Posts Tagged ‘Amu Darya’

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.

Another piece for The National Interest, looking this time at China-Afghanistan. A topic I have covered a few times in the past, but this time based off a research trip there. We actually wrote this the day after Obama’s visit to Kabul which took place overnight. We went to bed hearing it was coming and woke up to discover it had been. As mentioned previously, go to my other site for a more focused look at my work on China in Central Asia, and keep an eye for more on this topic as we go forwards.

China Digs in to Afghanistan

May 24, 2012
Archeological excavation near a Chinese mining camp in Aynak. Picture from here.

Our recent trip to one of Kabul’s Chinese restaurants was disrupted by President Obama’s motorcade. It was May Day, and Obama said he had come to the Afghan capital to sign a strategic agreement between Afghanistan and the United States, a document that will delineate the two nations’ interactions for the next few years. The more clearly political intent of the visit, however, was to note the first anniversary of Osama bin Laden’s death and visibly draw a line under U.S. efforts in Afghanistan. It all presaged the next two years of troop withdrawals. As Election Day in November looms, the administration is keen to demonstrate that it has brought an end to U.S. sacrifices in Afghanistan.

Our visit to Kabul, however, was part of a larger project tracking the interests and influence of a power that is digging in for the long term. As the United States and its NATO allies prepare to pack their bags, China is looking toward a long presence in Afghanistan with mining, energy and transport projects. A low-key presence on the ground, Chinese firms and diplomats are thinking and acting in terms that have a horizon beyond 2014. Beijing may not be angling to take over the country, but in contrast to the West’s increasingly unseemly rapid exit, it is setting itself up to guarantee its long-term interests.

China’s Investment in Infrastructure

The most visible evidence of this long-term approach can be seen in the two major projects Chinese firms have already won in Afghanistan. First of these is the famous Aynak copper mine in Logar province. Potentially one of the world’s largest copper sources, it is a Chinese project jointly managed by the Metallurgical Corporation of China (MCC) and Jiangxi Copper with more than $3 billion worth of investment in the war-torn country. Primarily a copper mine, the project contract also was expected to help develop local infrastructure, including a train connecting the region to Kabul, local roads, local schools, hospitals and employment for local Afghans.

But the Chinese project is currently stalled. An archaeological site found atop one of the excavation points has provided the Chinese firms with a good reason to slow production, and a precarious security situation has exacerbated these considerations. The reality is the firm is in no hurry. Copper prices will only go up, and now that the Chinese firm has won the contract and already spent considerable funds (including an initial signing bonus to the Afghan Ministry of Mines of $808 million), they can happily sit on the project until the overall political situation becomes clearer.

Further evidence of China’s long-term interests in Afghanistan can be seen in the China National Petroleum Company (CNPC), which won a contract in December of last year to explore oil blocs in Amu Darya, northern Afghanistan. Putting down an initial investment of some $400 million at terms that are highly favorable to the Afghan government, the assessment from analysts we spoke to in Kabul is that the contract is in fact a testing of the water for the Chinese energy giant. The actual volumes are relatively small for a company of CNPC’s size, and the belief on the ground is the Chinese company is using this to get its foot in the door. Prospectors believe the area is also rich in natural gas, which offers further potentially lucrative contracts for CNPC down the road. The firm has now opened an office in Kabul, staffing it with a mix of local and Chinese employees.

In both cases, these state-owned Chinese firms have made substantial and long-term investments in Afghanistan. In need of routes to extract the materials they mine, they are invested in ensuring that the nation gets the appropriate infrastructure, linking the natural resource projects in Afghanistan to its burgeoning transport network in Central Asia. As mentioned, the proposal for Aynak included the construction of a railroad to Kabul, which would connect to Chinese rail projects in the north of Afghanistan and onward into Tajikistan, Kyrgyzstan and Western China. This network is also set to stretch to the Indian Ocean, the Chinese-built port at Gwadar in Pakistan and the Iranian coast.

Looking Backward

Allowing the Aynak archaeological dig to proceed without haste shows at least some level of Chinese interest in helping develop Afghanistan’s cultural heritage. Afghan and foreign archaeologists and historians repeatedly have highlighted the cross-border cultural links interspersed throughout this region, and the Buddhas at Aynak have some cultural significance to China. These sites are part of China’s history, too. As Chinese officials and analysts told us, this is China’s neighborhood, and they are committed to making sure it works out well.

In stark contrast, President Obama’s visit highlighted the beginning of the end of U.S. involvement in Afghanistan. While discussion of a New Silk Road by Secretary Clinton hearkens back to historic East-West links and suggests a long-term investment in the region, it is China’s new Eurasian land bridge that is actually being built. Linking Afghanistan to Central Asia—by developing direct land links between China, Europe and warm waters in the Gulf using a latticework of rail and road links—shows China is a serious, capable and long-term player in the region.

The West has spoken a great deal of a “regional strategy” as the key to Afghanistan’s future. But China is the one that is actually implementing such an approach, suggesting that in the future Beijing will have much more of an impact on the region than Washington.

Raffaello Pantucci is a visiting scholar at the Shanghai Academy of Social Sciences. Alexandros Petersen is author of The World Island: Eurasian Geopolitics and the Fate of the West. Their joint research is available at www.chinaincentralasia.com.

Image: jeromestarkey