Second Wind for China’s String of Pearls Strategy. Part 2
Foreign
scholars could not help but notice that by the implementation of a
special policy of conducting anti-piracy campaigns around the Horn of
Africa, Beijing began to show increased interest in the Port of Aden,
where it has transported fuel, freshwater, and food for the ships that
made frequent visits to the Port of Salalah on the shore of Oman.
Overall, since the turn of the
millennium, the Chinese Navy has already conducted multiple large-scale
voyages, including one circumnavigation that visited 23 countries in
Asia, Africa, America, Europe, and Oceania. According to unconfirmed
sources, the Chinese vessels crossed the Strait of Magellan. These
voyages across the ocean were not only acts of naval diplomacy and a
chance to fly the Chinese flag in major ports around the world, but
also, apparently, an opportunity to collect information about major
Canals – the Suez, Panama, etc., which Beijing has been observing for a
long time due to its expanding interests in oil an natural resources.
And now it may be stated that Beijing is
clearly reshaping the global map of traffic flows in all directions.
For example, at the turn of the century Beijing managed to beat the USA
in obtaining the concession to operate the Panama Canal for 50 years and
to rent the ports of Bilbao and Cristobal on either side for 25 years.
By the end of 2014 the extensive modernization of the inter-ocean canal
will be completed, as well as the construction of pipelines, a railroad
and highway running alongside it. After it is dredged, the canal will be
able to admit a greater number of vessels per day, with a deadweight up
to 120-130 thousand tonnes. Essentially, the squeezing of the USA out
of the Panama Canal by the Chinese signifies not only a victory in this
specific competition, but also a weakening of Washington’s position in
Latin America as a whole.
China has appropriated the Suez Canal
just as thoroughly. Multiple Chinese companies established presences in
the area of Port Said at the beginning of the twenty-first century, with
the intention of creating a “free economic zone” in the future. The
negotiations between Egypt and the PRC conducted at the time resulted in
an agreement permitting the ships of COSCO (China Ocean Shipping Co) to
use the port’s equipment along the entire canal. By 2012, there were
two facilities for unloading containers with cheap Chinese goods in
operation at Said Port. After the Arab Spring, problems arose regarding
its use due to a limitation of traffic, an orgy of piracy around Somalia
and in the Gulf of Aden, as well as possible acts of terrorism, which
almost occurred in August, 2013, but were successfully averted.
To protect the installed transportation
communication network control system against potential risks, Beijing
initiated the construction of an alternative to Panama and Suez in 2012 –
a “dry canal” through Colombia. The project, however, turned out to be
expensive and unprofitable – one train can transport 6-7 thousand tonnes
by rail, whereas the average capacity of a freight ship is 70 thousand
tonnes. So the project was forgotten.
Regarding the zone around the Indian
Ocean, Chinese authorities have displayed admirable consistency,
especially in recent years. The major port in Gwadar, modernized by
China in the first decade of the twenty-first century, was transfered to
the management of the Chinese Overseas Port Holding in February, 2013
due to the disappointment of Pakistani authorities over the results of
the Singaporean firm that had been operating the port for the last six
years. Gwadar may be quickly transformed into a military base, according
to the media, and also boasts a strong point under construction with
substantial storage space, numerous moorings for the simultaneous
reception of more than 30 vessels, and an oil refinery in Hambantota in
southern Sri Lanka (the total investment in the project amounts to 1.2
billion USD). All of these, as well as other facilities along the
northern arc of the ocean, are exposed to several threats to the flow of
energy resources into China through the Indian Ocean.
But nevertheless, Beijing continued to
seek new opportunities to gain a foothold on the east coast of Africa,
which has become a very important source of various resources that fuel
the rapid growth of the Chinese economy. In 2011, Beijing succeeded in
concluding an agreement to construct a base on the Seychelles for
refueling and rest, with intentions to expand its functions. But the
Chinese met with disappointment in the Maldives, where on the one hand,
they were refused the right to establish a base, but on the other hand,
their economic integration was strongly welcomed.
After lengthy discussions with the
government of Kenya, Beijing began the construction of a major complex
in Lamu (north of Mombasa) in 2013 – a major ports with moorings for 32
ships, three international airports, a railroad line 1 thousand miles
long and a highway 1.1 miles long to transport oil and other resources
from Sudan, Ethiopia, and other areas of West and Central Africa. An oil
refinery will also be constructed in Lamu. In the future, it is planned
to connect this complex with similar facilities on the west coast of
Africa.
The Malacca Dilemma is perhaps the only
remaining “tough nut to crack” for Chinese strategists, forcing them to
continuing searching for possible solutions. By and large, the problem
remains acute and has not been taken off the agenda. Nevertheless, in
2014 oil pipelines from the shores of Myanmar in the Bay of Bengal to
Yunnan province entered services, with gate points at more than 60
locations on roads built by Chinese workers between Chinese provinces
and neighboring ASEAN countries. China had the opportunity to become a
legitimate user of the Strait of Malacca by virtue of its active
participation in international anti-piracy campaigns (without formally
joining the ReCAAP: Regional Cooperation Agreement on Combating Piracy
and Armed Robbery against Ships in Asia), which, in the opinion of
Beijing’s military leaders, posed less of a danger to China’s ships that
the possibility of a blockade of the strait by the USA, either
independently, or jointly with the loyal US ally, Japan.
In 2012, China received the status of a
permanent observer in the region-wide Association for Regional
Cooperation in the Indian Ocean (ARCIO) composed of 19 countries, which
it joined in 2000, but not in the Naval Symposium of the Indian Ocean
created by India in 2008 due to the opposition of Delhi.
China is gradually creating pockets of
influence and inventing various contingency plans, but does not always
achieve the desired result. For example, the plan to build a canal
through the Isthmus of Kra in the narrowest section of the territory of
Thailand and Myanmar, in which Beijing showed a strong interest even in
the last century, and for which it was prepared to spend 25 billion USD,
has been delayed once again. It would short the route compared with the
Strait of Malacca by a factor of two, and would increase the amount of
ships that could pass through to 200 per day. Several construction
options have been put forward, and several players are interested in
participating (in addition to the main contractor – China), including
the EU, USA, Japan, India, Vietnam, Cambodia, etc. Only Singapore
reacted negatively, fearing competition and a loss of income due to a
lower number of ships in the Strait of Malacca.
Among the reasons for the repeated
postponement of beginning to process of collecting funds for
construction, Thai authorities have listed the following, in addition to
the global financial crisis: growth in separatism in the south of the
country, complexity of legally registering the ownership over the future
canal and preserving sovereignty over it (following the adage – “he who
pays the piper calls the tune”), fears of excessive activism and
influence from China by potential regional participants in the project,
the implementation of which will take approximately 10-15 years.
Continuing to experience pressure from
the Malacca Dilemma, China is wisely seeking to expand the spectrum of
levers at its disposal to overcome it and promote its interests, while
also opening up new geo-strategic areas:
1). Beijing managed to achieve good
results in the development of the Northern Sea Route (NSR), its interest
in which, as well as in the Arctic as a whole, has been clear since the
beginning of the twenty-first century, when, in 2004, it established
its first polar research station Nai-Alesund at Svalbard, initiated
construction of a non-nuclear icebreaker, and received in May, 2013 the
status of permanent observer in the Arctic Council. In August of the
same year, the first Chinese cargo ship Yun Shen reached Rotterdam via
the NSR, and successfully completed its journey two weeks earlier than
if it had used the routes going through the Indian Ocean and Suez Canal.
The Wall Street Journal, August 20, 2013, remarked that this voyage was
a noteworthy achievement, which not only saved the Chinese over 820
thousand USD in fuel, crew wages, etc., but also presented lower risk
than transporting raw materials, oil, and cargo through the South China
Sea and Strait of Malacca. According to Chinese experts, shipping via
the NSR may account for 15% of China’s trade exports by 2020. This also
draws attention to the reciprocal objective of “opening” the NSR for
China – establishing along the NSR regular, less expensive
communications with Greenland and Iceland. After signing a Free Trade
Area (FTA) agreement with Iceland in 2013, Beijing intends to begin
developing offshore hydrocarbons. Greenland has been a location of
interest for many mining companies for several decades. China is among
those actively striving to acquire the rights to mine uranium and rare
earth metals, including Australia, the USA, etc. By participating in a
project with London Mining, which is excavating iron ore at Isua in the
southwest of the island, Beijing has already invest 2.3 billion USD, and
is also building a port, airport, and roads. In the future, the
successful completion of this project by Beijing will depend on a smooth
transition to independently mining gold and copper ore, and extracting
oil and gas from the Greenlandic shelf.
2). There is another very promising task
at the top of the list – a Chinese company will build an inter-ocean
canal in Nicaragua for 40-50 billion USD and receive a concession to
operate it for 100 years. Despite protests by local “greens” due to
fears that the construction of the canal may cause damage to the
environment, the legislature and government of Nicaragua approved the
project in the summer of 2013, in the hopes that the country would
receive substantial benefits. According to estimates, this modern canal
(due to its ability to allow large vessels carrying cargoes of 270
thousand tonnes through) is likely to become a rival of the Panama
Canal. Despite the long term nature of the project, its construction may
result in economic growth of 10% in the country in 2014 alone. The
Nicaragua Grand Canal (NGC) will allow China to cut the Pacific Ocean in
half and open a strategically important and shorter route to the
Atlantic Ocean, Latin America, and West Africa.
3). China is making an effort to change
the balance of power in its favor in the southern seas of the Pacific.
Here, in exchange for economic aid, handouts to local elites,
investments in weak local manufacturing and fishing, modest military aid
to protect the EEZ, military equipment, and other methods of Chinese
“soft power”, Beijing is trying to obtain the right to create support
points and military bases in Fiji and Tonga.
Some western analysts immediately dubbed
Beijing’s policy in Oceania a variant of its “string of pearls”
strategy. The strategy has been applied in the Indian Ocean for a long
time, and judging by many measures, it has already expanded beyond its
borders. The accumulated experience and diverse mechanisms to implement
the strategy proved to be fully applicable to its implementation in
other regions, in order to promote Beijing’s global and regional
interests.
* * *
Returning to the Chinese exercises
conducted at the beginning of 2014, a few remarks must be made regarding
the sharp reaction to them by Australia, USA, India, etc. The core
reaction was the usual call for greater unity against the “China
threat”, an increased level of multilateral maneuvers in the region, an
expansion of navy-to-navy information connections, and the necessity of
tightly monitoring the movements of the Chinese navy.
In “Australian”, hints were intoned
regarding the undesirability of an incursion of Chinese ships into the
eastern areas of the Indian Ocean, which are, incidentally,
international waters. The desire was also voiced for joint efforts to
integrate China into the global “rule system”, including on the sea,
still rigidly imposed by Washington, which is difficult to reconcile
with the recognized accession of the Middle Kingdom to the status of the
second world power.
In practical terms, the trends in the
convergence of India with Australia, Japan, and Indonesia have received
further stimulus. Also, while the USA will maintain its current primacy
in the seas in coming years, it will not be able to restrain China from
gradually gaining control of points of global significance and
assembling new “strings of pearls” in an increasingly global world.
Nina Lebedeva, leading
scholar at the Institute of Oriental Studies of the Russian Academy of
Sciences (RAS), exclusively for the online magazine “New Eastern Outlook”.
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