The China-Pakistan Axis: Asia's New Geopolitics

by Andrew Small

  On 29 August, Long Xiao Wei and Zhang Guo, two engineers who worked for ZTE, had been repairing a telecommunications tower in Lower Dir, a district in Swat Valley, and were on their way home when they were abducted along with their driver and security guard.154 The Pakistani Taliban soon claimed responsibility: “Our aim is to hit the government’s interests wherever they are. We kidnap everyone irrespective of whether he’s Pakistani or Chinese and we’ll continue to do this until they stop killing our people,” said the spokesman, Muslim Khan.155 He went on to say that the military operation against the Red Mosque was launched under pressure from the Chinese and indicated that the Taliban would take revenge for the martyred students. Yet again, China had found itself caught in the middle of a confrontation between the Pakistani government and the militants, this time in a part of the country that was once a tourist haven known as the “Switzerland of Pakistan”.156 Violence in the region had been on the increase for several years. Maulana Fazlullah, the “Radio Mullah” who ran Taliban operations in Swat and would later become the leader of the Pakistani Taliban, had set up illegal FM radio stations in which he demanded the imposition of sharia law.157 Following the Lal Masjid operation, Fazlullah urged his supporters to launch a jihad against the Pakistani government, and formed an alliance with militants operating in FATA.158 Swat saw an alternating sequence of talks, truces and battles between the Pakistani army and the Taliban. In the early months of Zardari’s coalition government, which took power after the February 2008 elections, talks with the militants broke down. Zardari assumed the office of the presidency days after the kidnappings had taken place.

  The South Waziristan incident in 2004 had been dealt with in less than a week. By the time Zardari arrived in Beijing, the Chinese engineers in Swat had been in captivity for one and a half months. In some respects, the Pakistanis were operating under more constraints on this occasion: Beijing made it clear that it did not want to see any of the hostages killed, reducing the scope for a repeat of the commando raid four years earlier, and the Pakistani army had poor intelligence anyway on the location where they were being held.159 China was not, however, convinced by Pakistan’s response, comparing it unfavourably with Musharraf ’s, and even raising the prospect of curtailing all of its other economic projects if the situation was not effectively addressed.160 The men were not freed after a military operation. The two hostages escaped shortly after Zardari’s return from Beijing, though one of them—who slipped and broke his leg in the escape—was recaptured.161 After extended negotiations with tribal elders, contacts with the Chinese embassy brokered by former ISI chief Hamid Gul, and Chinese offers to the Pakistani Taliban to pay a ransom, he would finally be released as a “goodwill gesture” on the eve of Zardari’s next visit to China. Muslim Khan, the Taliban’s spokesman, claimed that this was as a result of the Pakistani government’s agreement to support the imposition of sharia law in parts of Swat.162 In practice, the deal involved money—paid for by the ISI—and the release of twenty militants, which had been bargained down from the original demands for over 130.163

  Zardari was not the only one to feel the heat. The army chief Ashfaq Kayani had been in Beijing in September 2008, his own first overseas trip since taking the position.164 Although the new president received much of the stick, Beijing knew perfectly well that the responsibility for the slow response to the hostage crisis didn’t lie with the civilian government but with Pakistan’s security services. The man in the firing line was the Director General of the ISI, Nadeem Taj. Under Taj, the ISI had been directly tied to the bombing of the Indian embassy in Kabul and was believed to be either complicit in practices such as ISI warnings being provided to militants before drone attacks, or unwilling to stop them. Pressure from Washington to remove him had been intense, and Kayani was keen to replace Musharraf ’s appointee with his own man anyway.165 Chinese unhappiness at the intelligence services’ slow response to the kidnappings, conveyed during his visit, provided additional reinforcement.166 Days after Kayani returned from Beijing, Taj was kicked upstairs to take over a more senior but less powerful position as commander of the Gujranwala Corps, and replaced by Shuja Pasha.167

  Zardari’s difficult first year of relations with China cast a long shadow over economic ties between the two sides during his time in office. The kidnappings, alongside ETIM’s seeming return to the scene (detailed in the previous chapter), certainly deepened Beijing’s security concerns. But the slow response to the kidnappings was also a broader symbol of the new government’s diminished capacity to exercise power, and of China’s own trouble working out what levers it needed to pull to get things done after Musharraf ’s fall.168 Virtually all the major economic initiatives between the two sides had been set in motion under Musharraf ’s tenure and very few of them made significant progress after he had gone. The “mega-projects”—Gwadar, the KKH expansion, and the enormous new hydro-electric dams among them—appeared to go into a state of suspended animation. As one former Chinese diplomat put it, if projects “are threatened by insecurity, it’s easy: we stall them”.169 Security problems alone are not responsible for the weakness of the economic relationship, which long predates the rise of the TTP, the Red Mosque crisis, and the PPP government. Neither are they solely responsible for the broader difficulties that face the Pakistani economy overall, which—in addition to being hit by the global economic crisis—has struggled with problems ranging from energy shortages and infrastructure problems to corruption and the central government’s painfully small tax revenue base. Moreover, the protection mechanisms that were put in place for Chinese workers in the aftermath of the Swat Valley kidnapping proved relatively successful. There were a couple of near-misses: a group of Chinese engineers narrowly escaped the Mehran naval base attack,170 though they were not the target, and there are suspicions that a bombing in Karachi was directed at the Chinese consulate.171 But during the remainder of the PPP’s term in office, the only confirmed attack took place against a Chinese woman, Hua Jiang, who was shot by the Taliban in Peshawar’s bazaar in February 2012 with her interpreter.172 Variously described as a “student” or a “tourist”, and inevitably suspected to be an intelligence operative, she was travelling without the battery of protection that had become common for Chinese moving around the country.173

  But after the events of 2007 and 2008, it took a long time for Beijing to recover enough confidence to make big economic bets on Pakistan again. Arms sales and heavily protected nuclear plants were one thing, infrastructure projects and normal commercial investments quite another. In 2011, China’s largest private-sector miner, Kingho Group, pulled out of a $19 billion deal that would have been the country’s largest, citing security concerns for its personnel following bombings in Pakistan’s major cities.174 Chinese officials routinely noted that the viability of the proposed transport and energy corridor to connect Xinjiang through to the Arabian Sea175 is contingent not just on the stability of Balochistan, or the safety of specific contingents of Chinese workers, but on security in much of the rest of Pakistan too.176 While China strenuously insisted that Pakistan should not be bracketed with its war-torn neighbour, in reality they were also looking with growing nervousness at developments across its western border, and the ripple effects of the militant resurgence there for Pakistan itself. And a new term entered the vernacular among Chinese policymakers, and started to be used with ever-greater frequency: “Talibanization”.

  6

  TEA WITH THE TALIBAN

  Now, we’re all talking about Syria. [By the] second half of next year, the most important topic will be Afghanistan.

  Wang Yi, Chinese Foreign Minister, 20131

  I think we all desperately hoped that British soldiers were dying for something more noble than helping Karzai’s drug dealing cousin to sell gas from northern Afghanistan to the Chinese.

  Former senior diplomat to Kabul, speaking to The Telegraph2

  The start of China’s latest round of adventures in Afghanistan was marked the s
ame way the last couple ended—with a plane crash. Twenty minutes after its take-off on 24 February 2003, a clear sunny morning, a Cessna 402B twin-propellor aircraft plunged into the Arabian Sea 35 kilometres from Karachi, killing everyone on board.3 The nine passengers included Joma Mohammad Mohamadi, Afghanistan’s Minister of Mines and Industry, and Sun Changsheng, chief executive officer of China Metallurgical Group Corporation Resources Development, the giant Chinese company’s Pakistani subsidiary. Mohamadi had taken up his position in Afghanistan’s interim government the previous summer after a long career as an engineer at the World Bank, and a previous stint running the ministry of water and power in the 1970s. He was the third federal minister to be killed in the first year of Hamid Karzai’s new administration.4 Inevitably for a suspicious plane crash in Pakistani territory, the rumours started up almost immediately. Mohamadi’s daughter suggested that it was her father’s unwillingness to extend the benefits of a new gas pipeline to the right people that resulted in his untimely death—“All I know is that my father and his top advisers were in Pakistan signing the final agreements for a $2.5 billion gas pipeline to be built across Afghanistan, a lucrative project that many people wanted a piece of. But my father wouldn’t sell out, and my brother once cautioned him, ‘You’ll be lucky if they give you a warning.’ But he wouldn’t listen.”5 A lawsuit brought by the young Chinese executive’s family described the accident as “of such a nature which in the ordinary course of things does not happen”.6

  MCC, a Chinese state-owned engineering and construction conglomerate, had chartered the plane to fly the minister and a group of his officials out to see their new Pakistani venture, the Saindak gold and copper mine in the far west of Balochistan. Saindak was rumoured to be a location used by Chinese agents to maintain covert contacts with the Afghan Taliban after they fled the US invasion.7 That February morning, though, it was supposed to act as a showcase that would help MCC secure an even greater prize: the biggest mining contract in Afghanistan’s history. Aynak, in Logar province, is estimated by geologists to hold the world’s second largest copper deposit, worth as much as $88 billion.8 Afghanistan’s mineral riches had been uncovered by repeated geological surveys conducted by the Russians and the British over the preceding century, and Aynak, which had been used for copper-working since ancient times, was identified as one of the country’s two truly world-class deposits.9 The Soviet Union had made the most concerted attempt to get a mine on the site into operation, but its efforts were derailed by the mujahideen’s campaign.10 During the Taliban years, it was used as an Al Qaeda training camp, infamous for its elite training course whose alumni included one of the USS Cole attackers and four of the 9/11 hijackers.11 There would be a gap of nearly two decades before another effort was made to tap the rich seam of copper that lay beneath.

  The Chinese embassy in Kabul resumed its functions in February 2002, almost exactly nine years after rocket attacks on the compound forced the withdrawal of all of its diplomatic staff.12 Afghanistan’s interim government was seeking sources of revenue that were independent of the Western aid that constituted the bulk of its financing, and the newly arrived Chinese officials had learned that it was considering making Aynak one of its first tenders.13 They tipped off their colleagues at MCC.14 A Korean conglomerate was already making a pitch for the mine and MCC would need to move quickly with its own proposal.15 From the perspective of Chinese resource needs, the appeal was obvious: twenty-five years of production at the mine would be equal to a third of China’s entire copper reserves.16 Like many state-owned companies, though, MCC was motivated by commercial considerations as much as any national goals. It was in the process of diversifying away from its traditional field of domestic steel mill construction, and planned to make the more lucrative avenue of natural resource development its new focus.17 The Afghan mining minister’s trip to Pakistan was part of a seven-year wooing campaign to make Aynak one of the jewels of MCC’s burgeoning corporate empire that ran from Australia to Argentina. The company’s ambitions in South-West Asia were being driven by the man who died with him in the plane, Sun Changsheng, but the crash derailed MCC for barely a few months.

  MCC and its partner, Jiangxi Copper, prepared a mammoth bid for the mine that included plans to construct an on-site power plant, an associated coal mine to fuel it, a cement mill, and—at the request of the Afghan government—a railway line connecting the mine to the Uzbek and Pakistani borders. 10,000 jobs were promised.18 The companies worked hard to persuade the new Mining Minister, Mohammad Ibrahim Adel, and his superiors that their bid should be looked on favourably. Adel certainly did that, advocating for MCC throughout the tendering process, and China’s proposal showed distinct signs of benefiting from inside information from the ministry of mines.19 Allegations persist—“with a high degree of certainty”, according to a US official cited by the Washington Post—that a $30 million bribe paid in Dubai heightened the minister’s desire to smooth things along.20 Nevertheless, for the Afghan government the numbers looked good anyway: three $808 million payments, royalties at 19.5% (one of the highest in the world), and investments that could end up totalling as much as $10 billion.21 It surpassed the other bidders on virtually every count. Aynak was more than just a good deal for the Afghan state, it was potentially a big step towards providing it with an autonomous financial underpinning: estimates suggested that it could generate $390 million of tax revenue a year, nearly a 50% increase in the government’s income.22 The initial investment alone would represent more than 70% of all the investments in the country from 2002 to 2007 and 35% of all the international assistance provided across the same period.23 A commitment from a major Chinese company was attractive for another reason too. Afghan leaders hoped that China’s relationship with Pakistan might help to protect the mine, the revenue stream, and possibly even the future security of the country.24 Would the ISI really allow their assets to attack Chinese facilities? The Afghan government hoped not. Any insurgent advance on Kabul would now worry Beijing too, with the mine barely 20 miles south-east of the capital. On 20 November 2007, the ministry of mines made the formal announcement that everyone had been expecting. The Chinese consortium had won the contract, opening a new chapter in China’s relations with Afghanistan.25

  What MCC could not have anticipated, however, was Aynak’s elevation to a symbolic status that supposedly made the copper mine deal representative of virtually everything about Beijing’s approach to the country and the long war that was intensifying there. Rarely has so much been written about a mine from which so little was actually extracted. The drumbeat began almost immediately after the announcement. “While America is sacrificing its blood and treasure, the Chinese will reap the benefits,” argued Robert Kaplan, claiming that China was “free-riding on the public good we offer”.26 “We do the heavy lifting and [China] picks the fruit,” echoed S. Frederick Starr.27 With China contributing nothing to the military campaign and very little by way of aid, the case that it somehow hadn’t “earned” the juicy contract wasn’t hard to make. There were even claims that American soldiers had taken on the responsibility for physically protecting the mine from Taliban attacks.28 While that was untrue in a narrow sense, the notion that China was unfairly taking advantage of the Western security presence in Afghanistan proved difficult to shake off.

  From Beijing’s perspective, the argument was more than a little odd. Certainly the Aynak site needed an immediate level of protection, like other such projects in an insecure neighbourhood, but if there was one thing China did not want to see, it was a rival power setting up a long-term military presence in its backyard. Beijing had been deeply concerned about US bases in Afghanistan and the wider region since the very first days after 9/11. Afghan officials routinely described their Chinese counterparts pulling out maps of the country, stabbing their fingers anxiously at the various locations, and pressing them about Washington’s grand designs.29 What’s more, however ambivalent China was about the prospect of the Taliban taking control of
the country again, it had dealt—and continued to deal—amicably enough with them when it needed to. Beijing’s approach in Afghanistan relied on a carefully hedged policy that avoided picking sides or making unnecessary enemies. Any perception that the Chinese were only able to extract resources under the condition of armed American protection against the insurgency would be entirely antithetical to China’s goals not only in the region but in the wider Islamic world.

  In the end, free-riding was to be the least of the US or the Afghan government’s concerns. Six years later, with production at the facility still to begin, the conditions of the contract being renegotiated, and an emergency trip by Hamid Karzai to China to determine whether the whole deal might be abrogated, the real question was whether the Chinese companies would risk taking a ride at all.30 If Aynak symbolized anything it was that for China, Afghanistan remains largely a land of threats, real, potential, and imagined, rather than one of opportunities. The moment at which Beijing finally realized it had to take some responsibility for influencing the political and security situation there had little to do with its multi-billion dollar investments and a lot to do with its fears that chaos in Afghanistan might end up destabilizing two places it cares about a great deal more: Pakistan and Xinjiang.31