“China is investing in a string of ports across Eurasian and Indo Pacific rim, the construction of ports around the world would inevitably demand and enable military presence which fits well with China’s blue water ambitions” said Ritika Passi, Associate Fellow and Project Editor at Observer Research Foundation (ORF), she was speaking at a panel discussion on ‘China’s External Economic Engagement ‘held recently at the Nehru Memorial Library and Museum in New Delhi.
Passi was of the opinion that China through its monumental port construction projects around the world aims to control sea lines of communication “They are investing in ports along major maritime routes so the potential for an increase in power projection and intelligence gathering capabilities cannot be denied. Chinese port development has a dual nature to them civilian plus military, it’s not necessarily about establishing hegemony but securing access to sea lines of communication and preventing containment.”
Passi analyzed in detail the prospects of the Gwadar port which China is currently developing, she questioned the economic feasibility of the planned Gwadar- Kashgar oil pipeline “The pipeline would be the cheapest option for transporting energy between Gwadar and Kashgar it would transport 1 million barrel of oil per day. However its feasibility is in question, it is estimated that initially 10 million dollars would be needed to layout this crude oil pipeline but this pipeline would have to pass through inhospitable environment, high altitude, cold temperatures, a terrain which is earthquake prone, the extra heating and installation equipment would drive up costs and this cost is expected to be 16.6 times more than shipping from Saudi Arabia all the way to Eastern Chinese coastline. The distance between Gwadar to a more populous Chinese province which would actually absorb this oil import would drive up the cost to a minimum of $8 per barrel so the economic potential of this pipeline (as it cuts distance by 85%) would never be realized.”
She explained the economic impact on Pakistan due to close collaboration with the middle kingdom “In 2013 Pakistan trade deficit with China stood at 5 billion dollars today the deficit has almost doubled, largely because of the increased imports of Chinese equipments for use in the CPEC related activities. Estimates point out that machinery import from China in the first two years of operationalization of CPEC raised Pakistan’s current account deficit by 50%. The employment that has been created due to CPEC is mostly labour work which is temporary in nature and most of the middle and high ranking positions are occupied by Chinese this is also due to paucity of high skilled workforce in Pakistan.”
Passi identified water shortage, electricity shortage and a deteriorating security scenario as big challenges to the success of Gwadar port “Many analysts believe that infrastructure development is going to aggravate the security challenge for the provincial government of Balochistan. Currently Gwadar handles not more than one container ship in a month even Chabahar Port currently handles about 8 to 10 container ships in a month, the fact that Pakistan is not well integrated with South Asian region also takes away a volume of trade that could have taken place. Attractiveness of ports depends on the facilities, and investment by private and international investors Gwadar is basically state financed, even China will not be able to keep a port commercially viable by its crude oil shipping.”
She identified China as a formidable naval power “China’s shipping companies carry more cargo than any other nation, its port operators are among the top operators in the world. Five of the top 10 container ports in the world are in mainland China and one in Hong Kong, its fishing armada consists of two hundred thousand sea vessels and it has a formidable Naval presence.”