China-India Great Power Competition in the Indian Ocean Region: Issues for Congress

Some IOR states appear to be hedging against China ‘s rising power by building their defense capabilities and partnerships, while others utilize more accommodative strategies with China or employ a mix of both. Some besides see an opportunity to balance India ‘s influence in the region. Hedging strategies by asian states include increasing intra-Asian strategic ties, a well as seeking to enhance ties with the United States. This may present an opportunity for enhanced security collaboration peculiarly with like-minded democracies such as the United States, India, Australia and Japan. While forces of nationalism and competition may increase tensions, shared trade interests and interdependencies between China and India, equally well as forces of regional economic integration in Asia more broadly, have the potential to dampen their competition. The United States ‘ presence as a balancing baron can besides contribute to regional stability. much of the action associated with China ‘s Belt and Road Initiative ( BRI ) can be viewed as an attempt by China to minimize its strategic vulnerabilities by diversifying its trade and department of energy routes while besides enhancing its political influence through expanded deal and infrastructure investments. China ‘s BRI in South and Central Asia and the IOR, when set in context with China ‘s assertive demeanor in the East China Sea and the South China Sea and border tensions with India, is contributing to a growing competition between India and China. This competition, which previously had been largely limited to the Himalayan area where the two nations fought a edge war in 1962, is immediately increasingly maritime-focused. Some in India feel encircled by China ‘s strategic moves in the region while China feels threatened by its circumscribed ability to secure its sea lanes. Understanding and effectively managing this evolving security dynamic may be crucial to preserving regional stability and U.S. national interests. rival between China and India is driven to a big extent by their economic surface and the rapid consociate increase in, and addiction on, seaborne deal and imported energy, much of which transits the indian Ocean. There seems to be a new strategic focus on the maritime and littoral regions that are adjacent to the sea lanes that link the energy rich Persian Gulf with the department of energy dependent economies of Asia. Any break of this issue would probably be damaging to the United States ‘ and the world ‘s economy. China ‘s dependence on seaborne trade and imported energy, and the strategic vulnerability that this represents, has been labeled China ‘s “ Malacca dilemma ” after the Strait of Malacca, the key strategic suffocate point through which a large proportion of China ‘s craft and energy flows. A discussion of strategic dynamics related to the competition between China and India, with a concentrate on U.S. interests in the area, and China ‘s developing strategic presence and infrastructure projects in places such as Pakistan, Sri Lanka, Burma ( Myanmar ), and Djibouti, can inform congressional decision-makers as they help shape the United States ‘ regional scheme and military capabilities. potential issues for Congress include determining resource levels for the Navy, Marines, Air Force, and Army to meet the United States ‘ national security interests in the region and providing oversight of the Administration ‘s efforts to develop a regional strategy, provide foreign aid, and keep and develop the United States ‘ strategic and diplomatic relationships with regional friends and allies to further american interests.

The indian Ocean Region ( IOR ), a key geostrategic outer space linking the energy-rich nations of the Middle East with economically vibrant Asia, is the site of intensifying competition between China and India. This competition has significant strategic implications for the United States. Successive U.S. administrations have enunciated the growing importance of the Indo-Pacific area to U.S. security system and economic scheme. The Trump Administration ‘s National Security Strategy of December 2017 states that “ A geopolitical contest between free and inhibitory visions of earth order is taking place in the Indo-Pacific region. ”

Introduction

This report provides background data and electric potential issues for Congress regarding the growing strategic competition between China and India—the world ‘s two most populous nations—in South Asia and the indian Ocean Region ( IOR ). The consequence for Congress is how the United States should respond to this strategic competition and what character Congress might play in shaping that response. 1
Sino-Indian strategic rival in the IOR poses respective particular policy and oversight issues for Congress. Decisions that Congress makes on these issues could affect numerous aspects of U.S. policy, including U.S. relations with India, China, and other countries in the area ; U.S. defense programs and spend levels ; U.S. arms sales and alien aid programs ; and U.S. trade and energy policy. other CRS reports cover related issues, such as U.S.-China relations, 2 U.S-India relations, 3 U.S. relations with early countries in the IOR, 4 China ‘s military forces, 5 and other specific issues relating to U.S. policy and this function of the worldly concern .

Background

U.S. Strategy and the Indian Ocean Region

Overview of U.S. Strategic Goals, Objectives, and Assets

Indian Ocean Region in U.S. Strategy

A central long-run dogma of U.S. strategic think has been that the United States can not allow any one ability, or alliance of powers, to dominate the eurasian land mass, as such a baron or alliance would have the ability to significantly threaten the United States and its interests. 6 geopolitical thinkers have long debated the importance of the eurasian littoral in influencing the strategic direction of the eurasian landmass. ( For more on geopolitics and geo-economics, see Appendix A. ) South Asia and the indian Ocean littoral are a significant separate of this broad strategic geography. As such, it is of strategic importance to the United States to understand the evolving power dynamics related to China-India competition in the IOR .
The global ‘s geo-economic shift toward Asia, and the relate increase in indian Ocean trade and investment, is increasing the strategic importance of the indian Ocean Region to many nations. 7 Further, the rapid development of China ‘s economic and military capabilities in the IOR is a generator of competition and tension. The indian Ocean is the earth ‘s busiest barter corridor, carrying two thirds of global petroleum shipments and a third of bulk cargo. approximately 80 % of China ‘s, 90 % of South Korea ‘s, and 90 % of Japan ‘s anoint passes through the indian Ocean. 8 This economic addiction on energy and trade transiting the amerind Ocean has become a strategic vulnerability for these states at a time when the United States is becoming less pendent on imported energy .

U.S. Goals and Objectives

Under several past administrations, U.S. policy toward the Indo-Pacific has included the stick to goals and objectives :

• Shape the strategic dynamics in the IOR as needed to prevent Asia from being dominated by a single hegemon or coalition of powers that could threaten the United States;
• Support U.S. friends and allies in the region and develop strategic and defense relationships with regional partners to strengthen the U.S strategic standing in the region;
• Promote a rules-based order and norms that support regional stability;
• Protect U.S. access to energy supplies;
• Help maintain freedom of navigation on the high seas and through the strategic choke points of the Indo-Pacific to facilitate the flow of U.S. and global trade and energy resources and the transit of U.S. naval forces;
• Prevent the region from being used by terrorists as bases of operations;
• Prevent the proliferation of Weapons of Mass Destruction from the region to state and non-state actors;
• Prevent large scale conflicts, such as between India and Pakistan, to preserve regional stability and trade;
• Keep the United States engaged in the dominant economic and strategic architectures of the region to promote U.S. economic interests;
• Continue to work with like-minded partners to support open societies and promote shared values including the rule of law, human rights, democracy and religious freedom;
• Conduct counterpiracy operations; and
• Work with China, India and regional states to address the threat of climate change in bilateral, multilateral, and global contexts.

Under the Trump Administration, some of these assumptions and policy positions, such as the importance of climate change, have changed. 9

U.S. Assets

The United States has significant military assets in the indian Ocean Region including

• Camp Lemonnier in Djibouti, which is the primary base of operations for U.S. Africa Command in the Horn of Africa, supports approximately 4,000 U.S. and allied military and civilian personnel.10
• A U.S. Navy Support Facility is located on the British Indian Ocean Territory of Diego Garcia in the Indian Ocean south of India. The facility “provides logistic support to forces forward deployed to the Indian Ocean and Persian Gulf areas of responsibility (AOR).” There are approximately 2,500 U.S. and allied military and civilian personnel on Diego Garcia.11
• Naval Support Activity Bahrain is home to U.S. Naval Forces Central Command (CENTCOM) and the U.S. Fifth Fleet. Naval Support Activity Bahrain provides operational support to U.S. and coalition forces in the CENTCOM AOR.12 In addition to much of Central Asia and the Middle East, CENTCOM’s AOR includes the Persian Gulf, the Red Sea, and the Arabian Sea.

The U.S. Pacific Command ‘s ( PACOM ) AOR extends across much of the indian Ocean. 13 The United States is besides developing a rotational presence of up to 2,500 marines and aircraft near Darwin, on Australia ‘s northern seashore, as share of its alliance relationship with Australia. 14

2017 U.S. National Security Strategy and 2018 U.S. National Defense Strategy

2017 U.S. National Security Strategy15

The 2017 National Security Strategy ( NSS ) of the Trump Administration declares that “ great might competition [ has ] returned ” and places significant emphasis on the Indo-Pacific while describing China, along with Russia, as a revisionist baron and rival challenging “ American exponent, determine and interests ” while “ attempting to erode american security and prosperity. ” 16 One observer states that, “ The biggest deviation from previous NSS documents is the placement of the Indo-Pacific discussion—at the very clear of the regions considered, above Europe and the Middle East. ” 17
The NSS states that “ China seeks to displace the United States in the Indo-Pacific region, expand the reaches of its state-driven economic exemplar, and reorder the region in its favor. ” It identifies “ a geopolitical rival between free and inhibitory visions of world order ” in the Indo-Pacific. The document besides states that “ China ‘s infrastructure investments and deal strategies reinforce its geopolitical aspirations. ” The NSS lists the “ Indo-Pacific ” as the first of six regional context it discusses and states that, “ we welcome India ‘s emergence as a leading ball-shaped might and stronger strategic and defense partner. ” It goes on to say that the United States will expand and deepen its security cooperation and strategic partnership with India while supporting India ‘s leadership function in the indian Ocean area. The NSS besides states : “ We will seek to increase quadrilateral cooperation with Japan, Australia, and India. ” 18 The NSS takes the opinion that past assumptions that engagement with rivals through international fora and commerce would turn them into benign partners have, for the most part, turned out to be delusive .

2018 National Defense Strategy

The 2018 National Defense Strategy views the reemergence of long-run, strategic competition by revisionist powers as the cardinal challenge to the United States ‘ prosperity and security. Within this context it states
China is leveraging military modernization, influence operations, and predaceous economics to coerce neighbor countries to reorder the Indo-Pacific region to their advantage. … it will continue to pursue a military modernization program that seeks Indo-Pacific regional hegemony in the near term and translation of the United States to achieve global eminence in the future. 19
The Defense Strategy prioritizes expanding Indo-Pacific alliances and partnerships to achieve a “ network security architecture adequate to of deterring aggression, maintaining stability, and ensuring spare access to common domains … and preserve the free and open international system. ” 20

Concept of a Free and Open Indo-Pacific

On October 18, 2017, in a lecture described as seeking to establish a foundation for U.S.-India relations over the future century, 21 then-Secretary of State Rex Tillerson stressed the importance of the United States ‘ developing a strategic partnership with India by stating that, “ The Trump presidency is determined to dramatically deepen ways … to further this partnership. ” Tillerson pointed to the annual Malabar naval exercises and growing bilateral defense ties before observe, “ The United States and India are increasingly ball-shaped partners with growing strategic overlap …. The emerging Delhi-Washington strategic partnership stands upon a shared commitment upholding the predominate of law, freedom of seafaring, universal values, and loose barter. ” In discussing developing ties with India, Tillerson described China ‘s get up as
at times undermining the international, rules-based order even as countries like India function within a model that protects other nations ‘ sovereignty. China ‘s provocative actions in the South China Sea directly challenge the international law and norms that the United States and India both stand for. The United States seeks constructive relations with China, but we will not shrink from China ‘s challenges to the rules-based order and where China subverts the sovereignty of neighboring countries and disadvantages the U.S. and our friends. In this period of uncertainty and slightly angst, India needs a dependable collaborator on the world stage. I want to make clear : with our shared values and vision for ball-shaped stability, peace, and prosperity, the United States is that collaborator. 22

design 1. The indian Ocean and Littoral Regions

Former Secretary Tillerson besides raised the publish of “ predaceous economics ” and the relate want to counter China ‘s financing mechanisms by providing alternative finance to states. 23 India lauded Tillerson ‘s remarks while China was more critical. 24
Tillerson ‘s affirmation of the strategic partnership between the United States and India builds on bilateral developments of the past several years, over diverse U.S. administrations. The U.S.-India Joint Strategic Vision for the Asia-Pacific and the indian Ocean Region of 2015, released under President Barack Obama, affirmed a growing partnership between the two countries :
As the leaders of the world ‘s two largest democracies that bridge the Asia-Pacific and amerind Ocean region and reflecting our agreement that a closer partnership between the United States and India is indispensable to promoting peace, prosperity and stability in those regions, we have agreed on a joint Strategic Vision for the region. 25
bilateral cooperation is besides taking on a more practical view. For exemplar, in January 2017 the United States and India were reportedly “ jointly tracking chinese naval movements in the amerind Ocean. ” 26
The Trump Administration has called for an “ America First Foreign Policy ” and emphasized the need for “ Making Our Military Strong Again. ” The Administration has highlighted that “ Our navy has shrunk from more than 500 ships in 1991 to 275 in 2016. Our Air Force is roughly one third base smaller than in 1991. ” 27 An sympathize of strategic dynamics between India and China may help inform congressional decisionmakers as they make military procurement decisions related to the Administration ‘s policies and U.S. interests. To this end, Congress can help the Administration to define more distinctly what U.S. interests, objectives, and scheme are relative to India and China in an indian Ocean context .
Some Members of Congress have observed the increasing importance of the Indo-Pacific. H.R. 2621, “ Strengthening Security in the Indo-Asia-Pacific Act, ” introduced in May 2017 and referred to the subcommittee on Asia and the Pacific in June 2017, is one model. It would declare that
It is the common sense of Congress that ( 1 ) the security, stability, and prosperity of the Indo-Asia-Pacific region is vital to the national interests of the United States ; ( 2 ) the United States should maintain a military capability in the region that is able to project ability, dissuade acts of aggression, and react, if necessity, to regional threats .
The proposed legislation besides states : “ Continued United States betrothal in the Indo-Asia-Pacific region is cardinal to maintaining security and stability in the region, and the United States should expand and optimize cooperative relationships with and among allies and partners in the region. ” 28
congressional sake in the region was besides demonstrated by the House Armed Services Committee ‘s February 14, 2018, hearing on “ The military position and Security Challenges in the Indo-Asia-Pacific region. ” admiral Harry Harris, Commander, U.S. Pacific Command, testified that “ The U.S. has a survive national interest in the Indo-Pacific, ” adding, “ To be numb, the constancy of the Indo-Pacific matters to America. And the region needs a strong America, fair as America needs a vibrant, thriving Indo-Pacific that remains both politically and economically complimentary. ” During the hearing, Harris noted that the current naval modernization program of the People ‘s Liberation Army Navy ( PLA Navy ) has China on track to surpass Russia and become the world ‘s moment largest dark blue by 2020. 29
How U.S. policymakers view China-India competition in the IOR will in region be shaped by U.S. perspectives on China ‘s rise, which one source has described as falling into one of three wide perspectives :

• China’s rise is a direct threat to U.S. national interests. Beijing seeks to weaken the U.S. alliance system in the Asia Pacific.
• China has no strategic plan to supplant the United States in the region. Beijing’s assertiveness arises from insecurity and opportunism as a consequence of the perceived U.S. threat.
• It is too early to know China’s endgame objectives. Nevertheless, the United States needs to prepare for all eventualities.31

erstwhile Principal Deputy Assistant Secretary of Defense for Asian and Pacific Affairs Kelly Magsamen described U.S.-China contest as the United States ‘ most consequential challenge and India as the United States ‘ biggest strategic opportunity during an April 2017 Senate Armed Services Committee hearing on Policy and Strategy in the Asia-Pacific. 32 many analysts and policymakers increasingly view China as a rising rival seeking to challenge the West and the existing rules-based order. Within this context, many U.S. strategic analysts view India ‘s rise as a positive development for economic and strategic reasons. One observer states
only a solid confident India can take a more big diplomatic and, if necessity, military role in the world. A firm India can help moderate China ‘s more extreme external behavior, for exercise, by pushing back on China ‘s impingement into the indian Ocean and over the two countries ‘ Himalayan margin. 33

Growing U.S. Energy Independence

The United States energy dynamic has been basically altered by new U.S. domestic sources of energy derived from newfangled extractive technologies such as hydraulic fracture or “ fracking. ” As a result, the United States surpassed Russia and Saudi Arabia to become the earth ‘s largest department of energy producer in 2013. The United States ‘ reliance on imported petroleum peaked in 2005 at 60 % of provision. 34 Natural gas production in the United States is projected by some analysts to grow by 6 % a class from 2017 to 2020. 35 In 2016, U.S. net imports of petroleum equaled 25 % of U.S. petroleum consumption. “ This share was up slightly from 24 % in 2015, which was the lowest level since 1970. ” 36
Despite growing U.S. energy independence, the IOR may remain of key strategic significance to the United States. While the United States is now well less dependent on imported energy than in the past, it will probably import energy for years to come. Some assert that “ the strategic arguments that rationalized the Carter Doctrine ( see below ) remain valid today, ” flush as the Soviet Union is no long. 37 many U.S. friends and allies, arsenic well as China, trust on department of energy and trade that transits the indian Ocean .
In 2013 testimony before the House Energy and Commerce Committee ‘s Subcommittee on Energy and Power Daniel Yergin, generator of The Quest : Energy, Security and the Remaking of the Modern World, observed that despite the rapid increases in U.S. energy production the United States would remain an department of energy importer for some time even as the Western Hemisphere and North America are headed towards energy autonomy. 38 A February 2018 projection had the United States becoming a net energy exporter by 2022. That said, it is besides expected that the United States will continue to import 6.5 million to 8 million barrels of blunt oil per day through 2050. 39
The United States ‘ geostrategic focus on the Persian Gulf and IOR can be traced to the Carter Doctrine articulated by President Jimmy Carter in his 1980 State of the Union Address. This reaction to the 1979 soviet invasion of Afghanistan stated, “ an attempt by any away force to gain control of the Persian Gulf region will be regarded as an rape on the vital interests of the United States. ” The samara aim of the Doctrine was to warn the Soviets away from any plans to seek to control the energy resources of the Persian Gulf region and thereby maintain regional stability and U.S. access to the region ‘s energy resources. 40 During the 1970s, the United States experienced energy shortages as the resultant role of add restrictions imposed by the Organization of the Petroleum Exporting Countries ( OPEC ). This highlighted U.S. vulnerability created by dependence on external sources of energy and, as a result, the strategic necessitate to secure these resources. As noted above, key U.S. allies such as Japan and South Korea remain to a large degree dependent on Persian Gulf department of energy. 41

The “Quad” Group

The Quad has been defined as “ a unleash geostrategic alignment of states concerned with China ‘s electric potential challenge to their interests. ” 42 As such, some observers view it as one of the key strategic responses to China ‘s rise in the Indo-Pacific. The Quad was first convened on the sidelines of the ASEAN Regional Forum in May 2007. Following this, Australia ‘s then-Prime Minister Kevin Rudd reconsidered Australia ‘s commitment to the Quad, leading to a ten-year hiatus of australian government concern in engagement. 43 Australia, India, Japan, and the United States held senior official consultations on the Indo-Pacific in November 2017 in Manila. 44 India ‘s motivation for participation in efforts to revive the Quadrilateral group with the United States, Japan, and Australia appears to stem, at least in part, from the perception of a need for increase coordination on nautical security issues in the Indo-Pacific. 45
The Quad raises the character of values, deoxyadenosine monophosphate well as interests, in regional security groups. In October 2017, U.S. Acting Assistant Secretary for South and Central Asian Affairs Alice Wells stated, “ I think the idea is how bash we bring together countries that share these same values to reinforce these values in the global computer architecture. ” Wells went on to describe the Quad as “ providing an alternative to countries in the region who are seeking needed investment in their infrastructure ” so that they have “ alternatives that do n’t include marauding finance or unsustainable debt. ” 46 Former Indian Secretary Anil Wadhwa reportedly believes reviving the four-way security negotiation is a necessity separate of managing China. 47 In 2018, United States Pacific Commander Admiral Harris stated at a meet in Delhi, India, that China is a “ disruptive transitional military unit in the Indo-Pacific ” and that “ We must be uncoerced to take the rugged decisions to ensure the Indo-Pacific region and the indian Ocean remain free, overt and comfortable … .This requires like-minded nations to develop capacities, leverage each other ‘s capabilities. ” 48 other observers are less certain of the efficacy of such a Quadrilateral group. 49

China-India Strategic Rivalry in Indian Ocean Region

Overview

China ‘s economic and military power has been growing significantly and China ‘s military modernization efforts have greatly augmented China ‘s capability. China ‘s growing naval capability, including “ capabilities against submarines—its quickly maturing capabilities in fields such as anti-ship missiles, modern surface combatants, submarines operations and longer roll deployments, ” has significant implications for India. 50 For some time, the United States has sought to “ assist the growth of indian might. On the premise that New Delhi and Washington share a common interest in preventing taiwanese hegemony in Asia, the United States has sought to bolster India as a counter weight to China. ” 51
There is a growing sensing among many analysts that China is asserting itself to expand its influence and challenge the West, India, and a rules-based international order, peculiarly in the Indo-Pacific area. One means for doing so is China ‘s use of its geo-economic leverage, which is largely gained through its craft and investment relationships presently being developed through its Belt and Road Initiative ( BRI ). 52 According to one analyst
The heavily promoted One Belt, One Road first step is, in separate, an undertake to develop new markets for China across Eurasia—with infrastructure links across central and confederacy Asia towards Europe and Africa …. China ‘s developing interest in Eurasia has significant strategic consequences. The indian politics is concerned that China is encircling it with infrastructure projects that have clear military implications …. The ultimate ambition of the Belt and Road first step is to turn the eurasian landmass into an economic and strategic region that will rival—and finally surpass—the Euro-Atlantic region. 53
China-India strategic competition in the IOR is shaped by a number factors, including the trace :

• China’s further development of its strategic partnership with Indian rival Pakistan through the China-Pakistan Economic Corridor (CPEC), a key project in China’s BRI;
• China’s strategic, trade, investment and diplomatic advances in Bangladesh, Burma (Myanmar), Nepal, and Sri Lanka;
• China’s expanding naval and military presence in the IOR including the new military base at Djibouti (and potentially another in Pakistan) as well as increased naval presence in the Indian Ocean;54
• India’s decision not to join China’s BRI over sovereignty concerns related to CPEC projects in Kashmir;
• Border disputes including China’s claim to the Indian state of Arunachal Pradesh and China and India’s border standoff at Doklam in Bhutan;55
• China’s opposition to India joining the Nuclear Suppliers Group and to it becoming a permanent member of the United Nations Security Council;
• India’s hosting the Dalai Lama and nearly 100,000 exiled Tibetans;
• India’s Act East Policy including developing relations with Vietnam;
• China’s role in blocking the designation of certain anti-India terrorists at the United Nations;56
• India’s trade deficit with China; and
• the two nations’ starkly different political systems (India is the world’s largest democracy and China is presenting its authoritarian system as a model for the world).

many analysts view the emergence of a Sino-centric asian system as not in India ‘s interest, particularly since India has its own aspirations to bang-up office status in Asia. 58 India has by and large welcomed the United States ‘ strategic overtures under the former Bush and Obama Administrations, but has besides sought to maintain its independence and avoid provoke China. Prime Minister Modi ‘s call for India to become a lead exponent, or a bang-up ability, marks a deepen for India. For some
Whether India becomes a bang-up world power depends on its ability to achieve multidimensional success in terms of improving its economic performance and wider regional consolidation, acquiring effective military capabilities for power protrusion coupled with wise policies for their practice, and sustaining its majority rule successfully by accommodating the diverse ambitions of its peoples. 59
India ‘s aspirations to big baron status are longstanding. several developments—including India ‘s economic growth ( which may soon make India ‘s economy larger than either France ‘s or Britain ‘s ), the modernization of its department of defense pull, Prime Minister Modi ‘s more active foreign policy and conceptualization of India as a “ lead power, ” India ‘s increasing economic mutuality ( with 40 % of its GDP linked to global deal ), an increasingly multi-polar populace, and India ‘s ambitions to assert influence in South Asia and the indian Ocean—contribute to India ‘s growing condition as one of the populace ‘s precede powers. 60 In 2016, India had the universe ‘s fifth largest defense outgo after the U.S., China, Russia and Saudi Arabia. 61
Speaking in 2015, amerind Foreign Secretary S. Jaishankar discussed India ‘s efforts to develop greater connectivity with neighbors and the exploitation of an integrate indian Ocean strategy and the need for India to pursue a
more energetic statesmanship that seeks a larger and deeper footprint in the universe …. The transition in India is an expression of greater assurance. Its foreign policy dimension is to aspire to be a leading office, preferably than equitable a balancing ability. consequently, there is besides a willingness to shoulder greater ball-shaped responsibilities. 62
Tensions related to ongoing amerind frame disputes with China and concern over China ‘s increase presence in its neighborhood vitamin a well as the welcome of a stronger India in global affairs by the United States, contributes to a level of agreement by some in India that the bearing of the United States in the area generally supports indian interests. That said, India ‘s continuing attachment to policies of strategic autonomy and its reluctance to take actions that could antagonize China, have placed limits on its relationship with Washington. 63
While mounting tensions characterized bilateral relations between New Delhi and Beijing for much of 2017, more late events point to efforts to improve bilateral ties between them. India is reportedly seeking a “ reset ” of its relationship with China in the run up to the Prime Minister ‘s inflict to the Shanghai Cooperation Organization ( SCO ) acme in Qingdao in June 2018. 64 In the view of one analyst, “ Both sides seem to be conscious of the need to do something to arrest the decay in their ties. ” 65 Another report states, “ Post-Doklam, India and China are trying to put the pieces together. ” 66 Prime Minister Modi and President Xi met on the sidelines of the BRICS acme in Xiamen in September 2017 and opened a “ forth looking ” turn of date, obviously including border confidence build measures aimed at preventing future edge incidents from occurring. Foreign Secretary S. Jaishankar emphasized that the two leaders had “ laid out a very positive watch of the relationship ” and stated
I think one of the important points which were made in the meet was that peace and tranquillity in the molding areas was a prerequisite for the far development of the bilateral kinship and there should be more effort to in truth enhance and strengthen the common grade of confidence between the two sides. 67
In December 2017, the Foreign Ministers of China, India, and Russia held their fifteenth meet in New Delhi to discuss issues of coarse concern. Among other provisions in their articulation dispatch, they reiterated the importance that they attach to the trilateral chopine, and the Foreign Ministers of Russia and China welcomed the entree of India as a extremity of the SCO in June 2017. 68
indian analyst Raja Mohan has observed that “ India might be quite open to a substantive negotiation with China on the Belt and Road Initiative if Xi is prepared to address New Delhi ‘s concerns on sovereignty and sustainability ” and that “ Delhi has said it is open to consultations with China on the development of regional trans-border infrastructure. ” 69

Some Emerging Implications of China-India Rivalry

Emerging implications of Sino-Indian competition in the IOR include the come :

• This rivalry is no longer mainly limited to the Sino-India border in the Himalayan geographic area, though that area, too, has seen an increase in tensions as demonstrated by the stand-off at Doklam. China-India competition is expanding into the Indian Ocean region and as a result is more maritime-focused than in the past. This has the potential to spur further development of naval assets on both sides that could have implications for U.S. naval procurement and regional posture.
• The geographic expansion of strategic competition between China and India is increasing strategic linkages between East Asia and South Asia and the Indian Ocean, making the broader Indo-Pacific region increasingly linked.
• Both India and China have an expanding vision of their place in the world.
• There may be increasing competition for energy and other resources across the IOR which could have an impact on global markets.
• Increasing competition with China may add impetus in India to further develop its relationship with the United States and other regional partners in the Indo-Pacific, such as Australia, Japan, and others.
• The competition may offer increasing opportunities to Indian Ocean littoral states to play China and India off against each other to extract foreign aid, military assistance, expanded trade and investment, and other advantages.
• The expansion of India’s and China’s naval capabilities and presence and increased engagement with regional states may relatively diminish the strategic posture of the United States in the IOR.

For extra background data bearing on Sino-Indian competition in the IOR, see Appendix B through Appendix F .

Potential Issues for Congress

Sino-Indian strategic competition in the IOR poses a number of electric potential policy and oversight issues for Congress, including the following :

• Administration strategy. Where does the Indo-Pacific lie in the Administration’s list of priorities? Does the Trump Administration have a fully developed, whole-of-government strategy for responding to Sino-Indian rivalry in the IOR, for achieving a free and open Indo-Pacific, and for implementing the Quad concept? If so, what are the elements of that strategy, and what programs and funding in the Administration’s proposed FY2019 budget are intended to begin implementing that strategy? If not, when does the Trump Administration anticipate completing its development of such a strategy? Should Congress require the Trump Administration to submit a report or reports to Congress on the development and implementation of its strategy for responding to Sino-Indian rivalry in the IOR?
• Economic architecture. Is the evolving strategy towards the Indo-Pacific overly reliant on military tools following the United States’ withdrawal from the Trans-Pacific Partnership (TPP)? Should the Trump Administration seek to further develop or engage with an economic architecture for the Indo-Pacific that could promote peace and stability and enhance U.S. interests through enhanced economic interdependencies between regional states including China?
• State Department staffing. Numerous senior State Department positions, including positions relating to Asia, are currently unfilled due to nominees for those positions not having been named or confirmed, or to resignations of career State Department staff. What impact, if any, does the current staffing situation at the State Department have on the U.S. ability to develop and implement a whole-of-government strategy for responding to Sino-Asia rivalry in the IOR?
• Time and attention devoted to issue. Given the need for the United States to monitor and respond to other regions, is the Trump Administration devoting adequate time and resources to tracking and responding to developments in the IOR, including Sino-Indian rivalry in the IOR?
• U.S. relations with other countries. What implications does Sino-Indian rivalry in the IOR have for U.S. relations with India, China, and other countries in the IOR, such as Pakistan, Sri Lanka, Australia, and countries in Southeast Asia?
• U.S. defense programs and spending levels. What implications does Sino-Indian rivalry in the IOR have for U.S. defense programs and spending levels? How, for example, might it affect requirements for maintaining forward-deployed U.S. military forces in the region, or for modernizing U.S. military forces, particularly naval and air forces? To what degree can or should the United States rely on Indian military forces (or the military forces of other U.S. allies or partner countries) to counter China’s military presence in the IOR?
• U.S. arms sales. What implications does Sino-Indian rivalry in the IOR have for U.S. arms sales to India or other countries in the region? In light of Sino-Indian rivalry in the IOR, what kinds of arms should the United States sell to India, in what quantities, and on what schedule?
• U.S. foreign assistance. What implications does Sino-Indian rivalry in the IOR have for the scale or allocation of U.S. foreign assistance funding to the region? Is the IOR receiving too large a share, too little a share, or about the right share of total U.S. foreign assistance funding? Is the allocation of U.S. foreign assistance funding to individual countries in the region appropriate, or should it be changed in some way?
• Trade policy. What implications, if any, does Sino-Indian rivalry in the IOR have for U.S. trade policy? For example, does Sino-Indian rivalry in the IOR have any implications for whether the United States should pursue bilateral trade agreements as opposed to regional or multilateral trade agreements?
• Energy policy. What implications, if any, does Sino-Indian rivalry in the IOR have for U.S. energy policy? For example, what impact might it have on the role that Persian Gulf oil supplies have in the formulation of U.S. foreign and defense policy?
• Congressional organization and staffing. What implications, if any, does Sino-Indian rivalry in the IOR have for congressional organization and staffing? For example, are congressional subcommittees optimally organized and staffed (in terms of both number and experience levels of staffers) for addressing the issue of Sino-Indian rivalry in the IOR and its potential implications for the United States?

Appendix A. Geopolitical and Geoeconomic Framework
Geopolitics, and its relate concept of geoeconomics, is a conceptual framework that may assist congressional decisionmakers as they grapple with policy questions related to China-India competition in the IOR, peculiarly related to the strategic considerations behind China ‘s Belt and Road Initiative ( BRI ). 70
While Beijing is selling the promise of economic growth throughout the area, its chief stress is on the benefits that it hopes BRI will bring to China, not just in the region of economics but most importantly in the geopolitical sphere. More full-bodied engagement of the entire eurasian continent through BRI is intended to enable China to better use its growing economic punch to achieve its ultimate political aims. BRI is frankincense not merely a tilt of vamp construction projects but a grand piano scheme that serves China ‘s vision for itself as the uncontested leading world power in the region. 71
There are other conceptual frameworks, such as the security dilemma, which could besides be applied. 72
Geopolitics
geopolitical competition on the indian Subcontinent was captured by the concept of the “ Great Game, ” popularly articulated by Rudyard Kipling in his novel Kim. This great Game was a rival for influence between the british East India Company in colonial India and Czarist Russia. Some analysts view today ‘s conditions as an evolving fresh Great Game in the Indo-Pacific, focused primarily on deal, investment and infrastructure development, between China, on the one hand, and India, the United States, Japan, and Australia on the other. 73 While the rival is primarily economic at give, this new Great Game is increasingly developing strategic and military aspects. 74
current american english geopolitical think is to a large extent built on a tradition formed through a debate between United States Navy Captain Alfred Thayer Mahan, who wrote the seminal 1890 work The Influence of Sea Power on History, 75 which argued that control of the seas and littorals determines strategic decisions on down, and Britain ‘s Halford J. MacKinder who, in his 1904 exercise The Geographical Pivot of History, argued alternatively that the eurasian heartland was central to strategic control. 76 In Mahan ‘s scene, the manipulate of sea lanes of communication and nautical choke points with the selective expulsion of exponent inland was identify to a winning strategy. 77 MacKinder ‘s focus lay in the eurasian inner preferably than with maritime theaters of operation. This argue was expanded during and after World War II by Nicholas Spykman, who argued in America ‘s Strategy in World Politics and The Geography of the Peace, that the “ rimland ” region of Eurasia, stretching in a crescent from Europe through the indian Ocean to East Asia “ had a tendency to unite in the hands of one state and that the state that controlled it would likely dominate the worldly concern. ” 78 such discussions of heartland, rimland, and august geopolitics are once again part of strategic comment about Eurasia and the Indo-Pacific area and growing great power competition .
In his prepare statement for the Senate Armed Services Committee ‘s January 2018 hearing on Global Challenges and U.S. National Security, former Secretary of State Henry Kissinger spoke of the “ systemic failure of worldly concern order ” and the vogue toward the “ external system ‘s erosion. ” Kissinger pointed to negative trends with respect to sovereignty, geoeconomic coercion, and territorial acquisition by force and stated “ traditional patterns of big office competition are returning. ” Kissinger besides observed, “ In a populace of admit competition and competition, a balance of baron is necessary but not sufficient. The fundamental interrogate is whether a renewed competition between major powers can be kept from culminating in conflict. ” 79
House Foreign Affairs Subcommittee on Asia and the Pacific Chairman Representative Ted Yoho stated “ For a hanker clock, the world ‘s center of gravity has been shifting to the East, and the indian Ocean region is a major part of this vogue. ” 80 When he chaired the subcommittee, Representative Steve Chabot stated :
As the center of the indian Ocean Rim-land that extends from the Middle East to India and south to Indonesia, South Asia is a subregion in need of strategic stability. The view of a ability struggle for energy and security, the indian Ocean nautical area holds the populace ‘s most important shipping and trade routes … it is in the recognition of this area ‘s importance that the competition between China and India is interlocked with a competition between the United States and China. 81
A geopolitical debate inspired by Mahan, Mackinder, and Spykman can besides be discerned in current indian strategic debates over how best to deter any electric potential menace by China to India ‘s frame. A “ continentalist ” school of idea has placed relatively more emphasis on the indigence to develop a batch strike corps to defend India ‘s Himalayan boundary line from a reprise of the black [ from the indian perspective ] 1962 molding war, while others believe developing India ‘s naval capabilities to be able to interdict China ‘s transport in the amerind Ocean is the best way to deter China ‘s aggression. 82
early indian Foreign Secretary Shayam Saran has besides described how geopolitical concepts infuse China ‘s strategic thought today :
The ideas of McKinder and Mahan are ampere much discernible in chinese strategic thinking today as are the concepts derived from the writings of the ancient chinese strategist Sun Zi. The One Belt One Road project is McKinder and Mahan in equal quantify ; the Belt designed to secure Eurasia which McKinder called the World Island, dominance over which would grant global hegemony ; and the Road which straddles the oceans, which would enable maritime ascendancy—the indispensable component in pursuing hegemony according to Mahan. 83
America ‘s strategic vision toward Asia has, until recently, by and large conceptualized Asia as the Asia Pacific, which by and large includes East Asia, Southeast Asia and the Southwest Pacific and a separate South Asia. many analysts and officials are today referring to the broader region as the Indo-Pacific or Indo-Asia-Pacific : 84
The way policy makers define and imagine regions can affect, among early things, the allotment of resources and high degree attention …. therefore, the increasing practice of the term Indo-Pacific carries implications for the means countries approach security competition or cooperation in nautical Asia. The idea of an Indo-Pacific area involves recognizing that the growing economic, geopolitical and security connections between the Western Pacific and the amerind Ocean regions are creating a unmarried “ strategic system. ” 85
This see of the Indo-Pacific as an increasingly linked area was reinforced by early Secretary of State Tillerson and Admiral Harris in October 2017. Tillerson highlighted the importance of the IOR and stated, “ The Indo-Pacific … will be the most consequential part of the globe in the twenty-first century. ” admiral Harris stated, “ the indian and Pacific Oceans are the economic lifeblood that links India, Australia, Southeast Asia, Northeast Asia, Oceania and the United States. ” 86
The indian Ocean was besides linked to U.S. security interests across Asia by early President Obama in his January 2012 strategic steering document Sustaining U.S. leadership : Priorities for the twenty-first Century which stated : “ U.S. economic and security interests are inextricably linked to developments in the arc extending from the Western Pacific and East Asia into the amerind Ocean area and South Asia, creating a mix of evolving challenges and opportunities. ” 87
The Obama Administration focused attention on the strategic importance of the Indo-Pacific to the United States through its rebalance to Asia strategy. While placing renewed emphasis on Asia, the strategy besides linked United States interests in East Asia with “ newly emphasized U.S. concerns in Southeast Asia, South Asia, the indian Ocean, and the Pacific Ocean, creating a region wide first step of extraordinary breadth. ” 88 The Indo-Pacific is besides a geostrategic concept that has gained acceptance in versatile countries in the region. 89
In the November 2011 Foreign Policy article “ America ‘s Pacific Century, ” in which she articulated the concept of a United States “ pivot ” to Asia, former Secretary of State Hillary Clinton described strategic dynamics in the region : “ The Asia-Pacific has become a key driver of global politics. Stretching from the amerind subcontinent to the western shores of the Americas, the region spans two oceans – the Pacific and the amerind – that are increasingly linked by shipping and strategy. ” 90 In this direction, former Secretary Clinton extended the geostrategic definition of the Asia Pacific to include the indian Ocean Region and South Asia. 91
Geoeconomics
Another lens that can aid congressional decisiveness makers as they grapple with policy decisions related to Indo-Pacific strategic dynamics, which is peculiarly relevant when looking at China ‘s Belt and Road Initiative, is the concept of geoeconomics. One definition of geoeconomics is “ the use of economic instruments to promote and defend national interests, and to produce beneficial geopolitical results ; and the effects of other nations ‘ economic actions on a state ‘s geopolitical goals. ” 92
The United States has used geoeconomics to further its geopolitical interests. Past examples of the United States ‘ habit of geoeconomics include the Louisiana Purchase of 1803, the Lend Lease Policy of 1941, the 1944 Bretton Woods Agreement, the 1947 Marshall Plan, and the Suez Crisis of 1956. 93 China has more recently besides used the tools of geoeconomics to promote its interests in numerous ways. 94
One exemplar of China ‘s use of geoeconomic power was its 2010 decision to prevent the export of rare earth elements ( REE ), which are used in the production of products such as hybrid cars, wind instrument turbines, and guided missiles, to Japan. China ‘s decision to halt shipments of REEs to Japan was apparently aimed at compelling Japan to release the captain of a fishing vessel whom it detained. China mines 93 % of the world ‘s rare earth minerals. 95

digit A-1. Key Indo-Pacific Energy and Trade Routes

Source: Graphic created by CRS. Map and data generated by [ author name scrubbed ] using data from the South China Morning Post ( 2017 ) ; the Department of State ( 2015 ) ; Esri ( 2016 ) ; and DeLorme ( 2016 ) .

In November 2017 testimony before the House Foreign Affairs, Subcommittee on Asia and the Pacific, Jonathan Stivers, a Commissioner at the U.S.-China Economic and Security Review Commission, stated
China is marshalling the full resources of its state and secret sector in an undertake to shape the Asia-Pacific region in a means that places China at the center of economic and security natural process in the region. I believe that the U.S. needs a newly strong, coordinated economic and development policy for Asia in order to efficaciously compete with China ‘s growing investing and influence in the Asia-Pacific region. 96
In his testimony, Stivers emphasized development finance, foreign aid, and coordination with allies and partners, adenine well as trade, as winder components of a fresh strategy .
Appendix B. Geography, Historical Background and Border Tensions
Strategic Choke Points
The Atlantic and the Pacific Oceans are relatively open oceans when compared with the indian Ocean, which in many ways is defined by its strategic suffocate points. The U.S. Energy Information Administration ( EIA ) has identified seven key straits that act as choke points for the world ‘s primary nautical routes. Of these, the Straits of Hormuz, Malacca, and the Bab el-Mandeb are in the Indo-Pacific area. The EIA has pointed out that even impermanent blockage of a die point “ can lead to substantial increases in sum energy costs. ” It goes on to express that “ chokepoints leave anoint tankers vulnerable to theft from pirates, terrorist attacks, and political unrest in the mannequin of wars or hostilities. ” 97
The Strait of Hormuz is the earth ‘s most important oil transit choke detail with approximately 35 % of all seaborne oil sink through the strait. More than 85 % of this flow of energy is for Asia. The pass is deep and is 21 miles wide at its narrowest point. 98
The Strait of Malacca is the key choke target in Asia. Singapore, Malaysia, and Indonesia are located along the strait. southern Thailand and India ‘s Andaman and Nicobar Islands are located at the northerly entrance to the pass. The contest South China Sea is located to the north east of the pass. Piracy is a threat to ship in the area. An estimate 41 % of pirate attacks between 1995 and 2013 took home in Southeast Asia while 28 % took place in the west indian Ocean. 99 approximately 120,000 vessels transit the Malacca strait each year. 100 The energy-hungry economies of northeast Asia depend on energy flows that pass through the strait. Any conclusion of the strait would force dearly-won diversions to alternative routes through the Sunda and Lombok Straits in the indonesian archipelago. 101
The Bab el-Mandeb Strait and the Suez Canal are located on either end of the Red Sea. The Bab el-Mandeb is located between Djibouti and Yemen. Houthi rebels have attacked embark in or near the pass. 102
The indian Ocean is the worlds ‘ third-largest ocean after the Pacific and Atlantic Oceans and has extensive hydrocarbon reserves offshore Saudi Arabia, Iran, India, and Western Australia. This economic importance is in addition to providing a major energy and trade sea route linking the Middle East, Persian Gulf, Europe, Asia, and the Americas. 103 Offshore vegetable oil and gas exploration and origin activeness is thought to potentially increase the strategic importance of the east coast of Africa, the Bay of Bengal, the Timor Sea, and Australia ‘s northwest coast. 104 The United States ‘ fight against Al Qaeda, the Islamic State, and its related military engagement in Iraq and Afghanistan, has besides increased the strategic importance of the region for the United States .
early asian and european Presence in the IOR
The amerind Ocean has been a nautical environment of strategic importance for centuries. Throughout this history fleets have been dispatched and bases established, by both Asian and european powers, to secure valuable barter routes and ports throughout the Indo-Pacific region. The south indian Chola dynasty had extensive trade linkages with Southeast Asia in the ninth century and Imperial China sent fleets under the command of Zheng He into the indian Ocean in the early fifteenth century. 105
european colonial powers ‘ influence began to extend across the IOR begin in 1498 when Vasco district attorney Gama reached India. The Portuguese established a series of enclaves and trade posts around both the littoral of the indian Ocean and the westerly Pacific in places like Hormuz, Goa, Malacca, Timor-Leste, and Macao. The Dutch East India Company, founded in 1602, centered in Batavia, or award day Jakarta, established its control over much of Indonesia and the lucrative spice trade and had a presence in places such as the Dutch Cape Colony and Ceylon .
The influence of earlier powers in the Indo-Pacific was followed by the french, british, and japanese. Although the french lost their holdings on the indian Subcontinent to the british East India Company following Robert Clive ‘s victory at Plessey in 1757, they continue to have a bearing in the amerind Ocean in places such as Djibouti, Abu Dhabi, and Reunion. 106 The british Raj in India was the “ Jewel in the Crown ” of a rightfully ball-shaped empire that spanned the Indo-Pacific with samara british bases across the indian Ocean littoral. japanese might engulfed the western Pacific during World War II and extended concisely into the northeastern quadrant of the indian Ocean following the fall of Singapore in 1942. Beginning in the 1960s, independence movements across the Indo-Pacific led to the end of the colonial era and began the switch of political, economic, and military power from colonial Europe to the newly autonomous countries .
Land Border Tensions
While nautical security dynamics between China and India are evolving quickly, the two nations continue their long-standing challenge over the contested Himalayan domain boundary line. China and India fought a month-long bound war in deep 1962. The war was a demeaning defeat for India and left indian leaders with a deep feel of betrayal by China. It followed a 1959 Tibetan uprising against Chinese Communist Party rule that sent Tibet ‘s spiritual drawing card, the 14th Dalai Lama, into exile in India, strengthening China ‘s percept of a threat by India to its rule in Tibet. Following the margin war, China retained control over an extensive area in the westerly sector of the border, known as Aksai Chin, which previously was amerind territory. China besides claims big swaths of district in the bound ‘s easterly sector in Arunachal Pradesh, and does not recognize the 1914 McMahon Line that British and Tibetan authorities recognized as the border between India and Tibet, and that a newly independent India recognized in 1947 .
Over clock time, the buffer states that historically helped separate India and China have come under pressure as China ‘s and India ‘s power has expanded. In geopolitical terms Bhutan, like Nepal, can be viewed as a buffer zone express between India and China. India and Bhutan signed a Treaty of Friendship in 1949 and Bhutan relies on India to a large degree for its defense mechanism. Tibet, over which China ‘s Communist Party gained manipulate in 1951, and Sikkim, annexed by India in 1975, besides acted as buffers between the two great powers of Asia. 107
More recently, boundary line tensions between China and India escalated in mid-2017 as China extended an unpaved road on the Doklam Plateau on the disputed border between China and Bhutan, high in the Himalayas. China ‘s road-building activeness was first revealed by a Royal Bhutan Army Patrol that sought to dissuade China from continuing. indian military personnel subsequently moved to the border area. Doklam is located in territory disputed by Bhutan and China to the north of the Siliguri Corridor, besides known as the “ chicken ‘s neck, ” that links central India with its seven northeastern states. It is approximately 20 miles wide at its narrowest part. China ‘s master of the corridor would isolate 45 million Indians in an area the size of the United Kingdom .
Bhutan does not have diplomatic relations with China but does have a “ special ” relationship with India based on a 1949 Treaty of Friendship, which gives India a guide influence over Bhutan ‘s defense and extraneous affairs. The treaty was revised in 2007 to give Bhutan a greater level of autonomy. With a population of less than 1 million, Bhutan is dwarfed by India ( 1.3 billion ) and China ( 1.3 billion ) .
The Doklam surround tensions mounted while Prime Minister Modi traveled to Washington, DC, to meet with President Trump. China may have been motivated to signal displeasure over developing ties between India and the United States. Another rendition of border tensions at Doklam is that the move was depart of an campaign by China to open diplomatic relations with Bhutan as contribution of an effort to increase its influence there. 108 Another horizon speculates that Doklam might be China ‘s way of signaling its displeasure over India ‘s decision not to join the BRI. 109
While India and China agreed to deescalate their bound repulsion at Doklam in late August 2017, it appears that neither side is inclined to back down over the exit. India is reportedly raising 15 newly battalions to bolster defenses on the Pakistan and China borders while China is reportedly upgrade air defense capabilities in its western Theater Command which is responsible for batch war at the surround with India. 110
In 2006, China expanded previous claims to include all of Arunachal Pradesh in India ‘s northeasterly. 111 China protested both when Prime Minister Modi visited Tawang in Arunachal Pradesh in 2015 and when the U.S. Ambassador to India Richard Verma visited Tawang in 2016. China besides protested the Dalai Lama ‘s April 2017 inflict to Tawang. While China claims 90,000 feather kilometers of Arunachal Pradesh, the area around Tawang is of finical refer to China because of its religious and cultural connections to Tibet and besides because of the strategic Bum La pass north of Tawang. China used this die to invade India during the 1962 war. The 6th Dalai Lama was besides from Tawang and the Tawang Monastary is an important center of Tibetan Buddhism. 112 Differences between India and China on how to resolve the surround appear to be growing quite than diminishing with time. It now appears that China is pressing its border demands in a more across-the-board means than previously. 113

design B-1. China-India Border Region

Source: Graphic created by CRS. Map and information generated by [ writer appoint scrubbed ] using data from the Economist ( 2017 ) ; the Department of State ( 2015 ) ; Esri ( 2016 ) ; and DeLorme ( 2016 ), parallelism with Department of State ( 2017 ) .

Appendix C. China ‘s Strategic Posture in the IOR
Energy and Trade
The rise of China has led it to depend on sea routes that cross the indian Ocean for imported department of energy and trade. much of China ‘s department of energy must be imported by ocean. ( See below. ) This creates a strategic vulnerability for China :
For China, the chief refer is securing extensive sea lines of communication ( SLOC ) that traverse the amerind Ocean and western Pacific, linking the irani Gulf unrefined exporters and China ‘s independent oil terminals and coastal refineries. Beijing is in the midst of respective ambitious projects to expand its naval power projection capabilities well beyond its littoral …. away from the clear worry to India and other asian states, the development of China ‘s nautical power—or what China has labeled its “ far sea defensive structure ” —is besides of increasing concern to the U.S. 114
China ‘s vulnerability to the electric potential interdict of its trade and energy supplies at the Strait of Malacca has led it to seek to develop alternate trade and energy routes. For case, it is developing overland energy routes linking the Xinjiang Uyghur Autonomous Region in its west with the Arabian Sea Port of Gwadar in Pakistan. It has besides sought to lessen its strategic vulnerability at the Strait of Malacca by exploring alternative routes from the indian Ocean overland through Burma to China ‘s Province of Yunnan. ( These projects, and other port and infrastructure investments in the IOR, are discussed in more detail in the area sections below. ) While outside the geographic focus of this reputation, China is besides developing and exploring routes through Central Asia, 115 Russia, 116 and the Arctic Sea. 117
China ‘s energy requirement and oil imports have grown dramatically in holocene years. China became the world ‘s largest department of energy consumer in 2011 and is the world ‘s second largest petroleum consumer after the United States. China ‘s total primary energy pulmonary tuberculosis is 66 % ember, 20 % petroleum and other liquids, 8 % hydroelectric, 5 % natural boast, 1 % renewables, and 1 % nuclear. China ‘s vegetable oil import addiction has grown from 30 % in 2000 to 57 % in 2014 and it has diversified its sources of petroleum imports as its need has grown. China is besides the global ‘s top producer, consumer and importer of coal, accounting for approximately one-half of world char consumption. China is seeking to increase imports of natural gas through pipelines and LNG through oversea imports. Natural gas imports met 32 % of necessitate in 2013. 118 China ‘s dependence on imported energy, much of which must transit the Indiana Ocean and the Strait of Malacca, is a key strategic vulnerability for China and is a key driver for China ‘s increasing battle with the IOR .
Over the longer term, some observers anticipate the far development of overland energy linkages, particularly with Russia and/or Iran, as a mean of importantly lessening China ‘s strategic vulnerability to interdict of sea-borne energy routes. According to one analyst, “ once the new overland pipelines for bootleg gold are fully operational, the United States no long will have the ability to sever Beijing ‘s department of energy line of life. And China may no long be deterred from resorting to military action in support of its proclaimed core interests. ” 119
table C-1. China Investment and Construction Activity

Source: The datum is drawn from AEI, “ China Global Investment Tracker, ” hypertext transfer protocol : //www.aei.org .
Notes: Data on levels of China ‘s investment and construction activeness varies by reference .
China ‘s Belt and Road Initiative 120
China ‘s extraneous policy mentality is being shaped in new ways by General Secretary of the Communist Party of China Xi Jinping who stated at the 19th party conference in October 2017 that, “ socialism with chinese characteristics has crossed the threshold into a fresh era. It offers a new option for other countries and nations who want to speed up their development while preserving their independence. ” This “ new choice ” under Xi is viewed by many as “ increasingly autocratic and illiberal. ” As a result, China has become an ideological rival, ampere well as a geopolitical equal, to those states, such as India and the United States, that value big democratic values. 121
China ‘s One Belt, One Road, or Belt and Road Initiative, beginning articulated by President Xi in 2013, is a conceptual cock that has given policy coherence to a across-the-board range of China ‘s craft and investment activities across the Indo-Pacific and beyond. The BRI concept builds on China ‘s historical trade links to the West through the van routes of the ancient Silk Road. The BRI has been described as being
a comprehensive vision for regional, political, economic and fiscal integration under Beijing ‘s helm … BRI is the chinese leadership ‘s answer to China ‘s most crusade economic and strategic challenges … it ‘s about securing China ‘s continental periphery, it ‘s about energy security, a well as broader political influence and strategic expansion. The objective is an matchless chinese influence over a key region of the world. 122
China ‘s Belt and Road Initiative is, according to the U.S.-China Economic and Security Review Commission ‘s Jonathan Stivers, aimed at achieving a number of key objectives for China including the follow :

• relieving China’s domestic overcapacity in industrial and construction sectors;
• expanding China’s access to strategically important maritime and overland trade routes;
• enhancing China’s energy security strategy;
• gaining influence and leverage over other countries and countering U.S. influence; and
• placing China at the center of future economic and trade activity in Asia.123

The BRI is besides serving to act as a catalyst to deepen linkages and build consolidation between the indian and Pacific Ocean littoral regions. 124 While some view China ‘s Belt and Road Initiative largely as a vehicle for deal and investing, others see its importance as besides, or more importantly, strategic in nature. From this perspective
the expanding scale of Beijing ‘s efforts suggest that BRI is nothing less than an attempt to reshape the economic, geopolitical, and energy landscape of the eurasian continent and asian maritime environment with China at its kernel. 125
The BRI has six proposed main overland corridors, several of which are key trade and energy routes that connect China with South Asia, Southeast Asia, and the indian Ocean, potentially having a significant impact on China ‘s relationship with India. The six proposed corridors are

• China-Mongolia-Russia Economic Corridor;
• New Eurasian Land Bridge Economic Corridor;
• China-Central Asia-West Asia Economic Corridor;
• China Pakistan Economic Corridor (CPEC);
• Bangladesh-China-India-Myanmar Economic (BCIM) Corridor; and
• China-Indochina Peninsula Economic Corridor.

In a South Asia/Indian Ocean context, the two most significant of these overland routes are CPEC and BCIM. The BCIM corridor may not include India because “ advance has been slow, particularly because of India ‘s misgivings about China ‘s real intentions. ” 126 As a leave, the BCIM corridor at confront appears to be more focus on infrastructure and investment activity along a road from Kunming to Kyaukphyu. other key maritime silk road routes cross the indian Ocean and link China with the Persian Gulf, Africa, and Europe. These, ampere well as CPEC and the Kunming to Kyaukphu corridor, are discussed in more detail in the nation sections below .
China was reportedly matter to in having India join its BRI and warned India that it risks being isolated by remaining outside. For India, sovereignty issues related to the fact that the BRI crosses Pakistan-occupied Kashmir are a key stumbling parry to engagement. 127 There is besides reportedly a sensing in India that “ the BRI first step is nothing but an undertake by China to unsettle the established regional order and replace it with a China-centric system that would marginalise other major asian powers such as India and Japan. ” 128
China held its first BRI summit in 2017 and has scheduled another in 2019. reportedly, 68 nations and international organizations have signed cooperation agreements with China related to the BRI in 2017, and 29 heads of express attended the inaugural Belt and Road Forum for International Cooperation in May 2017. 129 India ‘s decision not to attend the peak was criticized by some observers in India who viewed the decision as “ the grandest failure of indian foreign policy ” that could “ quarantine [ India ] into brilliant isolation. ” 130
China ‘s Strategy and the indian Ocean
China ‘s influence and presence in the indian Ocean region are spreading. This presence is not limited to trade and investment but now besides includes a military component. While the yard and extent of China ‘s plans to develop its strategic position in the region are unclear, some regional analysts see China ‘s presence as developing faster than previously anticipated .
China is now moving faster than many expected to build a military function in the amerind Ocean. This includes the exploitation of a network of naval and military bases around the indian Ocean littoral, starting with Djibouti ( opened last year ) and a new base probably to be built at or near Gwadar in Pakistan. Further chinese bases are likely in East Africa and possibly in the central/eastern indian Ocean. A network of bases—of varying types and size—will serve maximize China ‘s options in responding to contingencies affecting its interests, including corroborate for anti-piracy operations, noncombatant evacuations, protection of chinese nationals and property, and potentially, interventions into indian Ocean littoral states or other regional countries. It is improbable that China will be in a position to challenge U.S. authority in the indian Ocean for some years to come. But it will be poised to take advantage of strategic opportunities or step into any perceived baron vacuums. 131
China ‘s “ Far Sea Defense ” strategy is an extension of past naval strategy which was more focus on Taiwan and China ‘s coastal regions. The scheme reflects China ‘s emerging power and increased confidence on the world phase and seeks to develop a capability to protect its embark interests which are of critical importance to China ‘s economy. 132 China ‘s Premier Li Keqiang has pointed to the indigence for China to continue to expand its air and naval defense capabilities because “ China ‘s national security system is undergoing deep changes. ” 133 Among other key missions, China ‘s naval modernization is aimed at “ defending China ‘s Sea Lines of Communication ( SLOC ), peculiarly those linking China to the iranian Gulf ” and “ asserting China ‘s condition as a leave regional and major world ability. ” 134 The chinese dark blue deployed in the indian Ocean in 2009 as separate of external anti-piracy operations. 135 such deployments have helped China ‘s dark blue develop its long-range capabilities. China reportedly increased its naval presence in the amerind Ocean from its more typical deployment of seven or eight ships to 14 warships in December 2017. 136
The commission of China ‘s first aircraft carrier wave in September 2012, the 50,000-ton Liaoning, can be viewed as contribution of an ongoing attempt to develop China ‘s baron projection capabilities. 137 China launched its second carrier wave in April 2017. It is expected to have a slenderly larger air wing than the Liaoning and “ represents an significant step in China ‘s developing aircraft carrier wave plan. ” 138 China began building its one-third aircraft carrier in Shanghai in 2017, and it reportedly plans to have four aircraft carrier battlegroups in avail by 2030. 139 The Secretary of Defense ‘s annual Report to Congress : military and Security Developments Involving the People ‘s Republic of China 2017 discusses China ‘s evolving overseas position in the keep up terms .
As China ‘s global footprint and external interests have grown, its military modernization program has become more focused on supporting missions beyond China ‘s periphery, including power projection, sea lane security …. China will probable seek to establish extra military bases in countries with which it has longstanding, friendly relationships. 140
The 2017 report besides stated that
China ‘s nautical vehemence and attention to missions guarding its oversea interests have increasingly propelled the PLA beyond China ‘s borders and its immediate periphery. The design ‘s evolving focus-from “ offshore waters defense ” to a mix of “ offshore waters defense ” and “ army for the liberation of rwanda ocean protection ” —reflects the high command ‘s expanding interest in a wide operational achieve. 141
The U.S.-China Economic and Security Review Commission 2016 Report to Congress examined the impingement of China ‘s rise in South Asia and concluded the succeed :
China ‘s willingness to reshape the economic, geopolitical, and security order to accommodate its interests are of great business as China ‘s global influence grows. This determine has been manifesting most recently with China ‘s “ One Belt, One road ” enterprise aimed at connecting China with big portions of the rest of the world via a across-the-board range of investments and infrastructure projects …. China ‘s emergence as a major musician in South Asia is affecting the geopolitics of the region, and is causing the area ‘s traditional major power, India, to grow increasingly concerned about the prospect of taiwanese blockade. 142
The report besides makes the watch observations :
China ‘s documentation for Pakistan—coupled with taiwanese military transcendence along the disputed China-India land border and the growing chinese naval presence in the indian Ocean—is indicative mood of a chinese scheme to encircle or contain India …. China has been seeking a greater presence and more influence there, chiefly to protect the ocean lines of communication upon which its economy depends …. As both countries [ China and India ] grow their maritime presence and capabilities, the indian Ocean is likely to become an sphere of increasing rival between them. 143
China ‘s expanding naval capabilities and its will to use them to promote China ‘s objectives was demonstrated in the December 2016 deployment of China ‘s beginning aircraft mailman to the South China Sea and to the Taiwan Strait in January 2017. 144 China ranks as the world ‘s third-largest arms exporter and is a key beginning of arms for several indian Ocean countries. between 2012 and 2016, an estimated 60 % of China ‘s arms transfers went to Pakistan, Bangladesh, and Myanmar with a further 22 % going to African states. 145
Appendix D. India ‘s Strategic Posture in the IOR
overview
Through a lot of its history India focused on land office and invasions across its northwest frontier. India ‘s, a well as China ‘s, shift to focus on its nautical security environment in addition to its land borders marks a meaning switch in its geopolitical predilection. The propagation of China ‘s and India ‘s competition into the nautical domain distinctly involves the interests of states across the IOR deoxyadenosine monophosphate well as those of the United States and other states with significant interests in the region. 146
India ‘s size, military might, economic increase, estimated to be 7.3 % -7.5 % between 2018 and 2020, and military position near the key sea lanes running from the Strait of Hormuz to the Strait of Malacca point to India ‘s strategic importance in the emerging geopolitics of the broader Indo-Pacific. 147 A possible transformation of India ‘s external worldview, from previous notions of non-alignment and strategic autonomy to a new vehemence on developing strategic partnerships with the United States, Japan, and others, may facilitate India ‘s increasing function as a major power in South Asia and the Indo-Pacific. India ‘s objective of playing a more active role beyond South Asia and the indian Ocean was demonstrated by External Affairs Minister Sushma Swaraj in 2014, when she called on India to “ Act East. ” 148
popular perceptions besides play a function in the bilateral kinship between India and China. A November 2017 Pew Research poll indicates that Indians are increasingly wellbeing and have a declining see of China. Of those polled, 88 % had a “ favorable view of Narendra Modi ” while 83 % felt “ the current country of the economy is effective, ” and 70 % were “ satisfied with management of area. ” 149 Of those Indians polled by Pew Research in 2017 lone 26 % had a “ golden watch of China. ” This marked a refuse from 31 % in 2016 and 41 % in 2015. ” In the like poll, 49 % of Indians had a “ favorable view of the United States ” as compared with 56 % in 2016 and 70 % in 2015. 150 Pew besides found in an October 2017 poll that 51 % of Indians felt China ‘s growing economy was a bad thing for India while merely 20 % felt it was a adept matter for India ‘s economy. similarly, 56 % of Indians polled by Pew felt that “ China ‘s growing military power is a bad matter ” with alone 16 % viewing it as a good thing for India. furthermore, 65 % percentage of Indians polled in 2017 responded that “ China ‘s baron and influence is a terror. ” 151
Under Prime Minister Modi ‘s leadership, India may be seeking to evolve from its position as the leading power in South Asia to become one of Asia ‘s and the populace ‘s leading powers. This evolution has the likely to transform past, now outdated, external relations paradigms into a newfangled more assertive strategic position for India. According to one observer, Modi ‘s
call for India to become a run world power represents a switch in how the country ‘s top political leadership conceives of its character in international politics. In Modi ‘s sight, a leading power is basically a big power. 152
China ‘s emanation, and its attendant increasingly active voice character in the indian Ocean region, is of concern to some strategic thinkers in New Delhi. Key observers have noted that “ India remains deeply leery of any actions it views angstrom designed to supplant indian influence among its neighbors. ” 153 Former Indian Foreign Secretary Saran has stated that
There is little doubt in my mind that the most significant challenge to India comes from the resurrect of China. There is besides no doubt in my beware that China will seek to narrow India ‘s strategic quad by penetrating India ‘s own neighborhood and this is what we see happening in each of our sub-continental neighbours. Unless India is able to confront this penetration and restore its primacy in its own periphery, it would be ineffective to play the larger game of countervailing taiwanese world power. 154
India has undertaken or participated in a number of initiatives in holocene years that may serve to counter China ‘s expanding presence in South Asia and the broader indian Ocean region. such initiatives include India ‘s Act East policy, its efforts to develop its own deal route to Central Asia through Cha Bahar in Iran, the Asia-Africa Growth Corridor, and the Quadrilateral enterprise with the U.S., Japan and Australia .
The United States has worked with India in an attempt to enhance India, Bangladesh, and Burma ‘s engagement and integration with Southeast Asia and the Asia-Pacific through the Indo-Pacific Economic Corridor ( IPEC ) project. The IPEC besides seeks to promote regional constancy and economic prosperity. 155 It was observed in February 2017 that the invention of the IPEC is “ at a very nascent stage. ” 156
Act East
During the 2014 East Asia Summit, Prime Minister Modi revamped India ‘s “ Look East ” policy—which dated to the early 1990s—to be an “ Act East ” policy, distinctly signaling India ‘s strategic interest in Southeast Asia and the broader Asia-Pacific region. Modi ‘s “ Act East ” policy is driven by both strategic and economic factors. These include

• a strategic interest in countering China’s rising influence in South Asia and the Indian Ocean, and
• an economic interest in promoting Indian exports and developing India’s underdeveloped northeast.

economic interests are leading India to seek to develop overland trade connectivity with Southeast Asia through infrastructure projects linking India with Southeast Asia through Burma. The India-Myanmar-Thailand Trilateral Highway and the Kaladan Multi-Modal Transport project are two key initiatives. 157
Chabahar
India is seeking to develop a new trade route through the iranian port of Chabahar, which is located on Iran ‘s Gulf of Oman slide near Iran ‘s molding with Pakistan and to the east of the Strait of Hormuz. 158 indian Prime Minister Modi signed a transmit corridor deal with Iran in 2016 to provide $ 500 million to develop a port in Chabahar and pledged to invest $ 16 billion in a nearby free-trade zone and in new road and dragoon links from Chabahar to the edge with Afghanistan. The route, which bypasses Pakistan, would probably provide India with better access to Central Asian and Iranian natural gas and thereby provide India with greater energy security. 159 It is reported that a $ 1.6 billion railroad is being built from Chabahar to Zahedan on the Iran/Afghanistan border and that Zahedan has rail linkages with Turkmenistan. 160 India is besides exploring the North-South Transport Corridor ( NSTC ) through the iranian interface of Bandar Abas, located near the Strait of Hormuz, that would improve trade and ecstasy linkages between India, Iran, Russia, the Caucuses, and Central Asia. 161
Asia-Africa Growth Corridor
Prime Minister Modi and japanese Prime Minister Shinzo Abe announced plans for an Asia-Africa Growth Corridor ( AAGC ) in a joint announcement in November 2016. The AAGC is based on four pillars :

• 1. enhancing capacity and skills;
• 2. quality infrastructure and institutional connectivity;
• 3. development and cooperation projects; and
• 4. people-to-people partnership.162

Some media reports view the AAGC as a counter to China ‘s Belt and Road Initiative and “ an attack to create a loose and open Indo-Pacific region by rediscovering ancient sea-routes and creating modern sea corridors that will link the african continent with India and countries in South-Asia and South-East Asia. ” 163 Observers have noted an increasing convergence of India ‘s and Japan ‘s strategic and economic interests in the Indo-Pacific Region and see China ‘s Belt and Road Initiative as a key factor in this convergence. 164 Some view the AAGC, in bicycle-built-for-two with the Quadrilateral Group, as linking India ‘s Act East Policy with Japan ‘s Free and Open Indo-Pacific Strategy. 165 China reportedly has sought to persuade India to go slow on the AAGC and to keep Japan out of it. 166
Malabar
The annual Malabar naval exercises among India, the United States, and Japan promote nautical interoperability and provide a link between the Indo-Pacific ‘s three most brawny democracies. 167 Malabar began in 1992 as a bilateral naval exercise between India and the United States with Japan participating in 2007 and then joining as a permanent penis in 2014. India blocked australian participation in Malabar 2017, although India and Australia did hold bilateral naval exercises. 168 India-Australia relations were improved by the 2014 nuclear cooperation agreement which provides for the export of uranium from Australia to India. 169 An article in China Daily suggests that “ India should do good to not become a childlike assemble of the U.S.-Japan chessboard. ” 170
Appendix E. China ‘s and India ‘s Relations with IOR States
China-India geopolitical competition is manifesting itself in many states across the IOR. To gain a better understand of this dynamic the following section will examine how this competition is unfolding in selected regional states .
djibouti
Djibouti ‘s strategic importance as a basal of operations for extra-regional powers has increased in holocene years. The explicit military aspect of China ‘s interest in Djibouti makes this relationship unlike from the pillow of China ‘s bilateral relationships across the IOR. Djibouti, a former french Territory, is located on the strategic Bab-el-Mandeb Strait, which separates the Red Sea from the Gulf of Aden and the indian Ocean. The United States, France, Japan, and most recently China have established military facilities there. China ‘s first oversea military base was opened in Djibouti in August 2017. China ‘s Navy began counter piracy operations off Somalia and in the Gulf of Aden in 2008. 171 Djibouti announced that it was granting China a 10-year lease for the floor in 2016. Under the agreement, China may station astir to 10,000 troops in Djibouti, 172 and China is reportedly investing significantly in Djibouti. 173 Observers have concerns about Djibouti ‘s ability to pay back loans to China that are estimated to amount to 60 % of the nation ‘s annual GDP. 174 U.S. Pacific Commander Admiral Harry Harris ‘ statement for the House Armed Services Committee hearing on U.S. Pacific Command Posture pointed out that China ‘s base at Djibouti “ could support Chinese storm expulsion through the indian Ocean and into the Mediterranean and Africa. ” 175 Some believe that China may seek to develop its second oversea base in Pakistan. ( See below. )
pakistan
Shared hostility with India is at the core of the strategic partnership between Pakistan and China, which has been a strong partnership for decades and which has complicated India ‘s own relations with both nations. 176 This partnership is military, economic, and strategic in nature. Pakistan is a cardinal aspect of Beijing ‘s plans to develop its Belt and Road Initiative and extend its influence across South Asia and the Indo-Pacific. For Pakistan, China ‘s “ all weather friendship ” offers the prospect of much-needed investing and development and acts as a strategic halter in Pakistan ‘s fraught relationship with India. Pakistan receives 30 % of China ‘s arms exports. 177
The China-Pakistan Economic Corridor ( CPEC ) is a flagship of China ‘s Belt and Road first step and was launched in 2015. China ‘s announce investments in CPEC projects were estimated by some to be approximately $ 46 billion in 2016. 178 many experts are doubting of such big estimates and have noted that many announced projects in the by have fallen short of expectations. As such, there is a high level of uncertainty over the accurate sum of investment involved, which may be importantly less than announced. According to one reservoir, an estimate $ 19 billion of Pakistan ‘s debt is owed to China. 179 One analyst has argued that, “ rather than opposing the dispersed of chinese influence in South Asia at every call on, Washington and New Delhi should alternatively objectively study the details of China-Pakistan employment and consider how these ties, for the most share, actually benefit ball-shaped security. ” 180
CPEC is a collection of road, railing, and energy projects that link Kashgar in China ‘s far western Xinjiang Uyghur Autonomous Region with the Arabian Sea port of Gwadar in Baluchistan, Pakistan, while developing much needed department of energy and transportation infrastructure in Pakistan. 181 The China Pak Investment Corporation describes CPEC in the follow way :
CPEC aims to improve Pakistani infrastructure and to deepen the economic and political ties between China and Pakistan …. CPEC will prove to be a strong knitting-factor between China and Pakistan who parcel a history of congenial strategic relations, over versatile canvas of reciprocal interest, extending over six decades …. CPEC is China ‘s biggest splurge on economic development in another country to go steady. It aims over 15 years to create a 2000-mile economic corridor between Gwadar Port to China ‘s North western area of Xinjiang through 2,700 km long highway from Kashgar to Gwadar, railroad track links for cargo trains, anoint and accelerator pipelines and an ocular character yoke. The realization of this project will create over 700,000 new jobs and will add up to 2.5 % to Pakistan ‘s annual growth rate. 182
The two countries besides plan to develop Gwadar as a deep-water Arabian Sea port able of handling 300-400 million tons of cargo per year. A Pakistani newspaper reported that firms from China may be considering constructing a $ 500 million house project for up to 500,000 chinese citizens. 183 Observers point out that CPEC energy projects could alleviate some of Pakistan ‘s energy shortfalls. influence on a Gwadar-Kashgar vegetable oil grapevine that is planned to carry up to one million barrels of vegetable oil per day to China is reportedly to be completed by 2021. Upon completion the pipeline could reduce China ‘s dependence on seaborne imported petroleum by an estimated 17 %, far reducing its strategic vulnerability at the Strait of Malacca. 184 CPEC plans call for the Karakorum Highway to be upgraded from Rawalpindi to the edge with China and for railroad track lines across Pakistan to be upgrade and expanded. A new 1,100 kilometer highway from Karachi to Lahore is besides planned. 185 Pakistan raised an Army division of 15,000 personnel to provide security for chinese workers and CPEC projects. 186
China appears to be gaining economic leverage complete Pakistan as a result of CPEC/BRI projects. By one appraisal, “ Pakistan is immediately expected to repay China $ 90 billion for CPEC investments over the adjacent three decades. ” Repaying such sums will be increasingly difficult for Pakistan as its deal deficit with China had grown to reach $ 12 billion in 2017. 187
China is a key security collaborator and a major arms supplier to Pakistan. China has transferred engineering, expertness, and equipment to aid Pakistan ‘s nuclear weapons and missile programs. China has besides supplied Pakistan with tanks, aircraft, and little arms. In 1992, China supplied Pakistan with 34 short-range M-11 missiles. China is reported to be helping Pakistan build two Hualong One nuclear reactors and the two nations are reported to have signed a deal in November 2017 to build a one-third nuclear reactor in Pakistan. 188 China ‘s submarines, including a submarine able of carrying nuclear weapons, have besides reportedly docked in Karachi. 189 China and Pakistan held the 12th round of defense and security talks in Beijing in June 2017. semiannual Aman naval exercises between the two nations were held in February 2017 and their air forces completed the Shaheen-VI tune training use in Xinjiang in September 2017. 190 In October 2017, it was reported that Pakistan would buy eight stealth approach submarines from China for an estimate $ 4 to $ 5 billion. It was besides announced that Pakistan would besides purchase frigates from China. 191 While it is ill-defined, media reports suggest that “ there is a possibility that Beijing might set-up a nautical logistics facility on the Makran coast … [ and that ] the PLA navy may finally establish a dual-use commercial military adeptness at Gwadar. ” 192 “ China [ reportedly ] is about to start construction of a naval base and airfield at Jiwani, some 60 kilometers west of Gwadar. ” 193 The scale and commitment of the CPEC, and other aspects of the two nations ‘ relationship, indicates China ‘s continuing confirm for Pakistan, a nation with which India has fought several wars. 194
India and Pakistan fought wars in 1947, 1965, 1971, and 1999 adenine well as several serious skirmishes along their contest bound in Kashmir. Pakistan is wide believed to support cross-border terrorist infiltrations that have destabilized India and made peace difficult to achieve. While the history of inter-communal tensions on the subcontinent is long, many analysts believe India has demonstrated considerable restraint in the wake island of by terrorist attacks. These attacks have included the 2001 attack against the indian parliament and the Mumbai terrorist attacks of 2008 which killed 164, including 6 Americans, and wounded over 300. As a result, this edge remains one of the most volatile in the world and a source of concern for U.S. policymakers. India-Pakistan tensions besides complicate U.S. efforts to stabilize Afghanistan. 195

visualize E-1. China-Pakistan Economic Corridor

Source: Graphic created by CRS. Map and information generated by [ writer name scrubbed ] and Calvin DeSouza using data from the Council on Foreign Relations ( 2017 ) ; the Economist ( 2017 ) ; the Department of State ( 2015 ) ; Esri ( 2016 ) ; and DeLorme ( 2016 ), parallelism with Department of State ( 2017 ) .

Sri Lanka
Sri Lanka ‘s strategically important location near sea lanes that link the energy-rich Persian Gulf with the economies of Asia obviously have led to China ‘s growing interest in the nation. Its proximity to India, and historic, ethnic, and religious ties, besides make Sri Lanka of particular sake to India .
China has increased both security and economic aid to Sri Lanka. According to some observers, China ‘s aid played a key character in enabling former Prime Minister Mahinda Rajapaksa to win the civil war against the Liberation Tigers of Tamil Eelam ( LTTE ). 196 Sri Lanka is seeking to leverage its strategic geography and make itself an increasingly significant economic hub in the indian Ocean region. 197
Sri Lanka has attracted much interest as separate of China ‘s Belt and Road barter and investment inaugural. Under erstwhile President Mahinda Rajapaksa, China ‘s naval ships including a submarine visited Sri Lanka. total investment from China in Sri Lanka from 2005 to October 2017 has been estimated by one informant at approximately $ 14.87 billion. 198 Rajapaksa ‘s successor, President Maithripala Sirisena, initially sought to reset Sri Lanka ‘s relations with China and India to be more balance by revisiting China ‘s investments in Sri Lanka including the Colombo Port City visualize. It was estimated by some in September 2016 that Sri Lanka owed $ 8 billion to China. Economic considerations led the Sirisena government to go forward with a 99-year rent of Hambantota port for payments that will help Sri Lanka pay down some of its $ 65 billion estimated debt to financiers. 199 In February 2018, India ‘s Defence Minister Nirmala Sitharaman raised doubts about China ‘s activities in Sri Lanka : “ Whether China will use the port alone for port activities is a motion commemorate. ” 200
India has many stream ties with Sri Lanka and has sought to develop its relationship with Colombo at the lapp meter that China ‘s engagement with Sri Lanka has grown. India became entangled in a counter-insurgency war against the LTTE following the sign of the Indo-Sri Lanka Agreement of 1987. between 1987 and 1990 India lost over 1,200 soldiers in this conflict. Prime Minister Rajiv Gandhi was former killed by an LTTE suicide bomber in 1991. The Sri Lanka-India relationship was strengthened by President Maithripala Sirisena ‘s February 2015 visit to India, his beginning alien visit as president, and besides by indian Prime Minister Narendra Modi ‘s March 2015 return inflict to Colombo, the first by an amerind premier minister in 29 years. India ‘s native Tamil populations feel kinship with Sri Lanka ‘s Tamil minority. India, along with the United States, has been an active voice voice for reconciliation .
The Maldives
The unfold of recent events in the Maldives is viewed by some analysts as another example of the rising charm of China in the indian Ocean. The Maldives, like Sri Lanka, is situated close to the key ocean lanes that transit the indian Ocean. For many years, the Maldives had been seen by many observers as largely within India ‘s sector of determine. 201 This was demonstrated in 1988 when India sent troops to avert a coup d’etat in the Maldives. 202 China ‘s President Xi Jinping visited the Maldives in 2014. 203 Maldives President Abdullah Yameen met with China ‘s President Xi in Beijing in 2017 where the two nations signed agreements on absolve trade and besides signed a Memorandum of Understanding bringing the Maldives into the Maritime Silk Road component of the BRI. 204 China is funding boastfully development projects in the Maldives including a bridge from Malé, the capital, to Hulhule Island. An estimate 70 % of the Maldives foreign debt is owed to China and some observers fear that the Maldives could, as a resultant role, fall into a debt trap. 205 In December 2016, a taiwanese company obtained a 50-year lease of Feydhoo Finolhu island near Malé. 206
Media reports in February 2018 speculated that China ‘s deployment of a naval tax military unit to the indian Ocean may have been related to a constitutional crisis in the Maldives. President Yameen declared a state of hand brake and arrested the Supreme Court Judges who had ordered the government ‘s passing of confrontation leaders. The tax impel reportedly included a Luyang III guided projectile destroyer, a Jiangkai Frigate, and an amphibious transport dock embark. According to one perceiver, “ the mere bearing of taiwanese warships acts as a hindrance to indian Intervention. It ‘s besides a neon-sign of Beijing ‘s determination to wield its new-found influence global. ” 207
Seychelles
India is developing its kinship with the Seychelles in part to enhance its amerind Ocean maritime surveillance capabilities. 208 India and the Seychelles signed a revised agreement in January 2018 under which India will be allowed to build military infrastructure on Assumption Island in the Seychelles island chain in the western IOR. This agreement extends India ‘s strategic reach in the indian Ocean and amends a 2015 agreement between the two nations which builds on former indian engagement with the Seychelles. The Seychelles islands are located northeast of Madagascar and southwest of the Maldives. The Seychelles has an exclusive economic partition ( EEZ ) of 1.3 million square kilometers. According to indian Foreign Secretary S. Jaishankar ‘s remarks of January 2018
India and Seychelles have drawn up a cooperation agenda that covers within its horizon joint efforts in anti-piracy operations, and enhanced EEZ surveillance and monitor to prevent intrusions by likely economic offenders indulging in illegal fish, poaching, drug and human traffic. The cooperation is further exemplified by the operationalisation of the Coastal Surveillance Radar System in March 2016, and our commitment to augment Seychelles ‘ defense mechanism assets and capability. 209
According to Captain Gurpreet Khurana with the indian Navy ‘s National Maritime Foundation, “ India ‘s geostrategic frontier is expanding in bicycle-built-for-two with China ‘s growing strategic footprint in the Indo-Pacific. ” 210 The amerind Navy deployed a U.S.-supplied P-8I Neptune nautical patrol and anti-submarine war plane to the Seychelles in March 2016. The indian Navy besides deploys ships to assist the Seychelles patrol its EEZ .
India conducts joint military exercises with the Seychelles in addition to operating the network of coastal surveillance radars. Prime Minister Modi visited the Seychelles in 2015 to launch the first gear of a plan configuration of 32 coastal surveillance radars which provide the indian Navy with enhance maritime domain awareness. 211 According to some observers, “ the larger reason behind New Delhi ‘s push is to check China ‘s growing nautical expansion into the indian Ocean. ” 212 India has besides deployed P-8I aircraft to its Andaman and Nicobar Islands as a reception to China ‘s submarine deployments into the indian Ocean. 213 The Andaman and Nicobar Islands are located to the northwest of the Strait of Malacca .
In October 2017, the Seychelles and China signed an Economic and Technical Cooperation Agreement. China reportedly is providing a $ 7.3 million grant for school construction and $ 15 million grant for the construction of the Seychelles Broadcasting Corporation House. 214 China besides reportedly financed a $ 6 million judiciary build in the Seychelles. 215
Bangladesh
Positioned at a geopolitically important overlap between India, China, and Southeast Asia, Bangladesh is a nation of strategic importance not only to the South asian sub-region but besides to the larger geopolitical context of Asia as a whole. Dhaka ‘s foreign policy seeks to develop ties with China while continuing positive relations with New Delhi, the United States, and the West .
India provided decisive support during Bangladesh ‘s war of independence from Pakistan in 1971. Since that prison term, bilateral relations have been mixed. Relations between India and Bangladesh have tended to be more positive when the Awami League ( AL ), quite than the Bangladesh National Party ( BNP ), is in exponent. Prime Minister Sheikh Hasina, of the AL, emphasized that Bangladesh would not be used as a base for extremism during a meeting with amerind Prime Minister Modi in 2014. Another major irritant in bilateral relations with India was removed during Modi ‘s June 2015 travel to when a Land Boundary Agreement was reached. India besides extended a $ 2 billion line of credit to Bangladesh in 2015. 216
The prospect for political tensions with India remains, however, over illegal immigration to India from Bangladesh, the communion of cross-border water resources, and Bangladesh ‘s developing ties with China. By some accounts, there are a many as 10-20 million Bangladeshi immigrants in India illegally. Prime Minister Modi has conveyed his hopes for a solution to the Teesta river dispute. India receives a higher share of the river ‘s waters than Bangladesh and Bangladesh wants a higher share than it receives. 217 Bangladesh ‘s late skill of two submarines from China has reportedly caused a degree of concern in New Delhi. These are Bangladesh ‘s first gear submarines, and their transfer is viewed by some observers as potentially part of China ‘s strategic blockade of India. 218
Unlike India, China backed Pakistan and not the Bangladesh independence movement in 1971. Despite this, China and Bangladesh have importantly deepened their bilateral relationship. The two nations upgraded the relationship to a Strategic Partnership through an October 2016 Joint Statement. 219 An estimated $ 24.4 billion in government investment from China for 34 projects in Bangladesh has been announced. A further $ 13.6 billion in private investment from China was besides announced during China ‘s President Xi Jinping ‘s October 2016 visit. 220 China is besides the major arms supplier to Bangladesh. In November 2016, China delivered the first of two type 035G diesel-electric locomotive submarines as noted above. 221 Since 2010, China has besides delivered five maritime patrol vessels, two corvettes, 44 tanks, and 16 combatant jets to Bangladesh. 222 According to the Stockholm International Peace Research Institute, Bangladesh ( 20 % ) is the second-largest destination, after Pakistan ( 30 % ), for China ‘s arms exports. 223
As noted, the Bangladesh-China-India-Myanmar Economic Corridor ( BCIM ) was identified as one of seven key pillars of the BRI. 224 India ‘s reluctance to join the May 2017 BRI summit may shift the vehemence of this corridor to the section between Kunming and the Rakhine slide in Burma. The October 2016 Bangladesh-China Joint Statement welcomed China ‘s Belt and Road Initiative ( BRI ) and articulated the importance of the BCIM EC in promoting practical cooperation. Bangladesh ‘s growing export economy depends on two existing, relatively shallow conscription ports at Chittagong and Mongla, with Chittagong being by far the more important of the two. China is upgrading Chittagong port and build up road and railing infrastructure linking Chittagong and Kunming. Both of these ports, however, are excessively shallow for bombastic ships. The volume of goods transiting Chittagong is increasing by 14 % to 15 % per class and is expected to reach capacity by 2018 .
Since 2010, China has been working with Bangladesh to develop a deep-water port at Sonadia. For China, this was to anchor the Bangladesh, China, India, Myanmar Economic Corridor ( BCIM EC ) that is to link China ‘s Yunnan Province with the Bay of Bengal. From India ‘s perspective
the Sonadia larboard, as the Hambantota and Gwadar ports, were deemed to be part of China ‘s much talked about ‘string of pearls ‘ scheme to encircle India in its maritime neighborhood. 225
In February 2016, the Sonadia port project was canceled by Bangladesh. This was reportedly in response to pressure from India, the United States, and Japan. Japan enabled this decision by offering to loanword $ 3.7 billion of an calculate $ 4.6 billion cost to construct a newfangled port and relate infrastructure at Matarbari. Another fresh port at Payra, in which China besides expressed interest, will reportedly involve $ 15.5 billion in investment from 10 different countries. 226
Burma ( Myanmar )
The potential for Burma to offer access to the Bay of Bengal to interior regions of both China and India acts as an drift for competition between China and India. 227 China is developing an energy and trade route from Kunming, China, to Kyaukpyu, in Burma ‘s Rakhine submit. This project is developing into a significant energy and craft release to the indian Ocean for China. China has completed anoint and accelerator pipelines linking Kunming with Kyaukpyu. 228 The petroleum grapevine, which shortens and diversifies China ‘s oil supply routes, was opened in April 2017. 229 The gas grapevine became operational in 2014. 230 The anoint grapevine is designed to carry 22 million tons of crude per year while the accelerator grapevine is designed to transport 12 billion cubic meters of natural boast per annum. 231 Railroad linkages connecting Kunming and Southeast Asia through Burma are besides apparently being explored as part of China ‘s One Belt, One Road. 232
China ‘s charm in Burma experienced setbacks in 2011 when Burma ended decades of isolation with a transition that has led to civilian-military rule and lessened the country ‘s dependence on China. 233 In that year, anti-Chinese and rising democratic opinion led the transitional government to suspend the $ 3.6 billion Myitsone Dam project under which 90 % of the energy generated by the China-financed dam would have gone to China. 234 Mining operations by China ‘s Wanabo Mining Company and the Union of Myanmar Economic Holdings conglomerate at the Letpadaung copper mine have besides led to local resentment and protests over land appropriation and inadequate compensation. 235

digit E-2. Kunming-Kyaukpyu Route

Source: Graphic created by CRS. Map and information generated by [ generator name scrubbed ] using data from the Economist ( 2017 ) ; the Department of State ( 2015 ) ; Esri ( 2016 ) ; and DeLorme ( 2016 ), parallelism with Department of State ( 2018 ) .See besides “ China Moves to Revive its Sway in Myanmar, ” The Wall Street Journal, February 28, 2017 .

China has sought to reestablish its influence in Burma more recently. 236 In May 2017, Burma ‘s State Counselor Daw Aung San Suu Kyi and China ‘s President Xi Jinping signed a Memorandum of Understanding on Cooperation within the Framework of the Silk Road Economic Belt and twenty-first Century Maritime Silk Road Initiative. 237 By developing energy and deal connectivity from Yunnan Province to the Bay of Bengal and the indian Ocean through Burma, China is lessening its dependence on the Strait of Malacca and developing its kinship with Burma. China ‘s CITIC Group has been awarded contracts to build a deep ocean port and especial Economic zone at Kyaukpyu. 238 The larboard will reportedly cost $ 7.3 billion while the industrial park will cost $ 3.2 billion. CITIC will reportedly have the right to operate the port for 50 years with a potential 25-year reference. 239
China is besides investing heavily in Rakhine. A $ 2.45 billion pipeline from Kyaukpyu to Western China is already operational. The goal of the pipeline ( 793 kilometer gas and 771 kilometer oil grapevine ) is to secure a key route for Beijing to import crude vegetable oil from the Middle East, reducing the area ‘s reliance on anoint supplies that pass through the Strait of Malacca. The pipeline can carry up to 22 million tons of anoint a year, account for about 5 % -6 % of China ‘s annual anoint imports. 240
Burma itself is besides a hydrocarbon-rich nation. furthermore, Beijing has an ambitious infrastructure development design worth $ 7.3 billion in the department of state developing the Kyaukphyu Special Economic Zone and a deep seaport. It is one of the major projects of China ‘s Belt and Road platform in the region. 241
The humanitarian crisis triggered by the Burmese military ‘s operations against the Rohingya Muslim cultural group, in Rakhine state on Burma ‘s northwest seashore on the Bay of Bengal, has led hundreds of thousands of Rohingya to flee to Bangladesh and has raised humanitarian-based concerns in the United States ‘ and other western countries. such humanist concerns are largely absent in China ‘s relations with Burma which are more focused on securing its trade and energy infrastructure investments. 242 China ‘s Foreign Ministry has voiced support for Burma ‘s efforts to “ uphold peace and constancy ” in Rakhine state. 243
India is besides focused on developing ties with Burma for economic and strategic reasons as part of its Act East Policy of 2014. India besides reportedly seeks to counter China ‘s influence in Burma. As China ‘s profile continues to rise in India ‘s vicinity, New Delhi would like to enhance India ‘s presence by developing infrastructure and connectivity projects in the country. 244 India is developing a $ 484 million Kaladan Multimodal Transport Project to connect Sittwe in Rakhine with Mizoram in India. This visualize includes both port development at Sittwe and road construction that gives northeast India an alternative and more direct route to the ocean. This route is besides meant to provide India with increase access to other ASEAN states angstrom well as Burma itself. 245 Two agreements were signed between India and Burma in September 2016 to move fore with development of the India-Myanmar-Thailand Highway. 246 Some observers have speculated that India ‘s, american samoa well as China ‘s, strategic interests in Burma will mute or moderate both countries ‘ criticism of Burma on the Rohingya topic. 247
malaysia
Malaysia ‘s is strategically situated adjacent to the Strait of Malacca linking the South China Sea and the Andaman Sea in the indian Ocean. Like many of its Southeast asian neighbors, Malaysia has long adopted careful hedging strategies to balance its relations with China and the United States and has not had extensive relations with India. Malaysia ‘s population of 31 million is approximately 50 % Malay, 25 % chinese and 7 % indian by origin. Malaysia and China signed a defensive structure treaty in 2005 and began annual military exercises in 2015. Relations between the two improved significantly in December 2015 when China bought $ 2.3 billion in 1Malaysia Development Berhad ( 1MDB ) assets which helped ease concerns over mounting debt. China and Malaysia reportedly signed investment agreements worth $ 34 billion during Prime Minister Najib Razak ‘s visit to Beijing in November 2016 and Malaysia has besides announced plans to purchase four littoral mission ships from China. In early 2017, two of China ‘s submarines visited the malaysian port of Kota Kinabalu. 248 Malaysia ‘s relations with the United States were strained after the U.S. Department of Justice filed lawsuits related to 1MDB, a malaysian sovereign wealth fund whose chair is Prime Minister Najib Razak. 249 Some observers view the November 2016 Najib visit to Beijing as diluting U.S. influence in the region and signaling a strategic shift by Malaysia toward China. Some argue that late diplomatic moves by Malaysia to improve relations with Beijing may be depart of a new balance of power in Asia. Others point to a long history of both cooperation and tension between Malaysia and the West which can be traced binding to former Prime Minister Mahathir and the East Asia Economic Caucus concept. They note that despite Malaysia ‘s strategic hedge towards China, U.S. naval ships continue port calls and U.S. surveillance aircraft continue to operate out of Malaysia .
It is crucial to understand alignments shifts-whether perceived or real-as being the product of a complex scope of factors like history, proportional capabilities, or domestic politics—rather than advancing commodious but faineant and inaccurate narratives like states succumbing to some kind of domino effect. 250
Australia
Australia, a treaty ally of the United States, has in late years looked to develop extra strategic partnerships in the Indo-Pacific as a hedge against the heighten of China and relative decline of U.S. power in the region. 251 Australia has sought to develop its partnership with India in this context. A major stumbling obstruct was removed when Australia moved to export uranium to India. This was made potential by the passage of the Civil Nuclear Transfers to India Act by the australian fantan in December 2016. 252 Prime Ministers Turnbull and Modi have
reaffirmed their committedness to a peaceful and comfortable Indo-Pacific, based on common respect and cooperation. Australia and India share a commitment to democratic values, convention of law, international peace and security, and shared prosperity. The strategic and economic interests of both countries are converging which opens up opportunities for working together in a quickly changing region …. Both leaders recognised that India and Australia parcel common interests in ensuring maritime security and the guard of ocean lines of communication. 253
Prime Minister Modi and Prime Minister Turnbull have besides committed themselves to “ deepening the bilateral defense and security partnership ” and welcomed build up achieved through the bilateral Framework for Security Cooperation of 2014. They besides plowshare a hope “ to ensure that amerind Ocean architecture keeps footstep with regional issues and addresses emerging threats and challenges in the area. ” The two nations ‘ bilateral naval use AUSINDEX was held in 2015 and is scheduled to be held again in 2018. Army-to-army exercises are besides scheduled for 2018. 254
Australia and India have held a count of high-level visits in late years. Turnbull and Modi “ reaffirmed their committedness ” in New Delhi in April 2017 and noted that “ India and Australia share coarse interests in ensuring nautical security and the guard of ocean lines of communication. ” 255 Prime Minister Modi made an official visit to Australia in November 2014, when he addressed a joint sitting of both houses of fantan and met with Turnbull ‘s predecessor, Prime Minister Tony Abbott. This was the first state visit of an indian prime curate to Australia in about three decades. Abbott visited India in September 2014. Australia and India besides hold an annual Foreign Ministers Framework Dialogue to further their bilateral agenda .
During her April 2015 travel to to New Delhi, Australian Foreign Minister Julie Bishop gave the inaugural Indo-Pacific oration at the Observer Research Foundation where she stated “ our increasingly close cooperation in the Indo-Pacific region, the region in which both Australia ‘s and India ‘s core economic and strategic interests converge … is vital to Australia ‘s future economic and strategic security. ” 256 Australia and India besides work together through the indian Ocean Rim Association ( IORA ) a ministerial forum focused on the amerind Ocean, with a Secretariat based in Mauritius. 257
India is Australia ‘s one-fifth largest export market, one-tenth largest trade partner, and increasingly a finish for australian investment. 258 bilateral trade between Australia and India grew dramatically from AD $ 6.8 billion in FY2003/04 to AD $ 14.8 billion in FY2013/14. Australia is seeking an Australia-India Comprehensive Economic Cooperation Agreement with India to facilitate the growth of bilateral barter between the two nations. The two countries besides are involved in Regional Comprehensive Economic Partnership ( RCEP ) craft negotiations, which involve 16 nations in the Indo-Pacific region. 259
Australia ‘s strategic vision is increasingly shaped by its geographic localization between the Pacific and indian Oceans, and many strategic decisionmakers and analysts in Australia are increasingly focused on India and the Indo-Pacific, 260 which have historically received less care proportional to China and the Asia-Pacific. This increasing stress on the Indo-Pacific is discernible in Australia ‘s 2016 Defense White Paper that stated, “ The indian Ocean area is besides probable to become a more significant partition of competition among major powers, with China, India, and the United States all increasing their levels of military action in this region. ” It besides described India as an “ increasingly important economic and security partner. ” 261
Australia and India have established several mechanisms to further their strategic and defense cooperation. A model for Security Cooperation was established in November 2014, and is based on “ converging political, economic and strategic interests. ” 262 Today, this model is viewed by many analysts in Australia as an authoritative footstep ahead in developing relations between Australia and India. 263
bilateral defense relations are based on a 2006 memo on Defense Cooperation and a 2009 Joint Declaration on Security Cooperation. Strategic dialogues include annual Defense Policy Talks and an annual Track 1.5 Defense Strategic Dialogue. The first-ever official visit to Australia by an indian defensive structure minister came in 2013 and, during Prime Minister Modi ‘s former 2014 chew the fat to Canberra, the two countries agreed to extend defense cooperation to cover research, development, and industry date. They besides formalized annual defense minister summits and made plans to conduct regular maritime exercises. 264
A count of issues have caused tensions in Australia ‘s kinship with China despite the fact that China is Australia ‘s primary coil export address. Among these are China ‘s political donations in Australia, the sale or lease of farmland and energy and transportation infrastructure to chinese commercial enterprise interests, and differences over the South China Sea maritime territorial disputes. taiwanese corporate donations to australian political parties have become a focus of attention with respect to concerns over China ‘s influence in Australia. Senator Sam Dastyari of the Labor Party resigned from the opposition frontbench after media examination of his toleration of such funds. The Northern Territory granted the party Landbridge Group, which has ties to China, a 99-year lease for port facilities in Darwin. The port, which was attacked by the Japanese in 1942, is strategically located in the north of Australia and former President Obama reportedly registered his displeasure over the lease to Prime Minister Turnbull. Critics of the rent have argued that this gives China an excellent place to observe U.S. and australian military operations. China became the largest investor in Australia ‘s agricultural sector in 2014. The australian government blocked the sale of Kidman and Company agrarian enterprises on national security system grounds in 2015. National security concerns were referenced when Australia prevented the A $ 10 billion sale of Ausgrid to China. Ausgrid supplies power to New South Wales. Australians are besides concerned that chinese buyers are putting up pressure on very estate prices. Foreign Minister Julie Bishop besides urged China to abide by the regnant by an arbitral court under the United Nation Convention on the Law of the Sea ( UNCLOS ), which ruled largely in favor of the Philippines and against China ‘s behavior and claims in the South China Sea in July 2016 .
Appendix F. Summary Comparison of India ‘s and China ‘s military Forces
Table F-1 provides a compendious comparison of India ‘s and China ‘s military forces .
table F-1. Comparison of China ‘s and India ‘s Military Assets

Source: The military Balance, International Institute for Military Studies, 2017. “ nuclear Weapons : Who Has What at a glance, ” Arms Control Association, January 2018. economist Intelligence Unit, India and China Country Reports, 2018 .
Notes: na = not available .
a. China has one operational aircraft mailman, the Liaoning. Its moment carrier is expected to undergo ocean trials in 2018. China reportedly began construction of a third carrier in 2017. India ‘s Vikramaditya aircraft carrier is presently in service. Its second aircraft carrier, the Vikrant, is in late development stages. A third amerind aircraft carrier the Vishal is reportedly in mid-design stage. See Franz-Stephan Gady, “ Will China ‘s New Aircraft Carrier Start Sea Trials This Week ? ” The Diplomat, April 23, 2018, and Abraham Ait, “ US and french Fighters Contend for a Place Aboard India ‘s New Aircraft Carrier, ” The Diplomat, February 24, 2018.

b. Includes four SSBN nuclear-armed submarines .
vitamin c. Estimates .
d. between 2007 and 2016 China ‘s military spend increased 118 % ; India ‘s defense spend increased by 54 % over the lapp time period. “ A New Military order ? ” Times of India, February 14, 2018. China ‘s 2018 military budget of $ 175 billion represents a 8.1 % increase from 2017. “ China Boosts Military Spending 8 %, ” CNN, March 5, 2018 .