China tosses maritime silk route bait to India

china-indianoceanChina surprised India last week once again with a new initiative – this time in the maritime domain with the idea of working together in the “maritime silk route” in the Indian Ocean. China’s leaders, officials and media have been projecting this concept – initially during the maiden visit abroad by the new leader Xi Jinping to Indonesia last October and then in an interaction with the visiting Sri Lankan foreign minister at Beijing early this month. After the Ming Dynasty initiatives by Admiral Zheng He in the 14th century in the Indian Ocean region, the sea-faring faction in China is pushing this idea once again.

While details of such a route are still not clear nor are the modalities of interactions with India and other countries identified, the new “maritime silk route” is to coincide with the land silk route passing through Central Asia up to Europe. President Xi Jinping, visiting Kazakhstan last August, had called for such a route linking the Pacific with the Baltic region. These two routes then are to further contribute to China’s rise in the 21st century.

For China is today dependent on these routes to trade with nations and increase its gross domestic product from $200 billion in 1978 to about $10 trillion by 2013. China’s trade has increased from $620 billion in 2002 to $3.8 trillion in 2012. Significantly, a large section of the above trade figures are based on the maritime domain, with very less trade transiting through the land borders. This overwhelming dependence on the maritime time had added new demands on the maritime areas.

Continuing its maritime dependence is China’s increasing profile in the possession of world-class merchant fleet, production of containers and the expansion in port-handling capacity. China ranks number 9 out of the top 20 countries possessing merchant fleets. It ranks No. 4 among top 20 countries in total Gross Tonnage controlled by parent companies located in these countries and territories. Put together, China has over 5,000 ocean-going merchant ships. China also accounts for more than 90 percent of the production of containers in the world. Today, Shanghai ranks as number one container port in the world’s top fifty ports – given the Pudong Special Economic Zone’s ability to export enormous quantities of goods.

Energy Calculus  

Another driving factor behind the maritime silk route is China’s energy consumption. In 2012 China became the largest energy consumer with nearly 22 percent of global total energy demand. According to the estimates of British Petroleum, China is to overtake the United States as the largest oil consumer by 2025 and Russia by 2027 as second largest gas consumer. Most of this today – over 80 percent – passes through the Indian Ocean region with West Asia contributing to about 56 percent of China’s oil imports while Africa accounts for the rest. Even though China, Russia and Central Asia have expanded land routes in the energy sector, for the foreseeable future, China’s “Malacca Dilemma” is not expected to be resolved without naval or diplomatic initiatives in the Indian Ocean. Naval and diplomatic efforts then are behind this idea of the silk route.

Global Ambitions

Apart from these existential concerns, one has to also reckon into account the global ambitions of China in the power transition with the United States. Indeed, in 2009 the US Admiral Keating reported his Chinese counterpart’s view of dividing the Pacific and Indian Oceans between these two countries. Now, China is suggesting that India and China need to work together in connecting these two oceans in the light of the US rebalancing strategy in the Asia-Pacific.

Geopolitics of Indian Ocean

As an important transhipment corridor in the world, the Indian Ocean Region (IOR) is of considerable significance for China. The IOR links Asia with Africa and Oceania. Some Chinese reports indicated that nearly one-sixth of the global cargo and about one-tenth of global cargo turnover is through the IOR. More importantly, the two main routes of Persian Gulf to the west (to Europe and the Americas through the Cape of Good Hope/Suez Canal) and the east (through the Straits of Hormuz, Malacca and Lumbok) are considered to be the hub of these transfers. These geo-strategic routes are considered to be ‘very important’ from the Chinese point of view. Hence, several transportation corridors are being worked out by China to connect it to the IOR.

The leaders of China’s south-western Yunnan province have been pushing through these ideas in the recent past. Yunnan intends to connect to the Bay of Bengal and then to the IOR through a series of networks connecting with the Salween, Mekong and Irrawaddy Rivers. While China has been an active participant in the revival of the Asian Highway and Railway concepts and has made efforts to open up the country for expanding transportation corridors linking it with Southeast Asia, Central Asia and South Asia, China has been selective in expanding the sea routes. It is here that the enunciation of the maritime silk route becomes evident.

One of the major projects, apart from the Karakoram Highway, is the Gwadar Port. Indeed, the collaboration between China and Pakistan on the Gwadar port is termed as a landmark in the bilateral relations similar to the Karakoram Highway project officially opened in 1978. Gwadhar naval port in the western Makran coast of Pakistan was built with Chinese assistance by the China Harbour Engineering Company, a subsidiary of China Communications Construction. The first phase of the project, conceived in 1964 but started only in 2002, saw China spending $198 million as against the Pakistani share of about $50 million in a project estimated at over $1 billion and was completed by 2006. In 2002, the then Chinese vice Premier Wu Bangguo attended the ground-breaking ceremony of the project, although in 2005 Premier Wen Jiabao had to cancel the inaugural function following threats. China Harbour was given the contract for the first phase of Gwadar port construction and the same company is also involved in the construction of Quay Wall and Break Water (Marine Protection Works) to develop the Deep Water Container Terminal at Karachi. Gwadar overlooks the Strait of Hormuz, through which an estimated 47 percent of West Asian oil passes. China has agreed to increase the deep-sea port from 14 meters to 19 meters and the plan included construction of about 12 berths. In general, larger displacement vessels (such as aircraft carriers, etc) would require about 11 meters depth ports for berthing. Increasing the depth of this port further indicates to a long-term plan of China in the naval sphere. A signals outpost is reportedly to be in place at Gwadar to monitor maritime traffic in the region.

In 2011, the then Pakistan’s defence minister Chaudhry Ahmed Mukhtar suggested that China should build a naval base at Gwadar. Subsequently, in August 2012, Pakistan planned to transfer the operational control of the deep water port from Singapore’s PSA (Port of Singapore Authority) International (which was running the port on a contract for 40 years since five years) to that of a Chinese state owned company. This was finally realised in January 2013 when Pakistan transferred the port to Chinese Overseas Port Holdings Limited. These infrastructure projects, along with the proposed idea of a Chinese military base in Pakistan, point to Beijing’s three strategic objectives, viz., ‘putting military and political pressure on India, limiting Washington’s influence in Pakistan and Afghanistan, and directly monitoring the activity of ‘Uygur separatists’ in the North Western Frontier Province.

Another project undertaken with active Chinese assistance is the Hambantota project in Sri Lanka which includes a port as well as an airport. China Harbour Engineering Company and the Sino Hydro Corporation are involved in the Hambantota project. Originally offered to India, one phase of this port was opened – after cost escalation (with an estimated $40 million in additional costs out of a total $400 china-menonmillion for this phase) and time overruns (by one year) – for international shipping in June 2012. China also offered to construct another port at Colombo with reports of possible investments from China amounting to $50 billion. Besides, the Chinese have long expressed interest in the building of the Trincomali port – the 5th largest natural harbour in the world.

The involvement of China and its state-owned companies in the maritime connectivity in the Indian Ocean indicates a long-term interest in the region. These have both civilian and military purposes. Hence the idea of “maritime silk route” needs to be cautiously weighed by New Delhi. In the background of China’s efforts to shoo Indian oil companies in South China Sea, India needs to insist on reciprocity with China in the East and South China Seas and work with like-minded parties.

(srikanthSrikanth Kondapalli is Professor in Chinese Studies at Jawaharlal Nehru University, New Delhi. He is also an Honorary Fellow at Institute of Chinese Studies, Delhi and Research Associate at Centre for Chinese Studies, University of Stellenbosch, South Africa. He received the K. Subrahmanyam Award in 2010 for Excellence in Research in Strategic and Security Studies.)

-The views expressed in this column are solely those of the author.