Pakistan Seeks To Re-Negotiate CPEC Project; China Angry on Reports

In what could be a massive jolt to China-Pakistan relations, the CPEC Project (China Pakistan Economic Corridor) under China’s ambitious Belt and Road Initiative (BRI) is under scrutiny in Pakistan. Pakistan’s new Prime Minister – Imran Khan plans to renegotiate the CPEC agreement, as it “unfairly benefits Chinese corporations.

As per media reports, the ministers and the advisors of the Pakistan Tehreek-e-Insaf government led by PM Imran Khan said that the CPEC agreement “unfairly benefits Chinese companies.

Meanwhile, Pakistan and China have reacted angrily to a report in London-based Financial Times (FT) newspaper which quoted some cabinet ministers as saying that Islamabad is considering to renegotiate some agreements signed with Beijing under the multibillion-dollar rail and road network.

Earlier Reports on CPEC by FT

The CPEC Project, launched in 2015, is a planned network of roads, railways and energy projects linking China’s Xinjiang Uyghur Autonomous Region with Pakistan’s Gwadar Port on the Arabian Sea.

Imran Khan, who was elected on principles of anti-corruption and transparency, had earlier criticised former prime minister Nawaz Sharif for corruption in the CPEC projects. Khan has pledged to publish details of existing CPEC contracts whose details remained closely guarded secrets.

“The previous government did a bad job negotiating with China on CPEC — they didn’t do their homework correctly and didn’t negotiate correctly so they gave away a lot,” Abdul Razak Dawood, Prime Minister Khan’s Adviser on Commerce, Textile, Industry & Production and Investment, was quoted as saying by the UK-based paper. 

“Chinese companies received tax breaks, many breaks and have an undue advantage in Pakistan; this is one of the things we’re looking at because it’s not fair that Pakistan companies should be disadvantaged,” he said.

Prime Minister Khan has established a nine-member committee to evaluate the CPEC projects and the committee is scheduled to meet for the first time this week, said Dawood, who sits on the new committee. The committee will “think through CPEC – all of the benefits and the liabilities”, the paper quoted him as saying.

Malaysia, Sri Lanka Myanmar Also Cancel Projects

Governments in Malaysia, Sri Lanka, Myanmar have already expressed reservations over the harsh terms of Chinese BRI lending and investment. Malaysia’s new government headed by Prime Minister Mahathir Mohamad has cancelled three China-backed pipeline projects and put a showpiece BRI rail link under review.

Pakistan is facing a financial crisis and it must decide in the coming weeks whether to turn to the IMF for its 13th bailout in three decades. Finance Minister Umar said he was evaluating a plan that would allow Islamabad to avoid an IMF programme, which several people close to the government say would involve new loans from China and perhaps also from Saudi Arabia, the paper reported.

More News at EurAsian Times