when compared to Pakistan (so we can equate the total cost of the land routes) so the cost and time from Shanghai to Kashgar (2625 miles) and Gwadar to Kashgar (1750 miles) is the same
- #38: Regional connectivity with India through the eastern alignment is planned through the Hyderabad-Mirpurkhas-Khokhrapar-Zero Point link and the Wagha border, Lahore