NATO, China and Afghanistan at the Security-Development Nexus

In Analysis
February 24, 2014
CIPS
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By Kirsten Van Houten and Benjamin Zyla

Since the U.S.-led invasion that toppled the Taliban in 2001, NATO has provided extensive security and development assistance to Afghanistan. While NATO is slated to withdraw from Afghanistan later this year, the international community must stay involved in the development and conflict mitigation processes there following NATO’s withdrawal later this year. This is the final test of the success or failure of the work that NATO has done in the country since 2001.

In the coming years, Afghanistan will continue to need external support for economic growth through the development of its infrastructure and natural resources, as well as fighting against sources of insurgency. NATO’s withdrawal will also create new opportunities for international engagements in Afghanistan’s economic and political landscape.

In the short term, China’s economic and security interests and perceived neutrality may be economically and politically beneficial to both China and Afghanistan.

China is likely to play an important role in this transition process. Both security and economic interests motivate its previous and ongoing engagement in Afghanistan.

Security in Afghanistan is of particular interest to China in part because of the 85-kilometer border that the two countries share. The Chinese province bordering Afghanistan, Xinjiang, has suffered from an insurgency led by the Uighur East Turkestan Islamic Movement. It is well-documented that the Uighur militants from Xinjiang, who the Chinese view as a threat to national security, received training from other insurgents and jihadi militants in Afghanistan. This is particularly troubling for Beijing because China and Pakistan have been close allies since the 1950s, when Pakistan became the first Muslim country to recognize the then-weak and largely isolated China. Ever since, China has provided Pakistan with extensive military and economic assistance because of their shared rivalry with India.

Civil unrest in Xinjiang also provides a breeding ground for militant Islamic extremism, which not only contributes to security threats there but destabilizes the entire region (in which China seeks to maintain economic and political dominance). It also makes newly-established trade routes for exporting Afghanistan’s natural resources increasingly unreliable. Thus, China’s foremost strategic interest is to maintain security and stability in Afghanistan and to prevent the full return of the Taliban.

Beijing also has long-held economic interests in Afghanistan. In 2010, the Pentagon estimated that Afghanistan is endowed with over $1 trillion worth of natural resources. However, the country has always lacked the start-up capital to exploit and sell those resources on international markets. For its part, China has the financial abilities and a high demand for natural resources to support its billion-plus population and its rapidly growing economy. The business relationship between the two states grew into a strategic partnership which benefitted Afghans by allowing them to access their natural resources and to invest the royalties in national infrastructure such as phone lines, roads and hospitals.

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Oil and gas exploration serve as primary examples of the economic relationship between China and Afghanistan. In 2011, the Chinese National Petroleum Company (CNPC) entered into a joint venture with Watan Oil and Gas (an Afghan company with strong ties to the Karzai government) in order to explore for oil in the Kashkari, Bazarkhami and Zamarudsay basin fields, valued roughly at US $700 million. Currently CNPC has a 25-year contract to exploit discovered oil fields, and has agreed to pay the Afghan government a 15% exploration tax per barrel, a 20% business tax and a 70% share of total revenue. CNPC has also promised to build a US $300 million oil refinery on the site.

China’s engagement in Afghanistan is also motivated by its regional and global power imperatives. It is a permanent member of the UN Security Council, and shares certain security interests with NATO. In 2002 China also joined Afghanistan’s five other neighbouring countries in signing a non-interference pact, the Kabul Declaration, and in 2006 the Treaty of Good Neighbourly Friendship and Cooperation.

Chinese distrust of American involvement in the region has also influenced many of its economic and political activities. Despite the authorization of NATO’s ISAF peace enforcement missions Afghanistan by the UN Security Council, which Beijing supported, China became increasingly uncomfortable with the U.S. military presence during the ISAF operation.

Moreover China has demonstrated a willingness to collaborate with the Taliban. While it does not want the return of Islamic extremism, and wants to keep exporting Afghanistan’s natural resources, Beijing has acknowledged the Taliban as political actors through the negotiation of resource extraction projects (particularly in the northern areas bordering Pakistan). An example of China’s neutrality in the increasingly acerbic rhetoric between Kabul and the Taliban is its involvement with the Watan Group, a corporation closely tied to President Karzai’s family and linked to the Taliban. It is well known that NATO countries (especially the U.S. and Canada) had hired Watan Risk Management (a private security company that belongs to the Watan Group) to protect their supply convoys as well as signature development projects (for Canada, the Dahla Dam project). In contrast, when NATO member states terminated their relationships with Watan Risk because of proven ties with the Taliban, China increased its involvement with the Watan Group while NATO forces increasingly became the target of Taliban attacks.