String of Pearls Redux: China, India and a Cambodian Base

21 May 2019 Lindsay Hughes, Senior Research Analyst, Indian Ocean Research Programme Download PDF

Key Points

  • China is constructing a tourist resort at Koh Kong, on the Cambodian coast.
  • Given its previous history of such projects, the resort could, in the future, provide China with a dual-use facility.
  • A future Chinese base at Koh Kong could also reduce the advantages that India’s planned base at Sambang, in Indonesia, is intended to provide.
  • If Myanmar were also to allow China to construct a base at Kyaukphyu, any conflict between China and India would likely occur closer to the Indian mainland, which would be dangerous for India.

Summary

A previous FDI paper examined the issue of China potentially underwriting the construction of a canal across the Thai isthmus. The so-called Kra Canal, if constructed, would give China yet another alternative route for its energy imports from Africa and the Middle East, thereby enabling it to bypass the Malacca Strait chokepoint. The Malacca Strait, Beijing’s “Malacca Dilemma”, is a strategic vulnerability because, in the event of a conflict with, for instance, India, that route could be blocked off to China, thus disrupting its energy flows and hindering its ability to wage war. It is this situation that has caused China to seek alternative routes for its energy imports, which could explain to a large extent its drive to gain access to ports at Gwadar in Pakistan and Kyaukphyu in Myanmar.

India remains wary, however, of China’s activities in the Indian Ocean region. It is especially wary in regard to the so-called “String of Pearls”, the various ports around the Indian Ocean to which Beijing has access or has developed and which could be used to contain India. As with China’s Belt and Road Initiative, the String of Pearls, New Delhi fears, could be used as a geopolitical instrument to project Chinese power and influence in the region and beyond as well as contain India.

Analysis

The FDI paper referred to previously emphasised the point that a canal across the Thai isthmus would, in addition to allowing China to bypass the Malacca Strait, give it greater access to the Indian Ocean. Such a canal, combined with the right to manage a future port or base situated at its Indian Ocean entrance, would give China the ability to overlook India’s combined military base at Port Blair in the Andaman Islands and possibly negate its effectiveness. Whether Thailand would agree to the construction of that canal, let alone give China the right to manage it and to build a base on its territory is doubtful and will remain a longer-term item on China’s geopolitical wish list.

By far more possible and immediate is its influence over Cambodia. The country’s Prime Minister, Mr Hun Sen, who likes to be called Lord Prime Minister and Supreme Military Commander, has previously castigated the West for tying offers of aid to demands that the country moves towards liberal democracy. As he has asked rhetorically, ‘The Chinese leaders respect me highly and treat me as an equal’, adding, ‘Let me ask those of you who have accused me of being too close to China, what have you offered me besides cursing and disciplining me and threatening to put sanctions on me?’ It is not surprising, then, that China supports his increasing authoritarianism. Beijing’s investments in Cambodia rose from US$600 million in 2012 to US$1.08 billion in 2016 or half of all foreign investment over that period, consequently, according to Cambodian government figures.

The Prime Minister has, nevertheless, sought to deflect criticism that Cambodia could become a vassal state of China. At the ground-breaking ceremony at the beginning of March this year for a Chinese-funded hospital in Tboung Khmum province, he stated that he understood China ‘very well’ and that China had no intention of ‘taking over other nations’. He went on to say:

I say this in front of the Chinese ambassador: Cambodia will never allow China to occupy it, but China also has no intention to occupy Cambodia. China’s approach to foreign policy is that it doesn’t want to control any countries. China only wants to develop friendships around the world.

On 22 March, work began on the construction of Cambodia’s first expressway; it was, again, Chinese-funded to the tune of US$2 billion. The near-two-hundred-kilometre-long road, which is being constructed by the China Road and Bridge Corporation and is a part of China’s ambitious Belt and Road project, will connect Phnom Penh and Sihanoukville, a resort town and seaport on the Cambodian south coast.

Given that level of investment, it ought to come as no surprise that China would seek to insure its investment in Cambodia. The Hun Sen Administration has since granted around 45,000 hectares of prime real estate and 20 per cent of its coastline to a private Chinese company, Union Development Group, allegedly for the construction of a US$3.8 billion tourist resort, all for the paltry rent of US$1 million a year. While Phnom Penh holds to the story of the tourist resort, satellite images obtained from the European Space Agency show that the runway for the site’s proposed airport is far longer than that required for civilian aircraft. At 3,400 metres in length, the runway is longer than that at Phnom Penh airport and sufficiently long enough to serve any aircraft in the Chinese Air Force.

The administration’s denial that the resort’s deepwater port could be used to berth Chinese naval ships, furthermore, has led to speculation that the entire project could serve a dual purpose. As one analyst noted, additionally, senior officials in the Hun Sen Administration had indicated to him that Cambodia is ‘moving towards the tacit approval of a naval base on a 99-year land concession in Koh Kong’.

In January of this year, three naval ships from the 30th Chinese Naval Escorting Fleet, two missile frigates and a supply ship, docked at Sihanoukville. Responding to a letter from US Vice-President Mike Pence in November last year, which expressed concern regarding the military aspects of the tourist development, Mr Hun Sen said:

I confirm that the constitution of Cambodia does not allow any foreign military bases in the Kingdom, nor does it allow Cambodian armed forces to go abroad outside the United Nations’ framework. This is not only an issue for Cambodia, but could be of concern to neighbouring countries if this propaganda continues. I hope that these evil rumours will cease.

If China’s “cabbage slicing” precedent regarding its military installations is any guide, however, that denial would fit into an established pattern for just such an outcome. In the South China Sea, for instance, Beijing initially denied that it had any plans to construct artificial islands there. When it started constructing bases on those islands, Beijing claimed that they were for humanitarian purposes only. It later began constructing hangars and installing military facilities on those islands, claiming that those activities were driven by threats to China. The base at Koh Kong could follow that precedent. In every instance, Beijing invests in a country’s infrastructure (Pakistan, Sri Lanka and Djibouti are prime examples), then enables a Chinese company to acquire seafront property that, it claims, is for a commercial or humanitarian purpose.

A military base in Cambodia would provide Beijing with several strong advantages. It would increase China’s footprint in Cambodia and extend its influence in South-East Asia. It would also enable China to monitor and possibly control maritime traffic from the Malacca Strait into the South China Sea without having to overly rely on ships based at Hainan Island. If a canal across the Thai isthmus were actually constructed, moreover, a military base in Cambodia could offer China the ability to monitor it without having to build a base on Thailand’s west coast as well as one on its east coast, thus mitigating any Thai concerns. Even if a canal is not built, a base in Cambodia would enable China to keep watch over Thailand’s expanding military exercises with the US.

There is a further reason why China would wish to have a base in Cambodia, however. Following Indian Prime Minister Narendra Modi’s visit to Indonesia in 2018, the two countries agreed on a “shared vision of maritime co-operation in the Indo-Pacific”. That agreement was in keeping with India’s Act East policy, according to which it sought to enhance its relationships with South-East Asian countries. In keeping with that objective, India has developed its trading relations with the region. In light of China’s economic and military rise, however, New Delhi realises that it needs to hedge against China’s increased presence in South-East Asia and the eastern Indian Ocean.

India has reached an agreement with Indonesia, therefore, to develop a deepwater port at Sabang, an island off the northern tip of Aceh Province. Sabang lies at the Indian Ocean entrance to the Malacca Strait. Coupled with India’s rapidly-developing military base at Port Blair in the Andaman Islands, Sabang could provide India with the unsurpassed ability to monitor maritime traffic through the Malacca Strait and, if required, exert a degree of control over that traffic. While Sabang is portrayed by India as having a decidedly commercial purpose, it is difficult to deny its dual-use facility. A Chinese base in Cambodia – at Koh Kong – could, however, negate some of the advantage that Sabang offers India. If Myanmar were, in the future, to permit China to construct a base at Kyaukphyu – which is not altogether impossible – that advantage could be further reduced. The situation could become a cause for concern for India, moreover, as any future conflict with China, would be conducted closer to the Indian mainland. In such a conflict, India would then face a two-front war with China and, very likely, a third, simultaneously, against Pakistan.

It is to be borne in mind that such a scenario is speculative. Strategy is based to a large extent, however, on just such forward planning. India’s growing competition with China, which will likely be played out in the Indian Ocean, is a fact, just as are its future base in Sabang and China’s in Koh Kong. Given the very difficult circumstances in which China currently finds itself vis-à-vis the trade war with the US, its cooling economy, the developing technological Cold War with the US and, arguably most importantly, its growing loss of face, Beijing will very likely feel the need to undertake an action to prove that it remains a major power. The base at Koh Kong could be just the instrument it requires to do that. India is ill-equipped at this time to pose any realistic economic or military challenge to China. While China’s GDP is around US$14 trillion per annum, India’s is around US$2.3 trillion; where China’s foreign exchange reserves are around US$3 trillion, India’s are at US$400 billion or so. China’s GDP per capita is approximately US$9,000 whereas India’s is below US$2,000. India would need to grow its economy by 40 per cent per annum to match China’s in real terms. China’s military budget, similarly, is around US$250 billion while India’s is about US$55 billion. China, however, has its own set of problems; high debt, which runs to around 280 per cent of GDP, and a volatile, unpredictable and transactional US President being only two of those.

India needs more foreign investment, technology transfers and political support if it is to be able to challenge China – as it will surely seek to do at some point in the future, given their overlapping goals. It would be to its advantage, then, to forego its policy of strategic autonomy at the present time and formulate a stronger relationship with China’s other competitors, including the United States, until such time as it can realistically stand up to China. Building bases is only half the battle; possessing and utilising economic, political and military assets is equally important if those bases are to be utilised optimally.

 

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