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Time of India
2 hours ago
- Business
- Time of India
Trump's ‘critical' move on Pakistan? US step on BLA may aim at America mining rare earths; how will China react?
It seems Pakistan has successfully persuaded the Trump administration that controlling BLA is crucial for accessing "critical minerals" in the region. (AI image) The Donald Trump administration's move to recognise the Baloch Liberation Army (BLA) as a Foreign Terrorist Organisation (FTO) may have its reasons rooted in a desire to mine rare earth deposits in Pakistan. Since the improvement in relations during Trump's second term, Pakistan and the United States have engaged in discussions regarding the extraction of rare earth elements. This aspect has been a significant factor in the enhancement of bilateral relations over the previous six months, according to an ET report. Trump's desire for rare earths It seems Pakistan has successfully persuaded the Trump administration that controlling BLA is crucial for accessing "critical minerals" in the region. The move comes at a time when Trump has not been able to gain an upper hand in the US-China trade deal talks, mainly due to what experts see as America's dependency on rare earth elements from China. Also Read | No upper hand for US? Why Donald Trump has extended tariff truce with China for another 90 days - explained Diplomatic observers note that whilst some critics suggest possible US military deployment in Balochistan similar to Afghanistan, such action could prove problematic. Local inhabitants, with their superior knowledge of the terrain, could pose challenges to American forces, potentially creating a situation reminiscent of Afghanistan. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Jolie-Pitt Family Shows Support For Shiloh's Change Drivepedia Undo How will China react? The residents of Balochistan have consistently opposed Chinese-funded initiatives and personnel, believing that China has utilised their resources without providing local benefits whilst compromising their autonomy. Whilst China is likely to support actions against BLA, its response to the Trump administration's economic and security involvement in Balochistan remains uncertain, particularly considering the China Pakistan Economic Corridor 's route through the region. The strategic Gwadar port is situated in Balochistan. According to the ET report, analysts are monitoring whether Pakistan, currently serving as a non-permanent UNSC member, will approach the council following the US decision regarding BLA. This could present an unusual scenario where both China and the USA back Pakistan's position. However, BLA's designation under the 1267 sanctions committee is not possible due to its lack of connections with Al Qaeda or its affiliates. The US classification of BLA corresponds with Munir's Washington visit and follows a recently established US-Pakistan trade arrangement. Also Read | 'Can't cross some red lines': Government officials tell Parliamentary Panel on India-US trade talks; focus on export diversification amidst Trump tariffs Stay informed with the latest business news, updates on bank holidays , public holidays , current gold rate and silver price .
Business Recorder
26-07-2025
- Business
- Business Recorder
FDI repatriation
EDITORIAL: State Bank of Pakistan has reported that foreign companies operating in Pakistan repatriated 2.220 billion dollars on account of profits and dividends in 2025 against 2.215 billion dollars in 2024 with 90 percent on account of returns on foreign direct investment. There is no doubt that in spite of achieving in 2025 the highest current account surplus ever in the country's history, Pakistan is grappling with serious foreign exchange reserve crisis, and hence the country's capacity to clear all dues/receivables on foreign direct investment remains a challenge. Foreign exchange reserves held by the SBP have risen to 14525.6 million dollars on 1 July 2025 against 9423.7 million dollars on 12 July 2024, a significant rise; however, given that as per the Governor SBP total rollovers from the three friendly countries (China, Saudi Arabia and the United Arab Emirates) are 16 billion dollars (minus borrowing from the multilaterals and other bilaterals) the rise does not provide a comfort level. In this context, it is relevant to note that Chinese Chief Executive Officers of various Independent Power Producers — coal-fired, and wind power — established under the umbrella of China Pakistan Economic Corridor, have repeatedly written to authorities requesting payment of outstanding receivables of 500 billion rupees (1.72 billion dollars). The CEO of Pakistan Matiari-Lahore Transmission Company (Pvt) Ltd, Xiong Feng wrote to the Managing Director of National Grid Company (formerly NTDC) recently noting that 'NGC is still in the process of settling the invoice for December 2024 which became overdue on 31 January 2024. In addition, invoices for January, February, March, April, and May remain outstanding and unpaid. As a result, the total amount payable to PMLTC under the Transmission Services Agreement has ballooned to 55.071 billion rupees (exclusive of sales tax) with 47.076 billion rupees now long overdue including interest on delayed payments.' It has been reported that the government recently released 5 billion dollars to the Chinese IPPs through an escrow account and intends to disburse an additional amount to the Chinese IPPs prior to the expected visit of Prime Minister Shehbaz Sharif to China next month. Portfolio investment as per the Finance Division's June Update and Outlook indicated that it declined in July-May to negative 624.4 million dollars as opposed to negative 559.5 million dollars in the comparable period the year before while FDI declined to 1354.4 million dollars in 2025 against 1582.9 million dollars in the same period of 2024. This is in spite of the government's comprehensively proactive approach to lure and facilitate all incoming FDI — an approach whose success is constrained due to the country's sustained non-investment rating by the three international rating agencies. This indicates that the economy remains fragile in spite of some improvements; notably, in the decline in inflation and the current account surplus. However, this fragility must not be a source of disheartenment but must be perceived as a challenge to continue on the path towards structural reforms particularly in the tax and power sectors as well as a proactive attempt to curtail current expenditure on items other than those associated with a projected reduction in the mark-up. To conclude, Pakistan is poised to take advantage of its geographical and ideological positioning in the emerging multipolar world and one would hope that the economic team leaders take timely appropriate reforms to strengthen the momentum towards achieving inclusive development. Copyright Business Recorder, 2025
Business Recorder
01-07-2025
- Business
- Business Recorder
Tax structure: budget envisages no reform
EDITORIAL: The major revisions in the Finance Act 2025 must be supported as they attempt to reduce the import taxes on key raw materials and intermediate goods, with the government claiming its intent was to create a business-friendly import environment (with an associated positive impact on growth) while inexplicably extending 50 tax exemptions that cannot be supported in the current year considering that the economy remains extremely fragile, reflected partly by the failure of the government to clear its contractual obligations to Independent Power Producers set up under the China Pakistan Economic Corridor, and continued high dependence on foreign loans (nearly 20 billion dollars) from not only multilaterals but also from the three friendly countries. The business-friendly revisions include zero tariffs applicable on 2201 tariff lines to be extended to an additional 916 lines and reduction of customs codes on 2624 PTC codes. At the outset it is relevant to note that phasing out import taxes has been a long-standing loan condition by multilaterals and this particular amendment to the Finance Act is unlikely to be challenged by the International Monetary Fund (IMF) staff whose approval is critical to the success of the second staff-level review followed by tranche disbursement. However, it has not yet been clarified as to how much of the budgeted collections by the Federal Board of Revenue (FBR) would be negatively impacted by these measures. This shortfall in budgeted revenue collection would, one may safely assume, generate the need to impose additional taxes (mini-budget) later in the year as part of the contingency measures agreed with the IMF staff under the ongoing Extended Fund Facility (EFF) programme. Without Fund approval pledged external assistance releases would not be forthcoming to stave off the still looming threat of default. This stands to reason as both the Finance Minister and the Chairman FBR have publicly stated that in the event that the 389 billion rupees budgeted under enforcement measures is not realised there would be a need to impose additional taxes though the amount noted by the two men has varied between 400 and 600 billion rupees. There is no doubt that the investment climate in the country needs pro-business measures as the large-scale manufacturing sector (LSM) continues to show an increase in negative growth — negative 1.47 percent July-March 2024-2025 against 0.92 percent 2023-24. This deterioration is in spite of the discount rate being slashed from 22 percent to 11 percent (June 2024 to June 2025) and a decline in electricity tariffs though captive power plants will now be taxed, again an IMF condition. The draconian measures that consist of enhancing the powers of the FBR officials, slightly watered down by parliament, may further compromise productivity in the LSM sector. Be that as it may, successive Pakistani governments have relied on monetary and fiscal incentives to industry though as per the EFF documents uploaded on the Fund website in October 2024, 'The government's intervention in price setting, including for agricultural commodities, fuel products, power, and gas (biannual), combined with high tariff and non-tariff protection tilted the playing field in favour of selected groups or sectors. Despite all this support, the business sector has failed to become an engine of growth, and the incentives eventually weakened competition and trapped resources in chronically inefficient (including perpetually 'infant') industries.' In marked contrast to the reduction in import tariffs, exemptions are vigorously opposed by multilaterals as they are largely, if not entirely, supportive of the rich and influential. It is fairly evident that exemptions on the pension of Pakistani presidents falls in the category of benefiting the rich and the influential and is not justified, especially given the economy's fragility. The most disappointing aspect of the budget 2025-26 is the fact that there have been no reforms in the tax structure and the reliance on indirect taxes, whose incidence on the poor is greater than on the rich, remaining intact as they are easy to collect. Direct taxes based on the ability to pay principal continue to consist of withholding taxes in the sales tax mode (which are indirect taxes) comprising of 75 percent of total collections. Copyright Business Recorder, 2025
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South China Morning Post
30-05-2025
- Business
- South China Morning Post
Why is China speeding up work on Pakistan dam after India held Indus Waters Treaty in abeyance?
Read more here: Following a short military confrontation between Islamabad and New Delhi in early May 2025, Beijing announced it would speed up construction of a dam in northern Pakistan that is being built under the China-centred trading network called the Belt and Road Initiative. The announcement was likely made following the temporary suspension of the Indus Waters Treaty by India, which guarantees Pakistan a steady flow of water from Indian-administered Kashmir. The Mohmand dam is one of several Chinese-financed projects and part of the China-Pakistan Economic Corridor.
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First Post
28-05-2025
- Business
- First Post
Post Operation Sindoor, China struggling to regain reputation of its military products
While demand for Chinese military products will recede, those for Indian air defence systems and Brahmos missiles are on the rise read more (File) Operation Sindoor displayed on the screen during a press briefing by the Indian armed forces, in New Delhi on May 11, 2025. PTI The sudden visit to Beijing of Pakistan's deputy PM and foreign minister, Ishaq Dar, would not have been without reason. After all, China is Pakistan's largest creditor, apart from its own investments in the CPEC (China Pakistan Economic Corridor). As per the World Bank, Pakistan owes China $22 billion, which is 22 per cent of its total debt. It is surviving because the Chinese government continues rolling over the repayment. The day it stops, Pakistan will collapse. Hence, it is a Chinese vassal state which must dance to Beijing's tune. STORY CONTINUES BELOW THIS AD Pakistan does not have resources to procure military equipment from the West; hence, it relies on Chinese and Turkish products, most of which are provided at huge discounts, making it the testing ground. For China, Pakistan is a proxy which it exploits to distract India from its Northern front. China has, in recent years, been projecting its military equipment, including aircraft, air defence systems as also artillery as amongst the best globally, though they remain poor copies of Russian products. A copy, no matter how close, can never be as good as the original. That was proved recently. China was irked with Pakistan on two factors which necessitated its summoning Dar. One was the total failure of its famed military products which it was attempting to sell to Africa and Asian nations. It was already facing criticism for its poor-quality fighter aircraft from Nigeria and Myanmar, which grounded their planes due to large scale technical malfunctions. Further, it was projecting these capabilities as a deterrent from any attack by the US in possible retaliation to its attempt to regain Taiwan. The second factor was Asim Munir approaching the US Secretary of State, Marc Rubio, for requesting India for a ceasefire rather than China as also subsequently doing his bidding by having their DGMO approach his Indian counterpart. This displayed that Rawalpindi believes Washington more dependable than Beijing or possibly that it considers failed Chinese equipment as the cause for collapse of its defences. The cold reception accorded to Ishaq Dar on his arrival in Beijing indicates that China is dissatisfied with Pakistan. He was received by a local official and made to travel in a mini-bus. Failure of Chinese military equipment will be blamed on poor Pakistan handling and not on quality. Inputs suggest that China may provide Pakistan with its latest jets at reduced rates, whether Islamabad desires it or not, considering its current experience on Chinese products. STORY CONTINUES BELOW THIS AD Officially the Chinese have projected themselves as neutral in the conflict. Their foreign ministry statement read, 'India and Pakistan are and will always be each other's neighbours. They're both China's neighbours as well. China opposes all forms of terrorism. We urge both sides to act in the larger interest of peace and stability.' Their foreign minister Wang Yi also spoke to his Indian counterpart; however, it meant little. In reality, Pakistani terrorists would never have launched Pahalgam without Chinese concurrence. Islamabad knew Delhi would react violently and needed Chinese backing, which was provided by means of its military products and satellite inputs. China has repeatedly stated that it supports Pakistan in defending 'national sovereignty and territorial integrity.' Further, China would have hoped that any conflict would, apart from being a testing ground for its equipment, push its sales across the world. Chinese bloggers initially joined hands with Pakistan's DGISPR led disinformation network, pushing the Pakistani narrative of it not being involved in Pahalgam, as also success of Chinese military equipment in the short conflict. They claimed downing of multiple Indian aircraft, specifically mentioning the Rafale as it was China's main competitor in the global market. STORY CONTINUES BELOW THIS AD Even today, two weeks after the ceasefire, Chinese social media influencers quote banned Chinese handles, masquerading as western, mentioning India's unwillingness to permit Dassault aviation to verify its aircraft losses. Similarly, China wanted to prove that the Brahmos missile, now being procured by nations in conflict with China in the SCS (South China Sea), including Philippines and Vietnam, could be easily intercepted and were nothing special. Initially the China-Pakistan narrative on downing of Indian aircraft including the Rafale was successful, however with no proof emerging nor discovery of a crash site, the narrative began collapsing. Pakistan's initial success in the narrative war could be attributed to its hard sell on social media and lack of counter by India. Air Marshal AK Bharati, the air force spokesperson gently mentioned that there are losses in conflict, however all pilots are safe. This was misconstrued to Indian acceptance of Pakistan's outrageous claims. Then came the Indian counter. It tore apart China's famed air defence systems by displaying proof of destruction of Pakistan's strategic assets, protected by Chinese air defence systems as also destruction of Chinese manufactured radar and missile sites. The fact that China's air defence system could not destroy a single Indian Brahmos missile added fuel to fire. While Bharati did not mention the quantum of Pak aircraft downed, he hinted at them. Anger in Beijing against Rawalpindi only grew. STORY CONTINUES BELOW THIS AD A few Chinese missiles were also recovered intact. These will now be studied by Indian scientists as also of those of its allies. Its electronics and other gadgetry will open doors to Chinese technology. Adding to the pain was the complete failure of China's famed drones, as also those from Turkey, each of which was intercepted by India. Turkey was shocked to realise that its UAVs, which were successful in a zero air defence environment such as Syria, were a liability in modern warfare. It was worse when reports emerged that Turkey lost two of its UAV pilots operating alongside Pak forces, in an Indian strike. On realizing the reality of their failed equipment, Chinese bloggers switched sides blaming Pak forces for poor handling. What became a greater pain for China was that India employed its domestic products, like the Akashteer air defence system, anti-drone systems and Brahmos missiles to great success. The Akashteer also integrated multiple systems including the Russian S-400, refurbished L-70 and Zu 23 guns. STORY CONTINUES BELOW THIS AD Pakistan was the proxy whom China exploited to prove to the world that its defence industry has come of age. It is also possible that China bribed the Pak army leadership to launch the Pahalgam strike, aware India will be compelled to respond and be given a bloody nose, benefitting both, Pakistan and China. In addition, it would impact the Quad and test US-India ties. However, all its plans backfired. While demand for Chinese products will recede, those for Indian air defence systems and Brahmos missiles are on the rise. Rafale shares, which had dropped due to Pakistan and China's fake narratives, have rebounded to their best levels. On the contrary, Chinese defence stocks dropped to their lowest levels. Once again, while China is compelled to lick its wounds, it would, as usual, throw Pakistan under the bus. The author is a former Indian Army officer, strategic analyst and columnist. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost's views. STORY CONTINUES BELOW THIS AD
