China's String of Pearls Strategy
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String of Pearls
China's String of Pearls strategy is the name given to a geopolitical strategy adopted by China arising as foreign oil becomes a center of gravity critical to China's energy needs. This policy on the face of it appears to be an attempt by China to have an increased access to various ports and airfields in the South Asian region and at the same time to developing special diplomatic relations with these countries.
This seems to be a strategic move as China is establishing these pearls or a series of nodes of military and economic power thus enhancing its overall influence in these regions. A question posed by the "String of Pearls" is the uncertainty of whether China's growing influence is in accordance with Beijing's stated policy of "peaceful development," or if China one day will make a bid for regional primacy. China gives the impression that it is interested in having a more powerful role to play on the global stage and thus evoking concerns in its neighbours, especially India, as being threatening. However, China's development of these strategic geopolitical "pearls" has been non-confrontational, with no evidence of imperial or neocolonial ambition, whatsoever.
Extension of the Pearls
The pearls extend from the coast of mainland China through the littorals of the South China Sea, the Strait of Malacca, across the Indian Ocean, and on to the littorals of the Arabian Sea and Persian Gulf.
However, looking at the progress that China has made in the last couple of years it may not be too erroneous to say that it is now trying to extend these pearls by making a foray into the African continent and the Central Asian regions. In light of this, it is imperative to focus on the abovementioned issue and the concerned predicament in the minds of the other world power players as to the real design and intention of China and the consequence that this might have on the energy and economic security of these nations, particularly India and the US.
Emergence of Strategic Players
The rise of this strategy has not only shifted focus on China and its growing energy needs but also has brought to limelight those smaller nations in which China is trying to gain foothold and develop these pearls.
Nations like Myanmar, Bangladesh, Thailand and recently, countries like Sudan, Egypt & Nigeria etc which are rich in energy resources, have come to play a major role in the world's energy needs. These nations are fast becoming the centre of the world's energy playing field and are emerging as the strategic centres around which this game of energy security will be played out in the coming future.
Hence, it becomes essential for fast developing countries like India and Brazil, who need their share of this energy market, to progress ahead in order to counter China's strategy at the earliest. These nations need to evolve their own strategy if they do not want to be left behind because not acting at this point in time may have a huge impact on their economies in the coming future.
Statement of the Problem
This paper seeks to study and analyse the impact of China's string of pearls policy on the energy security of the world's major players in general and India in particular.
China's String of Pearls policy does not have security implications for India militarily but will have definite implications on the energy security particularly that of India and US.
Justification of the study
China, in the past decade has influenced the behaviour of its neighbouring nation states to quite an extent. In continuing with its stated policy of economic reforms, it had to secure all the energy resources that it could in the available time frame. Although the name 'String of Pearls' was a name coined by a minor pentagon analyst but certainly it does indicate China's quest for securing its energy needs by occupying certain areas of influence in and around its neighbourhood.
China, in recent past, has started making headway into the vast energy resources of Africa and Central Asian regions apart from the resources in Myanmar, Spratlys and Paracel islands. Hence, a detailed study is required to look into the effects that may be caused by China's incursions into these yet untouched and somewhat unexplored regions. The world took some time to wake up to the vast amount of energy resources that these countries had and China had a headstart in this regard over other nations in these regions. This study tries to bring out the effect that the existing pearls have on the energy security of India and other nations and examines the 'new' pearls and their effects on the energy security of these nations.
This study concentrates on the specific issue of string of pearls policy and the impact of this policy on the energy security of India in particular. The study also tries to bring out the aspect of China's inroads into the African Countries and the Central Asian Regions as an extension of this policy. The aspects of China's military modernization as an offshoot of this policy have been kept out of this discussion.
Methods of data collection
Organisation of the dissertation
Rising China: Implications for India by Major General (Retd) Dhruv Katoch SM, VSM, USI journal July - September 2009.
U.S.-China Commission, 2005 Report to Congress.
Rising China: Implications for India by Major General (Retd) Dhruv Katoch SM, VSM, USI journal July - September 2009.
M K Bhadrakumar, India and its troublesome Neighbours, The Hindu, 02 Nov 2009
HISTORICAL BACKGROUND - HOW CHINA TRANSFORMED IN THE LAST DECADE?
Before we begin to discuss the String of Pearls' policy in detail, let's take a look at how China has transformed itself economically in the last 10 years.
China is the third largest economy in the world after the US and Japan. China has had the fastest-growing major economy for the past 30 years with an average annual GDP growth rate above 10%. In 1978, after years of state control of all productive assets, the government of China embarked on a major program of economic reforms. In an effort to awaken a dormant economic giant, it encouraged the formation of rural enterprises and private businesses, liberalized foreign trade and investment, relaxed state control over some prices, and invested in industrial production and the education of its workforce.
By nearly all accounts, the strategy has worked spectacularly. China's economy regained momentum in the early 1990s. In early 1992, China made a series of political pronouncements designed to give new impetus to and reinvigorate the process of economic reform. Along with cContinuity in the political system, but a bolder reform was announced in the economic system were announced as the a hallmarks of the 10-year development plan for the 1990s.
Although capital accumulation, i.e., --the growth in the country's stock of capital assets, - such as new factories, manufacturing machinery, and communications systems--, was important, as so were the number of Chinese workers., a A sharp, sustained increase in productivity (that is, increased worker efficiency) was the driving force behind thise economic boom.
China has really come very far in the last ten years. China's growth as an economy won't flow smoothly from the bottom-left to the upper-right side of the chart. But the fact remains that China will be the biggest, fastest-growing economy in the world in the twenty-first century. In fact, it is interesting to note that when China began its reforms , Deng Xiaoping put military last on the list forro modernization. China's economy is gathering momentum and gaining speed. After a period of a double -digit growth in the post-Tiananmen period of the early 1900s, the law of large numbers would have predicted that thisat kind of growth couldn't happen again. But China has defied conventional wisdom. Already one of the largest economies, China grew by at least 10 percent in 2003, 2004, 2005, 2006 and 2007. The country had $21 billion in foreign reserves in 1993; ten years later, in 2003, China was adding $200 billion or more of reserves into its coffers each year. By the end of 2006, China had more than $1 trillion in foreign currency reserves, an unprecedented amount that was growing by $50 billion each month.
China's leaders are traveling the world negotiating long-term supply contracts with oil-producing countries. China doesn't have enough of its own energy reserves, and obtaining enough energy to fuel its economy is a very real concern.
Quest for Energy
South Korea, Taiwan, Thailand, Hong Kong, and Singapore were dubbed "Asian Tigers" as they sustained rapid economic growth and industrialization from the 1960s through the 1990s. China's rise in the 21st century, the rise of the "Asian Dragon," has the potential to surpass greatly the growth of the "Asian Tigers." Since the beginning of economic reforms under Deng Xiaoping, China has averaged an annual gGross dDomestic pProduct (GDP) growth rate of 9.4 percent. Since 1978, foreign trade has grown from a fraction of a percent of the world economy, or $20.6 billion, to over 4 percent, or $851 billion in 2005. China's GDP is the world's third largest at roughly 1/7th that of the United States, yet because of its population of 1.3 billion, on a per capita basis, China is ranked roughly 100th in the world and considered a low-income developing country. Many economists believe that with the latent potential of a rapidly emerging middle class, China has the potential to continue its impressive growth for many years to come. An ever-increasing demand for energy fuels China's growth.
China's Energy Needs
The majority of China's energy requirement, 70 percent, is currently met by coal — China is the world's largest producer and consumer of coal.
Although coal will remain preeminent, oil consumption is expected to grow at an average annual rate of 5.8 percent for the next 10 years. In 1985, China was East Asia's largest petroleum exporter; in 1993, China became a net oil importer; and in 2004, China leapfrogged Japan to become the world's second largest oil importer. Roughly 40 percent of all new world oil demand is attributable to China's rising energy needs. Secure access to foreign oil resources will be necessary both for continued economic growth and, for the survival of the Chinese Communist regime because since growth is the cornerstone of China's domestic stability., for the survival of the Chinese Communist regime.
Jack Perkowski, Managing the Dragon
Robyn Meredith, The Elephant and the Dragon
THE PEARLS AND THEIR STRATEGIC SIGNIFICANCE
A few strategists in India and US have been using the term String of pearls to designate those areas where China is establishing its bases. These bases have been given the term 'pearls'. Each pearl in the string is a nexus of Chinese geopolitical influence or military presence, which stretches from Hainan Island to Gwadar.
Gwadar port is a small fishing village, 450 miles west of Karachi and 75 km east of Iran border , and was identified by Pakistan as a potential port location in 1964 but lacked the means to develop. It is a deep sea , warm water port situated in the Balochistan province of Pakistan at the apex of Arabian sea and entrance of Persian gulf.
The port facility at Gwadar is a win-win prospect for both China and Pakistan. The port at Karachi currently handles 90 percent of Pakistan's sea-borne trade, but because of its proximity to India, it is extremely vulnerable to blockade. This happened during the India-Pakistan War of 1971 and was threatened again during the Kargil conflict of 1999.
The port is strategically located between three important regions - Oil rich Middle East, heavily populated Pakistan and the Central Asian Region. A modern port at Gwadar would enhance Pakistan's strategic depth along its coastline with respect to India. For China, the strategic value of Gwadar is its 240-mile distance from the Strait of Hormuz. China has funded a majority of the $1.2 billion project and provided the technical expertise of hundreds of engineers. Since construction began in 2002, China has invested four times more than Pakistan and contributed an additional $200 million towards the building of a highway to connect Gwadar with Karachi. This port accrues the following advantages for China :-
- It can serve as a potential Chinese Naval Anchor.
- It serves as an energy transport hub to carry oil from Gwadar to its western region of Xinjiang by an oil pipeline.
- It helps insulate the Chinese imports from interdiction in case of any major war.
- It benefits by having access to international trade routes.
- Use of rail network is also a major advantage although the access in this case may be hampered due to the difference in gauge between China , Pakistan and CAR nations.
- Shanghai port is approximately 16000 kms from Chinese industrial areas and sea travel adds another 2-3 months whereas Gwadar is only 2500 Kms and will work throughout the year.
- It also provides Beijing with a listening post from where it can monitor US, India and US-India Maritime cooperation.
As Admiral (retd) Sureesh Mehta said" It has a serious strategic implication for India, being only 180 Nm from the exits of Strait of Hormuz, would enable Pak to take control over the world energy jugular & interdiction of Indian tankers."
Hambantota is a rural town in the SE coast of Srilanka. As per the 2007 agreement, development of Hambantota included:-
- Developing a container port
- Developing a bunkering system
- Establishing an oil refinery
- Setting up an airport and other facilities
The approximate expenditure in setting up Hambantota was $1 Bn of which 85% will be financed by China over the next fifteen years.
A question that comes to mind is that although there seems to be not much economic significance of this 'pearl' to China, then why is it investing so heavily here. Possibly the following answers come to mind:-
- There is a potential for Navy as a Port of Call.
- The port can be used for refueling purposes.
- The port will act as a Listening post and watch tower on India's nuclear, space and naval establishments in South India.
At present, there is no military component here but China's involvement here would make much more sense from a military perspective.
Chittagong is the largest seaport in Bangladesh. China is developing a container port facility a Chittagong. However, it is important to note here that there has been no further word on this development probably because of the regime change in Bangladesh which is India friendly.
Among the many ventures of China in Myanmar, the following two are the most crucial:-
- The gas pipeline from Myanmar's West Arakan state to Yunnan province.
- Using Sittwe Port as a sea gateway.
According to the 1992 agreement, China was ready to modernize Myanmar's naval facilities in return for the permission to use the Coco Islands. China undertook building a deep sea port (Kyaukpyu); road construction from Kunmig to Sittwe for which a feasibility study was done in 2005 and is also funding the road construction from Rangoon to Akyab. From 2013, Chinese oil tankers from the Middle East and Africa will be able to cross the Bay of Bengal to dock at Myanmar's Sittwe and Kyaukphyu ports from where their cargo will be transported through pipelines to Yunnan. The transport time of fuel that bypasses the Malacca Strait in this way will be cut by a week. A recent article in the Outlook explained the significance of Chinese Vice-President Xi Jinping's Dec '09 visit to Myanmar, one of the key reasons being China's determination to go ahead with the construction of the parallel oil and gas pipelines from the Arakan area of Myanmar to Yunnan. He accorded a greater priority to the Arakan-Yunnan pipeline as compared to the Gwadar-Xinjiang pipeline proposed by the Pakistan Government citing the reason that the Chinese Government was more confident about the Myanmar Army taking care of the security of parallel pipelines passing through Myanmar than about the Pakistan Government for security of a pipeline passing through Pakistan. Moreover, the first stage of the pipeline connecting Xinjiang with the Central Asian Republics has been recently commissioned, thereby reducing the urgency of a Gwadar-Xinjiang pipeline. There is another added advantage of the Arakan-Yunnan pipelines over the pipeline from Gwadar. The former has a two-fold benefit -
- it will help carrying oil brought by Chinese tankers from West Asia and Africa thereby reducing present Chinese dependence on Malacca Strait - transporting the gas procured locally in Arakan by Chinese companies The pipeline from Gwadar can only be used to carry oil/gas from West Asia. Pakistan does not have any oil or gas to sell to China .
As per the Indian analysts, Chinese presence may allow it to interdict regional SLOCs. On this account, Myanmar is emerging as the single largest threat to Indian strategic interests in SE Asia.
Coco islands are a pair of strategically important islands located in the East Indian oceanOcean politically administered by Burma under Yangon division. The Great Coco Islands (10x2) and Small Coco Islands (5x1) are separated from each other by Alexandra Channel. They are separated from the Andaman by Coco Channel; Myanmar - 300 km N
Historically, these islands were a part of India under British rule but due to lack of close supervision, they were transferred to Myanmar. These islands were supposedly leased to the People's Republic of China since 1994, according to various amateur sources. The government of Burma and that of the People's Republic of China do not comment on such manner.
China has helped in carrying out the following activities here:-
- Establishing a SIGINT and ELINT int gathering station (supposedly '92) Oon the Great Coco Island.
- Building a maritime base on the little Coco Island.
- Development of airfield, radar dish, ae, jetty and a number of buildings.
However, there are no signs of a large base here.
Strategic importance of this 'pearl' for China:-
- Monitoring Indian Naval activity
- Monitoring movement of other navies and ships esp between Bay of Bengal and Malacca Strait.
- May be used to monitor the activities at the launch site of ISRO at Sriharikota and DRDO at Chandipur on sea.
According to Indian analysts, this may pose a threat to Indian tri-service command at Port Blair (190 Nm away). If seen in toto, this completes the maritime encirclement of India.
Strait of Malacca
Strait of Malacca is a narrow 805km stretch of water between Peninsular Malaysia and Indonesian island of Sumatra. At the Philips Channel, this Strait narrows down to 2.8 km, thus becoming one of the world's most significant choke points.
Straits of Malacca and Hormuz have become crucial waterways for China. Close cooperation with Myanmar and Pakistan thus also becomes a crucial issue. From economic and strategic perspectives, Strait of Malacca is one of the most important shipping lanes of the world. This Strait is economically significant for China in that 50,000 vessels pass through it each year and almost 80% of China's oil passes through this Strait. In essence, whoever controls Malacca threatens China's oil supply route.
China gave a statement indicating that it would use its naval might to ensure that these sea lanes remain open. In President Hu Jintao's own words, "Malacca dilemma is the key to China's energy security". Hu also hinted that various powers (including US) had tried to enlarge their scope of influence in the Straits of Malacca by either controlling or trying to control navigation in the Straits of Malacca.
It is interesting to note here that India's naval base in the Andaman and Nicobar islands puts India in an advantageous position.
Kra Canal or the "Thai Canal" is actually a plan for a large canal that would cut through Southern Thailand to enable improved transportation in the region.
China had planned to construct this over ten years employing 30,000 workers with an estimated cost of $20-25 Bn. However, initially the plan seemed to have been dropped owing to environmental concerns but recently there have been signs of revival of this plan since there are economic benefits for China and a threat of piracy in the Strait of Malacca. The plan was tentatively approved in 2007 but Singapore and US showed their dissent for obvious reasons.
Another alternative to this plan is to build a pipeline across the Isthmus to carry oil to ships waiting on the other side.
South China Sea
South China Sea is located south of China and Taiwan, west of Philippines, North West of Malaysia, North of Indonesia and East of Vietnam. The region has proven oil reserves - 7.7 billion barrels (28 bn estimated) and its natural gas reserves are estimated at 7500 km3.
A significant part of this region is the Spratly Islands where oil was discovered in 1968. It has been estimated by the Geology and Mineral Resources Ministry of People's Republic of China that Spratly islands may have oil reserves to make them the fourth largest reserve bed in the world. Hence, there is intensification by PRC to claim these islands.
Woody Islands are a part of the Paracel Islands occupied by PRC. This node acts as a Chinese Emergency Rescue Centre served by an artificial harbour and an airfield with a 2350m runway. The centre was occupied in 1956 and also has oil tanks, gun emplacements and ammunition storage bunkers.
The islands may be used as a staging point to sp offn ops in the Spratlys. There are also reports of the existence of Silkworm anti-ship cruise missile installations on the Woody Islands.
In mid '95, a new SIGINT station was established on the Rocky Island, north to Woody Island. Since it is the highest point, there is good signal interception is obviously good.
These 200 islands form the smallest province of PRC and are home to the PLAN strategic nuclear submarine naval harbour that is capable of hiding upto 20 nuclear submarines from spy satellites.
The harbour houses nuclear ballistic missile subs and is large enough to accommodate aircraft carriers. PLAN has developed Sanya Naval Base (Yulin) in Southern part to op Jin class subs (SSBNs) and Shang class subs (SSNs) (replaced Han Class).
Rising China : Implications for India by Major General (Retd) Dhruv Katoch SM,VSM ,USI journal July - September 2009.
Dilip Ghosh,China's String of Pearls encircling India , Asia Defence News Vol IV , Issue 12 , 15 Dec 2009.
Dilip Ghosh,China's String of Pearls encircling India , Asia Defence News Vol IV , Issue 12 , 15 Dec 2009.
Amardeep Athwal, China - India relations contemporary Dynamics
Source: The Straits of Malacca: the Rise of China, America 's Intentions and the Dilemma of the Littoral States - by Mokhzani Zubir, Researcher, Centre for Maritime Security & Diplomacy
POSSIBLE MOTIVATIONAL FACTORS BEHIND THIS STRATEGY
China's development during the past decade, from its expanding economy and increased global influence to its growing military might and demand for energy, presented tremendous challenges to their leaders as they managed the turmoil of massive structural, technological, and social changes. The governing three key worries of the Chinese government have been:-elites of China had three overarching concerns:-
- Regime survival.
- Territorial integrity.
- Domestic stability.
In the succeeding paragraphs these three concerns and their impact on the economy have been highlighted. The relation between the economy and the string of pearls strategy has also been shown.
Regime survival was has always been and will shall remain the foremost concern of the ruling Chinese Communist Party (CCP). The party leadership is It is aware that their survival depends upon the satisfaction of the Chinese people and their ability how well they are able to protect Chinese national interests. The collapse of the When Soviet Union collapsed and the end of the Cold War ended, Communism was exposed deduced as a communism as a "bankrupt ideology with a flawed economic system". To avoid the same fate as had befallen the erstwhile USSR, the Chinese adopted a "socialist market economy". Although a lot of economic and social reforms have taken place but , in the middle of it the CCP has maintained a strict authoritarian control. The CCP is aware of the fact that as long as the economy is thriving the populace willl be satisfied and hence there would not be a serious threat to the current regime.
China has in the recent past adopted a strategy of befriending its neighbours with the notable exceptions being India and Taiwan and in the process has met with considerable success too. Although certain contentious issues still remain with the countries such as Japan over some disputed islands but more or less China has successfully demilitarized its land borders in the nNorthern and the cCentral aAsia. On the central Central asian Asian front, China has become more influential under the support of the Shanghai Cooperation Organization (SCO), whose member states consist of China, Russia, Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan, along with the observer members of India, Pakistan, Iran, and Mongolia. It is slowly but surely laying to rest the dispute over Tibet although in a more subtle way. The only spanner in the wheel that remains is its relations and territorial disputes with India which are not showing any signs of fast progress. However, the relations with India have been more of a sine curve with statements against one another coming from both sides. India has more or less recognized China's claims to Tibet and China has reciprocated by recognizing India's claim to the Himalayan state of Sikkim. Even with respect to Taiwan, Chinese policy attempts to balance the "stick" of diplomatic and military pressure with the "carrot" of mutually beneficial cross-strait economic ties. With the last elections in Taiwan throwing some startling results in favour of cChina, the day is not far off when it will come into some sort of agreement with Taiwan also. What has made China want to have good relations with its immediate neighbours . neighbours. The one thing that comes to mind is 'economy'. It seems that the ever increasing demands of increased economic development are the driving forces behind China's improved relations with her neighbors.
Again successful economic development is perceived as key to China's third area of strategic concern, domestic stability. CCP is focused inward, and primarily domestic politics drive China's foreign and economic policies. Changes to the economic system and the decision to embrace globalization are causing major shifts in Chinese society. The Chinese government is aware that although it is moving towards becoming an economically prosperous nation but everything is not in order inside their house. ThHere are large disparities between the economy of the people who are living in the coastal cities such as Shanghai and the people who are living in the interior less developed regions which have not seen the effects of the information revolution. Due to this class distinction due as a result of theto economic stratification, the government is wary and knows that if there are anti government demonstrations they cannot be repressed as was done earlier, the famous example being of the Tiananmen Square crackdown of June 1989. Thus to address this issue the regime is aware that it needs to bring economic parity to its provinces such as Yunnan and Xinjiang. In meeting this challenge, the government must foster economic prosperity to satisfy the demands and expectations of the Chinese people.
Link with Energy
All these three abovementioned factors, as have been shown in the preceding paragraphs, are inescapably linked with the economic prosperity of China. The government iof China is aware that the greatest strength of cChina as also its greatest vulnerability is the its economy and hence it has based its national policy and strategy on economyaround this key factor.
For its economy to continue thriving, as is with the case of all nations, China knows that it has to rely upon continued and sustained import of energy. Since energy provides the foundation of the economy, China's economic policy depends on the success of its energy policy. As the energy resources available within the country are quite limited and cannot ascribe to the full economy; hence it China, therefore, has to rely in a big way on the external sources of energy and raw materials. To import these energy resources and raw materials, it has to have a good and effective transportation system both on land and at sea is required. The three major problems that were faced by China in importing energy via land based routes were that firstly, most of the energy rich nations are either not connected by land; secondly, it would take a major effort and would not be cost effective to connect them with land and thirdly, even if these nations were connected, their links pass through other nations which may be a risk keeping in mind the fluid world order and changing equations. Hence, it was important that the 'Sea Lines Of Communications' , which were importing the major chunk of energy be secured . Securing Sea Lines of Communications for energy and raw materials supports China's energy policy and is the principal motivation behind the "String of Pearls." This is how and why the "String of Pearls" relates to China's Grand National Strategy.
Protection of SLOCs
The question that arises here is that from whowhom is the protection is required, if at all.? Whom does China fear? Over 70 percent of the total oil imports of China come from either the Middle East or the African countries majority of which is transported through sea and this will remain so for the foreseeable future. Hence, China has a long-term commitment to these supply sources due to which it has been trying to build up better relations with these countries whether that comes as monetary help or in some other form. For eg, Saudi Arabia is China's largest crude oil supplier, and the Saudi national oil company, Aramco, is a 25 percent investor in China's biggest refinery and petrochemical complex. China recently signed a 25-year oil and natural gas deal with Iran, its biggest ever, worth over $70 billion. In Africa, China has invested $3 billion to develop Sudan's unexploited oil resources, including a 930-mile pipeline, a refinery, and a sea port.
As already brought out, the infrastructure required to develop an overland link is massive and the cost quite high which does not justify the construction of these overland links. The regional instability in and around these regions is also a major worry for China and ; which further adds to the uncertainty of future development and long-term reliability.
The current means available to China for the protection of these sea lines of communication were very limited. Moreover, seen with the fact that these communication lines pass through the Sstrait of Hormuz and the Malacca straits, which are considered to be a haven for sea pirates. 37 incidents occurred in the Malacca Strait in 2004, many of which "involved the crew being kidnapped for ransom" or "attacked by machine guns and rocket launchers." This increase in the piracy was also a major factor which prompted china to go in for development of some pearls to protect its sea assets. Also, China is aware that in case of a conflict, as brought out earlier, it will be very easy to choke its energy lines and if proper protection is not provided to them, then it wcould become a major weakness for China.
Thus, it is very clear that the motivation behind the string of pearls is as given above in the preceding paragraphs. However, if given a closer look not all the 'pearls' will be safeguarding the sea lines of communication. In the succeeding chapters it will be brought out that China is now engaged in a major way to establish bases all around the world where it thinks that its energy requirements can be met. These bases although may not threaten India directly but the way china is going around the world to garner maximum energy sourcessources; they may prove to be detrimental to the interest of India and other powers in future.
21 Lt.Col. Christopher J. Pehrson String of Pearls: Meeting the Challenge of China's Rising Power Aacross the Asian Littoral
22 Lt.Col. Christopher J. Pehrson String of Pearls: Meeting the Challenge of China's Rising Power Aacross the Asian Littoral
23 International Maritime Bureau's annual piracy report
"Whoever Controls the Indian Ocean dominates Asia.....in the 21st Century the destiny of the world will be decided on its waves"
THREAT TO INDIA'S ENERGY SECURITY - A BRIEF ANALYSIS
Although it has been said quite often that the development of these strings by China poses a serious military threat to India, however, what is often not seen is the propensity to take shelter under a dubious thesis that was first propounded by a Pentagon analyst in her late 20s - who since has moved on, unsurprisingly, to the Rand Corporation - known as the "string of pearls." The advocates of the thesis have vociferously portrayed the Chinese activities in the South Asian region as unalloyed acts of hostility directed against India with the grand design of creating an arc around India's neck that would stifle our India's performance as a regional power.
This chapter analyses the threat being posed by these 'pearls' and would try and bring out that though these pearls do not pose a significant threat militarily, but they does pose a threat to the energy security of India in the longer run. In doing so, we will analyse each of these pearls in detail as also the emergence of china as a leading player in the African region and the CAR and the danger it accrues to the Indian energy security.
The interest of the Chinese in developing the port of Gwadar has been brought out earlier. Although China would want to transfer its oil from Gwadar to its Xinjiang province but it would be pertinent to mention here that he would also like to get into the CAR through the development of this port. India, as is well known, had interests in the development of TAPI (Tajikistan - Afghanistan - Pakistan - India ) pipeline and the IPI (Iran - Pakistan -India) pipeline projects. However, due to certain objections from the Pakistan government as well as due to the non negotiation of the terms and conditions, these projects could not materialize. Now with the Chinese coming into this region it is certain that they are definitely going to have an influence on these nations and it would not be wrong to say that they would try and gain the maximum energy benefit that they can get.
Reams of paper have been wasted on the Chinese "presence" in Gwadar. But what is coolly overlooked is that China of its own volition turned down the Pakistani offer to run the Gwadar port after its development with considerable Chinese aid. Arguably, China would benefit by direct access to the Persian Gulf but it factored in that a managerial role in Gwadar was superfluous for achieving the purpose. Nor does China harbour rancour that Pakistan decided that Gwadar is best managed by a Singaporean firm with American links.
(Curiously, Gwadar has become as American pearl - just as Myanmar too might if the determined American diplomacy toward Yangon makes headway.)
Although, it is quite evident that development of Hambantota port by China does not in any way jeopardize energy security of India but in the same vein it does not threaten the security of India in any way. It is time that we take a dispassionate look at the events that led to the formation of his pearl.
Sri Lanka first offered the Hambantota port for development to India. New Delhi thumbed its nose at it, whereupon Colombo turned to Beijing for help. Sri Lanka was just a sovereign country trying to exploit its unique factors to its advantage for economic development. At any rate, it seems quite a far fetched idea to fear about Sri Lanka becoming a pearl in the Chinese string, as there are very few people on this planet who treasure their autonomy of thinking and action as the Sinhalese do. China plans to use this port as a refueling and docking station for its navy as it patrols the Indian Oocean and protects china's oil
Again, as is the case with Hambantota it seems not only highly unlikely but also quite improbable that Chittagong which is presently just a container port facility to be developed into much more than what it is now.
China values Bangladesh for its immense natural gas reserves and they are accessible to it through proximity to Myanmar.
India should look at Bangladesh in this perspective and should try to have better relations with her rather than fretting on the fact that China is making inroads in a huge way ,otherwise, India would stand to lose not only diplomatically but also would fail to tap the vast amount of natural resources present in the country. Relevant in this regard is a statement by the Bangladesh Additional Foreign Secretary, " We have nothing to sell to the Chinese. We could sell a great deal to the Indians if they allowed us". In this regards, it is also important to note that Bangladesh shares borders with India and not with china, thereby limiting its ability to distance itself from India.
Myanmar has the world's 10th-largest natural gas reserves, estimated at over 90 trillion cubic feet (tcf) in 19 onshore and three major offshore fields.
Both India and China realize the importance of Myanmar strategically as also as far as the their energy security needs are concerned. Firstly, Myanmar has the largest natural gas reserves in South East asia Asia and is also rich in oil. Secondly, as far as china is concerned it provides an easy and quick route to its landlocked Yunnan province. Thirdly, as far as India is concerned it would like Myanmar to be neutral and away from Chinese influence.
India and chinaChina, both are putting their energy needs first and are looking towards the nations which can fulfill them. Although in the international community Myanmar is considered to be a pariah state since the 1988 military crackdown on the nation's pre-democracy movement but that has not deterred either India or china China to pursue their energy interests in that region.
As per the agreement signed between China and Myanmar they have agreed for constructing fuel pipelines that will transport Middle East and African crude oil from Myanmar's Arakan coast to China's Yunnan province. This would not only shorten the time period of sea voyage but would also enable china to draw on the gas resrves of Myanmar at the Shwe gas fields. It has been estimated that the Shwe field holds a gas reserve of 4tcf to 6 tcf and the Shwephyu, and the Mya fields have a combined proven reserve of 5.7tcf to 10 tcf. Construction of the US $1.5 billion oil pipeline and the $1 billion gas pipeline will begin soon and is expected to be completed by 2013 2013.
What India needs to consider at this moment is the question that why is it that China has been able to make serious inroads into the energy sector of Myanmar and despite the fact that though it entered the market quite late it has surely become Myanmar's biggest trader. The reasons for this could be attributed to the fact that China is a veto-holding member of the United Nations Security Council and it is in a position where it may be able to prevent any resolutions which are detrimental to Myanmar's interest.
China has made considerable headway on transnational pipelines while India is floundering. China's success in importing gas by transnational pipelines stems from its ability to aggressively sign deals based on a well thought out energy strategy. India has an integrated energy policy but the geopolitical strategy seems to be missing. It becomes very important that India has a geopolitical strategy on the lines of china's string of pearls to safeguard its energy interests.
From String of Pearls to Circle of Pearls
It is important for India that some amount of dispassionate analysis of the string of pearls policy be done so that it can be disregarded as an act of hostility directed towards India and the true nature of threat that this policy brings about may be seen. As we know that this name was not given by the Chinese government but was a name which was prounded founded by a pentagon analyst somewhere in 2005. But does that mean that the Chinese have stopped after development of these pearls or are we merely trying to overlook the facts that are staring right in our faces. A scrutiny needs to be done in order to see the facts as they emerged after 2004-05.
The last of the string of pearls as we move from east to west seems to be Gwadar port or the Chinese presence in the Straits of Hormuz. But, indeed is that the case or in trying to give credence to this policy we are overlooking the fact that the Chinese have not stopped there. They have continued their policy of securing energy resources by tapping the resources of Africa, CAR and South American Nations. An examination is in order to delve into the psyche of the Chinese rulers.
Africa. China and India are fast rising economies with an ever-growing demand for energy resources. The requirements are likely to grow rapidly and both the energy importers have no alternative but to diversify their resource base, in which China has already taken the lead. Let us do a step by step analysis of Africa energy resources, Chinese entry and threat to Indian energy security.
Africa's Energy Resources. Africa's energy resources have attracted global attention.
China's Foray foray into Africa. China's has emerged as a ruthless competitor in African markets. Within a short span of time, the China-Africa trade has grown significantly. The two-way trade between India and the African continent totals about $30 billion a year. In comparison, the trade between China and Africa has grown from $55 billion in 2006 to $73.3 billion in 2007. The surge in trade has been mainly due to China's import of oil and other commodities from Africa and the sale of low cost manufactured products. As is with the case with Iran and Myanmar China has not looked too perturbed over the provision of economic aid to pariah states like Sudan in Africa. Chinese leaders have raced across Africa inking deals with Nigeria, Angola and EquitorialEquatorial Guinea. In November 2006, China hosted a summit that brought leaders from foryty- eight African countries to Beijing, signed 1.9 bn USD worth of trade deals and were given 5 bn USD in Chinese aid. In feb 2007, Chinese President Hu Jintao visited eight African nations, offering development aid and cementing ties.China has adopted a pragmatic political policy and agreed to provide 'aid' and enter into business collaborations in Africa without a check-list of stringent norms on adherence to human rights, democracy and good governance. This unconditional aid is an attractive proposition for many of Africa's authoritarian rulers. Of late, African countries have realized that the continuing exploitation of their resources is one of the main reasons for their underdevelopment. Prompted by this understanding, the African countries have adopted a 'Look East' policy as a pragmatic and fundamental decision. Today, many African countries such as Kenya, Angola, Sierra-Leone, Zambia, Tanzania and Zimbabwe, amongst others, have welcomed investments and aid from the Asian giant. China pursues a policy whereby the profit motive surpasses all other concerns such as democracy, good governance or human rights.
India and Africa. Indian companies like ONGC, Indian Oil and Reliance have been active in seeking prospects for exploration indirectly. India has established a presence in Libya, Sudan, Angola, Nigeria and the area around the Gulf of Guinea. An important landmark in the India-Africa cooperation was the launch of the Indian government funded Pan-African e-network project in 2007. However, if we compare India with China in terms of economic relations with the African continent, the former appears to have missed the opportunities offered by the huge untapped natural resources of oil, gas and minerals that the African continent is endowed with.
India's Worries. It is the Chinese challenge that should worry Indian policymakers. But our response has been either to deny that there is a challenge from China or exaggerate the damage done by China's push into Africa. China has been proactive, and has reached out to Africa, while India was passive in the past two decades. There has been a meaningful and policy-oriented debate on India's relations with African nations in recent days. Though a late entrant on the African continent, China has surpassed India-Africa trade, despite India's much hyped and talked about historical, cultural, diplomatic and ideological connections with the African continent. Though the cultural and ideological bridge was in evidence in India-Africa relations, the economic relationship progressed at a snail's pace. Although India has accumulated abundant goodwill in its relations with African nations, the economic context of these relations is low in comparison to that of China. India needs to make significant inroads into the African economy. India has an advantage in terms of acceptability because of a long-term association with Africa. It also has support for its investments, as the Indian government's policies are not motivated by profit alone. India has focused on capacity building in Africa and adheres to economic relations with Africa based on equal partnerships. The Indian assurance that its companies working on infrastructure projects in Africa would not bring the Indian labour force with them, but employ and train local staff to build capacity would help boost bilateral economic engagement.
South American Nations. China has also aggressively courted the Latin American countries and is developing its sphere of influence. Often overlooked trade between China and these countries have increased to 400 bn USD annually. As far as energy is concerned China has tapped into the resources of Venezuela ignoring its anti US stance. Seen in this light India's efforts almost come to a noughtnaught in comparison. China has taken almost an unassailable lead in the sphere of securing its energy needs and it becomes imperative for India to come out of its self imposed shell if it needs to secure some of its energy needs let alone give competition to china in this part of the world. There are only finite energy resources in the world and to tap them at the earliest should be the major worry of our policymakers.
CAR. The central asian region is one of the most energy rich regions in the world. Turkmenistan has the world's fourth largest reserves of natural gas, while Kazakhstan's oil reserves are said to be three times those of the North Sea. Beijing imports a large amount of its energy from Russia, but has become increasingly interested in buying directly from Central Asian suppliers -- including oil from Kazakhstan and natural gas from Turkmenistan. The following points merit attention:-
SCO. China was a founding member of the Shanghai Cooperation Organisation consisting originally of Russia, China, and its four Central Asian members, Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan  and the SCO has indeed led to greater cooperation, specifically in regards to regional political stability, terrorism, trade, electricity, and last but not the least energy. In short, the Central Asian chessboard is enormous, the pieces are numerous, and the stakes are high. Though the SCO created an energy Club and its members have signed a multitude of oil and gas pipeline deals, its member's specific energy interests are in many ways contradictory and have not been shown to be easily resolvable. The main competition in the central asian region is between Russia and China with China desiring pipelines to the east and Russia the north, and it does not augur well for India that the deals which it needed to sign with the CAR countries have not yet materialized.
Deals with the CAR Countries. China has loaned Turkmenistan $3 billion, which will give it a stake in the Turkmen's enormous Yolotan Osman gas field, rumored to be the world's largest. Kazakhstan got a $15 billion loan, giving China a 22% share in Kazakh oil production. Beijing is planning an almost 4,000 mile, $26 billion Turkmen-Kazakh-China pipeline to run from the Caspian Basin to Guangdong Province in China. There are currently 35 Chinese companies operating in Turkmenistan on 53 investment projects related to energy, telecommunications, agriculture, textiles, food production, health care, and construction worth more than $1 billion in total.
Emerging Equation with Russia. According to former Indian diplomat and current Asia Times commentator M.K. Bhadrakumar, after years of tension between Moscow and Beijing, the two countries are burying that past and "steering their relationship" in the direction of a "strategic partnership in the overall international situation," rather than competing over energy resources.
India in CAR. India had two major projects in the pipeline as far as the CAR is concerned. The TAPI (Turkmenistan- Afghanistan- Pakistan - India) and the IPI ( Iran - Pakistan - India).Although it seems that TAPI project will more or less materialize but the main issue is the safety of this pipeline which passes through a trouble torn region of Afghanistan . As if this was not enough, in the past year even Pakistan is now embroiled in a war of its own and the future of this project in this regards seems quite bleak.
- the hindu
- the hindu
- Rising China: Implications for India by Major General (Retd) Dhruv Katoch SM, VSM, USI journal July - September 2009.
- Rising China: Implications for India by Major General (Retd) Dhruv Katoch SM, VSM, USI journal July - September 2009.i
- The elephant and the dragon
- Source: http://www.atimes.com/atimes/South_Asia/KD03Df03.html
- Source: http://ipcs.org/article/southeast-asia/myanmar-china-energy-engagement-implications-for-india-2898.html
- Africa quarterly
- 'India pledges development projects for Africa during summit with African leaders,' International Herald Tribune, 8 April 2008.
- The elephant and the dragon
- Remarks of Rear Admiral Raja Menon (Retd) during his visit to DSSC
- The end of the American century
- Source: http://centralasia.foreignpolicyblogs.com/2008/04/01/the-shanghai-competition-organization/
- Source: http://www.rferl.org/content/New_Gas_Pipeline_Showcases_Turkmen_Chinese_Cooperation/1901525.html
IMPLICATIONS FOR THE U.S
"Americans and Eurpoeans will have to run at least as fast as the fastest lion .... and that lion will be China"
Since the beginning of economic reforms in 1970s, China has been the world's fastest expanding economy. The country is expected to overtake Germany in 2010 as the world's third largest economy after the US and Japan.
The question that arises is that how can China endanger the energy security of a superpower like the US. Although still in its early stages but the signs are more or less becoming clear that the US dominated world order is changing under the pressure of China emerging as a mammoth economic power.
China has the world's largest population, is also the second largest consumer of energy and the third largest importer of oil. Its enormous appetite for energy and petroleum is also one of the main reasons for the rise of gasoline prices in the US. In the next few paragraphs the attempt would be to analyse the growing influence of China in the Indian Ocean Region and the effect of its string of pearls policy on the energy security of the US.
A Strategic Competitor
Till a few years back US had a complete hegemony over the region of Indian ocean , Middle east and the African countries. However, over the past decade China's share of world energy consumption has increased from 9 to 12 percent. Due to this fact and its dependence on the middle east heightened Beijing's concern about the US control of the sea lanes of communication which led it to expand its influence along the routes connecting the Arabian Gulf, Indian Ocean , strait of Malacca and south china sea.
South China Sea. As already brought out earlier South China sea has one of the largest known oil and gas reserves and hence the competition to control the Spratly and the Paracel islands is extremely fierce. The US obviously is quite worried of the growing Chinese influence in this region and quite rightly so as the energy resources of the world are diminishing at an alarming rate. China on the other hand has for the past decade tried and succeded to quite an extent in forging good relations with its neighbours in and around these islands.
Kra Isthmus. This pearl of Kra Isthmus is an interesting project which the Chinese had envisaged. However, the two countries which are opposing this project are Singapore and the US for the obvious reasons as it would greatly affect the economy of Singapore. Moreover the Chinese are wary of the influence of US and India on the strait through Malacca and would not want it to rely on only this small bottleneck in case of any hostilities.
Chinese Influence in Africa and CAR. If we see the presence of China in Africa and CAR as an extension of String of Pearls policy it becomes quite evident as to why US is so chary of Chinese presence in this region. The arguments given in the earlier chapter stand true for the US as well. With the energy resources at a premium and increasingly wars being fought over oil most of the nations in an endeavour to safeguard their interests are reaching out to those regions where the energy resources are in abundance. Increasing influence of Russia and China in the CAR region and their recent bonhomie has clearly unnerved the US. These two nations have signed a $25 billion oil agreement that will supply Beijing with 4% of its needs through 2034. The two countries are currently negotiating a natural gas deal. Hence, it becomes imperative for America too that it should try and resist the influence of these nations in these regions. A step in this direction had already been taken by the Obama administration by increasing aid to Kyrgyzstan and Tajikistan. This extension of the policy of china isn't limited to the Middle East and Central Asia. As discussed in the previous chapter, China has also been greatly expanding its presence in Africa. Beijing is particularly interested in countries with oil and other mineral resources and has signed at least 40 oil agreements with various African countries. The countries pragmatic and soft power approach seems to be striking a chord in African countries. If the string of pearls policy started by Chinese soft approach towards countries such as Indonesia and Myanmar then it has grown in the last couple of years by its same approach towards CAR and African countries. It exists in South America also from the steamy depths of Venezuela's Oronoco Basin to the depths of the South Atlantic off the coast of Brazil. This is the right time that US realizes that oil and gas need not be the ultimate aim of the US. The aim of the US should be to control the sources of the energy of its rivals as controlling these energy sources would ultimately result in controlling these nations. However, China it seems has preempted the US in this regards and it seems a very difficult proposition that America from the position as it stands today can control an emerging china or the sources that it has accumulated.
The U.S has enormous military power but it seems that the days of controlling an energy rich nation may be gone as diplomacy and good relations take a centrestage. As really the Chinese have shown it is possible to garner a great share of the world energy market without getting into actual conflict. The Americans if they have to keep an edge over china in this competition would like to take a leaf out of the Chinese book .The trick over the next several decades will be how to keep the competition for energy from sparking off brush fire wars or a catastrophic clash of the great powers.
- The end of the American century
- Defence Watch dec 2009.
- The end of the American century
- JFQ issue 55 ,4th qtr 2009
- The end of the American century
CONCLUSION - THE ROAD AHEAD
The Indian military establishment has been crying hoarse for some time about the growing Chinese military threat. Every move that is made by China in the region is viewed with suspicion. Chinese help for the upgradation of ports in Myanmar, Pakistan, Bangladesh and Sri Lanka has been interpreted as moves to encircle India with a "string of pearls" and shown as giving rise to 'maritime encirclement' of India . This seems to be a futuristic assessment as China would take at least a decade if not more to develop the kind of military force to give china a greater clout in the Indian Ocean region. Former Foreign Secretary Shiv Shankar Menon said recently that there were no Chinese naval bases in the region despite all the talk about the "string of pearls". Chinese diplomacy, despite the pinpricks, remains focussed on ensuring the country's "peaceful rise" as a superpower in the coming decades. String of Pearls theory as we knew it earlier does not seem to be a valid theory as has ben pointed out in the earlier chapters. 'Containment' is not valid anymore as it is more of a 'Make Neighbours Rich' theory. It is in this light that the policy of China should be viewed.
The so called China's String of Pearls policy emanated from the Chinese perception of a danger to its sea lines of communication but over a period of time this policy if seen in totality is nothing but a part of race for resources. This race for resources, especially oil, can put countries at loggerheads. The world is engaged in a desperate race for resources they need to continue to grow. China has taken a headstart in the race by following its policy of string of pearls which takes care of having a base near the energy rich resources as well as keeping its sea lines of communication open in case of any eventuality. The views on China of two recently retired Foreign Secretaries of the Government of India - Shyam Saran and Shiv Shankar Menon - as reported by "The Hindu" were restricted to the sphere of maritime security, but indicate a desire to look for ways for working with China instead of treating China all the time with suspicion.
India needs to put a correct perspective on the policy being followed by china. Instead of accusing the Chinese of making a maritime string around the country to be used in case of war, the realization should dawn on our policymakers that it is the energy which is being sought after and the maritime threat presently is only secondary. The former Indian Navy chief, Arun Prakash, has written that China has created "weapon-client states" such as Myanmar, Bangladesh, Pakistan, Saudi Arabia and, Iran to surround India. However it would also be pertinent to note here that Myanmar is known to be paranoid about its neutral status and has gone to considerable lengths to retain it. It is also well known that Bangladesh, Pakistan and Saudi Arabia have closer strategic links with Washington than Beijing. Iran, like India, is so far not known to be subservient to the strategic interests of a third country. What threat does Hambantota or Coco islands pose is really questionable but they do seem to point to an intent which is quite clear. Starting from the Hainan islands and gradually building bases in or around the energy hubs of the world clearly points to a strategy which revolves around securing as much of energy sources as possible. The chances of a conflict in the near future between India and China though cannot be ruled out entirely but are bleak as both the nations do realize that they are growing economies and cannot afford a war at this stage in time. Both India and China are energy deficient and need a stable international order and affordable energy imports.
Although, earlier when speaking of this policy Gwadar or Strait of Hormuz was the last pearl which we used to identify this policy with, but in the last couple of years the Chinese have expanded its reach more towards the west and has gone in a big way into the CAR and the energy rich African states. India should realize that what it is seeing is a 'new game in asia' by practicing 'currency diplomacy' in an attempt to win political and energy rich allies.
Development of Gwadar port provides a much shorter route than before. It will also be useful in countering the soviet influence over the CAR by providing a much shorter access route from CAR to its Xinjiang province. Similar is the case with Myanmar, Strait of Malacca and Kra Isthmus. Rocky island as a pearl not only gives it an access to the happenings in the south China sea but also might serve as a possible platform for any operations on the energy rich and controversial region of Spratlys and Paracel Island. The other smaller pearls like Hambantota or Coco Islands seem to be just act as a listening post and provide security to its sea lines of communication. Hence, it would be in India's interest to try and secure the available energy sources as early as possible in a planned manner before it so happens that with its policy of "Attracting friends and Influencing people" most of these sources are secured by China.
Hence, in conclusion it would be prudent to say that it is imperative that India should participate in shaping an emerging economic and security architecture in the region in close collaboration with all stakeholders,
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