Pakistan’s Black Pearl

State visits between friendly countries seldom produce surprises or unscripted moments, but the recent trip to China by top Pakistani officials managed to do just that.

Upon returning to Islamabad, the defense minister, Ahmed Mukhtar, made two eyebrow-raising announcements: first, that Beijing had agreed to take over operation of Gwadar port in Baluchistan, and, second, that he had invited the Chinese to build a naval base there. China’s leaders, seemingly caught unaware by these statements, promptly denied them.

Nevertheless, Mukhtar’s seemingly ad-libbed remarks revived the debate about China’s ambitions in southwest Asia. For example, last week, a Wall Street Journal opinion piece provocatively titled "China Breeds Chaos" claimed that "China wants to get into the great-power maritime game by operating ports throughout the Indian Ocean." Is Gwadar an isolated case or an important platform for the projection of Chinese influence in the region?

For much of the past decade, a theory called the "string of pearls" has gained currency, with proponents suggesting that Beijing is seeking to expand its influence by developing a "string" of commercial ports and listening posts — "pearls" — along the rim of the Indian Ocean. The term seems to have been first coined by defense contractor Booz Allen Hamilton in a 2005 report "Energy Futures in Asia" and elaborated upon by dozens of armchair strategists since. A 2006 study from the U.S. Army War College described this purported strategy as a "manifestation of China’s ambition to attain great power status and secure a self-determined, peaceful, and prosperous future" and hailed the development of Gwadar’s port — then in its early stages — as a "win-win prospect for both China and Pakistan."

But is it?

It is easy to understand why Beijing would be keen to build and operate a port in southwest Pakistan. Gwadar’s strategic location at the crossroads of the global energy trade — opposite the Strait of Hormuz at the mouth of the Persian Gulf — offers Beijing a handy transit terminal for Middle Eastern energy imports. With the Middle East likely to remain the largest source of China’s crude oil imports, a significant portion of this supply will continue to transit the Indian Ocean. China therefore has an obvious interest in securing vital sea lanes. A commercial port facility offers a relatively uncontroversial means to achieve an important energy security objective.

Some have taken the "string of pearls" vision a step further, suggesting that military factors are also at play. In particular, some observers have claimed (so far without much evidence) that China is constructing naval bases at Gwadar, among other places. For example, Robert D. Kaplan writing in Foreign Affairs in 2009 claimed: "The Chinese government has already adopted a ‘string of pearls’ strategy for the Indian Ocean.… It is building a large naval base and listening post in Gwadar, Pakistan, … a fueling station on the southern coast of Sri Lanka … and a container facility with extensive naval and commercial access in Chittagong, Bangladesh." (Kaplan seems to have changed his assessment since then.)

It all makes sense — in theory. A naval base in Pakistan would be a strategic asset for China. As a rising power, being able to project power in the Middle East and parts of Africa — regions on which it is heavily dependent for natural resources — is undoubtedly attractive. A naval base would also enhance China’s influence in Central Asia, another area of increasing importance for Beijing. Also, with U.S.-Pakistan relations under strain and with American troops due to begin drawing down from Afghanistan in 2014, some, such as Nayan Chanda in a recent Times of India article, argue that China will look to seize an opportunity to fill a power vacuum.

But the truth is that Beijing is treading carefully, and with good reason. A combination of compelling economic, security, and political factors ensure that a fully functioning commercial port — let alone an operational military base — remains a distant prospect.

By far the most obvious deterrent to development is the endemic instability in Baluchistan province. Despite being the largest (and arguably most mineral-rich) of Pakistan’s four provinces, Baluchistan has suffered decades of neglect by the central government. Chronically underdeveloped and beset by a low-level insurgency led by Baluchi nationalists, the situation on the ground has worsened considerably in recent years. Baluchis complain bitterly of Islamabad’s naked exploitation of their province’s natural resources and its seeming disregard of local interests.

Although much of this opposition is aimed at the energy industry, Gwadar has also become a focal point of protest. Hopes that the construction of the port would generate development and employment opportunities for locals have been dashed. Instead, most of the jobs created were handed out to members of other ethnic groups. Moreover, during the port’s construction phase, members of Pakistan’s military and civilian bureaucracies appropriated vast tracts of prime coastal land around Gwadar, according to an International Crisis Group report.

Widespread anger has regularly flared into violence. In 2004, for example, three Chinese engineers were murdered in Gwadar, and in 2007, a bus carrying Chinese engineers was bombed in the southern town of Hub. An already tense security situation in Baluchistan has deteriorated over recent years as the insurgency has spread into non-tribal areas such as the southern Makran belt, where Gwadar is located. As a result, all foreign visitors require permission from Islamabad to visit the region. This is often tricky, though not impossible.

Baluchistan’s lack of modern infrastructure poses another obstacle. Regardless of how sophisticated or efficient its new port might one day become, its usefulness to Beijing will ultimately hinge on how smoothly goods can be transported the 2,000 or so kilometers to and from the Chinese border. Already, the absence of road links between Gwadar and the rest of Baluchistan has hampered commercial activity. A local media report in January 2010 noted that the central government has been forced to subsidize the high cost of transporting goods from the port to other parts of the country. For an economy dependent on external funding, this state of affairs bodes ill for Gwadar’s future.

Even if China takes matters into its own hands by financing the construction of a road from Gwadar to the provincial capital of Quetta, as a Forbes article last year observed, security will remain a key challenge.

It comes as no surprise therefore that business activity in and around Gwadar has been slow. The ambitious vision articulated by former President Pervez Musharraf — to turn the port into a Dubai- or Singapore-style trade hub — seems to have fizzled out. Gwadar is open for commerce, but only up to a point.

Having become operational shortly after the Chinese completed the first phase of development in 2007, the port only received its first commercial cargo ship almost two years later, in July 2009. It has not seen much use since; a local newspaper noted last year that some port equipment had already started to rust. A planned second phase of (again Chinese-led) development has yet to begin, suggesting that Beijing may have other priorities.

Indeed, both financial and diplomatic considerations are likely to discourage China from deepening its involvement in Gwadar. These same factors make it doubly unlikely that Beijing would seek a military presence there.

The undefined but presumably substantial cost of establishing a naval base in an unstable part of a volatile country is one obvious deterrent. Such a financial commitment would in turn necessitate an open-ended political commitment, one that China’s traditionally circumspect strategists would not undertake lightly.

Motivating their caution is Beijing’s wariness of adding new sources of tension in Sino-U.S. relations. The Pentagon, already unnerved by China’s rising military expenditures and its emerging naval dominance of the South China Sea, would not look on benignly were the People’s Liberation Army Navy to drop anchor in Gwadar.

Might China someday seek a naval presence in Gwadar to protect its vital energy supply lines and possibly challenge Indian naval domination? It is perhaps with this eventuality in mind that China built the port in the first place. All indications, however, are that the Taiwan Strait and South China Sea will remain the focal points of Chinese maritime strategy for the foreseeable future.

For now, Pakistan’s bold claims about China’s commitment to develop Gwadar have less to do with Beijing’s foreign-policy ambitions and more to do with Islamabad’s desire to show Washington that it has other powerful friends. After the humiliation and hurt feelings caused by the United States’ unilateral action against Osama bin Laden in Pakistan in early May, Islamabad’s clumsy effort to play the "China card" was a blatant face-saving maneuver — as Beijing’s immediate rebuff made clear.

In public, Chinese officials expressed sympathy and solidarity with their South Asian ally, but the Economist reports that in private, they urged the Pakistani government to cooperate with the United States. At a time when Beijing is jousting with Washington over a variety of issues — from exchange rate issues to freedom of navigation in the South China Sea — it has no interest in adding another point of friction.

Pakistan remains a very important ally, but China has too much at stake to be dragged unwittingly into Islamabad’s soap opera with Washington.