For a relatively small drilling operation, China National Petroleum Corporation's (CNPC) project in Afghanistan's Sar-e-Pul province has a large footprint. Several layers of fences and containers serving as blast walls surround the extraction site, which includes dormitories, an office complex and various security structures. Throughout the day, trucks ferry in equipment and more containers. On the outside, the faces are all Afghan, but CNPC's logo and bright red Chinese slogans are impossible to miss.
This remote outpost, not far from Afghanistan's northern border with Turkmenistan, may symbolize the country's future after the planned U.S. withdrawal of combat troops next year. As Washington prepares its exit following 13 years in the country, signs that Beijing has steadily stepped up its official and corporate presence across Afghanistan have begun to arise. In September, then Politburo member Zhou Yongkang met with President Hamid Karzai, while lower level diplomats have discussed greater engagement with the Afghan government. China even plans to re-open a branch of the Confucius Institute, an organization devoted to teaching Chinese culture and language, in Kabul.
These efforts are part of a rapid change in Chinese strategy. Until two years ago, Chinese strategists regarded Afghanistan as solely an American concern: Washington broke it, and Washington should have to put it back together. Now, Chinese state-owned enterprises (SOEs) are the largest investors in Afghanistan's extractive sector and Afghan officials speak of Chinese investment as central to ensuring that the national government in Kabul will remain in power after 2014. American analysts, for their part, have undergone a similar transition, going from criticizing Chinese companies for riding on the coattails of U.S. security to openly advocating that Beijing take a leadership role in post-withdrawal Afghanistan.
The process has already begun. China's investment in Afghanistan ranges from burgeoning trade associations to the increasing dominance of wireless sector infrastructure by telecom giants Huawei and ZTE to cooperation on heavy industry, with a China-financed steel smelter planned for Kabul.
China's experiences in two strategic projects underscore both the challenges and opportunities Beijing faces in navigating Afghanistan's treacherous security environment. In Aynak, a site located 20 miles south of Kabul, two Chinese SOEs the Metallurgical Company of China (MCC) and the Jiangxi Copper Corporation (JCC) won a contract in 2007 to develop the world's second-largest copper mine and construct a coal-fired power plant and a railroad. Before long, the project's plans to destroy priceless Buddhist relics in the extraction area garnered significant negative press, forcing the SOEs to delay the start date to at least 2014. Ostensibly, the delay gives archaeologists an opportunity to salvage the ruins, but a more likely explanation is that Beijing wants to see how security in the area plays out post-U.S. withdrawal. "We're just useful idiots for the MCC," a French archaeologist working on the project said.
The security concerns are valid, and are compounded by differences with the Afghan government. Various militant groups have attacked Aynak 19 times in the past year, sabotaging the projects in an effort to starve the Kabul government of revenue. The government, for its part, has accused MCC and JCC of reneging on the promise to build a railroad, rather than simply conduct a feasibility study as the two SOEs have claimed. This, coupled with delays for both companies on projects outside of Afghanistan, has created uncertainty about China's major economic anchor in the central east of Afghanistan. While it is unlikely that the Chinese SOEs will pull out of the project altogether -- Chinese diplomats are still lobbying heavily for it in Kabul -- their reticence reveals Beijing's unease with the security question in that part of Afghanistan.
By comparison, CNPC's investments in Afghanistan's northern area have proceeded smoothly. Two years ago, China's largest energy SOE nabbed three lucrative, if relatively small, oil blocks; Kashkari, Bazarkhami and Zamarudsa, all part of the oil and gas-rich Amu Darya basin. Geologists working on CNPC's massive projects in southeastern Turkmenistan, part of the same basin, identified the potential across the border and now the oil produced in northern Afghanistan is shipped by truck to Turkmen refineries.
Like its fellow SOEs at Aynak, CNPC dealt with persistent militant attacks. Last year, however, its executives cut a deal with local militias to provide protection for the energy infrastructure, allowing the company to operate in relative security. As a result, CNPC is now expanding its initial plans for a natural gas pipeline that would connect Turkmenistan's fields to China's western province of Xinjiang via northern Afghanistan and Tajikistan, one that would have the potential for connections to Iran and the Gulf along the same route in the future.
Unlike at Aynak, Chinese actors in the Amu Darya basin are settling in with the confidence that at least the northern part of Afghanistan will be integrated into China's burgeoning pipeline network in post-Soviet Central Asia. In addition, Chinese investments are already attracting others: an American chemical company and a consortium of diaspora Afghans are seeking to build refineries to service CNPC's extraction activities, as well as expected future extractors.
It seems that both the Chinese government and the SOEs that work closely with it have found that helping to mend a broken Afghanistan is more an opportunity than a burden. Whether this will translate into a leadership role for China in a post-U.S. withdrawal Afghanistan is still unclear. What is certain, however, is that Beijing aims to play an active role in reshaping the economy of this fractious country.
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