The memorandum is the most substantial part of a series of Chinese contacts with Afghanistan over the last two years. China now has the closest relationship with the isolated Kabul regime of any non-Muslim country, a senior Western diplomat said.

China has helped form the Shanghai Cooperation Organization, which joins it with Russia and four Central Asian countries in a loose grouping. One of main purposes is to combat cross-border terrorism, specifically from Afghanistan. But at the same time, China has dealt with the Taliban as part an effort to persuade its officials to close Afghan-based camps that are to train Muslim separatists from China's restive Xinjiang region. separatists on occasion re-enter China and launch attacks on China's services or civilian targets.

As part of a sweetener to secure cooperation from the Taliban leadership, Asian diplomats say, China has dangled the prospect of providing with much needed infrastructure and economic development assistance. The new agreement was reported on Tuesday Sept 12. A Chinese delegation signed the deal in Kabul with the Taliban's mining minister, Mulla Muhammad Ishaq, news reports said.