September 12, 2021

Challenge and Risk for China in Afghanistan

B Arjun

AFGHANISTAN’S future remains in a state of flux. The US withdrawal has added to the uncertainty in the region. Afghanistan shares a 90 km border with China and this makes Beijing concerned about the developments in Kabul as instability and violence in Afghanistan directly impinges on its security and strategic interests. 

Since the US occupation of Afghanistan in 2001, China has maintained low profile in the country, occasionally providing financial aid to the Afghan government and making humble efforts to boost trade between the two countries. 

As former US President Donald Trump started talking about ‘Afghan withdrawal’ China began to step up its involvement. In 2017 the China-Afghanistan-Pakistan trilateral cooperation dialogue was established to help reduce tensions in Pak-Afghan relations. The fourth trilateral dialogue was held in June 2020. The future of the trilateral is dependent on the Taliban's attitude towards establishing peace in the region.

“In 2019, China was the fifth-largest export destination for Afghan goods, after the United Arab Emirates (UAE), Pakistan, India, and the US. It was also the fourth-largest source of imported goods for Afghan markets, following UAE, Pakistan, and India.”

In the wake of American withdrawal and sudden surge in the political fortunes of the Taliban, Beijing has adopted a pragmatic approach towards its neighbour. It is not reluctant to engage with Taliban and has expressed its desire to cooperate with any government that is not inimical to China’s domestic and regional interests.

Ahead of the Taliban takeover of Afghanistan, China had hosted top Taliban leaders led by Mullah Abdul Ghani Baradar, the group’s chief negotiator. China’s foreign minister Wang Yi has stressed that Beijing “would not interfere in the internal affairs of Afghanistan”. Wang Yi has also appealed to the various Afghan factions to avoid conflict, accelerate intra-Afghan dialogue and prevent their country from becoming another terror hub. Yi has also urged Taliban to eschew its entire links with forces of terrorism and behave as a responsible political unit capable of leading the destinies of Afghanistan.

The Taliban has assured China that it will provide a stable government and is looking forward to Chinese investments in Afghanistan as China has already invested huge amounts in Pakistan, Afghanistan’s neighbour.

It is reported “the US has frozen nearly $9.5 billion in assets of Da Afghan Bank (DAB), the Afghan central bank, and stopped shipments of cash to Afghanistan" while the IMF, too, has barred access to money.

According to Taliban, China is its “most important partner and represents a fundamental and extraordinary opportunity for us, because it is ready to invest and rebuild our country".   The Taliban understands that its partnership with America is tenuous. And for Chinese support, Taliban would have to emerge as an effective and legitimate political actor capable of running the affairs of a nation-state.

According to The New York Times, “With the US withdrawal, Beijing can offer what Kabul needs most: political impartiality and economic investment. Afghanistan in turn has what China most prizes: opportunities in infrastructure and industry building – areas in which China’s capabilities are arguably unmatched – and access to $1 trillion in untapped mineral deposits."

For China, Taliban rule in Afghanistan brings both opportunity and risk. Regional security is of concern for China because it wants Xinjiang protected and its massive investments, worth $62 billion in Pakistan to remain safe from terrorist attacks.

In July this year, nine Chinese engineers working on Dasu hydroelectric dam were killed in a blast on a Chinese shuttle bus in northern Pakistan. Earlier in April, the Pakistani Taliban carried out a suicide bombing at a hotel where the Chinese ambassador was staying. China has refrained from blaming Afghan Taliban for Dasu attacks. Beijing makes a clear distinction between Afghani and Pakistani Taliban. It considers the latter to be a terrorist outfit and the former as “a pivotal military and political force,” China expects Taliban to tame Tehreek-e Taliban Pakistan (TTP), and make China-Pakistan Economic Corridor (CPEC) safer. 

Despite the security situation, Beijing wants to deepen its economic involvement in Kabul because it sees Afghanistan as an important transport link in the Belt and Road Initiative (BRI) plans.

A road project, worth US$5 million, connecting Kabul with China through the Wakhan corridor is already underway. However, most of the previous BRI projects had failed to take off. For example, the copper mining contract between the Chinese State-owned company MCC and the Afghan government in Afghanistan died its natural death due to immense security risks.

Despite the hurdles and the lurking US shadow in the region, the Chinese are keen to extend the China-Pakistan Economic Corridor, to Afghanistan.  It is largely for economic reasons that Beijing envisages creating a safe and secure trade environment before recommencing investments. Since 2015, almost 97 per cent of original Afghani goods exported to China enjoy zero-tariff.   

The new Taliban dominated government in Kabul is expected to sign the double taxation avoidance agreements (DTAs) and probably give fresh impetus to the existing China-Afghanistan Joint Committee on Economics and Trade (JCET), which has been dormant since 2017. 

In August 2014, China and Afghanistan signed the exchange notes on granting zero-tariff treatment to the exports of some Afghan goods to China. Since 2015, 97 per cent of goods originated from Afghanistan can enjoy zero-tariff when exporting to China.

The new regime in Kabul as well as Beijing seeks stability, peace and trade between the two countries. The question is, will the US allow the relationship to flourish? Washington is expected to demand greater compliance from both Kabul and Beijing on human rights issues.  The US may not use military means but it would certainly use the economic sanctions as one of the tools to control the Taliban from getting too close to China. US with its past experience of handling extremist elements in Afghanistan and West Asia may polarise Taliban and instigate in-fighting among various Afghan factions. China is also worried that the US may use proxies to cause political turmoil in Xinjiang.

Overall, the world is worried that independent Afghanistan should not become another Syria where various multinational forces are vying with each other to prove their military effectiveness and jostling to achieve their strategic objectives.