Strait of Malacca, China and India

At the end of the day, the economy makes the world go round

China’s real strategic needs have to be understood to understand her concerns and ambitions. Primarily it is securing its energy and trade routes.  The Strait of Malacca is second only to the Strait of Hormuz in terms of strategic chokepoints. Crude volumes crossing the strait have increased to 15.2 mb/d. (EIA (2014) World Oil Transit Chokepoints: Full Report) China will continue to be reliant on oil via the Strait of Malacca. Its concerns are heightened by the lack of feasible multilateral safeguards, such as joint ASEAN security operations, being an option in the region due to existing power politics. (Lanteigne, “China’s Maritime Security”, p.150)

There are alternate land options available to China. However, these options have one common drawback. This is the failure of providing China with the quantum of oil needed by her as those via the route of Strait of Malacca. Even if China pursues simultaneously the various options available there will still be a sizeable difference between the consumption need and the production. China has expanded her Navy and modernised it.

One may be reminded here of the String of Pearls strategy by China that includes Strait of Malacca. In a world focused on a ‘growing India’ and ‘growing China’ both vying to emerge as leaders of the region and ultimately super powers, the fight for geo-political supremacy is crucial and unrelenting. Both doubt each other intentions and seek to attain world leadership positions. If China has a fear about her trade route of Strait of Malacca, India has the same fear for Strait of Hormuz.

“It is less publicised or talked about, but in the last two decades India has stealthily straddled its interests in the Indian Ocean Rim, which includes the islands of Mauritius, Maldives, Seychelles and Madagascar and the rim states of South Africa, Tanzania and Mozambique by very deft moves in foreign policy, economic sops like the double taxation exemption with Mauritius, and military inroads.  This is the classical strategy of gaining influence by conjoining economic perks and power, with military diplomacy called ‘Showing the Flag’, so well perfected by larger maritime naval powers in the past. The Indian Navy has transferred offshore naval patrol vessels, provided staff and training, and refit facilities and most importantly provided naval hydrographic support to the island nations of the IOR, which steps have left strategic imprints on the recipients.” (Cmde Ranjit B Rai, February 19, 2013 Indian Defence Review)

India fears China’s expansion in waters and in 2015 increased its defense budget to as much as $40 billion in addition approving the production of six submarines, all nuclear powered. However, in spite of this increase China overshadows India by miles on the naval prowess, quantum and strength.

“China has established ports in Pakistan and Bangladesh and new transportation links with Myanmar, Nepal, and Pakistan, in addition to upgrades to military infrastructure in Tibet and a new naval base in Djibouti. China seems to be surrounding India. China is eroding India’s maritime dominance in the Indian Ocean and its terrestrial dominance over Indian land in addition to supporting India’s neighbours. China can rapidly invade India from numerous directions at once. Additionally, India derives one-third of its annual water supply from Tibet. India’s alliance with the United States has provoked China. India may possibly become another US client-state used as a proxy against China but it will prove to be merely another cog in America’s wheel of primacy, to be used and discarded as needed. The US may be setting up India for a fight it should be trying to avoid in order to circumvent direct US confrontation with China.” (Alexander May, Harvard International Review February 10, 2016)

China’s interest in Gwadar, becomes clear in the above scenario. China seeks to use this base as a point of commuting imports from Africa via both pipeline and road onward to Central China. Old and close terms between both countries had led China to approximately $198m in the project. There is absolutely no bone of contention between China and Pakistan so far as Gwadar is concerned. Both countries as partners wish to see it as a route to boost trade with Asian countries. Pakistan is facilitator to China in expanding her reach not only to Persian Gulf but also to Middle East.

Pakistan on the other hand, is receiving huge funding for the project from China. “Pakistan can gain from China’s significant success in the launching of special economic zones like Shenzhen, which has undergone steady growth, achieved great successes and accumulated experience in its pioneering and exploratory work. It has been successful in attracting foreign investment, introducing advanced technology and producing readily marketable and highly competitive products to expand exports.” (Syed Fazl-e-Haider November 2008)

The heavy investment in Pakistan will undoubtedly attract more investors, opening up the country to international trade. It can well become an internationally viable transit area.

For both Pakistan and China it’s a win-win situation.

Besides Gwadar Port, China desires to lay pipelines extending from Gwadar to Kashi for exporting crude oil. Though this is a plan for the future. It will be an expensive project requiring higher amounts in terms of maintenance costs spiking up the price considerably.

Once Gwadar delivers on its promise and becomes a major naval facility for China, how will Trump’s America balance her interests in the region? This development will without question increase China’s ability to expand its presence in the Indian Ocean.

It is important for America not to disengage with Pakistan in spite of being pushed to the back bench by China. This engagement needs to be on different levels, may that be by supporting the efforts Pakistan has effectively made in counter-terrorism or it is to involve her economically in the project positively. These steps should be inclusive of strong diplomatic ties.

The world powers are evolving yet again and new alliances are on the anvil. Let us keep in mind; it’s the economics that drives politics!