Afghanistan tempting but risky for Chinese firms
Editor's Note:
China and Afghanistan's relationship is deepened after the recent Shanghai Cooperation Organization summit in Beijing. The two have signed a number of investment deals aiming at reviving Afghanistan's war-torn economy. Is China trying to compete with the US, as some China observers believe? How will the US react to China's growing influence in Afghanistan? Global Times (GT) reporter Gao Lei talked to Jeffrey Reeves (Reeves), a research fellow at Griffith University's Asia Institute in Brisbane, Elizabeth Wishnick (Wishnick), senior research scholar of the Weatherhead East Asian Institute at Columbia University, and Zhao Huasheng (Zhao), professor and director of the Center for Russia and Central Asia Studies at Fudan University, on these issues.
China and Afghanistan's relationship is deepened after the recent Shanghai Cooperation Organization summit in Beijing. The two have signed a number of investment deals aiming at reviving Afghanistan's war-torn economy. Is China trying to compete with the US, as some China observers believe? How will the US react to China's growing influence in Afghanistan? Global Times (GT) reporter Gao Lei talked to Jeffrey Reeves (Reeves), a research fellow at Griffith University's Asia Institute in Brisbane, Elizabeth Wishnick (Wishnick), senior research scholar of the Weatherhead East Asian Institute at Columbia University, and Zhao Huasheng (Zhao), professor and director of the Center for Russia and Central Asia Studies at Fudan University, on these issues.
GT: What's your opinion on speculation that China is about to compete with the US over Afghanistan?
Reeves: The US and Chinese interests in Afghanistan, at least at this point, are different enough that direct competition can be avoided. For the US-led International Security Assistance Force (ISAF), security remains of paramount importance, which means US involvement in Afghanistan will be primarily military for the near future.
The country that has concerns over China's influence in Afghanistan is India. New Delhi has been extensively involved in Afghanistan's development at a grass-roots level to both extend its influence over the country and to prevent other states in the region from making inroads in Afghanistan at its expense.
Some analysts have suggested the next "Great Game" in Afghanistan will not be between China and the US, but between China and India.
Zhao: China's involvement in Afghanistan doesn't carry the notion of competition. Afghanistan is an independent state. Its affairs should be left to its own people, not any external powers or foreign countries, to decide.
China's investment is primarily driven by economic interests and the likely benefits Afghanistan will enjoy from it.
GT: How does the US see China's presence in Afghanistan?
Wishnick: The US understands that Afghanistan is in China's neighborhood and repeatedly has sought to engage China to do more to help its neighbor.
For instance, currently illegal drugs account for 10 percent of Afghanistan's GDP, and international donors provide 90 percent of its government's budget. To the extent that China's investments help the government of Afghanistan bring in legitimate revenue and help the Afghan people, I think the US will view these projects positively.
In fact, the Obama administration has long sought to cooperate with China in Afghanistan. Last month at the US-China Strategic and Economic Dialogue meeting in Beijing, they agreed to cooperate in training diplomats from Afghanistan at both China's Ministry of Foreign Affairs and the US Department of State.
GT: How do you see Afghanistan's strategic importance to China and the US?
Reeves: Security and stability in Afghanistan are of the utmost importance for China.
At the heart of this concern is the negative influence instability in Afghanistan can have on stability in the Xinjiang Uyghur Autonomous Region. Failure to deal with extremist Islamic forces in Afghanistan means that China may have to deal with them in Xinjiang.
The Chinese government has identified linkages between Al Qaeda and the Taliban and the "East Turkistan" organization as contributing to occasional flashes of violence in Xinjiang.
Drug trafficking from Afghanistan into China is also a large problem. Afghanistan is now, by some accounts, the largest source of drugs into China. This transnational security issue is a major concern for the Chinese government as it has negative impact on social stability and cohesion.
Zhao: The US strategy in Afghanistan is multiple, and fighting terrorism is just one part of it. Geopolitics is obviously another integral part of its plan.
Afghanistan's position in the region is special, as it not only sits in between Central Asia, West Asia and South Asia, but is also close to Russia and China.
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GT: What risks do Chinese investors face in Afghanistan at present?
Reeves: Since the majority of Chinese investment in Afghanistan will be in mining and mining-related infrastructure, maintaining security at these sites will be a huge challenge for China.
Right now, the Chinese government and Chinese businesses are relying on the success of the Kabul process to ensure their investments.
However, of the Afghan Geographical Survey's 22 priority mineral areas across the country, the majority are in areas outside of ISAF and Afghan control.
Thus, relying solely on Afghan forces for security of investment sites is overly optimistic.
At present, the Afghan Ministry of Mines has only 7,000 mining police, just a fraction of what it would need to secure its mining sector.
Wishnick: In Iraq, it took many years before the oil industry went back online as it was constantly the target of terrorist attacks, and this was when US forces remained in the country.
China has made some large investments in Afghanistan at time when the security environment is very unstable. Many observers question whether it was wise to get involved on such a massive scale.
GT: How can Chinese investors manage Afghanistan's complexity?
Zhao: We should try to maintain the country's stability with the help of the international community. We should also strive to establish good relationships with different domestic factions, and build good reputations with local communities. Enterprises should stay neutral and avoid Afghanistan's domestic issues.
Chinese investors also need to stay away from risks, such as by investing in safer places like Afghanistan's northern and central eastern regions, and learn how to deal with emergencies. They need to have a comprehensive and functioning risk management system, so that they can evaluate risks there and operate accordingly.
Reeves: China views the Taliban as a political as well as a religious group and favors maintaining ties, despite the groups ties with terrorism in Xinjiang. In this regard, China takes a long view on its relations with the group that includes the possibility of having to interact with the Taliban in a more official manner in the future.