Archive for the ‘Nikkei Asia Review’ Category

More catch up posting now from the previous few weeks. This one was written a little earlier, but ran in Nikkei Asian Review just as Kabul fell after excellent editor Jason pushed it through to be timely. Written in irritation at the overinflated narratives that kept emerging in the wake of Taliban visit to Tianjin, it attracted a surprising amount of attention and generated a lot of subsequent media hits which I post in due course. It is a topic which I have covered a great deal in the past, and is likely to become more relevant as time goes on. There is a whole chapter on China in Afghanistan in my upcoming book, which I have finally seen some draft covers for which is exciting. More on that in due course!

The myth of Chinese investment in Afghanistan

Little evidence that war-torn country is a strategic priority for Beijing

Taliban fighters take control of Afghanistan’s presidential palace in Kabul on Aug. 15: they are certainly not Beijing’s preferred choice.   © AP

Raffaello Pantucci is a senior fellow at the S. Rajaratnam School of International Studies in Singapore and a senior associate fellow at the Royal United Services Institute in London.

Among the many overblown narratives bouncing around amid the chaos of the Taliban victory in Afghanistan is the notion that China is champing at the bit to sweep in and pluck the country’s economic riches once the country has been cleared of its Western impedimenta.

There is no doubt that Beijing’s companies will look at some of the resources in Afghanistan as potential opportunities, but there is little evidence that this is a strategic priority for Beijing. China has played a surprisingly limited economic role in Afghanistan until now, and it is hard to imagine this is going to abruptly change in the face of instability implicit in the wake of the Taliban takeover.

Up until now, Beijing has been able to maintain good relations with both the Afghan government and the Taliban at the same time, and both sides recognize that whoever ends up in charge, China will still be their neighbor. And as the world’s second-largest economy, it is clearly a relationship they hope to benefit from.

This narrative is not new. The Taliban doubtless recall that their own earlier minister of mining was in a meeting with a Chinese delegation in Kabul when the Sept. 11 attacks took place in 2001. Afghans in general been encouraged by the fact that the biggest putative bilateral investment projects in the country since the U.S. invaded have been Chinese.

In 2007, the Metallurgical Corporation of China and Jiangxi Copper won a contract to develop and exploit a copper mine in Mes Aynak, while in 2011, Chinese energy giant China National Petroleum Corp. won a tender for an oil field in Amu Darya in the north of the country, sparking hopes that this might finally bring a measure of economic independence.

Yet the two projects have since stalled, with the Afghan government taking back the Amu Darya concession, while Mes Aynak has become a byword for broken Chinese dreams in Kabul. In both cases, the much-vaunted agreements for all ancillary infrastructure — a railway line, power station and refinery — never materialized.

There is no doubt that Afghanistan’s mineral riches would be attractive to Chinese companies on the lookout for untapped resources to feed insatiable domestic demand. Yes, Chinese companies may have a higher risk tolerance than some of their Western counterparts, but in the wake of two big project failures, why would a potentially more unstable Afghanistan suddenly be more attractive? Beijing might be in discussions with the Taliban, but China has little reason to force its companies into the country.

When it comes to infrastructure, Chinese investment in Afghanistan is also limited. There has been some hospital construction, housing in Kabul, several small-scale factories and some new buildings for Kabul University — and possibly a military base in Badakhshan — but connectivity infrastructure such as roads, bridges, rail and ports has been in short supply.

Chinese construction companies have built roads and more in Afghanistan, but most of this has been done through international institutional financing, rather than being driven by Beijing. Chinese contractors have won competitive bids and delivered them under dangerous circumstances.

As for extending President Xi Jinping’s signature Belt and Road Initiative, the little that has been advanced has been mostly rhetorical or just concepts floated by Beijing to connect the China-Pakistan Economic Corridor with Afghanistan. But as far as it is possible to tell, little economic energy or effort has been put into turning this into reality. Beijing has refurbished some border posts to facilitate the transit of goods between Afghanistan and Pakistan, but this is certainly not the weighty economic infrastructure projects being advanced in Pakistan or North and Central Asia.

The one thing that the Chinese Embassy in Kabul has focused its attention on recently is pine nuts, celebrating the creation of an air corridor to facilitate their export to China. While such opportunities are to be encouraged — they create lots of jobs in what is still a heavily agrarian society — this is hardly a game-changer.

Pine nuts bound for Shanghai are loaded into a Turkish Airlines aircraft at Kabul’s Hamid Karzai International Airport in November 2018: such activities create jobs but are hardly a game-changer.   © Afghan Presidency Press Office/Anadolu Agency/Getty Images

None of this is to dismiss China’s aid efforts in Afghanistan. The key point is that aid has been limited, with the few substantial achievements tending to be driven by Chinese companies and entrepreneurs operating on their own. Notwithstanding serious and high-level Chinese engagement, the Mes Aynak project remains in limbo, suggesting a limit to how far China wants to force its companies to operate within the country.

Moreover, all of this took place while the country was at least substantially under the command of a government that possessed a degree of international accountability and expertise. While past experience has shown a willingness by Chinese companies to engage with the Taliban, they are certainly not Beijing’s preferred choice. The assurances that Chinese investors would need to proceed further will likely take some time to materialize.

The sad truth is that China is a missed economic opportunity for Afghanistan. And there is little chance that the instability that will follow a Taliban takeover is going to change that.

A new outlet for a well-trodden topic. Exploring the China-Pakistan relationship for Nikkei Asian Review, using the recent terrorist atrocity in Pakistan against a busload of Chinese engineers as the way into the topic and the tensions around it between Beijing and Islamabad. It has generated some chatter online which is always good to see, at least someone is reading! Undoubtedly more on this topic to come.

China is a habit that Pakistan cannot break

Ties with Washington further strained by the need to declare fealty to Beijing

Imran Khan, pictured in Beijing in November 2018: the Pakistani Prime Minister is increasingly China’s staunchest defender on the international stage.   © Reuters

An attack on a busload of Chinese workers en route to the Dasu Hydropower plant in Pakistan has once again highlighted the complex precariousness of the relationship between Beijing and Islamabad.

The rapid comment by the Chinese Ministry of Foreign Affairs citing terrorism as the reason, while their Pakistani counterparts suggested an accident of some sort, did little for the dead Chinese engineers and their Pakistani guards. But it did reveal the evident tension between the two powers, in stark contrast to the public rhetoric surrounding their relationship. Rust, it seems, is weakening the bond between these iron brothers.

The most curious aspect of the tension is paradoxically visible in the public displays of fealty from Prime Minister Imran Khan, who is increasingly China’s staunchest defender on the international stage. While it is not surprising that he would agree with his most important ally’s perspective, it seems odd that he feels the need to do so repeatedly in such an ostentatious way.

Many other countries that enjoy strong ties with China have successfully avoided situations requiring them to make such displays.

While the declarations may win favor in Beijing, they are undoubtedly going down badly in Washington. Since U.S. President Joe Biden was sworn in, he has not engaged with his Pakistani counterpart in any public way. The only high-level in-person engagement has been between National Security Adviser Jake Sullivan and his Pakistani counterpart Moeed Yusuf.

At the same time, U.S. Defence Secretary Lloyd Austin has visited Delhi, and Secretary of State Anthony Blinken has hosted India’s Foreign Minister Subrahmanyam Jaishankar in Washington. When Pakistan’s Foreign Minister Shah Mahmood Qureshi visited New York in May, he was able to meet with members of the Senate and Congress, but, publicly at least, there were no meetings with administration officials.

Biden himself has long-held concerns about Pakistan. As vice president in Feb. 2010, Biden told CNN that Pakistan was a large country with a “significant minority” that was radicalized and was not “a completely functional democracy in the sense we think about it,” adding that its status as a nuclear power was his biggest “foreign policy concern.”

As Washington pivots from the war on terrorism to confrontation with Beijing, Islamabad risks being left stranded in the middle. Always an awkward U.S. partner in Afghanistan, the U.S. withdrawal means this is no longer a primary consideration for Washington.

In the years ahead, Washington is likely to look at Islamabad through the lens of its growing tensions with Beijing, with Pakistan seen to be sitting firmly on China’s side.

All of this comes as Islamabad has been trying to signal, often through U.K. contacts, that it is eager to find ways of building a more constructive relationship with Washington. The problem is that Pakistan is no longer as important to Washington as it once was, especially as it is seen as being unlikely to do much to support attempts to contain China.

Islamabad has, however, been playing fast and loose when it comes to its relationship with Beijing. Articles in the Pakistan media discussing the China-Pakistan relationship are often peppered with off-the-record dissenting government voices hinting that significant parts of the Pakistani establishment feel they are locked in a bad relationship. Perhaps this explains why Beijing saw the need to send a new ambassador with strong party links, rather than the traditional South Asia expert.

People wheel a gurney towards an ambulance outside a hospital in Dasu after a bus with Chinese nationals on board plunged into a ravine following a blast on July 14.   © Reuters

Irritations are also building on the security front with the attack on the busload of engineers in Dasu coming after a separate incident in Quetta which came close to hitting the Chinese Ambassador, as well as earlier targeted attacks by Baluchi and Sindhi separatists on Chinese nationals and projects. Beijing is doubtless not shocked by these, but the loss of life in the Dasu incident was a step too far.

Signs that Beijing is losing patience include thunderous Global Times editorials warning Pakistan to get its house in order or China will explore deploying forces. Officially deploying a team of investigators immediately to look into the attack and being quicker than Pakistan to blame terrorists for the Dasu attack all illustrate a willingness by Beijing to start assuming the worst. The decision to cancel the next meeting of the Ministerial Joint Coordination Committee of the China Pakistan Economic Corridor is the clearest signal Beijing can send about its displeasure.

This hardly speaks to a relationship that is “higher than the mountains and deeper than the oceans” as diplomats on both sides like to sing. It speaks instead of a relationship where Beijing is increasingly frustrated with a partner that has failed to deliver and appears preoccupied with mending fences with China’s principal adversary.

The bigger problem for Islamabad, however, is that their attempts to get Washington’s attention are not getting through, putting them in the position of having to continually emphasize their fealty to Beijing. Unfortunately for Pakistan, such behavior will only further deepen the rupture with Washington.

Islamabad has backed itself into a complicated position that it will struggle to extricate itself from anytime soon.

Raffaello Pantucci is a senior fellow at the S. Rajaratnam School of International Studies in Singapore and a senior associate fellow at the Royal United Services Institute in London.