defence or dominance?

Even before China launched its Belt and Road Initiative in 2013, it was constructing deep water ports in Asian and African countries bordering the Indian Ocean – the so-called ‘String of Pearls’. When President Xi spoke of making China a global power, Asian neighbours began questioning the true purpose of its maritime investment. Nicholas Nugent investigates

When China invested in a vast container port at Hambantota in Sri Lankaa decade ago it seemed like a magnanimous gesture to boost the export and import trade of a long-standing friend. But lack of trade meant Sri Lanka could not repay the $1.5bn loan,so it leased the port for 99years to the Chinese construction company that built it.Sri Lanka’s inability to settle upsent warning signals to other nations hoping to benefit from China’s infrastructural spending spree, now bracketed together as part of its Belt and Road Initiative (BRI).

Despite debts of $8bn, Sri Lanka then embarked on another expensive China-backed project,creating Port City on land reclaimed from the Indian Ocean opposite Colombo, Sri Lanka’s capital. It is being talked of as a ‘new Dubai’.

Greater than its investment in Sri Lanka is China’s development of the Pakistan port of Gwadar,close to the entrance to the Persian Gulf and associated power projects and transport links. China will be able to pump oil from Gwadar – which will provide an alternative port to overcrowded Karachi – across the Karakoram Pass into Xinjiang, China’s rapidly industrialising western region, and send exports to the port by rail, saving time and expense compared with shipping through Shanghai. Beijing is investing at least $60bn in Pakistan,the largest beneficiary of BRI expenditure.

China is also helping Bangladesh develop the ports of Chittagong and Mongla, and recently revived plans to develop Kyaukpyuin Myanmar. Kyaukpyu Port in southern Rakhine state will be connected to China’s Yunnan province by a 770-km pipeline as well as road and railway, a second land route (after Gwadar) enabling Chinese tankers and other vessels to avoid sailing through the crowded Malacca Straits. Originally costed at $7.3bn, the revised plan for Kyaukpyu has now been scaled back to a more modest $1.3bn, involving two berths rather than ten, which is more in line with Myanmar’s needs and budget. Kyaukpyu will also be a useful outlet for Chinese exports to neighbours such as India and Bangladesh, with whom it has no land-border crossing points.

China recently revived plans to develop Kyaukpyu in Myanmar

While China would like to connect to Bangladesh’s ports by road or rail, this would involve building transport infrastructure across India’s north-east as Bangladesh and China have no common border. India, with its own interests in developing the largely tribal north-east and an unresolved border dispute with China in Arunachal Pradesh, has resisted being drawn into China’s Belt and Road Initiative.

In addition, China is investing in the Indian Ocean’s African littoral, where it has developed Djibouti Port, from which runs a new China-built railway to the Ethiopian capital, Addis Ababa. New rail links from Mombasain Kenya and Port Sudan are helping China access minerals such as copper and cobalt in land-locked nations such as Zambia and Congo. China recently opened a military base alongside the deep water port it built in Djibouti, a former French colony that commands the entrance to the Red Sea.

China’s Indian Ocean ports on two continents have been dubbed its ‘String of Pearls’. It says the ports protect important shipping lanes, not only for Chinese vessels, but protection suggests militarisation. India feels threatened by Beijing’s investments, fearing it could be surrounded by Chinese-run ports, and is particularly worried at reports that China wanted to build a naval base in the Maldives archipelago off south-western India – a plan now thwarted by last year’s change of government in the Maldives.

FAST TRACK: A train on the railway linking Djibouti Port with the Ethiopian capital
FAST TRACK: A train on the railway linking Djibouti Port with the Ethiopian capital

China is also developing infrastructure in small island nations in the Pacific and Caribbean, though Australia put its foot down when Beijing seemed to be making plans for a naval base on the Pacific island republic of Vanuatu.

This provision of deepwater portsto poor countries can be compared with the United States’ Marshall Plan of aid for Europe after the Second World War and contemporary bilateral aid or ‘neighbourhood’ policy projects like those funded by the European Union. However, critics believe Beijing is engaged in what has been dubbed ‘debt-trap’ diplomacy or ‘debt colonialism’, aimed at creating what once were known as tributary states – countries that owe a debt to the dominant regional power.

Sri Lanka and Pakistan are already heavily in debt to China and the US-based Center for Global Development has identified seven other countries, most of them in Asia, which are at risk of defaulting on their loan repayments.

A Chinese submarine has been seen visiting Hambantota

Another view is that such projects benefit China most. Apart from the obvious merit of opening an import-export ‘back door’, China-watchers say port building has enabled China to use its overproduction of cement and steel, secured contracts for Chinese firms and provided jobs for hundreds of thousands of Chinese workers. It may also help secure access to important mineral and other resources and win new markets for Chinese goods.

India worries that China’s investment in ports is changing the balance of power in the Indian Ocean. The base at Djibouti is said to be needed to refuel Chinese naval vessels while a Chinese submarine has been seen visiting Hambantota. Recalling Anglo-Russian rivalry for Central Asia in the 19th century, observers say China’s maritime investment is part of a new ‘Great Game’.Another 19th century comparison questions whether China intends to ‘rule the waves’ as Britannia once did.

Last year China’s President Xi spoke of making his nation‘a great global power’ by 2050,adopting a maritime metaphor: ‘Let the gigantic Chinese ship loaded with the great dream of the 1.3 billion Chinese people continue to cut choppy waters but triumphantly sail towards a hope-filled tomorrow.’

If it is confirmed that China plans a second overseas base (after Djibouti) in northern Afghanistan– ‘to promote peace in that country’ – and that another may follow at Jiwani near Gwadar in Pakistan, to protect its investment there,it is likely to become the dominant power in the region long before the middle of this century.


Nicholas Nugent writes about Asian trade routes, old and new

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