China Won’t Save the Afghan Taliban

March 29, 2022 Topic: Afghanistan Region: Asia Tags: ChinaTalibanISIS-KBelt And Road InitiativeUighurs

China Won’t Save the Afghan Taliban

Far from plunging headlong into Afghanistan, Beijing has adopted a highly cautious, risk-averse approach with some diplomatic engagement but little economic activity.

When Chinese foreign minister Wang Yi touched down in Kabul on March 24, 2022, he was by no means the first such official to visit Taliban-run Afghanistan: his counterparts from Qatar, Pakistan, Uzbekistan, and Turkmenistan had all traveled there since the August 2021 takeover.

That China’s government would wait so long before dispatching its top diplomat is, in a sense, surprising. Some expected Beijing to rush into the power vacuum that emerged after the NATO withdrawal and eagerly incorporate Afghanistan into its sphere of influence.

Breathless media articles predicted that China would swiftly recognize the new Taliban regime, flood Afghanistan with infrastructure investment, and pounce on the country’s natural resources. But, several months on, none of this has happened. Far from plunging headlong into Afghanistan, Beijing has adopted a highly cautious, risk-averse approach with some diplomatic engagement but little economic activity.

Western analysts, Chinese scholars, and even state media—not known for the sobriety of its coverage—warned that Beijing would tread carefully in Afghanistan. However, those voices were drowned out by sometimes hysterical commentary in the American and British press. The Taliban also talked up China’s role, describing Beijing as its “main partner” in reconstruction.

But China has provided relatively little assistance to Afghanistan since the takeover. In October, Beijing announced a $31 million aid package, including food and clothing. Xinjiang province donated a further $47 million in December. And, on top of that, China is pumping $2 million into the United Nation’s response plan.

In total, Chinese aid since August amounts to $80 million, a sum that pales in comparison to the more than $500 million donated by the United States in the same period. Beijing has more or less admitted that there are limits to its generosity in Afghanistan, arguing last October that countries involved in the war should shoulder the burden of reconstruction.

Beijing has long eschewed a leadership role in Afghanistan and shows no signs of assuming one now. During the war, Beijing relied on NATO countries to provide the bulk of security and development assistance. And, with the Taliban back in power, China again expects the United States and other countries to do most of the humanitarian heavy-lifting.

China’s aid, though low, has nonetheless been exploited for propaganda purposes. Images of Chinese trains carrying emergency supplies into Afghanistan are routinely disseminated by the government and celebrated by Taliban sympathizers as proof of Beijing’s beneficence.

It is not just Chinese aid that is limited. Business activity is also thin on the ground. Firms are reluctant to get embroiled in a high-risk market like Afghanistan. A Chinese scholar visited and noted that, although violence had dropped, terror attacks were ongoing, and “major hurdles and risks” remained for companies wishing to invest there.

Afghanistan’s political stability is also precarious. Only a fool would bet on the Taliban regime’s long-term survival. For now, the group appears to be in control. But it faces challenges from ISIS-K and other militant groups, not to mention an overwhelming economic and humanitarian crisis. The movement is also experiencing internal tensions.

It was suggested that China might eventually occupy Bagram airbase with troops and Belt and Road workers. A photograph emerged last year purportedly showing the arrival of Chinese personnel at the base, but satellite imagery told a different story. There is no evidence that China’s military footprint in Afghanistan has increased under the Taliban.

Beijing appears reluctant to enter the Afghan arena, and well it might be given the disastrous history of foreign interventions in the country. China’s security assistance to the previous Afghan government was always limited, and it is unclear how much, if any, of that assistance has been maintained since the takeover.

The notion that Afghanistan will soon become a vibrant part of the Belt and Road Initiative (BRI) is, quite simply, laughable. True, Afghanistan joined the initiative in 2016 and received a tiny pledge of investment, but no progress was made. And, in any case, the regional BRI land routes move through Central Asia and Pakistan, bypassing Afghanistan.

In fact, Afghanistan is peripheral to China’s connectivity plans. Mei Xinyu, an economist at China’s Ministry of Commerce, penned an article shortly after the Taliban takeover arguing that Afghanistan was irrelevant to the BRI and that “large-scale investment” there should be “delayed.”

Moreover, the BRI has been slowing, plagued by debt crises, corruption allegations, environmental problems, and the coronavirus pandemic, making it unlikely that China would expand the initiative into a devastated country like Afghanistan which can barely print its own currency, let alone service foreign debt.

In recent years, China has dialed back its BRI lending, favoring smaller, less risky projects. The BRI is not a free lunch—it is mostly funded by loans, often at high rates, and Beijing expects its debts to be repaid. What is the likelihood of Chinese banks lending to a country like Afghanistan that is in the grips of total financial meltdown?

It has also been suggested that China will link to Afghanistan via the country’s land border, but the frontier is tiny and almost impassable owing to very remote terrain. China, wary of terrorists and drug traffickers, has closed the area to trade and there is no road on the Afghan side, despite plans to build one under the previous government.

An air corridor transporting pine nuts to China resumed in November, but that will not solve Afghanistan’s economic problems. Under the former government, which launched the pine nut scheme, Sino-Afghan trade was minuscule, far lower than Afghanistan’s trade with India, for example.

Threats from ISIS-K and other militant groups are a major impediment to BRI investment in Afghanistan, and the increasingly dangerous situation in neighboring Pakistan, which hosts the largest Belt and Road corridor and has seen a spate of attacks on Chinese workers, has made Beijing even more sensitive to security risks.

It has long been suspected that China will grab Afghanistan’s copious natural resources. But this is far-fetched. The country lacks the basic infrastructure required for resource extraction, such as a railway network, adequate roads or a reliable supply of power and water, and Afghanistan’s minerals tend to be concentrated in remote parts of the country.

China certainly needs resources to feed its vast economy, but it can acquire them from other places. Chinese firms have quite advanced lithium investments in Latin America, for example. While there are indeed rare earth elements in Afghanistan, China has much larger deposits of the same elements within its own territory.

China’s extraction projects in Afghanistan saw little progress under the former government. The Chinese copper mine at Mes Aynak was delayed by insecurity, contractual issues, and other seemingly intractable problems. An oil and gas project in Amu Darya basin also failed, leading the China National Petroleum Corporation to pull the plug after the Taliban takeover.

The Taliban is in talks to resuscitate Mes Aynak, but the Afghans are apparently keen to preserve the previous contract, which was a very bad deal for the Chinese, imposing high royalties and requiring the construction of a railway and power plant. Added to that, the copper deposits lie beneath an ancient Buddhist site, which could be damaged by mining activity.

Having destroyed two giant Buddhist statues during its previous spell in government, the Taliban now claims it wants to protect the artifacts at Mes Aynak. The Chinese are also reluctant to damage the remains, having strongly opposed the Taliban’s destruction of the Buddhas in 2001. China seeks to outcompete its rival, India, as a guardian of Buddhist faith and heritage.

One way of safeguarding the antiquities would be to dig underground tunnels beneath the ancient city, but the Chinese have deemed that solution too costly. The Taliban seems intent on relocating the remains, perhaps to the Kabul Museum, but it might not be possible to remove everything, and in any case about 30 percent of the site still needs to be excavated.

Both sides are showing signs of frustration. The Taliban minister of mines and petroleum recently told the Wall Street Journal that he would prefer to work with American companies instead of Chinese firms, while Beijing’s ambassador said bluntly that “better terms were needed to make the investment worthwhile.”

True, sky-high commodity prices following the Russian invasion of Ukraine may incentivize the Chinese to take the plunge in Afghanistan. Added to that, China might need an alternative source of copper if imports from Russia are choked off by sanctions. But that doesn’t mean its companies can simply defy gravity and wish away the hurdles that lie in their path.

Indeed, conditions under the Taliban are in some ways even worse for investors than they were during the republic, with a brain drain of Afghan technicians, the removal of foreign aid (75 percent of the previous government’s operating budget), freezing of Afghan assets, massive capital flight, and—last but not least—U.S., EU, and UN sanctions against many high-ranking Taliban.

Chinese firms are not magically immune to sanctions. While China has managed to circumvent measures against Iran and North Korea, to some extent, its trade with those countries has dropped significantly. Chinese business activity in Syria, another heavily sanctioned market, is low.