Chinese Ambassador Yao Jing on Friday said that China-Pakistan Economic Corridor (CPEC) projects were free of corruption.
Speaking at the fifth CPEC media forum, organised jointly by the Chinese Embassy in Islamabad and Pakistan-China Institute, the envoy said that CPEC projects were investigated and it was unanimously concluded that there was no corruption in their affairs. “CPEC is clean,” he said.
Mr Yao was responding to senior US official Ambassador Alice Wells’ comments at the Woodrow Wilson International Centre in which she alleged that CPEC projects were piling debt burden on Pakistan and lacked transparency.
“We hope Pakistanis will ask Beijing tough questions on debt, accountability, fairness and transparency... Ask the Chinese government why it is pursuing a development model in Pakistan, that significantly deviates from what brought China its own economic success,” Principal Deputy Assistant Secretary of State for South and Central Asia Alice Wells said.
Ambassador Yao said he was “shocked and surprised” at Ms Wells’ speech which “fully exposes her ignorance of Pakistan-China relations”.
He said the US should not cast aspersion over something about which it doesn’t have accurate information.
Senator Mushahid Hussain Sayed said Pakistan-China relations and the success of CPEC “rankles many” in the region and beyond, hence while they cannot stop or slow the project, now they are trying to undermine it through negative propaganda.
About the so-called debt trap, he said 91 per cent of the Pakistani debt is owed to the West, including multilateral institutions, and only 9pc to China.
APP adds: Mr Yao called upon the media to play its role in nullifying the effects of propaganda against the CPEC.
“Media is a major vehicle of information and platform of interaction,” he said while addressing the CPEC media forum. “Media from both Pakistan and China have already been playing role in promoting state-to-state relations.”
He said that Pak-China relations were based on win-win cooperation and were mutually beneficial.
China always came forward to assist Pakistan in need without any political or government differences.
The envoy said that if Pakistan was in need, China would never ask Pakistan to repay its loans in time. However, he pointed out, the International Monetary Fund (IMF) was strict in its repayment system.
He wondered why the US had suspended its aid promised to Pakistan and said Washington obviously did so because of political priorities. “When in 2013, the Chinese companies were establishing power plants in Pakistan, where was the US? Why it did not invest in Pakistan’s power sector despite knowing that Pakistan was in dire need of electricity?” he asked.
With respect to the US allegation of corruption in CPEC projects, Mr Yao said it was easy to hurl allegations at anyone without having evidences.
With regard to the Main Line (ML-1) railway project which is to be executed under the CPEC, he clarified that the project’s cost is around $9 billion; however, it is only an estimate. “The real cost of the project will be finalised in the second stage of determining financial package of the project,” he added.
The Chinese ambassador also reacted to the US accusation of providing few jobs to Pakistani workers in CPEC projects, saying that so far over 75,000 Pakistani workers had been given job opportunities and that around 2.3 million jobs are expected to be created in CPEC projects by 2030.
“I would be more happy to see more investment coming from the United States to Pakistan,” Mr Yao said, adding that China was determined to build capacities of Pakistani businessmen and industrialists to boost productivity in the country which would ultimately help increase Pakistan’s exports.
The United States has warned Pakistan that the China-Pakistan Economic Corridor (CPEC) would push the country deeper into an already stifling debt burden, foster corruption and repatriate jobs and profits to China.
In a speech, described as “unusually specific” by the international media, the top US diplomat for South Asia warned on Thursday that the multi-billion-dollar project would take a toll on Pakistan’s economy at the time of repayments and dividend in the coming years.
Assistant Secretary Alice Wells explained that CPEC was not an aid to Pakistan but a form of financing that guarantees profits for Chinese state-owned enterprises, with little benefits for Islamabad.
As an international media report pointed out, this specific warning comes at a time when Washington and Islamabad are trying to rebuild their turbulent relationship.
Addressing a gathering of diplomats, scholars and journalists at a Washington think tank, the Wilson Center, Ms Wells also quoted specific examples from the project
“CPEC’s most expensive single project is upgrading the railway from Karachi to Peshawar. When the project was initially announced, the price was set at $8.2 billion,” she said.
“In October of 2018, Pakistan’s railways minister announced that they had negotiated the price down to $6.2 billion, a saving of two billion. And he explained Pakistan is a poor country. We cannot afford this huge burden of these loans.”
“But recent media reports claim the price is now risen to $9 billion,” she added. “So, why doesn’t the Pakistani public know the price for CPEC’s most expensive project or how it’s being determined?”
The US diplomat also underlined the long-term effects in Pakistan of China’s “financing practices” and urged Islamabad to examine “the burdens that are falling on the new government to manage with now an estimated $15 billion debt to the Chinese government and $6.7 billion in Chinese commercial debt”.
Ms Wells also emphasised the need for Pakistan to know that China was providing loans, not grants, as the United States.
“It’s clear or needs to be clear that CPEC is not about aid. This is almost always the form of loans or other forms of financing, often non-concessional with sovereign guarantees or guaranteed profits for Chinese state-own enterprises that are repatriated to China,” she said.
“Now, together with non-CPEC Chinese debts payments, China is going to take a growing toll on the Pakistan economy, especially when the bulk of payment starts to come due in the next four to six years.”
Ms Wells warned that even if loan payments were deferred, “they are going to hang over Pakistan’s economic development potential, hamstringing Prime Minister (Imran) Khan’s reform agenda.”
Directly addressing the alleged lack of transparency in CPEC projects, she said this could increase projects costs and foster corruption, resulting in a heavier debt burden for the country.
Ms Wells also challenged the notion that CPEC would create jobs in Pakistan. “CPEC relies primarily on Chinese workers and supplies, even amid rising unemployment in Pakistan,” she said.
The US diplomat also demanded more transparency on the proposed link between Gwadar Port and China’s Xinjiang while responding to a question that New Delhi saw this as a military project aimed at encircling India.
She said that while CPEC would only benefit China, the United States offered a better model and urged Islamabad to introduce economic reforms that would encourage US investors to invest in Pakistan.
She also recalled that during PM Khan’s July visit to the White House, US President Donald Trump had offered to greatly enhance American trade with Pakistan.
Ms Wells acknowledged that the United States could not offer investments from state-run companies. But, she added, the private US investment, coupled with grants, would improve Pakistan’s troubled economy.
“There is a different model,” she said. “Worldwide we see that US companies bring more than just capital; they bring values, processes and expertise that build the capacities of local economies.”
She pointed to interest in Pakistan by US companies including Uber, Exxon Mobil, PepsiCo and Coca-Cola, with the soft-drink makers together investing $1.3 billion in the country.
Her speech appeared linked to a major offensive that Washington has recently launched against Beijing’s Belt and Road Initiative, a signature project of President Xi Jinping which aims to build ports, highways and railways around the world.
