CPEC extension in Afghanistan faces challenges

China is encountering several roadblocks in the implementation of its newly proposed projects in Afghanistan, particularly the extension of the China-Pakistan Economic Corridor (CPEC). The primary reason for these delays is the vulnerable security situation in both Afghanistan and Pakistan.

Additionally, it appears that Beijing is more focused on constructing a positive narrative of aiding Afghanistan through its bilateral and regional economic initiatives and less on implementing them. Furthermore, ever since the withdrawal of foreign forces and the Taliban’s takeover of Kabul in August 2021, China has been criticising the United States for freezing Afghanistan’s assets.

On May 9, the foreign ministers of China, Pakistan, and Afghanistan convened in Islamabad to discuss the extension of CPEC into Afghanistan.

 During the meeting, they also reaffirmed their support for ongoing multilateral infrastructure projects, which include the Central Asia-South Asia (CASA) power project and the Trans-Afghan Railways.

While the CPEC extension had been anticipated for quite some time, the official declaration has possibly provided China with significant diplomatic leverage in the region. However, the decision is primarily driven by China’s strategic positioning against the United States.

The increasing incidents of terrorism and violent border skirmishes between Pakistan and the Taliban have further destabilised the region, posing challenges for China’s long-term plans in the region.

 More importantly, over the past ten years, the CPEC has failed to achieve its original goals, leading to serious doubts about the project’s long-term financial viability.

 Adding to these concerns, China’s Belt and Road Initiative (BRI) is already facing international accusations of employing Beijing’s infamous “debt trap” policy on weaker developing economies.

 Nevertheless, despite all these allegations, China has continued to secure new projects in Afghanistan since August 2021.

On January 5, the Taliban regime signed an agreement with the Xinjiang Central Asia Petroleum and Gas Company (CAPEIC), a subsidiary of the state-owned China National Petroleum Company (CNPC). This agreement allows for the extraction of oil from the Amu Darya basin, with China committing to invest USD 150 million annually for three years, with a planned increase to USD 540 million for the entire 25-year duration of the contract.

 Subsequently, on April 13, Afghanistan’s Ministry of Mines and Petroleum announced that the Chinese company Gochin had expressed interest in investing $10 billion in Afghanistan’s lithium reserves.

 Meanwhile, reports indicate that China is engaged in discussions with the Taliban to renegotiate the terms of a 2008 contract for mining copper from the Mes Aynak reserves in Logar province.

It is evident from these agreements that China has a keen interest in exploiting Afghanistan’s vast natural resources, including rare minerals like Lithium and Cobalt.

With the US exit in 2021, China saw an easy opening to expand its presence in the war-torn country, using the pretext of providing economic stability to the Taliban-led Afghanistan. The agreement concerning oil extraction in the Amu Darya basin marks the first significant foreign investment since the Taliban’s return to power in Afghanistan. Still, it is worth noting that major Chinese projects in the past, including the much-touted Mes Aynak Logar copper mining project, failed to materialise. In June, the Taliban’s Mining and Petroleum Minister, Shahabuddin Delawar, called upon the Chinese company to commence “practical” work on the development and operation of the Aynak copper mine.

Beijing has claimed for years that stability in Afghanistan is of utmost importance, not only for the success of Chinese investments and economic interests but also due to reported implications for the security situation in China’s disturbed Xinjiang region. Since the 1990s, Beijing has expressed concerns over alleged Uyghur “separatism” in Xinjiang, and it perceives an increasing risk associated with this issue.

 According to reports, some Uyghur militants, purportedly affiliated with the East Turkistan Islamic Movement (ETIM), have found refuge in Afghanistan, forming alliances with the Taliban, al-Qaeda, and now the Islamic State (IS).

 However, many experts argue that the ETIM threat to China is exaggerated. Notably, the US government removed ETIM’s designation as a terrorist organisation in October 2020, citing a lack of evidence for its continued existence.

 Despite this, China continues to view alleged Uyghur militancy in Afghanistan as a significant threat. This security concern gives China a convenient pretext to increase its presence in Afghanistan and strengthen ties with the interim Taliban government.

Beijing has maintained extensive diplomatic contacts with the Taliban leadership for years, and although official recognition has not yet been extended, the Islamic Emirate is permitted diplomatic representation in China.

 However, since the Taliban’s return in 2021, Afghanistan has faced financial difficulties, unable to proceed with economic and infrastructure development due to frozen assets abroad, lack of foreign aid, and sanctions.

 Seeing an opportunity, China marketed the CPEC extension to the Taliban to attract potential investment and business into Afghanistan. Interestingly, many Afghan officials claim that Chinese businessmen visit the country, make inquiries, and conduct feasibility studies but often do not return to invest.

This trend is expected to persist, leading to regular roadblocks and delays for any CPEC-related developments in Afghanistan.