China uses the excuse of India not providing enough evidence against terrorist to block any UN sanctions against these guys. Five nations have the veto power in UN of which China is one, thus China can use its veto to keep these terrorist safe and free to attack India as well as USA.
According to leaked diplomatic cables of the US embassy in Beijing, from June 25, 2009, to January 20, 2010, the United States desperately tried to influence China to lift the technical hold, but failed even after it provided enough evidence to prosecute these militants in any country.
The cables quoted a Chinese official, as saying that China “is very serious” about its commitments to the United Nations Security Council Resolution 1267, but without adequate information on “these three individuals”, it would not lift the hold. In other words unless China has no other alternative or pushed against the wall it will support Taliban movement in Pakistan and Afghanistan.
The militants whom India wanted to be listed as ‘terrorist’ include Maulana Masood Azhar of Jaish-e-Mohammed (JeM) and Abdur Rehman Makki and Azam Cheema of the Lashkar-e-Taiba (LeT). Chinese official Shen Yinyin was quoted in an August 21, 2009 cable, as telling the political officer of the US embassy that India had not provided sufficient information about Azhar, Makki and Azam Cheema, to merit their listing as terrorists.
According to another cable obtained by Dawn through whistle-blower website WikiLeaks, the US State Department viewed China as acting at the behest of Pakistan in holding the designations. You do not require a PhD degree to understand that. But what the US fails top realize that though this policy is India centric but has ramifications for the US Army in Afghanistan too.
China was one of the countries which condemned the US Abbotabad Raid to kill Osama Bin Laden. Even though most of the Arab nations and the world at large was happy to see Osama dead. Thus China has made it a policy to damage USA as much as it could in Afghanistan making them beat a hasty retreat. With Afghan nation not ready to shoulder security related responsibility it will be easy for China to move in as the honest trader to capture the economy and its ally Pakistan to move in with the help of its proxies to control Afghanistan. Then China can easily exploit the natural resources of Afghanistan for its own purpose while Afghanistan provides inexpensive slave labor and a market for cheap goods from China.