Nawaz’s ouster affects CPEC coordination, says Chinese diplomat

ISLAMABAD: A senior Chinese diplomat on Friday admitted that removal of Nawaz Sharif as prime minister did cause difficulties in coordination for China Pakistan Economic Corridor (CPEC) but the projects on the ground remained unaffected.

“Political stability is a must for economic development,” Lijian Zhao, Deputy Chief of Mission (DCM) and Minister Counsellor at Chinese Embassy said in an exclusive interview with The News.

He said after the removal of Nawaz Sharif in late July, the post of the planning minister remained vacant for about two months and there were some difficulties in coordination between the two countries for CPEC-related issues but now the situation has improved after the appointment of Ahsan Iqbal as planning minister again, earlier this month. 

“It will not be correct to say CPEC was not affected at all by the change of the prime minister. However to say it was affected grossly will also be a wrong statement as projects on grounds remained unaffected,” the diplomat said while answering question about the impact of Nawaz removal on CPEC.

He, however, clarified that Nawaz Sharif might have been removed but his party was still in the government which showed stability of the system. Lijian Zhao said the two countries had resumed normal coordination and 50th review meeting of CPEC projects was held last week which was attended by senior officials of all related Pakistani ministries from the Centre and provinces and also by Chinese companies and embassy officials.

To another question, the Chinese diplomat said so far not a single incident of corruption had been observed in projects being carried out under CPEC. Lijian Zhao said his country was closely monitoring CPEC projects to ensure they were graft free and current Chinese leadership was very strict regarding corruption.

Misinformation about “mega corruption” scam worth Rs1.8 billion in Multan Metro project was spread last month by some quarters but later it was revealed that the company mentioned in the fake scam had nothing to do with the project and it did not earn a penny from Pakistan.

In fact, a thorough probe by Chinese regulatory authority revealed that Jiangsu Yabaite Technology Co Ltd, a listed company in China wrongly used name of Pakistan and some other countries to manipulate its stocks in China. “Yabaite lied about investment and profits in many countries to artificially raise its share prices in China for which it was probed and punished by the Chinese counterpart of Securities and Exchange Commission of Pakistan (SECP),” the diplomat said.

The diplomat said CPEC offers a win-win solution for both Pakistan and China.

“Two major bottlenecks in Pakistan’s economic prosperity are energy shortage and lack of infrastructure and CPEC addresses both of them paving the way for a brighter future for the country. On the other hand for Beijing, CPEC offers regional connectivity and legitimate profit for Chinese investment companies,” Lijian Zhao said.

He said before CPEC there was up to 12-hour loadshedding in Pakistan which had reduced to a couple of hours now and would soon be completely over. “After a few years Pakistan will face a different problem; how to deal with surplus energy? The country will be able to choose its option to sell extra electricity,” he said joyfully.

In addition there will be at least 60,000 jobs directly related to CPEC while countless other jobs will be created as a result of economic activity generated by the corridor, said the diplomat.

He lamented misinformation about CPEC projects spread by vested interests. “Let’s be clear CPEC is not a gift or assistance. It has two major components, Foreign Direct Investment (FDI) and Soft loans.”

Firstly, he said, energy projects were being carried out by Chinese companies as Foreign Direct Investment (FDI) under which power plants would be set up with hydro, solar and wind energy. Secondly, government to government soft-loans would be given for infrastructure projects like Sukkur-Multan Motorway (M-5), Lahore Orange Line Train and KKH-2 with just 2 percent interest rate.

Some analysts, he said, were committing mathematical blunders by presenting wrong figures like 13 percent interest rate for Chinese projects. “These are totally fabricated figures motivated either by political agenda or vested interest”. 

For projects under soft loans worth about $6 billion the interest rate is 2 percent while for FDI the interest rate is 6 percent.

He said the Chinese investment companies carrying out CPEC projects had obtained loans from Chinese banks. “They are the one which will return the loan and pay the interest back to Chinese banks which means no Pakistani company or individual will be paying this FDI related interest rate,” he said asking what the concern of the analysts is raising question about interest rate when it is a matter between Chinese companies and Chinese banks.

The diplomat hopes that the ties between the two countries will be further strengthened in future after the success of CPEC. He said China is also working to bring Pakistan and Afghanistan closer for peace and stability in the region and Chinese shuttle diplomacy is yielding positive results.

“Soon there will be a high-level meeting attended by the foreign ministers of Pakistan, Afghanistan and China and preparation for the same are underway,” he said.