Monday Morning Meeting on “Extension of CPEC into Afghanistan: Drivers and Implications”

Dr. Priyanka Singh, Associate Fellow, Manohar Parrikar IDSA (MP-IDSA), spoke on “Extension of CPEC into Afghanistan: Drivers and Implications” at the Monday Morning Meeting held on 19 June 2023. The session was moderated by Dr. Smruti S. Pattanaik, Research Fellow, MP-IDSA. Ambassador Sujan R Chinoy, Director General, MP-IDSA, Maj Gen. (Dr.) Bipin Bakshi (Retd.), Deputy Director General, MP-IDSA, Lt. Gen. Yogesh Kumar Joshi, Director General, Centre for Contemporary China Studies, and scholars of the Institute were in attendance.

Executive Summary

China’s engagement with Afghanistan, throughout history, has been characterised by a combination of strategic calculations and economic interests. After the collapse of the American-backed administration in August 2021, Beijing found itself almost by default taking the lead in the crisis as a pre-eminent regional power. In recent years, China has sought to drastically increase its investments in an attempt to expand its economic and political influence in Afghanistan. With the proposal to extend China-Pakistan Economic Corridor (CPEC) into Afghanistan, China’s regional stakes have skyrocketed. Pakistan is attempting to strengthen its facilitation role while China is interacting with Afghanistan, based on geopolitical, and economic considerations. Taliban views China as a key partner in the country's economic development. Hence, the trilateral China-Pakistan-Afghanistan arrangement seems inevitable in the present state of affairs. Nevertheless, the long-term benefits are uncertain due to security challenges and lack of funding. India, another strategic player in the region, has embarked on a wait and watch approach. 

Detailed Report

In her opening remarks, Dr. Smruti S Pattanaik offered a brief overview of Afghanistan's inclusion into the CPEC. She discussed the competitiveness surrounding two ambitious ports in Chabahar and Gwadar. She asked whether the CPEC's expansion into Afghanistan meant that the Taliban were the legitimate rulers of the land.

Dr. Priyanka Singh began her presentation by stating that the expansion of CPEC into Afghanistan was already in discussion for quite some time now. Early in May 2023, the China-Pakistan-Afghanistan Trilateral Meeting and the Strategic Dialogue between the China-Pakistan formally welcomed Afghanistan into the CPEC project. Through this extension, Beijing aims to turn Afghanistan from a "land-locked" to a "land-linked" nation. Alongside this, she discussed China's comprehensive position paper on Afghanistan released in April 2023.

With this backdrop, she further focused on the motivation and rationale behind cooperative efforts of the three nations. Firstly, she said that China's engagement in Afghanistan was driven by a combination of strategic, economic, and political factors to safeguard its national interests and support its broader foreign policy objectives. For China, Afghanistan is of critical importance vis-à-vis BRI, CPEC and Central Asian connectivity. In terms of its geoeconomic interests, China has shown interest in Afghanistan's lithium reserves, a key component in producing batteries for electric vehicles and various electronic devices. She stated that Afghanistan's significant lithium deposits make it an attractive prospect for China seeking to secure a stable supply of this critical resource.

Secondly, by encouraging the expansion of CPEC into Afghanistan, Pakistan aims to maintain its strategic pre-eminence in Kabul's affairs and its role as a facilitator. She emphasised that given Pakistan's longstanding ties with the Taliban, Pakistan wants to teach the Chinese how to deal with them.

Thirdly, Afghanistan sees China as a key player in the country's economic growth since Beijing has the ability to inject substantial sums of cash. After the Taliban took control in August 2021, the economy collapsed leading to a serious humanitarian catastrophe, which got worse by the day. However, international sanctions were imposed on the new regime, and Western donors stopped providing aid. Furthermore, she added, the Taliban had relied on drugs to run their nation, but now that they have been outlawed, Afghanistan may continue to struggle financially in the near future. Further, Dr. Singh speculated that the Highway Road construction between Peshawar and Kabul, the Railway line along Peshawar and Jalalabad, and potential agreements on joint management of rivers were to be part of initial CPEC projects.

Further, she examined the possibility of a compromise among the three. In her analysis, they are bound together while each of them tries to achieve its ambitions alone. Their geographical location, CPEC’s capital and geopolitical as well as geo-economic interests will unite them together for a brief period but because there is little trust between these countries, it is unclear how the project will develop. She asserted that by expanding CPEC into Afghanistan, China hopes to undermine the US and seize the global leadership position it has long coveted. Afghanistan seeks clean sources of money that they think China will provide in their quest for recognition. All in all, Pakistan will remain the fulcrum of this trilateral arrangement and Afghanistan is vital for Pakistan in its conflict matrix with India, she explained.

Dr. Singh then addressed India's alternatives in light of the ground situation in Afghanistan. She said that India had expressed its objection to BRI's flagship CPEC project because it perceives it as an infringement on its territorial integrity and sovereignty. As a result, India is worried about the geopolitical consequences of including Afghanistan in CPEC. Further, China's expanding influence will only undermine India's goals in Afghanistan, where it has made significant investments over the years. Dr. Priyanka concluded by reiterating that while India maintains its current stance on the CPEC, it must also be strategically imperative to avoid being perceived as a regional spoiler that is impeding Afghanistan's development initiatives.

Comments and Question

After the presentation, Dr. Smruti S. Pattanaik invited the Director General, Ambassador Sujan R. Chinoy, to comment.

Ambassador Chinoy complemented the comprehensive presentation. He emphasised as to why China considers Afghanistan a vital neighbour, one of the reasons being the threat of terrorism originating from Afghanistan and its potential to become a haven for Uyghur separatists, which could have a detrimental impact on its Xinjiang province and, ultimately, China. He iterated China's long history of working with the Mujahideen during the Soviet occupation of Afghanistan. Post that, China and Pakistan have leveraged their sphere of influence in Afghanistan. Today's convergence between China and Afghanistan is based on Afghanistan's dire need for investment, and connectivity. China is an important actor in this evolving triangle because of its capability to invest in infrastructure and development. However, he stated that security concerns in the region had remained a significant setback to progress. As per India's concerns, he added he should view CPEC as violating India's sovereignty and territorial integrity. Finally, he reiterated that CPEC's success will be limited on the ground.

Lt.Gen. Y.K. Joshi, offering his remarks, stated that following the US exit, China’s profile in Afghanistan has continued to rise. Nevertheless, he pointed out that the security situation and lack of funding would make development and prosperity in Afghanistan very difficult.

The Deputy Director General, Maj. Gen. (Dr.) Bipin Bakshi (Retd.) underscored that the tripartite arrangement between China, Pakistan, and Afghanistan will formally bring the three nations together. However, he held that only China and Pakistan will gain from this arrangement, leaving Afghanistan to suffer. He claimed that despite Afghanistan's desire for connectivity through CPEC, prior development initiatives have failed to yield meaningful results because of the country's challenging topography and local conditions. He stressed that Afghanistan will be heavily dependent on Pakistan as a result of this arrangement. Finally, he inquired as to whether Afghanistan was producing any tangible outcomes. Dr. Priyanka responded by acknowledging the difficulties that can obstruct progress. Since the project is still in the proposal stage, she reiterated that the cooperation will be put to the test when it actually materialises.

Dr. Adil Rasheed questioned the speaker about the role of ISIS and TTP in hampering the potential developmental projects under CPEC. Agreeing to which, Dr. Priyanka drew examples of how various oil extraction agreements could not make a headway, citing security concerns.

Dr. Anurag Bisen asked the speaker if the inclusion of Afghanistan in CPEC impacted the International North-South Transport Corridor (INSTC) project. And what would be the impact on the China-Russia contestation in Central Asia. She agreed that there could be some impact and analysed that, given the larger geo-political and geo-economic interests, both China-Russia will manage differences ahead.

Dr. Ashok K. Behuria commented on how Afghanistan’s Foreign Minister was missing from the scene when China and Pakistan announced its inclusion in the extended CPEC. He reiterated China's sudden increased participation in Afghanistan is due to Rare Earth Minerals and lithium reserves.

Dr. Ashish Shukla questioned China's ability to engage the Taliban regime directly. He asked why China would piggyback on Pakistan to negotiate with the Taliban. While answering, Dr. Priyanka emphasised that, at every intervention, be it from the US or China, Pakistan has always been at the center of the discussion.

Dr. Deepika Saraswat commented on Iran's stance. Even before the Taliban took over, Iran was one of the major trading partners for Afghanistan and had adopted a pragmatic approach. She said that Iran had also invested in Afghanistan in recent years and wanted to maintain its stake in the region.

The report has been prepared by Ms. Sneha M., Research Analyst, South Asia Centre