China in the Indian

Ocean Region:
Impacts, Prospects,
Opportunities
Client: U.S. Government, Office of South Asia Analysis
Prepared by:
Nathaniel

Barber
Kieran Coe
Victoria Steffes
Jennifer Winter

Outline
Impact Analysis

Regional Security
Energy Issues
Non-Energy Economic Relations

Trends and Prospects

Expansionist China
Non-Expansionist China

Opportunity Analysis

Trends to Obstruct or Encourage

Opportunities for Future Action

Impact Analysis:
Regional Security
New Chinese partnerships with South
Asian states come at Indias expense
Construction of port facilities
Hambantota, Sri Lanka
Chittagong, Bangladesh
Sittwe, Burma
Gwadar, Pakistan

Economic and military aid

Impact Analysis:
Regional Security

Impact Analysis:
Energy Security
Definition of energy security:

Availability
Reliability
Affordability

China and India face three primary

energy security risks

High proportion of oil imports

Reliance on dominant oil exporting countries
Dependence on vulnerable sea lanes

Impact Analysis:
Energy Security

Impact Analysis:
Non-Energy Economic
Relations

Increasing Chinese Trade in the Indian

Ocean region
Indias Trade Deficit with China
Foreign Direct Investmentby China and
India

Impact Analysis:
Non-Energy Economic
Relations

Prospects and Trends:

Assumptions
Expansionist China
Non-Expansionist China
Likelihood Scale
Very unlikely
Very likely

Unlikely

Somewhat unlikely Plausible

Somewhat likely

Likely

Prospects and Trends:

Regional Security

Prospects and Trends:

Energy Security

Prospects and Trends:

Non-Energy Economic
Relations

Opportunity Analysis:
Trends
Trends to Obstruct

Chinese FDI to regional states

Chinese-financed and built ports

Trends to Encourage

U.S.-India relationship
Indias relationship with regional states
Indian and Chinese acquisition of energy resources
Chinese-Indian trade
Membership in international energy organizations

Opportunity Analysis:
U.S. Action
Strengthen U.S. relations with India

Expand relations with Chinese-courted regional

states

Maintain naval superiority in the Indian Ocean

Ensure energy security for South Asian states

Pursue a less unequal trade balance with China

Questions?