China’s shipping routes in the Indian Ocean and across the Strait of Malacca fuel its economic and energy prosperity. China is increasingly establishing its military and commercial presence in the region which has led to emerging concerns in India and other Western Pacific nations. The One Belt One Road Initiative is a seamless plan to employ huge sums of money from government loans and other state investments in various infrastructure projects for extending links between China and other economies of Central Asia, Middle East, Africa and also in Europe. China’s strategic ambitions have made it diversify in addition to energy and trade into erecting deep-sea ports in highly geostrategic areas like Sri Lanka and Pakistan. The military base at Djibouti is also critical to maintain control over its ports. The oil and gas pipeline in Myanmar is another vital asset.
Many international experts are viewing OBOR as a “debt trap diplomacy” as was apparent in the case of Sri Lanka which was not able to pay back Chinese loans and had to grant a 99-year lease of its Hambantota port to China. The Chinese role in giving massive loans to struggling economies in name of development and support, China finally coerce them to transfer the control of strategic assets like ports and other natural resources. The Djibouti, Pakistan where China has taken control over the Gwadar port and Maldives are seen as the most vulnerable points which can fall in the Chinese debt trap.
The fears are further aggravated by the fact that Chinese companies which are part of the biggest deals in OBOR initiative are state-owned and thus it won’t be surprising if the commercial footprints are finally turned into military presence. The increased naval capacity build-up in Indian Ocean area is also pointing towards a long-term strategy of carrying out submarine operations in the region.
The Malacca Dilemma
It is no secret that the growing strategic clout of China in the Indian Ocean which includes its energy and shipping facilities are largely dependent on a critical chokepoint of the Strait of Malacca which forms the entrance of South China Sea through which 80 percent of oil imports pass. Although the energy imports of Japan and South Korea also find a passage through the Malacca Strait only the share of Chinese imports is much heavy and thus far more vital to find an alternate route which can bypass the whole area in case Malacca Strait goes disputed and thus ultimately faces disruption. China is left with the sole option of building overland pipelines which can allow its tankers to offload in the Indian Ocean which can help it circumvent the whole route. The first such pipeline has finally opened last year in Myanmar through which tankers primarily from Africa and the Middle East, offload oil in the terminal on Made Island in the Bay of Bengal. Latter then makes way across Myanmar to China in Kunming, Yunnan province. The other such pipelines are still in developmental mode and not much progress has been achieved on this front. One notable among them is the proposed pipeline from Gwadar to Xinjiang in China which will connect its deep-water port and free trade zone at Gwadar in Pakistan to the mainland China.
However, even the building of pipelines will have little if any long-term edge over the Malacca Dilemma. China has to eventually lower its dependence on the imported crude oil to gain significant leverage as the pipelines cannot considerably bring down Chinese dependence on Malacca but will only lessen the degree of vulnerability to international threats and pressures.
China Advantage. Really?
The annual oil consumption is growing at a steady pace of 2.6 percent per annum- a trend which is likely to continue over next few decades. More than half of the crude oil which is imported by China is consumed 80 percent of which passes through Malacca Strait i.e. roughly around 2.5 billion barrels a year and only a meagre figure of 160 million barrels a year make its way through the Sino-Myanmar pipeline. This clearly shows that it is only less than 7 percent which has been diverted through alternate routes. Going by the same trends it is estimated that by 2030, the increase in annual demand will be much more than the standard transmission capacity of the pipeline in Myanmar. Hence, any number of pipelines cannot bring down Chinese dependence on Malacca Strait and any disruption to the latter will have highly devastating effects on Chinese shipping and energy industry. Another notable point is that by building pipelines China has exposed itself to the historically unstable economies of Pakistan and Myanmar which gives rise to another angle if China will be able to protect its pipelines from internal unrest in these nations by use of military and if it does to what extent can the situation be escalated at international front.
Indian concerns about Chinese presence in the Indian Ocean are valid as the net military balance between the two Asian giants tilts in favour of China. However, the presence of US and Japanese shipping fleets in the Western Pacific waters largely limits China’s influence in home waters. This is an apparent advantage for Indian navy to establish stronghold as China’s ships lack logistic support despite the growth in the number of commercial ports of China which have come to surround Indian mainland. The fact the latter are geographically isolated gives an edge to Indian side to develop decisive forces to overpower the Chinese warships which are sparsely distributed. Thus, these in combination with geographical challenges and other security obligations can pose serious problems to China in future. Thus, Advantage India!