General

A few days ago, the Afghan Taliban spokesperson announced that the Taliban had entered and controlled the capital Kabul, and the war in Afghanistan had ended. But even so, the economic situation in Afghanistan is still worrying.

According to data from the official website of the World Bank, Afghanistan’s gross domestic product (GDP) in 2020 is 19.807 billion U.S. dollars, an increase of 2.67% from 19.291 billion U.S. dollars in 2019. Afghanistan’s GDP per capita in 2020 is US$508, and nearly 40% of the population is living in absolute poverty with a daily living cost of less than US$1.

Years of war have brought serious disasters to Afghan society. According to United Nations statistics, nearly a quarter of Afghanistan’s 32.2 million population have left their homes. Currently, there are still 4.6 million Afghans in exile in the world, of which 2.7 million have obtained refugee status. Pakistan and Iran have hosted 1.4 million and 1 million Afghan refugees respectively. According to data from the Ministry of Commerce, the number of Chinese in Afghanistan in the past year is about 200, mainly in the capital Kabul and Bamyan province.

After years of war, countless factories were destroyed. There are basically no large-scale enterprises in Afghanistan, mainly small and medium-sized enterprises. Among the existing enterprises, there are only a handful of large-scale enterprises such as power plants and cement plants. Most enterprises are labor-intensive and workshop-type primary processing plants with small scale, backward production technology, aging equipment, poor storage, and lack of product quality standards and Quality inspection agency, the products are mainly oriented to the domestic market.

Although Afghanistan is now one of the poorest countries in the world, the country is rich in precious metals, uranium, natural gas and oil. According to estimates by the Afghan government, the value of Afghanistan's energy and mineral resources exceeds 3 trillion U.S. dollars. The irony is that these resources are basically unexploited, so Afghanistan is called the "poor man lying on the gold mine."

Afghanistan has a trade deficit for many years and is heavily dependent on imports

In terms of foreign trade, Afghanistan has had a huge deficit for many years. Afghanistan’s annual exports total about US$800 million, accounting for only about 10% of total trade. There are only dozens of primary products for export, including handmade carpets, dried fruits, fruits, medicinal materials, cotton, marble, etc.

Due to the weak foundation of the processing and manufacturing industry in Afghanistan, the domestic market is heavily dependent on imports, ranging from daily necessities to large industrial and mining equipment. The main imported products are household goods and medicine, food and petroleum products.

Afghanistan’s main trading partners are its neighbors. The top three countries of import origin are Iran, China and Pakistan, and the export destination countries are mainly Pakistan and India.

According to data from the Central Bureau of Statistics of Afghanistan, in the 2019/20 fiscal year, there are 11 countries that exported more than US$1 million from Afghanistan. They are Pakistan, India, China, Turkey, Iran, the UAE, Iraq, Saudi Arabia, Germany, Kazakhstan and Kazakhstan. Tajikistan.

At the same time, there are 12 countries that have imported more than US$100 million in Afghanistan, namely Iran, China, Pakistan, Kazakhstan, Uzbekistan, Japan, Turkmenistan, India, Malaysia, Russia, the UAE and Tajikistan.

Chinese products have an absolute advantage in Afghanistan

China has become Afghanistan's third largest trading partner, after Pakistan and Iran.

According to data from China Customs, from 1992 to 2020, the bilateral trade volume between China and Afghanistan has increased from US$30 million in 1992 to US$550 million in 2020.

According to data released by the Ministry of Commerce of China, despite the impact of the new crown epidemic, the economic and trade relations between China and Afghanistan remain relatively stable. In 2020, the bilateral trade volume was US$550 million, a year-on-year decrease of 11.7%. Among them, China’s exports to Afghanistan were US$500 million and imports from Afghanistan were US$50 million, a year-on-year decrease of 16.5% and an increase of 86.2% respectively.

Since 2015, China has granted zero-tariff treatment to products originating in Afghanistan with 97% of the tariff lines exported to China. At present, most of the daily necessities in Afghanistan, such as plates, bowls, pots, beds, carpets, etc., are mostly "Made in China."

According to incomplete statistics from the Ministry of Commerce, there are currently more than 230 Afghan companies in China. They are mainly trading companies and offices. They are engaged in consulting, purchasing and shipping Chinese goods exported to Afghanistan. They are located in Yiwu, Shaoxing, Guangzhou, Urumqi, Shanghai, Hangzhou, Ningbo and other cities.

"There is almost no competition for Chinese products here. The reason why Chinese people don't come in in large numbers is that they don't understand this place, and it takes a long time to accumulate if they come in, otherwise it will be impossible to show their strengths." A senior Afghan Chinese businessman Express. He believes that Afghanistan has been trapped in war for more than 40 years, has no industrial foundation, and no production capacity. In the future, Afghanistan needs to develop economy and improve people's livelihood. It will be very difficult to leave China because China has strong material and manufacturing capabilities, as well as infrastructure construction. ability.

If the political situation in Afghanistan can be stabilized and the security situation improves, it will be able to smoothly carry out infrastructure construction, and then develop into an important regional trade hub, radiating to markets in East Asia, South Asia, Central Asia, the Middle East, and Europe.

However, in view of the current security situation in Afghanistan, it is recommended that Chinese companies interested in expanding their business in Afghanistan conduct in-depth investigations, make cautious decisions, and pragmatically promote various cooperation on the basis of comprehensive security protection.

The attractiveness of Afghanistan is not in the present, but in the future, in the development potential, that is, the market opportunity after the security situation improves.