Gul Akbar’s tiny store is crammed from floor to ceiling with rolls of electric cables, plugs of all sizes and piles of extension cords. Virtually everything comes from China, as do most of the appliances and electronics being sold in Kabul’s busy Nader Pashtun Market.
Not far away, the sparkling 10-story glass-and brick Jamhuriat Hospital rises in the midst of Afghanistan’s war-torn capital.
Beijing gave US$25 million and the Chinese workers to build it.
Every day, Afghans wait in long lines at the Chinese Embassy for visas to let them cross the border to trade.
As the US and its NATO allies fight to stabilize Afghanistan, China has expanded its economic footprint with several high-profile investments and reconstruction projects. In 2007, it became the country’s largest foreign investor when it won a US$3.5 billion contract to develop copper mines at Aynak, southeast of Kabul.
The US is in favor of the Chinese investment.
“It can be a good thing. As a matter of fact, we encourage all of the international community to take an interest in the economic development of Afghanistan,” US State Department spokesman Gordon Duguid said. “Working with our coalition partners and other interested partners, we are trying to establish a viable market economy in Afghanistan. This is one way to wean people from illicit activities and also to fight the ideology of the terrorists.”
For China, the reward is not only expanded trade and access to natural resources, it’s also security for its western flank, the vast Xinjiang region that is home to a separatist movement of minority Uighurs, said Liu Xuecheng (劉學成) of the China Institute of International Studies, the Chinese Foreign Ministry’s think tank.
“Our interest is clear. We need a peaceful neighbor because we have our own problems in Xinjiang,” Liu said. “If we have a friendly country in Afghanistan, they can help us to manage issues on the separatists, security and territorial integrity. We want Afghanistan to be successful.”
Though the two countries have always been friendly, the relationship has blossomed in recent years. In March, Afghan President Hamid Karzai made his fourth trip to Beijing, bringing back agreements on economic cooperation, technical training and lower tariffs for Afghan goods.
The emerging alliance is giving Kabul an alternative to its sometimes strained ties with the West. The two neighbors share a narrow, mountainous border, the Wakhan Corridor, and links that date back centuries to the caravans of tea, spices and other riches that traveled the Silk Road.
Afghanistan is “well aware that the US is likely to only be a temporary ally, so it’s looking for a longer-term partner in the region. China would be an obvious choice,” said security analyst Christian Le Miere, editor of Jane’s Intelligence Review.
China drew worldwide attention with the US$3.5 billion winning bid by the state-owned China Metallurgical Group Corp to tap one of the world’s largest unexploited copper reserves. That deal — which included commitments to build a power plant, railway, hospital and mosque, and to employ thousands of Afghans as miners — has dwarfed all other countries’ foreign investments, including the US.
“China is the biggest buyer of raw materials in the world, whether that’s in Africa, Asia or any other part of the world. So if China wants to come to Afghanistan, why not?” Afghan Commerce and Industry Minister Ghullam Mohammad Yalaqi said. “We just like to do the deal.”
The country’s untapped minerals, including gold, iron, copper and cobalt, is valued by a US estimate at nearly US$1 trillion. Afghan officials say it’s triple that amount.
For Yalaqi, who led a group of Afghan government and business leaders to China last month, the Chinese contribution is as important as that of Western troops.
“If we can create jobs, then youths wouldn’t turn to the Taliban. A good economy also has the impact of stability,” he said.
Trade between the two neighbors has mushroomed over the past decade from US$25 million in 2000 to US$215 million last year, according to Chinese figures. Yalaqi’s ministry estimates the actual figure, including unofficial border trade, to be closer to double.
On display in the crowded stalls of Kabul’s main electronics market are the fruits of that trade: computers, cellphones, cameras, irons, heaters and washing machines.
Squeezed into a small space is Suliman Electric, the electrical parts business owned by Gul Akbar’s family. Akbar and his brother used to travel to Iran and Pakistan to buy merchandise, but switched four years ago.
“We started going to China because a socket made in Germany or Iran or the US is more expensive, 200 Afghanis [US$4.40], but sockets from China are only one-fifth the price. The quality of Chinese goods is not the best, but it’s good enough and the price is the lowest,” he said.
“When I started traveling to China, my business increased by 50 percent,” Akbar said.
Every four months, he makes the 4,800km flight to eastern China to fill up two 12m containers and ship them to Kabul.
He is one of an estimated 30,000 Afghan traders shuttling between the two countries, said Sultan Baheen, Afghanistan’s ambassador to China. Most head to the southern manufacturing hub in Guangdong Province, to Urumqi in Xinjiang, or the eastern city of Yiwu, home to a massive commodities market, he said.
The need to quickly shuttle goods between countries is huge. On the strength of cargo demand alone, privately owned Safi Airlines plans to launch the first-ever direct passenger and cargo flights between Kabul and Beijing this fall. Currently the only flights are between Kabul and Urumqi.
“What we found out is that the amount of visas being issued from Afghanistan to China, and vice versa, has increased dramatically. This is an indication that there’s upcoming traffic, upcoming business,” said Werner Borchert, Safi’s chief operating officer.
China may be the biggest foreign investor, but its US$180 million in development aid over the past eight years lags far behind the US’s US$12 billion.
Much of China’s aid has gone on projects such as the Parwan irrigation system in the north, a conference hall for Karzai’s presidential palace and the Jamhuriat Hospital in Kabul. It has also helped train some civil servants as well as teaching police and army officers in logistics and mine-clearance, Baheen said.
However, by focusing on signature construction projects, often built with its own workers, China has made itself visible in a way that the US has not, he said.
“America spends billions and billions of dollars, but they give out projects to contractors from different countries — China, India, Pakistan, etc, because the labor costs are low,” Baheen said.
So when the average Afghan looks at a US project, “How does he know this is American money?” he said.
Duguid said that while foreign investment was welcome, it should be done “according with Afghan laws and free and fair competition rules that much of the world respects. That would include investment from China.”
The Aynak copper mine deal was shadowed by allegations that the Afghan mines minister, who has since been replaced, had collected huge bribes for steering the bid toward China.
China has also benefited by focusing its investments on Afghanistan’s relatively safer north, while much of the US-funded effort is in the more violent south and east regions. The Taliban is not known to have made threats against Chinese involved in Afghanistan.
Beijing has reaped admiration for projects such as the 350-bed Jamhuriat Hospital. Inaugurated last summer, it was built in three years by 200 Chinese workers who lived on-site in temporary lodgings, hospital director Ramazan Karimi said.
The hospital sits empty, though, because the government hasn’t allocated any operating funds, he said.
“The Afghan people prefer this gift from China. The Chinese side has done streets, roads and clinics in Afghanistan,” Karimi said. “They didn’t bring their troops here.”
Liu said he doubted China would ever send troops.
“The war is not China’s war,” he said. “But economically and socially, we can try to help.”
For Afghans such as Akbar, China is an example to be emulated.
“When I travel to China, I feel safe. I see good roads and cars,” he said. “I don’t hear the sound of weapons. I don’t worry about someone stealing. I wanted to stay there.”
Additional reporting by Matthew Lee
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