THE BLOG

The Pearl Harbors: China's Port Diplomacy

04/23/2015 04:40 pm ET | Updated Jun 23, 2015

Siyu Yang reflects on what China's "One Belt, One Road" strategy means for India-China and US-China relations.

Flip to the back of a five rupee Pakistani note and you will see red-orange cranes amid a seascape of soft, complementary blue. The illustration is of Gwadar Port, brainchild of the Pakistani government since the country's independence in 1947. Its management transfer to the state-owned China Overseas Port Holding Company last year generated renewed buzz around the China Threat theory. Among the most vociferous opponents were India and the United States. Meanwhile, China has responded by formalizing its venture as an economic strategy, assuring the world of its peaceful intentions.

The String of Pearls

The Chinese takeover of Gwadar Port, which China was contracted to build since 2002, had India claim that China aims to encircle it with a chain of Chinese-influenced ports throughout the Indian Ocean, often dubbed as the "String of Pearls." This phrase was coined in a report by the US defense consultancy Booz Allen Hamilton in a 2005. Perhaps due to its strong visual imagery and colonialist connotations, the phrase stuck in the minds of China observers.

Located some four-hundred kilometers east of the Strait of Hormuz, through which forty percent of the world's oil tankers pass, Gwadar is valued by China as a solution to its Malacca Dilemma. The Strait of Malacca is a narrow passage between the Malay Peninsula and the Indonesian island of Sumatra, through which over eighty percent of China's imported oil is shipped. Beijing has been apprehensive about this choke point since China became a net oil importer in 1993. A blockade of the Strait could truly hold China to ransom, much like how American oil sanction on Japan led to the attack on Pearl Harbor and the outbreak of the Pacific War.

Michael Kugelman, senior program associate for South and Southeast Asia at the Woodrow Wilson International Center, said that although Gwadar Port "was built in order to create various benefits for Pakistan, from local employment to improving the economy by having an efficient warm-water port," the investment also "gives China a foothold in South Asia and facilitates its trade routes by moving away from the Malacca Strait." He notes that "these are not necessarily advantages for Pakistan, but Pakistan is willing to overlook that because it values its relationship with China so much" in a hostile diplomatic environment and Pakistan "regards China's navy as a reassurance, an indication that China is an ally."

However, the postponement of Chinese President Xi Jinping's visit to Pakistan last September due to security concerns may indicate waning enthusiasm for the project. Insurgences in the Balochistan Province, where Gwadar is located, continue to make construction of a land transportation route unrealizable.

At the southern tip of the Indian subcontinent, two sites on Sri Lanka have been identified as "Pearls." The Port of Colombo on its west coast saw the opening of a $500 million container terminal in August 2013, eighty-five percent of which is owned by China Merchants Holdings International. On the poorer south coast of Sri Lanka, the Hambantota Port is expected to be the largest port in South Asia once completed, serving as a hub between Singapore and Dubai with the aid of Hambantota International Airport, also funded by China. Chittagong Port in Bangladesh is turning into "Gwadar East" after China promised $9 billion to develop deep-sea port capacities in 2010. Its Pearl status was elevated a year ago when China agreed to supply the Bangladesh Navy two submarines, to India's consternation.

In another energy-related project, China invested in a deep-sea port on Maday Island at Kyaukphyu, Myanmar, to facilitate a $2.5 billion pipeline transporting oil and gas to China's Yunnan province. Chinese investments have dwindled, however, since Myanmar's opening-up and democratic reforms in 2011 brought investments from elsewhere.

In February 2014, China signed an agreement to set up a naval base in Djibouti, joining France (Djibouti's former colonizer), the US, Germany and Japan. Strategically positioned, the small nation sits at the Horn of Africa facing the Mandab Strait, where the Red Sea enters the Indian Ocean. On the far end of the String is Seychelles, an island-country halfway between Madagascar and the Maldives. For now, China will be using it as a refueling port for its anti-piracy operations that began in 2008. Xi's visit to the Maldives last September drew parallel to his predecessor Hu Jintao's 2007 visit to the Seychelles, laying foundation for further association with China.

The "String of Pearls" is now a foil to Xi's "Maritime Silk Road" slogan introduced last October and the official name given to China's strategy of building better trade routes from its South Sea to the Middle East and Africa. The two appellations reflect the mistrust many have of China's seemingly expansionist moves and its effort at dispelling them.

"Legitimate concern over China's legitimate rise"

The economic argument for the String of Pearls is reflected in Xi's tour of South Asia last September, negotiating backing for the "Maritime Silk Road." These efforts aim to secure China's oil supply. China imports more than half of its oil, which of fifty-two percent come from the Middle East and twenty-three percent from Africa, both requiring transportation across the Indian Ocean. Economic strength is China's greatest asset, but also its greatest vulnerability in a time when energy availability and security drive so much of the economy.

Pehrson at the Strategic Studies Institute of the US Army proposes that since the survival of the Chinese regime depends on the continued rise of living standards, projecting its naval power in the Indian Ocean is of core importance to Chinese leaders.

As countries on the Indian Ocean littoral trade economic development for Chinese influence over them, the lack of neocolonial ambition does not stop China from emerging as a challenge to American dominance over the seas. The British Empire, perhaps the greatest String of Pearls in history, was not formed by executing a carefully set-out plan, but grew as economic interests took its merchants all over the globe.

Kugelman specifically emphasizes the role of energy security: "there is a widely held perception, particularly in India, but also in other smaller countries in South Asia excluding Pakistan, that China is trying to secure energy assets and other types of natural resources to support China's economy. In doing that, it is willing to push its way around and get involved in parts of the world that are by no means its backyard." Kugelman maintains that certain members of the security establishment in India envision potential conflict between the two countries "years from now, when natural resources become more precious than they are now."

India's lack of trust in China also has historical roots. In the words of twenty-year-old Kumar, a student at the Indian Institute of Technology Delhi, "far more fundamental than the economic competition is the Sino-Indian War of 1962, the root of distrust against China even for young Indians today. We simply could not believe that China, which our prime minister at the time called 'a brother,' would attack us," referring to the territorial conflict on the Tibetan border.

The construction of the deep-water port in Sittwe, Myanmar, funded by the Indian government, is a response to counterbalance the China-Pakistan axis. Indian Prime Minister Modi's visit to Japan last August also had China concerned that a "democratic" alliance will form in the Indo-Pacific waters. Kugelman adds that "India makes no secret of the fact that its decision to modernize its navy is a direct response to China's decision to modernize its navy."

For the US, the uneasiness is more complex. The US watches as China devises a network of potential Gibraltars in the Indian Ocean, in the same manner that the US gained its naval dominance through overseas bases such as Australia, New Guinea and Taiwan, not to mention Japan and Hawaii.

Kugelman points out that the US is very intent on completing the 'Pivot to Asia' strategy launched in 2009, a reorientation of its foreign policy focus to the Asia-Pacific while encouraging its diplomatic partners to do the same. He adds that, in this respect, "Washington may look with a bit of concern at China and its various activities and efforts in South Asia,... that this has been happening and that there has not been much of a response from India as of yet."

Naval scholar Seth Cropsey at the Hudson Institute and Arthur Milikh at the Heritage Foundation have warned that the rise of a competitor state challenging American influence on the oceans will lead to economic consequences for the US, as there were to the Dutch when they "vanished as an international force in the late eighteenth century due to the loss of dominant sea power."

Robert Daly, director of the Kissinger Institute on China and the United States, characterized the reactions of India and the US as their "legitimate concern over China's legitimate rise." He suggests that "China feels its navy is bottled up by Japan and the United States from bases on land in Indonesia, the Philippines, Taiwan and Japan. It wants to break out of that and project its capabilities."

Attempting to explain why this will not adversely affect the world order, Liu Mingfu from the Chinese National Defence University said, "while China pursues 'powerful but not hegemonic status,' US struggles for hegemony... the Chinese goal to challenge the US is to build a 'hegemony-free world.'" While the world certainly expects a multipolar international power landscape, it has yet to entertain the possibility of a nation being "powerfully peaceful" on a resource-scarce planet.

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Siyu Yang is an engineering student in her junior year at Princeton University. She can be reached at siyu@princeton.edu

This article also appears in China Hands.