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China, Pakistan Renew Call to Unfreeze Afghan Cash Reserves

By Ayaz Gul February 06, 2022

Chinese President Xi Jinping Sunday held wide-ranging bilateral talks with visiting Pakistani Prime Minister Imran Khan in which they stressed the urgency of providing enhanced international aid to Afghanistan to help it avert a looming humanitarian crisis.

The meeting marked the culmination of a four-day visit to Beijing, where Khan was among foreign leaders invited to witness Friday's opening ceremony of the Winter Olympic Games.

A post-meeting joint statement said that China and Pakistan "called upon the international community to provide continued and enhanced assistance and support to Afghanistan including through unfreezing of Afghanistan's financial assets."

"The two sides are ready to discuss with Afghanistan the extension of CPEC to Afghanistan," the statement said, referring to a multi-billion-dollar investment program known as the China-Pakistan Economic Corridor.

CPEC is hailed as a flagship of Beijing's global Belt and Road Initiative, which builds roads, power plants and other infrastructure projects in Pakistan with Chinese investments.

When the Taliban took control of Afghanistan last August, wide-ranging international sanctions dating back to the Islamist group's first time in power from 1996 to 2001 followed.

The Taliban's return to power prompted the United States and other Western nations to immediately freeze more than $9.5 billion in Afghan central bank's assets, mostly held in the Federal Reserve Bank of New York.

The sanctions have pushed the heavily aid-dependent Afghan economy to the brink of collapse and exacerbated a simmering humanitarian crisis in the conflict-torn South Asian nation, where the United Nations estimates around 24 million people, or more than half of the population, face acute hunger.

The international sanctions and other punitive financial restrictions, say aid agencies, are impeding the flow of much needed humanitarian aid to Afghans.

The Biden administration has acknowledged such concerns but remained noncommittal on possible remedies. Last month, U.S. Ambassador to the United Nations Linda Thomas-Greenfield said Washington is looking at options to ease Afghanistan's cash crunch.

"Ultimately, a functioning Afghan economy will require an independent and technically competent central bank that meets international banking standards," she said. "While Afghan Central Bank reserves held in the United States are subject to ongoing litigation, we recognize calls to examine making available reserves to help the people of Afghanistan."

Meanwhile, China and Pakistan have stepped up engagements with the interim Taliban government in Afghanistan in recent months to explore ways to increase humanitarian aid and economic cooperation with the crisis-hit country.

China and Pakistan are among the neighboring countries that fear that the turmoil, unless checked, could trigger a massive exodus of Afghan refugees and encourage transnational terrorists to use Afghan soil for cross-border attacks.

Chinese state media quoted Xi as pledging to work with Khan's government to jointly build "a closer China-Pakistan community with a shared future in the new era, so as to bring greater well-being for peoples in both countries and provide more impetus for regional cooperation and stability."

Xi was quoted as highlighting the significance of bilateral strategic ties, saying that China and Pakistan should further strengthen economic cooperation, regional connectivity and cooperation in fighting terrorism.

"The strategic relationship between China and Pakistan is of prominence in a changing world," the Chinese president said.

Chinese officials have long said that militants linked to the outlawed East Turkistan Islamic Movement, or ETIM, use Afghan soil for terrorist attacks in China's western Xinjiang border region. The separatist ETIM claims it is fighting to support the minority Uyghur Muslim community in Xinjiang. China has denied allegations of human rights abuses against the Uyghurs.

Meanwhile, Pakistani leaders say the banned Pakistani Taliban have set up sanctuaries on the Afghan side of the border and orchestrated terrorist attacks against Pakistan.

Both Beijing and Islamabad are pressing the Taliban to prevent such activities from their soil in line with their international pledges not to allow Afghanistan to be used for terrorism against other countries.

In the joint statement issued Sunday, Xi and Khan pledged to discuss with Taliban rulers ways to relaunch the China-Pakistan-Afghanistan trilateral foreign ministers' dialogue.

Beijing initiated the process with the now-ousted Western-backed Afghan government to help defuse Afghanistan's simmering tensions with Pakistan and improve security as well as economic cooperation between the two countries.

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