Saturday, January 30, 2010

The Chinese “string of pearls” policy

The Chinese “string of pearls” policy

In 2009, after having done prolonged anti-piracy deployments in the Gulf of Aden for a year, a retired Chinese Admiral publicly propounded the need for the Chinese Navy to acquire a base near this strategic region so as to overcome numerous logistics-cum-maintenance problems and also allow some rest to its sailors. At present Chinese warships operating over 4,500 nautical miles (nm) from their home bases are deployed for four to six months in the Gulf of Aden, without access to ports. Given the international concern about China seeking bases in the Indian Ocean Region (IOR), the Chinese government distanced itself from the retired admiral’s proposal. However, the fact is that the farsighted Chinese already have a suitable base available (Gwadar port they built in Pakistan), and will soon have another one in Sri Lanka (Hambantota port, which they are building), even as media reports hint at another Chinese-built port that is to come up in Burma.

The Chinese, as part of their “string of pearls” policy of having suitable bases in the IOR, not only helped Pakistan to build the Gwadar port, but practically provided all the funding. This strategically-located port on the Balochistan coast, near the Iranian border, some 180 nm from the exit of the strategic Straits of Hormuz, will enable Chinese oil tanker ships to offload crude oil from West Asia at this port. From Gwadar, a proposed rail, road and pipeline will transport oil and other goods to China, thus avoiding the Malacca and Singapore straits which can be closed during wartime or are vulnerable to piracy. This port also provides another option to Pakistan for ensuring oil imports, should Karachi get blocked during wartime.

Work on Phase 1 of Gwadar port commenced in March 2002 and was formally completed in March 2005, though ships had started using it by 2003. The total project cost of this phase was $248 million (of which the Chinese contributed $198 million). The Gwadar port has a 4.5 km approach channel of 11.5m depth, and three multipurpose berths. Pakistan’s former President Pervez Musharraf is reported to have stated that “in the event of war with India, Pakistan will not hesitate to invite the Chinese Navy to Gwadar”.

Phase 2 (adjacent to Phase 1), was completed in January 2006, with nine additional berths and the approach channel was deepened to 14.5 m, thus permitting larger ships of about 50,000 DWT (deadweight tonnes) to enter and leave the port. The port was formally inaugurated in March 2007, and Pakistan Navy was reported to have set up a base at the port. It may be noted that all oil tankers from the Gulf bound for India’s Vadinar Oil Terminal in the Gulf of Kutch generally pass about 40 nm south of Gwadar Port and would be vulnerable to interdiction by Pakistani or Chinese units based in Gwadar. Some unconfirmed media reports indicate the possible presence of a Chinese electronic “listening post” at Gwadar.

To fully understand the serious strategic implications for India, we need to note that 70 per cent of India’s oil imports come by sea, from the Gulf (with tankers exiting through the Strait of Hormuz). Seventy per cent of our imported oil arrives at ports in the Gulf of Kutch, the Gulf of Cambay and the Mumbai port. Indeed, in 2007, the Gulf of Kutch received 1,100 oil tankers (passing some 40 nm from Gwadar), and this number will grow to 2,100 by 2012 and over 4,000 tanker ships by 2025, when India’s oil imports would have quadrupled to 320 million tonnes (China’s imports would also rise to over 600 million tonnes and hence the possibility of conflict of interests between these two largest consumers of oil). Similarly, the ships carrying imported oil from the Gulf to Mumbai Port and ports in the Gulf of Cambay, would increase manifold, with some shipping being diverted to other Indian ports.

The global strategic implications are also serious since the Gulf region has 75 per cent of the world’s proven oil reserves and 50 per cent of the world’s proven gas reserves. About 16 million barrels of oil pass through the Strait of Hormuz daily on tanker ships (worth over $200 billion annually). This amounts to over 90 per cent of the oil exported by the Gulf region and over 40 per cent of the entire world’s oil trade. All this oil passes in vicinity of Gwadar port whose facilities can be assumed to be made available to the Chinese Navy in an emergent situation. Notwithstanding the facts, to allay fears of neighbouring countries regarding Chinese intentions in the region, the Pakistani government signed an agreement with Singapore’s PSA Corporation in March 2007 to operate Gwadar port under a 40-year agreement. PSA’s concession holding company (CHC), a subsidiary that operates 22 ports in 11 countries, will invest $550 million in the next five years in the port.
While India’s security and intelligence agencies deserve a pat on the back for ensuring that 2009 and Republic Day 2010 were largely terror free, we cannot be complacent.

The present peace may be the proverbial lull before the storm, given the fact that Pakistan is continuously receiving arms from the Chinese at “friendship prices” and from the Americans as “gifts”, with the recent gift of F-16 (Block 52) fighter jets and a dozen UAVs. The Chinese Navy’s activities in the IOR need to be monitored as closely as we monitor Pakistani-based terrorist moves. China now imports more oil from West Africa (Nigeria and Angola) than it does from West Asia, and this oil will still need to move by sea through the Malacca and other straits in Southeast Asia (Sunda and Lombok). However, in a crisis situation, China does have the option to move this West African oil to Gwadar port and then pump it to China via the proposed land oil pipeline. So the Indian Navy needs 200 ships and 500 aircraft to deal with all our security problems in the IOR. And since naval power takes a long time to build or import, we need to immediately overcome critical shortages in our inventory, specially the well-publicised case of our dwindling submarine force.

Vice-Admiral Arun Kumar Singh retired as Flag Officer Commanding-in-Chief of the Eastern Naval Command, Visakhapatnam