Why the Wakhan Corridor can boost Afghanistan's trade with China

A high altitude rugged terrain and harsh climate are what come to mind when describing Afghanistan’s Wakhan Corridor.

It is a narrow strip of land situated in the Badakhshan province of Afghanistan, which has consistently stood out as one of the most secluded and challenging-to-reach areas of the country.

But last week, for the first time since the Taliban took over in 2021, the group said the construction of the Pamir Highway up to the Chinese border had been completed, officially paving the way to plan and budget for Wakhan Corridor's development to begin.

The link between Afghanistan and China will lead to an “economic boost, particularly benefiting the residents of Badakhshan and neighbouring provinces”, according to Zabihullah Amiri, head of the information and culture department of Badakhshan province.

With this route, Afghanistan is anticipated to engage in the import of various goods, including food and raw materials, while simultaneously exporting items like pine nuts, carpets, precious stones, and other materials to China.

Beyond its role in import-export dynamics, Afghanistan is expected to generate substantial revenue through taxes, according to the group.

“The significance of this road extends beyond mere connectivity, as it is poised to bring forth numerous advantages and create economic opportunities for both Afghanistan and China,” Amiri tells TRT World.

When the US forces concluded their withdrawal from Afghanistan in 2021 after a two-decade-long invasion, neighbouring countries began reassessing their relationships with the country.

The northern border of the corridor abuts Tajikistan's Gorno-Badakhshan region, which witnessed a civil war in the 1990s. To the south lies the highly-contested greater Kashmir region, disputed among India, Pakistan, and China.

At the eastern end of the corridor, beyond the challenging snowy terrain of the Wakhjir pass, lies Xinjiang.

India is careful not to risk its significant investments in Afghanistan, which encompass approximately $3B in civil infrastructure.

This investment includes the 218-kim-long Zaranj-Delaram Highway linking Afghanistan to the Chabahar Port through Milak in Iran, establishing a crucial route for Central Asian connectivity to India.

As a result, India maintains diplomatic relations with the Afghan Taliban but has not yet recognised the government.

With Pakistan, Afghanistan's trade relations have always remained turbulent with Islamabad’s recent decision to close the border with the country due to bilateral tensions, inflicting losses of millions of dollars on Afghan traders.

The Taliban government says it is working on reducing reliance on Pakistani ports and is considering boosting trade with its neighbouring countries.

The Wakhan Corridor is viewed as an alternative to Pakistani ports, particularly since the countries to the north of Afghanistan prioritise economics and trade over politics.

China, aiming to reach diverse markets as part of the Belt and Road Initiative, is actively working on establishing alternative corridors and roads.

It has formed trade connections with nations across the Asian continent, with one of its pivotal objectives in the region being the construction of a road network facilitating access to global and regional markets.

“China will continue to be more visible in its engagement with the Taliban regime in the foreseeable future,” Hameed Hakimi, lead researcher on Afghanistan and associate fellow at Chatham House, tells TRT World.

“The Taliban government benefits from the optics of such engagements with a major global power while the United States and other Western nations refuse political dialogue with the Taliban.”

However, China is known to be pragmatic, according to Hakimi, and does not have a deep strategic relationship with the Taliban. Hence, security will continue to be Beijing’s primary focus.

“The Taliban’s ability to maintain control over Afghan territory and prevent the emergence of any real threat to China’s domestic security by groups and militants inside Afghanistan dictates the future of Beijing’s willingness to maintain positive ties with the Taliban regime,” he says.

It is clear that China holds significant potential to exert influence over the economies of Central Asia, some of which are already in a position of dependency.

Tajikistan is one of the examples. It heavily relies on China for imports and foreign investment.

This dependency played a role in Beijing achieving a relatively favourable outcome in resolving an old border dispute, resulting in the transfer of 1,000 square kilometres (386 square miles) of Tajik land to China.

So far, Chinese companies in Afghanistan primarily engage as contractors for projects funded by other international investors.

Hence, a more robust economic relationship between the two nations is likely to materialise only when the situation in Afghanistan stabilises, reducing the risks associated with investments, Hakimi says.

“Afghanistan remains severely aid-dependent, and the United States and other Western nations remain by far the largest donors to humanitarian spending in the country.

“So far, China has not come out as the main player that provides all the lifelines – especially the economic one – to the Taliban regime.”

Regardless of the economic prospects tied to the completion of the Wakhan Corridor, which the Taliban said could take years to build, this strategically significant region will persist as a centre of imperial ambitions and geopolitical complexities.