Why China investing in Gwadar port?

Gwadar is situated on the coastline, in the Balochistan province of Pakistan. Traditionally, a small fishing port, it has attracted a lot of media attention since China decided to invest in Gwadar.

In order to understand China’s decision to invest in Gwadar, we need to have a background of China’s interests & challenges.

Sustaining Growth Rate & Quicker Market Access:

    The declining growth rate over the years has compelled China to maintain economic stability, looking for new opportunities for growth simultaneously.

    Europe is an important market for Chinese manufactured goods. The Middle-East is a primary source of China’s oil & gas supplies; whereas Africa is a big supplier of raw materials for China. Africa is also an emerging market for Chinese products.

    On the other hand, much of Western China is traditionally underdeveloped compared to the southern & eastern parts of the country, China seeks to develop this region & connect Beijing to markets in Eurasia, Africa & the Middle East, through newer & relatively quicker routes, bypassing the Malacca Strait.

Malacca Strait Conundrum:

    Carrying over 94,000 vessels every year, Malacca Strait is one of the most important shipping routes in the world. The narrow body of water is the only shipping channel between the Indian & Pacific Oceans.

    The dense marine traffic in this narrow route and poor visibility created by bush-fires in Sumatra often causes delays. Piracy is another major concern. Most of China’s maritime trade is conducted through this route.

Border & Maritime Disputes with Neighbors:

    China has been having strained relations with its neighbors, Vietnam, Malaysia & the Philippines, in light of the South China Sea dispute. And the maritime border dispute with Japan in the East China Sea has ruffled many feathers in the global stage. With China taking the role of an aggressor in these disputes, the United States has expanded its presence in the region, citing ‘Freedom Of Navigation’ under the International Law. The growing tensions in its own backyard have made China look for alternatives to protect their trade routes & business interests overseas.  

One Belt One Road [OBOR]:

    In order to optimize its capacity in steel manufacturing, develop the backwards western regions & provide a greater push for China on the global stage, the Chinese premier Xi Jinping proposed to revive the ancient Silk Route to Eurasia. One Belt, One Road (OBOR) is a multi-pronged development strategy & security framework. The OBOR has two main components, the "Silk Road Economic Belt" (SREB) on land & the "Maritime Silk Road" (MSR) which is a sea route. The China-Pakistan Economic Corridor has become an extension of the ‘One Belt One Road’ project.

China–Pakistan Economic Corridor [CPEC] :

    The China–Pakistan Economic Corridor, also known as CPEC, is a US$ 46 billion economic corridor comprising a collection of energy projects, infrastructural facilities, that is currently underway in Pakistan. The purpose of the CPEC is to connect Kashgar in Xinjiang province of Western China and Gwadar in Balochistan province of Pakistan, in turn facilitating trade between China, Pakistan & the countries in the Indian Ocean. The CPEC is a matrix of railways, highways, energy pipelines & special economic zones across Pakistan.

    The objective of CPEC is to rapidly upgrade infrastructure setup in Pakistan, simultaneously improving economic links between China and Pakistan. CPEC is being considered as a test for China & the success of this corridor will be crucial for the implementation of the OBOR project.

    Some defence experts remark that the CPEC is essentially part of China’s defence thrust to assert naval dominance in the Indian Ocean; a geopolitical strategy that has come to be known as “String Of Pearls”.

Chinese String Of Pearls:

    China's aim of projecting its blue-water capability has drawn a lot of attention. China. China seeks to set up a network of military & commercial facilities to protect its trade routes & sea lines of communication from the mainland China to the African coast. Hambantota in Sri Lanka & Gwadar in Pakistan are similar projects funded & constructed as commercial ports by the Chinese. At the same time, similar ports are being constructed in Chittagong in Bangladesh & Sittwe in Myanmar. It has agreed to invest in the construction of a port at Bagamoyo in Tanzania on the eastern coast of Africa & identified the Marao Atoll in the Maldives a potential base of military operation. China also is planning to invest on the western side of the proposed Kra Canal in Thailand .

    Interestingly, the facilities acquired by China, are at these locations that seem to be encircling India & are being perceived as a military threat by defence experts. Given the deeper military collaboration between Pakistan & China, the port construction at Gwadar is being seen as a potential military base.

Warm-Water Port at Gwadar :

    Gwadar port is at the heart of the CPEC. Traditionally, a small fishing port, Gwadar was upgraded to a deep-sea port & was inaugurated in 2007, after an initial phase of investment worth US$ 200 million by China. Gwadar is essentially a warm-water port. The Balochi port gives China round-the-year entry in the Indian Ocean.

Defence experts and analysts remark that China aims to counterbalance India’s naval prowess in the Indian ocean & the road-railway network of the CPEC linking China to Gwadar, which can be used to quickly mobilize military forces in an event of war between India & Pakistan.

China justifies that acquisition of ports in the Indian Ocean, including Gwadar, is purely commercial & any naval presence in the Indian ocean is in line with the principle of ‘Freedom Of Navigation’ under International Law, to secure their ‘sea lines of communication’.