China's Maritime Silk Route in the making Photograph: (Others)
Counteracting China's growing influence, India presses its economic interests in the South China Sea
In July 2016, the Permanent Court of Arbitration at Hague gave a landmark judgment on the ongoing dispute in the South China Sea. Between the two litigating parties, the Court ruled in favour of the Philippines, rejecting the historical claims of China over the South China Sea. The Court further said that the rocky outcrops claimed by China as its own cannot be used as the basis for the territorial claims. Also, China has infringed upon the sovereign right of Filipinos by building artificial islands and exploring petroleum and fishing in the disputed waters.
In this backdrop, recently the annual summit of the ASEAN member countries took place at Vientiane in Laos. The tension surrounding the verdict concerning the South China Sea, and China’s subsequent statement that it is not legally bound by the verdict, was evident at the recent summit.
The South China Sea holds strategic importance in the world trade as approximately $5 trillion of world trade passes through this region annually. The continuing tension in the region or dominance of one country over the entire region can have an adverse impact on the maritime trade and hence, the economies of several countries.
India and South China Sea
India has no sovereign issues in the South China Sea but definitely has economic concerns. India has 55 per cent of its trade passing through the South China Sea. Thus, it is essential to maintain ‘freedom of navigation’ in the waters of South China Sea. Moreover, the Vietnamese Government has offered India seven oil blocks within its territory at the South China Sea. Oil and Natural Gas Commission Videsh Limited has been deeply involved in sea drilling and exploration in the area. The Indian Government has pumped in over $5 billion of our taxpayers' money there. China has often raised concerns and issued warnings to India for its drilling activities in the region. In fact in 2011 to frighten India, the Chinese actually cut away cable of a Vietnamese shipping rig.
However, India has always maintained that it would stay in the region and that every country should respect the concept of freedom of navigation. Under the Modi government, the relationship between Vietnam and India has further strengthened with India’s Act East policy. The Prime Minister of India recently visited Vietnam before the G20 summit and extended a credit line of $500 million for deepening the defence cooperation between the two countries. India is making sure that its interests and presence in the South China Sea are ensured with Vietnam as its main ally. Recently, India has signed energy deals with Brunei as well.
The Bigger Picture
The South China is just one small part of the whole picture. The Indian Ocean is pivotal to world trade with major sea lines of communication in this region. Most of the energy-related trade happens in this region. India due to its geographical placing has a natural control over this region. To counter this and strengthen its control, China has initiated two major infrastructural projects: Silk Route Economic Belt over land and 21st Century Maritime Silk Road. They are commonly called the ‘One Belt, One Road’ (OBOR) project.
In the 2nd century AD, the Eurasian merchants created the first super highway for trade over both land and sea called the Silk Road. For 1600 years, the Silk Road worked as a vital trade route between Asia and Europe as well as an instrument for cultural exchange between the two continents. The first mosque in China was built over a thousand years ago in Quanzhou city along this route by Arab Muslims. China aims to re-instate the silk route under OBOR starting from Shaanxi Province in Central Eastern China to all the way to Australia.
Several countries have expressed their concerns regarding OROB as it passes through the disputed territory of Kashmir as well as Arunachal Pradesh. Also, the disputes in the South China Sea are far from resolved. China is further strengthening its presence in the Indian Ocean Region; the US Dept. of Defense in its report 'Energy Futures in Asia' used the term 'String of Pearls' to describe the network of Chinese military and commercial facilities in the Indian Ocean region.
China is building massive facilities and ports in the Indian Ocean Region like the one in Hambantota in Sri Lanka and Gwadar in Pakistan. Gwadar port forms an integral part of China’s massive $46 billion China - Pakistan Economic Corridor. The port is seen by Pakistan as extremely important because it frees Pakistan from dependence on Karachi port which has over 90 per cent of its trade. Additionally, it is extremely strategic for China as it is only 240 miles from the Strait of Hormuz, giving China access to the Middle East and the Gulf states.
Through the String of Pearls, the Chinese are attempting to dominate sea lines of communication across choke points such as the Strait of Malacca (Malaysian peninsula, Singapore and Indonesian Sumatra), the Strait of Mandeb (connecting Red sea and Gulf of Aden), the Strait of Hormuz (Gulf of Oman and Persian Gulf) and others. Thus, China is methodically increasing its presence and control over the entire Indian Ocean Region: the oxygen of world trade.
In response to this, in 2007, India has opened its second overseas military listening post in northern Madagascar, hosted negotiations with Mauritania regarding the construction of an airstrip for Indian surveillance aircraft, as well as organised the construction of radar stations in the Maldives. The Indian Navy is also expanding aggressively lately. A bigger share of India’s growing military budget is being passed to the Indian navy. Three years ago, it got just $4.2 billion; this year it has $6.2 billion, that is, nearly a fifth of the total military spending.
The US role
An increasingly assertive China leaves the US with no option but to take an active interest in the South China Sea. It has to be borne in mind that America’s influence in global politics, though significant, is now on the wane. Its misadventures — almost reckless approach to combat global jihad — had cost it much more than its failed Vietnam military expedition. If China, now controlling the economic stakes in an integrated global environment, casts its writ on the South China Sea, for the US that would be a body blow to its reputation as the uber power. At one level, this is more about brinkmanship than diplomacy. It is the West’s desperate bid to show China its place.
Russia and China will hold their planned joint drills in the South China on September 12-19. According to Russia, the exercises would focus on organised efforts to protect merchant ships in the South China Sea. However, this exercise is being interpreted as a signal that Russia endorses the claims of China in the South China Sea. It is yet to be seen if another stakeholder is in the line of joining the South China Sea dispute.