China’s strategic interests in Pakistan’s port at Gwadar
March 24th, 2013
March 24th, 2013
Author: Ghulam Ali, Institute of Information
Technology, Islamabad
On 30
January 2013, the Port Singapore Authority (PSA) abandoned administrative
control of Gwadar port in Pakistan — five years into a 40-year agreement.
Pakistan has now handed over
the ‘management and operation’ of Gwadar port to a Chinese company, and in
another landmark decision, Pakistan has signed onto the Iran–Pakistan gas
pipeline, much to the annoyance of the United States.
Commentators argue that both
agreements are a political stunt; the incumbent government made these decisions
shortly before it completed its five-year term in an attempt to restore its
declining popularity. It has now left the next government to deal with the
consequences.
Gwadar is
located at the juncture of South Asia, Central Asia and the Middle East. It is
close to the Iranian border and lies at the gateway to the Strait of Hormuz, a
key world oil supply route. Some analysts argue the port could become China’s naval base in the Indian Ocean and enable Beijing to monitor Indian and US
naval activities. The port has also been called the western-most link in
China’s ‘string of pearls’
How valid are these claims and
what is the port’s real importance to China?
Pakistan purchased the small
town of Gwadar from Oman in 1958, but did not begin work on a port there until
2002. Pakistan lacks ports for shipping and maritime security — in successive
conflicts, the Indian Navy quickly blockaded Karachi, severely limiting the
Pakistan Navy’s manoeuvrability. Gwadar, a deep warm-water harbour 470
kilometres away from Karachi, seemed an ideal place for a new outlet to the
Indian Ocean. At Pakistan’s request, China provided US$198 million for the
first phase of the port, which was completed in 2006, but was lukewarm about
further development. The project consists of three phases, so Pakistan is still
waiting for investment to complete the remaining two.
The robust nature of
China–Pakistan defence ties, and a number of interrelated developments therein,
has catapulted the port to international attention. China is developing its own
western region and has been building a network of roads in Pakistan, and
intends to lay pipelines and a railway track. Pakistan offered China a ‘trade
and energy corridor’ via Gwadar, linked to inland roads. The plan would see oil
being imported from the Middle East, stored in refineries at Gwadar and sent to
China via roads, pipelines or railway. Many Western and Indian analysts argue
that China wants to gain a foothold in Gwadar for strategic purposes.
This analysis overplays
Gwadar’s geo-economic importance and ignores important facts. Firstly, though
China has built some roads in Pakistan, it still needs to lay thousands of
kilometres of gas and oil pipelines and railway track in order to turn Gwadar
to economic use. That will cost money, and China is reluctant to invest in this
volatile part of the world. Secondly, Pakistan faces a low-scale insurgency in
its Balochistan province — where Gwadar is located and through which the proposed
pipelines will pass. A number of feudal lords are opposed to large-scale
foreign investment, fearing it will bring an influx of outsiders.
They demand greater autonomy
and royalties for the extraction of natural resources. Although China has
developed local infrastructure, it is considered an ‘exploiter’. Some
Chinese workers have in the past been victims of targeted attacks. Thirdly, the port has failed to draw any major business since its
completion in 2006. The fact that the port remained unused was one reason the
PSA withdrew. Unlike Islamabad’s tall claims about the port’s geo-economic
significance, Beijing has taken a more cautious and realistic approach. China
remains sceptical of the port’s profitability. Both in 2001, when it agreed to
finance the first phase of the port, and in 2013, when it took over
administrative control of the port, Pakistan had to drag Beijing into the
project.
Gwadar is not the only option
for the Chinese in the Indian Ocean. It is not even the most viable option.
Beijing has developed Hambantota port in Sri Lanka and built a container port facility in Chittagong in Bangladesh. In Myanmar, Beijing has built roads, dams and pipelines, and is
looking to the ports of Kyaukpyu and Sittwe,
regardless of the fact that the latter is being built by India. Beijing intends to lay a
pipeline from Kyaukpyu to Yunnan province. Chinese oil ships from the Middle East and Africa will cross the Bay
of Bengal and unload at these ports, allowing oil to be piped to Yunnan. China
appears more optimistic about the future of an Arakana–Yunnan pipeline than the
Gwadar–Xinjiang pipeline because it considers Myanmar capable of protecting its
assets.
Due to its strategic location,
and because the strong military ties between China and Pakistan, Gwadar port
has received excessive attention from the very beginning. Despite its being
over a decade since China started construction of the first phase, no
military-related activity has ever been observed there. If China intended to
use a Pakistani port for naval purposes, Karachi, with its established military
infrastructure, is an alternative that is available although Karachi has the
strategic diswadvantage of proximity to India.
It is likely that China will
develop the port quickly by making a bigger investment than the PSA, but its
current interests appear commercial, aimed at securing its energy supplies.
Moreover, Gwadar is just one of several options for Beijing, and due to the volatile
security situation in the surrounding region it may not be China’s best bet.
Gwadar is far from becoming a Chinese economic hub, let alone a security asset.
Ghulam Ali is PhD from Monash
University in Melbourne and is presently assistant professor at COMSATS
Institute of Information Technology in Islamabad.
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