Briefing on China-Pakistan Economic Corridor · China was the cornerstone of Pakistan’s foreign policy and early implementation of the CPEC projects would help realize the true

Briefing onChina-Pakistan Economic Corridor

Chinese Embassy in Pakistan2018.10.26

Where We Started

2013President Xi Jinping proposed the Belt and

Road Initiative which provides an importantplatform of win-win cooperation for the countriesalong the Belt and Road, aims to share theopportunities and dividend of China’sdevelopment. With such a spirit, the leaders ofChina and Pakistan proposed China-PakistanEconomic Corridor in 2013.

2014

In order to meet the urgent need and solve thebottle-necks of Pakistan’s economic, China reachedconsensus with Pakistan to promote a series of energyand infrastructure early-harvest projects.

2015

President Xi Jinping paid a state visit to Pakistan.

The two sides agreed to establish Gwadar port, energy,

infrastructure and industrial cooperation as 4 key

cooperation areas under the framework of CPEC. It

became a historic visit and opened a new chapter for

China-Pakistan cooperation.

NAYA Pakistan

President Xi Jinping and Premier Li Keqiang sent Congratulatory Messageto President Arif Alvi and Prime Minister Imran Khan after they took theoffice.

Chinese Premier Li Keqiang held a telephone conversation with hisPakistani counterpart Imran Khan on August 20:

China is willing to work with Pakistan to conduct close high-levelcontacts, deepen pragmatic cooperation, enhance coordination on majorinternational and regional issues, promote common development andmake contributions to regional peace and prosperity.“

”

NAYA Pakistan

We will strengthen and improve our relations with China. We want to work towards success of CPEC. We also want to send teams to learn poverty alleviation from China.

Imran Khan’s victory speech:

“

”The friendship with China is a cornerstone of Pakistan’s foreign policy and my government is committed to implementing the CPEC.

In meeting with Chinese State Councilor and Foreign Minister Wang Yi, PM Imran Khan said:

“”

NAYA Pakistan

Strengthening the strategic cooperative partnership with China was the cornerstone of Pakistan’s foreign policy and early implementation of the CPEC projects would help realize the true potential of Pak-China economic relations not only for the two countries but for the entire region.

PM chaired a high level meeting at PM’s Office on 8th October 2018 and said:

“

”

What we have done

10 early-harvest projects completed.

12 early-harvest projects are under smoothconstruction.

With total contract

amount of around 19

billion USD

50MW Dawood Wind Power Project Sahiwal 1320MW Coal-fired Power Plant

100MW Pakistan Jhimpir UEP Wind Power Phase I Project China-Pakistan Friendship School, Faqueer Colony

Sachal 50MW Wind Power Project Laying of Optical Fiber Cable (OFC) from Rawapindi to Khunjrab

Zonergy 900MW Solar Project in Punjab Feasibility Study for Upgradation of ML1 and Establishment of Havelian Dryport

Port Qasim 2×660MW Coal-fired Power Project Three Gorges Second Wind Power Project（100MW）

KKH Phase-II（Havelian- Thakot） Gwadar Port Operation and Development of Free Zone

Karachi-Lahore Motorway Sukkur-Multan Section (392KM)

SUKI KINARI Hydro-Power Project

Metro Rail Transit System on the Orange Line in Lahore Gwadar Smart Port City Master Plan

Expressway on East Bay of Gwadar DTMB Demonstration Project

720MW Karot Hydro-Power Project 2×330MW Mine Mouth Coal Fired Power Plant at Thar Block II, Sindh

660MW HUBCO Coal Power Plant 3.8Mta Open Cast Lignite Mine at Thar Block II, Sindh

What We Have Done

Gwadar Port( 1 project completed)

Name Financing model No. of Pakistani staff

China-Pakistan Friendship School0.399M USD,

Aided by Chinese government

More than 400 Pakistani students are studying in the school

Gwadar Port Operation and Development of Free Zone

114.7M USD, Invested by Chinese Company

630

Expressway on East Bay of Gwadar143M USD,

Free-interest loan by Chinese government

4222

Gwadar Smart Port City Master Plan4M USD,

Aid by Chinese government8

What We Have Done

Infrastructure (1 project completed)


KKH Phase-II（Havelian- Thakot）

1.3 billion USD,Funded by Chinese government

soft loan8424

Karachi-Lahore Motorway (Sukkur-Multan)


soft loan33333

Metro Rail Transit System on the Orange Line in Lahore


soft loan2349

What We Have Done

Infrastructure


Feasibility Study for Upgradation of ML1 and Establishment of Havelian

Dryport of Pakistan Railways

6M USD,Funded by Pakistan Government

What We Have Done

Energy (7 projects Completed)


50MW Dawood Wind Power Project 115M USD, invested by Chinese Company 117

100MW Pakistan Jhimpir UEP Wind Power Phase I

262M USD, invested by Chinese Company 192

Sachal 50MW Wind Power Project 110M USD, invested by Chinese Company 162

Zonergy 900MW Solar Project 460M USD, invested by Chinese Company 3755

Port Qasim 2×660MW Coal-fired Power Project


Sahiwal 1320MW Coal-fired Power Plant


Three Gorges Second Wind Power Project（100MW）

42.3M USD, invested by Chinese Company447

What We Have Done

Energy (5 projects under construction)


720MW Karot Hydro-Power Project 1650M USD, invested by Chinese Company 3505

660MW HUBCO Coal Power Plant 2100M USD, invested by Chinese Company 2525

SUKI KINARI Hydro-Power Project 1962M USD, invested by Chinese Company 6323

2×330MW Mine Mouth Coal Fired Power Plant at Thar Block II, Sindh


3.8Mta Open Cast Lignite Mine at Thar Block II, Sindh


What We Have Done

Industry and Others(1 completed, 1 under construction)


Laying of Optical Fiber Cable (OFC) from Rawapindi to Khunjrab

144M USD,Funded by Chinese government

soft loan505

Digital Terrestrial Multimedia Broadcasting

Demonstration Project

23M USD,Aided by Chinese government

138

Chinese Experts have held 3 Expert Group Meetings for China-Pakistan Industry cooperationand visit most of the proposed SEZs. The Chinese Expert Group also provided consultationsservice for the relevant SEZs.Chinese experts have finalized the Chinese Expert Group’s Preliminary Comments andSuggestions on the Incentives and Preferential Policies for PSEZs and provided to Pakistan sidefor future reference on SEZs policy making.

CPEC Financing Model

Of all the CPEC projects, only KKH Phase-II, Karachi-Lahore Motorway (Sukkur-Multan) ,Orange Line and Laying of Optical Fiber Cable used the Chinesegovernment soft loan, which were guaranteed by Pakistani government, the totalamount was around $6 billion USD. According to the statistics of the Ministry ofFinance of Pakistan, Pakistan’s external debt and liabilities reached $95 billion byOcober 2018. Chinese government soft loan for CPEC projects accounted for only6.3% of Pakistan total foreign debt.

The repayment time of the 4 projects starts from 2021, repaying 300 million - 400 million USD annually.

All CPEC energy projects are funded by commercial loans which are borrowed andrepaid by the Chinese companies. There is no foreign debt on Pakistani government.

CPEC Benefits

Promote Pakistan's economic growth

Moody: Ongoing implementation of CPEC projects are likely tocontribute 9% to 10% of GDP in fiscal year 2018-19.

0.00%

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6.00%

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

0.36%

2.58%

3.62% 3.84% 3.68%4.05% 4.06%

4.56%

5.37%5.79%

GDP Growth

CPEC launchedPresident Xi visited Pakistan

”“

CPEC Benefits

Promote Investment to PakistanCountry 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18China -3.6 47.4 126.1 90.6 695.8 319.1 1,063.60 1,211.70 1,585.80UK 294.6 207.1 205.8 633 157 169.6 151.6 215.8 278.7USA 468.3 238.1 227.7 227.1 212.1 223.9 13.2 44.6 92.3Hong Kong,China 9.9 125.6 80.3 242.6 228.5 136.2 93.3 17.2 140.8

Switzerland 170.6 110.5 127.1 149 209.8 -6.5 58 101.8 88.1

U.A.E 242.7 284.2 36.6 22.5 -47.1 213.6 109.7 120.5 5.4Italy 4 7.9 200.8 199.4 97.6 115.4 105.4 60.5 56.6

Netherlands 278.6 -48.5 22.1 -118.4 5.5 -34.5 29.9 457.6 70

Austria 56.8 32.4 68.8 53.3 53.8 24.8 42.7 21.7 27.7Japan 26.8 3.2 29.7 30.1 30.1 71.1 35.4 57.7 56.9Turkey 0.8 1.8 0.3 0.5 7.9 43.4 16.8 135.6 29.8Others 601.3 625.1 -304.6 -73.2 47.6 -288.2 585.7 301.9 335.3Total 2,150.8 1,634.80 820.7 1,456.50 1,698.60 987.9 2,305.30 2,746.80 2,767.60

CPEC launched

Since CPEC was launched, China has become the largest investor for the last 5 years.

CPEC not only attracted much more Chinese investment in Pakistan , but also made Pakistan a popular destination for investment.

CPEC Benefits

Create Job Opportunities

22 Projects directly hired more than 75000 Pakistani local staff.

CPEC also promotes relevant upstream and downstream industries includingcatering, raw material processing, cargo transportation, manufacturing etc., whichhave provided more employment opportunities for local people.

CPEC Centre of Excellence:

“ ”CPEC could assist in the creation of 1.2 million jobs under its presently agreed project.

Deloitte:CPEC will create 700,000 jobs for Pakistan from 2015 to 2030.“ ”

CPEC Benefits

Increase energy supply

7 projects have been installed with capacity of 3240 MW inonly 3 years, since the first energy project groundbreakingceremony in 2015. These projects accounted for 11% of totalelectricity generation in Pakistan.

11%

89%

Pakistan’s national installed capacity:29,000 MW

CPEC projects

non-CPEC projects

CPEC Benefits

Help Pakistan optimize energy structure

Energy structure in 2013Energy structure in 2022 when all CPEC priority projects

are completed

By optimizing the energy structure, Pakistan's energy supplywill be more stable and safe.

Significantly reduce GAS/RFO imports to help Pakistan saveforeign exchange reserves.

CPEC Benefits

Please bear in mind: Coal-fired energy is the base power in all major countries

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CPEC Benefits

Strengthen connectivity

CPEC on-going infrastructure projects will promote Pakistan's North-South interconnection and help Pakistan's coastal areas strengthen tieswith the northern areas, promoting the coordination and development indepth and breadth.

CPEC on-going infrastructure projects will significantly reduce the timecost of transportation. After the completion of KKH Phase-II（Havelian-Thakot）, the travel time between the two places will be reduced from 4hours to 1.5 hours, which will promote commercial development andexchanges.

CPEC Benefits

Strengthen connectivity

KKH Phase-II（Havelian- Thakot）

Karachi-Lahore Motorway (Sukkur-Multan)

CPEC Benefits

Strengthen information connectivity

Before 2018, Pakistan’s only fiber cable outlet was a submarine cablethrough the Indian Ocean.

The China-Pakistan cross-border fiber cable project has opened up anew information channel for Pakistan, which will benefit IT industryand strengthen bilateral information link.

CPEC Pipeline

KKH Thakot-Raikot N35 remaining portion (136 Km)Khuzdar-Basima Road N-30 (110 km)Upgradation of D.I.Khan (Yarik) - Zhob, N-50 Phase-I (210 km)Expansion and reconstruction of existing Line ML-1Havelian Dry port (450 M. Twenty-Foot Equivalent Units)

Infrastructure（5）

CPEC Pipeline

300MW Imported Coal Based Power Project at Gwadar, PakistanThar Block I Coal fired Power PlantEngro Thar Block II 2×330MW Coal fired Power PlantSSRL Thar Coal Block-I 6.8 mtpa &SEC Mine Mouth PowerPlant(2×660MW)Matiari to Lahore ±660kV HVDC Transmission Line ProjectKohala Hydel Project, AJKCacho 50MW Wind Power ProjectWestern Energy (Pvt.) Ltd. 50MW Wind Power Project

Energy（8）

CPEC Pipeline

Pak China Friendship HospitalPak-China Technical and Vocational Institute at GwadarChina-Pakistan Friendship School, FaqueerDredging of berthing areas & channelsNecessary facilities of fresh water treatment, water supply and distributionGwadar East-Bay Expressway Phase IIGwadar desalination plantNew Gwadar International Airport

Gwadar（8）

Moving Towards a New Stage of Expansion and Broadening

On September 8, 2018, State Councilor and Foreign Minister Wang Yi met the press together withForeign Minister Makhdoom Shah Mahmood Qureshi of Pakistan in Islamabad, and introduced theten important consensuses reached by the two Foreign Ministers:

The normal operation of the completed project and thesmooth progress of the project under construction will beensured. At the same time, according to the next economicand social development priorities and the needs of thepublic of the Pakistani side, the future development pathand cooperation direction of the CPEC will be determinedthrough consultation. Speeding up industrial cooperationand livelihood projects, and gradually extending to thewestern region of Pakistan are the main focuses.

“

”


China will firmly promote bilateral industrial cooperation, expand China'sdirect investment in Pakistan, and encourage Chinese enterprises toactively participate in the construction of special economic zones.

Chinese side has proposed that special economic zones under CPECindustrial cooperation will provide fair access to Pakistani domesticenterprises and encourage third-party investment.

China will focus on helping Pakistan develop manufacturing and export-oriented economy.

Chinese government has encouraged Chinese companies to increase localcomponent in their procurement in Pakistan.

Priority List of SEZs

Sr. No. Province Location

1 KPK Rashakai&Hattar Economic Zone2 Sindh Dhabeji3 Balochistan Bostan Industrail Zone4 Punjab Punjab-China Economic Zone, M-35 Northern Areas Moqpondass, Gilgit SEZ

6 Northern Areas Bhimber Industrial Zone7 Federal Government Development of Industrial Pakr on Pakistan Steel Mill Land

in Port Qasim near Karachi8 Federal Government ICT Model Industrial Zone, Islamabad9 FATA Mohmand Marble City


The two sides will establish Joint Working Group on Social Economic Developmentto focus more on Pakistani people’s livelihood in human resources, health care andsmall-scale livelihood projects.

China will promote agricultural cooperation to help Pakistan improve agriculturaltechnology，production efficiency and value-added agricultural industry.

China will support Chinese companies in fulfilling their social responsibilities andhelp Pakistan build more livelihood projects.

A Historic Visit

At the invitation of the Chinese leadership, Prime Minister Imran Khan willpay an official visit to China from 2-5 November 2018.

During the visit, Prime Minister Imran Khan will meet with ChinesePresident Xi Jinping and hold talks with Premier Li Keqiang and meetother Chinese leaders. They will exchange ideas on bilateral relations as wellas international and regional issues. The two Prime Ministers will witnessthe signing of a number agreements.

A Historic Visit

This is the first official visit by Prime Minister Imran Khan after heassumed his office in August.

This visit has great significance in promoting China-Pakistan all weatherstrategic and cooperative relationship in the new era.

This visit will further enhance strategic communication, deepen pragmaticcooperation, promote people to people exchanges, take CPEC to the newstage of extension and broadening.

China International Import Expo

The Prime Minister will attend the opening ceremony of the First ChinaInternational Import Expo (CIIE) in Shanghai. Pakistan has been grantedthe status of “Guest of Honor Country”. This will ensure the provision of allpossible facilities and benefits to Pakistan pavilion. It is a special gesture ofgood will to Pakistan. The theme of “Emerging Pakistan” will fullydemonstrate Pakistan’s development achievements and investmentopportunities.

It is a significant move for the Chinese government to hold CIIE to give firmsupport to trade liberalization and economic globalization and actively openthe Chinese market to the world. It facilitates countries and regions all overthe world to strengthen economic cooperation and trade, and to promoteglobal trade and world economic growth in order to make the worldeconomy more open.

China International Import Expo

At present, more than 2,800 companies from more than 130 countries andregions have confirmed their participation to CIIE, including more than 200world top 500 companies and industry leading enterprises. The commercialexhibition area of the Expo has reached 270,000 square meters.

More than 10 Pakistani companies will participate in the BusinessExhibition, and more than 50 Pakistani companies in the field of textile, rice,medical equipment, sports will participate in the supply and demanddocking activities.

Pakistani companies will take advantage of CIIE as a new platform forbilateral economic and trade cooperation, promote more Pakistani productsand services entering the Chinese market, which will add new impetus todevelopment of bilateral economic and trade relations.

THANKYOU

Briefing on China-Pakistan Economic Corridor · China was the cornerstone of Pakistan’s foreign policy and early implementation of the CPEC projects would help realize the true

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