Pakistan official’s criticism of China’s ‘Silk Road’ projects raises worries

A Pakistani soldier stands guard beside a ship carrying containers during the opening of a trade project in Gwadar port, some 700 kms west of Karachi on November 13, 2016. (AFP file photo)
Updated 10 September 2018

Pakistan official’s criticism of China’s ‘Silk Road’ projects raises worries

  • Commerce Minister Abdul Razak Dawood suggested that all projects in the $57-billion China Pakistan Economic Corridor program were eligible for suspension and review
  • He said that China may have been granted too-favorable terms in many projects by the former government of Nawaz Sharif

KARACHI/ISLAMABAD: A Pakistani official's critical comments about projects funded by China to the tune of billions of dollars rattled investors and sparked worries on Monday of a souring in ties, a day after Beijing's top government diplomat concluded a visit.

Abdul Razak Dawood, the Pakistani cabinet member for commerce, industry and investment, suggested that all projects in the $57-billion China Pakistan Economic Corridor program could be eligible for suspension in a review to be conducted this week under the orders of new Prime Minister Imran Khan.

"I think we should put everything on hold for a year, so we can get our act together," Dawood told the Financial Times in an interview. "Perhaps we can stretch CPEC out over another five years or so."

He added that he thought China had been granted too-favorable terms in many projects by the former government of Nawaz Sharif.

"Chinese companies received tax breaks, many breaks and have an undue advantage in Pakistan; this is one of the things we're looking at because it's not fair that Pakistan companies should be disadvantaged," Dawood said.

Pakistani markets fell in early trading on Monday, with the benchmark KSE 100 index down 477.38 just after midday at 40,374 points, before recovering to close at 40,684, still down 0.4 percent.

Dawood's comments were "mind-boggling" and rare public criticism of China, said Mohammad Zubair, privatization minister in the previous government.

"This is probably the harshest statement about the Chinese in the last 50 years or so," Zubair told Reuters. "Even if there are issues with the Chinese, those issues could be dealt with in private rather than being made public."

Later on Monday, Dawood told domestic broadcaster Geo TV that his statements had been misconstrued and he would clarify them later.

The critical comments were published just after the Chinese government's top diplomat, State Councilor and Foreign Minister Wang Yi, visited Pakistan and the two sides reaffirmed the mutual benefits of the Beijing-funded projects.

While Khan, a former cricket star, has made no secret he plans to review all government projects and expenditure, the finance ministry last month said Pakistan was "fully committed to undertake and complete CPEC projects in their totality."


Japan’s capital sees prices fall most in over 8 years as COVID-19 pain persists

Updated 27 November 2020

Japan’s capital sees prices fall most in over 8 years as COVID-19 pain persists

  • Tokyo core CPI marks biggest annual drop since May 2012
  • Data suggests nationwide consumer prices to stay weak

TOKYO: Core consumer prices in Tokyo suffered their biggest annual drop in more than eight years, data showed on Friday, an indication the hit to consumption from the coronavirus crisis continued to heap deflationary pressure on the economy.
The data, which is considered a leading indicator of nationwide price trends, reinforces market expectations that inflation will remain distant from the Bank of Japan’s 2% target for the foreseeable future.
“Consumer prices will continue to hover on a weak note as any economic recovery will be moderate,” said Dai-ichi Life Research Institute, which expects nationwide core consumer prices to fall 0.5% in the fiscal year ending March 2021.
The core consumer price index (CPI) for Japan’s capital, which includes oil products but excludes fresh food prices, fell 0.7% in November from a year earlier, government data showed, matching a median market forecast.
It followed a 0.5% drop in October and marked the biggest annual drop since May 2012, underscoring the challenge policymakers face in battling headwinds to growth from COVID-19.
The slump in fuel costs and the impact of a government campaign offering discounts to domestic travel weighed on Tokyo consumer prices, the data showed.
Japan’s economy expanded in July-September from a record post-war slump in the second quarter, when lockdown measures to prevent the spread of the virus cooled consumption and paralyzed business activity.
Analysts, however, expect any recovery to be modest with a resurgence in global and domestic infections clouding the outlook, keeping pressure on policymakers to maintain or even ramp up stimulus.