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Home  > Tamil Eelam Struggle for Freedom > International Frame of  the Tamil Struggle  > The Indian Ocean Region - A  Story Told with Pictures > China moves into India's back yard -Sudha Ramachandran  in Asia Times > International Relations in an Asymmetric Multi Lateral World

The Indian Ocean Region
China moves into India's back yard
Sudha Ramachandran  in Asia Times, 13 March 2007
© Asia Times Online (Holdings), Ltd.

"...the significance of Hambantota to China lies in its proximity to India's south coast and on the fact that it provides Beijing with presence midway in the Indian Ocean. The Indian Ocean is a critical waterway for global trade and commerce. Half the world's containerized freight, a third of its bulk cargo and two-thirds of its oil shipments travel through the Indian Ocean. It provides major sea routes connecting Africa, the Middle East, South Asia and East Asia with Europe and the Americas and is home to several critical chokepoints such as the Strait of Hormuz and the Strait of Malacca...."

"China is all set to drop anchor at India's southern doorstep. An agreement has been finalized between Sri Lanka and China under which the latter will participate in the development of a port project at Hambantota on the island's south coast.

... Even as the Sri Lankans were finalizing the deal with the Chinese, they clinched an agreement with the Americans. In Colombo, officials reached agreement on an Acquisition and Cross-Servicing Agreement (ACSA) with the US.

The agreements come at a time when India is already watching with concern the growing Pakistani influence in Sri Lanka.

The Hambantota Development Zone, which the Chinese will help build, will include a container port, a bunkering system, an oil refinery, an airport and other facilities. It is expected to cost about US$1 billion and the Chinese are said to be financing more than 85% of the project.

Construction on the first phase of the project is scheduled to begin in July and is due to be completed in three years. The entire project is scheduled to be completed in the next 15 years.

Sino-Sri Lankan cooperation on the port project is expected to propel Hambantota, 240 kilometers south of the Lankan capital, Colombo, into a major transshipment hub. Hambantota's infrastructure will help service hundreds of ships that ply the waters to the south of Sri Lanka.

China's role in the Hambantota project has stirred concern in some quarters in India. Some analysts here have argued that India has lost out to the Chinese. They say China won the project thanks to Indian lethargy and shortsightedness. According to this view, while India has been dragging its feet on this and other issues, the Chinese quickly moved in to clinch the deal. In the process, it has made inroads into Sri Lanka - a country that India regards as within its sphere of influence.

However, there are others who have played down the implications of the Sino-Lankan cooperation at Hambantota. They dismiss allegations that India lost the port project to the Chinese and maintain that India was not interested in the Hambantota oil-tank farm and bunkering project in the first place, as it already has a sizable presence in Trincomalee on Sri Lanka's northeast coast.

"India feels that it is unnecessary to bid for it [Hambantota] given the fact that it is already refurbishing the World War II-vintage oil-tank farm at Trincomalee with 99 giant tanks. Out of these, only 35 can be put to use in the near future," a report in the Hindustan Times said in 2005. "There isn't enough business in Sri Lanka to make expansion worthwhile even in Trincomalee. India also does not consider the Hambantota project to be of a great strategic value, either. For India, a presence in Trincomalee makes much more strategic sense."

An official in Delhi told Asia Times Online that while the Hambantota project gives the Chinese a foothold in Sri Lanka, this cannot be interpreted as a decline in India's role on the island. Geographic proximity, ethnic links and close ties between India and Sri Lanka cannot be eroded by a few projects and agreements with other countries, he said.

But the Chinese role in the Hambantota project is not just about influence in Sri Lanka. It is about China's presence close to Indian shores, which has implications for India's security. Besides, with Hambantota, Chinese presence in the Indian Ocean has been further consolidated.

The Hambantota port project is the latest in a series of steps that China has taken in recent years to consolidate its access to the Indian Ocean and to secure sea lanes through which its energy supplies are transported. It has adopted what analysts describe as a "string of pearls" strategy, building strategic relationships with countries along sea lanes from the Middle East to the South China Sea.

One such "pearl" is Gwadar, Pakistan. Since late 2001, China has been engaged in constructing and developing a deepsea port and a special economic zone at Gwadar, in Balochistan province. China's interest in Gwadar is motivated by the latter's strategic location. Gwadar is just 72km from the Iranian border and 400km east of the Strait of Hormuz, a major conduit of global oil supplies.

China's massive involvement in the Gwadar project - it has provided most of its funding and technical expertise - has provided Beijing with a "listening post" from where it can "monitor US naval activity in the Persian Gulf, Indian activity in the Arabian Sea, and future US-Indian maritime cooperation in the Indian Ocean", Zia  Haider, an analyst at the Washington-based Stimson Center, has noted.

Other "pearls" that China has been developing are naval facilities in Bangladesh, where it is developing a container-port facility at Chittagong; in Myanmar, where it is building radar, refit and refuel facilities at bases in Sittwe, Coco, Hianggyi, Khaukphyu, Mergui and Zadetkyi Kyun; and in Thailand and Cambodia.

At this juncture the Hambantota project does not seem to be in the same league as Gwadar. For one, it is not clear whether the Sri Lankans want China to develop Hambantota on the lines of the Pakistani port. Besides, Hambantota does not sit at the mouth of the strategic Persian Gulf. Neither is the port as vital to China's energy security or trade and economic development as are other "pearls" such as Gwadar and Sittwe.

But the significance of Hambantota to China lies in its proximity to India's south coast and on the fact that it provides Beijing with presence midway in the Indian Ocean.

The Indian Ocean is a critical waterway for global trade and commerce. Half the world's containerized freight, a third of its bulk cargo and two-thirds of its oil shipments travel through the Indian Ocean. It provides major sea routes connecting Africa, the Middle East, South Asia and East Asia with Europe and the Americas and is home to several critical chokepoints such as the Strait of Hormuz and the Strait of Malacca.

This makes the Indian Ocean important to the Chinese, the Americans, the Indians, the Japanese and scores of other countries, and hence the calculated moves of several powers to consolidate their presence in Indian Ocean littorals.

This is the prime factor motivating the Americans to go for the ACSA with the Sri Lankans. The agreement provides a framework for increased interoperability to transfer and exchange logistics supplies, and support and refueling services during peacekeeping missions, humanitarian operations, and joint exercises. In essence, it will give the Americans a base at India's doorstep.

While the US has described this agreement as "a barter deal on goods and services" and as "a very routine and fairly moderate" agreement, others are warning that it has "major ramifications for the region, particularly India".

"For all the sophistry and spin by the Americans, the ACSA is a military deal and, on the face of it, is loaded in Washington's favor," wrote Muralidhar Reddy, The Hindu's Colombo-based correspondent. "For the US, it is as good as acquiring a base in the Indian Ocean, and at little or no cost.

"Just a few years ago, such an agreement would have been inconceivable given the sensitivities of India in view of the geographical proximity of Sri Lanka. For example, the grant of permission by Colombo to Voice of America to establish its transmitter on the island and the leasing of oil tanks in Trincomalee port to pro-American firms were major bones of contention between India and Sri Lanka for decades," Reddy wrote.

But today New Delhi is silent. This is because of "the changed geopolitical environment in the post-Cold War era" and the changed India-US relationship.

"The provisions of the ACSA cannot be described as being detrimental to New Delhi's interests in the current phase of its relations with Washington," wrote Reddy, adding: "However, in a possible new context, India has every reason to be concerned about the pact."

During the Cold War, India bitterly opposed the US presence in Diego Garcia, 1,600km to the south of India's coast. But today, with India-US relations blossoming, Delhi appears to have given its blessings to a US "base" in a country that is a few dozen kilometers from its coastline.

Today it is only China lurking in waters near its coast that worries India.

But both deals that Sri Lanka finalized with the Chinese and the Americans last week make India's southern neighborhood more crowded with extra-regional powers. This has implications for India's security and its interests and ambitions in the Indian Ocean.