As we all know, Pakistan has been promoting CPEC as a “game-changer” both to aam Abduls of Pakistan itself and to outsiders. This project is supposed to lift Pakistan straight out of stone age into WESTERN LEVELS OF prosperity.
As we have pointed out earlier, thanks to the India-card which Pakistanis have printed out and supplied in abundance, China is able to pretty much ask for whatever it wants, commercially, strategically and militarily. High interest rates, sweeter than honey terms, taller than mountain debt, deeper than ocean opacity, you name it they can get it for CPEC.
Now Pakistan is facing even more competition, from two unlikely new corners – Malaysia and Philippines. What that means is the terms have to become even sweeter before Uncle Xi is going to cough up any more Yuan.
Malaysia, IMDB and China factor
The Malaysian PM, Najib Razak is under considerable pressure not just domestically but even from US, Switzerland and other countries for the vast IMDB scam. You can google for more and enjoy all the juicy details but to cut the long story short, billions of state funds have found their way into personal accounts of the powered elite and their cronies.
As US and others turn on the screws, Najib has responded with typical (and familiar) anti-Western rhetoric and jumped on the Chinese bandwagon.
Interestingly, the response from Najib is quite similar to that of the Pakistani PM. Encourage fanaticism and Islamic extremism, approach “friends” in Middle east for certificates of conduct and bailouts, and last but not the least, court the Chinese ignoring all risks and commercial common sense.
And the Chinese are responding – big time. On top of various other projects and investments, the Iskandar project in the southern state of Johor alone is worth almost $100b – that is twice the size of CPEC.
And all said and done, investing in Malaysia is a lot more secure than Pakistan with more prospects of returns and less of bomb blasts and jihadi terror although Najib’s Malaysia is rapidly moving in the “right” Wahabi direction. Chinese feel at home there thanks to the fact that more than 25% of Malaysians are ethnic Chinese which ensure steady supply of food & entertainment, language convenience, business contacts and cultural familiarity. Plus Singapore which is 80% Chinese and stable, prosperous, is close by and is a key target market.
If you were a Chinese businessman with $1b to invest, you will be mad to choose Pakistan over Malaysia. Unless you get taller than mountain..well you heard that line earlier 😉
DUTERTE falls at XI’s feet
As if Malaysia’s sudden pivot is not enough, the recent ascent of Duterte in Philippines has given China yet another opportunity to pump funds and buy goodwill.
In addition to shooting off his mouth against the USA on every occasion, Duterte has also made it very clear he looks to China to fund infrastructure and supply arms and boost growth. It doesn’t matter whether he will succeed or not. He is going to be around for another six years barring disasters, and he is going to make things even more difficult for Pakistan.
Why? Again given limited investment funds, China will look for quality targets not jihadi fanatic cesspool like Pakistan. Yes, it will throw some money at Pakistan too, to keep them on the hook but there is no reason to do so without squeezing out special terms and conditions.
Philippines too shares many of the advantages of Malaysia. Its ethnic Chinese population is more integrated with the mainstream in terms of language,script and religion (unlike the Malaysian Chinese) but it has numerous Chinese tycoons with close links to China who control almost all of Philippines’ business and trade. It has skilled manpower and English speaking populace (another key advantage over Malaysia and Thailand) which has filled numerous call centers and BPOs and is already a decent sized manufacturing base for hi-tech including Intel chips and solar panels. Duterte himself is a half Chinese.
As if these two were not enough, other despots and undemocratic regimes are also courting China. For their own good reasons and mainly because they can’t get along with the West which asks too many inconvenient questions. Cambodia is one with its strongman Hun Sen a big time friend of China and its “investments”.
If I were Narendra Modi, India should demand a commission from China for CPEC as they are able to get excellent terms thanks to our “threat”.