How did a Major Chinese Investment in Afghanistan Collapse?

0:00Today on State of the World, how did a major Chinese investment in Afghanistan collapse? You're listening to State of the World from NPR. We bring you the day's most vital international stories up close where they're happening. I'm Greg Dixon. Four years ago, the U.S. withdrew from Afghanistan and the Taliban regained control of the government. Chinese investors quickly entered the picture as Afghanistan faced Western sanctions. The first major investment China made was in the development of oil fields in Afghanistan. But that deal recently fell apart. The Afghan government cut the contract, and the Chinese firm says the Taliban took some of its workers hostage.

0:44As NPR's Anthony Kuhn tells us, the saga sheds light on the relationship between the Chinese government and the Taliban. In 2023, Afghanistan's Ariana TV network News showed turbaned officials and hard-hatted engineers turning on oil wells in northern Afghanistan's Amudarya River Basin. China and Afghanistan signed a 25-year contract to produce oil, with China pledging to invest$540 million in the first three years. But after two and a half years, the deal fell apart, with both sides blaming each other. Two Chinese employees of the joint venture, Afchin Oil & Gas Limited, spoke with NPR. They requested that we not use their names or voices because they feared retribution from the Chinese government and the Taliban.

1:32We use voice actors to read their quotes. One employee explained what happened to his colleagues in June. The Taliban forcibly took over our joint venture oil fields and unreasonably drove our Chinese personnel out of the oil field at gunpoint. He says the Taliban detained 12 Chinese employees in Kabul and confiscated their passports. In June, Afghanistan's Ministry of Mines and Petroleum said it was canceling the contract because the Chinese side didn't deliver promised investments or pay royalties on time. The Chinese company disputes this account. Their employees said the Ministry of Mines sent them a private verbal message offering a deal.

2:10They told us, you give us a written pledge saying you're voluntarily terminating the contract and we're not forcing you to do it. He says that they also demanded that the Chinese side leave them all their equipment and their Kabul bank account with millions of dollars in it. If you do these three things, I reckon you'll get your passports back quickly. The Ministry of Mines and Petroleum did not respond to repeated requests for an interview. One Afghan source with direct knowledge of the situation confirmed that Chinese employees' passports were confiscated, but denies they were detained. He requested that his name and voice not be used because he wasn't authorized to speak to the media.

2:49After the U.S. withdrawal four years ago, China was the first country to appoint an envoy to Afghanistan. A second Chinese employee said his company did not invest in Afghanistan just for financial gain. We had hoped that we could help them develop, improve citizens' lives, and help their interim government to function and be stable. Their stability is good for China and China's Xinjiang region. Xinjiang borders eastern Afghanistan. The second employee says the oil fields created thousands of jobs and millions of dollars in revenue for the Afghan government, but the Taliban was still not satisfied.

3:24Their business mindset does not include win-win outcomes, like a bandit committing a robbery. They think, if I like it, then it's mine. Last week, the two employees told NPR the Taliban let eight Chinese employees return to China, while four remain in Kabul, and it's not clear when they'll be able to leave. This happened as Chinese Foreign Minister Wang Yi was visiting Afghanistan. The Chinese embassy in Washington said they were not aware of this case, but attach importance to protecting Chinese nationals overseas. Former Afghan diplomat Omar Samad says both countries need to protect their long-term interests in good relations.

4:01I think that both sides, not just the Afghans, may want to be a bit more sober about this and realize that this one particular deal may jeopardize overall relations if it's not handled properly. Afghanistan says it's open to partnering with other foreign investors to operate the Amudaria oil fields. But the Chinese employees warn that unless the Taliban treat foreign investors better, they're unlikely to find any new partners. Anthony Kuhn, NPR News.

4:41That's the State of the World from NPR. Thanks for listening.