A Chinese delegation recently visited Pakistan for the seventh Joint Cooperation Committee (JCC) meeting to finalise the Long Term Plan (LTP) for CPEC. The LTP finalised on 21st Nov has not been made public yet to keep people in the dark. China is insisting on making the Yuan a legal tender in Gwadar port, not in rest of Pakistan, as part of its major policy priority to make Yuan a global currency through Yuan-denominated bonds and currency swap arrangements between the central banks of China and other countries. Even Pakistan too has such a swap arrangement for many years now. China maintains two rates for its currency and accepts in the ports only that rate which is advantageous to China but disadvantageous to the other party doing business with them.

Pakistan allegedly opposed the demand twice in the past but Chinese came calling the third time, pressing it once again. The planning department secretary told the demand has been turned down while the minister revealed it was being considered. Probably it is ‘turned down for now but to be considered later’. The Chinese press debated the proposal hard through extended discussions but Pakistan neither announced it publicly, nor in the CPEC website, nor in the JCC meetings nor at the LTP finalised in December 2016.

Legal tender will enable Chinese Yuan to be used freely anywhere in Gwadar so that Chinese residents and workers can pay Pakistani shop keepers in Yuan and save on paying the exchange charges. Payments from one Chinese agency / company to another won’t be in foreign currency to save foreign reserves. All the earnings from CPEC can easily be repatriated back to China in Yuan avoiding fluctuations / risks of foreign currency. Chinese companies could try and balance financial adjustments of all CPEC projects in their own country paying off mere local costs at project sites. This move will benefit China as Pakistan will haplessly watch China making money in Pak soil. Maintaining two currencies is not in the interest of Pakistan.

Thus far, only two countries have officially allowed the Yuan to be legal tender: Angola and Zimbabwe. Zimbabwe’s decision was aided by collapse of its own currency in 2009, when they shifted to the US dollar and the South African rand as legal tender, and added Yuan in 2015.

Pak government has so far hidden information from the public and signing agreements with foreign countries and entities obligating the people without public disclosure and consent in violation of public trust and democratic norms. Important issues are neither discussed in parliament nor details shared with the public. The lands along the Road have been bought by political people making the Chinese buy back those lands at high rates for projects. Any information withheld causes worry to people. China first showed interest in 2006 to have energy pipelines run from Gwadar to China via the Himalayas which years later turned into CPEC under President Xi’s grand OBOR vision. Chinese soon built a small harbour at Gwadar to bring machinery, equipment and materials for constructing a proper port while the management and development of other facilities was given to a Singaporean Company. CPEC added rail and road connections to the energy lines projecting it as a grand plan for overall economic and industrial development of Pakistan.

China is thinking long term – laying the seeds in both Sri Lanka and Pakistan, for eroding the absolute sovereignty over strategic geographical locations like Hambantota Port in Sri Lanka and Gwadar in Pakistan which will become like Hong Kong and Falklands – colonies that are defended by force or demographic changes if necessary to defend the Chinese world order.

CPEC is of China, by China and for China, Pakistan merely being incidental in the whole scheme of things. It involves a fundamental and profound reshaping of Pak economy and policy landscape to create wealth for China using Pak resources. Gwadar is China’s navy base, the rest of Pakistan its economic colony. Yuan could make Gwadar a Chinese port away from China. Today the Yuan, tomorrow the Chinese Flag, and the day next could be the Chinese law and administration. Very shortly Pakistan will have zero control over Gwadar and Balochistan and eventually cede the sovereignty over Gwadar to China.

Photo Credit : Shutterstock

Like this: Like Loading...