Prospects for economic cooperation between China and Afghanistan after the withdrawal of US Troops

Rakhimov Komron Hakimjonovich ORCID: 0000-0003-2771-1817 PhD in History Senior Lecturer; Department of Theory and History of International Relations; Patrice Lumumba Peoples' Friendship University of Russia (RUDN) 6 Miklukho-Maklaya str., Obruchevsky district, Moscow, 117198, Russia rahimov_k93@mail.ru Nguyen Tri Dung Student; Department of Theory and History of International Relations; Patrice Lumumba Peoples' Friendship University of Russia (RUDN) 6 Miklukho-Maklaya str., Obruchevsky district, Moscow, 117198, Russia tridung156@gmail.com

Chan Thi My Hanh Student; Department of Theory and History of International Relations; Patrice Lumumba Peoples' Friendship University of Russia (RUDN) 6 Miklukho-Maklaya str., Obruchevsky district, Moscow, 117198, Russia tranmyhanh2812@gmail.com

Introduction

Afghanistan, due to its unique geographical location between South Asia, Central Asia, the Middle East and East Africa, occupies a strategic place in regional geopolitics and trade. Although the country is rich in natural resources, constant wars and political instability have become a serious obstacle to its economic development and integration into the global economy.

In 2021, after the withdrawal of US troops, a significant power vacuum was created, which increased China's interest in participating in the reconstruction of infrastructure and the revival of the Afghan economy. According to A. Dkhar and co-authors, Beijing is reconsidering the importance of Afghanistan for the Belt and Road Initiative. Afghanistan's participation gives China the shortest route to the countries of Western Asia, the Middle East and East Africa ^{[13, p. 169]}. At the same time, as noted by D. Canyon and S. Sitaroman, China's actions pursue not only economic goals. They are also aimed at reducing the influence of the United States, curbing radical Islam and strengthening global security ambitions ^{[8, p. 1]}.

Currently, academic research and policy reports on China-Afghanistan economic cooperation after the U.S. withdrawal remain limited. This study aims to assess the economic and political factors affecting bilateral relations, as well as identify opportunities and obstacles for long-term partnership.

The context of China's economic cooperation with Afghanistan

Historically, Afghanistan has been a low priority on China's diplomatic agenda. In 1955, the Afghan government led by Zahir Shah recognized the legitimacy of the People's Republic of China, despite significant economic and social differences between the two countries. The parties maintained bilateral relations on a benevolent basis, in the spirit of the Five Principles of Peaceful Coexistence proclaimed by Beijing, which was reflected in the signing of the Treaty of Friendship and Non-Aggression in 1960 ^{[20, p. 47]}. At that time, the priority of the PRC remained the security of the Wakhan corridor, a narrow section of the border with a length of only 92 km, but of strategic importance in the context of Beijing's policy towards the Uighur separatist movements in the Xinjiang Uygur Autonomous Region ^{[23, pp. 3292-3293]}.

From the 1950s to the 1980s, Afghanistan was in the sphere of influence of the Soviet Union, reflecting its role in the system of great Power rivalry during the Cold War. Subsequently, the country plunged into prolonged instability, which included Soviet military intervention and the subsequent rule of the Taliban. This protracted instability explains why the PRC pursued a policy of minimal involvement based on two pillars — economic and diplomatic ^{[9, p. 8]}. Given the significant U.S. military presence in Afghanistan, Beijing continued to take a cautious approach. The turning point was in 2014, when Chinese Foreign Minister Wang Yi made his first official visit to Kabul. This visit marked the beginning of a new stage, during which China began to play a more active role in Afghan affairs ^{[22, p. 47]}.

Since August 2021, after the withdrawal of US troops and the return of the Taliban movement to power, China has been able to form a certain influence on the new regime. Beijing has not condemned the Taliban* and has maintained its diplomatic representation in Kabul. Political isolation and the cessation of foreign aid have led to the fact that Chinese support has become critical for the functioning of the Taliban regime*.

On international platforms, Beijing has also expressed support for Afghanistan, calling for the resumption of aid and the lifting of sanctions. A few months after the return of the Taliban* to power, agreements were renewed between the two countries on a number of projects that had not been completed under the previous government, including the Mes Aynak project and the development of deposits in the Amu Darya basin, as well as new lithium mining projects. The Chinese private sector also demonstrates an active approach to interaction with the Afghan sectors of agriculture and infrastructure ^{[20, p. 21]}.

Afghanistan's economy declined sharply during this period.: GDP decreased by 20% in 2021 and by an estimated 30-35% in 2022 due to protracted conflict, natural disasters and the global food crisis ^{[24, p. 121]}. With the support of Pakistan and other regional powers, China has put forward a reconstruction plan based on the principle of "Afghanistan at the head, Afghanistan in the interests." In turn, the Taliban* stated that they consider China as a friendly state and welcome Chinese investments in the reconstruction of the country ^{[22, p. 46; 17, p. 77]}.

Beijing provided emergency humanitarian aid in the amount of about 31 million US dollars; this step emphasized its importance as an important economic and humanitarian partner in the country's reconstruction process ^{[17, p. 83]}. Against the background of the cessation or reduction of cooperation on the part of many states, bilateral trade between China and Afghanistan not only did not decrease, but also showed a noticeable increase. There was a tendency for China's exports to Afghanistan to increase (see Fig. 1) ^[11].

1. China exports to Afghanistan (2012-2024) (The currency used in the table is US dollars) ^[11].

In 2023, Afghan exports to China amounted to 63.9 million US dollars. In turn, Chinese exports to Afghanistan reached 962 million US dollars (15 times more), mainly due to synthetic fibrous fabrics worth 141 million US dollars ^[10]. The import of cheap goods from China poses the risk of reducing Afghanistan's production capacity and further worsening the trade balance. In addition, starting from December 1, 2022, China abolished duties for 98 items of Afghan imports ^[3]. This measure directly reduces the costs of Afghan exporters, contributes to their income growth and supports the recovery of the domestic economy.

The intensification of bilateral relations between Afghanistan and China can be explained by several key reasons. First, given the severe domestic political and economic crisis, the Taliban* is in dire need of external financial support. Secondly, the close ties between Islamabad and the Taliban provide Beijing with certain security guarantees. Thirdly, an important incentive for Afghanistan is the opportunity to connect to the CPEC, which opens up prospects for wider access to global commodity markets.

Currently, there are significant prospects for economic cooperation between China and Afghanistan in both bilateral and multilateral formats. Firstly, Afghanistan occupies a central geographical position at the junction of South and Central Asia, as well as East and West Asia. Secondly, the country has rich natural resources, which, due to prolonged military operations, have not yet been explored and developed ^{[1, pp. 229-230; 2, p. 152]}. Initially, due to the protracted conflict, Afghanistan was not included in the Belt and Road Initiative. Nevertheless, Beijing often actively advocates the official accession of Afghanistan to this initiative due to its key role in linking the Chinese market with the rest of Asia, Europe and East Africa ^{[13, p. 169]}.

Prospects for integration within the framework of the Belt and Road Initiative

While the Belt and Road Initiative (hereinafter referred to as the BRI) was initially focused on the countries of Central Asia and Pakistan, Afghanistan is becoming increasingly strategically important due to its position at the intersection of Central and South Asia. Being the shortest route from China to the countries of the Middle East and South Asia, Afghanistan has significant potential for efficient transportation of goods and energy resources ^{[19, p. 14]}.

The Taliban Government* sees the IPP as an opportunity to modernize transport and energy infrastructure, as well as integrate into global trade networks. Investments in Afghanistan can improve logistics and transport, stimulate foreign trade, create new jobs and attract foreign capital, which is a key factor for the country's economic recovery ^{[6, p. 120]}.

The signing of the "Memorandum on the Launch of IPP Projects" between China and Afghanistan in May 2016 marked a milestone on the path of Afghanistan's integration into the Belt and Road Initiative. In August of the same year, the first China—Afghanistan railway line was commissioned, connecting the two countries directly for the first time, without the participation of Pakistan. The project started with the dispatch of the first freight train from Afghanistan to China and is currently expanding: preparatory work is underway to restore the Sher Khan-Herat section ^{[15, p. 21]}.

A deeper analysis suggests that Afghanistan may be the missing link in the IPP network. The completion of the Peshawar—Kabul highway will shorten the overland route from China to the regions of the Middle East and India. The formation of a transport corridor through Pakistan, Afghanistan and Central Asian countries will be a strategic step for China, but its implementation will require effective cooperation with the Taliban authorities*. The experimental China—Afghanistan route is particularly noteworthy (see Fig. 2), opened in September 2022 as part of the KKZD project (China—Kyrgyzstan—Uzbekistan). The travel time on this route has been reduced to two weeks, and the load capacity of one train reaches 5,000 containers ^{[4, pp. 61-62]}.

Fig. 2. Chinese-Afghan railway ^[18].

Currently, Afghanistan has the potential to become an important transit hub in three key areas: freight transportation through the implementation of the Five Nations Railway project (see Fig. 3); in the energy sector — through proposed initiatives such as the TAPI pipeline, the CASA-1000 power transmission line, the 500 kV transmission line under the TAP project and hydropower facilities in the Kabul—Kunar River basin; as well as in the field of data transmission — through the creation of the fiber-optic "Wakhan Corridor", integration into the KPEC backbone and technical support from ZTE and Huawei concerns for the deployment of GSM, 3G and CDMA networks ^{[19, p. 6]}. Special attention is paid to the Digital Silk Road project, designed to turn Afghanistan into an intercontinental data center, which is currently at the pilot deployment stage ^{[13, p. 171]}.

In general, this multi-level infrastructure architecture fits seamlessly into the "southern belt" of the Belt and Road Initiative, connecting China with Southeast Asia and the Indian Ocean, where the three—route Kunduz-Torkham corridor and a specialized railway line through Hairaton stand out among the priority projects along with the "Railway of Five states" ^{[19, p. 21]}.

3. The Five Nations Railway: Railway projects with Afghanistan ^[18].

Prospects in the China–Pakistan Economic Corridor

Of the six onshore corridors of the IPP, the China–Pakistan Economic Corridor (hereinafter referred to as the CPEC) is the most prominent and priority. One of the possible ways to integrate Afghanistan is to connect with KPEC through four railway branches in Helmand, Kandahar, Khost and Nangarhar provinces ^{[19, pp. 3-4]}.

Since 2013, Pakistan has been the main beneficiary of KPEC's investments. Beijing and Islamabad position it as a bilateral project with possible expansion to third countries ^{[14, p. 5]}. In 2017, at the China–Afghanistan–Pakistan Dialogue, the Chinese Foreign Ministers proposed that Afghanistan be included in the CPEC. However, the Afghan government, led by Ashraf Ghani, demanded that Pakistan establish transport links with India. As a result, these disagreements led to the suspension of the relevant project expansion plans ^{[24, pp. 116-117]}.

After the withdrawal of US troops, China quickly established contact with the Taliban regime*. In April 2022, at a conference of foreign ministers of neighboring countries, Beijing initiated the Tongxi Initiative. Within its framework, it was proposed to expand the CPEC and the China–Central Asia–West Asia Economic Corridor to Afghanistan ^{[24, p. 117]}.

On May 9, 2023, at a trilateral meeting in Islamabad, the Foreign Ministers of China, Pakistan and Afghanistan agreed to expand the CPEC to Afghanistan. They also confirmed their support for multilateral infrastructure projects such as the CASA‑1000 energy project and the Railway through Afghanistan. In turn, the Taliban regime* positively accepted the invitation from China and Pakistan, regarding it as an opportunity to accelerate the country's reconstruction and lift its international isolation ^{[20, p. 19]}.

For the successful implementation of the project, Afghanistan must ensure political stability. Reliable protection of foreign investments is necessary. During the visit of Foreign Minister Wang Yi in March 2022, it was emphasized that the Taliban* must fight terrorist groups such as the East Turkestan Islamic Movement*. This is important to create a safe environment for cooperation. Despite the promises, the Taliban's ability to carry out these tasks remains limited. An obvious evidence of this was the terrorist attack on a Kabul hotel in December 2022, which injured five Chinese citizens ^{[24, p. 122]}.

Afghanistan's accession to the CPEC will give it access to South Asian markets, which will reduce import costs and boost exports. In particular, the Peshawar–Kabul highway will reduce logistical costs when exporting traditional Afghan goods such as pine nuts and saffron. In Khost and Paktia provinces, more than 40,000 people are engaged in harvesting and processing pine nuts. The connection of this highway with the port of Gwadar will reduce logistical costs and increase export volumes ^{[5, p. 93]}.

Integration with railway projects across the Hindu Kush can turn Afghanistan into a strategic bridge between Central Asia, South Asia and West Asia ^{[15, p. 22]}. It is planned to connect the Karachi–Peshawar railway to the Afghan network. The Chinese side proposed building a national highway network in Afghanistan, as well as implementing energy projects. Export and import operations through the ports of Gwadar and Karachi will be significantly stimulated. The Peshawar–Kabul–Tajikistan and Quetta–Herat–Turkmenistan highways are included in the KPEC expansion plan ^{[5, p. 93]}. All these initiatives are designed to turn Afghanistan into an important link in the regional trade network.

Finally, the deployment of the fiber-optic "Digital Silk Road" across most of Afghanistan, combined with KPEC and land–rail routes through the Gulf region (Chabahar-Zaranj–Delaram), expands China's influence. This limits the role of India and the United States in South Asia. This China–Pakistan–Afghanistan cooperation model is seen as a strategic move by Beijing to create a reliable post-American corridor. ^{[8, pp. 1-2]}.

Afghanistan's mineral potential

Afghanistan has rich mineral resources. These include copper, iron, coal, precious stones, marble, lithium, and hydrocarbons. However, due to the prolonged armed conflict, most of them remain undeveloped. China intends to provide access to these reserves through investments in infrastructure projects in Afghanistan. These actions are aimed at supporting industrialization within China and establishing stability in Afghanistan ^{[16, p. 451]}. According to estimates, the cost of Afghan mineral resources ranges from 1 to 3 trillion US dollars ^{[19, p. 37]}. Despite the lack of reliable data, this potential attracts the interest of China. It should be emphasized that for Beijing, it is more important to maintain stability in Afghanistan than just to extract resources ^{[24, p. 117]}.

The Mes Aynak deposit, located 40 km southeast of Kabul, is the second largest copper mine in the world. In 2008, the China Metallurgical Corporation (MCC) and Jiangxi Copper Company were granted the right to develop this deposit. The total investment exceeded 3.5 billion US dollars, and the contract was valid for 30 years. The project provided for the construction of the necessary infrastructure, including a power plant and a coal storage facility, as well as the import of mining equipment. Nevertheless, the project was suspended in 2015 due to disagreements over the terms of profit sharing, a decrease in the global price of copper and an aggravation of the security situation ^{[21, p. 69; 6, p. 122]}.

Afghanistan is considered the owner of the world's second largest lithium deposit — about 9 million tons, on a par with Bolivia ^{[19, p. 39]}. The primary data was obtained by Soviet specialists in the 1980s. In 2010, US Army research confirmed the reserves and estimated their value at 3 trillion US dollars. In early 2023, the Chinese company Gochin announced its intention to invest 10 billion US dollars in lithium mining in Afghanistan. In the same year, China signed a contract with the Taliban* to explore two promising lithium deposits ^{[6, p. 123]}. Taking into account the fact that China dominates the global electric vehicle market with a share of 73.1%, makes control over lithium supplies a vital strategy ^[12].

Another key energy project is oil production in the Amu Darya basin. In 2012, a 25-year development license was obtained by China National Petroleum Corporation (CNPC), but work was not started due to safety issues. According to preliminary estimates, oil reserves in this region amount to about 87 million barrels ^{[7, p. 134]}. After the Taliban came to power, efforts to relaunch the project intensified. On January 5, 2023, an investment contract was signed between Taliban* and CNPC's subsidiary Xinjiang Central Asia Petroleum and Gas Company (CAPEIC) in the amount of USD 150 million per year for three years, with a total investment of up to USD 540 million under a 25-year agreement. During the same period, an additional contract was signed for USD 35 million for drilling 18 wells. In accordance with the agreements reached, production of about 3,000 tons of crude oil per day is expected upon reaching the design capacity, with the first well at the Kashkari field in Sar-e-Pol province designed for a daily production volume of 50 tons ^{[6, p. 123]}.

Given the large reserves of copper, lithium and oil, Afghanistan can become a strategic center of natural resources in the region. However, development depends on two key factors: stable security and the ability to fulfill contracts. Although China is increasing its presence through agreements with the Taliban*, the real pace of work remains low. This shows that Afghanistan is not yet among the priorities of China's long-term investment strategy.

The main obstacles to cooperation

China is interested in the undeveloped resources of Afghanistan due to the high demand for mineral raw materials to maintain the pace of industrialization. As discussed above, during the period of the Afghan Republic, Beijing signed multibillion—dollar contracts, in particular, for the development of the Aynak copper deposit in Logar province and for oil production in the Amu Darya basin. However, due to security concerns and political pressure from the United States, these projects were suspended. After the return of the Islamic Emirate of Afghanistan, numerous mining agreements were renegotiated. According to a study by A. Aksir and co-author, about 100 Chinese companies have registered with the Ministry of Mining of Afghanistan and 500 Chinese traders have arrived to explore investment opportunities in the mining industry, which indicates a broad interest in mining ^{[6, p. 125]}. On the other hand, E. I. Safronova emphasized that many Chinese companies simply stop at field research and leave. Such actions disappointed Taliban officials* ^{[4, p. 61]}.

As part of the Belt and Road Initiative, Afghanistan represents a potentially shortest land route connecting China with Western Asia and Europe, particularly through Iran. Projects such as the Five Nations Railway are proposed for implementation ^{[6, p. 125]}. It should be noted that these initiatives can be considered as important steps in the development of economic cooperation between the two countries.

However, the IPI initiative has been repeatedly criticized due to the risks of involving developing countries in the so-called "debt trap". A typical example is Sri Lanka, which was forced to transfer control of the Hambantota port due to the inability to service debt; Djibouti also faces similar risks. In addition, large infrastructure projects within the IPI are associated with potential environmental and social risks, as well as corruption risks, especially in the absence of effective monitoring and control mechanisms ^{[15, p. 23]}.

One of the most serious problems in the field of bilateral economic cooperation is ensuring security. Despite the establishment of Taliban control, violence continues in the country. The Wilayat Khorasan group (ISIS-X)* Poses a serious security threat by carrying out numerous terrorist attacks both inside and outside Afghanistan. According to the data provided in the study by Ts. According to Zhang, between August and December 2021, ISIS-X* carried out 152 attacks, compared with 20 attacks in the same period of the previous year. The PRC demands guarantees from the Taliban to create a safe environment for the implementation of investment projects, however, as of the current moment, these obligations are not being effectively fulfilled ^{[24, p. 123]}.

C. Zhang also stressed that Afghanistan is experiencing an acute shortage of infrastructure and human resources. According to data from 2016-2017, only 36% of the population had access to clean drinking water and 31% to electricity, while the majority of residents lived dispersed in rural areas. Many transport routes, such as Kabul–Maidan-Shar–Gardez, have not yet been built due to lack of funding. Natural disasters in 2022 caused damage estimated at 2 billion US dollars; at the same time, ISIS-X* militants destroyed at least four large poles of power transmission lines, which worsened the shortage of electricity ^{[24, p. 124]}. Migration processes, high unemployment and the so-called "brain drain" make it difficult for Afghanistan to realize the potential associated with international initiatives.

Nevertheless, it should be recognized that the emerging relations do not constitute an equal trade partnership. Beijing rather acts as the main investor and donor of humanitarian aid for Afghanistan in the period after the withdrawal of American troops. China is prioritizing investments in material infrastructure – highways, railways, waterways, economic zones, and resource corridors – to ensure connectivity between raw material sources and export ports, thereby improving production and export efficiency. However, this approach to investment often ignores the development of human capital, the improvement of public administration and the strengthening of the negotiating capacity of local authorities, which increases Afghanistan's vulnerability to external influence and manipulation.

Conclusions

Having systematized and analyzed the relevant data, the authors conclude that economic cooperation between China and Afghanistan is fully feasible and has high potential. The withdrawal of U.S. troops in 2021 eliminated one of the main political obstacles for Beijing and helped establish relatively favorable relations with the Taliban. This is confirmed by a series of contracts for the development of mineral resources and China's efforts to integrate Afghanistan into the Belt and Road Initiative. Despite the good prospects, Afghanistan faces unresolved problems of political instability and security threats. Limited infrastructure and a shortage of qualified personnel are also holding back development. The risks associated with terrorist attacks and internal conflicts remain a major obstacle to foreign investment. The authors propose the following measures to increase the feasibility of economic cooperation projects between the two countries:

First, as the leading Power in the region, China should take a more proactive approach to Afghan issues. The withdrawal of US troops removed a major political obstacle for Beijing, but at the same time created a power vacuum. China must fill this vacuum through humanitarian and economic assistance to Afghanistan. In addition, soft power should be developed through cultural, sports, and educational exchanges.

Secondly, the Afghan Government must improve the internal security environment. This task can be solved with the participation of regional powers — Russia, China and Pakistan — within the framework of such formats as the SCO. In parallel, the Taliban* should develop more open economic policies to attract investment not only from China, but also from other countries in the region.

Thirdly, Afghanistan needs to focus on creating infrastructure facilities that are attractive for foreign investment: roads, electricity grids, ports, airports, and railway lines connecting the country with its neighbors. Projects under the Belt and Road Initiative are crucial to this strategy. According to the authors, infrastructure projects should become a priority area of bilateral cooperation.

Fourthly, in order to achieve long-term economic goals, the Taliban leadership should give priority to developing human resources: improving professional knowledge and skills necessary for effective participation in Chinese programs. This includes technical and vocational training, higher education, and academic exchange.

* An organization (movement) recognized as a terrorist organization and banned in the Russian Federation.