Taliban Courts Chinese Capital but Can’t Keep Investors
Afghanistan’s Taliban government is aggressively courting Chinese investment, but a combination of rising security risks, erratic taxation and an opaque business environment has driven most of the Chinese entrepreneurs who once rushed into the country to leave. After a 2025 gold-rush peak drew nearly 10,000 Chinese businessmen into Afghanistan, fewer than 2,000 are estimated to remain as of late 2026, according to an in-depth report published by The Paper.
A Boom That Turned to Bust
Following the Taliban’s 2021 return to power, Afghanistan became a rumored gold rush destination for Chinese gem traders, mining operators and equipment suppliers. Businessman Zheng Rong (a pseudonym), who arrived in 2022, told The Paper that the influx accelerated sharply. “More and more people came. When the 2025 sand-gold rush peaked, the number of Chinese businessmen pouring into Afghanistan rapidly ballooned to nearly 10,000,” he said.
The reversal was equally abrupt. After 2026, early opportunities faded, operating costs and security risks rose, and Chinese entrepreneurs began departing en masse. Taliban Commerce and Industry Minister Nooruddin Azizi said in August that Afghanistan is ready to attract investment across sectors and called China a major economic partner, according to Ariana News. China’s ambassador to Afghanistan, Zhao Xing, reported record bilateral trade of USD 1.89 billion in 2025, up nearly 20 percent year-on-year.
Yet the enthusiasm on paper has not translated into staying power on the ground.
A Demand Without a Foundation
At the core of the disconnect is a gap between the Taliban’s demand for capital and Afghanistan’s capacity to absorb it. Liu Zongyi, director of the Center for South Asia Studies at the Shanghai Institutes for International Studies, conducted field research in Afghanistan in early 2026 and found acute Taliban demand for Chinese capital and technology across mining, oil and gas, energy, infrastructure and basic consumer manufacturing.
But Liu argues the real bottleneck lies elsewhere. “The core problem of China-Afghanistan economic cooperation is not whether the Afghan side has cooperation demand, but whether Afghanistan’s institutional and security environment can provide basic soil for Chinese enterprises to land, and whether the Taliban can provide practical security protection for foreign builders,” he told The Paper.
Zheng Rong echoed that assessment. “Afghanistan’s situation is very unlikely to fundamentally improve in the short term; the Taliban’s current state governance and overall control capacity remain fragile,” he said, warning that the situation will remain “highly uncertain” for years.
Security Fears Mount
The security picture has been a decisive factor in the exodus. In January 2026, a bombing at a Chinese restaurant in Kabul’s Shahr-e Naw district killed at least seven people, including one Chinese national, and injured 13. The Islamic State Khorasan Province (ISIS-K) claimed responsibility, as Al Jazeera and the BBC reported. The New York Times also covered the attack, which prompted China to issue a security alert and make urgent representations to Afghan authorities. The full details of the bombing underscored the vulnerability of soft, street-facing targets.
Earlier violence had already drawn scrutiny. In mid-2025, clashes at a Badakhshan gold mine killed Chinese nationals and Afghan workers, a subject examined by Sarah Godek of the Stimson Center in Foreign Policy, who described the Afghan gold rush as “turning deadly.” RFE/RL reported on the lethal stakes facing Chinese miners and on how the Taliban Interior Ministry confirmed in January 2026 that clashes over gold mining in Chah Ab district, in Takhar Province, had left four people dead and five others wounded.
Godek told readers that the targeting of Chinese nationals was a “landmark watershed” that dealt a heavy blow to investor confidence. Zheng Rong agreed: “Once large enterprises withdraw, they take away teams of hundreds.”
Cost of Doing Business
Beyond security, the sheer cost of operating in Afghanistan has proven prohibitive. Zheng Rong said his Kabul hotel must employ government-mandated, background-screened security personnel — four guards on round-the-clock rotation at USD 400–500 per month each, plus food and lodging — costing thousands of dollars monthly, roughly half the hotel’s rent.
Real estate agent Nabiullah Quraishi told media that a standard three-bedroom apartment’s average monthly rent was about 10,000 Afghanis (roughly RMB 1,032) last year; tenants now pay up to 20,000 Afghanis (about RMB 2,065).
Taxation compounds the burden. Businesses pay a wage tax of nearly 20 percent, plus rental taxes and license fees. “This adds tens of thousands of RMB in extra annual costs,” Zheng Rong said, criticizing a system he called opaque and arbitrarily enforced. Licensing is fragmented across ministries, and overlapping jurisdictions lead to duplicate fees.
An even stranger dynamic is the currency. Despite economic stagnation, the Afghani has appreciated roughly 40 percent against the Chinese yuan since 2022. Former Afghan Deputy Finance Minister Gul Maqsud Sabit told The Paper that Afghanistan’s mining policy still lacks appeal to foreign capital because stable, transparent industrial policy and a credible legal framework are absent. Cross-border fund clearing and foreign-exchange channels, he said, are “nearly closed,” meaning foreign investors cannot ensure the safety of local assets or remit legitimate profits abroad.
A New Business Elite
A deeper structural change is reshaping who wins in the Afghan economy. Sharif Akram, a researcher at the Afghanistan Analysts Network, noted that traditional Taliban members came mainly from socially conservative, economically poor rural areas, historically distant from urban commerce. After 2021, some members and supporters entered urban business, and officials and allied clerics increasingly formed a new commercial elite leveraging state resources and political influence — a phenomenon explored in analysis by the Center for Development and Stability.
Chinese traders describe commerce as heavily reliant on personal connections. Chen Lin (a pseudonym), a jewelry trader, said “connections and networks are too important” — without a trusted local intermediary, even routine disputes proved nearly impossible to resolve.
What’s Next
Zheng Rong’s conclusion is sobering: only a modern industrial system with the capacity to generate its own growth can create the clustering effect needed to sustain a Chinese business community. Relying on fragmented border trade and gemstone dealing, he argues, cannot hold one together.
The Tencent news reprint of The Paper’s reporting underscores how widely the story has circulated in Chinese media. For now, the Taliban’s courtship of Chinese capital faces an uncomfortable reality: verbal enthusiasm is one thing, and persuading businessmen to commit real money is quite another.
As Afghanistan’s security and institutional environment remain fragile, the coming years will test whether the Taliban can translate its eagerness for investment into the stability and predictability that foreign capital — Chinese or otherwise — demands.