Tag Archives: Malacca Strait

Fish, Gas and Minerals: the Arctic

Mr Xi has been showing a growing interest in Arctic countries. In 2014 he revealed in a speech that China itself wanted to become a “polar great power”..,,In January 2018 the Chinese government published its first policy document outlining its Arctic strategy.

China is also keen to tap into the Arctic resources that will become easier to exploit as the ice cap retreats. They include fish, minerals, oil and gas. The region could hold a quarter of the world’s as-yet-undiscovered hydrocarbons, according to the United States Geological Survey. Chinese firms are interested in mining zinc, uranium and rare earths in Greenland.

As the ice melts, it may become more feasible for cargo ships to sail through Arctic waters. China is excited by this possibility (its media speak of an “ice silk road”). In the coming decades such routes could cut several thousand kilometres off journeys between Shanghai and Europe. Sending ships through the Arctic could also help to revive port cities in China’s north-eastern rustbelt… China is thinking of building ports and other infrastructure in the Arctic to facilitate shipping. State-linked firms in China talk of building an Arctic railway across Finland.

Chinese analysts believe that using Arctic routes would help China strategically, too. It could reduce the need to ship goods through the Malacca Strait, a choke-point connecting the Pacific and Indian oceans. Much of China’s global shipping passes through the strait. It worries endlessly about the strait’s vulnerability to blockade—for example, should war break out with America.

There are no heated territorial disputes in the Arctic, but there are sensitivities, including Canada’s claim to the North-West Passage, a trans-Arctic waterway that America regards as international—ie, belonging to no single state.

Plenty of non-Arctic countries, including European ones, have similar dreams. But China is “by far the outlier” in terms of the amount of money it has pledged or already poured into the region, says Marc Lanteigne of Massey University in New Zealand. Its biggest investments have been in Russia, including a gas plant that began operating in Siberia in December 2017. Russia was once deeply cynical about China’s intentions. But since the crisis in Ukraine it has had to look east for investment in its Arctic regions.

The interest shown by Chinese firms could be good news for many Arctic communities. Few other investors have shown themselves willing to stomach the high costs and slow pay-offs involved in developing the far north…. The main concern of Arctic countries is that China’s ambitions will result in a gradual rewiring of the region’s politics in ways that give China more influence in determining how the Arctic is managed. Greenland is a place to watch. Political elites there favour independence from Denmark but resist taking the plunge because the island’s economy is so dependent on Danish support. The prospect of Chinese investment could change that. Should Greenland become independent, China could use its clout there to help further its own interests at meetings of Arctic states, in the same way that it uses its influence over Cambodia and Laos to prevent the Association of South-East Asian Nations from criticising Chinese behaviour in their neighbourhood.

Excerpts from The Arctic: A Silk Road through Ice, Economist, Apr. 14, 2018, at 37

The Scramble for Maldives: US/India v. China

The Maldives archipelago, popular among luxury honeymooners, has become a playing field for geostrategic rivalry as China expands its influence in the Indian Ocean and the U.S. and India push back.

Maldives President Abdulla Yameen Abdul Gayoom, who has steadily swung his country toward Beijing and away from traditional partner New Delhi, has imposed a state of emergency, jailed opponents and clamped down on protests to weaken his opposition, which is led by pro-India ex-President Mohamed Nasheed.

India and the U.S. don’t want Beijing, already dominant in the South China Sea, to entrench itself in these waters. The island nation sits astride shipping lanes that connect China to the oil-supplying countries of the Middle East, via the Strait of Malacca. The location also makes the Maldives vital to Beijing’s Belt and Road plan to develop land and sea trading routes linking China to Europe.

Chinese President Xi Jinping won Mr. Gayoom’s support for the project’s maritime corridor on a visit to the Maldives in 2014, and China began investing in island infrastructure. A Chinese bridge now under construction will connect the capital city, Malé, to a nearby island where its airport is located. A Chinese company is expanding the airport; another has leased an island close by for development. Chinese contractors are building roads and housing units for locals.

Many in the Maldives opposition have raised concerns that Chinese infrastructure loans will turn into “debt traps,” particularly after a major Chinese-financed port in neighboring Sri Lanka passed into Chinese control last year when Colombo couldn’t repay.

U.S. Secretary of State Rex Tillerson…called China’s infrastructure-financing deals an example of “predatory economics” that saddle developing countries with unsustainable debt and could undercut their sovereignty.  Mr. Gayoom steered a constitutional amendment through parliament in 2015 allowing foreigners to own land, a change the government said was meant to attract investment and critics in the country said could help Beijing establish a military foothold.

In recent years, China has built a naval base in Djibouti in East Africa; in addition to the port in Sri Lanka, it operates one in Pakistan. A senior Indian navy officer said Chinese submarines and research vessels are visiting the Indian Ocean more frequently.

The Indian military deploys aircraft specialized in anti-submarine warfare to patrol the ocean, and its government is negotiating the purchase of U.S. drones with advanced surveillance features. India also plans to build new attack submarines, and a military upgrade is afoot in its Andaman and Nicobar Islands, whose capital is around 1,200 nautical miles from Malé.

Excerpts from China-India Rivarly Plays out in Maldives, Wall Street Journal, Mar. 6, 2019

Bay of Bengal: ports against fishing

Strait_of_Malacca. Image from wikipedia

Bangladesh’s Chittagong, has… become a bottleneck. The Bangladeshis are modernising it… China is putting $200m towards upgrading the airport at Cox’s Bazar, the country’s southernmost tip, to attract investment and tourists.

Myanmar’s …new government, keen for foreign inflows to help rebuild the economy, has been approving projects that sat idle for years. Sittwe is one, but it looks small compared with the Dawei project on Myanmar’s Tenasserim coast… a deepwater port, industrial zone and highways to connect it with distant Bangkok, estimated to cost $8.5 billion.Thailand’s rulers dabbled for centuries with the idea of building a canal across the Kra isthmus, which would link their own gulf directly to the Andaman Sea and save days of costly shipping through the Strait of Malacca. Dawei should do the trick…. The Japanese are taking advantage of Myanmar’s opening to build a riverine port called Thilawa, south of Yangon.

The Chinese are exploring ways round their own Malacca-strait dilemma. They have been building new oil and gas pipelines across the whole of Myanmar starting from a new port-terminal at Kyaukphyu, near Sittwe….China’s activity in the Bay of Bengal is purely “defensive” [some say] but Indians versed in the “string of pearls” theory, which sees Chinese-built ports encircling India, will not be much comforted.

Amid the sometimes airy speculation, it is relatively easy to predict the effects on the repurposed waters of the bay. Yugraj Yadava, the director of an environmental watchdog in Chennai, says increased shipping is already eroding traditional livelihoods and polluting the sea. About 31% of the world’s coastal fishermen live and work on the Bay of Bengal, and they stand to lose huge tracts to the port-builders (and to rising sea levels, too). Mr Yadava says the bay still has some of the world’s healthiest natural fisheries, but they are under threat, not least from non-native species that stow away in long-haulers’ ballast.

Collisions between fishing vessels and commercial ships are becoming more frequent, as are snagged nets. All this will probably accelerate in the next few years. Before the Bay of Bengal falls victim to its new-found popularity, it might be good if some of its beneficiaries were to build a transnational maritime authority, to limit the damage.

Excerpts, The Bay of Bengal: New bay dawning, Economist,Apr. 27, 2013, at 40