Internal Politics, Instability, and China’s Frustrated Efforts to Escape the “Malacca Dilemma”

Since the early 2000s, analysts and policymakers have viewed the “Malacca Dilemma” as an important—and possibly crucial—geopolitical issue for China to overcome in its quest for security. Many of China’s foreign policy initiatives in the Indo-Pacific can be viewed through this lens, particularly its multibillion dollar projects in Myanmar and Pakistan to develop infrastructure routes connecting the Chinese mainland to vital shipping lanes in the Indian Ocean. However, progress has been sporadic and underwhelming—and not just for reasons of geography. Persistent internal political issues and instability in Myanmar and Pakistan have slowed Beijing’s attempts to bypass Malacca to a crawl, which may ultimately incentivize a more activist interventionist streak in Chinese foreign policy towards these countries over the long-term.

A Belt and Road around Malacca

The Communist Party of China views the world through the lens of insecurity, and the so-called Malacca Dilemma constitutes an acute geographic problem for Beijing. This dilemma arises out of the possibility of a foreign navy (such as those of the United States or India) disrupting a majority of Chinese oil shipments during wartime with a blockade of the Straits of Malacca between Malaysia and Indonesia. Chinese crude oil imports reached 10 million barrels per day in 2019, the highest in the world, and some analysts predict Beijing’s dependency on foreign oil will reach 80 percent by 2030. The lion’s share of this imported oil, 80 percent, travels by tanker in the Indian Ocean through the Malacca Straits. Furthermore, 40 percent of global shipping passes through the Strait as well. With the obvious importance of these shipments for the economy, an effective wartime blockade could threaten overall regime legitimacy and stability, one of the CCP’s core national security concerns. The economic upheaval caused by this year’s accidental blockage in the Suez Canal illustrates the reality of this threat but at a much smaller scale. Alternate routes across Russia and the Northern Sea Route could help alleviate the issue, but so long as China remains dependent on Middle Eastern oil, Beijing will need to find a way to mitigate this chokepoint.  

With this dilemma in mind, Chinese foreign policy towards the Indo-Pacific includes various initiatives to bypass the Malacca Straits, or at a minimum, diversify and protect China’s access to Middle Eastern oil in the coming decades. As an example of these efforts, the People’s Liberation Army Navy (PLAN) introduced a new element to its naval doctrine, “Far Seas Protection” [远海防卫], which details their intention to become a blue water force capable of defending China’s sea lines of communication (SLOCs) beyond the Western Pacific. To support fleets operating far afield under this approach, China has pursued the acquisition of basing facilities in Djibouti and, reportedly, Cambodia.

Beyond Djibouti and Cambodia, some experts express concern that China’s Belt and Road Initiative (BRI) investments could enable additional Chinese military and logistical access. Often described as a “String of Pearls,” this rumored strategy threatens to surround India with Chinese-controlled ports acquired via the BRI in Pakistan, Sri Lanka, Bangladesh, Myanmar, and elsewhere. Further afield, islands in Oceania have also been the subject of discussion for future Chinese military basing. In Thailand, rumors of a Kra Canal through the isthmus largely amount to naught but still elicit the occasionalwarning in policy circles. For now, however, permanent Chinese naval access beyond Djibouti and Cambodia remains out of reach bar the occasional symbolic port visit and rumored basing site.

To be sure, China will need more than isolated bases and military access points to protect its SLOCs: a forward-deployed fleet. Beijing’s naval presence in the region is low at any one time, which jeopardizes its outlying military bases and other potential access points, such as Gwadar Port in Pakistan. So long as a PLAN fleet presence in the Indian Ocean is nascent, isolated Chinese port facilities are susceptible to “withering on the vine.” Over the long-term, China’s rapid naval build-up could enable greater power projection into the Indian Ocean under “Far Seas Protection,” but it remains a long way off as of 2021.

These sibling projects promise to physically connect the Chinese mainland by land to the Indo-Pacific and its crucial energy and shipping lanes. In doing so, Beijing hopes to move heaven and earth to mitigate the Malacca Straits and its potential chokepoint. At least, in theory.

In addition to basing, access, and fleets, the longest-term and most resource-intensive initiatives are Beijing’s efforts to establish direct overland routes to the Indian Ocean. China’s BRI investments in Myanmar and Pakistan therefore warrant the most discussion as the potential lynchpins in China’s quest to bypass the Malacca Dilemma. These sibling projects promise to physically connect the Chinese mainland by land to the Indo-Pacific and its crucial energy and shipping lanes. In doing so, Beijing hopes to move heaven and earth to mitigate the Malacca Straits and its potential chokepoint. At least, in theory. Unfortunately for Chinese leaders, internal political turmoil and instability in each partner country threaten this plan.

A Spiraling Myanmar

In Myanmar, the China-Myanmar Economic Corridor (CMEC) promises an extensive infrastructure and energy route directly connecting Kunming, Yunnan to a deep water port at Kyaukphyu on the Bay of Bengal. During World War II, lend lease aid from the Western Allies transported along the Burma (later Ledo) Roads provided something of a supply lifeline to Chinese Nationalists based in Chongqing, and today’s CMEC tantalizingly offers a similar route. After a decade of fits and starts, the project finally appeared underway with the signing of 33 Memoranda of Understanding in early 2020 following Xi’s positive visit to Naypyidaw.

However, with Myanmar’s recent military coup and the country edging towards a high-intensity civil war, China’s attempt to bypass Malacca via its southwest is in jeopardy. While China sided with the military junta, the coup is a disaster for Chinese interests in Myanmar. In a sign of the anti-China sentiment in Myanmar that previously slowed the project’s initial progress, Chinese investments have been damaged in the current instability, which casts serious doubt on the project’s security and led Chinese officials to complain vigorously to the military for protection. Additionally, CMEC snakes through several restive regions, and fighting in northern Shan State has already broken out close to the infrastructure route. Certainly, the junta needs China’s support even as it distrusts Beijing and looks elsewhere for assistance, and it will therefore likely go out of its way to defend and advance CMEC. But, even so, Myanmar was never stable and CMEC plagued by stops and starts during more stable periods. The current crisis only makes matters much worse. With little prospect for Myanmar’s political and security stabilization in the near-term, a fully-operational CMEC is now much further off.

Instability and Cost Overruns in Pakistan

CMEC’s westward sibling, the China-Pakistan Economic Corridor (CPEC), similarly promises to alleviate China’s concerns with maritime chokepoints. Extending from Xinjiang south, the infrastructure route passes through Pakistan (including via territory claimed by India) and terminates at Gwadar Port in Baluchistan. It also includes a prominent defense component that reflects Beijing and Islamabad’s “all-weather friendship.” With an announced cost of $46 billion enshrined during a 2015 visit by Xi Jinping, CPEC seemingly represents a priority in bilateral relations. Complementing CMEC from a geopolitical perspective, the two routes would circumvent Malacca and surround India from both west and east.

Since its launch in 2015, however, the project has only underperformed, belabored by political setbacks and Pakistan’s instability. After expanding to a purported $62 billion (or more), many of the project’s investments remainstalled amidst political and economic issues in Pakistan over ballooning debts, fiscal troubles, and occasional criticism of CPEC from both Prime Minister Imran Khan’s government and other political groups. Furthermore, Gwadar port, the key locus for CPEC, lacks basic supporting infrastructure and is wracked by insecurity. Islamist militants and Baluchi separatists in Pakistan have attacked Chinese nationals and interests involved in CPEC, which drove Pakistan to deploy some 15,000 troops to secure the route. As in Myanmar, domestic instability and political issues have slowed China’s strategic investments to escape the Malacca Dilemma through Pakistan.

Incentivizing Interference

With CMEC and CPEC hitting roadblocks largely outside Beijing’s direct control, China will likely face growing pressure to exert its influence in Pakistan and Myanmar to ensure Chinese geopolitical objectives can be met. For the past few decades, Chinese foreign policy has largely emphasized “non-interference” as a principal element precisely to avoid setting a precedent that would enable Western intervention in China’s internal affairs. However, evidence suggests that this may be changing. For instance, Beijing seemingly reconsidered its traditional stance on non-interference abroad to cooperate with the Pakistani military on security for CPEC. Going forward, the internal political and instability issues facing the sibling routes in Myanmar and Pakistan may ultimately incentivize China to involve itself more directly in both countries’ affairs.

For CPEC, Pakistan may suffer from ongoing instability of its own, but it enjoys a much closer relationship with China than Myanmar does, thus opening up room for a cooperative approach. Engaging on CPEC for Beijing primarily means accommodating the concerns of local elites and populations to address fears of “debt traps” and providing economic incentives for Pakistan’s cooperation, as well expanding ties with the military as it takes more direct control over CPEC. On internal security, Wilson China Fellow Isaac Kardon argues in “China’s ‘New Era’ of Influence in Pakistan” that Beijing’s holistic approach to national security could also lead it to directly engage in counterterrorism operations alongside the Pakistani military within Pakistan. These policy avenues could help smooth the road to CPEC’s completion and mitigate the risk of the project failing.

In the current crisis, Beijing’s support for the Tatmadaw is ultimately pragmatic and conditional on CMEC and its other national interests, and it therefore allows some outside pressure to be placed on the regime.

Myanmar, on the other hand, will perhaps necessitate a more direct approach due to the greater severity of the country’s internal problems and China’s relatively more tumultuous relations with Naypyidaw’s ruling elites. In the current crisis, Beijing’s support for the Tatmadaw is ultimately pragmatic and conditional on CMEC and its other national interests, and it therefore allows some outside pressure to be placed on the regime. For instance, the UN Security Council's mildly critical statements. In Myanmar, China enjoys several policy levers to advance its interests, such as economic and political influence derived from its status as one of the junta’s primary backers, its valuable veto on the UN National Security Council, the option of cooperating with the anti-regime opposition, and cashing in on its close ties with and patronage of several Ethnic Armed Organizations (EAO) in the country, most notably the United Wa State Army.

Furthermore, if the country destabilizes further or Myanmar’s military is unable to properly defend Chinese investments, the possibility exists for direct military intervention. A range of options are available to Beijing, with either the PLA or its EAO proxies deploying to protect CMEC, assist or pressure Myanmar’s military, or play a peacekeeping role in the conflict. Certainly, such an intervention would likely only inflame the domestic political tensions in Myanmar surrounding Chinese influence and the PLA lacks recent combat experience, but for Beijing the cost may be necessary if it determines that Myanmar is heading towards a “failed state” status or CMEC is considerably threatened. That said, the possibility remains remote, and Beijing would undoubtedly prefer the junta consolidate control itself as soon as possible.

Ultimately, China may prefer to avoid external intervention as non-interference currently serves its interests well, but the persistent internal political issues and instability plaguing CMEC and CPEC could incentivize expanded Chinese action over the long-term. Intervention abroad is a hard question for Beijing as it looks to avoid setting a precedent for interference in its own restive regions, such as Xinjiang, Tibet, and Hong Kong. But, as it emerges as a great power, China’s incentives will only grow to behave more assertively in its neighborhood if important national interests are at risk. In the end, reducing Beijing’s geographic insecurity will require mitigating the Malacca Dilemma, and overcoming the problem posed by the straits may mean expanded involvement in Myanmar and Pakistan with more direct incentives or coercion to ensure CMEC and CPEC come to fruition.

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The views expressed are the author's alone, and do not represent the views of the U.S. Government or the Wilson Center. Copyright 2020, Asia Program. All rights reserved.