Imran Khan and Xi Jinping
A file image of Pakistani Prime Minister Imran Khan with Chinese President Xi Jinping | Photo: @ForeignOfficePk | Twitter
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A committee in Pakistan recently presented a sensational 278-page inquiry report to the Imran Khan government about the country’s power sector, where Chinese companies are heavily involved. It exposed a sordid tale of corruption, collusion and, of course, politics. That explains why the inquiry committee included the Inter-Services Intelligence, or the ISI, and why the report will never be made public.

From power companies to airport construction to highways and safe city projects, Pakistan is now an ‘interest’ to Beijing at several levels, including personal profit, company profile and state power. There’s money to be made, and intelligence to be had, both into India and US activities in Afghanistan and Iran. The relationship, which was already close, has come a long way since the Kargil conflict, when China was Pakistan’s creditor for a mere PKR 818 million, to the last financial year, when Pakistan owed China some PKR 506,062 million (RE 2019), not including the ‘concessions’ that are built into the negotiations. Overall, Pakistan owes $6.7 billion in commercial loans to China, more than what it owes the International Monetary Fund (IMF). This has ramifications for India from Handwara to Pangong.


Also read: The Chinese are so predictable, Modi & Shah should’ve seen them coming on 5 August 2019


A deep, dark shadow of China-Pakistan friendship

Consider the facts. According to the inquiry report, a massive project, involving transmission line, which is a flagship project of the China-Pakistan Economic Corridor (CPEC), has been estimated as being 234 per cent more expensive than a similar one in India, which used better technology. Other examples refer to two coal-based power plants, where the Chinese were able to extract more than $2.5 billion by over-invoicing the plant and equipment.

Pakistan’s National Electric Power Regulatory Authority (NEPRA) was involved at every stage. Worse, two of the Pakistan Prime Minister Imran Khan’s aides, Razak Dawood and Nadeem Babar, are among those who are said to have benefitted from this massive scam. The latter, for instance, is a major shareholder in an independent power producer Orient Power, which is also the biggest defaulter on payments to the state. He has been appointed special assistant to Imran Khan on petroleum, and was earlier chairman of the Energy Task Force that involved key decision-making, apart from appointing members to the boards of various power companies.

Apparently, the Pakistan-China friendship, which is called ‘higher than the mountains’, also has a deep, dark shadow.


Also read: China believes India wants Aksai Chin back. PLA has likely secured 40-60 sq km in Ladakh


Chinese power in Pakistan

There have been other instances of Chinese contractors buying up the top echelons of power in Pakistan, including the Pakistani Army. For instance, the building of a new international Airport at Islamabad was contracted to the China Construction Third Engineering Bureau Co. Ltd, in a $2.6 billion project. This was the largest overseas contract won by the Chinese company. Even before the airport was inaugurated, parts of the building collapsed raising questions as to its value. Then came the investigations, which revealed embezzlement by 13 retired army and air force officers, including a Lieutenant General and an Air Marshal.

More recently, the Pakistan Army’s Frontier Works Organisation reversed an earlier decision not to give the Diamer Bhasha dam to a Chinese company, after it demanded ownership of the dam, and rights over a second such project.  Imran Khan then tried to crowd fund the construction of the dam, which has obviously fallen short. Awarded in May 2020, the project will see 70 per cent of Chinese loans. That means more Chinese labour being brought into an area where Chinese ingress has steadily increased due to the building of the Karakoram Highway. The new terms of engagement, like interest on loans for a project of $2.8 billion, are, as always, shrouded in mystery.

Other massive Chinese projects like the Safe Cities Project have also come under disrepute in Islamabad. It was found that surveillance cameras installed by Huawei in the Rs 13 billion project for the city were of poor quality. By the time the project was ready to be handed over, it was pronounced as ‘nearly out of order’. A review by a Senate Standing Committee directed that a technical evaluation of the project be carried out before taking it over from the Chinese. Senators also observed that the cost of the project was unreasonably high and that there was no doubt that the Chinese had overcharged the state. Similar projects in Karachi and Peshawar have also languished.


Also read: Pakistan’s 40-yr-old Gilgit-Baltistan dam project could finally be a reality, with China help


CPEC and corruption

There are a number of  other questionable ‘awards’ by Pakistan under the CPEC like a 23-year tax exemption for all projects in the Gwadar ‘Free Zone’. But corruption charges have come to a halt for two reasons. One, China threatened to halt funding for road projects like the Karakoram Highway, after persistent reports of graft. Second, the media is now so muzzled in Pakistan, the earlier courageous reporting has virtually come to a halt.

While much of South Asia can hardly balk at corruption, the point here is that these CPEC projects are government-to-government deals, with a World Bank report noting that corruption is built into these negotiations. Tenders are placed for any three Chinese-only companies. Contracts allow these corporations to fix the extent of local sourcing, with interviewees noting that there was little local benefit since these contractors preferred to import almost everything, including labour. ‘Pre-bid meetings’ often resulted in a dilution of the original clauses. For instance, liquidated damages for delay were reduced from 10 per cent to 5 per cent and the clause for bonus on early completion also changed.

Many Chinese contractors operating in Pakistan, like China Harbour Engineering Company, which has projects in Gwadar and Karachi, have been barred by the World Bank for unsavoury practices. In Malaysia  for instance, the company was accused of offering to inflate project costs to bail out the state development funds.


Also read: Blue Dot Network — US answer to China’s Belt & Road Initiative that India’s ‘interested’ in


A Chinese company is China’s company

Again, these practices are not unknown in much of South Asian contracting either. But here’s the thing. There is now no longer a ‘private company’ left in China. Since 2012, President Xi Jinping’s policies have led to a resurgence in state intervention, including the National Intelligence Law 2017 that obliges them to ‘support, assist and cooperate’ with state intelligence. Article Two of the law requires intelligence work to operate across the realm of ‘comprehensive national security’, which includes just about everything, including cultural and political aspects, open source intelligence, all of which must be aimed at protecting ‘national interest’.

Huawei is cited by the US as a case in point. But the law covers all corporations. And finally, all of these major companies are tied through complicated ways to state bodies, which in turn are controlled by top echelons of the Communist Party itself.

In that process, key decision-makers in Pakistan have become richer, translating into Chinese influence on a major scale.

Beijing, therefore, has new reasons to protect Pakistan. The fact that the first clashes in Pangong occurred three days after the Handwara attack, and one day after the Army Chief M.M. Naravane threatened retaliation, may be a coincidence. India has always factored in a possible Chinese front in a war with Pakistan. Now it may be that the second front has to be considered in a punishment strategy. Beijing, however, needs to understand that two, or more, can play at that game. Chinese chequers are not exactly a favourite anywhere in the world right now, barring among Pakistan’s elite. And that’s not saying much.

The author is former director, National Security Council Secretariat. Views are personal.

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37 Comments Share Your Views

37 COMMENTS

  1. being living in lahore, i know china is making pakistan more shity, Earlier also we have given part of kashmir to them, this gonna continue, no in one pakistan objected it, cause we pakistani are fools!

  2. why does India care so much if CPEC is a Corruption corridor. If it is one, it is for Pakistan. India should be happy instead of worrying about it.

    To know if something is in the interest of India or Pakistan, one must evaluate the reactive-Opinion of the other country. In the case of CPEC, the kind of Response, that is emanating from India in the form of a continuous stream of propaganda via diplomatic, electronic, print and social media, suggests and concludes only one thing, and that is, CPEC MIGHT BE ANYTHING FOR PAKISTAN, BUT FOR INDIA, IT IS A DEFINITE CAUSE OF SERIOUS CONCERN.

    CPEC may carry any visible/invisible , friendly/unfriendly Chinese Designs for Pakistan. But Pakistan is also well aware of everything and everyone. Pakistan has been through similar situations many times, China is no different story for Pakistan.

    Pakistan’s only problem is it’s Geography, which is both a strength and a weakness, but it always keep Pakistan busy in the fight for its national interests. Other than that, our problems are just the same as that of any other country. if other countries can make progress with similar problems, Pakistan could also do it, had Pakistan not been in its current geography.

    • India cares because China is taking over Pakistan slowly but surely. And this is a problem because they will encircle India around its neck. Pakistanis are easier to handle, but Chinese have more power and money and influence, so it will become a bigger headache

  3. Upon reading this article I was ready to remove ThePrint from my news sources until I read the comments which are far more enlightening. Thank you to the commenters for pointing out how biased and unreliable the author of this article is.

  4. Pakistan is a deep and closed friend of china. On the other hand there is no friend of India like wise India has issues with Pakistan, China, Nepal, Sri Lanka or even with Bangladesh too. A very “laraka” country.

  5. Wowwwww!!! What. a joke written by this joker writer! LOL…….. Jealousy bespeaks!!! Long live Sino-Pak friendship!!!

  6. Very weak and unclear piece of reporting as writer was trying to translate a foreign language.
    First please explain the Pak China relation, then expose what are your findings and then show how past shows up in future or not.

  7. While China and Pakistan launch a corridor of Economy from Kashgar till Gwadar you Indians and Afghans launch a corridor of Terror from Kunar till Spin Boldak. While China and Pakistan launch Joint Fighter 17 you Indians, Afghans & Iranians launch a joint strategy to unleash Terror from Kandahar and Chabahar.

  8. While China and Pakistan launch a corridor of Economy from Kashgar till Gwadar you Indians and Afghans launch a corridor of Terror from Kunar till Spin Boldak. While China and Pakistan launch Joint Fighter 17 you Indians, Afghans & Iranians launch a joint strategy to unleash Terror from Kandahar and Chabahar. Trust me none of these Cities are going to develop if you don’t shut your bogus and dirty propaganda ! After losing the battle against China at every front you’re trying to target CPEC which is a flagship & Crown Jewel of Global BRI but trust me this time you’ll lose Ladakh forget Baltistan & Azad Kashmir. The corridor that you’re developing to connect India with Central Asia is doomed to fail !

  9. Fictional story creation with very biased approach, without knowing the partnership model between China and Pakistan in Cpec and in defense strategy.
    Better you follow CPECmakingprogeess at Twitter to have updates.
    60B$ investment is partnership based model and not like #hindutvatakingoverindia model which will make India into pieces

  10. A mere poor effort in getting attention of your govt attention, the story is completely different, sovereignty of Pakistan is highly in tact, follow us at #cpecmakingprogress and burn your hearts out.
    Time to switch gears between Pakistan and India, Indian leadership is in extremists hands and Pakistan is working on regional progress with definitely China as leading figure.
    Next time come prepared by having more study on gawadar and cpec progress story,
    #goodpoorattempt

  11. We very much know indians view point. Mind your own business is not fit now for india. Loans of china to pakistan Water problem Punjabi Army etc. Etc. R the things of past. Chinese slavery or Pakistsn will be broken. While totally un natural country on earth is india but it will remain intact. Little GDP growth changed the indian minds as if thry r the only one growing. Bangla Desh hardly had any God given Mines Agr land or any other comoelling natural asset but still their GDP is more than india. This shows if Bangla Desh canbachueve this then any other country can and will do this sooner or later. World economy and developement is ever changing cheap labor open policies and a bit of improved infrastructure all this is needed to develop coz FDI automatically directs to that. India is not alone Vietnam Philippines Cambodia Bangla Desh Indonesia are going on much better pace next is Mayanmar Pakistan and some other countries. CEPEC will take Pakistsn miles shead of india. Gilgit Baltistan Ladakh or Leh or Kargil all these r Muslim dominated area Jammu and Kashmir IOK soon or later Indians will be comoelled to release it. Indians had still not seen or experience Afghanistans Talibsn type war which soon will happen its bound to happen due to indian mentality. If Pakistan stay behind firmly thennit could have happened much earlier. Now it seems china will perhaps forced to do that. Then khalistan and Bengal. Many things will happen soon in india due to its Hindutva. Circular india perhaps can survive a bit longer but Hindus dominated india cannot. Leave Pal stan china aside indians shud mind their own business.

    • Lol Dont worry Chinese love pigs that’s why they are breeding u 😀 Nothing else than there ulterior motives. You will get burned like Bacon in future.

  12. Over 500,000,000 Indians go in the fields for Tatti. and dare to compare with young developing nation like Pakistan and super power China. Wow – wake up and learn to wash … First

  13. Pakistan is a client state of China, and more than India, it is actually the USA who is more upset and tightening their fists. Actually before OBL got killed, Pakistan was still USA’s ally in the coalition. But now, Islamabad feels with Beijing becoming the top dog in Asia, and what goes also for their favour is the animosity and distrust it has for India. If the USA troops pulls out completely, the ISI will reverse the front and place the militants along India’s border. They have reason to do so, as the death toll keeps rising in Kashmir. It will probably have China’s blessing. The main point is for India to pump up the economy to 5 trillion.

  14. Stop living a lie China is reality. If you don’t believe take out ur iPhone and see where is it manufactured. Our region has all tech and man power but are divided by politics and race to gain power. Instead we should focus on removing poverty like China did….learn something all ur writing are negative. Nothing positive can come out of such thought. Be good neighbor’s solve the problems like good neighbor’s…don’t believe ur politicians

  15. This is truly hilarious. After suffering extreme embarrassment at the hands of incompetent, loud talking chowkidar, the bhakts have produced this gem of Investigative journalism.
    To start the expectedly long discussion, since Indians take long to admit their mistakes or failure, here are few facts for the spin wizards:
    1. 2/3rds of IPPs are not Chinese.
    2. Nearly all scams mentioned here and many more have been unearthed by IK. Overall, more than half do not involve the Chinese.
    3. Era of India friendly Pakistan looters is over.
    4. There are many more and much bigger scams in India. Goa Mining Scam (BJP), Himachal PPE Scam, PMC Bank scam, DHFL scam, INX Media case, Rafael aircraft (BJP), Agusta Westland scam.
    5. Are the Chinese also responsible for India’s fiascos? economy’s nose dive, farmers suicides, demonetization, Feb 19 jaw-breaker by PAF, loss of 120 million jobs, communal riots in capital Delhi, Kashmir failure.
    6. China has occupied India’s territory only because Modi tried to threaten CPEC.
    7. Your criminal is Modi. But sadly, no media house can afford to question him.

  16. I think I can feel jealousy on Indian side. This project is completing in Pakistan rapidly. Which country stood with Pakistan at security issues. And what about your friend America, why did not he come to help you in Ladakh??? You cannot stop CPEC, it will be completed Inshallah very soon. Yes corruption is not in China Pakistan Friendship, on the whole we need to control in our Society. Pakistanis king breaker, first it wS RussiA, now it will be America
    Your friend

  17. Two countries are connecting each other by road for trade and other reasons.,what India has to do with this,
    Pakistan and China never discuss any relation of India with Nepal or Bangladesh.
    If there is some corruption then what India has to do with?
    CPEC and other projects are the signs of deep and sweet relationships between two countries,
    India, s cry is really unreasonable…..

  18. Sour Grapes on CPEC and OBRI the largest infrastructure project the world has ever seen since the Marshall Plan.

    India once more on the wrong side of history in Afghanistan and in Indo Pacific has lost 60km of Chinese territory that they the Indians were occupying.

    Nepal Kingdom included Sikkim and Bhutan before the fathers of modern India split it into 3 and following the independence of Muslim Bengal a little chicken neck passage way connevting the 7 sister states to the rest of India rests on how far right xenophobic Hindu extremist ideology continues to flourish im India.

    India faces a four front war if it does not stop bidding for the US.

    Kashmir
    Ladakh
    Sikkim
    Nepal

    But also in the sea too.

    RAND corporation has spelt out US strategy over next decades and seeks to limit Chinese growth through small to large conflicts in Africa, Middle East and Asia. It should be noted the USA does not wish to directly confront China but seeks to crrate local alliances. In South Asia and Pacific the USA seeks to place India and Indian navy in the forefront.

    USA also seeks tonuse Muslims and Muslims regions in Asia and inside India as fault lines to a proxy or full blown war.

    It all sits well with the impending prophecy Muslims of Asia have shared.

    Ghazwa Hind prophecy,

    Indian pivot to USA through Modi has put India in the next decade or two in a very precarious situation.

    India can not win a war with China nor Pakistan for that matter and if on the Muslim fault lines Muslim Mujahids will contomue fighting India for decades. On the Notheren Eastern front a new guerilla war will emerge with the Assamese and Maoist.

    India under Modi will ensure lands occupied by the Indian Union will become liberated to pre British era.

  19. Please note
    as far as china , Pakistan relations are concerned , India no need of worrying because their relations will end up in a war between China and pakistan within 5 to 10 years
    There are lots of reason and development for these problems that i will not put it here
    wish all the best for china pak development , which will result in favour of India

  20. All this in a way is music to our ears. Let China wreck Pakistan’s already floundering economy. There will be some security challenges along the way for us but in some time with increased pressure on Chinese firms regarding demand weakening for their products across the world Chinese will straighten out. I foresee Pakistan’s eventual breakup, and China will only fasten the process. The military is heavily Punjabi posing increasing water problems in Sindh, especially with now Diamer-Bhasha dam construction.
    We on the other hand need to reform fast and keep away from harmful socialist ideas to make sure we grow at near 10% growth post FY 2021-22.

  21. Excellent analysis Madam. Your articles are always very high quality and easy to follow even for the late person.

  22. This article explains a lot about China-Pakistan relationship. Pakistan has become kind of a slave country to China. By means of Chinese loans, the way various projects are sourced and managed, and more importantly the way China controls Pakistan from security point of view, Pakistan is completely under the control of China.

    • Make enough toilets in India and sort out your Tatti issues first before even thinking about Pakistan and comparing with great China.

  23. Chinese Products are sub-standard and inferior stuff.Myself as an advocate found out from various sources that the products supplied by China Manufacturers are hopelessly poor quality.One of my clients purchased Ink-Jet Printing machine from an Chine exporter.It never worked ever since its landing in India and my Client had to file consumer complaint in consumer Forum at Hyderabad/India.That apart, even China’s mobile phones are of hopelessly poor quality and they dont work properly despite over-charging and if we go to the mobile shops. we are told that company has closed down.[Moto mobiles]. Further more all indian markets are flooded with waste chinese products which are completely useless.Considering all these i wrote to Prime minister Modi to Check up Chinese miltary Hardware ,as it is inferior and sub-standard and china had to purchase S-400 from russia to update its technology.nisaruddinjeddy@gmail.com

  24. On expected lines. Chinese will purchase Pakistan society, at least the major part of it. Pakistani will not know what has hit them.

    • they cant purchase the society. i feel societies views may be totally different from the govt and army. i didnt mean they are pro-India. as the article indicates, it is the select decision makers that the chinese are buying to turns the rules and regulations in their favor. poor foolish pakis. feel sad for them.

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