Pakistan-China Economic Corridor

A Mega Project of InfrastructureBy

Muhammad Shahzeb Khan Mbag143009Rana Sohail

Problem Identification

• Chinese industries are facing problems to compete in global market due to high transportation cost and delivery time.• China is using the longest way of transportation due to which the

transportation cost and delivery time increases which gives competitive edge to the competitors e.g. Japan, United States of America etc.

Planning Phase

To make an alternative road that minimize the transportation cost as well as the delivery time which can be a road from cutting a corridor directly from Kashgar to Gwadar.

Financing Section of Pak-China Corridor

• According to South China Morning Post, Beijing does not plan to use either the Asian Infrastructure Investment Bank or its Silk Road Fund to finance the US$46 billion Pakistan-China economic corridor, with money to come from both countries instead:• Several different facets will be utilized for the financing of these projects.

Both sides will increase cooperation, to jointly provide financing support.......As to whether the AIIB or the Silk Road Fund will be used, at present these [projects] are being looked into, or are in the planning stages. So at the moment we are not considering using these mechanisms or platforms or financial organizations to provide financing

—Liu Jianchao, assistant Foreign Minister of China

Ministry of Planning

• Pakistan and China today set in motion roll out of $45 billion portfolio agreed under CPEC. • Both signed agreements worth $28 billion to immediately kick-start

early harvest projects, while projects worth $17 billion, which are in pipeline, will follow as soon as required.

For more visit : http://pkpolitics.com/2015/04/20/details-of-projects-signed-today-with-china/

• 1000 MW Solar Power Park, 870 MW Suki Kanari KPK Hydro Power Project, 720 MW Karot AJK Hydro Power, three projects of wind power at Thatta of 50 MW, 100 MW UEP and 50 MW, Chinese governmental concessional loans for the second phase upgradation of Karakorum Highway (Havelian to Thakot), Karachi-Lahore Motorway (Multan to Sukur), Gwadar Port East Bay Expressway Project and Gwadar International Airport, provision of material for Tackling Climate Change, Pro Bono Projects in the Port of Gwadar Region, establishment of China-Pakistan Joint Cotton Bio-Tech Laboratory, establishment of China-Pakistan Joint Marine Research Center, cooperation between the State Administration of Press, Publication, Radio, Films and Television of china and Ministry of Information, Broadcasting and National Heritage of Pakistan, Triple Party Agreement between China Central Television and PTV and Pakistan Television Foundation on the rebroadcasting of CCTV-NEWS/CCTV -9

Payback of $45 billion

• Even if China were to use PCEC only for 50% of its current level of oil supplies, it will save around $6 million every day, almost $2 billion every year. Only by this we can get the payback period accounted as 22.5 Years. • And if the PCEC uses 100% of its current level of oil supplies, it will

save around $12 million every day, almost $4 billion every year. No by these figures we can get the payback period accounted as 11.25 years.