University Of Central Punjab

Punjab Group Of Colleges Kamoke

International Finance

Presented To: Usman Sarwar

K1F14MCOM0015 Maryam AslamK1F14MCOM0016 Sana LiaqatK1F14MCOM0017 Noor-ul-AinK1F14MCOM0020 Firdos MunerK1F14MCOM0021 Zain AnjumK1F14MCOM0019 Haseeb HassanK1F13MCOM0040 Iqra Zainab

Presented by:

Pakistan ChinaEconomic Corridor

History

Pakistan–China relations began in 1950 Strategic alliance was formed in 1972 and economic co-operation began in 1979

China has invested $20 billion in various projects

Mega infrastructural projects in Pakistan Gwadar Port, the Coastal-Highway linking Karachi with

Gwadar, Karakoram Highway, the Chashma nuclear power plants, and a number of hydro-power projects.

Under construction $46 billion mega project Infrastructure of Pakistan$11 billion loan from Bank of China (1.6%)Increase width of PakistanVast network of highways and railways(Gawadar to Xinjiang)An extension of China’s proposed 21st century silk road initiativeLink the supply and demand sides (Eco zones)

IntroductionApr’15

Prof Ahsan Iqbal has said the China-Pakistan Economic Corridor is a long-term broad framework with multiple sectorial projects, which will be completed in different phases through bilateral agreements agreed upon by both sides as a win-win equation.

Minister Planning, Development and

Reform $46 billion project $35 billion would be utilized for energy

$11 billion for developing the infrastructure

$35 billion-energy $11.5 billion for Sindh$7.1 billion for Balochistan$6.9 billion for PunjabRest for KPK

Estimation of Local

ComponentLocal

ComponentInvestment

(USDbn)Domestic Share (%)

Domestic Share (USDbn)

Energy 33.8Coal 7560 MW 8.8 20% 1.8

Wind 200 MW 0.5 20% 0.1

Hydel 1590 MW 4.2 50% 2.1

Solar 1000 MW 1.7 0% -

Second phase 6445 MW 9.5 20% 1.9

Mining Expense 9.0 50% 4.5

Road 5.9 80% 4.7

Rail 3.7 50% 1.8

Mass Transit (Lahore) 1.6 50% 0.8

Gawadar Port 0.7 50% 0.3

Total 45.7 18.1

Energy

Highways

Railway

Classification

Renewable Energy Projects

Fossil Fuel Energy Projects

Infr

astru

ctur

e

Karakoram HighwayRe-build

Karachi-Lahore

Motorway

Western Alignment

Projects

Karachi-Peshawar main line

Khunjerab Railway

Energy Projects

Renewable Energy Projects

Shortfall 4500 MW

• 900MW

• 6,500 acre

Quaid-E-Azam Solar

Park

• 870 MW

• $659 million

Kaghan Valley Hydro Electric Plant

Diamer- Bhasha Dam

To be completed in December 2016China's Zonergy company

Near Bahawalpur

Financing by China's EXIM bank Sell electricity to Pakistan at 8.8 cents

per KWh

4,500 MW $14 billion

Energy Projects

Fossil Fuel Energy Projects

Pakistan Port Qasim Project

1,320MW $2.08 billionJoint venture Al-Mirqab Capital (Qatar) China’s Power Construction Corporation

Sahiwal Coal Power Project

$1.8 billion 

1,320MW

Joint venture of two China’s firms

Chinese Shangai Electric and Pakistan's Engro , five coal plants

2,060 MW

330MW coal power plants in Punjab 's Salt Range

300MW coal power plant at Gawadar

Liquefied Natural Gas power plants: 1,223MW Baloki Plant near Kasur.

Highway Projects

Karakoram HighwayRe-build

Cost $3.5

billion

• Karakoram Highway reconstruction

$1 billion• With China offering

concessionary loans to finance

Cost $475

million

• Gilgit-Skardu road will be upgraded to a 4-lane road 

$1 billion• Karakoram Highway’s up

gradation to a controlled excess highway

Highway Projects

Karachi-Lahore

Motorway

• Between Karachi and Hyderabad• M9 Motorway136 kilometer

296 kilometer

•Long section•Between Sukkur and Multan387 kilometer

•Between Multan and Lahore•Via the town of Abdul Hakeem333 kilometer

 Long section Between Hyderabad and Sukkur

Highway Projects

Western Alignment

Projects

The route consists of: N50 between Dera Ismail

Khan and Kuchlak The N25 between Kuchlak

and Surab The N85 between Surab

and Hoshab The M8 between Hoshab

and Gawadar The N70 from Qillah

Saifullah to Multan is also

Red line

Railway Projects

Upgrading the Multan to Peshawar section

Hyderabad to Multan section

Hyderabad to Karachi

$3.65 billion overhaul of the of Karachi-Peshawar Railway Line:

Completion by December 2019

Permit train travel at up to 160 kilometers per hour

Cut transit times from Karachi to Peshawar by half

Railway Projects

250 new passenger coaches

Reconstruction of 21 train stations

Total investment $5 billionDry Port is to be set up in the city of Havelian

Additional 800 coaches at a later date (595 in Pak)

CPEC -A Game Changer

Chinese investments can lift FY16-18 annual GDP growth beyond 6% through direct impact.

GDP-FY15 USDbn 287Local Component of Investment

USDbn 18.1

Local Component of Investment

%age of GDP 6.3%

Time Period Years 3Annual Addition to GDP Growth

%age of GDP 2.1%

GDP to increase by

6%

Impact on Electricity

Generation

CPEC -A Game Changer

+15,000MW power plants, 74% of existing capacity. Materialization of the entire 15,000 MW power plants will augment electricity generation by 90% even if existing inefficient capacity is shut.

Total Capacity Addition under Chinese Investment (MW)

16,845

Current Capacity (MW) 22,812% Increase 74%Incremental generation of electricity at 70% utilization (GWh)

103,294

Current Generation (GWh) 96,122Less: Generation of inefficient plants (GWh) 16,737

Potential Generation at Project Completion (GWh)

182,678

% Increase 90%

CPEC -A Game Changer Stock

Market Impact

Manufacturing sector

Large volumes, Demand benefit Cheaper energy supplies, Supply benefit

GDP GrowthSteel stock Cement stock

Eliminate Energy CrisisGrowth opportunities Increase in income levels

China- Equal Beneficiary

The proposed trade route of China-Pakistan economic corridor will reduce distance between China and the Persian Gulf to 2,500 km as opposed to the existing distance of 13,000 km from Beijing to the Persian Gulf and reduce shipping time from 45 days to 10 days.

China- Equal BeneficiaryBeef up the country’s global economic muscle

Flagship project of a broader policy

Connect China to its markets in Asia, Africa, Europe and beyond

Link China with Europe through Central Asia

Safe passage of China’s shipping through the Indian Ocean

Advantages of CPEC

Avail great opportunities from China’s expert in various sectors

Employment opportunities

Target Half of the world’s population collectively….. Expand markets.

Advantages of CPEC

Regional stability in Asia as well as whole world

Pakistan economy will Boost

Enhance trade among Pakistan, China, Gulf States, Central Asia and Africa

Concerns of KPK over CPEC

G-B has been neglected in the CPEC.

China Pak Economic Corridor or China-Punjab Economic Corridor? 

Proposed shifting of Sust Dry Port to Havelian, it would render thousands of locals jobless. 

Conclusion

Game changer for the entire region.

It will uplift the lives of about 3 billion people across China, Central Asia, South Asia and the Middle East.

The time and tide is not in favor of the detractors. They will die their death in the hurricane of CPEC since China is determined to make Pakistan a success story. $46 billion economic package is Chinese gift for people of Pakistan.

Thank youFor

Listening