The African Review 47 (2020) 357–376 TARE THE AFRICAN REVIEW brill.com/tare The Dragon’s March into the Indian Ocean: Implications for International Trade Fred Jonyo Associate Professor; Department of Political Science and Public Administration, University of Nairobi, Main Campus, Gandhi Wing ‒ 4th Flr, Office No. 403 C, Nairobi, Kenya [email protected] Samuel Mbutu PhD Candidate; Department of Political Science and Public Administration, University of Nairobi, Main Campus, Gandhi Wing ‒ 4th Flr, Office No. 403 C, Nairobi, Kenya [email protected] Abstract This article reviews China’s engagement in the Indian Ocean Region, implications for international trade and strategies to mitigate its vulnerabilities. Premised on maritime theory, it argues that China’s interests in the Indian Ocean will influence its relations with India, extra-regional powers and African states. China is likely to leverage on its presence in the Indian Ocean to boost its levels of international trade volumes, while at the same time forge alternative strategies such as string of pearls, Maritime Silk Road and access through Myanmar to mitigate its vulnerabilities in the region. Keywords China ‒ Indian Ocean Region Maritime ‒ India 1 Introduction There is no generally agreed definition of the Indian Ocean Region, however the most popular version conceptualizes the region as comprising the ocean © Koninklijke Brill NV, Leiden, 2020 | doi:10.1163/1821889X-12340023Downloaded from Brill.com10/01/2021 07:00:39PM via free access 358 Jonyo and Mbutu itself and the countries that border it. These include the Northern Indian Ocean littorals: Indonesia, Thailand, Myanmar, Bangladesh, Sri Lanka, India, Pakistan, Iran and Yemen. The South Eastern littoral is made of Australia and the Western Indian Ocean littorals comprises Egypt, Kenya, Tanzania, Mozambique, South Africa, Sudan and Eritrea. Although some scholars have also included the gulfs, seas, and islands that surround the water. The countries bordering the Indian Ocean are home to about 2.5 billion people representing which is one-third of the world’s population (Pherson, 1993). The region en- compasses a wide variety of cultures, races and religions. The level of political stability, the quality of governance, ethnic and sectarian tensions, the demo- graphic pressure and the economic growth pace creates a difference in the mix for opportunities and risks in each of the states (Doyle, 2018). The strategic value of the Indian Ocean region is that it holds both a political and economic spotlight as the key emerging region in strategic priorities and world affairs. Eighty percent of the world’s maritime oil trade and other eco- nomic products are transported through the Indian Ocean via three major nar- row passages, namely the Strait of Hormuz, Strait of Lombok and the Malacca Strait (Doyle, 2018). The Strait of Hormuz is located between the Persian Gulf and the Gulf of Oman and it is the only sea passage from the Persian Gulf to the Indian Ocean. The Malacca Strait also known as the “Gibraltar of the East” connects the Indian Ocean and the Pacific Ocean is about 1080 km long and 25 to 115 m deep, and since the end of the Second World War the Malacca Strait has been under joint governance by Singapore, Indonesia and Malaysia. As the longest and busiest waterways in the world, it supports almost a quarter of the maritime world’s trade, and currently over 50,000 vessels pass through this passage whereby 60 percent encompasses China’s vessels. Many investors seek new opportunities across the Indian Ocean Region (IOR) hence the expansion of the countries in this region. In 2017, countries like Malaysia, Bangladesh, Tanzania and India witnessed an economic growth of 5% which was attributed to the increased economic activities in the Indian Ocean. This level of economic growth was above the average global economic growth of 3.2%. According to the World Bank report of 2017, India has got the most growing economy in the IOR and it has an increasing population which is assumed that in the coming decades it will be the world’s largest market. Most states in this region would really want to establish their pence in the Indian ocean since the Indian ocean is an important international trade root, the ex- pected benefits that these countries are anticipating as a result of establishing their presence is the Indian ocean includes; trade expansion, economic expan- sion and increment of their citizen’s welfare among others. However, this only remains a desire since in actualizing this desire, it will demand that each state The African ReviewDownloaded 47 from (2020) Brill.com10/01/2021 357–376 07:00:39PM via free access The Dragon’s March into the Indian Ocean 359 must have sufficient resources, favorable geographical characteristics such as an access to the sea, a developed navigation power as well as an updated naval system just to mention but a few. This requires supporting geographical fea- tures such as an access to the sea or an ocean and a well developed navigation system. The IOR has increasingly become a zone for strategic competition having different countries and private investors showing their interest in the region. China being one of these countries has invested millions of dollars on the Belt and Road Initiative (BRI) whose Maritime Silk Road Initiative (MSRI) passes through the region. China has also invested in state-backed firms in building ports in the Maldives, Sri Lanka and Bangladesh. The US and India have also projects in this region so that they could counter the Chinese competition on trade, security and navigation. The US has invested on a 113 million funds on the digital, energy and infrastructure projects. In security terms, piracy, un- regulated migration and the continued presence of the extremist’s groups in Somalia, Bangladesh and parts of Indonesia pose significant threats to the Indian Ocean countries. Therefore, the combination of Chinas strong econom- ic power and its growing interests in the region raises the question of what portends for international Trade. The region, therefore, could be viewed as the Clausewitz’s center of gravity as far as great power interests are concerned. The bare-knuckle competition currently being staged by China could as well clash with the interests or other states such as India which uses the ocean as its trade routes and business hub, Australia which also relies on the Indian ocean as its trade route and the United States of America which wants to establish a military base in the Indian ocean in a bid to advance its security interests to control the region and its resources should therefore be seen in this context. Drawing empirical data from secondary sources, this article utilizes mari- time theory to understand China’s engagement in the Indian Ocean Region, implications for international trade and strategies to mitigate its vulnerabili- ties. The central arguments of this theory are that national politics and inter- national politics affect maritime and naval activities. The theory also argues that since states rely on the sea and oceans to carry out trade, communications and immigrations; science, technology and innovation matter, an enemy state may choose to interfere with all these activities of the state in question as way of weakening their economic strength or as a strategy of exerting economic pressure of that state in question to do certain things according to the wishes of the enemy state. The article is structured as follows: After this introductory section, the next section presents strategic importance of IOR, followed by theoretical framework. Subsequently, China’s strategic interests in the IOR is presented then followed by a discussion on implication for international trade. The African Review 47 (2020) 357–376 Downloaded from Brill.com10/01/2021 07:00:39PM via free access 360 Jonyo and Mbutu The penultimate section presents strategies to mitigate threats before the final section summarizing the article. 2 The Indian Ocean Region and Its Strategic Global Importance First, the region is emerging as the center stage for the 21st century and it re- mains a stage for pursuit of the global strategic and regional military interests of all world and regional powers. The IOR has assumed great significance due to rising economic dependence on trans-national trade, energy, security and human resource wealth. The region is also bridging the gap between East and West and has thrown open new economic opportunities. The economic im- portance of the Indian Ocean to the emerging Asian powers and global econ- omy is unquestionable: About 70 percent of the world’s oil and 50 percent of the world’s container traffic passes through the Sea Line of Communications (SLOCs) of the IOR (Ryan, 2013). The power struggle to control energy resourc- es is a major vulnerability which has the potential to create instability in the IOR and even the South China Sea. Secondly, the region is home to approximately one third of the world’s pop- ulation in a landmass of just about 25 percent ‒ a huge human resource. It contains approximately 40 percent of world’s gas and oil reserves (Brewster, 2014). The region therefore directly impacts multilateral trade and transit. The economic imperatives and strategic challenges are leading China and other world economic powers to expand their activities to different regions of the world. For instance, areas with high concentration of world population have large market sizes; therefore, all the commercial interests of states through their multinational corporations and other companies would be pursued ag- gressively. The major motivation behind all this is that a state wants to maxi- mize their power over other states and improve on the standards of living of her people. Power in Cobbett and Mahan’s conceptualization involves the pur- suit of these interests against the interests of other competitor states.