Global Implications of China’s Big Investment in Iraq and Afghanistan

This article assesses the significance of China’s recently announced investments in large copper and oil development in Afghanistan and Iraq respectively, with potential significance not only for development and peace in the two war-torn nations, but also for China’s global role and the US-China relationship. With foreign and domestic investment in both nations barely trickling in despite UN, World Bank, NATO and US efforts, the Chinese plans are highly significant.
They are indicative not only of China’s aggressive search for energy and resource development opportunities, but also of a shift in US goals in the two countries: while all signs pointed to earlier US attempts to monopolize control of Iraqi oil for American companies, under present strategic conditions, the US appears to more than welcome the Chinese initiative.

The author offers an optimistic assessment of the prospect of the Chinese investments, and notes reasons why the Chinese prospects of success may be brighter than those for US or other international investors at a time when the Taleban is on the march in Afghanistan and investors enter Iraq at their peril. She also notes the broader significance of the Chinese agenda including railroad links that would transform Afghanistan’s linkages to the world economy.

Yet surely there is great reason to doubt that the proposed investments will proceed any time soon, for precisely the same reasons why others have been so cautious: in both Afghanistan and Iraq, the security situation precludes, and is likely to continue to preclude, largescale investment of the kinds proposed. Time will tell.

Japan Focus