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CPECChina’s Perspective
China GDP Growth Trend
2010 2011 2012 2013 2014 2015 2016 20170%
2%
4%
6%
8%
10%
12%
Source: Knoema
“At present, China’s economy has entered a state of new normal – the gear of growth is shifting from high speed to medium to high speed.” --- Li Keqiang, Premier of China, World Economic Forum, Davos 2015
Challenges For China
• Ensure Sustained Economic Growth– Create new domestic demand– Ensure cost effectiveness for international trade– Focus on Africa
• Assume A Bigger Role In Global Affairs– Create secure, cost effective alternate route for energy and trade– Create large economic block on its western periphery– Establish strong influence in Africa
71.4% Area
28.8% Population
(2002)
20% GDP(2009)
Western China Growth Challenge
Western Development StrategyInitiated in 1999-2000
1. Development of infrastructure 2. Enticement of foreign investment 3. Focus on ecological protection 4. Promotion of education 5. Retention of talent
As of 2006, a total of 1 trillion yuan has been spent building infrastructure in western China
The combined GDP of the western regions reached 3.33 trillion
yuan in 2005, compared with 1.66 trillion yuan in 2000
One Belt One Road Initiative
China – Pakistan
China – Indonesia
China – B’ Desh – India - Myanmar
China – Mangolia - Russia
New Eurasian Land Bridge
China – Central Asia – West Asia
CPECLogistics Opportunities For Pakistan
CPEC ProjectsCoal Mining /Power plant
Hydro
Wind
Source
Sector Est Cost in $ BlnEnergy 33.79Road 5.9Rail 3.69Mass Transit in Lahore 1.6Gwadar Port 0.66China Pakistan Fiber Optics 0.04Total 45.69
Coal Mining /Power plant
Hydro
Wind
China – SS Africa Rising Trade
2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%
5%
10%
15%
20%
25%
Share of China in SSA's total trade Share of SSA in China's total trade
Source: World Bank
2004: $ 15 Bn2015: $170 Bn
Direct OpportunitiesFreight Forwarding / Customs Clearance Services
Seaport, Airport, Dryport Operations
Bulk Terminal Operations
Marine Haulage
Cross Border / Domestic Logistics
Warehousing & Value Added Services
Manufacturing Activity In Proposed Economic Zones
Coal Logistics
Proposed Coal Power Projects MWEstimated
Coal ConsumptionSahiwal, Huaneng Shandong 1,320 5,184,168
Muzafargarh 1,320 5,184,168
Thar Engro 660 2,592,084
Thar Other 1,320 5,184,168
Port Qasim 1,320 5,184,168
Gwadar 300 1,178,220
Total 6,240 24,506,976
2018 2019 2020 2021 2022 20230
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
0%
10%
20%
30%
40%
50%
60%
70%
Up Traffic Down Traffic Annual Growth Factor
TEU
p.a
Freight Traffic PotentialGwadar - Kashgar
Estimated CPEC Trucking Potential(Estimated China transit trade traffic only, Assuming no railway movement)
Estimated Truck Requirement
Trucks required 0
5,000
10,000
15,000
20,000
25,000
2018 2019 2020 2021 2022 2023
Projected Truck Freight Revenue
Freight Revenue 0
102030405060708090
2018 2019 2020 2021 2022 2023
PKR
Bln
Indirect OpportunitiesForeign Direct Investment
Formation of International Alliances
Rise in Aggregate Domestic Demand
Growth in Manufacturing Sector
Growth in Fisheries & Agri Sectors
Improvement in Productivity
Incremental 2-3% GDP Growth
CPECChallenges for Pakistan
Grabbing A Share Of The Pie
• Two Way Transit Transportation• Trucks vs Freight Train • Domestic Trucking & Warehousing• International Shipping & Freight Forwarding• Supply of Raw materials• Supply of Finished Goods• Services
No Legislation To Ensure Market Share For Local Businesses
Handling Coal Logistics1.5 – 2.0 Million Tons p.a.
By Road?• Pollution • Truck Availability• Congestion• Adherence to Standards
– Safety– Traffic laws– Highway deterioration
By Rail?• Capital Availability• Railway Tracks• Rolling Stock Availability
– Quantity– Quality
• Impact of Circular Debt• Impact On Passenger Trains• Pollution• Efficiency and Effectiveness
TIR Carnet
• Pakistan signed TIR Carnet in 2015• Cross border movement of trucks across all
signatory countries• Strict conditions, – financial guarantees, – vehicle quality
• Iran and Turkey are Biggest Players
Ensuring Employment For Locals
• What share of jobs will go to Pakistanis ? – Managerial– Engineering– Skilled– Unskilled
• What share will go to Baloch people?– Number & Type Of Jobs– Educate / Upgrade / Elevate– Sense Of Deprivation / Alienation
Legislation
• Directing Opportunities Towards Local Businesses
• Guaranteeing Employment For Locals • Ensuring Use Of Locally Available Raw
Materials• Transparency
THANK YOU