December 21, 2018

Iran oil exports: 8 waivers and the OPEC meeting

Sara Vakhshouri
17th December, 2018

Anadolu Agency - ©

Iran’s oil exports are likely to remain limited in 2019, with significant negative impact on Iran’s economy

Last month, the Trump administration reimposed sanctions on Iran’s energy sector as part of its ‘maximum pressure’ campaign against Iran. But it nevertheless sought to prevent an unhelpful spike in oil prices ahead of the midterm elections. As a result the United States issued eight waivers to importers of Iranian oil: China, India, Japan, South Korea, Turkey, Taiwan, Italy, and Greece. The waivers allow these countries to import a limited amount of oil from Iran without falling foul of US sanctions.

The ‘waiver effect’ was visible from the outset: oil prices dropped the day the waivers were announced. At the same time the market expected other oil producers – particularly Saudi Arabia and Russia – to cut back their temporary production, which had increased over the previous few months to cover Iran’s drop in production. Saudi Arabia and Russia agreed to this at the 7 December OPEC meeting.

Follow the ECFR sanctions series:

In this series of commentaries, ECFR assesses the likely impact of US sanctions on economic ties between Europe and Iran, covering strategically important areas such as trade in essential goods, energy, and banking. The series examines how European governments can minimise the fallout of their attempts to maintain Iranian compliance with the nuclear deal.

Part 1: Trump’s Iran sanctions: an explainer on their impact for Europe
Part 2: Iran: The case for protecting humanitarian trade
Part 3: Can Iran weather the oil-sanctions storm?
Part 4: Bankless task: can Europe stay connected to Iran? Part 5: Iran oil exports: 8 waivers and the upcoming OPEC meeting 
Part 5: Iran oil exports: 8 waivers and the OPEC meeting

The waiver decision initially appeared to be a major setback for the US ‘zero oil’ policy. Yet these eight waivers had a significant impact on the psychology and expectations of the oil market. They have created a perception that there will be an oversupply in the market in the short term, and at least through to the end of 2019.

Now, weeks on from the granting of the waivers, no guidelines or details have been announced publicly with regard to how much these countries will be able to import. This has created confusion in the market as to how much Iran will produce up to April 2019, when the 180-day waiver issued for most of these countries is set to end. Upon the announcement of the waivers, many market analysts had anticipated that Iran’s oil exports would increase to 1.5 million barrels per day (mb/d).

However, the reality could be more complicated. Iran’s oil exports are actually unlikely to increase beyond 1.1 mb/d. At most, they could increase to 1.3 mb/d if market conditions are tight and there is not enough supply in the market. And if China decides to ramp its imports back up to 500,000-560,000 barrels per day (b/d) Iran’s oil exports could increase even further, up to 1.5 mb/d.


Several factors prevent Iran oil exports from increasing significantly over the 180-day period.


Under the 2012-15 Obama-era nuclear sanctions, China imported roughly 440,000-530,000 b/d from Iran. However, in October 2018, in light of incoming US sanctions, its imports dropped to about 300,000 b/d. Chinese companies heavily invested in the US are worried and cautious about compliance with the sanctions. China National Petroleum Company – Iran’s largest oil consumer in China – reportedly halted its imports in October and November in order to prevent any potential risk against its business and investment interests in the US. Even though the company announced that it might resume imports from Iran, the market does not expect imports to exceed more than 300,000-360,000 b/d. Adequate market supplies provided by Saudi Arabia’s and Russia’s production mean the Chinese are disinclined to import more ‘problematic’ Iranian oil.

Besides US sanctions exposure for Chinese companies, the ongoing trade negotiations with the US are likely to influence China’s decisions. The US government is granting – on a case-by-case basis – waivers on export tariffs to Chinese companies for their trade with, and exports to, the US. It is likely that major companies and the Chinese government are exercising caution with their oil imports from Iran to avoid other sources of tension with Washington. CNPC has also recently suspended its investment in Iran’s South Pars giant gas field in order to minimise tensions over the trade negotiations. It is noteworthy that Saudi Aramco recently singed five new crude oil supply contracts with China to supply its new refinery capacity in 2019. This will significantly increase Saudi Arabia’s market share in China, reaching a total of about 1.6 mb/d. Saudi Arabia exported an average of about 1 mb/d of oil to China in first 10 months of 2018. This will increase Saudi Arabia’s market share in China by about 11 percent on 2017.

Simply put, China is using its Iran oil imports as part of its tariff negotiations with the US. This is spilling over into China’s own negotiations with Iran. Knowing Iran’s limitations for export, Bejing is bargaining hard and strong with Tehran over prices and delivery conditions. China was very late to issue oil purchase orders to National Iranian Oil Company for the month of November. Chinese refineries waited late – the third week of October – to submit their purchase orders to Iranian authorities.

Limited shipping capacity and payment issues

Iran’s oil exports have dropped significantly since August 2018 following the implementation of the first round of US secondary sanctions. These put strict limitations on Iran’s oil insurance and shipping. Most of the oil shipped since then has gone through the National Iranian Tanker Company (NITC), even oil shipments to China. Lack of access to adequate insurance has increased the risk of shipping. Most tanker owners are either unwilling to rent their tankers for shipping Iranian oil cargoes or are demanding very high leasing premiums. Hence, importers are mostly relying on NITC to deliver their oil cargoes. This has also impacted on Iran’s refined petroleum products and petrochemical export.

Historically, and in the months since August, NITC’s oil shipments stood at between only 1-1.1 mb/d; this too will prevent Iran from increasing its exports. This is especially the case for Iran’s allocated shipping export capacity to the European Union countries holding waivers (Italy and Greece), as most of its domestic shipping capacity is busy delivering oil to its customers in Asia. Meanwhile, like China, European countries will remain wary of the risks of importing Iranian oil even with the waivers in place.

Sanctions limit Iran’s access to its oil income in the form of cash and hard currency. Due to the latest US sanctions, importers of Iranian oil have to keep Iran’s oil revenues in an escrow account, and Iran can use this credit to purchase certain goods or services. Even for these clients, payment restrictions could also keep oil purchases lower than Tehran hopes. China, India, and Turkey have diverse trade relations with Iran and in theory could pay for Iranian oil with goods such as food and medicine. However, for countries such as Japan and South Korea, paying back Iran’s oil money is complicated. In the case of South Korea, Iran recently signed a food-for-oil agreement. However, there are limitations in terms of volumes and diversity of Iran’s required food from each particular country. Iran has not signed any similar contracts with Japan yet. Auto and electronics industry owners in Asian countries are highly hesitant to barter their products with Iranian oil money, again because they fear losing one of their largest markets: the US.  


The uncertainty over Iran’s oil exports created a difficult decision-making environment for OPEC members and their non-OPEC allies during their 7 December meeting to finalise a decision over production cuts. This decision aimed to maintain market balance. OPEC and Russia finally agreed to cut their production by 1.2 m/bd, of which OPEC will cut 800,000 b/d and non-OPEC countries (mostly Russia) will cut about 400,000b/d. This volume is in line with Iran’s oil exports of 1.1-1.3mb/d until the end of the 180-day period. Russian and Saudi Arabian oil production had increased to historic highs in the past few months.

Saudi Arabia in particular came under pressure to reduce its production and generate higher prices, to in turn maintain domestic budget balances. Given the recent warm political, energy, and investment ties between Russia and Saudi Arabia, Russia supported Saudi Arabia’s target for higher oil prices. If not Saudi Arabia’s oil price target of $70/b, Russia is supporting at least price range of around $60-65/b. Russia also agreed to join OPEC members in a further production cut.

Another significant outcome of this meeting was that Iran was excluded from any production or export cut as its production and export is already below its usual capacity due to the sanctions. In November, Iranian crude oil exports fell slightly below 3 mb/d. The sanctions have not only had a significant impact on Iran crude oil exports, but they have also had a negative impact on Iran’s petroleum product exports. This means that some Iranian refineries are unable to run at full capacity given their export limitations.

A variety of factors are set to impact on the oil market and Iranian oil exports. If the market is adequately supplied and prices remain relatively low, even importers that have received waivers will have little incentive to import oil from Iran. With the prospects of US export capacity rising in 2019 and Saudi Arabia’s and Russia’s own considerable export capacity, Iranian oil exports of 1.1-1.3 mb/d or even less may ensue. If prices remain low countries with waivers may still choose not to import oil from Iran even up to the level for which they received the waivers. Taiwan, Italy, Greece, Turkey, and Japan might behave in this way if they are not convinced that the economic profit of importing Iranian oil is not greater than the risks related to shipping and insuring Iranian oil cargoes. Iran’s oil exports are likely to remain limited in 2019, and so the country’s annual budget for 2019 is based on an export of 1.5 mb/d. This could have a significant negative impact on Iran’s economy – particularly if oil prices remain relatively low throughout 2019.


 Sara Vakhshouri is the founder and president of SVB Energy International.

December 20, 2018

Trade war, day 168: Fresh accusations of stolen technology, but no sanctions (yet)

Trade war, day 168: Fresh accusations of stolen technology, but no sanctions (yet)

The U.S. Justice Department has, for the fourth time in three months, unveiled a significant indictment (press release here; full charging document here) against Chinese actors for alleged technology thefts.

Zhu Hua and Zhang Shilong are two computer hackers, the U.S. government says, who “compromised...clients in at least a dozen countries,” and accessed computer networks in “banking and finance, telecommunications and consumer electronics, medical equipment, packaging, manufacturing, consulting, healthcare, biotechnology, automotive, oil and gas exploration, and mining.”They operated under China’s Ministry of State Security, like the hackers in previous indictments, the Justice Department says. Their actions violate a 2015 pledge by China to not use computer hacking “with the intent of providing competitive advantages to companies or commercial sectors,” the Justice Department said.Deputy Attorney General Rod J. Rosenstein was very explicit in his remarks tying these hacks to China’s efforts to develop technology in ten sectors identified in the Made in China 2025 initiative — click here to read SupChina’s explainer on that program.For more on the details of the hacks, see the New York Times (porous paywall) or the Wall Street Journal(paywall).

The first two indictments that the U.S. Justice Department announced in recent months, SupChina reported on as standalone stories: Chinese spy extradited from Belgium, faces aviation espionage charges in the U.S.U.S. accuses 10 Chinese nationals of stealing aerospace technology. The third was part of a trade war update — Trade war, day 119: Trump has ‘good conversation’ with Xi, then issues another technology theft indictment.

But they are all clearly part of the broader pushback by the United States on unfair Chinese economic practices, and so therefore part of the trade war. Now that pushback is going more global, at least among the “Five Eyes” countries that cooperate on intelligence sharing — The U.S., UK, Australia, Canada, and New Zealand. The Washington Post reports:

In London, Canberra, Ottawa and Wellington, ministers knocked China for violating a 2015 pledge, first offered by Chinese President Xi Jinping in the Rose Garden and later repeated at international gatherings such as the G-20, to refrain from hacking for commercial gain.

The Sydney Morning Herald reported on the increased coordination of these countries on China last week. A few other western countries are also voicing concerns now, too, the Washington Post reports:

The foreign ministries of Denmark, Sweden and Finland later tweeted statements saying they shared the concerns over rampant cyber commercial espionage.

Other countries identified as victims of the hacking, which have not yet expressed a reaction to the news, are France, Germany, and Japan.

While the extent of this pushback is significant, noted China watcher Bill Bishop points out (paywall) that the most significant angle on the story may be that it did not go as far as expected. The original Washington Post story from last night flagging that the indictments were coming further stated, “Sanctions related to the cyber economic espionage effort also are expected to be announced.”

“I hear from multiple people that the Trump administration backed off on any sanctions because Treasury Secretary Mnuchin was worried about Beijing's reaction and a possible impact on the trade talks,” Bishop reports. In the distinctly possible scenario that trade talks break down before they reach the end of the current 90-day period, that calculation could change quickly.

In other trade war news

The third Canadian detained has been identified, and there are interesting updates on the other two detainees as well.

Sarah McIver, a teacher from Alberta province in Canada, was sentenced to “administrative punishment” for a visa issue, but the Chinese foreign ministry “did not explain what that means,” the CBC reports.Her case “doesn’t seem to fit the pattern of facts on the previous two,” Prime Minister Justin Trudeau said, though like the others, she had worked and lived in China without problems for months before suddenly running into issues, the SCMP reports.Michael Kovrig, the International Crisis Group employee and former Canadian diplomat, also has Hungarian nationalityaccording to Reuters. Hungary has been seeking access to him but that has “not been granted yet,” as the new development threatens to entangle the EU in the Canada-China-U.S. situation.Friends of Michael Spavor, the NGO worker who was the second detained, have been raising money online to “support him on his eventual release,” SCMP says.“Developments such as these [arrests] increase uncertainty and distrust among foreign scholars who regularly conduct research within China, as they fear for their safety. This will clearly undermine efforts to better understand developments in China and to further constructive relations between China and other countries,” wrote the directors of six Berlin-based policy institutions in a joint statement.“Travel Alberta is suspending marketing efforts in China along with trips by its staffers to the Asian country amid a deepening diplomatic row between Ottawa and Beijing,” Calgary Herald reports.

Even more significant trade-war-related links from just the past 24 hours:

World Bank and EU want changes in Chinese tech transfer
China should address US concerns on investment and tech transfer to defuse trade war, says World Bank / SCMP
“China should address the concerns expressed by the United States and other major trading partners over forced transfer of technology and openness to investment to de-escalate ongoing trade tensions, the World Bank advised on Thursday.”
EU expands WTO case against Chinese technology transfers / Reuters
“The European Union expanded its challenge against China at the World Trade Organization on Thursday over laws it says force the transfer of technology in areas including electric vehicles and crop seeds.”American influence at international institutions
US warns of Chinese influence at multilateral lenders / FT (paywall)
“At a congressional hearing last week, David Malpass, the top US Treasury official on international affairs, issued a thinly disguised warning that might have seemed unthinkable just a few years ago: the World Bank and other bastions of the US-led international economic order are at risk of being captured by Chinese influence.”Meng Wanzhou’s bail
These are the Canadians who paid millions in bail for Huawei’s Meng Wanzhou, putting homes and retirement savings on the line / SCMP
“They include a property agent, a mansion-owning homemaker and a part-time yoga-instructor – a veritable casting call of modern Vancouver.”More soybeans
China poised to buy more U.S. soybeans soon: sources / Reuters
“China plans to make a third round of U.S. soybean purchases within days, two sources familiar with the matter said on Thursday, after a trade war truce between Washington and Beijing earlier this month triggered two waves of buying…More than 2 million tonnes of additional purchases are likely before the Christmas holiday on Dec. 25, according to one of the sources, bringing total U.S. sales to China to more than 5 million tonnes in December.”Analysis of 90-day talks
Clock ticks for China to reach a deal with US in trade talks / AFP
“Chinese President Xi Jinping's trade war strategy is getting more complicated, with slowing growth and disagreements about his approach within the Communist Party adding new battlefronts, according to analysts. With the clock ticking since December 1 on a 90-day deadline to reach a deal with the United States, China has only made superficial peace offerings as it tries to buy time…”
Opinion | China Is Willing to Make a Deal / NYT (porous paywall)
Eswar Prasad writes, “The official word is that everything is fine…In private, Chinese officials admit they are worried. During a trip to Beijing last week, I encountered varying degrees of concern about the economy among bureaucrats, academics and business executives…Against this backdrop, there is a real opportunity for a deal to end the damaging trade war with the United States.”
Will U.S. trade pressure actually change China’s industrial policy? / Washington Post
Yeling Tan, an assistant professor of political science at the University of Oregon, compares the current trade war to historical U.S.-Japan disputes, and concludes, “Trade pressure on China is therefore far from historically unprecedented, but as long as those in China see it as part of a broader external effort to weaken or curtail the country, it is unlikely to result in the kinds of deep structural concessions that the United States has won in previous battles.”
Goldman Says China-U.S. Deal Would Be 2019's Top Economic Event / Bloomberg (porous paywall)
Ex-U.S. Treasury Chief Thinks Trade War Will Last Past March Deadline / Caixin (paywall)
“The U.S. and China are unlikely to negotiate an agreement that could end the trade war by their March deadline, former U.S. Treasury Secretary Lawrence Summers said on Tuesday, warning that the possibility of the U.S. slipping into a recession in the next two years would put even more strain on the relationship.”Criticism of Trump, uncensored
Please Welcome China’s WeChat To The #Resistance / BuzzFeed
“Negative articles and comments about Trump were censored on the Chinese internet as recently as this summer. But now the floodgates appear to be open.”Interview with Graham Allison on the “Thucydides Trap”
Thucydides Trap author Graham Allison says China and US must work together and not end up on path that leads to war / SCMP
“The scholar who warned that China and the US could be heading for war said the two powers needed to redefine their relationship with a ‘new strategic concept’. Graham Allison, who said Beijing and Washington could fall into what he called the Thucydides Trap – where a rising power threatens to eclipse a rival and conflict may result – told the South China Morning Post that the two were ‘in a dangerous period’.”

—Lucas Niewenhuis

Belt and Road and military jets in Pakistan

The New York Times has a scoop: Since Trump announced (via Twitter, of course) on January 1 that the U.S. would “No more!” give aid to Pakistan, China has unsurprisingly swooped in to help out its “all-weather friend.”

But that help wasn’t just economic, but military-related. And it was formally identified as part of the Belt and Road initiative, which is supposed to be purely an economic project of building roads and bridges and more harmonious trading relationships across Asia and beyond. The Times reports (porous paywall):

According to the undisclosed proposal drawn up by the Pakistani Air Force and Chinese officials at the start of the year, a special economic zone under CPEC [the China-Pakistan Economic Corridor, officially part of the Belt and Road] would be created in Pakistan to produce a new generation of fighter jets. For the first time, navigation systems, radar systems and onboard weapons would be built jointly by the countries at factories in Pakistan.

The proposal, confirmed by officials at the Ministry of Planning and Development, would expand China and Pakistan’s current cooperation on the JF-17 fighter jet, which is assembled at Pakistan’s military-run Kamra Aeronautical Complex in Punjab Province…

The plans are in the final stages of approval, but the current government is expected to rubber stamp the project, officials in Islamabad say.

Other recent Belt and Road-related news and analysis:

Maldives owes China $1.4bn, says finance minister / Nikkei Asian Review

The Maldives' Finance Minister Ibrahim Ameer said Thursday that the island nation owes a total of $1.4 billion to China, the same amount that India had pledged in financial aid to the newly elected President Ibrahim Mohamed Solih.”

China-Led $2.6 Billion Kenya Highway Project Stalls / Caixin (paywall)
A $2.6 billion China-led highway project in Kenya has been suspended after one of the Chinese builders said it didn’t receive an advance payment, highlighting the risk of such projects. The setback for the consortium, led by Guizhou Transportation Planning Survey & Design Academic Co. Ltd. , comes as many Chinese infrastructure builders, including private enterprises, have rushed into the African continent in recent years.”

How Asia Fell Out of Love With China’s Belt and Road Initiative / Bloomberg (porous paywall)

—Lucas Niewenhuis

December 18, 2018

Inside Russia's playbook


Illustration: Lazaro Gamio/Axios


The biggest takeaway from the new Senate-commissioned research reports on Russian social media propaganda is that bad actors specifically go after vulnerable people who are more susceptible to radicalization.

Why it matters: Policymakers have failed to address how systemic problems that exist within society, like tensions around race and immigration, make the U.S. an easier target for online election meddling and propaganda campaigns.

Be smart: They've also failed to address the scope of these campaigns beyond Google, Twitter and Facebook. As the reports show, the Russians operated on nearly every social media platform, from Reddit to Pinterest to even PayPal.

This could be because the Trump administration hasn't made this type of research a priority, notes Joshua Geltzer, executive director of Georgetown University's Institute for Constitutional Advocacy and Protection."It took a congressional committee commissioning reports from outside entities (private and academic) to produce, almost two full years into the Trump presidency, the fullest public accounting the American public has received of the serious new threat our democracy faces. That’s downright remarkable."

Some of the most eye-opening findings from the new reports are the ones that show how Russians exploited existing divisions around key moments, people or movements in the U.S.

African Americans/racial tensions: The Oxford studyalso points out that the IRA tried to campaign for African-American voters to boycott elections or follow the wrong voting procedures in 2016. In a statement, the Congressional Black Caucus says this is particularly concerning because "black voter turnout declined in 2016 — for the first time in 20 years."Hispanics/immigration: report from the nonprofit think tank New Knowledge suggests that Mexican-Americans and other Hispanics in the U.S. were the target of campaigns after 2016 that geared towards "increasing distrust and cynicism about the U.S. political system" via coverage of issues such as deportation and treatment of migrants.


Offline manipulation: The New Knowledge report found that fake websites and PayPal accounts, among other platforms, were used to manipulate users to participate in hyper-political behavior offline, like protests or marches.Luring "assets:" The report details how the IRA tried to lure "assets" — or people — into doing tasks for them, like soliciting videos or legal requests, by using information against people with personal struggles around things like their sexuality.Selling merchandise: They also set up accounts to promote socially-divisive merchandise, like "LGBT-positive sex toys" on Instagram and Facebook. It's unclear if this was used just to sow discord, or to make money to propel the campaign as well.

Go deeper.

December 17, 2018

Pakistan: CPEC And Escalating Threat In Balochistan – Analysis

Map of the China-Pakistan CPEC roadway network. Credit: Government of Pakistan, Wikipedia Commons.

1 Analysis Business 

 December 18, 2018 SATP  0 Comments


By Tushar Ranjan Mohanty*

On December 10, 2018, the China-Pakistan Economic Corridor (CPEC) Cell, in its briefing to Balochistan Cabinet, revealed that Balochistan’s share in the USD 62 Billion CPEC project was a miniscule nine percent, about USD 5.6 Billion. It was also disclosed that, out of this committed sum, less than USD one Billion had been spent in over five years, since May 22, 2013, when CPEC was launched. The stunned Cabinet members reportedly described CPEC spending in Balochistan thus far, as “a joke”.

In its briefing, the CPEC Cell also disclosed that the current shortfall of 700MW in the Province meant that all the new power injected into the grid as a result of CPEC power projects had not found its way to Balochistan. On October 23, 2018, China engaged the World Bank to undertake a study on the real potential of CPEC investment and its future prospects. 

Expressing concern over the dismal share of the Province in development projects under the CPEC, on December 9, 2018, the Balochistan Government disclosed that only two projects — the Gwadar Port and Hubco Coal Power Plant — had been approved for the Province till that point, since CPEC’s launch on May 22, 2013. The Government, moreover, claimed that even these two projects had no direct benefits for the people of Balochistan. Significantly, the Gwadar Port is the epicentre of the entire CPEC project in Pakistan, yet the residents of the city have a hard time getting drinking water on a daily basis. In order to address the drinking-water shortage in Gwadar, the Federal Government has announced many desalination plants, but none has yet materialized.

On December 5, 2018, the ruling Balochistan Awami Party (BAP) founder Saeed Ahmed Hashmi stated, “despite passage of about five years the people of the Province have witnessed no development project initiated under the CPEC.”

The apprehension that CPEC will not benefit Balochistan has rightly been there for long.  Indeed, the Senate (Upper House of the National Assembly) was informed on November 24, 2017, that 91 percent of the revenues to be generated from the Gwadar port as part of CPEC would go to China, while the Gwadar Port Authority would be left with a nine percent share of the income for the next 40 years. This was disclosed by the then Federal Minister for Ports and Shipping, Mir Hasil Bizenjo, after senators expressed concern over the secrecy surrounding the CPEC long-term agreement plan, with many observing that the agreement tilted heavily in China’s favour.

Moreover, there is also great anxiety that CPEC will convert the Baloch people into minorities in their own homeland. Noordin Mengal, a human rights campaigner from the Province stated, on March 17, 2017, that with an influx of outsiders as a result of the project, the identity of the Baloch was being threatened.

According to the Census 2017, the total population of Balochistan was 12.3 million. Census 2017 indicates the Baloch population (Balochi language speaking population) has shrunk from 61 percent of the total to 55.6 percent over a period of 19 years (Census 1998 to Census 2017) in the 21 Districts where the Balochi-speaking population form a majority.

Pakistan currently hosts a sizable Chinese population and the numbers are only slated to grow as the project progresses. Concerns about the demographic transformation of Balochistan have been reiterated in a December 28, 2016, report by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), which noted that, at the current and projected rate of influx of Chinese nationals into Balochistan, the native population of the area would be outnumbered by 2048.

Since the start of the groundwork on CPEC, more than 39,000 Chinese have come to Pakistan over the past five years, according to official data and documents reported on March 5, 2018. 7,859 Chinese were issued visas in 2013, at the start of the CPEC projects, soon after the Nawaz Sharif Government came to power. Another 69 visas were issued in 2014; 13,268 in 2015; 6,268 in 2016; and, according to informed officials at the Ministry of Foreign Affairs, an estimated 12,287 in 2017. In addition, about 91,000 Chinese nationals have visited Pakistan on tourist visas over this period.

Due to these reasons, there is persistent discontent among the ethnic Baloch with regard to CPEC. The Province is at the heart of the CPEC scheme – a massive series of projects that includes a network of highways, railways and energy infrastructure spanning the entire country. CPEC is a flagship project in China’s ambitious Belt and Road Initiative (BRI). This discontent constitutes an enduring threat to Chinese engineers, workers and people associated with the constituent projects, with Baloch nationalists, who consider it part of a ‘strategic design’ by Pakistan and China to loot their resources and eliminate the Baloch culture and identity, strongly opposed.

In a sign of increasing anger against CPEC, in the first of its kind of attack, the Baloch separatist group, Baloch Liberation Army’s (BLA’s) ‘Majeed Brigade’ suicide squad, on November 23, 2018, carried out a suicide attack targeting the Chinese Consulate at Block 4 in the Clifton area of Karachi, the provincial capital of Sindh. At least six people, including three civilians, two Policemen, and a private security guard, were killed. Three terrorists involved in the attack were killed by the Security Forces (SFs). No Chinese national was hurt. Claiming responsibility for the attack, BLA disclosed that the attackers had been tasked to target the consulate.

On October 31, 2018, five construction workers of non-Baloch ethnicity were shot dead while another three suffered injuries in an attack near Ganz, some 15 kilometers west of Jiwani town in the Gwadar District of Balochistan. According to official sources, the labourers were working at a CPEC-related private housing scheme on Peshkan-Ganz road, which links Gwadar with Jewani, when a group of unidentified assailants riding motorcycles appeared on the scene and opened fire. Security officials identified four of the deceased as Naeem Ahmed and Hunzullah, residents of Karachi (Sindh); Irshad Ali of Sukkur (Sindh); and Muhammad Shakir of Multan (Punjab). The identity of the fifth deceased is yet to be ascertained. BLA ‘spokesperson’ Azad Baloch, claiming responsibility for the attack, stated,

The site attacked today was part of CPEC project… Today’s attack is a clear message to China and all other countries that Balochistan is an occupied territory. We warn all military and other constructions companies to immediately stop working on their projects in Gwadar or they will be targeted by Baloch fighters.

Significantly, on October 29, 2018, Pakistan had organised a conference of 26 countries – the Asian Parliamentary Assembly Committee on Political Affairs – in its attempt assert the legality of its occupation in Balochistan. Warning against the ongoing ‘colonisation’ of Balochistan Azad Baloch stated,

China and Pakistan are settling Punjabis and Chinese in Gwadar and other areas of Balochistan’s coastal belt to turn the Baloch into a minority under their expansionist designs… If the international community fails to fulfil their responsibilities and turns a blind eye to the Pakistani and Chinese colonisation of Balochistan, then the Baloch nation will have no other option but to target all non-Baloch settlers in Balochistan… The BLA will continue to resist against the occupation of Baloch Ocean and coastal belt…

He added that China and Pakistan were building around 70 housing schemes under the exploitative CPEC colonisation project.

On August 11, 2018, six persons – among them three Chinese engineers – had been injured in a suicide attack on a bus in the Dalbandin area of Chagai District in Balochistan. The bus, carrying 18 Chinese engineers, was being escorted by Frontier Corps (FC) troops to the Dalbandin Airport from the Saindaik copper and gold mines, when a suicide bomber tried to drive his explosives-laden vehicle into the bus. “The explosives-laden vehicle exploded near the bus on Quetta-Taftan Highway – and as a result three Chinese engineers, two FC soldiers and the bus driver were injured,” an unnamed Balochistan Levies official stated. Saifullah Khatiran, Deputy Commissioner of Chagai District, disclosed that the engineers were working on the Saindak Project, a joint venture between Pakistan and China to extract gold, copper and silver from an area close to the border.

Jiand Baloch, a BLA ‘spokesperson’, had then stated, “We targeted this bus which was carrying Chinese engineers. We attacked them because they are extracting gold from our region, we won’t allow it.” In a statement issued on Twitter, the BLA identified the suicide bomber as Rehan Baloch, who died in the attack, as the elder son of BLA’s ‘senior commander’ Aslam Baloch.

On May 4, 2018, six ethnic Punjabi labourers were killed and one was injured in an incident of firing in the Laijay area of Kharan District. Levies sources said the labourers, who hailed from eastern Punjab, were working on a mobile tower and were sleeping in tents at the site when unidentified militants on motorcycles opened fire on them. The assailants escaped unhurt after the attack. There was no claim of responsibility.

Insurgents trying to disrupt construction of CPEC projects in Balochistan have killed 66 persons since 2014. Colonel Zafar Iqbal, a spokesperson for the construction company Frontier Works Organisation (FWO), on September 8, 2016, had stated, “The latest figure has climbed up to 44 deaths and over 100 wounded men on CPEC projects, mainly road construction in Balochistan, which began in 2014.” Since September 7, 2016, according to partial data compiled by the South Asia Terrorism Portal (SATP), another 22 persons have been killed in different CPEC related projects across the Province (till December 16, 2018).

Meanwhile, the Chief Justice of Pakistan (CJP) Mian Saqib Nisar stated, on December 10, 2018, “the situation of Balochistan is deplorable” despite the Province having huge mineral resources. The CJP emphasised that the people of Balochistan complained that they were being neglected by Islamabad and they did not even have basic rights.

With the CPEC Cell’s revelation of injustices against the Province coming to light, the enduring discontent among the Baloch people is likely to be further aggravated, and CPEC-related projects will come under an escalating threat in the months to come.

*Tushar Ranjan Mohanty
Research Associate, Institute for Conflict Management

How Britain stole $45 trillion from India


And lied about it.

by Jason Hickel

14 Dec 2018 GMT+3

There is a story that is commonly told in Britain that the colonisation of India - as horrible as it may have been - was not of any major economic benefit to Britain itself. If anything, the administration of India was a cost to Britain. So the fact that the empire was sustained for so long - the story goes - was a gesture of Britain's benevolence.

New research by the renowned economist Utsa Patnaik - just published by Columbia University Press - deals a crushing blow to this narrative. Drawing on nearly two centuries of detailed data on tax and trade, Patnaik calculated that Britain drained a total of nearly $45 trillionfrom India during the period 1765 to 1938. 

It's a staggering sum. For perspective, $45 trillion is 17 times more than the total annual gross domestic product of the United Kingdom today.

How did this come about?

It happened through the trade system. Prior to the colonial period, Britain bought goods like textiles and rice from Indian producers and paid for them in the normal way - mostly with silver - as they did with any other country. But something changed in 1765, shortly after the East India Company took control of the subcontinent and established a monopoly over Indian trade.

Here's how it worked. The East India Company began collecting taxes in India, and then cleverly used a portion of those revenues (about a third) to fund the purchase of Indian goods for British use. In other words, instead of paying for Indian goods out of their own pocket, British traders acquired them for free, "buying" from peasants and weavers using money that had just been taken from them.

It was a scam - theft on a grand scale. Yet most Indians were unaware of what was going on because the agent who collected the taxes was not the same as the one who showed up to buy their goods. Had it been the same person, they surely would have smelled a rat.

Some of the stolen goods were consumed in Britain, and the rest were re-exported elsewhere. The re-export system allowed Britain to finance a flow of imports from Europe, including strategic materials like iron, tar and timber, which were essential to Britain's industrialisation. Indeed, the Industrial Revolution depended in large part on this systematic theft from India.

On top of this, the British were able to sell the stolen goods to other countries for much more than they "bought" them for in the first place, pocketing not only 100 percent of the original value of the goods but also the markup.

After the British Raj took over in 1847, colonisers added a special new twist to the tax-and-buy system. As the East India Company's monopoly broke down, Indian producers were allowed to export their goods directly to other countries. But Britain made sure that the payments for those goods nonetheless ended up in London. 

How did this work? Basically, anyone who wanted to buy goods from India would do so using special Council Bills - a unique paper currency issued only by the British Crown. And the only way to get those bills was to buy them from London with gold or silver. So traders would pay London in gold to get the bills, and then use the bills to pay Indian producers. When Indians cashed the bills in at the local colonial office, they were "paid" in rupees out of tax revenues - money that had just been collected from them. So, once again, they were not in fact paid at all; they were defrauded.

Meanwhile, London ended up with all of the gold and silver that should have gone directly to the Indians in exchange for their exports.

This corrupt system meant that even while India was running an impressive trade surplus with the rest of the world - a surplus that lasted for three decades in the early 20th century - it showed up as a deficit in the national accounts because the real income from India's exports was appropriated in its entirety by Britain. 

Some point to this fictional "deficit" as evidence that India was a liability to Britain. But exactly the opposite is true. Britain intercepted enormous quantities of income that rightly belonged to Indian producers. India was the goose that laid the golden egg. Meanwhile, the "deficit" meant that India had no option but to borrow from Britain to finance its imports. So the entire Indian population was forced into completely unnecessary debt to their colonial overlords, further cementing British control. 

Britain used the windfall from this fraudulent system to fuel the engines of imperial violence - funding the invasion of China in the 1840s and the suppression of the Indian Rebellion in 1857. And this was on top of what the Crown took directly from Indian taxpayers to pay for its wars. As Patnaik points out, "the cost of all Britain's wars of conquest outside Indian borders were charged always wholly or mainly to Indian revenues." 

And that's not all. Britain used this flow of tribute from India to finance the expansion of capitalism in Europe and regions of European settlement, like Canada and Australia. So not only the industrialisation of Britain but also the industrialisation of much of the Western world was facilitated by extraction from the colonies.

Patnaik identifies four distinct economic periods in colonial India from 1765 to 1938, calculates the extraction for each, and then compounds at a modest rate of interest (about 5 percent, which is lower than the market rate) from the middle of each period to the present. Adding it all up, she finds that the total drain amounts to $44.6 trillion. This figure is conservative, she says, and does not include the debts that Britain imposed on India during the Raj.

These are eye-watering sums. But the true costs of this drain cannot be calculated. If India had been able to invest its own tax revenues and foreign exchange earnings in development - as Japan did - there's no telling how history might have turned out differently. India could very well have become an economic powerhouse. Centuries of poverty and suffering could have been prevented.

All of this is a sobering antidote to the rosy narrative promoted by certain powerful voices in Britain. The conservative historian Niall Ferguson has claimed that British rule helped "develop" India. While he was prime minister, David Cameron asserted that British rule was a net help to India.

This narrative has found considerable traction in the popular imagination: according to a 2014 YouGov poll, 50 percent of people in Britain believe that colonialism was beneficial to the colonies.

Yet during the entire 200-year history of British rule in India, there was almost no increase in per capita income. In fact, during the last half of the 19th century - the heyday of British intervention - income in India collapsed by half. The average life expectancy of Indians dropped by a fifth from 1870 to 1920. Tens of millions died needlessly of policy-induced famine.

Britain didn't develop India. Quite the contrary - as Patnaik's work makes clear - India developed Britain.

What does this require of Britain today? An apology? Absolutely. Reparations? Perhaps - although there is not enough money in all of Britain to cover the sums that Patnaik identifies. In the meantime, we can start by setting the story straight. We need to recognise that Britain retained control of India not out of benevolence but for the sake of plunder and that Britain's industrial rise didn't emerge sui generis from the steam engine and strong institutions, as our schoolbooks would have it, but depended on violent theft from other lands and other peoples.

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial stance. 

CHINA: Party Watch Weekly Report

 Party Watch Weekly Report 2|10 12.8.2018-12.14.2018
By David Gitter, Julia Bowie, Nathanael Callan, Brock Erdahl, and Sandy Lu



The Politburo convened to discuss economic work in 2019 and to hear the work report of the Central Commission for Discipline Inspection (see Senior Leaders section).The highly authoritativePeople’s Daily pen name, Ren Zhongping, was used to issue perspectives on the 40th Anniversary of Reform and Opening Up. The commentary emphasized that the success of reform is due to Party leadership (see Propaganda Work section).

Senior Leaders

Xi Jinping Sends Congratulatory Letter to Universal Declaration of Human Rights 70th Anniversary Symposium
12.10  Xi Jinping sent a congratulatory letter to a symposium in Beijing commemorating the 70th anniversary of the Universal Declaration of Human Rights. In the letter, Xi emphasized that “the greatest human right is the people’s right to a happy life” and that “Chinese people are willing to work with people from every country to… establish a global human rights governance that is fairer, more reasonable, and more inclusive.”
Politburo member and Central Propaganda Department head Huang Kunming (黄坤明) read the letter to the symposium and gave a speech. He urged everyone to “conscientiously learn and implement the spirit of General Secretary Xi Jinping’ important directives, tell a good story about China’s human rights, deepen theoretical research on human rights, promote exchanges in the field of human rights, and practically conduct well the different works that respect and safeguard human rights.”
Xi Jinping Presides over Politburo Meeting
12.13  The Politburo met to discuss plans for economic work in 2019. The meeting held that this year, “in the face of a complicated international environment and the arduous domestic tasks of reform, development, and stability… we have maintained sustained and healthy economic development and overall social stability, and have taken new steps toward achieving the first centenary goal.” The Politburo said that next year, “we will maintain economic operation within a reasonable range, further stabilize employment, stabilize finance, stabilize foreign trade, stabilize foreign investment, and stabilize expectations.”
The Politburo also heard the CCDI’s 2018 work report and discussed the plan for the work of constructing honest Party conduct and clean government for 2019. The Politburo agreed to hold the 3rd plenary session of the 19th CCDI from 11 to 13 January, 2019 and highlighted four “musts” for next year’s anti-corruption work: “[we] must adhere to arming our brains with Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,” “innovating the system and mechanism for discipline inspection and supervision,” “vigorously reducing the [existing problems] and effectively containing the increase,” and “constantly keeping in mind the requirement that it takes a good blacksmith to make good steel.” 

Propaganda Work

Zhong Sheng: The Legitimate Rights and Interests of Chinese Citizens Are Inviolable
People's Daily
12.9  People’s Daily used its Zhong Sheng (钟声) column, which authoritatively transmits the opinions of the People’s Daily on matters of international affairs, to denounce Canada’s detention of Huawei Chief Financial Officer Meng Wanzhou (孟晚舟) at the behest of the United States. It described the arrest as “a serious violation of the legitimate rights and interests of Chinese citizens” as well as “lawless, unreasonable, and callous.”
The article linked Meng’s detention to “all kinds of unfair tricks to pressure the Chinese company Huawei” but warned those employing such tricks “are doomed to be hoisted by their own petard.” It also warned that “China will not cause trouble, but it is absolutely not afraid to get into trouble. Nobody should underestimate China’s confidence, determination, or strength.”
The article ended with a call for Canada to “rectify its mistake, immediately stop violating the legitimate rights and interests of Chinese citizens, and give a proper justification to the Chinese people” to “avoid paying a heavy price for this incident.”
Commentator: Uphold the Sanctity of the Law, Safeguard Legitimate Rights (On Retired Military Personnel)
People's Daily
12.10  A People’s Daily commentator article addressed protests by Chinese veterans this year against the lack of job prospects for retired soldiers and inadequate services. The commentator article asserted the importance of upholding the legitimate rights and interests of retired military personnel and providing them with guaranteed services, emphasizing that the Central Committee and Xi Jinping attach great importance to this issue. Xi Jinping has repeatedly made important speeches and directives on the subjects of preferential policies for retired military personnel, supporting their employment and entrepreneurship, and the introduction of the “Veterans Protection Law.”
The commentator wrote that, while the overall situation is good, there are still some places where policies are inadequately implemented and there is insufficient support for veterans. Of the veterans that have demands, the “overwhelming majority are able to express them in a rational and legal manner” and all relevant departments must conscientiously study them and implement the policies to address them.  
However, some people have “crossed a line, engaged in illegal and criminal activities to the extent that they have gathered crowds and made disturbances (聚众闹事) and violently assaulted police, have demonstrated an organized and violent tendency, have threatened Party and government organizations, ignored Party and state law, deviated from fairness and justice, disturbed social order, gravely harmed the image of retired military personnel, harmed the collective and individual interests of the people, have become a prominent factor affecting the social stability of certain localities, and have given rise to widespread and intense dissatisfaction among the people.”
The commentator urged veterans to recognize that China is a socialist country ruled by law, and that only by upholding legal authority and the sanctity of the law can social stability be maintained and can the country endure.
Xi Jinping Talks Belt and Road Published by Central Party Literature Press
12.12  A compilation of Xi Jinping’s remarks on the Belt and Road Initiative, beginning with his 2013 speech in Kazakhstan, has been published by the Central Party Literature Press. Commenting on the Initiative itself, Xinhua said the Belt and Road is becoming “China’s plan to participate in global open cooperation, improve the global economic governance system, promote common global development and prosperity, and promote the building of a community of shared future for mankind.”
Commentator: Adhere to a Path of Progress in Human Rights that Accords with National Conditions
People's Daily
12.13  A People’s Daily commentator article discussed the State Council’s recently published white paper on China’s progress in human rights since the start of Reform and Opening Up. It argued that China has “successfully walked along a path of progress in human rights that accords with its national conditions” over the last 40 years and, in the process, “created a new experience and new miracle for human rights protection in the history of the development of human civilization.”
The article elaborated that China’s progress in human rights “not only makes Chinese people enjoy ample human rights but also makes an important contribution to the development of humanity and provides a China experience and China program for protecting human dignity and enriching the cultural diversity of human rights.” It concluded with a call to “closely unite around the Party Central Committee with Comrade Xi Jinping as the core, always act as a proponent, practitioner, and promoter of human rights, and adhere to a path of progress in human rights that accords with national conditions.”
Ren Zhongping: Producing Major Historical Changes: Commemorating the 40th Anniversary of Reform and Opening Up (Part I)
People’s Daily
12.14  A People’s Daily commentary under the highly authoritative pen name Ren Zhongping (任仲平), standing for “importantPeople’s Daily commentary” (人民日报的重要评论), commemorated the 40th anniversary of Reform and Opening Up. The expansive 8,000 character commentary, which reviews the history of reform and opening, mentions Deng Xiaoping only three times and Xi Jinping thirteen times. Part II is forthcoming. 
The commentary compared the contemporary reform and opening up period to the failed 100 Days’ Reform of 1898, saying that reform and opening up succeeded in the next century because of the “persistence and guidance of the Party.” “For 40 years, it is precisely because of the Party’s strong leadership that reform and opening has always had a stable institutional framework; it is precisely because of the Party’s strong leadership that China is capable of correctly handling the relationship between reform, development, and stability… Those who believe they have even a little understanding of the course of China’s reform and opening up will all agree with this conclusion: ‘that insisting on the leadership of the Party, and comprehensively and strictly ruling the Party, is the key to and foundation of the success of reform and opening up.
The commentary concluded that the “China moment” in world history has already begun. “[We will] continue to advance bravely down the path of reform and opening up to create history… Socialism with Chinese characteristics has ushered in a brighter future.”

United Front Work 

Editorial: Writing a New Chapter in the Prosperity and Development of Guangxi
People's Daily
12.10  People’s Daily published an editorial celebrating the 60th anniversary of the establishment of the Guangxi Zhuang Autonomous Region. The article highlighted Guangxi’s developmental achievements since 1958 and stressed its geographical advantage for the Belt and Road.
According to the editorial, the regional GDP of Guangxi in 2017 is 832 times of its GDP in 1958 and opening up will further release Guangxi’s development potential and allow it to play a bigger role in the Belt and Road construction.
The article also mentioned cooperation with the Association of Southeast Asian Nations (ASEAN), saying that “as long as Guangxi unswervingly adheres to CCP leadership, the path of socialism with Chinese characteristics, the correct path of solving ethical issues with Chinese characteristics, and the path of reform and opening up, Guangxi will certainly have an even more splendid tomorrow.”
Wang Yang’s Remarks After Hearing Guangxi Zhuang Autonomous Region Work Report
People’s Daily
12.10 Politburo Standing Committee member and Chinese People’s Political Consultative Conference  (CPPCC) National Committee Chairman Wang Yang (汪洋) listened to a report from the Guangxi Zhuang Autonomous Region Party committee and government. At the meeting, Wang emphasized that the Guangxi government and Party committee must become “even more tightly united around the Party Central Committee with Comrade Xi Jinping as the core and take Xi Jinping Thought on Socialism with Chinese Characteristic for a New Era as a guide.”
Congratulatory Message from the Central Party and Government for the 60th Anniversary of the Guangxi Zhuang Autonomous Region
12.10  A congratulatory message from the CCP Central Committee, National People’s Congress Standing Committee, State Council, CPPCC National Committee, and Central Military Commission was delivered to their direct subordinates in Guangxi Zhuang Autonomous Region.
The message noted that the establishment of the autonomous region in 1958 is a great achievement in the history of China’s ethnic groups and that it starts a new chapter in the history of Guangxi in which cadres of every ethnic group in Guangxi together being “the master of their house” under the Party’s leadership. The message also noted that all the ethnic cadres of Guangxi should take Deng Xiaoping Theory, the “Three Represents,” the Scientific Outlook on Development, and Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as a guide. The message concluded, “long live the unity of all ethnic groups in the country!”
Penetrate the Grassroots Through Preaching  
Protestant Church in China Website
12.10  A meeting on preaching the sinicization of Christianity was held in Dunhua, Jilin by the China Christian Council and National Committee of the Three-Self Patriotic Movement of Jilin. Over 500 people participated in the meeting. A local preacher read from the Letter of St Paul to the Philippians and gave a sermon on patriotism and Christianity. After the sermon, the chairman of China Christian Council and National Committee of the Three-Self Patriotic Movement in Dunhua read a proposal released by the 10th national meeting of China’s Christians related to Christian practice of the core values of socialist to the audience.
Seventh National Religious Group Joint Conference Held in Beijing
United Front Work Department
12.10  The Seventh National Religious Group Joint Conference was held in Beijing. The conference was attended by the main leaders of various national religious groups and the heads of China’s YMCA and YWCA National Councils. United Front Work Department Vice Minister and National Religious Affairs Administration head Wang Zuoan (王作安).
According to the article, all the attendees agreed on the need to “increase the levels of legalization (法治化), institutionalization, and regulation of the groups’ self-management, allow regulations and the system to play their roles in guiding the behaviors of religious personnels and masses, setting rules, and protecting rights and interests, and provide an institutional guarantee for resolving outstanding issues in today’s religious domain.”
Islamic Association President Attends Academic Seminar “Confucian Culture and The Sinicization of Islam”
China Islamic Association Research Department
12.13  An academic seminar on “Confucian Culture and the Sinicization of Islam” was organized by the Central Institute of Socialism and organized by the Jining United Front Work Department, Jining Ethnic and Religious Affairs Office, and Confucius Research Institute of China. The seminar was attended by the China Islamic Association head Yang Faming (杨发明) and more than 60 other participants. At the seminar, Yang gave a keynote lecture entitled “Thoughts on Persevering with the Direction of the Sinification of Islam.”


Party Discipline

Li Shulei Meets Philippine Presidential Anti-Corruption Commission Chairman

12.11 Central Commission for Discipline Inspection (CCDI) Deputy Secretary and National Supervisory Commission (NSC) Deputy Head Li Shulei (李书磊) met with Philippine Presidential Anti-Corruption Commission (PACC) Chairman Dante Jimenez. Li said during the meeting that the Chinese side is willing to “reinforce experience exchange on anti-corruption and deepen practical cooperation on fugitive repatriation, asset recovery, and other fields… with the Philippines.” Jimenez praised China’s achievements on comprehensive strict governance of the Party and its anti-corruption battle and expressed willingness to reinforce anti-corruption cooperation between the Philippines and China.
CCDI and NSC Release Measures for Administration of Branches
China Discipline Inspection and Supervision Newspaper
12.12 The CCDI and NSC released measures for the administration of their branches stationed in Party and state organs at the central level. The measures regulate the kinds of measures and procedures that these branches can and should put in effect while conducting supervision, inspection, and investigation work. For instance, the measures stipulate that these branches can issue documentation for their personnel to investigate and freeze the assets of case-related units and personnel. They also establish a strict scope of authority and procedure for investigation and a review and approval mechanism for new measures.
China and Australia Sign Anti-Corruption and Law Enforcement Cooperation Memorandum of Understanding
12.13  CCDI Deputy Secretary and NSC Deputy Director Li Shulei (李书磊) met in Beijing with Australian Federal Police Commissioner Andrew Colvin and signed a bilateral memorandum of understanding on cooperation in anti-corruption and law enforcement. Li said during the meeting that China is willing to reinforce cooperation with Australia, and Colvin expressed the same. This marks the first time the NSC has signed an anti-corruption law enforcement cooperative document with a Western country since its establishment.
Xi Jinping Emphasizes Deepening Reform of the National Supervision System
12.13  The Politburo held its 11th collective study session on deepening reform of the  national supervision system. Xi Jinping emphasized during the session the importance of “continuing the deepening of the Party’s discipline inspection system and the state’s supervision system.” He stressed that establishing a centralized national supervision system with a high level of authority and efficiency, as well as listing it as the first article of the plan to deepen reform of Party and state institutions  (深化党中央机构改革方案), is to “build a supervision system that is led by the Party, provides comprehensive coverage, and with high [level of] authority and efficiency in order to form a cooperative force of supervision that mainly focus on internal Party supervision and connect with other [kinds of] supervision.”

International Liaison Work

12.6-12.8  International Department Minister Song Tao (宋涛) went to Norway and individually met with Minister of Finance and Progress Party leader Siv Jensen and Minister of Foreign Affairs Ine Marie Eriksen Søreide.
12.8  Tibet Autonomous Region Party Committee Executive Deputy Secretary Ding Yexian (丁业现) led a CCP delegation to Austria to meet with Austria-China Friendly Association President and former President of Austria Heinz Fischer.
12.9-11  Song Tao went to France for several days and met with multiple prominent French politicians while there.

On December 9, Song met with the President of the Regional Council of Provence-Alpes-Côte d'Azur Renaud Muselier and National Assembly First Vice President and La République En Marche (LREM) national commission member Carole Bureau-Bonnard.

On December 10, Song met with foreign policy advisor to the President of France Philippe Étienne, French Communist Party National Secretary Fabien Roussel, and LREM General Delegate Stanislas Guerini.

On December 11, Song met with General Secretary of Les Républicains and National Assembly Deputy President Annie Genevard and Minister of Europe and Foreign Affairs Jean-Yves Le Drian.

12.9-10  The International Department and Germany’s Koerber Foundation jointlyheld the 169th Bergedorf Round Table in Beijing. This year’s theme was "EU-China Relations in a Changing Global Order".

12.10  International Department Vice Minister Qian Hongshan (钱洪山) met with European Green Party Co-Chair Reinhard Bütikofer.

12.11  Guo Yezhou met with a six Southern African political parties cadre study group led by Chama Cha Mapinduzi National Executive Committee Secretary for Party Ideology and Publicity Humphrey Polepole.
12.11-14  On 11 December, International Department Vice Minister Guo Yezhou (郭业洲) met with an Ethiopian People's Revolutionary Democratic Front (EPRDF) cadre study group led by EPRDF Central Secretariat Deputy Secretary Melese Alemu Hirboro.
On 14 December, Song Tao also individually met with cadre study group.
12.12  Guo Yezhou met with an Ivorian Rally of the Republicans (RDR) cadre study group led by RDR Deputy Secretary-General David Soro.
12.12  Guo Yezhou met with Great Britain-China Center Chairman Martin Davidson.
12.13  Song Tao and Guo Yezhou met with an American Foreign Policy Council delegation led by former Commander of the United States Pacific Command Timothy J. Keating.
Guo Yezhou also individually met with the delegation on the same day.
12.13  Guo Yezhou met with a South African Communist Party (SACP) high-level cadre study group led by SACP First Deputy General Secretary Solly Mapaila.

Organization Work

12.10  Miao Shaobo (苗少波) was appointed secretary general of the Ministry of Science and Technology.
12.14  Chen Feihu (陈飞虎) was appointed chairman of China Datang Corporation.

12.14  Kou Wei (寇伟) was appointed chairman of State Grid Corporation of China.

Is Pakistan Breaking from Within

The newly formed Pakistan Government has sought out a bail-out package from International Monetary Fund (IMF) to steer through the looming Balance of Payment (BOP) Crisis. Prime Minister Imran Khan has reportedly asked for Pakistan’s largest bail-out package of $8 billion from IMF. It is already under the ‘debt-trap’ of China for building its part of China-Pakistan Economic Corridor (CPEC), China has reportedly lent $5 billion to Pakistan in 2017-18 which Pakistan has failed to payback as yet. When these economic woes are seen in conjunction with the internal instability in Pakistan and its relations with its neighbours, they become all the more troublesome.

Most worryingly for Pakistan, ever since India has shifted its defence policy from ‘defensive offense’ to ‘offensive defence’, many significant changes have been taking place in Pakistan in the last 4 years. In this article, all these changes have been discussed in detail. Before we delve into an in-depth analysis, let us first understand how India has shifted its gear as far as dealing with Pakistan is concerned.

From ‘Defensive Offence’ to ‘Offensive Defence’

Ever since Prime Minister Narendra Modi has appointed Ajit Doval as his National Security Advisor (NSA), India has moved towards a policy of ‘Offensive Defence’. Though there is less clarity on what it literally means, it can be understood from the recent methods like surgical strike towards tackling terrorism, especially sponsored by Pakistan.

For far too long, India has maintained ‘restraint’ towards Pakistan’s unofficial policy of ‘bleeding India through thousand cuts’. India’s pacified approach reached its height when India remained silent after one of the biggest terror attacks on its soil, that is, on 26/11 in Mumbai. But, recently, India has gone beyond and unleashed a surgical strike on terror launch pads in Pakistan which denoted its resolve to attack where it hurts the most.

As a part of the above strategy, PM Modi has raised its India’s concerns against Pakistan sponsored terrorism which has resulted in the isolation of Pakistan at the global fora. This increasing isolation of Pakistan along with its home-grown economic and security crisis has reached the tipping point, which is consequently exposing the cracks within it.

Here we analyse the current trends:

Resurging Independence Movements

Balochistan Independence Movement – People of Balochistan, a province situated in the south-western part of Pakistan, has been demanding a separate state since a long time (the 1960’s) which has resulted in the Baloch insurgency. However, this insurgency has intensified in the recent times after Pakistan started employing radical ISIS Islamists to crush Baloch separatists. In 2018, a suicide bombing attack killed a prominent Baloch leader Siraj Raisani along with his 150 supporters when he was addressing a rally of Baloch people. Ironically, Mr. Raisani was used as a native proxy by the Pakistani Army. Thus, the use of ISIS radicals in crushing the Baloch movement boomeranged on the state of Pakistan exposing its sheer hollowness. The constant oppression of the state has led to increasing distrust between the Baloch People and the Pakistan Government. Notably, India has also lent its voice for the cause of peaceful resolution of the Baloch movement in recent times.War in Wajiristan (North West Pakistan) – Khyber Pakhtunkhwa, is one of the four administrative units of Pakistan. It has been a major space of terrorism since the 9/11 attacks on United States of America (USA), as it is in this area that many terrorists’ groups like Taliban, Tehrik-e-Taliban Pakistan and Al-Qaeda have flourished. The funds given by USA to Pakistan for an armed operation against the terrorists have been reportedly misused by the Pakistan Army to provide safe harbour to them so that it can keep the neighbouring state of Afghanistan destabilised and seek more funds from USA. After the initial misunderstandings, Prime Minister Narendra Modi has been able to successfully bring Afghanistan on India’s side. This has started worrying Pakistan.Sindhudesh and Gilgit-Baltistan – In other parts of Pakistan too, the demand for independence is on the rise. In Gilgit-Baltistan, part of the Indian state but illegally occupied by Pakistan, there is discontentment on two fronts – one is that their counterparts living in India-governed Kashmir are living in much better condition, as the Indian government has been undertaking development rapidly; two is that the rising threat of CPEC which will bring in more Chinese interference in their region. In the Sindhu Province of Pakistan, according to the DAWN newspaper, Jeay Sindh Tehrik (JST) demandedfreedom from Pakistani’s occupation. Even the World Sindhi Congress has been asking the Pakistani Government to end the harassment and killings of Sindhi people. In fact, there has been an increase in protests against the Pakistani’s occupation over Sindh in recent times (2017).


Falling Economy:

According to a report by The Express Tribune in a national Pakistan newspaper, the Education Minister of Sindh Province, Jam Mehtab Hussain Dahar said that Pakistan’s economy will collapse in the next 10 years. Economist, Dr Kaiser Bengali supported Dahar’s views on the collapse of Pakistan’s economy. There are certain reasons (mentioned below) that gave rise to such views of Pakistani politicians and economists.

Pakistan’s rising imports and falling exports have been increasing the Current Account Deficit (CAD) of the country.

Source: Bloomberg Report

Pakistan’s foreign exchange reserves have been falling rapidly as shown in the below graph. This compounds the problem in the way that Pakistan has less to pay for its imports which are already on the rise (as shown in the above graph).

Source: Bloomberg Report

Isolation of Pakistan

Prime Minister Narendra Modi has single-handedly raised the voice at various global platforms against the state-sponsored terrorism by Pakistan. This has produced some noticeable results which have resulted in the notable isolation of Pakistan. Here are the instances:

Boycott by the SAARC countries – In the aftermath of the URI attack, SAARC nations had joined hands with India in boycotting Pakistan.Supporting its alliance with India, USA has cut down its aid to Pakistan saying that it has grossly failed in fighting terrorism. This has sunken USA-Pakistan relations to a new low and exposes the cracks between them.PM Modi has been able to drawAfghanistan closer to India through his diplomacy. As explained above, this has increasingly become another point of contention between India and Pakistan.Pakistan has never had good relation with its other neighbour on the western front – Iran. Iran is a Shia dominated country, while Pakistan is Sunni dominated. This makes both the countries mutually exclusive. Importantly, Pakistan- supported terrorism has caused a great damage to Iran also. Further, India is building the Chabahar Port in Iran which gives India double advantage of enhancing its relationship with Iran as well as bypassing Pakistan to reach Afghanistan.


Pakistan, due to its falling circumstances, has aligned itself to China. However, China has bigger plans and a geo-strategic idea of replicating the USA’s strategy of Marshall Plan to have an influence over Europe and Asia through its One Road One Belt (OROB) initiative. Pakistan is merely a pawn on this grand chessboard of Asia, in this plan.

India along with USA is cornering Pakistan as far Afghanistan is concerned. The neighbouring countries like Iran and Afghanistan do not have much hope from Pakistan either. Most of the countries, even in its extended neighbourhood, such as SAARC or Middle East countries have become all the more suspected of its direct role in spreading terrorism across the world.

Moreover, poverty and unemployment along with its collapsing economy are another area of concern for Pakistan where the army is allocated more funds than anyone. On the top of all this, 3 of total 4 provinces in Pakistan like Balochistan, Sindh and Khyber Pakhtunkhwa are witnessing the increasing protests and demands for independence. Pakistan looks to have got entangled in its own weaved web.