China Covets A Pearl Necklace

Dragon’s Foothold in Gwadar

Brahma Chellaney

(c) Asian Age April 7, 2007  

The newly opened deepwater port at Gwadar, Pakistan, represents China’s first strategic foothold in the Arabian Sea. Along with Beijing’s onshore and offshore strategic assets in Burma, Gwadar signifies an enlarging Chinese footprint on both the oceanic flanks of peninsula India. Add to the scene China’s agreement to build a port at Hambantota in Sri Lanka, its aid to the Bangladeshi port of Chittagong and its interest in a strategic anchor in the Maldives. What all this underscores is an emerging Chinese challenge to India’s traditional dominance in the Indian Ocean region.

The recent, little-noticed inauguration of the Gwadar port by Pakistani military ruler Pervez Musharraf has set the stage for Gwadar’s expansion into an energy-transport hub and naval base. Describing the occasion as “a historic day,” General Musharraf announced, in the presence of Chinese Communications Minister Li Shenglin, that a modern airport also will be built at Gwadar by “our Chinese brothers.” Chinese engineers already are constructing the Gwadar naval base, scheduled to be ready in less than four years.

The Gwadar port’s first phase was completed by China ahead of schedule, and during President Hu Jintao’s visit to Islamabad last November, one of the agreements announced was titled: “Transfer of Completion Certification of Gwadar Port (Phase I) between the People’s Republic of China and the Islamic Republic of Pakistan.” This revealed that China built the port on a turnkey basis. It has pledged more than $1 billion in grants and loan guarantees for the multiphase Gwadar project.

Gwadar, near the Iranian border, epitomizes how an increasingly ambitious Beijing, brimming with hard cash from a blazing economic growth, is building new transportation, trade, energy and naval links around India to advance its interests. Such links, whether by design or accident, strategically encircle India, constricting its options and room for manoeuvre. 

Beijing has been busily fashioning two strategic corridors on either side of India in a north-south axis — the Trans-Karakoram Corridor from western China stretching all the way down to Gwadar, at the entrance to the Strait of Hormuz, through which 40 per cent of the world’s oil passes; and the Irrawaddy Corridor from Yunnan to the Bay of Bengal involving road, river and rail links through Burma, including to the Chinese-built harbours at Kyaukypu and Thilawa.  

The Irrawaddy Corridor has brought Chinese security personnel to Burmese sites close both to India’s eastern strategic assets and to the Strait of Malacca. Chinese agencies already operate electronic-eavesdropping and maritime-reconnaissance facilities on the Coco Islands — transferred by India in the 1950s to Burma, which then leased them to Beijing in 1994. The Coco Islands, however, were not the only instance of Jawaharlal Nehru’s territorial big-heartedness toward Burma. A sore point in Manipur remains the way Nehru unilaterally accepted Burmese sovereignty over the 18,000-square-kilometre Kabaw Valley in 1953. Today China operates a signals-intelligence (SIGINT) collection facility from the Great Coco Island.

A third Chinese strategic corridor is in an east-west axis in Tibet across India’s northern frontiers. The $6.2-billion railway from Gormu to Lhasa significantly boosts China’s offensive military capability against India. A railway branch southward from Lhasa to Xigatse — seat of the Panchen Lama’s Tashilhumpu monastery — is nearing completion. The People’s Liberation Army, strategically located on the roof against the Indian forces at low levels, now has the logistic capability to intensify military pressure at short notice by rapidly mobilizing up to 12 divisions.  

          Beijing intends to extend the Tibetan railway right up to the Indian frontier — to the Chumbi Valley where the borders of Sikkim, Bhutan and Tibet meet, and to the Arunachal-Burma-Tibet tri-junction. It also plans to connect with Kathmandu by rail. The Chinese efforts to use transportation routes to make strategic inroads and create an economic dependency in Nepal challenge Indian security.

            As part of this east-west corridor, China has built new military airfields along the frontier with India, and has just announced a plan to set up the world’s highest airport at Ngari, at the southwestern edge of Tibet. The Ngari prefecture has a population of only 69,000, and the airport will play a largely military role in reinforcing Chinese capabilities in the captured Aksai Chin region, where China maintains an outer and inner line of control against India. The new railway allows China to rail-base in Tibet some of its intercontinental ballistic missiles, such as its latest DF-31A, a rail-mobile weapon.

China’s incremental efforts to build a “string of pearls” along the Indian Ocean rim symbolize its fourth strategic corridor — and the advent of a challenge to India from the south. This “string of pearls” — a term first used in a report for the Pentagon by defence contractor Booz Allen Hamilton — is sought to be assembled through forward listening posts, naval-access agreements and Chinese-built harbours stretching from Pakistan and Sri Lanka to Bangladesh and Burma. The Chinese interest in the Indian Ocean rim now extends up to the Seychelles, which the visiting Hu Jintao two months ago called “a shining pearl in the Indian Ocean,” as if to corroborate his country’s string-of-pearls scheme.

Such is Gwadar’s vantage location that it is central both to the string of pearls and the Trans-Karakoram Corridor. Gwadar is being linked by road to the Chinese-built Karakoram Highway — an emblem of the long-standing Sino-Pakistan nexus. With the Chinese-aided Gwadar-Dalbandin project extending the railway up to Rawalpindi, Beijing has begun a technical study about building a railroad from Pakistan to Kashgar through the Khunjerab Pass, in parallel to the Karakoram Highway.

Gwadar’s transformation from a sleepy fishing village to a strategic centre and boomtown has been rapid. In his March 20 port opening, Musharraf thanked China for dramatically changing Gwadar “where five to six years back there was nothing except for sand and dust.”   

China has acknowledged that Gwadar’s strategic value is no less than that of the Karakoram Highway. In fact, the largest Chinese economic-information portal called Gwadar “China’s biggest harvest” and boasted that Beijing enjoys “relatively large control” there. China’s role in developing Gwadar is as strategically significant as its well-documented part in arming Pakistan with nuclear-weapon and missile capabilities. By linking Gwadar with the Karakoram Highway and by planning to build an oil pipeline from Gwadar to its restive Xinjiang province, China actually is seeking to reap a strategic-multiplier effect.  

One component of China’s plan is to make Gwadar a major hub transporting Gulf and African oil by pipeline to the Chinese heartland via Xinjiang. Such piped oil would not only cut freight costs and supply time but also lower China’s reliance on US-policed shipping lanes through the Malacca and Taiwan Straits. Pakistan has already signed a memorandum of understanding for “studies to build the energy corridor to China.” Beijing is also setting up a similar energy corridor through Burma involving oil and gas pipelines, with Chinese firms now developing a major port at Sitwe, the capital of Rakhine province.

The past is a testament to how Chinese projects in India’s periphery progressively assume strategic and military colour after originally having been touted as purely commercial. A classic case is the Karakoram Highway, which has served as a passageway through occupied Kashmiri territories for covert Chinese nuclear and missile transfers and other military aid to Pakistan.

As the practitioner of a Sun Tzu-style balance-of-power strategy aimed at averting the rise of a peer rival in Asia and engaging the world on its own terms, China blurs the line between commercial and military interests. Its investments in ports in Burma, Bangladesh, Sri Lanka and Pakistan have been driven largely by strategic considerations. Indeed its $475-million investment in Hambantota is bereft of even the fig-leaf of commercial interest. 

Just as China has furthered its military interests in Burma behind a commercial veil, it values Gwadar for the major strategic advantages that port holds despite its location in insurgency-wracked Baluchistan. Even after four Chinese engineers were killed in two separate guerrilla attacks in 2004, China did not slow down the construction. Gwadar — half the distance from Kashgar than Shanghai — provides much-closer access to the sea from China’s landlocked, sparsely-populated Xinjiang province, which is twice the size of Pakistan. 

Beijing sees Gwadar as providing a more-secure corridor for energy imports, given its fears that in the event of a strategic confrontation, its resource-hungry economy could be held hostage by hostile naval forces through the interdiction of oil shipments. Gwadar, along with Sitwe, would help reduce China’s reliance on the Strait of Malacca, through which 80 per cent of Chinese oil imports now pass. By deciding to substantially widen the Karakoram Highway and upgrade it as an all-weather passageway, China also plans to export and import goods through Gwadar. 

But while keen to develop it as a major trade and energy hub, Beijing has no intention of forsaking its ambition to use Gwadar for naval and other strategic purposes, including to project Chinese power in the Indian Ocean rim and the Gulf region. Gwadar, however, is essentially a product of Pakistan’s drive for strategic depth vis-à-vis India. The Indian navy’s 1971 blockade of Karachi led Pakistan to consider ways to mitigate its naval vulnerability. By mid-2000, Pakistan had built a small naval base at Ormara, located between Karachi and Gwadar. But once the work is complete on a base at Gwadar — protected by cliffs from three sides — India will be in no position to bottle up the Pakistan navy in 1971 style.

How quickly Gwadar has come up can be seen from the fact that its cornerstone was laid by Chinese Vice-Premier Wu Bangguo only in March 2002 — ironically four months after the United States launched Operation Enduring Freedom in Afghanistan. The US military operations from the Pakistani airbases at Jacobabad in Sind and Pasni in Baluchistan, however, encouraged Beijing to successfully seek from Islamabad advance “sovereign guarantees” to use Gwadar facilities. Just before Musharraf opened Gwadar, the contract to run the port was awarded to PSA International of Singapore, with which Beijing enjoys close ties. 

In addition to a naval base, Gwadar is to house a modern air-defence unit, a military garrison, a large Chinese-built refinery and petroleum-storage facilities. Already home to an incipient Chinese listening post, Gwadar is a central link in the emerging chain of Chinese forward-operating facilities around India. Situated next to the world’s busiest oil-shipping lanes, Gwadar is a likely port of call and refuelling point for the rapidly modernizing Chinese navy. More than arming Pakistan with critical strategic depth, Gwadar potentially opens the way to the arrival of Chinese submarines in India’s backyard in the coming years.

            For China, Gwadar is a key maritime outpost to monitor developments in the Indian Ocean and the Gulf and to keep an eye on Indian and US naval patrols, including the naval bases in western India and the large American base at Diego Garcia, whose importance for US regional military strategy is set to rise after the Iraq debacle. 

 

The Baluchi insurrection, however, instils uncertainty about Gwadar’s future, with the new port already stoking the nationalist fire. Such is the threat that Musharraf, in his port-opening speech, was constrained to warn insurgents to “surrender their weapons and stop creating hurdles in the progress of Baluchistan” or be “wiped out.”  

China’s rise as an oil importer since 1994 and its more-recent voracious craving for energy resources have served as justification for its growing emphasis on the seas and its plans to build a blue-water navy. Its energy drive and desire to safeguard vital sea lanes, however, dovetail with its strategic efforts to build a string of pearls. For long, it has worked to box in India. 

The planned energy corridors on either side of India symbolize China’s mercantilist efforts to assert control — at New Delhi’s expense — over oil and gas assets and monopolize transport routes. That has been underlined by the way state-run Chinese companies, with their deep pockets and ruthless tactics, have signed energy deals in Iran and Burma, including to source gas from two partly Indian-owned Burmese blocks.

Not content with the six offshore and five onshore gas blocks it has already awarded to China, the Burmese junta now has chosen Beijing over New Delhi for selling the gas from the two fields where two Indian state-owned firms together hold a 30 per cent stake. A March 14 MoU with Beijing says Burma will sell to China “the entire natural gas” from the partly Indian-owned A-1 and A-3 blocks in the western Rakhine offshore region. The gas will be shipped through a 2,380-kilometre pipeline from Kyaukypu, on the Bay of Bengal, to Rili in Yunan. And in return, China will pay an annual transit fee of $150 million for 30 years for the pipeline’s 990-kilometre stretch through Burma.

India’s ability to avert the emergence of a Beijing-oriented Asia will hinge on its success in retaining its domination in the Indian Ocean. A China that expands its presence in the Indian Ocean and exerts increasing influence over the regional waterways and over Burma, Bangladesh, Sri Lanka, Pakistan and Nepal will pave the way for a Sino-centric Asia and for a greater strategic squeeze of India. 

Pakistan, of course, is not averse to a Sino-centric Asia and indeed would like China to complete its strategic encirclement of India. After all, China has been Pakistan’s “all-weather” ally, with their friendship billed as “taller than the Himalayas and deeper than the oceans.” Pakistan not only welcomes China’s maritime ambitions but also views Gwadar’s Chinese connection as essential to break India’s domination in the Indian Ocean.

Even so, India should leave Beijing in no doubt that using Gwadar for military purposes would be a serious escalation of Chinese containment and counterproductive, increasing strategic friction and rivalry and undermining prospects for interstate energy cooperation. 

The main reason India has come under increasing Chinese pressure is its retreat to a more and more defensive position. If India is to keep the Chinese navy out of its backyard, it has to start exerting naval power at chokepoints critical to its strategic interests. If India does not guard the various gates to the Indian Ocean — through its exercise of power and through strategic partnerships with key players — it will confront the Chinese navy in the Bay of Bengal and the Arabian Sea.

http://203.197.197.71/presentation/leftnavigation/opinion/op-ed/dragon’s-foothold-in-gwadar.aspx

(c) Asian Age, 2007 

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