China announced a groundbreaking economic gesture on Thursday, offering tariff-free access to Afghanistan’s exports to its vast construction, energy, and consumer sectors. This move marks an essential step in bolstering China’s relationship with the Taliban government that has governed Afghanistan since 2021.
The announcement was made by Zhao Xing, China’s ambassador to Afghanistan, in a post on his official X (formerly Twitter) account. Zhao shared a photo of himself meeting Afghanistan’s acting deputy prime minister, Abdul Kabir, signaling China’s determination to engage economically with the isolated, cash-strapped Afghan regime.
Despite this progressive trade offer, China—like the majority of the international community—has not formally recognized the Taliban government due to longstanding concerns over human rights, particularly regarding the status of women and girls in Afghanistan. Yet Beijing’s move underscores its strategic calculus in tapping into Afghanistan’s mineral wealth to secure critical supply chains, especially in sectors like battery production and construction that hinge on resources such as lithium, copper, and iron.
China’s trade overture toward Afghanistan involves granting zero-tariff treatment across all products, potentially catalyzing a significant shift in Afghanistan’s struggling economy. This policy, set to take effect from December 1, will allow goods from Afghanistan, a nation classified among the “least developed countries,” to enter China’s lucrative $19 trillion economy without import duties. Afghanistan’s export portfolio to China remains modest, with pine nuts constituting nearly 90% of the $64 million worth of goods exported to China last year. However, the Taliban leadership, eager to address Afghanistan’s fiscal woes, views this as an opportunity to diversify its export base.
“China will offer Afghanistan zero-tariff treatment for 100% tariff lines,” Zhao Xing wrote, outlining a trade strategy that aligns with the Taliban’s long-term goal of attracting foreign investment and capitalizing on Afghanistan’s mineral wealth.
China’s announcement follows a broader trade policy unveiled by Chinese President Xi Jinping in September, which eliminated import duties on goods from the world’s least developed countries that maintain diplomatic relations with China. Despite the lack of formal recognition, this gesture further indicates China’s openness to economic partnerships in Afghanistan.
Afghanistan’s mineral resources, particularly its lithium and copper reserves, offer China a potentially valuable supply of raw materials for its manufacturing and technology industries. Afghanistan’s lithium reserves, a critical component in battery production, are especially attractive as China pushes to secure resources amid rising global demand for electric vehicles and renewable energy technologies. Beijing’s interest in securing mineral resources abroad has been a longstanding aspect of its foreign policy, ensuring the resilience of its economy while supporting large-scale industrial projects. China’s Belt and Road Initiative (BRI), with massive investments in infrastructure, energy, and connectivity, is an established framework that could further solidify these supply chains.
However, Afghanistan’s political and security environment poses significant challenges. Despite Beijing’s economic interests, Afghanistan is a region marked by instability and threats from militant groups. For China, one of the key risks is the potential for extremist factions to destabilize its investments and spread unrest, particularly to its Xinjiang region, which shares a border with Afghanistan. Xinjiang, home to China’s Uyghur Muslim minority, has been the focal point of a broader counterterrorism narrative within Chinese governance, heightening Beijing’s caution regarding Afghanistan’s potential as a haven for militants.
Eric Orlander, co-founder of the China-Global South Project, notes the economic-focused dimension of China’s policy in Afghanistan. “I don’t buy the whole strategic minerals line that we hear in Washington about how China is eyeing Afghanistan’s vast lithium reserves,” Orlander commented. “China’s approach emphasizes economic development as a means to foster security and stability.” Orlander explained China’s focus on infrastructure as a foundation for peace-building, adding, “China’s answer to everything is build a road, and from that economic development will lead to peace and harmony.”
Since the Taliban assumed control, China has remained one of Afghanistan’s few allies open to economic cooperation, even as Afghanistan struggles with international isolation. Several Chinese corporations are currently active in Afghanistan, notably the Metallurgical Corp of China Ltd, which has engaged in discussions with the Taliban administration on a major copper mining project. This project aligns with China’s broader state-sponsored investments under the BRI, which in recent years have included a diverse range of infrastructure and resource-based projects around the world.
Chinese state media has also promoted Afghanistan’s potential for economic “reconstruction,” spotlighting Chinese enterprises as part of this rebuilding effort. In an August feature, Chinese news outlets highlighted the role of these companies in laying a foundation for renewed economic activity in Afghanistan, particularly in mining and industrial sectors that could spur job creation and boost revenue for the Taliban government.
Moreover, Afghanistan’s potential integration into the China-Pakistan Economic Corridor (CPEC), a $62 billion infrastructure network connecting China’s Xinjiang province to Pakistan’s Gwadar port, is another objective that Afghan leaders have been keen to explore. This ambitious initiative, originally conceptualized as part of the BRI, could offer Afghanistan critical trade access, with infrastructure linkages allowing it to expand its export markets.
Last year, Afghanistan’s acting commerce minister publicly expressed interest in joining the BRI, seeking a formalized entry that would bring much-needed investment to Afghanistan’s infrastructure and trade network. While this proposal has yet to materialize, the extension of CPEC into Afghanistan would allow Kabul to further leverage its strategic position at the heart of Asia.
With an economy that the United Nations has described as “basically collapsed,” Afghanistan faces a dire need for revenue streams and foreign investment. Since international aid, which previously comprised a large portion of Afghanistan’s budget, largely dried up following the Taliban’s return to power, the government has had limited options for sustaining its operations. China’s tariff-free access presents an opportunity for Afghanistan to offset some of its financial challenges by increasing its export volume and exploring new avenues for revenue.
The unfreezing of Afghan central bank reserves abroad remains a contentious issue for the Taliban, as the majority of these funds are held in foreign banks and are inaccessible due to international sanctions. Afghanistan’s access to these resources would considerably enhance the Taliban’s capacity to manage its fiscal crisis, yet without diplomatic recognition, these reserves are unlikely to be released. The Taliban’s efforts to attract foreign investment, therefore, hinge on building trade partnerships such as the one with China while working to stabilize domestic security and governance structures.
China’s economic outreach also carries broader diplomatic implications. By engaging with Afghanistan economically, Beijing reinforces its influence within the region, contrasting with the approach of other powers that have conditioned diplomatic ties on the Taliban’s compliance with human rights norms. China’s non-interference policy, emphasizing pragmatic cooperation over ideological differences, resonates with the Taliban, who view China’s support as crucial for building international legitimacy. Beijing’s influence also extends to neighboring Pakistan, a long-time ally and key stakeholder in Afghan stability, where China has been involved in numerous development projects.
China’s tariff-free arrangement with Afghanistan signals a deepening of bilateral relations that could reshape the region’s economic and security landscape. If Afghanistan successfully ramps up its exports to China and attracts investment, the resulting economic stability could positively influence regional security by creating job opportunities and reducing the economic motives that often fuel extremism.
Yet, challenges remain. Security issues, logistical bottlenecks, and Afghanistan’s underdeveloped infrastructure limit its capacity to fully capitalize on China’s offer. Transporting minerals and other goods from Afghanistan to Chinese markets would require significant investments in roads, railways, and possibly air transport. The costs associated with mineral extraction and the security risks inherent in operating within Afghanistan’s territory may deter private Chinese companies, leaving state-backed enterprises to take the lead in these ventures.
Afghanistan’s role in China’s supply chain will largely depend on the Taliban’s commitment to fostering a stable and secure environment. However, achieving lasting peace remains an uphill battle for the Taliban, who face armed opposition groups and insurgencies within their borders. The Chinese government, therefore, may seek assurances from Taliban leaders that its investments and citizens in Afghanistan are protected.
