China is one of the few countries working to expand its dealings with the Taliban government in Afghanistan, as it hopes to expand its use of the country’s natural resources while enhancing its geopolitical security.
In mid-2021, China welcomed the Taliban delegation, demonstrating its willingness to recognize the Taliban government at a time when the United States indicated its expected withdrawal. And at the beginning of January 2023, a Chinese company agreed to sign a 25-year contract to extract oil from Afghanistan. There is also the possibility that a Chinese government-owned company could sign a contract to extract copper from Afghanistan.
It is not surprising that at a time when Western countries have withdrawn almost all of their relations with Afghanistan, China seems ready to increase its commercial presence in this country. And although Afghan policy has traditionally not been a priority for Chinese diplomacy, it now sees it as an opportunity.
Although it was the largest foreign investor in Afghanistan in the past, and its strategic partner, China’s relations with this country were relatively limited in the past compared to other countries, such as Russia and the United States.
Some argue that China’s policy towards Afghanistan was driven by domestic economic interests and security issues. However, over the past decade or so, China has adopted a more assertive foreign policy. At the same time, commercial interests have increased China’s engagement with Afghanistan.
Useful natural resources
Active engagement with Afghanistan could enable China to benefit in several ways. It is known that Afghanistan is one of the richest countries in the world with resources, but its security conditions prevented the development of this sector. Some estimates put the value of untapped mineral deposits, such as copper, iron and lithium, at around £811 billion. As for crude oil, there are about 1.6 billion barrels in Afghanistan. As for natural gas, Afghanistan has about 16 trillion cubic feet of it, and it also has 500 million barrels of liquefied natural gas.
However, Chinese activities in the mineral sector in Afghanistan have stopped. At the end of 2010, for example, security concerns hampered Chinese activities and projects exploiting mineral resources in this country.
There are other gains related to working in the natural resources sector. China’s domestic energy supply is limited by geology, energy density, and its dependence on other countries, which has led to “energy concerns.”
Accordingly, access to Afghan natural resources not only provides economic incentives to China, but also increases its commercial presence in the country. This has the potential to help mitigate its growing energy demand.
China’s increased engagement with Afghanistan is among China’s priorities in order to maintain energy security in the short term, but it could become a key strategic component of its energy needs in the long term.
The fragile security situation in Afghanistan affected China in two ways. First, China worried that years of instability in Afghanistan could spread to its territory.
Secondly, the instability emanating from Afghanistan negatively affects the development of the Chinese Belt and Road Initiative, which is working to establish trade routes with the rest of the world, because two of its main corridors pass along Afghanistan. As a global infrastructure and development investment plan that includes about 60 countries, including some from East Asia and Europe, this initiative represents a vehicle for China to expand its global economic and political influence. For China, this expansion is the ambition of the great powers.
Trade frictions with the United States and other countries have increased pressure on China to open new markets for its goods. The Belt and Road Initiative is a channel for developing new export markets, which will ease trade pressures. Although the Afghan consumer market is rather small, it is not exploited by Chinese goods, especially those produced in the western regions of China.
An additional bonus is geopolitics. After decades of “neighboring” hegemony, but with a degree of reluctance to get involved in Afghan issues, it seems that China is ready, to some extent, to fill the power vacuum resulting from the withdrawal of Western countries from Afghanistan.
The large presence in Afghanistan provides China with an opportunity to enhance its regional power and influence. And by doing so, it can contribute to bringing stability to Afghanistan. Thus, such a role could help improve China’s image as a responsible rising superpower.
Until now, China is still not convinced to play a security role in Afghanistan, because this might lead to friction with other countries, and increase its exposure to threats from global terrorist groups. However, any change in its strategy to increase the economic stability of Afghanistan could contribute to reducing China’s security vulnerabilities.
• Access to Afghan natural resources not only provides economic incentives to China, but also increases its commercial presence in the country.
• Trade frictions with the United States and other countries have increased pressure on China to open new markets for its goods.
• China’s increased engagement with Afghanistan is among China’s priorities in order to maintain energy security in the short term.
Jose Caballero… Economist – Center for International Competition