How China is Wooing Afghanistan to Bypass India in Trade

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In the midst of trilateral talks between China, Pakistan and Afghanistan, Chinese foreign minister Wang Yi has remarked that Kabul could become an important part of the China-Pakistan Economic Corridor (CPEC) — the flagship project of China’s larger Belt and Road Initiative to control trade in Asia and the Indian Ocean.

Launched in 2013 as “one belt, one road”, the Initiative involves China underwriting billions of dollars of infrastructure investments — roads, rail routes, oil pipelines —  in countries along the old Silk Road linking it with Europe. The ambitious project, when completed, will span 68 countries across 4 continents and will touch 60% of the world’s population. 

 

Why is India worried?

The CPEC – not to mention the entire Belt and Road Initiative – has long been a point of contention between India and China. As the two major Asian superpowers predicted to lead the world economy by the end of the century, Beijing’s decision to create the infrastructure to dominate international trade has understandably worried New Delhi.

Although China has tried to include India in the CPEC, India has turned down the offer hinting that it wouldn’t prefer to be a secondary partner in the initiative. Additionally, China’s expansion of control into the Indian Ocean and the proposed CPEC pathway through Pakistan-occupied Kashmir has made Indian lawmakers uneasy.

Why Afghanistan?

As a land-locked nation, Afghanistan is in constant need for new trading partners. Over the last year and a half, Iran and India signed a tri-lateral agreement with Tehran to allow Afghanistan to use the Chabahar port. This agreement was seen as a landmark deal to push back against China’s increasing domination of Asian trade. In particular, it gave India direct access to Central Asia and Eastern Europe, which in turn provides a trade route to the Mediterranean. 

By indicating that Afghanistan could become a major player in the CPEC, China has hinted that it could provide both a better deal for the war-torn nation. While nothing has been formalised yet, it will be interesting to see how India responds to this economic threat.

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