With U.S. out of Afghanistan, China comes calling

The first thing you see upon exiting Kabul Airport is a billboard promoting Chinatown, which upon a visit turns out to be a plain, off-white trio of 10-story towers in the Afghan capital’s Taimani district. On the ground floor are shops selling Chinese products including lamps, office furniture, fans, electric bicycles, kitchen appliances, gardening tools, pipe fittings, solar panels, toiletries, clothes, decorations and Clean Laundry detergent that promises to “dissolve the stain.”

Most visitors’ first stop is the office of Yu Minghui, the 51-year-old entrepreneur who founded Chinatown in 2019 and is also the chairman of the China-Afghanistan Trade Committee, a semi-official liaison office for Yu’s passionate project: bringing Chinese merchants to Afghanistan.

The office helps them obtain visas, navigate the market and make contacts. Those who like their odds can join Chinatown or rent a spot at Yu’s newest venture, a sprawling 350-acre,
$216 million industrial park on the north-eastern edge of Kabul – the first infrastructure project signed between a Chinese company and the Taliban government.

“They want to help foreigners invest here,” Yu said of Afghanistan’s strict Islamic rulers. “The government is supporting us now.”

A man in a blue checked shirt and khaki pants stands in the middle of a barren land under a blue sky

A view of a sprawling, 350-acre, $216 million industrial park on the northeastern outskirts of Kabul, a new venture by Chinese entrepreneur Yu Minghui.

(Marcus Yam/Los Angeles Times)

Behind his efforts is at least the tacit support of another government: his own. With the West focused on Ukraine and the US refusing to do business with a Taliban-run state, China sees an opportunity to expand its influence in its backyard, using trade ties to create a stable regional order and to demonstrate that his brand of economic diplomacy – backed by an unwavering policy of non-interference in internal affairs – can succeed where Washington’s 20-year misadventure in Afghanistan failed.

The effort is unlike the United States’ massive nation-building campaign. Instead, Beijing’s goal is to neutralize the dangers of a long-troubled neighbor while pursuing broader measures such as the Belt and Road Initiative, which aims to develop international infrastructure links, and the Sino-Pakistan Economic Corridor, a 62- Billion-dollar project to build transportation networks, energy infrastructure and special economic zones that Beijing plans to expand into Afghanistan.

“The USA” was a transformation project. China is about stabilization,” said Jennifer Murtazashvili, a Central Asia expert at the University of Pittsburgh. “China’s interest in Afghanistan is primarily for security, and it sees Afghanistan’s security stabilization through its economic development, which also benefits China.”

Workers with gloves sort a large pile of metal parts

Afghan workers sort metals for recycling at a steel mill partly owned and operated by a Chinese contractor in Kabul.

(Marcus Yam/Los Angeles Times)

Others see Beijing’s efforts as a logical desire to promote economic development in a strategically located nation closer to home.

“If China can invest billions of dollars in Africa, why can’t it invest in its neighbors a little more than it has in the past?” said Zhou Bo, a former People’s Liberation Army colonel who is now a senior fellow at the Center for International Security and Strategy from Tsinghua University in Beijing.

The US and China say they want the same thing for Afghanistan — a stable, inclusive government. “The difference is how you achieve it,” Zhou said. “The Chinese approach is that this is the reality: the Taliban are in power. Let’s just get in touch and hope that through this process they can become inclusive and open.”

Signs of growing economic connections have been numerous over the past six months.

In April, China spearheaded the Tunxi Initiative, which brought together Afghanistan’s neighbors and Russia to support reconstruction and economic aid in the war-torn country. Over the summer, tariffs on 98% of imported Afghan goods were eliminated. Last month, an air transport service was restarted that delivers pine nuts – a key Afghan export item – to China, bringing in $800 million a year for Kabul’s coffers.

Taliban spokesman Zabihullah Mujahid said the group wants to advance China’s Belt and Road initiative, calling it “a great opportunity” and saying now that there is “good security, it is time that we start with big economic projects”.

They want to help foreigners to invest here. The government supports us now.

— Yu Minghui, 51-year-old entrepreneur

A man stands between sewing machines encased in plastic dust covers

Industrial sewing machines fill a room in one of Chinese entrepreneur Yu Minghui’s plants in Kabul.

(Marcus Yam/Los Angeles Times)

In Kabul today, it is not uncommon for stern-faced Chinese bodyguards to escort visitors to various Afghan ministries, or for provincial and central Taliban leaders to meet with Chinese state-owned company officials at the recently reopened Afghan embassy in Beijing. The Chinese embassy in Kabul is one of the few diplomatic missions still operational, although China has not officially recognized the Taliban government.

“I don’t deal with Chinese investors every week, I deal with them every day,” said Jawad, an official with Afghanistan’s trade ministry, who gave only his first name because he was not authorized to speak to the media.

Chinese officials pointedly trumpet Beijing’s humanitarian aid on social media, contrasting Chinese military planes in Afghanistan “carrying hope” with American planes “taking lives” — although US humanitarian aid to Afghanistan, which has increased over the last year, totaled $1.1 billion, the amount dwarfs China there. Other countries are also donating more.

A man in a blue polo shirt is standing in front of a group of skyscrapers

Yu Minghui in front of the three 10-story towers he calls Kabul’s Chinatown. Yu founded Chinatown in 2019.

(Marcus Yam/Los Angeles Times)

The latest addition to the Afghan capital’s hotels is the Kabul Longan, now Chinese-owned; Customers pay bills and buy Chinese groceries at a grocery store on the ground floor using Chinese payment systems such as WeChat or AliPay, Western credit cards and other cashless payment methods
Payments are suspended in Afghanistan.

Then there is Yu. On a rocky patch of land at the foot of a mountain eight miles northeast of Kabul, not far from where shepherds graze their sheep, he was excited by the prospects of the new Chinatown industrial park he launched six months ago .

“Before, the market was strong but not secure. Now security is 90% better, but the market is down 50%,” he said, adding that the project was first signed with the US-backed government in Kabul and then extended with the Taliban. If everything goes according to plan, more than 13,000 workers will be employed here in two years.

More than 100 Chinese entrepreneurs have already signed up, said Yu, who proudly points to a framed picture on his wall showing him with Taliban officials at the ribbon-cutting ceremony. Now he’s turning down applications, he added.

A man, right, looks up while standing next to a large stack of metal bars in a warehouse-like setting

Workers toil in a steel foundry in Kabul.

(Marcus Yam/Los Angeles Times)

But for all the fanfare and friendly visits and discussions, including Chinese offers to the Taliban for mining concessions and infrastructure investments, observers note that few concrete deals have materialized.

“I still haven’t seen any signatures for major projects, whether they’re roads or power lines, and if they don’t go ahead, any talk about mining and renewable energy is just that — talk,” said Niva Yau, a Central Asia-based expert in Bishkek, Kyrgyzstan.

That reflects the reluctance with which Beijing still faces the Taliban, said Andrew Small, China expert at the German Marshall Fund.

“None of this is super risky yet, big government projects of this nature are embroiled in deep political risk assessments of where it’s going in the coming years,” Small said. He pointed out that in the eastern province of Logar, a copper mine concession granted in 2007 by the state-owned China Metallurgical Group Corp. acquired was not yet developed, although Chinese officials said they had resumed talks with the Taliban.

Next to a window on a messy bed is an assault weapon

A sprawling, 350-acre, $216 million industrial park being built on the northeastern edge of Kabul has an armed guard on site for security.

(Marcus Yam/Los Angeles Times)

“They will make statements with rather small amounts of humanitarian aid and relatively modest activities like pine nuts,” Small said of the Chinese government. “All of them are useful, but they’re not of the magnitude that the US and West’s help will refill in terms of what they can actually do for the economy.”

Not surprisingly, Yu is more optimistic, even evangelical, about Sino-Afghan trade. He first came to Afghanistan in 2002, defying the consensus among friends and family that he was “crazy” to do so. He claims to be the first Chinese trader to bring lapis lazuli, the blue semi-precious stone Afghanistan is famous for, to Beijing. His investments include factories manufacturing metal wire, paint, PVC pipe, textiles, and a stainless steel factory that’s still making $30,000 a day, he says.

“I’m not like other foreigners who stay for a year or two and then leave. I felt like I had to be here,” he said.

When the Taliban took Kabul last year, he closed Chinatown but did not leave the country. The representatives of the militant group came to visit and assigned guards to protect the premises; Yu felt safe enough to reopen a week later.

This do-it-yourself attitude was one of the reasons Afghan businessman Abdul Qaher Faqiri worked with him.

“I’ve tried investing with Americans, but they won’t do it. I could offer it for free,” Faqiri said, gesturing at the desolate landscape around him, “and they still wouldn’t, whether now or before the fall of the Republic. Chinese are the type of people who stay here. Americans would never do that.”

Yu believes in the potential for companies to stabilize Afghanistan after decades of conflict.

“We come here to invest. If there are factories, people will work, get salaries and feed their families,” he said. “And if you can do that, you will never go to war.”

https://www.latimes.com/world-nation/story/2022-11-17/china-interest-afghanistan-trade-economics-stabilization With U.S. out of Afghanistan, China comes calling

Alley Einstein

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