The situation in Afghanistan is rapidly deteriorating. As the United States and its NATO allies accelerate their military withdrawal, amid the rapid collapse of the Afghan military, the Taliban have assumed control over the country’s capital. Despite the Taliban’s insistence on bringing about a moderate approach to governance, their rise threatens the civil rights of Afghan minorities and women, with serious economic implications for Afghanistan.

Following the Taliban's takeover, the International Monetary Fund suspended Afghanistan’s access to funds, and the Biden administration froze billions of dollars in Afghan government reserves held in US banks. The latter decision will severely impact the Taliban’s ability to manage the country’s already battered economy, which is highly reliant on American aid. Meanwhile, existing sanctions on the militant group can also hinder international aid programs for Afghanistan.

In these circumstances, Afghanistan’s eastern neighbor, China, anxiously weighs its limited options and looks to accommodate its vital economic and security interests. China hopes to expand its economic footprint in the country; Chinese companies are already invested in Afghanistan's energy and minerals sectors, hoping to further extract resources from the country’s vast mineral wealth. More importantly, Afghanistan’s strategic geographical position as a regional connector benefits China’s Belt and Road Initiative, as well as the China-Pakistan Economic Corridor.

Beijing has engaged Kabul on constructing a Peshawar-Kabul motorway, connecting Pakistan to Afghanistan, despite the previous Afghan government’s reluctance to participate in the BRI—hoping to avoid tensions with Washington. In addition, Beijing is already constructing a road through the Wakhan corridor, which connects the Xinjiang province to Afghanistan. China’s warm relations with Afghanistan’s neighbors, particularly Iran and Pakistan, and the respective countries’ strong interest in BRI, provide it with a unique advantage; a strategic position that the United States never enjoyed due to its strained relations with several regional stakeholders.

Second, China has serious security concerns vis-a-vis Afghanistan. On one hand, China’s economic ties with the country remain contingent on a stable domestic environment, where a strong central government can wield control over its resources and trade routes. On the other hand, the rise of extremism in Afghanistan could trigger a spill-over effect in the Xinjiang province, leading to a potential rise of Southeast Asian militant groups. More specifically, China worries that the rise of the Taliban could embolden the Eastern Turkistan Islamic Movement (ETIM); a Xinjiang-based separatist group labeled as a terrorist organization by the United Nations in 2002, which reportedly has more than 500 militants situated in northern Afghanistan, neighboring the Xinjiang province. China also fears that with a weakened central government in Kabul, the Islamic State can expand its presence in Afghanistan, posing a threat to Chinese security.

Considering these developments, against the backdrop of multiple failed great power interventions in Afghanistan, including the United States and the Soviet Union’s fruitless campaigns, the military option is off the table for Beijing. Henceforth, with limited options, China prioritized negotiating with the Taliban and facilitated peace-talks, despite the talks failure to produce a viable power-sharing agreement. Just recently, prior to the fall of the central government in Kabul, to improve bilateral ties and facilitate peace talks, China’s Foreign Minister Wang Yi welcomed Taliban officials in the northern Chinese city of Tianjin.

Hu Xijin, the editor-in-chief of the Global Times, a state-affiliated media outlet in China, recently argued that “we should not create enemies for ourselves at this crunch time,” and asserted that the “Afghan and the Pakistani Taliban are two separate groups” and blamed “Pakistani Taliban” for the recent attacks against Chinese engineers in Pakistan. 

This narrative signals an attempt by Beijing to play down the group’s threat for Chinese domestic security. In return, the Taliban has reportedly welcomed Chinese investment in Afghanistan, with spokesman Suhail Shaheen stating that "China is a friendly country and we welcome it for reconstruction and developing Afghanistan...of course we will ensure their safety.”

Following the fall of Kabul, the Taliban’s spokesman stated that China can contribute to Afghanistan’s economic development. The Taliban has also vowed to fight ISIS, while assuring Beijing that despite its historic links with separatist groups in Xinjiang, it will not interfere in the country’s internal affairs.

From a broader perspective, close bilateral ties between China and Pakistan, the Taliban’s closest regional backer, and the two countries’ mutual misgivings vis-a-vis India, an aspiring US ally, could help secure stability for Chinese investments in Afghanistan. Since assuming power, the Taliban have already halted all exports and imports between India and Afghanistan, closing a strategic transit route in Pakistan that streamlines trade from India.

On the other hand, due to uncertainty and long-lasting distrust, the Chinese Communist Party had long opposed a total Taliban takeover of Afghanistan. The fall of Kabul and the ensuing chaos have already threatened trade with Beijing. With the absence of security and stability, Beijing could be forced to forge unsustainable financial contacts with autonomous regions and local warlords.

Regardless, since the fall of Kabul, despite Chinese officials’ warm remarks welcoming the Taliban’s return to power, Beijing has adopted a wait-and-see approach, hoping for the new government to establish stability prior to any progress on economic cooperation. Moreover, China still sees an emboldened and now well-armed Taliban as a threat to its domestic security. Before the Taliban’s total takeover, Chinese Foreign Minister Wang Yi pressed the Taliban delegation in Beijing to “make a clear break” from all terrorist groups, signaling continued Chinese concerns with the organization.

In case the Taliban fails to address China’s concerns, Beijing has options to contain the Taliban vis-a-vis covert backing of local militias within Afghanistan, as well as engaging regional stakeholders to contain the militant group. China’s intelligence apparatus could join efforts in helping revive a militia force similar to the once NATO-backed “Northern Alliance”, led by the son of late prominent anti-Taliban militant leader Ahmad Shah Massoud.

During the late 1990s, the group enjoyed backing from India, Iran, and Russia, and is currently headquartered in the Panjshir province, the only region independent of Taliban control. China also has the option to engage Iran, Pakistan, and Russia to contain the Taliban, as the three countries wield political and economic influence in Afghanistan.

Nevertheless, while containment of the Taliban is on the table, any serious overt and covert effort could implicate the ongoing bilateral and multilateral talks with the new government in Kabul, undermining China’s diplomatic leverage. Therefore, Beijing will likely continue to prioritize diplomacy in the medium-term, hoping to avoid being entangled in the country’s domestic turmoil.