One Road, One Belt, One Happy Chinese Navy

Chinese leaders tout their trillion-dollar Belt and Road project, especially in the Indian Ocean, as a win-win commercial proposition meant to bring modern infrastructure and prosperity to an underdeveloped part of the world.

In reality, Beijing’s acquisition of more than a dozen ports across the Indian Ocean is a state-directed effort to bolster Chinese political influence and extend its military reach from Indonesia to East Africa, according to a detailed new study released Tuesday.

The report, conducted by C4ADS, an American data-driven research nonprofit, examined 15 Chinese port deals across the Indian Ocean region. It concluded that, contrary to Beijing’s public rhetoric, the economics of the deals are questionable, political control is nearly absolute, and one of the main drivers is to give the Chinese navy the possibility of far-reaching logistical support under the cover of seemingly innocuous commercial

“The trends across the ports we looked at seem to indicate that China is not upholding a ‘win-win’ idea, but is pursuing an ulterior motive,” says Devin Thorne, one of the report’s co-authors.

The accumulation of similar projects from Cambodia to Pakistan reinforces concerns that Beijing is using business bridgeheads for political and military purposes. “It’s more a layering of one deal after another — one by itself is not nefarious, but taken all together…” says Ben Spevack, another co-author.

Most important, what a few years ago appeared a distant fear now seems to be coming to pass. The Chinese government is using state-owned companies and politically linked private firms to create a network of facilities designed to provide logistical support to Chinese warships patrolling the Indian Ocean, the report says, citing a Chinese analyst who lays out a “first civilian, later military” approach to port development across the region.

Chinese warships are already taking advantage of the dual-use possibilities of commercial ports, bolstered by laws that oblige Chinese transportation firms working overseas to provide replenishment for navy vessels. In 2016 in Thailand, the dock landing ship Changbai Shan relied on a Chinese company operating there to get “one-stop” replenishment services, the C4ADS report notes.

“We have deepened the integration of military and civilian forces, given full play to the advantages of our commercial resources abroad, and provided quality services to the warships of the motherland,” said the general manager of an unnamed Chinese company that serviced the Changbai Shan, according to a Chinese-language article. The ship’s captain said that anywhere there are Chinese companies, there are advance transportation guarantees for warships.

It’s not just Thailand. While developing the so-called Maritime Silk Road, Chinese firms have snapped up control of ports in Cambodia, Indonesia, the Strait of Malacca, Myanmar, Sri Lanka, Pakistan, and Djibouti. Adm. Harry Harris, the head of U.S. Pacific Command, warned Congress earlier this year that China’s naval “presence and influence are expanding” thanks in large part to the commercial network created by the Belt and Road Initiative.

One former U.S. military officer who served in the U.S. Pacific Command, who spoke on condition of anonymity, sees a historical parallel in Beijing’s acquisition spree.

“It looks like coaling stations for the Dutch or British Empire, the way they set these up,” the former officer says.

China’s expanding footprint in the Indian Ocean includes its first formal overseas base, in Djibouti, which has raised concern among U.S. officials, including Adm. Harris. But commercial ports that can do double duty are arguably just as important for a navy seeking to transform itself into a true global force that can police the trade lines critical to China’s economy.

“China is pursuing a ‘places, not bases,’ strategy,” says retired U.S. Rear Adm. Mike McDevitt, a senior fellow at CNA, a nonprofit research organization. It’s the outgrowth of the Chinese navy’s first overseas mission in centuries, the anti-piracy patrols off the coast of Somalia that began exactly a decade ago. The only way to keep the ships supplied, Chinese leaders realized, was to rely on the existing port operations of state-owned China Ocean Shipping (Group) Company, or COSCO, one of the world’s biggest shipping outfits.

“COSCO primed the pump to make them realize the advantage of commercial entities,” McDevitt says.

Chinese leaders remain deeply concerned that hostile foreign powers could cut off critical supplies of energy that must cross the Indian Ocean and the Strait of Malacca, McDevitt notes. “What they’re doing is putting in place facilities that will enable them to have warships do protective operations” like the anti-piracy patrols.

Despite periodic hand-wringing in Washington and New Delhi about Chinese efforts to build a “string of pearls” across the Indian Ocean, Beijing’s ambitions in the region were still unclear for much of the last decade. China got control of a deepwater port in Gwadar, Pakistan, and strong-armed the Sri Lankan government into control of ports there. But it was unclear how those projects meshed with Beijing’s stated goal of becoming a first-class naval power.

“It wasn’t yet the coherent and cohesive strategy that it’s become,” says Evan Medeiros, who oversaw Asia policy in the Barack Obama White House and is now at the Eurasia Group.

Now that strategy is coming into focus, the C4ADS report concluded after scouring corporate registries and years of writing by Chinese analysts and military officers.

“Chinese analysts, particularly those with military backgrounds, describe port investments as discreetly enabling China to enhance its military presence in the Indo-Pacific,” the report notes.

It’s still a work in progress. Nearly all the port projects include plans for some type of Chinese-led industrial development nearby, including shipbuilding and metallurgical facilities, which could eventually make the ports more useful as logistic hubs, though few have been developed.

“They’re laying the groundwork — it will still be years before we see the full military utility of these ports,” says Thorne, of C4ADS. “But the legal framework has been laid,” he stresses, with Chinese law mandating that all commercial vessels be built to military standards and all Chinese transportation firms required to support military missions when called on.

China may be years away from its objectives, but it’s already making India nervous. Chinese ports at the top of the Bay of Bengal, in Sri Lanka, and in Pakistan essentially fence in India, its traditional rival. If sporadic Chinese port calls by destroyers and submarines in recent years were enough to make Indian naval planners look east, the prospect that China’s Silk Road business deals could give the Chinese navy greater staying power in the neighborhood is ringing more alarm bells. The Center for Strategic and International Studies just put out its own big report looking at the security implications of China’s Indian Ocean activities.

“The starting point is never a strategic base,” but rather mundane commercial deals, says retired Vice Adm. Anup Singh, former head of the Indian navy’s Eastern Command. “The repercussions are not good for India, or for the Indian Ocean,” he says.

U.S. military planners are also trying to come to grips with a challenge in the Indian Ocean, after grappling in recent years with China’s aggressive expansion into the South China Sea. Adm. Harris told Congress that “China’s lack of openness about its plans are reason for concern.”

But Beijing’s leap into the Indian Ocean is even subtler and more incremental than its land grab in the South China Sea. The low-key, seemingly innocent approach makes it hard for Washington to craft a response, says Medeiros, the former Obama official.

“For any military, it’s easier to respond to overt aggression,” he says. “It’s harder to mobilize national resources, it’s harder to mobilize allies and partners, when there is uncertainty about the nature of the challenge.”