Updated date:

Chinese Investment in the Indian Ocean Countries

having vast knowledge on global issue writer have written different article in global issues

Chinese Investment In IOR countries

China increased its naval presence in the Indian Ocean region to increases its dominance in this region, and the safety of its ships passes through the area. Its power China will increase its cooperation with neighboring countries of the Indian oceans, including Pakistan, Bangladesh, Myanmar, and other African countries. They start developmental and infrastructure projects in this region and complete these project china himself investment in these projects and give loans to these countries.


Gwadar Port In Pakistan

In the strategic view, Gwadar port is a present vital geostrategic position. It is located 240 miles away from the strait of Hormuz, which is a crucial strait in an economic sense near 60 % of world crude oil is carried through this strait. Through this project, China will introduce its product to the Pakistan market and export to the middle east and other regions of the world. This project will provide the shortest route to China to reach the middle east, Africa, and other European countries. This project is included in Pakistan china economic corridor in which china will invest nearly 60 billion dollars in Pakistan, and this project included infrastructure projects, energy projects, and creating the special economic zones in Pakistan. The development of Gwadar will happen in two phases. In the first phase, the story started in 2002, and this phase requires 240 million dollars for its completion. China will provide 198 million dollars for completion of phase 1 and financial assistance china also provide Chinese Harbor and Engineering Company which offers technical support for this project. This project was completed in 2005. The construction of phase II began in 2007.

In this phase, the ship holding capacity of the port is increased by adding nine berths and four container berths and added various terminal containers with containers of oil cargo and other heavy ships. The total estimated cost of this phase is 840 million dollars. In 2007, Pakistan awarded this to PSA, a Singapore port operational firm, on a 40-year contract. China is the second-largest economy in the world after the United States, so it has a considerable export and import market. For maintaining stable economic growth, China must have easily accessible and secure trade routes for its import and export. As china import 50% of its oil from the middle east, it must have an alternative way for its importance. If China has no alternative route, it will import and export all its goods through the south china sea, which has already tension with neighboring countries. It's also trouble in the strait of Malacca because of our influence in that region.

So, Gwadar port is significant for China for its economic growth because it provides the alternative and shortest route to china for its access to the Middle East, African countries, and other European countries.

Suppose China will import and export through the Malacca Strait. In that case, the total distance will 10000 km, and through Gwadar port, it is 2500 km. In this way, space will reduce to one-third of the Malacca Strait. This project started from the western province of china Xinxiang province to Gwadar port in Baluchistan. This region of China is not developed, so this project also helps the development of this area. China will increase its naval forces to project power and control major Sea Lines of communications (SLOC), and in the future, china use this port for the housing of Chinese submarines


Hambantota Port In Sri Lanka

China Harbor Engineering Company (CHEC) is first stepped in Sri Lanka in 1998 when a civil war was going on in Sri Lanka, and Sri Lanka was in devasting conditions. Sri Lanka was further ruined by the tsunami disaster in 2004, which damage property and lives. Chinese people participate in helping the people and starting to develop the infrastructure in Sri Lanka. One of them connects the Galle and Mattala. In 2005, a new election was contested, and Mahinda Rajapaksa was elected as a new president and started a ten-year plan for the development of Sri Lank. He wants to improve his country's economy by part of a maritime silk route project and to develop the Hambantota port in Hambantota.

Hambantota is located a significant location in the Indian Ocean region, and it is located near the international shipping trade route from Europe and East Asia. It also has a natural deep-water port within a few kilometers away from the seashore. Its dept increases to sixteen meters. This place is blessed with abundant resources and port facilities used to develop port facilities and industrial zones.

President Mahinda Rajapaksa moved towards India for the development of this port, but India shows no response. Then he moved towards china, and china will be agreed to work on this project, and work on this project will be started on October 31, 2007, by China Harbor Engineering company. Many workers will participate in this project, and most are Chinese workers, technicians, and engineers. They also helped the local workers by providing technical support, training, and advice and improve their skills and efficiency.

The construction of this port is divided into two phases. Phase 1 is started in January 2008 and was completed in November 2010, and the cost of this project was 650 million. The second phase began after the completion of the first phase. Work on the second phase was started in November 2012. This phase was completed in 2015. The total; estimated cost of this project is 810 million dollars. China gave 85% of this project cost, and for Hambantota port, Sri Lanka takes a load of 301 million dollars from China at an interest rate of 6.3%. This port costs heavy losses for Sri Lanka, and Sri Lanka cannot bear its maintenance cost and interest payment. Due to a 6% interest rate of loan Sri Lanka will come to the debt of china at 8 billion dollars in 2015. In 2017 the port was officially leased to China. Two Chinese firms, namely Hambantota International Port Group (HIPG) and Hambantota International Port Services (HIPS) are controlled by China Merchants Port Holdings Company Limited(CMPHCL). They also have control on Sri Lanka Ports Authority(SLPA) will maintain on this port 70% shares of Hambantota port will own by china for a 99-year lease, and SLPA will own 20%. It will be included infrastructure, industrial zones, and local islands.

China has a geostrategic interest in this port as this port is located near the sea line of communication. On one side, it has the south china sea and pacific oceans, and the other has Indian oceans. China will use a port just like Gwadar port for the Malacca dilemma in case of threat to Chinese ships or Chinese naval vessels. The handy port can use this port by the PLA Navy (PLAN). The PLA navy will also use this port to aid assist maritime shipping in the Malacca strait and keep the channel open. During peacetime, PLAN will use this port for its naval rest and refueling and repair of its ships and vessels. So, through this port, china wants to dominate the Indian oceans region and maintain its influence in this region. As Sri Lanka is very close to India and through this port, it easy for china to check the naval activities of India in the Indian Ocean region and easy to respond in any emergencies.


Chinese Investment in Bangladesh

China has the highest economy in Asia and emerging as a global power. Its continuous growth must have a strong influence in these regional countries, so China has increased its influence in the region, especially in countries attached to the Indian oceans region. For this purpose, Bangladesh is an essential country for china, and china has a lot of interest in this country, as Indian oceans surround Bangladesh and it has 45000 Sq. Miles of sea territory in the Bay of Bengal, so Bangladesh has an important strategic location in IOR. Bangladesh is a very natural position for import and export destinations of Chinese goods. Moreover, China can export its primary and secondary products to this region because it contains a relatively middle class. They can find cheap labor and raw material.

The most crucial thing that attached china towards Bangladesh is its geostrategic location in Indian oceans and its ports as china imports oil for the middle east and African countries. These ports will use for transshipment points for her. They also provided one of the shortest routes to the Indian Ocean region and the Arabian sea. These ports are also enriching with the various commercial resources. Through these resources, Bangladesh can be transformed into a regional transit hub.

The main interest of china wants to develop its southwestern Yunnan provinces and connect them with the South Asian region. The part of china is least developed when this province is connected to the south Asian region it will create a lot of economic opportunities in Yunnan province.

Yunnan is a landlocked province, and China wants to connect it with Bangladesh through a land route. This route will pass through Myanmar, increasing economic cooperation with Myanmar, Bangladesh, and another south Asian region. There is no road connection between China and Bangladesh. They will connect through air or sea, and during the sheik Hasina visit in 2010, both countries will agree to increases the link between the two countries.

China will invest more money in Bangladesh than all other countries over the past few years. In 2016 the total investment of China in Bangladesh was 61 million dollars which will increase 16-fold in 2018, and Chinese direct investment in Bangladesh was 1.03 billion dollars. China has become the largest foreign investor in Bangladesh. So finally, over the past few decades, the relationship between China and Bangladesh will increase in many folds. China will extend its economic, military, and other areas and interests to deal with global issues. Besides, China will also be helped to development of deep seaport in India by providing funds for expansion.

Chinese Investment in Myanmar

After 1988 Myanmar changes its economic policies and moves towards the liberation of its economy to the world, which will bring new economic conditions and increases the foreign direct investment in Myanmar. China will increase its investment in Myanmar for many reasons. Myanmar is a neighbor country of China, and China always wants to better relationships with its neighbors and is economically connected with them. Second is Myanmar, a rich deposit of natural resources, and China wants these resources for its growth. And third reason Myanmar is present is an essential geostrategic point, and it is vital transit for Chinese import and export. China will increase its investment in Myanmar during 1988-2016. China will invest nearly 18.53 billion dollars which will be included 130 projects. China's most investment is on energy and natural resources.

In 2015, Myanmar's parliament approved the construction of a deep seaport, industrial zone, and logistic hub in Kyaukpyu, and the Chinese company will construct this port. Is also reported that China will also develop other port and having rights of using these ports for naval and airport operations in various island and coasts. Hianggyi and Akyab have been used for the speculation for the Chinese involvement in early 1991. The most important part of China will develop a listening station in coco island, part of Myanmar. This island is close to two islands of India: Andaman and Nicobar. The position of Myanmar is very strategic for china because it will provide a route for Chinese products to reaches the middle east and others region of the world, and also china import oil and other resources without passing through the Strait of Malacca. The other project on Myanmar, which is projected with the help of China, is shown in the graph

Gas and pipeline project are also initiated by china. The cost of this project is 5 billion dollars, and it imports energy from Indian oceans and reaches the southwest region of China, and is refined in Yunnan and Chongqing. The starting points of this pipeline Kyaukpyu Island in Rakhine State. It is 2380 kilometers long, and more than 700 km passes through Myanmar. This project also contains marine port terminals, railway lines, airports, highways, petrochemical plants, steel mills, industrial zones, and infrastructure projects. Moreover, China's CITIC (China International Trust and Investment Corporation) Group has Initiated the Kyaukpyu Island Economic and technological development project.

So finally, china will increase its influence in Myanmar, and it has port facilities, and it will use it for import and export if the Malacca dilemma happens. Moreover, this will be very close to the island of its regional competitor India and through this region have better control over this region


investment in The Maldives

The Maldives is a small island country in the Indian oceans, and it is present southwest of India and Sri Lanka. It is present at a significant location in the Indian seas, and it has close ties with China. China has initiated many projects, and the Maldives also wants to become part of the MRI project. In December 2014, a joint committee on trade and economic cooperation, which contains members from both sides, signed a Memorandum of Understanding (MoU). In September 2015 second meeting of this committee will be held to sign an agreement for free trade. So, China will continue to increase its connection with the Maldives because of its location in IOR. They will be initiated different projects so they will maintain close ties with them and not give any chance to its revivals to increase their influence

Chinese naval port

Djibouti located a critical strategic location in the IOR. It is present near to Bab el Mandeb strait, a choke between the red sea and the Gulf of Eden. China will take an interest in this region and improve its relationship with them. China mostly trade passes through the area and passes through the Suez Canal. It is estimated that nearly 1 billion chinses trade passes through this strait in one day. It is present in the mouth of the red sea, so it is an important transshipment hub for cargoes in and of MENA. It is also essential to control access to the Indian oceans and the red sea. China has increased its interest in this region and starts cooperation with the African region. China first takes a step in helping to maintain peace in this region. In 2015 president of china XI give 100 million dollars military aid to the African Union to maintain stability in this region. It has deployed a more significant number of soldiers to this region to maintain peace. And the majority are deployed in the African area. They will also work on infrastructure projects. China will provide nearly 1.5 billion dollars to Djibouti. The other included a free trade zone in this area which has a cost of 3.5 billion dollars. The Chinese also worked to build railways and two airports, a contract of 320 million dollars.

The Doraleh Ports are very important for China, and China will increase its naval presence in this port. In 2018 Djibouti nationalize this port in which Chinese merchants have a 23.5% share china and Djibouti signed an agreement in 2014 and 2016, in which they agree to build a port facility for naval rest and resupply. China has also decided to lease the site for ten years to 20 million per year to Djibouti. This port also has a facility of few thousand personals. In this port, 10000 troops Can be hosted, and 250 are currently there.

Related Articles