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China Reform Monitor - No. 942

Beijing strikes oil exploration deal in Afghanistan;
China makes further inroads in Nepal

Edited by Joshua Eisenman
January 23, 2012

December 26:

The official People’s Daily reports that China will help Nepal enhance its customs and border administration, “intelligence and information sharing and law-enforcement education and training.” The help comes in return for Nepal’s refusal to “allow anyone to make use of Nepali territory to conduct separatist activities,” “its support on Tibet-related security issues,” and “in a bid to push forward bilateral law-enforcement cooperation” to repress supporters of Tibetan independence.
 December 27:

 The Afghan government has approved a joint venture between China National Petroleum Corp (CNPC) and an Afghan company, the Watan Group, to explore for oil in three fields in Sar-e Pul and Faryab. China outbid energy companies from Australia, London and Pakistan to secure access to the basins, which hold around 87 million barrels of oil. CNPC has agreed to give up to 70 percent of the project’s profits to Kabul, pay a 15 percent royalty on oil production, and a 20 percent corporate tax. The partnership could boost Afghan government revenues by $5 billion over the next 10 years. CNPC made the deal in an effort to gain drilling rights to oil and other hydrocarbon reserves in northern Afghanistan, especially in the northeast Afghan-Tajikistan Basin, which holds up to 1.8 billion barrels of oil,
the Telegraph reports.
 December 28:

An editorial in the independent Afghan newspaper Cheragh has criticized China for “sending its cheap military equipment to the warring parties in Afghanistan.” It claims that “China has not only been involved in the destruction of our country over the past four decades, it has also been a mere spectator of its most impoverished neighbor.” The article goes on to note that “the output of projects completed by China is of low quality. We remember well that dozens of Afghan laborers lost their lives when the Jamhureyat Hospital collapsed due to Chinese technical fault when it was undergoing restoration. China has still not paid compensation to the families of the victims.” It concludes: “if the bitter incidents of the past repeat themselves, this superpower will abandon us and it will not lend our people a helping hand.”
 A government report on the infamous bullet train crash in Wenzhou, Zhejiang on July 23 that left 40 dead and 192 injured has found 54 officials responsible for the crash including the former railway minister. Although several were dismissed from Communist Party posts, a penalty that ends career advancement, no criminal charges were announced. The report cited “serious design flaws and major safety risks,” noted a string of errors in equipment procurement and management, and criticized rescue efforts. It affirmed previous statements that a lightning strike caused one bullet train to stall and then a sensor failure and human error allowed a second train to keep moving causing the crash. Former Minister of Railways Liu Zhijun, who was detained in February amid a graft investigation, and the general manager of the company that manufactured the sensor, who died of a heart attack in August, were singled out for blame -- a decision that suggests any additional political fallout will be limited,
USA Today reports.
 December 29:

 In January China will begin construction in Nepal on the Larcha dry port at Tatopani, 110 km north of Kathmandu, on the Kodari Highway system. Additionally, Air China will begin servicing new flight routs between Kathmandu and Guangzhou,
Nepal’s Kantipur newspaper reports
. China will also underwrite education and healthcare services in the Tatopani border areas, issue five-year multiple entry visas for Nepalese traders and cut the duty on Nepalese imports. The People's Liberation Army will provide 115 pieces of heavy equipment including bulldozers, loaders, excavators, and dump trucks and other materials worth about 100 million yuan to the Nepalese Army.

Related Categories: China; China and East Asia Program

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