- The Washington Times - Monday, January 17, 2005

China is building up military forces and setting up bases along sea lanes from the Middle East to project its power overseas and protect its oil shipments, according to a previously undisclosed internal report prepared for Defense Secretary Donald H. Rumsfeld.

“China is building strategic relationships along the sea lanes from the Middle East to the South China Sea in ways that suggest defensive and offensive positioning to protect China’s energy interests, but also to serve broad security objectives,” said the report sponsored by the director, Net Assessment, who heads Mr. Rumsfeld’s office on future-oriented strategies.

The Washington Times obtained a copy of the report, titled “Energy Futures in Asia,” which was produced by defense contractor Booz Allen Hamilton.

The internal report stated that China is adopting a “string of pearls” strategy of bases and diplomatic ties stretching from the Middle East to southern China that includes a new naval base under construction at the Pakistani port of Gwadar.

Beijing already has set up electronic eavesdropping posts at Gwadar in the country’s southwest corner, the part nearest the Persian Gulf. The post is monitoring ship traffic through the Strait of Hormuz and the Arabian Sea, the report said.

Other “pearls” in the sea-lane strategy include:

• Bangladesh: China is strengthening its ties to the government and building a container port facility at Chittagong. The Chinese are “seeking much more extensive naval and commercial access” in Bangladesh.

• Burma: China has developed close ties to the military regime in Rangoon and turned a nation wary of China into a “satellite” of Beijing close to the Strait of Malacca, through which 80 percent of China’s imported oil passes.

China is building naval bases in Burma and has electronic intelligence gathering facilities on islands in the Bay of Bengal and near the Strait of Malacca. Beijing also supplied Burma with “billions of dollars in military assistance to support a de facto military alliance,” the report said.

• Cambodia: China signed a military agreement in November 2003 to provide training and equipment. Cambodia is helping Beijing build a railway line from southern China to the sea.

• South China Sea: Chinese activities in the region are less about territorial claims than “protecting or denying the transit of tankers through the South China Sea,” the report said.

China also is building up its military forces in the region to be able to “project air and sea power” from the mainland and Hainan Island. China recently upgraded a military airstrip on Woody Island and increased its presence through oil drilling platforms and ocean survey ships.

• Thailand: China is considering funding construction of a $20 billion canal across the Kra Isthmus that would allow ships to bypass the Strait of Malacca. The canal project would give China port facilities, warehouses and other infrastructure in Thailand aimed at enhancing Chinese influence in the region, the report said.

The report reflects growing fears in the Pentagon about China’s long-term development. Many Pentagon analysts believe China’s military buildup is taking place faster than earlier estimates, and that China will use its power to project force and undermine U.S. and regional security.

The U.S. military’s Southern Command produced a similar classified report in the late 1990s that warned that China was seeking to use commercial port facilities around the world to control strategic “chokepoints.”

A Chinese company with close ties to Beijing’s communist rulers holds long-term leases on port facilities at either end of the Panama Canal.

The Pentagon report said China, by militarily controlling oil shipping sea lanes, could threaten ships, “thereby creating a climate of uncertainty about the safety of all ships on the high seas.”

The report noted that the vast amount of oil shipments through the sea lanes, along with growing piracy and maritime terrorism, prompted China, as well as India, to build up naval power at “chokepoints” along the sea routes from the Persian Gulf to the South China Sea.

“China … is looking not only to build a blue-water navy to control the sea lanes, but also to develop undersea mines and missile capabilities to deter the potential disruption of its energy supplies from potential threats, including the U.S. Navy, especially in the case of a conflict with Taiwan,” the report said.

Chinese weapons for sea-lane control include new warships equipped with long-range cruise missiles, submarines and undersea mines, the report said. China also is buying aircraft and long-range target acquisition systems, including optical satellites and maritime unmanned aerial vehicles.

The focus on the naval buildup is a departure from China’s past focus on ground forces, the report said.

“The Iraq war, in particular, revived concerns over the impact of a disturbance in Middle Eastern supplies or a U.S. naval blockade,” the report said, noting that Chinese military leaders want an ocean-going navy and “undersea retaliatory capability to protect the sea lanes.”

China believes the U.S. military will disrupt China’s energy imports in any conflict over Taiwan, and sees the United States as an unpredictable country that violates others’ sovereignty and wants to “encircle” China, the report said.

Beijing’s leaders see access to oil and gas resources as vital to economic growth and fear that stalled economic growth could cause instability and ultimately the collapse of their nation of 1.3 billion people.

Energy demand, particularly for oil, will increase sharply in the next 20 years — from 75 million barrels per day last year to 120 million barrels in 2025 — with Asia consuming 80 percent of the added 45 million barrels, the report said.

Eighty percent of China’s oil currently passes through the Strait of Malacca, and the report states that China believes the sea area is “controlled by the U.S. Navy.”

Chinese President Hu Jintao recently stated that China faces a “Malacca Dilemma” — the vulnerability of its oil supply lines from the Middle East and Africa to disruption.

Oil-tanker traffic through the Strait, which is closest to Indonesia, is projected to grow from 10 million barrels a day in 2002 to 20 million barrels a day in 2020, the report said.

Chinese specialists interviewed for the report said the United States has the military capability to cut off Chinese oil imports and could “severely cripple” China by blocking its energy supplies.