China’s Belt and Road to Enter Afghanistan

10 May 2023

(Bloomberg) — The Taliban agreed with China and Pakistan to extend the Belt and Road Initiative to Afghanistan, potentially drawing in billions of dollars to fund infrastructure projects in the sanctions-hit country.

Chinese Foreign Minister Qin Gang and his Pakistani counterpart Bilawal Bhutto Zardari met in Islamabad on Saturday and pledged to work together on Afghanistan’s reconstruction process including taking the $60 billion China-Pakistan Economic Corridor to the Taliban-ruled nation.

“The two sides agreed to continue their humanitarian and economic assistance for the Afghan people and enhance development cooperation in Afghanistan, including through extension of CPEC to Afghanistan,” according to a joint statement issued by Pakistan’s foreign ministry following the meeting.

Chinese and Pakistani officials have previously discussed extending the project to Afghanistan built under President Xi Jinping’s flagship Belt and Road initiative that started almost a decade ago. The cash-strapped Taliban government has expressed readiness to participate in the project and the prospect of getting much needed infrastructure investment.

The Taliban’s top diplomat, Amir Khan Muttaqi, traveled to Islamabad to meet his Chinese and Pakistani counterparts and reached an agreement, his deputy spokesman Hafiz Zia Ahmad said by phone.

The Taliban have also harbored hopes for China to boost investment in the country’s rich resources. The government inked its first contract in January with a subsidiary of China National Petroleum Corp. to extract oil from the northern Amu Darya basin.

The Chinese and Pakistani ministers also stressed the need to unfreeze Afghanistan’s overseas financial assets. The Taliban has been blocked from accessing about $9 billion of Afghanistan’s central bank reserves held overseas on concerns the funds will be used for terror activities.

Washington later agreed to release half of it to bolster the economy but put it on hold after the Taliban imposed certain school and work restrictions on Afghan women last year.

The militants-turned-administrators see investments as a way to fix a cash-strapped economy after international aid, accounting for 60% of public spending, was halted following the chaotic withdrawal of U.S. troops in 2021.

China, Russia, and Iran are among a handful of countries that maintain warm ties with the Taliban. They have provided aid in the tens of millions of dollars to the Taliban but have stopped short of formally recognizing the government.

The U.S. remains the single largest donor to the humanitarian response by global agencies, having provided more than $2.1 billion since the Taliban retook power, according to a report.

A U.N. agency said last week it requires $4.6 billion this year to help more than two-thirds of the country’s 40 million people who are living in extreme poverty. A 2022 Gallup poll showed that nine in ten Afghans find it “difficult” or “very difficult” to survive on their present income.

Chinese businesses have been wary of investing in Afghanistan due to attacks by the Islamic State group, which is competing with the Taliban for influence. In December, the militant group took credit for an attack at a Kabul hotel popular with Chinese diplomats and businessmen.

There’s also the presence of the East Turkistan Islamic Movement, a Xinjiang-based separatist group, that’s kept Beijing rather cautious about expanding its influence.

Muttaqi’s second visit to Pakistan comes days after the United Nations stressed the need to engage with the Taliban rulers as Afghanistan is facing the “largest” humanitarian crisis in the world.


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