The Real Story Behind Beijing’s Quest To Dominate South China Sea

Even though the international tribunal of the Permanent Court of Arbitration has, in its verdict on Tuesday, decided against China’s claim on the South China Sea, the tensions in that region would not ease; they would, instead, rise. 

The Chinese attempts to dominate the South China Sea is, from the Indian standpoint, far more than a territorial issue. Taken with the increasing number of theatres where the Chinese and Indian navies have come up against each other — from the Bay of Bengal all the way to the coast of Japan — these reflect a struggle between the two nations to secure their energy needs.

The quest for energy security is also showing up in other build ups. One of these relates to India’s investment to build two docks at Chabahar port in Iran as China pours in money for the Gwadar port in Pakistan.

As India pushes for a seven-eight percent plus annual gross domestic product growth rate for the next couple of decades, it is essential to ensure that energy constraints do not slow down the pace. Notwithstanding the search for self sufficiency and the expected build up of solar power capacity, India will need to import most of its fossil fuel requirements to drive this growth.

The International Energy Agency (IEA) is clear that India will need to import the bulk of its fuel for this decade and the next. In its special report on India, the world’s leading energy tracking agency notes: “Indian coal import dependency has trebled over the last decade, reaching 30 percent in 2013. The share of imports is projected to increase further, peaking at 38 percent (in energy terms) around 2020”. In another four years, India is expected to become the world’s largest coal importer, overtaking Japan, the European Union and China.

A similar report on the sector written by Brookings India energy sector specialist Rahul Tongia makes a similar point. “Non-power imports of coal are not expected to end any time soon — we do not have prime coking coal — are we then targeting an unrealistic objective of eliminating imports?” and concluded that “imports cannot be wished away”. The IEA report also adds that India’s oil import dependency would reach 90 percent in the same period.

All of this commodity traffic in oil, natural gas and coal will sail mostly through the Indian Ocean, which is fast becoming the energy pipeline of the world. Of the 13 largest energy import or export dependent countries, six rim the Indian Ocean. They are Australia, Iran, the UAE, India, Indonesia and Singapore. Add China and Taiwan to it, both of which source 40 percent of their oil imports from West Asia via the lanes of the Indian Ocean, and the rising presence of Thailand and Bangladesh as new consumers. Whoever plays the policeman’s role in these waters will have a decisive say in shaping energy security in this century.

Two countries have the ability to play this role as of now, the US and China, neither of which is part of this neighbourhood. India at present cannot aspire to compete with them except by allying with one of them. Since China is the obvious competitor in these waters, India has moved closer to the US. This was made clear in the escalation of the scale of the tri-nation Malabar exercise held this year just above the disputed South China Sea where nine vessels from India, Japan and the US participated. A Chinese navy ship, expectedly, broke into the exercise.

In addition, to make up for the lack of vessels to patrol the shipping lines, India has moved to secure a bargaining position through building up of a ring of friendly ports abroad. Here too China is a competitor. One of the reasons for its unease is the geography of the Indian Ocean. Chinese ships have to enter it from the Pacific Ocean through a narrow strip - the Malacca Straits. It is not surprising that at the commemoration event for the Chabahar port, Prime Minister Narendra Modi flagged this context when he said: “In the Indo-Pacific, a rise (of) a mix of political competition and economic opportunities is putting pressure on the existing Asian order”.

Typical of New Delhi, the elements to catch these sea winds did not all fall into place together. The first stirrings happened when the Indian Navy was forced to take large-scale action, in response to the menace of Somalian pirates from 2009, as the US Navy stayed away. Incidentally, Chabahar is at a vantage position to track such problems. Since then, and especially after the current government has come to power, there has been a rash of political visits from India to the islands of the Indian Ocean to add to the number of friendly ports.

Summing them up, the Nikkei Asian Review noted last year, in an article titled ‘Modi trips mark sea change in India’s foreign policy’ punning on the word sea: “For more than six decades since independence, New Delhi has been preoccupied with defending long and disputed land borders with Pakistan and China, neglecting the Indian Ocean...”. It was the first time in 34 years that an Indian prime minister had dropped in at Seychelles.

A key element of this ring of ports vision will be played by the special purpose vehicle New Delhi has floated, the Indian Ports Global Private Limited.  It will be a holding company with equity participation by Jawaharlal New Port Trust and Kandla Port Trust. It will invest not only in Iran; it has already signed a memorandum of understanding for another port closer home at Paira in Bangladesh. Paira, like Chabahar, is a deep sea port, a rarity for India struggling to find anchorage for its deep draught vessels. And plans are already underway to find more such ports in Africa. It is not surprising that relationships with Mozambique are becoming hugely important in this context with its coal and ports.

It is the same game of gathering up ports and securing of shipping lines that China too is playing in the same neighbourhood. No wonder the arms of the two nations are brushing against each other, of late.