September 21, 2011

Understanding India’s South China Sea Gambit

Last week, The Times
of India
reported that India’s
Oil and Natural Gas Corporation (ONGC) Videsh would, with Vietnam’s support,
continue its exploration for oil and natural gas resources in the South China
. The announcement came despite warnings
from China
that it expects countries outside the region to stay out and
support bilateral cooperation between China and its Southeast Asian neighbors
as they deal with their competing claims.

The move by Vietnam to invite ONGC Videsh to the region is a
particularly interesting maneuver, one that suggests that bilateral cooperation
between Beijing and Hanoi may be more difficult than initially thought – at least
in the near term. Vietnam seems to be hedging by deepening its ties with India,
which observers note is
increasing its Naval and Air Force capabilities to offset China’s strengthening
.  For Vietnam, strengthening
its ties with India – and leveraging its military capabilities – it hopes will
help it develop a stronger bargaining position in the region; after all,
Beijing has shown that it prefers bilateral deals with countries in the South
China Sea as opposed to working multilaterally (e.g., with ASEAN or within the
East Asia Summit) for similar reasons: it can leverage its economic and
military strength to its advantage much more efficiently.

China is likely to keep a watchful eye on the developing Indian-Vietnamese
relationship, which could in the near-term chill cooperation in the South China
Sea. Perhaps in the long-term the leveling of the playing field will work to facilitate
cooperation, though. It is difficult to tell, but I’m fairly confident that
cooperation is still possible if the conditions are right.

For me what are more interesting are India’s motives to move
into the South China Sea, which I suspect are not dissimilar from China’s
interests in the South China Sea broadly. The Indian-based The Economic Times paraphrases one Chinese expert who argued that, “India's
efforts to firm up oil exploration cooperation with Vietnam in the South China
Sea, which China claims as its own is a provocative move to show its annoyance
over Beijing building up close ties with countries like Myanmar and Pakistan
That may be true. But I think it’s important to understand some of the reasons
why China is pursuing relationships with Burma (Myanmar) and Pakistan.

China’s relationship with these states is, in part, rooted
in Beijing’s overall energy strategy. Indeed, in recent years China has
invested significantly in overland energy pipelines in order to diversify where
it gets its energy resources from (overland pipelines are less vulnerable to
the kinds of disruptions that could develop in chokepoints like the Strait of
Malacca). And Pakistan and Burma (Myanmar) are important transit states for
China to secure its overland energy resources.

By developing an energy portfolio that includes overland and
maritime energy resources, China is reducing its vulnerability to disruptions
of either supply.  (Footnote: It is
important to note that China’s concern with disruptions to its overland
pipeline infrastructure reinforces its need to explore for and secure access to
hydrocarbons in the South China Sea; this, is complicated by the fact that
Burma and Pakistan are relatively unstable states, and the pipelines running
through those states may become increasingly vulnerable to attack.)

Can we expect then that India’s motives to move into the
South China Sea are roughly similar to China’s interests in the region as well?
Is India seeing the same energy trends and developing the same energy strategy,
one that relies on both overland and maritime energy resources? It’s not
outside the realm of possibility. And it would explain, in part, India’s
interests in the South China Sea. (I’ll concede that there are other overriding
geopolitical calculations as well, including concerns with China’s “string of
pearls” strategy in the Indian Ocean and the need to balance against it there.)

Perhaps then their shared concerns with access to energy can
be a point of cooperation – or at least help diffuse misperceptions about India’s
seemingly provocative move into the South China Sea. Of course, with China’s
need for energy to sustain its economic growth, India’s move into the South
China Sea may be viewed as zero-sum and exacerbate competition between the two.

I know I haven’t resolved anything here, but my point was
not to. The bottom line for me is that to understand the headlines coming out
of the South China Sea region, we need to drill down and try to analyze each state’s
motives before we can really understand the dynamics unfolding in the region. This
has to begin by looking at the bigger picture first. Energy exploration in the
South China Sea offers only a snapshot of the broader energy world we live in. China
may view India’s move into the South China Sea as provocative. But if we step
back and look at why India is moving into the South China Sea (as part of a
broader energy strategy), I think we’ll find that China’s and India’s actions have
more in common than we might have thought. For policymakers, that has to be