China’s Big Hedge

Karzai Yuanchao

By Raffaello Pantucci

First published by Durham Global Security Institute, May 19 2016

In November of last year, Chinese Vice President Li Yuanchao visited Kabul to celebrate 60 years of diplomatic relations between Afghanistan and China. The most senior level visit to Kabul by a Chinese official since the now-defenestrated former Politburo member and security minister Zhou Yongkang visited in 2012 the visit showed China’s continuing commitment to Afghanistan, whilst also highlighting its limits. Sitting awkwardly in President Xi Jinping’s ‘Belt and Road’ vision, Afghanistan remains a foreign policy conundrum to China who continues to see the potential risks from the neighbouring country, but that Beijing understands it has a particularly central potential role to play and whose proximity negates a completely detached approach. The result has been a hedging policy in which China continues to show some level of commitment towards Afghanistan whilst not going so far as to taking on the mantle of leadership.

The Belt and Road

One of the central topics of conversation during Vice President Li’s visit to Kabul was the ‘Belt and Road’ concept. In official read-outs from the meetings, both sides agreed to work on cooperatively to help develop Afghanistan’s role in the vision and thereby deepen the link between China and Afghanistan. ‘Belt and Road’ is the term used to describe the vision laid out by President Xi Jinping that is on its way to becoming his defining foreign policy legacy. First publicly raised during a visit to Astana, Kazakhstan in September 2013 when President Xi coined the term ‘Silk Road Economic Belt’ to describe the trade, infrastructure and economic corridor emanating from China’s westernmost region of Xinjiang through Central Asia ultimately to European markets. The next month during a speech at the Indonesian Parliament he built on this characterization to announce the 21st Century Maritime Silk Road that recreated the land model advanced across Eurasia out from China’s ports to the seas. Over the next few months these trade corridors proliferated as a China-Pakistan Economic Corridor (CPEC), Bangladesh-China-India-Myanmar (BCIM) corridor, China-Mongolia-Russia corridor and a New Eurasian Landbridge were all increasingly discussed. In fact, the Pakistan corridor was one that had been agreed prior to the September speech and had been raised during a visit by Premier Li Keqiang’s visit to Pakistan in May 2013 and signed in MoU form on a return visit by President Nawaz Sharif in July 2013. But the corridor was only later identified and absorbed under the logic of the grander vision. The logic of these various routes was largely the same and drew from the same structure as the Silk Road Economic Belt laid out in Astana, but over time was increasingly all captured under the rubric of the ‘One Belt and One Road’ (OBOR) and is now abbreviated to the ‘Belt and Road.’

By announcing the initiative in Central Asia President Xi was adding his stamp onto something that had in fact been taking place for over a decade. Since 2001 and the formal founding of the Shanghai Cooperation Organization (SCO) China has increasingly been developing its presence in Central Asia, something that was spurred on even further in the wake of riots in China’s westernmost region of Xinjiang in July 2009. The rioting took place as a result of deep tensions between the minority Uighur population (a community that is close in language, culture and ethnicity to the Turkic speaking populations of Central Asia) in the region and the growing Han Chinese population who have moved west over the past century. These two populations have lived uncomfortably next to each other for some time, with Uighurs increasingly feeling alienated from their own country. This has led to a push back which has expressed itself in a number of forms: people lashing out against the state in anger for real or perceived individual slights or in more organized fashion through terrorist groups and plots. In the first instance much of the violence was isolated in Xinjiang, and in particular in the southern predominantly Uighur corridor. But over time, it has increasingly spread around the country with violent incidents in Kunming and Beijing, an attack outside the country in Bangkok, Thailand and a persistent minority of Uighurs leaving China to seek to connect with extremist groups in Afghanistan, Syria, Iraq and Southeast Asia.

For China, the key to ameliorating the situation in Xinjiang is an economic solution. Seeing economic development as the answer to these problems means a great deal of internal investment, but for this investment to work, Xinjiang needs to have trading partners. Sitting in landlocked Xinjiang, it is easier to look across the Eurasian landmass to Europe and see a quicker route to markets than going to China’s eastern seaboard ports. Consequently, this investment has to spill into Central Asia where Chinese infrastructure companies, banks, and traders have all worked to develop trade corridors to open up Central Asian markets and routes to Xinjiang and Chinese traders. This has happened at every level with small time shuttle traders going back and forth with bags of goods, as well as more entrepreneurial individuals establishing brands and opening factories. Over time, this has led to a steady increase in Chinese presence in the region which has led to not only a re-wiring of the regions infrastructure so that all roads lead to Urumqi (Xinjiang’s capital), but also meant that increasingly China has displaced Russia to become the most consequential actor on the ground.

But all of this has been taking place now for over a decade. Meaning that the nomenclature of the Silk Road Economic Belt (SREB) is a case of President Xi placing his stamp of authority on something that was already underway – the development of an economic and trade corridor sweeping out from China’s west through Central Asia, ultimately to European markets. Seeing it as a successful model deploying foreign policy tools that Beijing could understand how to control (the deployment of capital through linked loans for Chinese firms to go forth and implement infrastructure projects), and based on some theoretical assumptions that are comprehensible. It also has the effect of helping keep the Chinese economy moving as the domestic economy slows down.

But the important thing to remember about the SREB is that it is not a single path, but rather a latticework of routes out of China across Eurasia. There are roads going from Urumqi through Kazakhstan, Kyrgyzstan and onwards through other Central Asian countries, across the Caspian, Russia or Iran to Europe. The China Pakistan Economic Corridor (CPEC) essentially turns Pakistan into a corridor for goods to travel through Pakistan from the ports of Gwadar and Karachi to Kashgar, Xinjiang. Whilst identified under a slightly different nomenclature, the CPEC is very much considered a part of the SREB vision, something exemplified by the fact that one of the first projects taken on by the specially created $40 billion Silk Road Fund established by Beijing was an energy project associated with the CPEC vision. In total, billions have been promised and poured into these two routes (the SREB and CPEC) – with Pakistan alone attracting promises of around $46 billion over a number of years, while President Nazarbayev of Kazakhstan announced some $23 billion worth of deals during his last visit to Beijing in September 2015.

Afghanistan in the middle

Problematically for Afghanistan, however, it is not entirely clear how the country fits into these ‘Belt and Road’ visions for the Eurasian continent. Whilst the central planning authority of China, the National Development and Reform Commission (NDRC), has not actually published a formal route for the ‘Belt and Road’ vision, numerous maps have been printed in the Chinese state press. One thing that is common to most of these is that when they show routes emanating from China going westwards into Central or South Asia, they tend to go around Afghanistan. The SREB and the CPEC are clear corridors of investment and potential trade that China is pushing but they do not need in their current incarnations to necessarily touch down in Afghanistan. In fact, they can for the most part quite comfortably go around the country, following the natural regional geography that favours such routes. From Kashgar through Tashkurgan, down the Khunjerab Pass through Pakistan to Gwadar or Karachi ports, or through the Irkeshtam or Torugart crossings into Kyrgyzstan or the Dzungarian Pass or Khorogos into Kazakhstan and onto Central Asia. Sitting at the end of the Wakhan Corridor, the China-Afghan border is small and surrounded by mountainous areas meaning that the direct link to the ‘Belt and Road’s is not going to be the same as the one in neighbouring Central and South Asia, unless a very specific corridor is developed.

And while this navigation around Afghanistan has not been acknowledged by Beijing – and in some ways is contradicted by the repeated references to the ‘Belt and Road’ during VP Li and other formal China-Afghan interactions – it is visible in the on-the-ground investments and projects undertaken by China in Afghanistan. Currently, China’s projects in Afghanistan are dominated by a series of aid contributions, like the $79 million that VP Li offered during his visit to Afghanistan to build housing in the capital, some similar contributions to Afghanistan’s security through equipment and training (most recently in declarations during a visit by Fang Fenghui, PLA Chief of General Staff ), and a few state owned enterprise (SOE) projects. Some smaller Chinese enterprises have sought to invest in the country, but find themselves hamstrung by a hesitant government and a difficult operating environment.

At the SOE level, the two main extractive projects being undertaken by Chinese firms are the exploitation of copper mines at Mes Aynak in Logar province and CNPC’s oil extraction project in Amu Darya. The Mes Aynak project in particular is one that has become something of an epigram for Chinese efforts in Afghanistan – with a pair of Chinese companies, MCC and Jiangxi Copper, outbidding a number of others to win the contract in 2007, only for them to then sit on the project since then. Underestimating the security costs and overpromising in terms of additional infrastructure that they would produce around the site, the mine has been left unexploited and the company is now attempting to renegotiate the contract as well as backing away from some of the earlier promised infrastructure (that made the bid so attractive to Kabul in the first place ). The company head has met with senior Afghan officials and have been reported as complaining to others that it was pressured into undertaking the project by the central authorities in Beijing. Whilst it is undoubtedly true that the security situation around the area of the mine has gotten worse over time (and global copper prices have dropped), the project has nevertheless become hugely symbolic to many Afghans showing the high levels of Chinese promises that have gone unfulfilled.

The project in Amu Darya has faced fewer difficulties and actually been able to extract some hydrocarbons from the ground, though by choosing a partner in the Watan Group, CNPC failed to engage with the proper local actors when they invested in the project. This led to some difficulties with other power brokers in the north, and led to the project’s delay. Beyond this, CNPC had promised to build a refinery in the north of the country, but this has not been undertaken yet and it remains unclear to what degree the project has actually managed to move forwards. Always seen as a relatively small investment for the company, the belief was that CNPC’s greater interest was to establish a foothold in the north of Afghanistan so that when future fields in the region were to open up they would be in an optimal position to win the contracts. CNPC is particularly bullish about these prospects given its substantial investment across the border in Turkmenistan in what is the same hydrocarbon basin.

Looking beyond extractives, Chinese firms have also bid and won contracts to undertake infrastructure development in Afghanistan. In particular, Xinjiang Beixin won a contract from the Asian Development Bank (ADB) to undertake the rehabilitation of a part of the road from Kabul to Jalalabad. However, the company has encountered difficulties in doing the project and it is unclear at what stage they are at the moment. The company is one that is active across the region implementing ADB projects in difficult environments, but it is unclear they still have an appetite to complete the Afghan project. Atop all of these difficulties at a state owned enterprise level, smaller traders and businessmen spoken to speak of lower level issues, from problems around visa issuances to Afghan businessmen wanting to travel to China, to standards imposed by China to the exports of Afghan goods, to a reticence by China to actively support its traders to go to Afghanistan. And none of this is to speak of the security situation in the country which intimidates even the most fearless Chinese traders.

China the Peacebroker

Amid much fanfare in July 2014 China created its first Special Envoy for Afghanistan appointing a prominent and popular former Ambassador to Kabul, Sun Yuxi, to the role. Coming at a time when the west was clarifying its decreasing role in Afghanistan, the appointment was one that reflected an effort by Beijing to show its commitment to the country. As time progressed, it also became clear that one of Ambassador Sun’s key roles was to help facilitate a ramping up of China’s efforts to act as a peacebroker between the Taliban and the government in Kabul. With the election of President Ghani in October 2014, he immediately signalled the importance he placed on the relationship with China by making Beijing the first capital he visited in his new role on a formal trip. During this visit he not only attended the ‘Heart of Asia’ process meeting hosted by China, but also laid the groundwork for the formal peace talk negotiations with the Taliban at a behind closed doors meeting hosted by the Chinese government.

By early the next year stories emerged that China was playing a more forward role in brokering peace talks and in conversations in Beijing, and officials spoken to at the time highlighted that they were willing to act as hosts for any future peace talks. By May 2015, senior Taliban figures were meeting with representatives from the Afghan High Peace Council in Urumqi. In July another round of talks was held in Pakistan at which Chinese participants also played a role. A further mulitlaterla track two engagement took place in Norway in which both Afghan representatives and Taliban counterparts attended.

In sum, it appeared as though the Chinese supported peace track was one that was bearing fruit, until abruptly in late July 2015 the news was leaked that the Taliban leader Mullah Omar had in fact died back in 2013. This action immediately scuttled the discussions as it set the Taliban in disarray as an internal leadership struggle surfaced as to who would be Mullah Omar’s successor. It also complicated China’s contribution as it abruptly meant it was not clear who exactly the relevant partner to engage with on the Taliban side would be and so therefore where China could play a role. Accusations of blame were passed between Islamabad and Kabul, but the net result was an uptick in violence that made it harder for the Afghan official side to negotiate in full confidence.

Chinese experts and officials spoken to at this time almost immediately fell back into pointing that it was up to the United States to step up and play a stronger role in supporting the Afghan government and national security forces. They further pointed to the fact that until there was greater clarity on the Taliban side about who was being negotiated with, it was unlikely that talks were going to bear immediate fruit. This did not stop Chinese efforts, and while Special Envoy Sun Yuxi stepped down from his role, he was replaced by the recent former Ambassador to Kabul Deng Xijun who seemed set to continue to play a key supporting role in any peace talks.

Keeping Options Open

Beijing has managed to continue to play this role by maintaining contacts with all sides. Its longstanding contact with the Taliban are believed to continue behind closed doors, while Vice President Li’s public calls in Kabul on President Ghani, Chief Executive Office Abdullah and former President Karzai show that they are eager to maintain links to all of the key official players in Afghanistan’s future. This is further reflected on the international stage where China has not only engaged with Afghanistan on a bilateral basis, but also through multilateral vehicles like the Shanghai Cooperation Organization (where China has played a championing role for the country. It was during Chinese Presidency’s that the Afghan contact group was created and later the country was made into an Observer), as well as through multilateral formats like an India-China bilateral where Afghanistan is discussed, an Afghan-Pakistan-China trilateral, and a willingness to engage with the United States to undertake joint training projects in Afghanistan. Most recently, during PLA Chief Fang Fenghui’s visit to Kabul, he spoke about the creation of a sub-regional security discussion between China, Pakistan, Afghanistan and Tajikistan to create a regional alliance against terrorism.

China is choosing not to take sides and using this as a way to guarantee its interests. While it is not clear that Afghanistan needs to fit into the ‘Belt and Road’ vision, it is also equally clear that an unstable Afghanistan has the potential to be a major spoiler for the routes through Central Asia and Pakistan. Instability in Afghanistan is likely to have an impact and cause trouble across the border in both directions and this will have a clearer impact on China’s larger project, and ultimately on Xinjiang. Consequently, China has an interest in stability in Afghanistan and this helps explain its substantial and multifaceted approach towards the country.

In many ways, this is reflective of China’s broader approach in the ‘Belt and Road’ vision where as a result of the increased external economic push Beijing is finding itself playing an ever more influential role in its immediate neighbourhood. Yet Beijing policymakers have not yet apparently entirely understood what exactly what this means for their larger political role in these countries. Nowhere is this more than in Afghanistan where they are finding themselves drawn into an ever more significant role, but are instead electing to hedge. President Ghani’s open lobbying of Beijing from early in his administration shows Kabul’s eagerness to engage with Beijing, something that is being done with Western agreement and support (the US has undertaken joint training programmes with China in Afghanistan, and European capitals are working to engage with China to encourage greater efforts in Afghanistan). But while Beijing is continuing to play a positive role, it is not demonstrating a willingness to step into a strong leadership role, choosing to instead play a significant support role.

This is ultimately unfortunate for Kabul as China has many significant cards to play in Afghanistan – be this in terms of their strong relationship with Islamabad, the massive investment they could pour in and the industry they could mobilize to rebuild the country, or the potential opening up of Iran that they could take advantage of across Afghanistan. Whilst security remains something that China is not able to provide in adequate measure outside its borders, across Central Asia, China’s security presence and efforts are growing highlighting that this is an evolving reaction from Beijing. China’s recently passed counter-terrorism legislation offers a formal framework for Chinese security forces to go deploy outside the country to counter terrorist threats. But Beijing remains a hesitant player in Afghanistan, willing to play a significant role, but continuing to make sure that it has kept its cards close to its chest and left itself a deniable exit in the case of things going in a negative direction. China continues to be Kabul’s closest hesitant friend.

facebooktwittergoogle_pluslinkedin

Post a comment

You may use the following HTML:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>