The Contest of the Century (10 page)

Something similar has been happening in Gwadar, a deep-water Pakistani port on the Arabian Sea, close to the entrance to the Strait
of Hormuz—the strategic chokehold for a large slice of the world’s oil supply. China helped build a commercial port at Gwadar, which was initially leased to a Singapore company, PSA International. But after a series of problems, the Singapore group dropped out and a Chinese company took over management control of the port. More important, a senior Pakistani official told one of my colleagues in 2011 that
the government had asked China to build a naval base next to the commercial port, and that China would have access to the base, potentially allowing Beijing to station some of its ships and submarines in Gwadar. The Chinese have played down the suggestion, but a clear marker has been laid down.

The “String of Pearls” is, of course, an idea straight from the Mahan playbook for aspiring great powers. Mahan urged the U.S. to find strategic locations in the Caribbean and the Pacific that could help the navy patrol the key maritime supply lines and the Panama Canal.
A peacetime naval strategy “may gain its most decisive victories by occupying in a country, either by purchase or treaty, excellent positions which would perhaps hardly be got by war,” he wrote. Around the same time that America embarked on a burst of navy building in the 1890s, it also launched a drive to acquire overseas bases for its new ships. In the Pacific, it was supporters of the new navy who made the strongest case for incorporating Hawaii into the union.
Secretary of State Hamilton Fish described Hawaii as an attractive “resting spot in the mid-ocean, between the Pacific coast and the vast domains of Asia, which are now opening to commerce,” as well as being a useful platform for curbing the rise of Japan. Earlier, the U.S. had taken control of the Midway archipelago, which was named because of its location directly midway between Los Angeles and Shanghai. Mahan was particularly obsessed with the Caribbean, where the British navy still had a large presence, and which he thought of in terms not dissimilar to the way the Chinese think today about the first island chain. In 1903, the U.S. Navy leased a new base in the Caribbean, which gave it the perfect launchpad to protect the eastern entrances to the Panama Canal, but which has become famous in modern times for very different reasons—Guantánamo Bay in Cuba.

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The “String of Pearls” concept appeals to a certain conspiratorial view of how China works, the image of a small group of Communist Party officials calmly hatching plans for global domination. It suggests that China already has a coherent and thought-out long-term strategy, a series of five-year plans that will eventually afford China a broad network of bases across the region. Given how utterly opaque China’s top-level politics remains, it is easy to imagine that the top leadership might have such a disciplined view of its future. But the reality of modern China is much more improvised and reactive than this cliché recognizes. It is certainly true that China’s interests are drawing it into the Indian Ocean. Yet Ramree Island tells a very different story about China’s overseas expansion, and one which corresponds more closely to how decisions really get made. In a system in which the authority of the leaders is fraying, the driving force is often pressure from below. The Burma pipeline is part of a dynamic whereby business moves first, to create a new reality of its own, and then foreign and military policies are forced to come from behind to fill in the gaps.

The idea for the pipeline was first put forward by a history professor at an unglamorous provincial university. Li Chenyang, an expert on Southeast Asia at Yunnan University, in the southwest of China, started writing newspaper articles in 2004 suggesting that a pipeline could allow China to avoid bringing oil through the Strait of Malacca. In the long corridors outside Li’s office, there are large framed maps of the region, detailing Yunnan’s long borders with Vietnam, Laos, and Burma. By driving a pipeline from Kunming, Yunnan’s capital, down through Burma, Li proposed China could gain access to the Indian Ocean. “The reality is the Americans want to control the Strait of Malacca,” as Professor Li put it. “For China to fall under American control is a very risky thing.” The idea was immediately taken up by the local government in Yunnan. But whereas Li and his academic colleagues were worried about energy and geopolitics, the local officials had a more prosaic motivation: jobs. Each year, Chinese officials receive a formal performance evaluation, and no matter whether they are running a village of a hundred people or a province of a hundred million, they are judged primarily on their ability to generate growth in their part of the economy. Their careers depend on the local GDP numbers. As a result, local officials
are on the constant lookout for new investment projects that will boost growth. Although it has a rich cultural heritage, Yunnan is one of the poorer provinces of China, and its leaders have often complained that the industrial boom in other parts of the country has passed it by. They saw the pipeline as a perfect way to kick-start an oil industry in the province. The construction would bring a lot of jobs and funds, and a refinery would be needed at the end of the pipeline. A lot of the dynamism in China’s economy in recent decades is derived from this basic equation, the ceaseless drive at all levels of government for the latest new opportunity. For Yunnan officials, the pipeline is not about geopolitics, it is about GDP.

The proposal also won support from the politically powerful oil industry. China National Petroleum Corporation is the biggest oil company in the country, but in the southwest of the country, it was coming second to its main rival, Sinopec. The new pipeline was a way into that market. Before long, CNPC was on board with the idea. Together with CNPC, the Yunnan authorities started lobbying Beijing hard to win approval. Initially, there was a good deal of resistance. But after several years of pressure by big-oil and provincial government officials, Beijing finally agreed to promote the idea. As Zha Daojiong, a Chinese academic who has followed these sorts of internal debates closely, told me: “From the outside, it can look like China has a coherent energy strategy, but in reality it often comes down to who shouts the loudest.”

Europe’s empires were not created overnight by grand design. Instead, they evolved through a gradual creeping process that started with trade and investment and ended with the use of military power to protect those business interests. The British Raj had its roots in the perceived need to protect the operations of the East India Company, and it was to defend those very same interests that the British invaded Burma in 1824. After defeating the Burmese forces—and ending Burmese independence for much of the next century—the British briefly moved the country’s capital to Sittwe, on the northwest coast, just north of Ramree Island. It is facile to suggest, as some do, that China is trying to re-create an old-fashioned empire, but it is fair to say that China’s overseas investments are repeating elements of the same imperial dynamic, the old story of the flag following the trade. In a political system in which some
of the lines of control have eroded, ambitious local governments and connected state-owned corporations are pushing projects that involve substantial international commitments, the local economic tail wagging the Beijing diplomatic dog. In the case of the Burma pipeline, the project won the backing of Beijing even though its strategic benefits are really something of a mirage. If there ever were some form of conflict between the U.S. and China, then the pipeline would be much more vulnerable than the sea-lanes through the Strait of Malacca. It would take the permanent presence of a significant fleet to enforce a blockade of the strait, but only one bombing run to destroy the pipeline. The Ramree Island investment brings no actual security for China.

On Ramree Island itself, there is widespread suspicion about China’s eventual plans for the area. Common among locals I talked to was the assumption that China would eventually want to have a naval base there, to help secure its interests and protect the commercial traffic to the port. In Yangon, I heard the same story, a constant refrain that the pipeline is some sort of Trojan Horse that will justify a Chinese military presence. There is no evidence that this is happening—and such an idea would likely spark considerable resistance in Burma, including from the new civilian government. But the reality is that China is now building a huge oil facility looking onto the Bay of Bengal, which it needs to protect. Its commercial interests are pulling it into the Indian Ocean in ways that were not originally anticipated.

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Whether by secret design or by the inertia of its advancing business interests, China is likely to push for a much stronger presence in the Indian Ocean. But just as there are enormous operational challenges ahead if China wants to construct a navy that can contend in the Indian Ocean, so there are huge political obstacles if it tries to establish the sort of military basing rights that would allow it to project power far from its home base. If China really aspires to a stealth “String of Pearls” strategy, it will be very difficult to turn this into reality, because few countries will want to be seen taking sides. Every government in the region knows that, even with the huge investments China is making in its navy, the U.S. will have a superior fighting ability in the Indian Ocean for several
decades to come. This means that a Chinese base on their territory would turn them into a highly vulnerable target in the first days of a conflict. Burma’s new government has tilted away from China in a way that makes it very hard to imagine its accepting a Chinese base, despite the incessant rumor mill in the country. Sri Lanka, too, knows how vulnerable it would be if Chinese vessels were permanently based at Hambantota. “There may or may not be a Chinese string in the region, but we will not be one of their pearls,” as one Sri Lankan official puts it.

Pakistan is the one country that has expressed some interest in hosting a Chinese base. But the idea is a lot less attractive than it seems. Gwadar is occasionally referred to in the press as “the most important place you have never heard of,” given its closeness to the Persian Gulf. But on closer inspection, it is of much less strategic use than it seems. Gwadar is an isolated city in the southwestern province of Baluchistan, squeezed in between Iran and Afghanistan, where an insurgency against the state has been running for decades, becoming particularly ugly in recent years. The roads and rail links to the more prosperous parts of Pakistan, around Karachi and Lahore, are, at best, precarious. The port itself is also vulnerable, as it is on a small island, connected to the mainland by one bridge. In
the event of a conflict, a single bomb could take it out of action.

Just as the U.S. did in an earlier era, China has long shunned the idea of foreign “entanglements.” Beijing has persistently denounced alliance building as a destabilizing form of power politics. We are not that sort of government, Chinese leaders insist. As a result, the establishment of an overseas base would be a Rubicon moment for China, one that cuts to the core of the question about how China really interprets its future role. Foreign bases are not just an exercise in logistics; they are sovereign territory within another nation. A base is the bridgehead to a very different relationship, the sort of defense alliance whereby the bigger nation offers to provide security in return for access and support. In other words, China would need formal allies. But the question every government would ask Beijing is, whom are we defending ourselves from? If China moves down this path, it could start a process of dividing the region between countries that rely on the U.S. for their security, and those that lean toward China. Asian governments would increasingly
find themselves asked to take sides, the outcome they fear the most. For that very reason, some in China view it as an extremely dangerous step, one that would lead to greater isolation for China. “It is a self-fulfilling, delusionary idea to build our own bases and our own alliances,” Zhu Feng, an international-relations professor at Peking University, told me. “I totally disagree with the idea. We would create a geographic split in the region. It really would be the start of a new Cold War.”

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Of course, the Indian Ocean already has a billion-person-plus rising power, with a growing navy and a strong sense of its own role in the modern world. India is another important reason why China will have to tread very carefully in the Indian Ocean. Washington is by no means the only capital where the rapid expansion in China’s navy has provoked anxiety; New Delhi has also been watching the developments with some alarm. India and China share a tradition of fraternal ties rooted in the language of anti-colonialism and the Non-Aligned Movement. In 1927, two decades before he became the leader of a newly independent India, Jawaharlal Nehru signed a joint manifesto with delegates from the Chinese Communist Party at an anti-imperialist congress in Brussels. In 1962, however, the two countries fought a brief but fierce war over a border in the Himalayas that is still under dispute, and since then have viewed each other warily. Now that sense of competition is shifting to the Indian Ocean.
“Rivalry has been a defining element of India’s relations with China for 60 years,” says Raja Mohan, one of India’s leading foreign-policy analysts. “But it is now beginning to move from the Himalayas to the waters of the Indo-Pacific.”

Just like China, India is also turning to the seas, and for many of the same reasons. As India has morphed since the early 1990s from an inward-looking and highly regulated economy to a more open, trading nation, it, too, has begun to fret about the safety of the sea-lanes that its new wealth depends upon. (Alfred Thayer Mahan is now the subject of great interest in India, too.) Having acquired its first aircraft carrier as far back as the 1950s, India now has three, and another which is a museum in Mumbai. Yet India’s naval buildup has had a different quality. Although New Delhi considers the Indian Ocean to be its natural
backyard, it does not have the same sort of sweeping ownership claim that China presents. India is neither as suspicious of the U.S. as is China, nor is it building a navy specifically designed to challenge the U.S. The Indian navy has also been much more willing to take part in joint exercises with the U.S., signaling its willingness to carry some of the security burdens in the existing U.S.-led system.