Ramifications of Chinese presence in Pakistan

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By Manzoor Ahmed
Are the Chinese visitors welcome in Pakistan? Yes, if you ask people in the government’s higher echelons. No, if you see the increasing number of arrests for varying petty crimes reported in the Pakistani media. It is not business as usual now that China is coming in big on the shoulders of the China-Pakistan Economic Corridor (CPEC) and a host of unrelated projects committed or conducted earlier.
While many in Pakistan fear the big Chinese arrival, those who welcome them find their business plans ruined and their profit margins shrinking. All talk of the Chinese presence as being some kind of advent of the Chinese East India Company, meant to colonize and exploit Pakistan is being silenced by the authorities at different levels since those in power view it as an opportunity to make it big.
But that does not diminish the fears of those who deal with the Chinese on the ground, often on un-equal footing. Their government offers them little by way of protection. For them, the Chinese presence is like having to welcome guests who come and work on their own terms. It is, in a manner of speaking, “mehmaan nawazi mehengi pad rahi hai.” Meaning “playing host is proving to be costly affairs”. The biggest nightmare the Pakistani businessmen foresee is the prospect of having to deal in Yuan, the Chinese currency fixed at official level, to the Chinese advantage, but having varying rates in the market place. The prospects of currency black-marketing are high.
The Pakistani merchants find that the Chinese are bad spenders. They are tight-fisted. They do not live and spend lavishly like Western, Arab or Far-Eastern tourists. They bargain and spend each Pakistani Rupee they have most judiciously.

KARACHI: Two Chinese men were caught red-handed by police in Karachi while trying to install skimmers in a local bank ATM.

The Chinese nationals’ surge post CPEC is growing slowly as of now. But fears of these unwelcome guests are rising faster. As against the projected arrival of 400,000 Chinese nationals once the CPEC projects pick up space, only 60,000 have entered Pakistan so far. But even that has the Pakistanis scratching their heads in despair.
Their biggest concentration is said to be in Karachi, Islamabad and Lahore, where preparations by starry-eyed Pakistani entrepreneurs are unable to match the Chinese expectations and requirements. There were about 20,000 Chinese living in Pakistan before 2013. These included Chinese nationals engaged in public projects in mining and energy, such as Saindak, nuclear energy plants, etc. Other businesses where Chinese had visible presence included grooming, dental care and restaurants.
All of it was not exactly welcome. For instance, the restaurants and massage parlours were suspected to be prostitution and drug dens. One may recall the raids on some of them in Islamabad by young militants trained in the madrassah attacked to the Lal Masjid. The Chinese did not take to this kindly and demanded action.
Then President Pervez Musharraf had to order a siege of the Lal Masjid , which was stormed, leading to over 100, mostly students, many of them girls, being killed. It is important to recall this because it proved to be a major debacle for Musharraf and gave birth to the Tehrik-e-Taliban Pakistan (TTP), the worst nightmare of succeeding Pakistani governments.
But there was money to be made and the Chinese stayed on. In 2013 when the CPEC was launched, there was some scepticism in business circles but the market was mostly optimistic. It was read by many as the first serious signal of revised economic diplomacy and a sign of readjustment to the changing geopolitical situation. Pakistan clearly committed itself to China’s Belt and Road Initiative (BRI) to revive its own flagging economy.
There were several other factors that converged but there is little denying the fact that the change paid off and the Pakistani economy did recover. The GDP growth has been gaining momentum since. From 3.6pc in 2013 growth surged to over 5.5pc in 2017 and is expected to be over 6pc during the ongoing fiscal year. The market of construction-related materials, including cement, improved significantly. But businesses counting on ready gains with the arrival of the very first wave of Chinese were disappointed. Even the expansion in the hospitality and allied sectors (hotels, guest houses, rent a car/taxi and airlines) was said to be less than expected. To the Pakistanis’ surprise the Chinese visitors proved to be different -miserly and holding their purse strings by their teeth. The Chinese were certainly not in Pakistan on a picnic. Initially, the number of live-in guests, dinners and hall booking for business meetings shot up. The rise, however, was only a fraction of what was anticipated. Accommodation at five-star hotels for one went largely unused. Even top Chinese executives, here for a few months, booked hotel rooms for merely days. They pounce on the first opportunity of a more economical option. Chinese companies have built workers colonies at breakneck speed near project sites. They add a few VIP houses in every colony to cut on their budget of hosting consultants.
All CPEC related projects collectively engage 28,000 people at varied levels. About 30pc (7,000) of the workforce was Chinese the rest 21,000 were occupied by locals. To ensure the early completion of projects in the energy and logistic sector, the Pakistan government opted for EPC (engineering, procurement and construction) mode in the deal. This meant that we had to forego the control on the employment policy in exchange for the company being responsible for any cost overrun in case of delay.
Lastly, the unstable political situation is deterring the Chinese who are in Pakistan to make money, not get into the crosshair of Pakistan’s complicated domestic issues. At the top level, the Chinese have been assured security through raising of a 20,000 special force of the army. But that does not necessarily reflect on the ground, everywhere and all the time. This is reflected in the visas issued. Pakistan’s Ministry of Interior does not confirm issuance of 27,000 visas to Chinese in 2016 or disclose the total number of visas issued in 2017. What is not admitted is that the number of visas actually fell somewhat in 2017. Hence, no numbers are being quoted. But this is certainly attributed to the political uncertainty and higher risk perceptions last year.
Not surprisingly, the planned increase in China-Pakistan flights is being withheld, for a future, favourable day.
(The author is geo-political analyst and the contents of the article are his views and not necessarily be agreed by the newspaper.)