The Future of Afghanistan-China Relations – Analysis

China is actively seeking to redefine its relations with Afghanistan, coinciding with its desire to fill the power vacuum that will emerge as a result of the NATO troop withdrawal next year. China has largely remained a bystander in Afghanistan — waiting for the conflict to play itself out and waiting silently in the background for the right opportunity to enter the arena. Consistent with its approach to foreign policy in many parts of the world, when the right moment presents itself, China emerges from the shadows to scoop up part of the economic prize that awaits. Such an approach has served China well in places like Iraq, where it let the West fight the battle, then swooped in to scoop more than a quarter of the oil and gas contracts. The China National Petroleum Company (CNPC) was the first foreign firm to sign an oil contract with the new government of Iraq in 2008.

Beijing's plans for Afghanistan reflect a broader agenda for "Greater Central Asia" (Afghanistan plus the five Central Asian Republics), whereby China seeks to consolidate control of the region's natural resources. China's Foreign Affairs Minister, Yang Jiechi, has summarized China's approach to Afghanistan as: 1) security and stability; 2) economic development; 3) political reconciliation; and 4) greater international cooperation.

Security and stability topped the list because of Beijing's preoccupation more generally about maintaining stability in Western China. Beijing is concerned about Islamist insurgents and Uighur separatists spilling across the 46-mile Afghanistan/China border. Afghanistan borders Xinjiang Province, which is home to millions of Muslim Uighurs, where demands for an independent homeland in Western China have created tension for decades. While many independent human rights organizations have concluded that China frequently exaggerates the Islamist/separatist threat to justify its oppression of political dissent in Xinjiang, links between the East Turkestan Islamic Movement (ETIM), the Islamic Movement of Uzbekistan and al-Qaeda have been confirmed by United Nations reports.

Eastern China's growing demands for energy resources depend on stability in Xinjiang, especially as pipelines from Central Asia transit through this province. Preventing Islamist insurgents from Afghanistan, Pakistan and other neighboring states from entering Western China therefore remains a top priority for the Chinese government. If Afghanistan were to become a safe haven for the ETIM, it would constitute a major geostrategic concern from Beijing's perspective.

In addition to Islamic extremism and Uighur separatism, the trafficking of narcotics throughout the region poses a challenge for China. According to China's Ministry of Public Security, by 2007 the amount of heroin smuggled into China from Afghanistan, Iran and Pakistan exceed the total amount trafficked in between 2001 and 2004. Moreover, China's primary concern regarding the heroin trade in Afghanistan stems from the narco gangs' alliance with the Taliban, which China does not want to re-assume power after the NATO withdrawal. Efforts to improve bilateral relations between Beijing and Kabul to strengthen cooperation on security measures were made official last June through signature of a Declaration. The Declaration's stated objective of combating "terrorism, separatism and extremism" clearly reflects Beijing's concerns about turmoil in Afghanistan creating instability in Xinjiang.

China sees Greater Central Asia as critical to its quest for enhanced access to natural resources. The Wakhan Corridor, an ancient trade route, is of immense economic and geopolitical value, as it grants China access to Afghanistan's vast lithium, copper, iron and cobalt deposits — with an estimated value of $1 trillion. In addition, Afghanistan is estimated to have significant oil and gas deposits in its northwest region. Several months ago, a Canadian company (Terraseis) discovered a large oil field in between the Khan Charbaugh and Aqeena border districts. In October 2012, CNPC began producing oil in the Amu Darya field in neighboring Sar-e Pol province. The South Yolotan-Osman natural gas field in southern Turkmenistan holds at least four trillion cubic meters of natural gas, and there is speculation that this gas field extends into Afghanistan.

Last June, Karzai and CNPC Chairman Jiang Zemin met to discuss a Turkmenistan-Afghanistan-Tajikistan-China (TATC) natural gas pipeline, however, no agreement has been reached, as Tajikistan and security considerations in Afghanistan pose immense risks to the viability of the idea. Kabul has issued reports of armed insurgents disrupting the CNPC's exploratory activities and demanding a share of the company's proceeds. As Beijing seeks no military involvement in Afghanistan, protection for TATC's section in Afghanistan will depend on the Afghan National Army (ANA) and the NATO-led International Security Assistance Force (ISAF). Given the dismal state of readiness of the ANA, China is unlikely to have much confidence in indigenous security for the project.

Moreover, as a Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline is progressing, it remains unclear if TATC would be seen as a viable additional pipeline. But it is to Beijing's advantage that TAPI would transit Taliban strongholds in Afghanistan, including the Pashtun-majority territories of Herat, Helmand and Kandahar. TATC could thus offer Afghanistan a safer theoretical transit route that would avoid areas where the Taliban is expected to retain influence after 2014. Clearly, a "greater game" is in play as China, India and the U.S. are opposing stakeholders regarding which countries' energy security interests will be most catered to by Afghanistan. President Karzai sees China as a crucial partner in gaining greater autonomy from the West. While China's energy demand holds the key to Afghanistan becoming a net-exporter of oil/gas, China is unlikely to dramatically increase its investments in Afghanistan before greater stability is achieved — so it is difficult to predict how it will all turn out. China's ambition is clearly to seize a significant piece of the economic prize that awaits acquisition in Afghanistan, but it has no desire to step on the West's military footprint.

A stable Afghanistan would advance Beijing's agenda of diversifying its sources of energy as demand continues to increase. Currently, China relies on the Middle East for more than half of its crude oil and a quarter of its liquefied natural gas imports. Beijing is desperate to reduce its dependence on the increasingly unstable region. Moreover, its supply lines via the Indian Ocean and Straits of Malacca are increasingly vulnerable as tensions continue to rise between China and other Asian powers. In this context, Beijing will become increasingly vested in Afghanistan's future, as it offers the Chinese an opportunity to develop greater energy infrastructure that ensures Beijing's access to Central Asia's resources through land-based pipelines. Given the alignment of economic interests, Beijing and Kabul may be expected to keep enhanced bilateral relations a high priority in the near and medium term.

Daniel Wagner is CEO of Country Risk Solutions, a cross-border risk management consulting firm, and author of the book "Managing Country Risk". Giorgio Cafiero is a research analyst with CRS based in Washington.