Trading the Rope: How Chinese Dual-Use Investment is Destabilizing South Asia

ChinaSailors

Earlier this year, Chinese state-owned Wuchang Shipbuilding Industry Group delivered the first of eight Hangor-class submarines to Pakistan continuing the decade-long trend of expanding Chinese influence in South Asia. The United States and its strategic partners have long overlooked this buildup. In order to avoid the Indian Ocean becoming a contested operating environment in the event of a conflict, the United States needs to be prepared to operate in the region, offer meaningful incentives to engage in multilateral initiatives, and establish consequences for engaging with bad actors. 

To understand the gravity of the current situation, one must first look into the origins of China’s willingness to export advanced defense products to its Southern neighbors. Beginning in 2012, with the transfer of Ming-Class submarines to Bangladesh, arms sales rapidly expanded to include Pakistan and Myanmar within a decade. In addition to the export of diesel-electric submarines and frigates, China has also engaged in construction projects to help these nations support their newly acquired assets. These include submarine bases in Myanmar and Bangladesh, building a very low frequency (VLF) communications facility in Pakistan, and refitting Karachi Shipyard and Engineering Works (KS&EW) in Pakistan. All of these efforts are critical to the operation of the strategic submarine force. They are also constructed to Chinese military standards

Some would argue that China is merely engaging in the international arms market, it is in reality another effort to exploit developing nations and further destabilize the region. The Chinese government has proved adept over the last semicentury at leveraging the country’s manufacturing capabilities to gain global influence. However, while overpriced railways to nowhere in Africa are of little concern to the United States, dual-use naval warfare facilities absolutely are. 

As of writing this, all vessels and facilities remain in the hands of their respective states. However, it is clear that these investments were just as much for Chinese gain as they were for their present operators. It can be no coincidence that the Myanmar base is located near India’s Rambilli nuclear submarine base, or that the VLF technology is identical to those that China uses to control its own submarines.  In the event of a conflict (or even gray zone operation), it would be easy for the Chinese to assume control of these facilities given their long tradition of weaponizing infrastructure projects. This could come in many forms: piggybacking off the Pakistani VLF facility, refusing entry to American ships at Burmese ports, or refitting their own submarine fleet at KS&EW. One thing is certain- these investments will put a massive strain on the ability of the United States and its regional allies to operate in the Indian Ocean. 

This is a massive problem because the Indian Ocean is essential to being able to prevail in a conflict with China. Currently, even with new bases, Chinese merchant vessels would find themselves vulnerable to interdiction. And with China being heavily export dependent such a move could cripple their economy. The Chinese government knows this and it has been one of its biggest motivations for expansion in the region. In order to counter these efforts, the United States must undertake the bureaucratically burdensome but practically possible task of defining a focus and pursuing a long-term strategy in the Indian Ocean––something we sorely lack. Additionally, to stem the tide of malicious investment coming from Beijing by leveraging existing institutions like the Development Finance Corporation and our dynamic private industrial base to compete toe-to-toe with Chinese firms who are often the only option for developing nations. Finally, there needs to be continued consequences for the authoritarian military governments in South Asia that choose to do business with China and an emphasis on the dangers of utilizing BRI funding. 

With tension rising in the Indo-Pacific seemingly daily, it is increasingly important for the United States to recognize, address, and contest the dual-use investment undertaken by the People’s Republic of China in South Asia. Recognizing the existential threat to freedom of navigation and setting an actionable policy will demonstrate a commitment to our allies in the region. Simply offering alternatives to Chinese investment in developing countries would convey a desire to cooperate with governments that believe in preserving global stability. The United States needs to pay attention to the Indian Ocean. With the region’s growing importance, it is an area in which we cannot afford a policy failure. 

Featured/Headline Image Caption and Citation: Chinese PLA Navy Sailors, taken on Sep 6, 2006, Photo by Joe Kane | Image sourced from NARA & DVIDS Public Domain Archive | CC License, no changes made

Author

Owen Oppenheimer is an economics student at the University of Texas at Austin focusing on innovation and acquisition policy reform in the defense industrial base. He has previously worked at the Inter-American Defense College and has completed the defense strategy program at the American Enterprise Institute.