Gwadar: China's Naval Outpost on the Indian Ocean
Tarique Niazi, The Jamestown Foundation, China Brief
2/28/2005
Four months after the U.S. ordered its troops into Afghanistan to remove the Taliban regime, China and Pakistan joined hands to break ground in building a Deep Sea Port on the Arabian Sea. The project was sited in an obscure fishing village of Gwadar in Pakistan's western province of Baluchistan, bordering Afghanistan to the northwest and Iran to the southwest. Gwadar is nautically bounded by the Persian Gulf in the west and the Gulf of Oman in the southwest.
Although the Gwadar Port project has been under study since May 2001, the U.S. entrée into Kabul provided an added impetus for its speedy execution. Having set up its bases in Central, South, and West Asian countries, the U.S. virtually brought its military forces at the doorstep of China. Beijing was already wary of the strong U.S. military presence in the Persian Gulf, which supplies 60% of its energy needs. It was now alarmed to see the U.S. extend its reach into Asian nations that ring western China. Having no blue water navy to speak of, China feels defenseless in the Persian Gulf against any hostile action to choke off its energy supplies. This vulnerability set Beijing scrambling for alternative safe supply routes for its energy shipments. The planned Gwadar Deep Sea Port was one such alternative for which China had flown its Vice Premier, Wu Bangguo, to Gwadar to lay its foundation on March 22, 2002.
Pakistan was interested in the project to seek strategic depth further to the southwest from its major naval base in Karachi that has long been vulnerable to the dominant Indian Navy. In the past, it endured prolonged economic and naval blockades imposed by the Indian Navy. To diversify the site of its naval and commercial assets, Pakistan has already built a naval base at Ormara, the Jinnah Naval Base, which has been in operation since June 2000. It can berth about a dozen ships, submarines and similar harbor craft. The Gwadar port project, however, is billed to crown the Pakistan Navy into a force that can rival regional navies. The government of Pakistan has designated the port area as a "sensitive defense zone." Once completed, the Gwadar port will rank among the world's largest deep-sea ports.
The convergence of Sino-Pakistani strategic interests has put the port project onto a fast track to its early completion. In three years since its inauguration, the first phase of the project is already complete with three functioning berths. The Chinese Premier Wen Jiabao will be on hand to mark the completion of this phase in March this year. Although the total cost of the project is estimated at $1.16 billion USD, China pitched in $198 million and Pakistan $50 million to finance the first phase. China also has invested another $200 million into building a coastal highway that will connect the Gwadar port with Karachi. The second phase, which will cost $526 million, will feature the construction of 9 more berths and terminals and will also be financed by China. To connect western China with Central Asia by land routes, Pakistan is working on building road links to Afghanistan from its border town of Chaman in Baluchistan to Qandahar in Afghanistan. In the northwest, it is building similar road links between Torkham in Pakhtunkhaw (officially known as the Northwest Frontier Province) and Jalalabad in Afghanistan. Eventually, the Gwadar port will be accessible for Chinese imports and exports through overland links that will stretch to and from Karakoram Highway in Pakistan's Northern Areas that border China's Muslim-majority Autonomous Region of Xinjiang. In addition, the port will be complemented with a modern air defense unit, a garrison, and a first-rate international airport capable of handling airbus service.
Pakistan already gives China most favored nation (MFN) status and is now establishing a bilateral Free Trade Area (FTA), which will bring tariffs between the two countries to zero. Over the past two years, the trade volume between the two countries has jumped to $2.5 billion a year, accounting for 20% of China's total trade with South Asia. Informal trade, a euphemism for smuggling, however, is several times the formal trade. The proposed FTA is an implicit acceptance of the unstoppable "informal" trade as a "formal" one. More importantly, Chinese investment in Pakistan has increased to $4 billion, registering a 30% increase just over the past two years since 2003. Chinese companies make up 12% (60) of the foreign firms (500) operating in Pakistan, which employ over 3,000 Chinese nationals.
The growing economic cooperation between Beijing and Islamabad is also solidifying their strategic partnership. Before leaving for his visit to Beijing this past December, Pakistani Prime Minister Aziz told reporters in Islamabad: "Pakistan and China are strategic partners and our relations span many areas." The rhetoric of strategic alignment is duly matched by reality. Last year, China and Pakistan conducted their first-ever joint naval exercises near the Shanghai coast. These exercises, among others, included simulation of an emergency rescue operation. Last December, Pakistan opened a consulate in Shanghai. The Gwadar Port project is the summit of such partnership that will bring the two countries closer in maritime defense as well.
Initially, China was reluctant to finance the Gwadar port project because Pakistan offered the U.S. exclusive access to two of its critical airbases in Jacobabad (Sind) and Pasni (Baluchisntan) during the U.S. invasion of Afghanistan. According to a Times of India report on February 19, 2002, Gen. Musharraf had to do a lot of explaining for leasing these bases to America. China, the Times of India reported, was also upset with Pakistan for allowing the U.S. to establish listening posts in Pakistan's Northern Areas, which border Xinjiang and Tibet. When China finally agreed to offer financial and technical assistance for the project, it asked for "sovereign guarantees" to use the Port facilities to which Pakistan agreed, despite U.S. unease over it.
Association for Asia Research- Gwadar: China's Naval Outpost on the Indian Ocean
