The US-China Cold War is now playing out in Pakistan

By Johann Chacko

I’m watching you.

On Sept. 01, days before US secretary of state Mike Pompeo and chairman of the joint chiefs of staff, Gen. Joseph Dunford, were due to arrive in Islamabad, a Pentagon spokesman announced that the department of defense intended to permanently cut $300 million from funds allocated to support Pakistan in the fight against America’s enemies in Afghanistan.

So does this mean America and Pakistan are finally breaking up?
The short answer is no. 

As much as both states are fed up with each other, they remain far too co-dependent to simply walk away.
What we are seeing instead is a tough and protracted re-negotiation over the terms of the relationship. The question of Pakistan’s role in Afghanistan is not necessarily the hardest issue; there might even be convergence given the greater realism in Washington, Rawalpindi, and Islamabad.
The far bigger question hanging over the Pompeo-Dunford visit is what India and Pakistan’s role will be in the emerging cold war between the US and China. 

Despite Pakistani hopes, China is not yet willing or able to spend what it takes to completely replace America as Pakistan’s primary strategic partner. 

US economic and financial cards remain hard to match, and the result, for the time being, is likely to be a series of compromises that are uncomfortable and dissatisfying for all parties.
The US government began paying Pakistan what it calls “Coalition Support Funds” (CSF) back in 2002, shortly after it began military operations against the Taliban. 

In theory, the CSF compensates Pakistan for specific costs incurred in deploying tens of thousands of additional troops to the Afghan border, and for the use of Pakistani airfields, ports, and roads to resupply American forces in Afghanistan.
In reality, the Americans treated the funds as a reward to cement a long-term commitment to its cause from the Pakistan Army in the face of deep and wide popular opposition over the violations of Pakistani national sovereignty and significant civilian casualties.
The Pakistani government became highly reliant on this funding—a congressional research service report in 2015 estimated that the $13 billion in disbursed CSF funds had paid for 20% of Pakistan’s military spending (especially food and ammunition). 

The Americans were willing to overlook what they suspected was creative accounting of the bills as long as Pakistan delivered results.
Over the last decade, the metric for results has shifted as trust in the Pakistan army within the Pentagon, Congress, and three successive White House administrations has plummeted. 

This shift accelerated after the “drawdown” of US forces in Afghanistan in 2014, which led to repeated bloody Taliban and Haqqani offensives, vexing and embarrassing Republicans, Democrats, and non-partisan professionals alike.
The Pentagon, with the support of Congress, retaliated with steep decreases in allocated military aid (at least 73%), as well as the conditional withholding of budgeted CSF “reimbursements” under Obama in 2016. 

In July 2017, under Trump, all CSF payments were frozen, and in January 2018 the allocation was cut by $700 million.
Put another way, the longer Pakistan resists American criticism, not only has it become harder to get those carrots, but the carrots have become much, much smaller.
Pakistan has not yet retaliated by squeezing US supply lines to Afghanistan, but it has not scaled back its covert support to the Haqqanis or the Afghan Taliban either.

However, this cycle of denial and punishment may have an end in sight. 

Caught between converging US and Chinese interest in a peaceful and stable Afghan endgame, the Pakistani military appears to be more open to a settlement that Washington DC could live with.
For that matter, the US has begun quietly negotiating with the Taliban without any of the preconditions it previously held. 

All of this is likely to form a major element of Pompeo’s meetings with the new government of Imran Khan and general Dunford’s discussions with army chief general Qamar Javed Bajwa.
There is no doubt that many in New Delhi are concerned the result might be a settlement that allows the Taliban to retain arms and gain a share of the national government, while still remaining tethered to Rawalpindi. 

This draws attention to the larger truth that US-Pakistan relations (and even US-India relations) are more inextricably impacted by the state of US-China relations than ever before.
Pakistan’s urgent need for up to $12 billion in relief from its looming balance-of-payments crisis dwarfs the question of military aid and constitutes the strongest source of American leverage. 

Given the Trump administration’s determination to use all available means of persuasion, it is particularly significant that the US has not linked the bailout to questions of Afghanistan or terrorism, but instead to China’s role in Pakistan.
Just over a month ago, secretary Pompeo called for the International Monetary Fund (IMF) to reject Pakistan’s bailout request on the grounds that there was no need for American taxpayers to repay Beijing’s predatory lending underwriting the China-Pakistan Economic Corridor (CPEC).
Pompeo’s statements must be understood in the context of the US National Security Survey that last year labeled China a “strategic competitor” engaged in “economic aggression.” 

One result has been the rapidly escalating multi-billion trade war that could damage both countries, the World Trade Organization, and the global economy.
Another result is the pressure on CPEC, the largest single component so far in Xi Jinping’s “Belt and Road Initiative” (BRI) intended to plug Eurasia into the Chinese economy, ensuring it an agenda-setting global role.

Pakistan hopes that China and Saudi Arabia might offer the financial relief that would provide an alternative to the IMF and American pressure. 

Although this is not the kind of role that China wants, an IMF bailout would lead to a disclosure of the highly secretive terms of CPEC deals, leading to renegotiation or even cancellation and undermining Beijing’s geo-economic goals.
This is an important moment for Chinese leadership as it decides what its BRI plans are worth, and what Pakistan is worth to those plans. 

Compromise between the two options is also possible; a limited form of additional Chinese assistance would reduce what was needed from the Saudis and the IMF, reducing American leverage on a range of issues. 

The status quo would limp on, but the result will be even greater Chinese influence in Pakistan.
As the battling winds from both Washington and Beijing pick up in intensity, and observers wonder who will win out, Pakistan’s historical role as the region’s weather-vane seems set to continue.

Axis of Terror: Sanction China For Its Support Of Taliban Terrorists

• China’s dialogue rewards Taliban violence, increases Taliban influence and sidelines the elected government of Afghanistan.
• China and its allies should follow the global norm: no negotiation with terrorists.

By Anders Corr

China started secret negotiations with Taliban terrorists at least as early as late 2014, and last week diplomatically supported the Taliban, along with allies Pakistan, Iran and Russia. 

China’s dialogue rewards Taliban violence, increases Taliban influence and sidelines the elected government of Afghanistan. 

China and its allies should follow the global norm: no negotiation with terrorists. 

Failing that, the U.S. and Europe should sanction Chinese companies involved in Afghanistan.

Afghan mourners carry the coffin of one of the 36 victims killed in twin Taliban blasts, in Kabul on January 11, 2017. Bombings across three Afghan cities including Kabul killed around 50 people and wounded 100 others on January 10, in a day of carnage as Taliban insurgents escalated a deadly winter campaign of violence. 

China is Afghanistan’s biggest investor, and Afghanistan has from $1 trillion to $3 trillion in mineral wealth, mostly from copper and iron ore deposits. 

The most important of these deposits, at Mes Aynak, sits below an ancient Buddhist walled city that is now a UNESCO World Heritage Site. 

In November the Taliban, which in 2001 destroyed the famous Buddhas of Bamiyan, appeared to reward China by giving the green light to mine the site.
China’s history with Islamic extremists in Afghanistan stretches back to the 1980s, when it provided weapons to anti-Soviet mujahideen. 

During Taliban rule of Afghanistan in the late 1990s, China promised to support the Taliban diplomatically at the U.N. in exchange for assistance against Afghan extremists targeting Chinese interests. 

China has also sought to weaken links between Uighur terrorists in China’s Xinjiang “autonomous” province, and terrorists in Afghanistan, including the Taliban, Al Qaeda, and Islamic State.

An Afghan archaeologist looks at the remains of Buddha statues discovered inside an ancient monastery in Mes Aynak, in the eastern province of Logar on November 23, 2010. The archaeological dig is located at the world's second-biggest unexploited copper mine. The Chinese government-backed mining company, China Metallurgical Group Corp., pressured archaeologists at the time by giving them three years to finish the excavations. Archaeologists fear that the 5,000-year-old Buddhist monastery will be largely destroyed once work at the mine begins. 

In addition to China’s direct negotiations with the Taliban, China can influence it through China’s close alliance with Pakistan, including China’s $46 billion Pakistan transaction in 2015.
The deal was probably originally planned (but postponed for security reasons) in September 2014. The funding will link Pakistan’s Gwadar Port to China’s One Belt One Road (OBOR) project.
The Taliban appeared to reward China’s overtures in December by calling on its fighters to protect China’s Mes Aynak copper mine in Afghanistan, the largest undeveloped copper deposit in the world. This is an important change in the mine’s security, as security concerns had stalled the mine for years. The site has been rocketed, and is on a Taliban transit route.
Gunmen executed eight workers clearing Soviet-era landmines in 2014.
Chinese workers have repeatedly evacuated Mes Aynak.

The Mes Aynak project is subject to corruption and bribery allegations, and six villages in the area were forcefully relocated to make way for the mine.
Al Jazeera interviewed a relocated village elder in 2015:
"We are all helpless. We don’t have a way to fight for our human rights...
The government is responsible for creating [the security problems] by grabbing people’s lands, beating them up, and humiliating and disrespecting their values…. 
It’s when people fight back, the government calls them ‘Al-Qaeda.’... 
If the people are happy with the Chinese [mining company], then why are missiles being fired into Mes Aynak? 
People are angry".
Chinese representatives of the Metallurgical Corporation of China (MCC) mining company sought help from locals to mitigate risk from attacks by the Taliban.
“The Chinese told me that there were four or five attacks in the past and that police had been killed," according to a village elder quoted in a March 2014 South China Morning Post article.
"They said we want your help so the Taliban does not attack with bombs and rockets, and does not attack the police."

Chinese companies, including MCC, Zijin Mining Group Company, China National Petroleum Corporation, and Jiangxi Copper Corporation, are seeking to extract billions in minerals from Afghanistan.
A new OBOR rail link between China and the North of Afghanistan would bring those minerals to China, bypassing Pakistan.
Rather than One Belt One Road, it appears China is seeking an Asia in which all-roads-lead-to-Rome, or in this case, Beijing.
The rail line runs through Uzbekistan and Kazakhstan, and at least two Chinese trains returned empty to China in October because of a refusal by Uzbekistan to let Afghan exports pass.
The Chinese copper mine at Mes Aynak will require $3 billion of investment to unearth over $100 billion worth of copper.
In 2014, around the same time it was seeking help from local village elders to mitigate the Taliban threat, China started bargaining with the Afghanistan government to renege on a 2007 agreement by lowering government royalty rates of 19.5% to just 10%, and cancelling $675 million in bonuses.
The Afghan government refused, providing China with a possible impetus for its secret Taliban talks in late 2014.

Those talks seemed to have yielded fruit in November when China’s Mes Aynak copper mine was specifically noted by the Taliban as under protection.
This raises a series of questions.
Is China using the threat of increased diplomatic or financial support to the Taliban to seek concessions from the elected government of Afghanistan on royalty rates, bonuses, or other matters? Is China promising financial compensation to the Taliban for approving operations at the mine?
The Taliban were in a financial crisis prior to the November announcement, and are known to obtain significant revenues from taxes and protection payments levied against legal and illegal mining.
So it is unlikely the Taliban would publicly instruct fighters to stop the attacks without some form of compensation.
As the Mes Aynak copper deposits are under a 5,000-year-old Buddhist archaeological site with a monastery complex housing 400 Buddhist treasures and rare domed stupa temples, it also raises the question as to whether China might prefer Taliban control of the mine, over that of the elected government of Afghanistan.
The Taliban are known for destroying two massive ancient Buddhist statues at Bamiyan in 2001, so they might be more amenable to allowing China to destroy the Mes Aynak UNESCO World Heritage Site to facilitate rapid mining of the copper beneath.

Pakistan's Prime Minister Nawaz Sharif (L) and Army Chief Raheel Sharif (2R) look on during the opening of a pilot trade project in Gwadar port, some 700 kms west of Karachi on November 13, 2016. Pakistan's Prime Minister Nawaz Sharif on November 13 opened a trade route linking the southwestern port of Gwadar to the Chinese city of Kashgar as part of a joint multi-billion-dollar project to jumpstart economic growth in the South Asian country.

China has demonstrated more influence with the Taliban than most other countries.
While attempts to broker peace talks between the Taliban and elected government of Afghanistan have generally failed, China was able to make progress on this front.
“Previous dialogue tracks through institutes like Pugwash, in Chantilly, France or through the Taliban Doha office had not appeared [to] move very far forwards with little evidence that the Taliban were taking the negotiations seriously,” according to a post by Raffaello Pantucci, who has done research in Afghanistan.
“In contrast, the [negotiations] track opened with Beijing’s support appeared to draw its influence directly from the heart of the Taliban in Pakistan.”
China’s negotiation with Taliban terrorists will likely freeze some Taliban-Uighur links, and protect China’s copper and other investments in Afghanistan.
Whichever country is able to satisfy the diverse and militant players in Afghanistan’s corrupt and insecure frontier investing environment will have a good chance at winning additional contracts and using their contacts and methods to exclude international competitors.
Up to $3 trillion in mineral deposits is at stake, and China is currently Afghanistan’s single largest foreign investor.

Chinese police ask a group of people who were denied entry to the Urumqi Intermediate People's court, to leave as the trial of Ilham Tohti, a former economics professor at a university in Beijing, begins in Urumqi, west China's Xinjiang region on September 17, 2014. Chinese authorities imposed tight security in Urumqi Wednesday for the separatism trial of a prominent scholar from the mostly-Muslim Uighur minority, as critics warned the prosecution will worsen tensions in violence-wracked Xinjiang.

Laws against corruption in the U.S. and Europe, for example the Foreign Corrupt Practices Act (FCPA) of 1977, will likely make Western investments in Afghanistan difficult for some time.
China takes advantage of those laws by failing to enforce its own anti-corruption laws.
Rather, Chinese firms are well known for buying off stakeholders to allow resource extraction, including through suitcases full of cash. 
China therefore has an advantage in Afghanistan and other frontier investing environments.
The U.S. and Europe are as a result losing valuable economic opportunities to China, which does not play by Western rules.
Governments where China uses corruption obtain sub-par agreements, for example in Southeast Asia and Africa. 
As these regions’ economic growth accelerates, China’s ill-gotten gains will contribute to its own economic growth and increasing global political influence.
In China’s Faustian bargaining with the Taliban, China increases the Taliban’s diplomatic profile and influence in Kabul, and appears to have strengthened and re-focused Taliban violence ever more tightly on the elected government of Afghanistan and international forces. 
China’s continued diplomatic support to the Taliban confirms its realist approach to international politics, in which might makes right and each country seeks, above all, its own advantage.
China’s renewed dialogue with the Taliban confirms China’s aversion to the liberal values of international law, democracy and human rights. 
If the U.S. and Europe truly care about these values, we should sanction Chinese companies operating in Afghanistan until China ends its dialogue with the Taliban and fully supports the elected government of Afghanistan.

A relative weeps over the coffin of one of the 36 victims killed in twin Taliban blasts, in Kabul on January 11, 2017. Bombings across three Afghan cities including Kabul killed around 50 people and wounded 100 others on January 10, in a day of carnage as Taliban insurgents escalated a deadly winter campaign of violence.