As a result of the deteriorating security situation in Afghanistan, after the withdrawal of US troops from there, and the bus explosion in Upper Kohistan district in Khyber Pakhtunkhwa (KPK) province on July 14, 2021 (which took the lives of 9 Chinese nationals), it is likely that Beijing will be compelled to rethink its vision for connectivity with Afghanistan and Central Asia via the China-Pakistan Economic Corridor (CPEC) project.
In recent months, there have been a number of challenges to the CPEC project, and there have been differences between Beijing and Islamabad over a number of logistical issues. Yet, there is also no denying the point that CPEC has been an important tool for China’s vision for connectivity with Afghanistan and Central Asia.
After the terror attack on July 14, 2021, Beijing has already put the Dasu hydro power project (the bus which was attacked was carrying workers and engineers to the site of the hydro power project, which is part of CPEC) on hold. A CPEC related meeting was also postponed.
Even before the current turmoil in Afghanistan and the attack on July 14, there had been differences between Beijing and Islamabad over the progress of CPEC; one prominent example of this was the pricing of the Karachi-Peshawar railway line/ML1 rail project (this is the largest project within CPEC). The initial pricing of the project was $9 billion and this was reduced to $6.8 billion. The ML1 project has been put on hold for the time being. In 2019, China also conveyed its concerns to Pakistan regarding the slow progress of CPEC and CPEC Authority (CPECA) headed by a former army officer was set up.
The CPEC project is especially important for China in the context of connectivity with Afghanistan and Central Asia. Beijing has held discussions recently with Afghan officials for the construction of a Kabul-Peshawar motorway, which will link Afghanistan’s capital with CPEC. Given the recent developments however, Beijing may go slow on CPEC in the short run.
Iran’s increasing relevance for Beijing
As a result of the changing geopolitical landscape in Afghanistan, Iran would be important for Beijing. Ties between Beijing and Tehran have witnessed an upswing especially after the Trump administration’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA)/Iran Nuclear deal. In March 2021, Iran and China signed a 25-year cooperation agreement with Iran which sought to enhance economic and security ties (some of the projects fall within China’s overall vision for connectivity). Under the agreement China has made investment commitments to the tune of $400 billion over a period of 25 years.
Iranian Foreign Minister Javad Zarif has already stated in April 2021, that China was keen to play a role in the Chabahar Port project (India has been developing a part of the port, and views the project as its gateway to Afghanistan and Central Asia). Zarif has also alluded to the point that the Chabahar project provided an opportunity for ‘all to come together’ to help Afghanistan. In 2019, Iran had expressed its displeasure with India for stopping oil imports from the former, and had also slowed down the development of the Chabahar Port.
While India has not made any remarks against Chinese participation in Chabahar Port, it would not be comfortable given the state of the bilateral relationship with China. In recent months, India has been paying greater attention to ties with Iran.
India’s External Affairs Minister S. Jaishankar during a brief stop over in Tehran, enroute a three day visit to Russia earlier this month, met not only with his Iranian counterpart, Javad Zarif, but also Iranian President elect Ebrahim Raisi. On July 21, 2021 Jaishankar also spoke with Zarif and apart from discussing bilateral relations, they are supposed to have discussed the security situation in Afghanistan.
The current situation in Afghanistan has opened a window for cooperation between all stakeholders, and reiterated the point that pragmatism, flexibility and an ‘out of the box’ approach are essential to adapt to geopolitical changes. It would also be interesting to see if Beijing focuses less at least in the immediate future on CPEC, and Iran emerges as an important gateway for Beijing to Afghanistan and Central Asia — and also as a key participant within BRI. If so, Iran’s strategic clout which is already likely to increase as a consequence of the turmoil in Afghanistan could witness a further rise.
Recent developments in Afghanistan and Pakistan have reiterated some points. First, as is already evident, the US withdrawal of troops from Afghanistan will have important ramifications for Afghanistan’s neighbors especially Pakistan, Iran and India. Second, the CPEC project is likely to be impacted by the turbulence in Afghanistan. Finally, it remains to be seen if China will significantly revise its approach towards regional connectivity, and how India and Pakistan would react to such a situation.