Afghan fiasco paves way for China’s rise

THE BOMBING AT THE KABUL AIRPORT IS AN OMINOUS PORTENT. — RAYMOND J. DE SOUZA

Plenty of comparisons have been drawn between the botched withdrawal from Afghanistan and the 1975 humiliation of American forces in Saigon. I am more persuaded by those commentators who see something more like the Suez crisis of 1956, which confirmed the end of Britain as a leading world power. The waning of Britannia across the seas was not cause for great alarm; the waxing world power was the United States with its, on balance, benign influence.

Today the rising power is China. Is the waxing of China and the waning of America in Afghanistan thus an analogue to the waxing of America the waning of Britain in the Middle East 65 years ago? While China’s demographic crisis likely means that its pre-eminence will be shortlived, much damage can be done in 20 or 30 years.

How much will China benefit from the Western humiliation in Afghanistan?

Given that China’s foreign minister hosted the Taliban leadership in China last month, it is clear that Beijing sees opportunities.

Indeed, the business pages have been filled with stories about Afghanistan’s mineral wealth, estimated to be worth trillions of dollars. Those stories have run periodically over twenty years; more than ten years ago the American defence department called Afghanistan the “Saudi Arabia of lithium,” an essential component in battery production.

Consider the Mes Aynak mine, a massive copper play in Afghanistan with an estimated potential to be one of the largest copper mines in the world. A joint venture of the Metallurgical Corporation of China and Jiangxi Copper took out a 30-year Us$1-billion lease in 2008 with the Afghan government. Seven years into the American occupation, the Chinese were already doing the big deals.

Mes Aynak is not in development yet; the Taliban turned against the project as they considered it a project of the American-backed Afghan government. Attacks

on the site dissuaded the Chinese from further development. But now that the Mes Aynak mine would profit the Taliban, it is expected that the megaproject will be revived.

One of the indications of world hegemon status is that, in general, the rules of the game are drafted in your favour. The Afghanistan pullout highlights just that.

The fall of the Afghan government means that the new Taliban regime will no longer benefit from American largesse; to the contrary it will face American-led international economic and financial pressure.

In need of fiscal stability and investment, the Taliban will certainly turn toward China, whose investments in the central Asian republics have been a key part of its foreign and trade policy over the last 15 years.

China, in turn, will seek to increase its dominance of the world mineral markets. In addition to lithium — the key to the batteries that power electric vehicles — Afghanistan is rich in the rare earth minerals needed for electronics.

The ESG — environmental, social and governance — priorities of Western governments and companies mean that investments in such mineral plays are hard to imagine. The toxicity of that mineral production, combined with the human rights abuses of a Taliban regime, will likely mean that investment will be hard to come by in Toronto, New York or London. China will be more than willing to take up the slack.

If the new rules of the game favour China on the investment side, so too on the demand side. All Western governments are all-in on electrical vehicles, competing to announce evermore fantastical targets for the proportion of their national fleets made up of the giant-batteries-on-wheels.

Those giant batteries will be made in China, produced from resources mined by Chinese companies in Afghanistan and other unsavoury parts of the world.

Coming and going, the Chinese regime sees the rules turning its way.

Afghanistan by itself is a significant fiasco, not least because the entire purpose of the Afghan venture — the prevention of terror attacks — may be the singular achievement unravelling with the withdrawal. Certainly the bombing at the Kabul airport is an ominous portent.

Yet what Afghanistan signifies, like Suez long ago, is as important. On a range of fronts — projection of international power, the cohesiveness of NATO, climate-driven resource policy, sources of international investment — the decline of the United States and the rise of China is drawn in sharp relief.

One need not be melodramatic. Within 10 years of Saigon, president Ronald Reagan had the Soviets on the back foot, negotiating major arms treaties from a position of strength. So while trends are to be noted, they are not entirely determinative. Leadership matters. Which, at the moment, is more cause for worry.

THE WANING OF BRITANNIA … WAS NOT CAUSE FOR GREAT ALARM; THE WAXING WORLD POWER WAS THE U.S. WITH ITS, ON BALANCE, BENIGN INFLUENCE.