Definir sistema de comércio marítimo do oceano índico

Sala de Notícias

Prefácio de Ian Millen, Chief Operating Officer & # 8211; Dryad Maritime.

Gostaria de destacar o artigo abaixo, que é tão bom quanto uma análise geral da situação no Golfo da Guiné, como tenho visto.

O autor é um contra-almirante nigeriano que entende o domínio marítimo regional tão claramente quanto ele entende os fatores sócio-econômicos que impulsionam o crime, as limitações à aplicação da lei para lidar com ele e as capacidades e limitações das marinhas que têm o trabalho de policiamento. isto.

É uma excelente análise e escrita de um especialista local que tem uma compreensão clara do cenário estratégico para as dificuldades práticas de combater o crime marítimo no nível tático e, eu sugiro, é uma leitura obrigatória para qualquer um que queira entender isso. região.

Meus agradecimentos pessoais ao Almirante Osinowo por autorizar esta excelente análise e ao Centro Africano de Estudos Estratégicos pela gentil permissão para publicação em nosso site.

COMBATE À PIRATARIA NO GOLFO DA GUINÉ.

Por Adeniyi Adejimi Osinowo.

O litoral de 5.000 milhas náuticas (nmi) do Golfo da Guiné oferece condições aparentemente idílicas para o transporte marítimo. É anfitrião de numerosos portos naturais e é em grande parte desprovido de pontos de estrangulamento e condições meteorológicas extremas. Também é rica em hidrocarbonetos, peixes e outros recursos. Esses atributos fornecem imenso potencial para o comércio marítimo, a extração de recursos, o transporte e o desenvolvimento. De fato, o tráfego de contêineres nos portos da África Ocidental cresceu 14% ao ano desde 1995, o mais rápido de qualquer região da África Subsaariana.

O Golfo da Guiné, que se estende de Cabo Verde a Angola, é o principal centro de trânsito e facilitador do rápido crescimento econômico da região, com uma média de 7% desde 2012. O Golfo da Guiné também se tornou um centro de fornecimento global de energia com quantidades significativas. de todos os produtos petrolíferos consumidos na Europa, América do Norte e Ásia que transitam por esta via navegável.

Este boom econômico, no entanto, está ameaçado. Em 2012, o Golfo da Guiné ultrapassou o Golfo de Aden (infame para os seqüestros em alto mar) como a região com o maior número de ataques de pirataria no mundo. Esses ataques também tendem a ser mais violentos. Dada a presença limitada da segurança marítima na costa da África Ocidental, os narcotraficantes sul-americanos descobriram que a região é uma rota de trânsito atraente para a Europa. O roubo de petróleo e o bunkering ilegal assolam o Golfo da Guiné. Só a Nigéria perde entre 40.000 e 100.000 barris por dia devido a roubo. Com 40% das capturas anuais da região consideradas ilegais, não regulamentadas ou não declaradas, as águas da África Ocidental também sofrem o nível mais alto de pesca ilegal no mundo.

Parceiros comerciais tomaram nota. Em 2013, quase todo o comércio regional estimado em US $ 10,2 bilhões com o Reino Unido passando pelo Golfo da Guiné foi declarado em risco de roubo. Com o aumento do risco para navios, carga e marítimos, os prêmios de seguro subiram e as empresas assumiram cargas adicionais para proteger seus navios.

A presença insuficiente do Estado no Golfo da Guiné dificulta a precisão das perdas econômicas incorridas pela região. Estes são certamente substanciais, no entanto. As estimativas do custo anual da pirataria para o Golfo da Guiné variam entre US $ 565 milhões e US $ 2 bilhões. Os planos estratégicos de desenvolvimento de muitos países da região dependem de 60% de suas receitas provenientes de recursos de hidrocarbonetos provenientes ou em trânsito pelo Golfo.

Os governos da região se atrasaram para perceber como sua ausência no domínio marítimo não apenas lhes custa incalculável receita, mas também prejudica a segurança em terra, já que as atividades criminosas no mar começam e terminam em terra. Na medida em que a economia global depende de redes de transporte e fornecimento de energia cada vez mais interdependentes, as ameaças marítimas no Golfo da Guiné constituem um desafio coletivo para todas as partes interessadas na região e internacionalmente.

A NATUREZA ÚNICA DO GOLFO DA INSEGURANÇA MARÍTIMA DA GUINÉ.

Ataques de pirataria (e assalto à mão armada no mar) no Golfo da Guiné representaram um quinto de todos os incidentes marítimos registrados em 2013. Esses números representam apenas uma fração dos ataques reais na região, pois os proprietários de navios e governos minimizam os incidentes para evitar o aumento do número de navios. custos ou uma reputação de insegurança. Incidentes relatados ao Bureau Marítimo Internacional indicam que a área afetada é substancial. Ancoradouros e abordagens para os portos de Bonny e Lagos (Nigéria), Cotonou (Benin), Lomé (Togo), Tema (Gana) e Abidjan (Costa do Marfim) são particularmente vulneráveis, com um grande número de navios mercantes, muitas vezes vadiando nestes portos. áreas. No movimentado porto de Lagos, centenas de embarcações perambulam por dias ao longo das estradas (áreas calmas de água perto de portos onde os navios podem ancorar) devido à capacidade limitada de descarregamento dos portos da África Ocidental e Central. As medidas de controle nas abordagens para esses portos permanecem fracas. O encalhe de 25 navios na costa de Lagos, após uma tormentosa tempestade de duas horas em 2010, revelou que muitos navios em portos não são tripulados nem monitorados. O então Diretor Geral da Agência de Administração e Segurança Marítima da Nigéria (NIMASA) sugeriu que esses barcos também podem servir como esconderijos e persianas para piratas e ladrões.

Quando um navio é abordado por piratas, equipamentos e carga são freqüentemente roubados. Ocasionalmente, membros da tripulação são seqüestrados para resgate. Os navios podem ser seqüestrados e navegados para locais distantes através das fronteiras marítimas, onde a carga é transferida para outros navios. Ataques recentes no Golfo da Guiné indicam uma preferência por navios carregados com petróleo bruto e derivados de petróleo. Sabe-se que tais ataques ocorreram ao longo dos eixos Gana-para-Angola e Nigéria-para-Côte d'Ivoire. Por exemplo, o MT Kerala foi encontrado em águas próximas ao Porto de Gana em 28 de janeiro de 2014, com uma quantidade considerável de sua carga de petróleo desaparecida após ser tomada perto de Luanda oito dias antes. Em outros casos, embarcações de apoio a instalações offshore são atacadas, às vezes com tal velocidade e precisão que levantam suspeitas de cumplicidade das tripulações offshore no roubo e venda ilícita de petróleo.

A pirataria no Golfo da Guiné é cada vez mais caracterizada por ataques violentos contra navios e sequestros - 1.871 marinheiros foram vítimas de ataques e 279 foram feitos reféns em 2013. Incidentes de resistência feroz às patrulhas navais também aumentaram. Piratas a bordo de um barco de passageiros abriram fogo contra uma embarcação da Marinha nigeriana (NN) durante uma patrulha de rotina ao longo da fronteira com Camarões em agosto de 2013. Seis piratas foram mortos na troca. Em outro incidente, apenas algumas semanas antes, os piratas tentaram fugir do petroleiro MT Notre, depois que oito navios do NN o cercaram. Doze dos 16 piratas foram mortos e seu barco afundou durante a batalha de 30 minutos. Em abril de 2013, dois tripulantes foram mortos depois que piratas embarcaram no SP Bruxelas, na costa da Nigéria. Apenas 18 meses antes, cinco tripulantes foram feitos reféns quando piratas roubaram a mesma embarcação enquanto ela estava a 64 quilômetros da costa do Delta do Níger.

O roubo de petróleo é muitas vezes o resultado de conluio entre gangues locais, elementos comprometidos na indústria petrolífera e agências de segurança e redes criminosas organizadas da Europa Oriental e da Ásia.11 Embora os nigerianos tenham sido os mais envolvidos na pirataria da região, outros africanos, europeus orientais e filipinos foram presos em águas do Golfo por roubo de petróleo bruto, bunkering ilegal e ataques ao transporte marítimo. Em março de 2014, 2 britânicos, funcionários de uma firma de segurança marítima sediada no Reino Unido, foram presos com 12 nigerianos por tentarem descarregar petróleo bruto de um navio que havia sido sequestrado por roubo de petróleo.

CONSTRUINDO UMA RESPOSTA COLETIVA DE SEGURANÇA MARÍTIMA.

Os ataques ao transporte marítimo no Golfo da Guiné expuseram a vulnerabilidade do espaço marítimo da região. Isso precipitou várias contramedidas. Em 2010, melhorias na colaboração operacional entre o NN e o NIMASA resultaram em reduções substanciais nos ataques em torno do porto de Lagos. Sob a colaboração, embarcações conjuntamente tripuladas realizam patrulhas policiais e antipirataria apoiadas por ativos de vigilância eletrônica, particularmente dentro dos mares territoriais e das abordagens portuárias.

Infelizmente, os ganhos na Nigéria levaram a um aumento dos ataques ao largo da costa do vizinho Benim. Depois de relatar nenhum ataque em 2009 e apenas 1 em 2010, Benin experimentou um surto de mais de 20 incidentes em 2011. Como resultado, a tonelagem no porto de Cotonou caiu mais de 15%, resultando em uma perda de US $ 81 milhões na receita aduaneira. O desenvolvimento levou o presidente do Benin, Boni Yayi, a solicitar assistência da Nigéria. Em setembro de 2011, os navios do NN-NIMASA começaram a patrulhar as águas em conjunto com as forças de segurança do Benin. O número de ataques reais e tentados a navios em torno do Porto de Cotonou caiu de 20 em 2011 para 2 em 2012 e 0 em 2013. Consequentemente, as atividades de navegação ressurgiram.

Refletindo a natureza interconectada dessa ameaça, o aumento do patrulhamento em Cotonou levou a um aumento acentuado nos ataques de 2012, quando os navios e reféns decolaram nas costas vizinhas do Togo (ataques-15, reféns-79) e novamente na Nigéria (ataques-27, reféns). –61). Mais de 80 por cento dos ataques registrados na Nigéria ocorreram nas águas ao largo do Delta do Níger, onde a colaboração NN-NIMASA foi menos robusta. Notavelmente, o Togo e a Nigéria foram responsáveis ​​por mais de 70 por cento dos ataques e reféns na África Ocidental em 2012-2014.

Em maio de 2013, duas empresas privadas de segurança marítima colaboraram com a NN para lançar a Área Segura de Ancoragem (Secure Anchorage Area - SAA), que fornece segurança aos navios em uma área designada do Porto de Lagos. A SAA oferece proteção armada para embarcações que desejam ancorar ou realizar operações de transferência de navio para navio no mar. Em 2014, o NIMASA, em colaboração com o NN e a Força Aérea da Nigéria, inaugurou um Centro de Vigilância por Satélite (SSC). O SSC rastreia todos os navios em águas nigerianas e pode identificar o número da Organização Marítima Internacional (IMO) de cada embarcação. Esta iniciativa complementa o conjunto existente de sensores instalados ao longo da costa da Nigéria, no âmbito do programa de Capacitação Regional de Consciência Marítima (RMAC), apoiado pelos Estados Unidos e pelo Reino Unido. Vários outros parceiros regionais e internacionais também adotaram resoluções e programas de apoio, incluindo a União Africana, Nações Unidas, União Européia, OMI e G8.

Enquanto isso, aproveitando as lições aprendidas no Golfo de Aden, a indústria naval criou o Centro de Compartilhamento de Informações sobre o Comércio Marítimo para o Golfo da Guiné (MTISC-GOG). Com o objetivo de se tornar um ponto focal dedicado para relatórios de incidentes, compartilhamento de informações e as mais recentes orientações de segurança marítima, o MTISC-GOG foi testado em 2013 e 2014 durante o exercício marítimo regional Obangame Express. O MTISC-GOG está sediado na Universidade Marítima Regional em Accra, Gana e fornece às embarcações participantes uma reportagem de segurança 24 horas por dia. Também pode fornecer informações aos centros operacionais marítimos nacionais na região e à Interpol.

Em resposta à crescente ameaça marítima, a Comunidade Económica dos Estados da África Central (CEEAC) desenvolveu uma Estratégia Integrada para a Segurança Marítima (SGSI) em 2008, que apelou a um quadro regional comum para regular as actividades marítimas fora da África Central. Em 2009, ativou o Centro Regional de Coordenação para a Segurança Marítima na África Central (CRESMAC) em Pointe-Noire, República do Congo. Sob o SGSI, o CRESMAC é responsável por comandar três centros de coordenação multinacional (CMCs), um para cada zona das águas da África Central: Zonas A, B e D. O principal valor dessa iniciativa é unir protocolos de compartilhamento e autorização de informações na busca de navios suspeitos através das fronteiras marítimas.

O CMC da Zona D, em operação desde 2009, coordena os esforços antipirataria das marinhas de Camarões, Guiné Equatorial, Gabão e São Tomé e Príncipe. Esta colaboração resultou em uma redução na criminalidade marítima e na tomada de reféns, além de mais de 17 citações de pesca ilegal que resultaram em pesadas multas somente em Camarões.

Existe um esforço contínuo para consumar uma Estratégia Marítima Integrada da Comunidade Económica dos Estados da África Ocidental (ECOWAS) modelada após o esforço da CEEAC, incluindo a criação de um centro regional de coordenação para a segurança marítima na África Ocidental e três zonas (E, F e G) supervisionado por centros multinacionais de coordenação marítima (MMCCs). O piloto para estas é a Zona E da CEDEAO (as águas do Benim, da Nigéria e do Togo).

A realidade de uma ameaça em constante mudança informou a Declaração de Yaoundé de junho de 2013, na qual os chefes de governo da CEDEAO e da CEEAC concordaram em estabelecer um Centro de Coordenação Inter-Regional Marítimo (MICC) em Yaoundé, Camarões. Um “Código de Conduta em Relação à Repressão à Pirataria, Roubo Armado contra Navios e Atividade Marítima Ilícita na África Ocidental e Central” foi adotado para promover ainda mais os esforços coletivos em compartilhamento de informações, interdição, processo e apoio às vítimas. A implementação do Código de Conduta não vinculante tem sido lenta, no entanto. Em particular, a tardia operacionalização do MICC destaca a necessidade de maior vontade política.

A natureza altamente adaptável das redes de pirataria no Golfo da Guiné reflete a situação no Golfo de Aden, com a qual os ganhos do esforço antipirataria multinacional na costa da Somália se transformaram em ameaças expandidas em outros lugares no Mar Arábico e no Oceano Índico. Enquanto soluções de estado único podem alcançar ganhos de curto prazo, elas são insuficientes para reduzir as estratégias fluidas adotadas pelas redes de pirataria. Consequentemente, a estratégia de se concentrar apenas nas vulnerabilidades de trânsito é insuficiente, pois os piratas se adaptam constantemente para contornar as contramedidas navais. As questões mais fundamentais de como gerenciar o espaço marítimo e combater o que motiva os piratas e suas estruturas de apoio em terra também devem ser abordadas.

Causas causais continentais. O homem vive em terra e não no mar. Enquanto o Golfo da Guiné oferece um local ideal para navegação e pesca, a facilidade com que os ladrões podem desaparecer ao longo do litoral após um ataque expõe outro aspecto menos favorável sobre a região - limitações de vigilância, inteligência e policiamento comunitário nas áreas costeiras. Em particular, as condições políticas e socioeconômicas em terra, especialmente o crescente exército de jovens desempregados, são condutores de pirataria na região. No delta do Níger, por exemplo, o programa de anistia do governo para ex-militantes em 2009 causou uma redução imediata nos ataques ao transporte marítimo. O ressurgimento em 2013 foi atribuído em parte aos desafios de sustentar oportunidades de emprego lucrativo para um número crescente de jovens na área.

Os governos são igualmente obrigados a buscar ações de fiscalização mais eficazes contra as redes de pirataria em terra. Por exemplo, os mercados ilícitos em que mercadorias pirateadas (especialmente petróleo) são vendidas em todo o mundo permanecem amplamente desimpedidas.

A operacionalização de compromissos políticos, interinstitucionais e interestaduais para combater a pirataria e crimes relacionados nas águas do Golfo da Guiné dependerá do estabelecimento de uma capacidade robusta de vigilância, resposta e fiscalização. Vigilância. Benin, Gana, Libéria, Nigéria e Senegal melhoraram seus ativos de vigilância costeira com a ajuda de parceiros como os Estados Unidos e a UE. Infelizmente, a capacidade de detectar embarcações sem vigilância ativa automática independente (AIS) além do alcance do radar (30-40 nmi) continua sendo um desafio para muitos estados da região. Da mesma forma, o acesso à banda larga acessível e a capacidade de manutenção local para facilitar a comunicação e as patrulhas representam um problema para muitos estados. Resposta . Marinhas da África Central e Ocidental e guardas costeiras têm capacidade limitada de patrulhamento. Mesmo se todo o estoque atual de plataformas fosse implantado, ainda não haveria navios suficientes para prover uma patrulha sustentada de uma embarcação para cada 250 milhas náuticas de costa. A variedade de fornecedores de equipamentos apresenta desafios adicionais de interoperabilidade e sustentabilidade de embarcações de frota, a maioria com mais de 25 anos de idade. No entanto, manter a disponibilidade desses vasos é vital. No início de 2014, o governo nigeriano anunciou uma queda de 60% no roubo de petróleo bruto (de 100.000 para cerca de 40.000 barris por dia) devido, entre outras coisas, à implantação de barcos de patrulha recém-adquiridos em rotas estratégicas de acesso no país. águas do Delta do Níger.19 Adições como o rápido Embarcações de Patrulha Costeira e Barcaças de Defesa do Mar (SDBs), incluindo ex-EUA Os cortadores da Guarda Costeira eram notáveis ​​a esse respeito. Sustentar um sucesso tão modesto requer um reforço significativo do inventário de patrulhamento com mais navios de patrulhamento offshore (OPV) e barcos de patrulha costeira. Execução. A frustração com a falta de processo efetivo de piratas e criminosos marítimos é prevalente em muitos países da África Central e Ocidental. Isso decorre da ausência de leis domésticas necessárias para processar a pirataria e, em outros casos, penalidades e processos judiciais fracos. Em muitos estados, as marinhas, os guardas costeiros e as agências de segurança marítima carecem de poder de acusação e contam com a polícia e outras agências para um elemento tão vital do ciclo de fiscalização. No inquietante Delta do Níger, por exemplo, o julgamento de muitos suspeitos de roubo de petróleo e pirataria ocorre vários meses após a prisão devido à falta de disponibilidade de oficiais judiciais. Durante esse período, os desafios na preservação de evidências e limitações dos períodos de detenção muitas vezes pesam em favor dos suspeitos que recuperam a liberdade logo após a prisão.

Comercialização de esforços antipirataria. O aumento dos ataques ao transporte marítimo no Golfo da Guiné provocou várias contramedidas comerciais. Na Nigéria, as empresas petrolíferas contrataram militares privados e empresas de segurança (PMSCs) para fornecer trânsito protegido nas águas do Delta do Níger. O aumento exponencial do número de EMSPs nos últimos anos demonstra a lucratividade de tais empreendimentos. O engajamento das EMSPs pelo NIMASA e pelo governo do Togo para proteger os portos, além disso, ressalta as oportunidades crescentes de EMSPs na região.

O enfoque orientado ao lucro das EMSPs, entretanto, introduz questões fundamentais sobre os imperativos de soberania, eqüidade e governança. O que acontece com tais empreendimentos proficientes quando a ameaça da pirataria diminui? Será que tais equipamentos direcionam atenção suficiente às redes onshore e aos motoristas da pirataria, incluindo o rastreamento dos produtos e produtos de tais atividades criminosas? Um cenário em que as EMSPs possuem mais navios de patrulha do que marinhas ou guardas costeiras levanta questões sobre papéis e responsabilidades pela segurança nacional. Um esforço concertado entre a OMI, os órgãos regionais e os governos nacionais deve abordar essas questões antes que os inevitáveis ​​conflitos de interesse e as teorias conspiratórias se desenvolvam.

O combate à pirataria e aos ataques armados ao transporte marítimo no Golfo da Guiné exige medidas mais eficazes em todo o ciclo da pirataria, desde causas baseadas na costa e vulnerabilidades de trânsito offshore até mercados em terra para os lucros da pirataria. Assolar a maré de ataques exige igualmente mais esforços transversais deliberados que incorporem medidas preventivas, de dissuasão e de colaboração entre as partes interessadas nacionais e regionais.

Gestão do espaço marítimo. Melhorar a segurança é mais sobre a gestão estratégica do espaço marítimo do que sobre as frotas navais e embarcações de patrulha. Os estados da África Central e Ocidental devem definir corredores de trânsito e pontos de ancoragem mais claros para a proteção de embarcações mercantes em suas águas territoriais e Zonas Econômicas Exclusivas, que se estendem a 200 milhas náuticas da costa de um país. Isso seria semelhante ao Corredor de Trânsito Internacionalmente Recomendado que funcionou bem no Golfo de Aden e foi replicado como uma Área de Relatórios Voluntários no Golfo da Guiné pelo MTISC-GOG. Tais acordos requerem uma combinação de colaboração regional e nacional que o MICC proposto poderia facilitar. Além da Área de Ancoragem Segura protegida no Porto de Lagos, conceitos semelhantes devem ser estabelecidos em torno de abordagens para todos os portos da região, incluindo processos de aplicação e sanção para violações de embarcações. Tais procedimentos irão melhorar a segurança dos navios, bem como simplificar as exigências de patrulha e vigilância das autoridades marítimas. Estima-se que a capacidade efetiva de conscientização do domínio marítimo na área possa ser realizada e sustentada a um custo razoável.

Para avançar na gestão regional do espaço marítimo, é necessário acelerar o processo de ativação do MICC e dos mecanismos piloto da Zona E. Isso facilitará o compartilhamento de informações entre as agências de aplicação da lei, as partes interessadas no comércio marítimo e os parceiros internacionais. Em particular, o estabelecimento de centros nacionais de operação marítima (MOCs) poderia resolver algumas dificuldades na cooperação interinstitucional entre as autoridades de controle das marinhas e das autoridades portuárias e de bandeira.

Harmonização de aplicação. O número limitado de ensaios relacionados à pirataria ressalta a necessidade de uma maior harmonização dos esforços legais na região, conforme estabelecido no Memorando de Entendimento entre a CEEAC, a CEDEAO e a Comissão do Golfo da Guiné. Para fazer isso, uma revisão completa da estrutura legal de cada país deve ser realizada para permitir que cada um processe efetivamente os responsáveis ​​por pirataria. Esforços para acelerar a extradição e sincronizar penalidades para crimes no mar através das jurisdições impediriam os piratas de encontrar tratamento mais tolerante através das fronteiras costeiras. Os membros do sistema judicial devem ser treinados em coordenação com as agências de fiscalização marítima, a fim de acelerar e padronizar o processo de coleta e preservação de evidências para facilitar julgamentos eficientes e justos. A criação de tribunais dedicados ao tratamento de processos de pirataria e roubo pode ajudar a minimizar esses atrasos.

Cooperação Interna. A autorização de um fórum permanente para os chefes de marinha da Zona E pelo Comité de Chefes de Defesa da CEDEAO (CCDS) poderia fornecer uma sinergia muito necessária para os esforços de coordenação das marinhas da região. Este protocolo precisa ser replicado entre outras zonas sob a CEDEAO. O Departamento de Assuntos Políticos, Paz e Segurança da CEDEAO tem a responsabilidade, a este respeito, de encorajar a ativação dos mecanismos de coordenação zonal para todos os estados membros, incluindo entendimentos comuns e processos de crimes transfronteiriços e extraterritoriais. A consumação e implementação da Estratégia Marítima Integrada da CEDEAO, portanto, merece a atenção e o compromisso urgentes de toda a estaca. Fonte: IHS Jane's, 2013.21 Country Coastline (nmi) Fragata Corvette Patrulha Grande Embarcação de Patrulha Pequena (IPC / SDB) Aquisição de Artesanato em 15 anos Aquisição de Pequenos Artesanatos em 10 anos Fontes de Aquisição Benin 65 7 7 China, França Cabo Verde 530 2 3 1 2 4 China, Alemanha, US Côte d'Ivoire 281 3 França Gâmbia 43 10 EUA, Reino Unido Gana 292 8 9 1 6 4 EUA, Alemanha Guiné 173 4 3 EUA GuinéBissau 189 2 Portugal Libéria 360 2 2 EUA Nigéria 459 2 10 15 4 7 25 França, Alemanha, EUA, Itália, Reino Unido, Singapura, China, Israel, Nigéria, Holanda Senegal 286 3 8 3 1 9 França, Espanha Serra Leoa 217 4 4 China, EUA Togo 30 4 2 França, EUA TABELA 1. Perfil de Plataforma das Marinhas e Guardas Costeiras da África Ocidental.

Requisitos do ativo. Um mecanismo de dissuasão em camadas caracterizado por patrulhas aéreas marítimas, patrulhas a bordo de navios (compostas por OPVs e SDBs) e por ativos de vigilância terrestres e por satélite será necessário para monitorar e proteger o Golfo da Guiné. Uma cobertura teórica de radar de 100-nmi e raio de patrulha devem ser assumidos para cada navio de patrulha. Para cada navio no mar, um deve estar em espera enquanto outro seria submetido a manutenção de rotina. Com base nessas suposições e na costa da África Ocidental de aproximadamente 3.000 nmi, a exigência mínima agregada de VOP para dissuasão e resposta efetivas é de 90 embarcações. Em comparação com o inventário atual de 32 OPVs / ativos equivalentes (fragatas, corvetas e grandes embarcações de patrulha, conforme categorizado na Tabela 1), os governos devem considerar o déficit do 58-OPV como um guia de trabalho sobre futuros esforços de capitalização. Nas águas relativamente calmas e abertas da região, OPVs de menos de 1.000 toneladas de deslocamento com o mínimo de armamento seriam suficientes. Os requisitos dos SDBs permitiriam uma presença efetiva nas abordagens de todos os portos da região, com uma disposição similar de que dois SDBs adicionais estivessem disponíveis para cada um deles implantado. Estados com longos litorais ou pontos de pirataria devem considerar a aquisição de aeronaves de patrulha marítima fixas e rotativas. Essas projeções, embora ambiciosas, fornecem um guia de planejamento para governos, marinhas, parceiros estrangeiros e investidores.

Criação de perfil de redes de pirataria. Quebrar a cadeia cíclica de ataques à navegação de maneira econômica exige uma capacidade robusta para traçar o perfil do crime marítimo e compartilhar informações entre as partes interessadas na região. Tal capacidade envolveria o monitoramento de embarcações em trânsito, suas tripulações e sua propriedade, com o objetivo de traçar navios e indivíduos suspeitos, incluindo atividades em comunidades costeiras. Uma lista de observação de embarcações suspeitas, bem como de cúmplices humanos, deve ser desenvolvida, atualizada e compartilhada.

Uma campanha internacional para fechar mercados e centros financeiros ao roubo de petróleo e seus lucros aumentaria o custo de roubo do Golfo da Guiné. Isso exigiria esforços mais concentrados entre os países da África Central e Ocidental e seus parceiros globais para identificar e sancionar redes criminosas envolvidas na lavagem de dinheiro da pirataria e crimes relacionados. Proprietários de embarcações sancionadoras e organizações conhecidas por serem beneficiadas pelos lucros de ataques e roubo de petróleo seriam extremamente úteis e ainda assim é uma lacuna significativa na colaboração entre os estados da UE, Ásia e África.

Compromisso de Parceria. É necessária mais colaboração entre os parceiros internacionais e os governos africanos nas águas internacionais em torno do Golfo da Guiné. As operações Atalanta, Ocean Shield e Combined Task Force 150/151 no Golfo de Aden e no Oceano Índico fornecem um modelo adaptável. Também haveria valor nos parceiros dos EUA, Europa e Ásia, fortalecendo a capacidade naval e da guarda costeira na região através de uma colaboração eficaz com os MICC, MMCC / CMC e MOCs em evolução.

Desenvolvimento econômico direcionado na costa. A situação no Delta do Níger e a pobreza generalizada na região enfatizam a necessidade de mais desenvolvimento de infra-estrutura concertada, geração de empregos para jovens e proteções ambientais costeiras. Dado que as águas do Delta do Níger representam mais da metade dos ataques de pirataria registrados nos últimos anos, há uma necessidade de melhorar as oportunidades econômicas para as comunidades costeiras de lá. Da mesma forma, dados os impactos socioeconômicos da pesca ilegal, poluição e degradação ambiental, os governos estaduais e locais em toda a região devem se concentrar em assuntos de política marítima relacionados que afetam diretamente os moradores costeiros. Isso inclui a aplicação de leis que regem o embarque interno de empresas estrangeiras, a aplicação adequada de leis ambientais e a expansão da construção naval, da pesca e de outras indústrias onde ainda existem deficiências significativas de produção. Tais avanços reduziriam os incentivos que levam os jovens à pirataria e criam interesses compartilhados entre as comunidades, o Estado e o setor privado em uma economia marítima segura e vibrante. A Lei da Indústria Petrolífera da Nigéria, que incorpora medidas destinadas a aprofundar a exploração responsável, melhorar a participação da comunidade local e beneficiar as comunidades anfitriãs com desenvolvimento econômico, social e de infra-estrutura, também poderia enfatizar as oportunidades econômicas ampliadas nas áreas costeiras. No mínimo, as empresas petrolíferas multinacionais deveriam repensar suas atuais estratégias de desenvolvimento comunitário.

Como os países do Golfo da Guiné confiam cada vez mais nos mares para a prosperidade económica, os ataques violentos em evolução à navegação com dimensões transnacionais exigem soluções multilaterais. Iniciativas rápidas como o MICC, o ZoneCC MMCC e outros modelos operacionais já em andamento em toda a região oferecem uma abordagem econômica e de impacto rápido para aumentar a segurança no curto prazo. Embora reconhecendo a necessidade de PMSCs como uma medida paliativa, há uma necessidade de cautela por parte dos proprietários de navios, governos e órgãos regionais contra a comercialização excessiva da segurança marítima. Os governos também devem erradicar os impulsionadores da pirataria, bem como expandir os recursos e os interesses compartilhados em um domínio marítimo seguro. Nenhuma dessas recomendações ganhará tração suficiente para ser autossustentável, no entanto, até que a discussão sobre a segurança marítima no Golfo da Guiné seja levantada do nível operacional para o nível ministerial, onde as linhas da bolsa são mantidas. Até que haja vontade política em cada país da África Central e Ocidental para proteger as águas da região, o Golfo da Guiné continuará a ser um espaço de segurança desafiado.

Fonte do artigo, notas e diagramas de suporte podem ser encontrados aqui.

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Linguista Balochi.

Um blog baseado no Balochistan para estudo de pesquisa acadêmica.

The 19th Century Slave Trade in the Western Indian Ocean: The Role of the Baloch Mercenaries1.

By Prof Dr Beatrice Nicolini.

Faculty of Political and Social Science.

Catholic University of the Sacred Heart.

Prof Dr Beatrice Nicolini.

For millennia monsoon winds and a network of interacting communities created a complex integrated commercial system in the western Indian Ocean. Along with goods and people, religious ideas flowed through short - and long-distance trade routesin the region. These exchange networks included major slave routes, and shared cultural and religious understandings influenced the way slaves were conceptualised and used.

As in Africa, slavery played a significant role in the Islamic world. Armies of mostly Turkish slave soldiers were raised in the Caucasus and the Central Asian steppes while domestic slaves came mainly from the coastal strip of sub-Saharan East Africa. Baloch became involved in this slave trade largely through their military association with Omani Arabs. In the 18th century Omanis began to recruit mercenary troops from Baloch tribes. These Baloch developed an enduring armed tradition and became a key element in the equations of power within Omani areas of influence in sub-Saharan East Africa, both on the coast and inland.

This study examines the role Baloch played in sub-Saharan East Africa during the 19th century. It focuses on Zanzibar and Pemba islands where the power of the Omani Arabs reached an apogee. It discusses their influence on East African social, political and economic systems.

Once the Omanis consolidated their military power in areas of sub-Saharan East Africa, Baloch were among those settled there and during the mid and late 19th century they were linked to the trade in slaves and the most lucrative commodity of the day, ivory.

The Baloch role in East Africa during the 19th century impacted on local societies and their values and they contributed to the transformation of traditional customs. When the British began to restrict the slave trade from Africa in the middle of the 19th century, Asia assumed greater importance as a source of slaves for sale to Arabia and to Persia. Once again Baloch would play a considerable role in that trade.

1. Slavery in the Islamic World and East Africa.

1.1 Slavery from Africa to Asia.

There were a number of significant slave routes throughout the western Indian Ocean during the 19th century (HOURANI 1995:89). These are generally divided into two main flows. One was from south to north, that is, from the East African coast and the Red Sea to the Arabian Peninsula, and onwards to western India and South Central Asia. The other was in the opposite direction. Consequently, slaves were not only black people from Africa but also of Asian origin.

Slaves from Africa were prominent in the history of the Islamic world and beyond. In the late 9th century black slaves from East Africa, the Zanj, who were mainly employed in sugar cane plantations, revolted against the Abbasid Caliph al-Mu’tamid and became masters of Southern Iraq and Basra (POPOVIC 1999, FURLONGE 1999). Around the middle of the 11th century there was an extensive commerce of slaves to China from Pemba and Ras Assir on the northern Somali coast (known as the Cape of Slaves), in exchange for ceramics and luxury goods. East African slaves were imported in great numbers to the Arabian Peninsula, travelling on Arab dhows (AGIUS 2002, 2005; GILBERT 2004). When the slave trade from West Africa to the Americas was banned in the middle of the 19th century there was an extensive and growing commerce of East African slaves from Ras Asir and Pemba.2 They were bought with cloth and dates on Zanzibar and Pemba Islands and transported to the Arabian Peninsula where they were.

mainly engaged in fishing pearls in the Persian/Arab Gulf (SHERIFF 2005:35-45). In some cases, East African slaves also became lords of local African realms (e. g., governors of ports from Guardafui to Cabo Delgado) because their Arab masters considered them much more loyal than anybody within their own clans and tribes.

In the Middle East, Central Asia and East Africa the social, political, and economic functions of slaves were generally divided among three categories: a) domestic – patriarchal, b) productive – agricultural and c) military – administrative. While these The 19th Century Slave Trade in the Western Indian Ocean 329 general categories were present, the slave trade practised in coastal East Africa had its distinctive characteristics. In East Africa slaves formed a separate “caste”. They were thought as less than human, and, even when they embraced Islam they were thought less than Muslim. There were three categories of slaves in the region: 1) watumwa wajinga, who were not assimilated into the coastal populations; 2) slaves who were transported as children to Zanzibar; and 3) mzalia (pl. wazalia), who were born on the coast and fully acculturated into coastal Islamic culture (POWELS 2000:251-271).

Slavery in East Africa was regulated by the principles of Koranic law and those slaves who did not come from areas of Swahili cultural influence were called mshenzi (pl. washenzi), which means “pagan, barbarian, uncivilised”. They were not Muslims, unlike most free Swahili.

Nevertheless, along the Swahili coast slavery was a very absorptive system. Domestic slaves enjoyed the most privileged conditions. Their relationships with their owners resembled more those of members of the family than items of property. Men were called ndugu yangu, “my brother”, and the women were suria, “concubines”, of their owners or “nannies”. In the spice and coconut plantations on Zanzibar and along the coasts, household slaves often became msimamizi “guardians”, or nokoa, kadamu, “first or second head slaves”. Others had the task of leading caravans towards the interior.

Slaves also worked on their owners’ plantations, called mashamba3 (LODHI 2000:46- 47). There, they worked the fields, sieved copal and carried merchandise to the ports. Some were assigned a piece of land with which to support themselves. They worked these plots on Thursdays and Fridays, the two days of rest. The more privileged cultivated their own small piece of land, paying an annual or monthly tribute to their master (GLASSMAN 1995:79-114). They were also permitted, on payment of a tax, to get married.4 During the 19th century, however, the majority of slaves from the interior of the continent, such as the Unyanyembe and Great Lakes regions were destined to work on plantations, and consequently totally excluded from any chance of paternalistic generosity from their masters (PÉTRÉ-GRENOUILLEAU 2004, CLARENCE-SMITH 2006).

In urban centres there was the institution of the vibarua (pl. of kibarua) “slaves hired by the day”. They were extremely poor but in some cases they joined the Hadrami Arabs’ caravans and were able to improve their humiliating conditions. The trading slaves, mafundi “craftsmen”, also reached a certain level of dignity, but remained under strict control of their master. Any illegal or personal initiatives were severely punished.

In East African slavery went hand in hand with the commercial plantations that supplied the growing markets of Europe (HEUMAN 1999): European demand had induced rich African landowners to introduce new, highly profitable agricultural industries. These included sugar cane, rice, copal, vanilla, pepper, cardamom, nutmeg and – especially on Zanzibar and Pemba – cloves. Indian merchant communities, both Hindu and Muslim, were involved in the development of this plantation economy and the trade in these products throughout the western Indian Ocean. Many became extremely rich and powerful as a result (BARENDSE 2001, MARKOVITS 2000). Because there was no local peasant class that could be employed on plantations, black slaves were routinely used to till the land and carry out heavy labour on the plantations. So when England undertook the crusade against slavery, it was precisely this most miserable section of society that constituted the economic foundations of the entire region.

2. Omani Arabs and Baloch in the western Indian Ocean.

Until the first British explorations around the 18th century Balochistan was terra incognita to Westerners, an unknown land and a blank spot on the maps of the period. During the 18th and the 19th centuries Baloch were known to the British representatives in India as ferocious freebooters. At this time Baloch tribes from the coastal region of Makran were pushed by extreme poverty towards Persia and the coasts of Arabia (REDAELLI 2003). Here, they offered themselves as soldiers, sailors and bodyguards for pay, which, even though modest, could represent the difference between life and death for their families. During the 19th century the conditions of life of these people was so hard that the British explorer Sykes wrote: “they are adscripti glebae and in miserable conditions, nominally receiving a third of the crop…only enough to keep body and soul together” (SYKES 1902:108).

It was through such arrangements that Baloch warriors came to be associated with Omani dynasties. These ties date back at least to the Ya’rubi dynasties of the 16th and the 17th centuries and grew in importance under the al-Bu Sa’id in the 18th century.

Thanks to the similar kinship and tribal structures of both societies which stemmed from their nomadic traditions, the Omanis could count on “solidarity” from their Makrani mercenaries. This solidarity always carried a price, however (NICOLINI 2002:

Baloch tribes who supported the powerful Omani-Arab Sultans in Makran initially hoped to receive military support against rival tribes. That support was often not forthcoming, and al-Bu Sa’id mainly sent the Baloch on military expeditions into the Omani deserts or employed them in the ships based in their trading port of Muscat. In 1794, Sultan bin Ahmad al-Bu Sa’id obtained the rights to the revenue from Bandar Abbas and its domains, which included Minab and the islands of Qishm, Hormuz and Hengam, from the Sheikh of the Beni Ma’in tribe. By the beginning of the 19th century the possessions of the al-Bu Sa’id included the island of Bahrain, the Makran coast with its important strategic-commercial enclave of Gwadar, certain sites along the Persian coast such as Chabahar, the island of Socotra, the Curia Muria isles, Zanzibar, and nearby ports on the sub-Saharan African coast. Through negotiation as well as countless acts of piracy and fierce power struggles5 the al-Bu Sa’id expanded their influence throughout the Western Indian Ocean (DAVIES 1997). BARENDSE 2001 suggests trade and tribal relationships between the Swahili coast and the Balochistan-Makran littoral pre-dated the rise of the al-Bu Sa’id but they increased once the al-Bu Sa’id consolidated their power. The al-Bu Sa’id realised that their survival was closely connected with the riches of East Africa, and in 1840 the al-Bu Sa’id Sultan Sa’id Sayyid al-Bu Sa’id (born 1791, reign 1806, died 1856) moved his capital from Muscat to Zanzibar.

Owing to the Arab-Omani mercantile and political expansion along East African littorals, many Baloch settled in East African port towns and in Zanzibar and Pemba islands, the heart of the Omani African dominions during the 19th century. From the accounts of travellers, explorers and European officials of the time, the Baloch tribes in East Africa included the Hot, the Rind and the Nausherwani (MILES 1981:97-112).

While these were the leading tribes of Makran (the Rind in particular were considered to be Baloch blue-blood) and therefore figured most prominently in the British sources, it seems likely that other Baloch tribes were also present. Their descendents are still present there today and are called Bulushi in Kiswahili.

As with the tribes of Oman, Baloch mercenaries along the Swahili coast served as a military force, though it seems they also became involved in East African trade relationships. At that time the islands of Zanzibar and Pemba were administered by governors who represented Sa’id Sayyid bin Sultan al-Bu Sa’id and exercised power on his behalf. The military support that underpinned the governors’ authority over the islands and their affairs, was special troops of proven trustworthiness, that is to say, mercenary Baloch corps closely tied to the al-Bu Sa’id. The governors who represented Omani overlords in the major East African trading ports leadership also had the support of the autochthonous Swahili aristocracy, who were mainly merchants. They were tied to the Omani elite by mutual interests in the exploitation of the resources in the region (GLASSMAN 1991). This mercantile empire moved its economic and political centre of gravity to Zanzibar, making control of the neighbouring islands and the nearby African coast one of the cornerstones of its vast system of mercantile interests. So much so that, many years later, the English explorer Richard Francis Burton would claim that: “If you play the flute in Zanzibar it will sound as far as the Great Lakes” (NICOLINI 2004:119).

3. Oman, Great Britain and Zanzibar.

European rivalry in the Gulf and the western waters of the Indian Ocean from the beginning of the 19th century also had a decisive impact on the region’s maritime routes and their immense commercial traffic, particularly the slave trade. Clearly, however, the ability of the Omani sovereign to exploit such political contingencies also carried a certain weight.

At issue were two profoundly different world views and ways of perceiving objectives and strategies. On one hand was an Omani-Arab merchant prince with his traditional court of advisors, warriors, merchants and slaves, and on the other was Great Britain, a great European power. As a result of marked public pressure, the British launched a crusade against the slave trade and slave traders. This undertaking would have the effect of tearing up by the roots the economic foundations of the entire western Indian Ocean region and of revolutionising both the mechanisms of local power and traditional culture. While the Europeans had superior technology and military power the merchant prince of Muscat and Zanzibar, Sa’id bin Sultan al-Bu Sa’id, was adept at manipulating the political alignments in the region.

By the 19th century the demand for East African slaves came primarily from the Arabian Peninsula, where the cultivation of date palms called for a continuous supply of labour. There was also demand from western India, where slaves were employed in oases and on sugar cane and tea plantations; from Central Asia, where cotton was The 19th Century Slave Trade in the Western Indian Ocean 333 beginning to be grown, from various regions of the Ottoman Empire; and from the American continent. The demand was especially high for young women and girls to.

serve in homes, as well as for eunuchs. Slaves destined for the courts were given special training to entertain important guests with singing and dancing.

Great Britain was the first nation to undertake an international campaign with humanitarian goals. It created, however, a weighty and complex knot to unravel: how to combat slavery and at the same time maintain alliances with the powerful protectors of the slave traders, such as the Omani Sultan, who obtained their greatest profits precisely from the trade in human flesh? The slave trade, therefore, represented a highly destabilising element for British policy, not only on the political but also on a social and economic level. During the 19th century, the growing effectiveness of British measures aimed at abolition restricted the availability of East African slaves. This shortfall was partly compensated for by Asiatic slaves who travelled on alternative and little known slave routes in the western Indian Ocean. One of these routes was through Balochistan, as shown by the commerce in Asian people from Makran destined to be sold in the squares of Arabia and Persia during the first decades of the 20th century.6.

At this point, it is useful to discuss other important factors that played a part in the impressive economic-commercial growth of East Africa at certain times: ivory (YLVISAKER 1982:221-231) and cloves. From the 2nd century BC, ivory was exported from eastern Africa to the Mediterranean. From the 7th century AD, India and China emerged as the main markets for East African ivory. Superior to Asian ivory in quality, consistency and colour, African ivory left Mozambique and followed the maritime routes of the Indian Ocean until the end of the 18th century. At the start of the 19th century the Portuguese imposed new taxes and other fiscal burdens and taxes on the trade, which Abdul SHERIFF 1987:81 terms “suicidal”. Together with the mercantile ascendancy of France and Great Britain in the Indian Ocean, this caused a shift in the ivory trade. The ports of Mozambique continued to ship ivory, but in smaller quantities, while Zanzibar became the major centre of the lucrative trade in this precious material (PRESTHOLDT 2004, MACHADO 2005).

Starting from the second decade of the 19th century, Europe entered the ivory market with its considerable demand. African ivory – pure white, strong, but easily worked – was increasingly sought after in the West for luxury items such as billiard balls, piano keys, elaborate jewels, fans, cutlery, clothing accessories, and elegant items of personal toilette. In the charged atmosphere of a fin de siècle Europe increasingly fascinated by Chinese or other exotic items, ivory was a must. This is clearly shown by the fact that British imports of ivory rose from 280 tons in 1840 to 800 tons in 1875.

The economy of the East African interior thus witnessed an immense growth in the demand for pagazi, “caravan porters”, free men recruited from among allied African tribes (mainly Yao and Nyamwezi), and for slave porters (ROCKEL 2000:173-195).7 Women too were forced by Omani slave traders and Baloch soldiers and bodyguards to abandon their children in order to transport elephant tusks.

No less important than ivory was the extraordinary expansion of clove cultivation on the islands of Zanzibar and Pemba. The creation of a new niche for agricultural exploitation was destined to transform the twin islands into a true commercial empire.

According to English publications of the time, at the end of the 18th century the introduction of cloves (eugenya caryophyllata) altered completely the economic and commercial potential of plantation production, not only in the eyes of the Europeans, but also in those of the Omani-Arab Sultan and the Indian mercantile communities in Zanzibar.

Since the 2nd century BC envoys from Java at the Han court of China had sucked cloves to sweeten their heavy garlic breath during audiences with the emperor. Clove plants, originating in the Moluccas, were first exploited by the Dutch who grasped the commercial value of this precious, perfumed spice, which also possesses medicinal properties. About 1770, the French merchant Pierre Poivre succeeded in obtaining a few seeds with which to start cultivation on the Mascarene Islands. So it was the French who, at the beginning of the 19th century, introduced cloves to Zanzibar. These initial attempts proved successful. The environment was perfectly suited to this cultivation and eventually Zanzibar became the primary producer of cloves in the world.

English accounts report that Sa’id Sayyid bin Sultan al-Bu Sa’id decided to invest his wealth and energy in this project. Such a move needed both courage and faith, as clove plants take from seven to eight years to reach maturity and eight to ten years for the first crop. Budding does not occur at regular periods and the buds themselves must be removed before flowering; harvesting is done in three phases, between August and December. This, along with the need to weed the plantations constantly, required numerous and skilled labourers, as well the Baloch troops which were reported to patrol the Sultan’s mashamba (BENNETT 1987:28-29). The production of cloves was very similar to that of dates and quickly grasped by the Omanis, who proceeded to acquire land on Zanzibar, mainly at the expense of Swahili. The legalised expropriation practised by the Omanis and a somewhat questionable interpretation of the juridical institution of usufruct often led to Swahili lands effectively being confiscated (COOPER 1980).

The clove boom, with its high profit on initial expenditure, effected the emergence of an Omani Arab landowning aristocracy, which was financed by the Indian mercantile communities that slowly replaced the old Swahili aristocracy. The confiscation of the most fertile Swahili lands in Zanzibar and the overwhelming influx of slaves resulted in the limited number of native Hadimu and Tumbatu tribesmen on the island being relegated to the very margins of society. This did not cause any major ruptures, thanks to the dexterity of the Indian investors, who gradually engaged local East African elites by delegating certain tasks and responsibilities to them and making them active participants in this major Indian Ocean business. These Indian banyans (merchants) employed Baloch to defend them, exploited Swahili families, and financed the al-Bu Sa’id as well as British traders and expeditions. Thus, during the 19th century, they became highly influential in Zanzibar (JAIN 1990:71-105).

Clove plantations would prove vital to Zanzibar’s economic growth but they also rapidly undermined the traditional order and created the phenomenon known as “clove fever”. Sales rose phenomenally from 4,600 Maria Theresa thalers in 1834 to 25,000 in 1840 (SEMPLE 2005). For the al-Bu Sa’id in Africa it was a triumph. But hand in hand with the growth of the plantations went an ever-increasing demand for slaves. In 1811, of the 15,000 slaves that arrived on Zanzibar, 7,000 were destined for labour on the mashamba (BHACKER 1992:128). Clove fever pushed the annual number of new slaves up from 6,000 at the start of the century to 20,000 in the second half.

Britain viewed the cultivation and exportation of tropical agricultural produce with an extremely favourable eye insofar as it was a valid economic alternative to the slave trade. The increasing number of clove plantations on Zanzibar also necessitated a notable increase in the labour force, however. High mortality rates on the mashamba meant that almost the entire workforce had to be replaced every four years which, as we have seen, created enormous problems and far-reaching changes within East African society. In addition, the migration flows of Arabs and Asians drawn by this new and profitable market further exacerbated the situation in the eyes of the English.

Maritime city-states of the Swahili coast had always been sustained by intimate interaction with non-Muslims of the rural hinterlands, and this contributed to the consolidation of the coastal identity (GLASSMAN 1995:33). During the first half of the 19th century the demand for ivory came mostly from India. The Omani Arabs exploited the old slave trade routes to the interior bringing new people to the coast of East Africa along with elephant tusks. The Mrima region was the major source of ivory export for Zanzibar economy. While agriculture initially remained their primary source of wealth, Omani Arabs gave gifts of imported cloth from their larger Indian Ocean trade routes, which involved the western Indian ports, to the major chiefs of the interior. Such foreign goods represented a clear sign of prestige and superiority within their tribes. Salted and smoked fish also became an important item of trade. Zanzibar and Pemba islands soon developed the production of fish to sustain the porters along the trade routes to the interior and to use in the very profitable exchange for ivory. The demand for copal also grew during this period. It was produced in Bagamoyo area and bought by the Indian merchants, along with mangrove poles, which were taken to Arabia and to the Gulf.

While the coastal regions were transformed by rising commodity production, societies in the hinterland experienced significant changes due to the massive influx of slaves from the interior and Arabs and Asians from abroad. For example, the town of Tabora, a key site on the commercial route to the heart of the continent, practically became an Arab town, with a considerable Baloch presence. Profound developments took place in the cultural identities of the coast and the islands, on the one hand, and the interior of the continent, on the other, where, from the 1830s on, new caravan routes wrought a true revolution in economic, social and cultural terms (BENJAMIN 2006).

There were several major sets of slave and ivory trade routes to the interior (see the map on p. 338): 1) the “southern” route from ports, such as Kilwa, to Lake Nyasa and the highlands of the south western interior, where the Nyamwezi porters took up their loads of tusks and other goods; 2) the “central” ivory route from Bagamoyo toward the west and northwest, where the caravan trade became progressively monopolised by the Omani Arabs and Indian merchants; 3) the “northern” or Masai route, which led from Mombasa and Malindi towards Kilimanjaro, where the Mijikenda and Kamba were ivory hunters. The Saadani caravan route to eastern Zaire did not develop an Arab merchant community, while the Pangani route led to the foundation of Ujiji around 1840 and passed through the Bondei hills and along the foot of Usambara and Pare mountains. The latter was well watered and preferred by travellers from other towns of the northern Mrima. Large quantities of ivory, pembe, of soft and high quality, came from Pare and the Rift valley, and this route became the second in importance after Bagamoyo. Taveta trading station on the northern route never became dominated by coastal Muslims, as it was too dangerous.

Another technology that was destined to profoundly change the balance of power in the hinterland was the gun. During the first half of the 19th century matchlocks began to appear in the hands of Baloch mercenary troops, who imported them from the Ottoman Empire and from Europe. Leading Swahili families, the Shirazi, gradually lost their power and were displaced by the Omani Arabs in the economy of Zanzibar.8 Although the Swahili retained control of the northern caravan trade, the great wealth soon passed into Arab and Indian hands. With the central route under the control of the al-Bu Sa’id, Tabora and Ujiji gradually became Arab dominated centres. Here Baloch soldiers settled, intermarried, and became powerful figures. The impact of Omani power in Zanzibar on the East African hinterland deeply influenced the lives and traditions of East African men and women. Power relations among traditional elites were modified considerably. Client-patronage relations were transformed, and new actors emerged. The ivory trade, especially during the second half of the 19th century, became a means of travel, adventure and wealth that offered a way to enhance one’s status within coastal communities. Everybody could share this ambition but new tensions grew between the rich Swahili families, who struggled to preserve their precarious domination, and the parvenus on whose support they relied.

While Britain continued on its anti-slavery crusade, motivated in part by the pragmatic aim of weakening the growing mercantile fortunes of Omani Arabs and other oriental leaders, France took advantage of the situation to recapture some of its standing in the region. Sa’id Sayyid bin Sultan al-Bu Sa’id did not hesitate either to double-cross. At the same time he reassured the English, he courted the French to support him against enemy Arab tribes (mazrui, pl. mazaria) on the islands of Mafia and Kilwa and in Mombasa. The Arabs in East Africa provided efficient support for the slave trade, and French merchants exploited this to the full. Under the Treaty of Paris in 1815, France regained sovereignty over the island of Bourbon (DE MARTENS 1818:682). The French explorer Charles Guillain noted the “rapports intimes qui continuaient d’exister entre l’Arabie et la côte orientale d’Afrique, oû nous savons que le commerce des esclaves avait lieu de temp immémorial” (GUILLAIN 1856:162). The Omani Sultan and France shared an interest in finding new ports and commercial bases. However, after taking the potential purchase of Zanzibar and Pemba into consideration, Paris instead turned its attention towards Madagascar. Given the unrivalled supremacy of the Royal Navy backed by the Bombay Marine (the fighting navy of the East India Company) in the western stretches of the Indian Ocean, and the defeats inflicted on the pirates of the Gulf, France was destined to play a secondary role in the Indian Ocean. In 1817, Lord Hastings, the Governor General of Bengal, proposed strengthening the Omani Sultan and supporting his power in East Africa. The Anglo-Indian government’s choice was influenced by continual pirate raids in the Indian Ocean and the Gulf, the commercial and political instability that afflicted the entire region, and the presence of the French, who, despite their setbacks, continued to represent a threat to Great Britain.

On the one hand, British documents reveal that the political manoevres of Sa’id Sayyid bin Sultan al-Bu Sa’id were a cause for alarm: the British perceived him as an element of instability in a region that was the object of great interest and importance. On the other hand, Hastings’ decision represented a firm stance in favour of the Omani Sultan as a political point of reference for Britain, also in relation to those regions of East Africa in which the Omani Arab dynasty exercised an indirect form of control.

Though there is limited literature available to document it, slavery was practised in Balochistan in a similar pattern to that in Africa and Arabia. For example, in 1874 a group of Rinds from eastern Balochistan bought domestic slaves at Gwadar who came from the coasts of East Africa.9 This gave rise to a conflict of interests between the Rind and the representative (na’ib) of the Khan of Kalat in Kej, a conflict that ended in bloodshed and the death of four Rind tribesmen. Sir Robert Sandeman, at that time Deputy-Commissioner of Dera Ghazi Khan, asserted that the death of these men had nothing to do with the slave trade at Gwadar. In 1877 Sandeman became agent to the Governor General and Chief Commissioner of Balochistan. He believed his political agents were not able to identify the real causes of tribal conflicts between groups in Balochistan. He remarked that “domestic slavery is a time-honoured institution in Balochistan as in other eastern countries, and much of the land is cultivated by slave labour … at the same time it must be remembered that many of the ideas attaching to the word “slavery”, which are so repellent to civilized minds, are absent from the manners of the Biluch tribes.”10.

This statement could be interpreted in different ways; for instance, it could be read as Eurocentrist and contemptuous of local populations. There were also geopolitical concerns that would have led Sandeman to justify slavery in Asia (SWIDLER 2003). These include the strategic importance of Balochistan within Anglo-Russian rivalry, the second Anglo-Afghan War (1878-1880), the construction of the Indo-European Telegraph Line that connected Calcutta to London, the long-term political consequences of the Great Mutiny in India of 1857, and the growing importance of the North West Frontier of British India. Also significant at the time was the push to define the borders between Persia and the Khanate of Kalat which started with the commission directed by Sir Frederic Goldsmid in 1870 and ended with the signing of an Agreement in Teheran on September 24th, 1872 (PIACENTINI 1991:189-203, BROBST 1977). During the first years of the 20th century, the British adopted measures against the slave trade that contributed to the reduction of the number of slaves coming to India from East Africa. This reduction corresponded to a new slave trade, a “horizontal slave route”, from the coast of Balochistan to the main suqs of Arabia (see fn. 6). British observers in Makran linked the rise of slavery there with the restriction of the trade elsewhere. “The reason there is such a demand for slaves from these parts, is that the trade from the African Coast has been effectually stopped, and Balochistan is the only place now open to them.”11 The poorest among the Baloch were sold as slaves. They were collected within the district of Kej and sent as slaves to Persian territory as well as to Arabia.12 This is shown by a telegram that the assistant superintendent in the Jask area sent to the to the director of the Persian Gulf section in Karachi on 20 May 1903: “a great number of them are brought to these places from the Kej district … not only Africans but low caste Balochis are now being sold by petty headmen.” Baloch slave women had their heads totally shaved, then covered with quicklime, so that their hair could not regrow, This rendered them easily recognizable and prevented them from returning to their own tribes and villages.13.

To conclude, Baloch were active in the supply of slaves from both Africa and Asia. First as mercenary troops and later as traders, they took part in the slave trade in sub - Saharan East Africa that was generally controlled by Omani-Arabs. But Baloch were engaged in the slave trade in their homeland. This trade included Africans who worked as domestic and agricultural slaves in Balochistan. However, there is also the factor of the enslavement of Baloch by rival tribesmen and more powerful ethnic groups.

A. G.G. Agent to the Governor-General H. S.A. Home Secretariate Archives (Quetta, Pakistan)

1 I wish to thank Professor William Gervase Clarence-Smith (SOAS, University of London) for his sharp comments. I am also grateful to Ms. Ann Griffin (British Library) for her efficient help. 328 Beatrice Nicolini.

2 Starting from the first half of the 19th century the banning of slavery on the western coasts of Africa affected the slave trade along East Africa, which grew during the second half of the 19th century, despite abolition treaties. On the effects of the banning of slavery in West Africa on East Africa see for example FAGE 2002, LOVEJOY 1997, 2000:226-252.

3 The word is a borrowing from French champ “field”.

4 See CLARENCE-SMITH 1989, MARTIN/RYAN 1977, ALPERS 1967, 1975, GRAY/BIRMINGHAM 1970, MANNING 1990.

330 Beatrice Nicolini.

5 Among the incidents the al-Bu Sa’id had to deal with were two attacks on Sur and Gwadar in 1805 by Shaikh Sultan, the leader of the Qasimi tribe of Ras al-Khaimah. The Omani fleet immediately retook the centres after they were seized.

332 Beatrice Nicolini.

6 H. S.A. – A. G.G. Office – Essential Records, Balochistan Archives: Complaint about existence of Slavery in Balochistan, from Capt. P. Cox, Consul and Political Agent, Maskat to Lieut. Col. C. A. Kemball, Agg. Political Resident in the Persian Gulf, 17th September, 1901. Political, 5-2/57. See also MIERS 2003:306-309. 334 Beatrice Nicolini.

7 The importance of porters for the African economy is also due to difficulties with the use of animals, which were liable to getting sleeping sickness (ROCKEL 1997:2).

8 Persian settlements on the east coast of Africa trace their origins to the legend of the seven Persian Princes. Ali, of Abyssinian mother and a Persian father named Hussein, had seven brothers from Shiraz, who sailed to Africa with seven ships and touched at seven different ports where they founded Persian “reigns” from Mombasa to Kilwa. Persian origins, i. e., Shirazi, soon became an ethnic and political identity within the history of Swahili civilization, and today in Zanzibar nauruz, the Zoroastrian new year (mwaka kogwa, which translates as “year washed / bathed”), is regularly celebrated (cf. NICOLINI 2004:62-63, MIDDLETON 1992:101, CHITTICK 1965).

9 The history of slavery in Balochistan, and its connections with East Africa is an open topic as available literature is limited. Some documents in the archives of the district commissioner in Quetta are preserved in a very poor state.

10 H. S.A. – A. G.G. Office – Essential Records, Balochistan Archives: From the A. G.G. to the Secretary to the Government of India. Foreign Department, Quetta, 25 March, 1884, Report n. 942.

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Persia, from Russell, Under Secr. to the Gov. of India to the A. G.G. Quetta, 1903.

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SAP Global Trade Services.

Discuss developments in Global Trade Management Software.

Muziri, Amber Road, Silk, Spice, Incense route to Modern Global Trade – Series VII.

SAP GTS - Restricted Party List screening features.

In SAP RPL feature available in GTS compliance management.

In SAP GTS, RPL feature available in module called compliance management, the available feature can do screening of FI, HR and logistics. SPL Content has to be sourced from third party service providers. SAP supports standard and Fuzzy logic. . Additionally, screening can be scheduled or to run ad-hoc as new business partners are added. Further, those required denied party lists can be updated with the latest versions of the lists (delta-files) from the issuing government agencies and international authorities. The SAP-GTS system would maintain those lists as well as log all updates and screenings. The SAP-GTS software would then identify if any business partner is a reasonable match to an entry on the denied party lists. The SAP-GTS software would then block any business connected to the software for that “possible positive” identification. The SAP-GTS software would then notify the company’s authorized compliance team or legal team for further verification. If a positive match is encountered then the compliance/legal team are obligated to alert the appropriate authorities.

SPL Master Data which can be get it from third party service provider. SAP GTS supports screening against multiple lists. Content can be uploaded either manually or automatically through PI interface. But SAP doesn’t own SPL master data.

The PST. AG is the official data provider for SAP GTS. All data are available also in SAP-XML format.

Data Loader is the module offered by PST that automatically transfers current data in SAP-GTS. This module replace manual uploads in SAP-GTS and secures the verification and execution of business processes based on the current valid directives.

MK Denial services also supplying SPL Master data as XML files.

Customer can use content life cycle management (CLM) to manage contents provided by third party agents who is supplying SPL Master data. Every GRC 10.0 version has this package. No separate license is required. It is excellent tool to manage content. It can be used in SPL and also in other areas process control , risk management and access control.

SPL Screening with the Web UI.

Sanctioned Party List Screening in GTS Area Menu with SAP GUI.

Sanctioned Party List Screening with Mobile App.

Standard and Fuzzy logic.

o Creating and Managing SPL Master Data.

o Generating a Comparison Index for SPL Master Data.

o XML Upload of Sanctioned Party Lists.

SAP Trex 7.0 supports fuzzy logic.

„ Unstructured data (documents)

„ Structured data (business objects)

„ Linguistic: stemming, etc.

„ Fuzzy: Search error tolerant.

„ Wildcards and truncation’s ( * or ? )

„ Phrase search for complex expressions.

„ Boolean operators (AND, OR, NOT…)

„ Highlighting / HTML conversion.

„ Content Snippets (Abstracts)

Trex supports multiple languages.

o Monitoring SPL Master Data.

o Checking Upload Logs.

Can be downloaded in excel format.

Oracle has six GTM match engine to choose from.

If Comparing John Paul to Jon Pal.

System breaks into four string combinations.

John compared to Jon Paul compared to Pal John compared to Jon Paul compared to Pal.

Bigram factor is calculated for each combination.

Field Match factor.

Weighted against the length to calculate Field match factor.

Every bigram combination is weighted against total word length.

If Field match factor > threshold in Service Parameter.

Then Multiply Field match factor by Weight in Service Parameter.

Determine if total value in last step is greater than threshold in Service Preference.

You now have the ability to define the match direction (forward, reverse, both) and threshold at the individual field level when using the Dice Engine. This capability allows you to configure GTM’s RPLS matching logic to calculate a match factor for the forward case i. e., match factor based on party value length and/or the reverse case where the match factor is based on the denied party value length. This enhancement improves the overall match quality by reducing the number of false positives.

The Dice Engine now supports Reverse Matching (i. e. with respect to Denied Party) • Available options are Forward, Reverse and Both • The Match Direction and Threshold can now be set at the Individual Field Level.

In Oracle GTM 6.3.4 , work flow can be created separately for contract party screening (Batch) and transaction party screening. The Denied Party List Data Download now automatically checks the current Agency Code List to insure that Agency Codes included in the latest download already exist in the Agency Code list – if they do not already exist the new Agency Codes are automatically added to the list. Null fields ignored for determining match considerably reduce false positive cases.

Review match factor helps to compare how match calculated between a party and restricted party . It provides the following information.

Forward Matching Threshold.

Reverse Matching Threshold.

Highlights the matched Word.

Modified Match Factor (based on weight age)

Overall Tolerance Check.

Display the actual match value with tolerance values.

Like SAP GTS, oracle GTM supports adhoc screening, but simulation without updating in the database is not available in GTM.

Amber road is supplying content to clients. That gives bigger benefits for client, because Amber road supplies restricted party screening (RPS) software as part of Export Management suite. It enables exporters to quickly screen customers, suppliers, and other trading partners against over 300 restricted party lists from government institutions worldwide. Providing accurate and up to date content of restricted parties is the strength of Amber road. Since Amber road’s is not sharing publicly documentation, knowledge has to be acquired from information available in Internet domain. Integration of content and software is generally challenge in SAP GTS and GTM, but here it is minimized, since vendor supplying both software and trade content (Sanctioned Party Lists). Since company is taking ownership of content, client not necessary to bother much about audit issues. Also company is providing automated feeds integrated with software so that real time update of content is possible. If you depend on third party service provider there will be possibility of time lag and delay in update causing slipping of sanctioned party potentially cause non-compliance.

Amber road use advance word matching technologies, exact matching is not sufficient to demonstrate reasonable care, solution should be capable to compare how similar trade party and sanctioned party. Typical text matching algorithm can produce results with 90% accuracy and 35% false positive. But, Computational linguistics matching can bring 99.6% accuracy and less than 1 % false positive, lesser false positive rates can result in tremendous gain in productivity for compliance team.

Amber road also offered as on demand software (or) Software as a Service [SAAS]

on-demand (or) cloud allows you to focus on your core business and.

a) avoid investing in hardware;

b) avoid investing in software;

and c) eliminate the cost of additional IT resources and data centers to run the application.

The objective of this article series is to understand the complexities of global trade management business in terms of documentation and regulations. All functionalities of individual software’s not covered here. Choosing a right software is very critical for business, one is investment another is time.

How to choose a right GTM software for your organisation, what are the criteria’s need to consider to decide a software, why we need to implement a GTM software, whether we need to implement on-premises or cloud. I see there is a huge potential for cloud in Global Trade Management process in terms of documentation, managing compliance and reporting to customs authorities. We see in detail about the prospects of cloud replacing on-premises (or) traditional software in detail after completing analysis of all areas of global trade business. In my series of article next i am going to discuss about license requirements as part of meeting compliance.

Muziri, Amber Road, Silk, Spice, Incense route to Modern Global Trade – Series VI.

Basic process flow of Restricted Party List screening 1) RPL master data can be inputted in to RPS software via manual entry, by text flat file loading or XML messaging. Also data can be uploaded through middleware from service provider server to RPS software available with client. This process can be set up as a batch job based on frequency of new file from third party service provider.

2) RPS software with a screening logic or search algorithm can be capable to do evaluation in a sequential manner. Screening information will be stored as record for audit trail. Screening happens against Business partner master data, this data can be either within RPS server or in external Master Data in order management system.

3) Match is a result of screening. System generates match after comparison.

4) Match generated can be reviewed in work queue or in dashboard by compliance team . Work queue can be internal within application or web hosted one. In web based software, a compliance manager can view list of blocked customer and vendors and then take decision with regards to release or continue to block. This process can be controlled through email notification workflow for authorization and approval based on hierarchy within compliance team.

5) The output of the results can be generated as reports . Match is generated based on screening logic or search algorithm only. Algorithm is the crucial factor for the performance of screening, in fact this feature decides how best that particular RPS software performs . Algorithm is nothing but a set of rules to perform a function in a sequential manner, starting from a initial input of master data upload proceeds through a finite number of successive steps eventually producing a “output” of possible match entries.

Governance Risk Compliance Framework policy is required for a company to decide upon what to include in screening and what to exclude . This is possible only after consultation with legal and compliance team. This is specific to company and it depends on products it selling , we have seen earlier in detail about GRC framework in previous article series.

The basic specification of Restricted Party Screening software are the following.

Check and throw a match or generate a message successful check without any match when a new list or new RPL master data input uploaded in system.

Monitor , if there is a change in field level of a business partner master or change in address in transaction level created in order management system generate a alert message . Basically, the change in feeder system has to trigger a screening in RPS software synchronously.

Report can be viewed in dashboards by compliance team to decide upon match generated after screening.

Audit trail is a record of activity happened in RPS software and in order management system for screening purpose . It has information of initial introduction of RPL master data and match comparison generated and subsequent action taken by compliance team. Since entire sequence is available it can be verified later for validation in case of compliance audit.

The variations between screening software’s available in the market is based on features like the way data input in to the system, search algorithm strategy and report functionality in the form of dashboard or work queue. There is another important feature is native language support other than English and other European languages. RPS list can be in any languages like in Mandarin, Arabic, Japanese and any other foreign languages. These languages are currently not supported by many software’s. SAP and oracle also not directly comparing, it is transliterating RPL master data into English to identify match. Having multi-lingual check helps to verify with original master RPL data , transliteration may cause conversion of text wrong.

We can do comparison of features available in SAP GTS, Oracle GTM and Amber road in detail in next article.

Muziri, Amber Road, Silk, Spice, Incense route to Modern Global Trade – Series V.

Know what you need : GRC framework is the starting point to decide what type of RPS software is required. When company has huge volume of transaction in a day, it will be mammoth task for compliance team to verify every block and check its background before release it or keep it on hold. Blocks are generated based on comparison between Restricted party list master data and business partner exist in order management system. If the number of false positive is more it is laborious process for compliance manager to release it and update reason for audit purpose. In a situation, if genuine case skips as negative, then there is a possibility company ship the goods to sanctioned party, which may cause penalty or loss of export privileges. So it is like walking in razor edge to implement a software with a well balanced approach of less false positive blocks without compromising genuine match to block. Restricted Party List master data created from various sources. Data from various sources collated and prepared in a format to upload in RPS software. Sources here can be either government or non-government agencies. Products like SAP GTS nominates third party service providers to share SPL details with client. They used to supply these information in XML format. There are GTM vendors like Amber road provides RPL information to their clients directly whenever there is update. We will understand now what is list type?.The Sanctioned Party List is categorized in some countries. This means that it is divided into sub-lists. The Sanctioned Party List type represents this type of sub-list.

The Sanctioned Party List in the U. S., known as the Denied Party List, is divided into the following sub-lists.

& # 8211; SDN (Specially Designated Nationals)

& # 8211; SDNT (Specially Designated Narcotics Traffickers)

& # 8211; SDNN (Special Designated Nationals Narcotics)

& # 8211; SDT (Specially Designated Terrorists)

& # 8211; EOC (Entity of Concern)

& # 8211; DOS (Department of State, Debarred Parties)

Specially Designated Nationals and Blocked Persons (SDN) are individuals and entities located anywhere in the world. SDN’s can be frontal companies, parastatal entities, individuals determined to be owned or control by or acting for or on behalf of, targeted countries or groups. They also can be specially identified individuals such as terrorists or narcotics traffickers. U. S. persons are prohibited from engaging in any transactions with SDNs and must block any property in their possession or under their control in which an SDN has an interest.

OFAC is providing information of SDN/ NON-SDN and it can be downloaded in excel format.

How lists are generally structured? Lists are structured with following fields :-

1) Type – whether individual or entity.

2) Name :- Name 1 and Name 2.

3) ID# reference ID # this a key field.

4) Program - It is a defined code and It can be either specific to country or comprehensive, the objective of this program is to implement trade restrictions and blocking of assets in line with foreign policy and national security goals of country. Every program has a tag definition. Country specific sanctions like Ukraine \ Russia specific, particular economic activity or export to this country is allowed based on US government interest. When an exporter plan to ship any goods to Ukraine / Russia it is a requirement to request for license from Office of Foreign Asset Control OFAC authorities. Authorities will review application and issue license with a validity period.

Specially Designated Nationals List (SDN) can be country specific or program defined by OFAC.

Consolidated Sanctions List is a non SDN list , though this is not part of OFAC list the records in these consolidated files may also appear in SDN list . The goal of these consolidation is to reduce the number of list related files, this has to maintained to have automated sanctions screening program.

Find below list of program provided by a third party service provider. The list by no means exhaustive. Now you can ask a question, how many lists are there do I need to screen with all. One service provider is offering 240 list, and normally US exporter is screening with 90 global lists in that 12 government lists are there to stay compliant. The answer for how many lists do I need to screen, depends on how many customers company dealing with how frequently you are doing drop shipments and what products / services offered. If your products are falling under ITAR, then it is necessary for you do double check to stay complaint.

BALK – Western Balkans (OFAC)

BYE – Blocked Yugoslav Entities.

CBW – Chemical Biological Weapons.

CTL - Canadian Restricted Entities.

BXA – End user Requiring License Entity list (BXA)

EUS – European Sanction List.

FBI - FBI most wanted list.

GPC – Global Proliferation Concerns.

INKSA – Iran, North Korea and Syria Nonproliferation Act.

JPC - Japanese Proliferation Concerns (MITTI)

MT - Missile Technology concerns.

MVI – Merchant Vessel Iraq.

MVV – Merchant Vessel Vietnam.

SDNB - Specially Designated Nationals, Belarus.

SDNC - Specially Designated Nationals, Cuba.

SDNK - Specially Designated Nationals, N. Korea.

SDNL - Specially Designated Nationals, Libya.

SDNLB – Specially Designated Nationals, Lebanon.

SDNLR – Specially Designated Nationals, Liberia.

SDNS - Specially Designated Nationals, Sudan.

SDNSM – SDN Designated Nationals Sergei Magnitsky.

SDNSO – Specially Designated Nationals of Somalia.

TCO – Transnational Criminal Organizations.

TDO – Table of Denial Orders (BXA)

UKPC – UK Proliferation Concerns (Concern List Only)

UNS - United Nations Security Council Sanctions.

WB - List of Debarred / Ineligible firms.

We have sanctioned parties list one side and other side master data from order management system. How we are going to do comparison to identify match . one fool proof method could be screening for exact match on a name. For example when “John Paul” matches ” John Paul” then you have a match. Unfortunately, in real world sanctioned parties are not that easy to catch, when your customer may order your product in disguise with alias name or purposely change spelling to avoid detection. John Paul and John Pal with 100% match rate will definitely get slips in the crack. Accurate screening solutions should be reasonably taking care of all loop holes and provide results with high level of accuracy and low level of false positives. A business partner who is dealing with your company will have Name, Street, City, Country and Zip code. Other side, RPL master data also will have Name and Address information. We have both these information side by side. Now we need to implement search algorithm to identify any match is there between these two records. We will do comparative study in next article how this is handled in RPS software’s available in market.

Muziri, Amber Road, Silk, Spice, Incense route to Modern Global Trade – Series IV.

The objective of this article series is to understand the complications in running global trade business and how GTM software can help to run smoothly.

We will see Compliance, Preference, Content, documentary letter of credit and Customs Management.

First, we see how Restricted Party Screening Framework can be constructed as part of Compliance policy for a company:-

Develop RPS Framework.

Define scope of screening: Identifying which are the Business partners need to be screened is the first step to construct a RPS framework. Business partners means not only customers alone. Customers, Suppliers, Financial Institutions like banks through which your customer making payments to you, there is a need to verify the background of the bank which issues Letter of credit on your customer behalf. It may have a branch in Sudan or Syria or may deal with banks of embargo countries. Also it is required to verify service providers like customs brokers, forwarding agent and transporters to stay complaint. Companies also should start RPS Screening within inside. HR departments should start using RPS software for background check as part of pre-employment screening. Employers need to ensure they are not recruiting a candidate who are in denied party list. As part of GRC Framework, visitors also should be screened when they visited company offices and production sites. It is the responsibility of export controlled technology products manufacturing companies to protect trade secrets for purposes of national security, foreign policy and counter-terrorism under the export control rules of the State, Commerce, and Treasury Departments. So maintaining trade secrets is not only for staying competitive and also it is part of export compliance. Companies planning to do acquisition also has to do proper scrutiny for compliance history and verify any violation history exists for selling company. All enforcement agencies impose successor liability so it is the responsibility of buying company to check antecedent of company which decided to sell. It is better to keep philanthropy activities of company also under the lens of compliance. It is necessary for company to do background verification check before granting money as part of charity work. It is imperative to implement a good RPS software solutions to verify the charity organization history before providing aid. It is the responsibility of the company make sure your financial grant is not distributed to wrong parties. Screening is necessary to be part of Governance, Risk and Compliance policy framework, and it is also required to extend to brokers, commission agents, dealers, insurance companies, hotels, car dealers, as a whole name any partners your company dealing with. If your company conducts business with a black listed party, or if found to be associated with a denied party due to poor internal security in IT infrastructure, improper pre-employment screening, supplied to denied party, distributed donations to parties who are blacklisted may result in revoking of trade privileges, fine and loss of reputation of company. A well-defined GRC Framework policy is crucial to prevent lapses.

What is fully automated means is, how system has to decide block or not to block a transaction when there is a match or a possibly positive match detected in feeder order management system. RPS Software solution should be capable to do screening large volume of data with less intervention manually, compliance manager’s responsibilities should be confined with verifying the resultant value is positive or false positive . How we decide automated system and how much to automate and what are the criteria’s has to be set, is the big question in front of us before deciding a solution :-

& # 8211; Average volume of international transactions created in year.

& # 8211; Average volume of transactions relevant to check means there is no need to verify stock transport order, intercompany shipments under one company code.

& # 8211; But end-user (or) ultimate consignee is third-party then it is necessary to check.

& # 8211; How master data for Trade or Business partners maintained.

& # 8211; When and how RPL master data updated in your system.

& # 8211; Volume, timing and control are the key factors to decide how you are going to construct a solution for your RPL Screening requirements. Third party service providers for compliance check like MK Denial and Choice point sharing data of Restricted Parties from various sources. Sources is listed and supplied to companies in XML format or directly uploaded in server if interface is there. Compliance manager (or) clerk can n keep RPL Master Data as spreadsheet and verify whether any match is there before creating sales order in order management system. But, this is time-consuming process and it will be very difficult to do when you have large volume, say 4,000 transactions in a year. An ideal solution should be have an option to check real-time and in batch, hundreds and thousands of partners at one time. Both batch processes and real-time verification is very critical when you are maintaining list from various sources with different validity dates. Currently, an average US exporter must screen twelve different government lists to stay compliant, if your company is doing business from other countries additional lists also needs to be verified to maintain compliance. If the volume is very high it will be very difficult to maintain accuracy.

& # 8211; Timing is when to perform screening.

& # 8211; When any new master data created for Business partner, for which screening is required.

& # 8211; When master data modified in system.

& # 8211; When new content of RPL master data updated in system.

& # 8211; When address is changed in transaction level. This is possible for drop shipment scenarios.

& # 8211; check of name and contact when attention details updated in transaction level.

& # 8211; Control is the standard of comparison for checking results of screening processes. You can have either synchronous (or) asynchronous screening. When document or master data created (or) modified in order management system, if RPS software runs automatically screening generates results then it is synchronous check. The displayed result in screen can have blocked and released documents. To block or to release decided by system based on RPL master data available in RPS Software. This process is completely system driven. In asynchronous mode, RPL Check run as background processing through batch job or in dialog. When you run screening as batch job, the check results will be displayed blocked and released documents same as synchronous. If you run screening as dialog, system generates results directly Asynchronous is advantageous when you have large number of back end system documents as it is not performance intensive. We see next what SPL specialist has to do when there is a block. How list prepared by third party service providers. How we control false positive block.

Muziri, Amber Road, Silk, Spice, Incense route to Modern Global Trade – Series III.

This is continuity of my previous article about developments in Global Trade business and also how evolving regulations by individual governments in customs areas posing challenges for International Trade managers and compliance to run export and import operations successfully. We have seen so far the customs declaration of US. Now we see customs declaration formalities in European Union.

N ew C omputerized T ransit S ystem (NCTS) is a European wide system for electronic declaration, it controls both community and common transit. It involves all European Union and EFTA. NCTS connected with 3000 customs offices in European Union and its central domain exists in Brussels.

In the EU customs declarations are mostly submitted electronically. However, every member state has its own system. For the Netherlands this is SAGITTA, for Germany it is ATLAS (Automatisiertes Tarif - und Lokales Zoll-Abwicklungs-System ), United Kingdom has CHIEF.

(Customs Handling of Import and Export Freight )and for Belgium it is PLDA (Paper Less Douane en Accijnzen) Austria has e-ZOLL France has DELTA and EFTA country Switzerland has e-Dec.

How Global Trade Management software’s available in market, supports declaration to customs authorities we see later in this article series..

We first analyse compliance issues faced by exporters and importers in the form of screening requirements. Restricted Party List (RPL) screening is one of requirements of a company as part of trade compliance when there is a inward or outward movement of goods, services or human across borders.

Why RPL Screening is required.

Screening is required as part of Export Management program for a company involved in International Trade to meet full compliance of foreign trade law of a country.

When RPL screening is not done.

If an exporter fails to do screening and done shipments to a party which is sanctioned by government it can results in Sanctions or fines, even loss of export privileges.

What do i need to understand about Sanctioned Party List or Restricted Party List Screening.

-No product can be shipped to any party on a denial list.

& # 8211; End user / Install site information necessary to know for all restricted product orders. (What is restricted product orders we can see in license requirements).

& # 8211; Distributors, Freight forwarders, and depots are not end users.

& # 8211; Ultimate consignee is the final party receives the product. Ultimate consignee is not end user in all instances.

-End user may be different from consignee, if products falls under restricted it is necessary to do screening. Onde eles estão? who are they? what business they are in?

& # 8211; Screening is not intended to check credit capability of buyer. It is intended to check whether the user is sanctioned by any government agencies.

What information require to do RPL Screening ?

-List of denied parties : Master data with list of parties forbid by government to receive goods or not to receive goods from them.

& # 8211; Source : Government authorities interacting with various agencies publish information about restricted parties. Source is a important element in screening that is the base for denial of exports to particular buyer which has to be stored in database for audit purpose.

& # 8211; Starting period : From which date on wards particular party falling under the category of restricted. Starting period is nothing but validity start date of sanctioned party published by government agencies. When government agencies publish lists, they include validity period starting from and to. Status reviewed periodically and updated as Restricted party again or exclude from lists.

Who can provide information ?

& # 8211; Government websites like export. gov, bis. doc. gov and individual countries government websites.

& # 8211; The companies supplying Global Trade Management software like Amber road, Choice point , Integration point also provides this information.

& # 8211; MK Denial is the service provider generally supports for SAP GTS.

How this information can be provided by service provider ?

& # 8211; Service provider can send this classified information as XML format either through email or directly uploaded in your server with a middle ware support. Individual customers also verified and replied by service providers via email. Those communications require to store it for audit review.

Alternatively this information can be downloaded directly from government websites as spreadsheets and verify it with your customer database.

How companies are managing this today?

Many companies are downloading this information from government websites and storing it as spreadsheets and comparing with prospective customer / existing customer master data in their system. The problem with this approach is, it is very difficult to keep a track of source of information and when that party declared as restricted. Also very difficult to maintain consolidated list of restricted parties with source information and validity period. Screening your customer base manually is not only inefficient but also impossible in many cases. So there is a need of defined criteria to find out optimal Restricted Party Screening Solution (RPS) software which helps compliance manager to perform screen/monitor/audit of customer and vendor details both in master data level and in order / PO creation level . Below criteria’s can be considered to identify suitable software for your needs :-

& # 8211; Screening scope with flexibility to expand.

& # 8211; Integrate with Order management system.

& # 8211; On Demand Solution.

-Matching accuracy with less false positives.

-Well defined workflow and escalation support.

Based on this criteria’s we will construct a RPS Framework to develop compliance program suitable for company’s needs…

(To be continued)

Muziri, Amber Road, Silk, Spice, Incense route to Modern Global Trade – Series II.

This is continuation of my previous blog about history of Global Trade business. In this article we see how institutional development brought many progress in International Trading worldwide. Customs formalities and government regulations changed over the years prompt companies to develop IT infrastructure to meet timely execution of their global supply chain. The history of modern global trade can be considered to start with Global Agreement of Tariff and Trade (GATT).

After World War II, the United Kingdom and the United States submitted proposals to the Economic and Social Council (ECOSOC) of the United Nations regarding the establishment of an international trade body that was to be named the International Trade Organization (ITO).ECOSOC convened a conference, the United Nations Conference on Trade and Employment in 1946 to consider the UK and U. S. proposals. A Preparatory Committee drafted the ITO Charter and it was approved in 1948 at the conference in Havana, Cuba. The Charter is often referred to as the Havana Charter or the ITO Charter. The first round of trade negotiations took place while the Preparatory Committee was still working on drafting the Charter because the participants were anxious to begin the process of trade liberalization as soon as possible. Their results were incorporated into the General Agreement, which was signed in 1947.Since the original signatory nations expected the Agreement to become part of the more permanent ITO Charter, the text of the GATT contains very little “institutional” structure. This lack of detail within the agreement has created increasing difficulties as the GATT membership and roles governing trade between so many of the world’s nations have grown. The GATT has functioned as an international organization for many years even though it has never been formalized as such.

ECOSOC established an Interim Commission for the ITO that is referred to as ICITO. Unfortunately, when it came time for the members to ratify the ITO Charter, the Congress of the United States refused and the ITO never became a reality. The GATT survived, but remained intact only due to the Protocol of Provisional Application of the General Agreement on Tariffs and Trade which was concluded in 1947 and which entered into force in 1948.The GATT completed 8 rounds of multilateral trade negotiations (MTNs). The Uruguay Round (the 8 th round) concluded with the signing of the Final Act on April 15, 1994, in Marrakesh, and produced the World Trade Agreement (WTO) and its annexes.

During the GATT period from 1947, there were lots of development happened in International Trade front. Bretton woods significant one in International trade, the agreements sowed the seeds of International Bank for Reconstruction and Development (IBRD, which is part of today’s World Bank Group) and the International Monetary Fund (IMF). These development started after end of Great Depression and world war II. The countries realised the fact there is a need of change in economic climate which is able to achieve only by trade co-operation. This article intended to explain development of customs activities and in turn cause complications of business so i don’t want to digress from my core topic. But people who wants to know more in this area can search for Euro currency market and Oil shock . These two major developments happened between 60’s and 70’s.

Institutional infrastructure to support international trading are.

Customs regulations of individual government - AES (US),ATLAS(Germany),CHIEF(UK), ATLAS / NCTS / CHIEF / SAGITTA Hassle free formalities for Export and Import activity in a country Information flow between individual company to customs of every country Inter country communication flow between customs of various activities Institutional support of ICC, WTO, WCO and UNCTAD Regional Trade Agreement (RTA’s)

AERP and AES in US Customs.

The Bureau of the Census, responsible for collecting US export statistics, introduced the Automated Export Reporting Program (AERP) to the US in 1970. This program permitted exporters and forwarding agents to declare their export transactions each month directly to the Bureau of the Census by using electronic media. Consequently, creating a paper Shipper’s Export Declaration (SED) was no longer necessary. The Bureau of the Census combines data received electronically and on paper to produce official US foreign trade statistics.

The advantages of issuing the AERP declaration instead of the paper SED included reduced costs, reduced administration, and faster generation of trade statistics. Until December 31, 1999, you could transfer the AERP declaration to the Bureau of the Census in three ways:

The system selects data from the intermediate database VESED, creates the information relevant to the declaration, and writes the information in a special file. This file forms the basis for creating a magnetic tape or diskette for the AERP.

The Automated Export System (AES) is a joint venture between the U. S. Customs Service, the Foreign Trade Division of the Bureau of the Census (Commerce), the Bureau of Export Administration (Commerce), the Office of Defense Trade Controls (State), other Federal agencies, and the export trade community. It is the central point through which export shipment data required by multiple agencies is filed electronically to Customs, using the efficiency of Electronic Data Interchange (EDI).

From 2001 US customs has brought in Focus Based Risk Assessment in Customs audit. In March 2003, the U. S. Customs Service became part of the U. S. Customs and Border Protection. The auditing pattern changed from Transaction to process validation. It means earlier before 2001 it was Compliance Assessment and after 2001 it was Focused Assessment . Focused Assessment starts with Internal Control Review , Test only area at risk, Transparent – on the Web AND Includes Models for Compliance c Continue reading →

Muziri, Amber Road, Silk, Spice, Incense route to Modern Global Trade – Series I.

International trade has got a long history there are evidences Romans trade with India in 1st century CE. Pattanam , a small village in Kerala once was a busy port town called Muziri visited by foreigners for trade. There are evidences of export and import happened in this place. (Source en. wikipedia/wiki/Muziris) . Amber Road is the ancient trade route for transfer of amber from Baltic to Mediterranean sea. Silk route is a china silk traded between china and other Mediterranean regions. The incense route was a network of trade routes extending over Arabian peninsula and Mediterranean region. Traders created the demand for the commodity they brought along with them to another country where it is not available. Historically international trade has many challenges, traders moved to unknown countries where the acceptance of their commodity is a big challenge. Colonial trade of North Atlantic ocean and establishment of British colonies in different parts of Asia, given an impression trade is an entry to make the country slavery.

History of Foreign Trade Law.

I have come across one web site which gives details list of export and imports of different parts of the world in ancient period.

If we try to explain international trade history we have to go way back Greek period. Classical Athens known for trading activities as early as fifth or fourth century BC. Athens was said to have imported grain from South Russia, Sicily and Egypt; Salt fish from Spain or the Black sea. From Mediterranean region they imported Spices , Textiles and luxurious goods . Basically, the Greeks import what is necessary for them can call it as “Corn and Grain Trade” There was no rules and regulation mostly people involved were foreigners who supplied what required for locals. But there was a primitive form of customs and commercial rules set mostly by foreigners. There was so called ‘Emporial Laws’ . These laws dealt with import and export supply of goods mainly corn and grain. Litigation under emporial law heard before a special court Nautodikai and from middle of fourth century onwards before Thesmothetal. Commercial self interest driven those laws, in detail information not available. I want to highlight one more interesting point here, Athens and other countries had commercial treaties for imports we have seen. For example the treaty between Athens and Leucon I of Bosporous merchants in 4th century. It exempted the import duty the ships of Bosporous merchants. There was some kind of Preferential agreement exists in those days itself.

Periplus of the Erythraean Sea – Wikipedia, the free encyclopedia.

Romans also has done exports and imports. Unlike Greeks, Romans trade and commerce largely regulated by state legislation and the customs of the trade. Trade and commerce governed by ancient codes (Refer unrv/government/laws. php ).What is interesting to note here Roman kings had commercial treaties with foreigners to safe guard interest of their own merchants. Since Rome then was strongest countries in the world treaties were favorable to their interest. But this was organised one and had treaties with many nations in the world.

Ancient India has good trade relations with Romans. You can refer en. wikipedia/wiki/Indo-Roman_trade_and_relations to understand Indo Roman trade. There is a book available in Internet “Foreign Trade and Commerce in Ancient India” by Prakash Charan Prasad has more insights how trade and commerce exist in ancient India.

The value of Indian trade may be estimated from the well-known passage of Pliny, in which he recorded that India drained the Roman empire of fifty million sesterces every year. The wealth of early India is confirmed by the lament of Pliny the Elder in Historica Naturalis (Natural History), completed in 77 AD that all of Rome’s coffers were being emptied into India to satisfy Roman demand for transulent Indian muslins. Pliny’s statement is corroborated by the discovery, in India, of innumerable gold coins of the Roman emperors, which must have come here in course of trade. Most of the coins have been found. Most of these coins have been found in South India, and their evidence is corroborated by many passages in classic Tamil literature. We read of ‘Yavanas of harsh speech’ with many wares; of foreign merchants thronging sea-port towns like Mamallapuram, Puhar, and Korkai; or busy customs officials, and those engaged in loading and unloading vessels in the harbor. The wealth of the Roman Empire reached India through the ports of Kalyan, Chaul, Broach, and Cambay in Western India. Tamralipti was an important port in Bengal. It carried on trade with China, Lanka, Java and Sumatra. In the Andhra region, the ports were Kadura and Ghantasala, Kaveripattanam (Puhar) and Tondail were the ports of the Pandya region. The ports of Kottayam and Muziris were on the Malabar coast. There was a great maritime trade between India and Southeast Asia and China. The rulers of India facilitated trade by building and maintaining lighthouses at the necessary points and by keeping sea routes free and safe from pirates. (source: India: A Country Study 1985)

Refer ancientindia. co. uk/staff/resources/background/bg16/ to know about list of commodities export and import from India.

The earliest form of body of rules and customs which we now call it as a International commercial law was found in rules and customs governing merchants and maritime matters which were then broadly called as maritime law. The Lex Rhodia de jactu was body of law developed in the island of Rhodes two or three centuries before Christ. The rules and customs laws varied in each European state based on local law and customs as a result maritime law also varied. After fifteenth and sixteenth century sea borne trade internationalized, moving from Mediterranean to Atlantic this create a demand for uniformity for international and customs law. It was interesting fact that English were late entrants in European Union . Lex Mercatoria one of the early forms of international commercial law or international trade law.

Ancient china was one of the world’s oldest civilization. Silk road was the recognized trade which refers to route of trade in the north west of china linking china with central Asia, the middle east and Europe. For centuries, Japanese , Koreans, Iranians , Arabians and Vietnamese and merchants from south east asia arrived in china by sea. Chinese textiles, porcelain, and crafts exported out of china by sea. Gold, Indian and Iranian gems, Soybeans and grapevines Chinese generally imported. This was happened through silk road and ships too. There was license system exist in china, during han dynasty trading with foreigners without license was punishable by death penalty . There were references about Bills of exchange during Tang dynasty period, one of the flourishing period in Chinese history. They were named feiqian named flying money. Also there were references of Tang code which describe about Foreign Trade and customs law.

Japan was mainly traded with china and Korea. Japanese mainly purchase copper coins, porcelians, books, paintings perfumes and medicines. Inline with Tang code Japanese also had ritsuryo (legal code). Japanese also has Bills of Exchange called Kaisen, Saifu or Warifu to facilitate commercial transactions.

The Incense trade route or the Incense Road of Antiquity (see also the spice trade) comprised a network of major ancient land and sea trading routes linking the Mediterranean world with Eastern and Southern sources of incense, spices and other luxury goods, stretching from Mediterranean ports across the Levant and Egypt through eastern Africa and Arabia to India and beyond. The incense land trade from South Arabia to the Mediterranean flourished between roughly the 7th century BCE to the 2nd century CE. The Incense Route served as a channel for trading of goods such as Arabian frankincense and myrrh Indian spices, precious stones, pearls, ebony, silk and fine textiles;and East African rare woods, feathers, animal skins and gold. (Reference : Wikipedia)

I am not going in detail about the development of Foreign Trade between Seventeenth, Eighteenth and Nineteenth century. It will be more academic research which is not the objective for me. Also, there are so many articles and detail available in Internet to know about it. When i do research about Foreign Trade in historic period i am surprised to find out what we call it as present day development exists more than thousand years back. We will see development in Foreign trade in terms of institutional and regulations in next article. & # 8230 ;.

Sourcing challenges and benefits from Landed cost calculation software.

Selling the quality products cheaper is the challenge of every entity throughout the world. In the coming years the requirement is going to augment when the demand and expectations of the customer manifold. How the companies are going to meet these challenges? Product should be manufactured cheaply, input cost should be economical. Purchasing worldwide helps the company to achieve economies of scale and give competitive advantage in terms of pricing and profit margins. The biggest challenge in product (or) raw material sourcing is identify potential manufacturers or distributors from around the world. We realize we gained or lost, when we compare the true or total landed cost calculated prior to making purchasing decisions. Without understanding of total landed cost it is impossible to make informed decisions on product sourcing and profitability. Many occasions we may end up in paying high than actually planned or cost calculated. Also the important point here is the inventory value needs to be arrived based on the total value incurred for purchase of that product.

Take the following example, a company in New york , US purchasing a widget from a supplier from Ahrnesburg , Germany :

purchase price – 100 widgets @ $ 20 each.

shipment from Ahrnesburg to New york – $ 1500.

Customs, Duties, and other Processing Fees are $500.

Domestic transportation cost $ 400.

If you value inventory your just vendor price $ 2000 then keep the margin and sell it you have lost additional values $2400 in your COGS. Based on the calculation above, the value of inventory will be $ 4400 for 100 widgets (or) $ 44 each . What it means … The increased cost will affect my Cost of Goods Sold in my sales side, impacting my margin accordingly.

In a typical trading business, you are quoting the price to the customer based on price quoted by vendor. If the value is wrong then you incur loss. Now you can appreciate the significance of Estimated Landed Cost and Actual Landed Cost. Estimated landed cost decides from which vendor you are going to source the material and actual landed cost.

Figure 1 : Total Landed Cost Calculation.

This is the base price you are paying for the materials or goods you are sourcing. Keep in mind that not even the purchase price remains completely static – it may change due to exchange rates or under certain conditions outlined in the payment terms you agree to. Various banking fees also apply. Banking fees may vary based on payment terms.

Transportation costs include both foreign and domestic inland shipping fees, as well as the direct line haul cost. Exchange rate fluctuations need to be considered while calculating landed cost.

When you receive a quote from prospective vendor you will come to know what type of contract, vendor proposed. Based on the contract you can do your planned Landed cost and decide on from which vendor to procure. Need to consider all the parameters before awarding contract to a seller.

Figure 2 – Incoterms 2010.

Customs inspections, broker fees, tariff rates, harbor fees, and the merchandise processing fee (MPF). If your imported goods are going to be re-exported or used in the manufacture of exported goods, you may be able to save money through duty drawback.

Overhead and administration.

Overhead and administration costs are often overlooked or unaccounted for when calculating total landed cost. Overhead also includes things such as paying staff members to oversee transactions and research potential suppliers (due diligence cost)

Risk and compliance.

Complying with various regulations and trade policies also costs your operation money. In addition to these compliance costs, it’s a good idea to account for the risk of supply chain disruption, especially when working with new offshore partners.

SAP Global Trade Services.

When you decide to go for procurement globally. You may be landed with two or three quotes to choose. At that point of time SAP GTS software helps you to take decision diligently and also helps you to make profits by making you to procure cheaply.

SAP GTS has a feature simulate calculation of customs duty . Simulation will not update the database. But you can save as report for future reference. Duty type conditions needs to be added in the feeder R/3 system , those condition types needs to be mapped in to GTS.

Estimated Landed Cost: Estimated Landed Cost is the item landed cost calculated based on the estimated amounts of the item price, the taxes, and the charge amounts.

Actual Landed Cost: Actual Landed Cost is the item landed cost calculated based on the actual amounts of the item price, the taxes, and the charge amounts. The actual amounts are provided by the related documents, as item invoices, freight invoices and charges.

What are the factors we need to take to evaluate estimated landed cost :-

1) Check inco terms quoted by supplier. Verify the cost includes shipment (or) not.

2) Check vendor country for verifying preferential agreement.

3) Product classification – HS & ECCN.

4) If supplier bears shipment cost then you need to take only duties and inland transportation cost.

5) No of cartons / CBM Calculation. The biggest challenge is calculating CBM without knowing this not able to get the rate from forwarder for sea (or) air shipment cost.

Figure 3 : Estimated Landed Cost.

Actual landed cost.

Before we discuss about landed cost calculation after the goods received to your ware house we will understand about valuation of goods by customs.

How customs dept apprise the value of customs, Article VII of GATT laid down the general principles for an international valuation system of valuation.

Method 1 — Transaction value.

Method 2 — Transaction value of identical goods.

Method 3 — Transaction value of similar goods.

Method 4 — Deductive method.

Method 5 — Computed method.

Method 6 — Fall-back method.

Actual landed cost needs to be calculated after goods received to ware house and you received all invoices from forwarder, you may have some demurrage cost.

There are some calculation methods available for landed cost.

For example, landed cost of a product is $ 100, the duty is 1% and the $ rate is defined as $ 3.00.

Master carton weight is 9 lbs.

weight * $ rate = Weight’s rate value.

The Additional Cost to be added to the Landed Cost is calculated as:

Weight’s Rate Value * Exchange Rate = Domestic Weight’s Rate.

27 * 0.75 ( 1USD = 0.75 EUR) = 20.25 US $

(you must convert to Domestic currency because Duty is calculated on Domestic value )

The Weight’s Rate is calculated as:

[(Domestic Weight’s Rate * Duty) + (Domestic Weight’s Rate)] / Quantity of the Master Carton (Actual)

[(20.25 * 0.01 ) +20.25]/1 = 20.4525.

To determine the new Landed Cost:

Original Landed Cost + Weight’s Rate Calculation.

100 $ + 20.4525 = 120.4525 $

The new landed cost is 120.46 $

Here is an example, the landed cost of a product is 100 $ , the duty is 1% and the $ rate is defined as $ 2.50. Volume is 72.33 CuFt.

Volume * $Rate = Cube’s Rate Value.

The Additional Cost to be added to the Landed Cost is calculated as:

Cube’s Rate Value * Exchange Rate = Domestic Cube’s Rate.

250 * 0.75 = 187.50 $

The Cube’s Rate is calculated as:

[(Domestic Cube’s Rate * Duty) + Domestic Cube’s Rate] / SKU Quantity (for the Master Carton (Actual)

[(187.50 * 0.01) + 187.50] /1 = 189.375.

To determine the new Landed Cost:

Original Landed Cost + Cube’s Rate Calculation.

100+ 189.375 = 289.375.

The actual landed cost is 289.38 $

Unit’s Amount Calculation Method, the Landed Cost based on the Quantities entered in the ‘From Purchasing Unit’ and ‘To Stock Keeping Unit’ in the Conversion Factor section on the Purchasing folder.

The landed cost of a product is 100 $ , the duty is 1% and the $ Rate defined as $ 3.00. The quantity entered in the purchase unit is 1 and the stock keeping unit are set to 12. If you select a Factor that has a calculation method of unit’s amount, the following calculation is used to determine the new Landed cost.

Purchasing Unit * $Rate = Unit’s Amount Value.

The Additional Cost to be added to the Landed Cost is calculated as:

Unit’s Amount Value * Exchange Rate = Domestic Unit Amount.

3 * 0.75 = 2.25 $ (you must convert to Domestic currency because Duty is calculated on Domestic value)

The Unit’s Amount is calculated as:

[(Domestic Unit’s Amount * Duty) + Domestic Unit’s Amount] / To Stock Keeping Units.

[(2.25*.01) +2.25 ]/12 = 0.1893.

To determine the new Landed Cost:

Original Landed Cost + Unit’s Amount Calculation.

100.00$ + 0.1893 $ = 100.0189 $

The new landed cost is 100.0189 $

Example 1: Cost Base selected is ‘Purchase Price’

The current Landed Cost is $ 100 and the Percentage Rate entered is 3%. If you select a Factor based on Value’s % and use the Purchase Price as the Cost Base, the following calculation is used to determine the new Landed Cost:

Current Landed Cost * Percentage Rate = Purchase Price Value.

Purchase Price Value + Original Landed Cost = new Landed Cost.

2.97 + 100 = $102.97.

The new Landed Cost is $102.97.

Example 2: Cost Base selected is ‘Value for Duty’

The Duty selected on the Pricing Info folder will increase by the percentage entered in the $Rate/Pct field. If you select a Factor based on Value’s % and use Value for Duty as the Cost Base, the following calculation is used to determine the new Landed Cost:

Current Duty + Percentage Rate = Value for Duty Factor.

0.03 + 0.03 = 0.06 or 6%

To determine the new Landed Cost:

(Purchase Price – Discount) * Exchange Rate = Domestic Price.

[(Domestic Price * Value for Duty Factor) + Domestic Price] = New Landed Cost.

[(100 * 0.06) + 100] = 106.

Example 3: Cost Base selected is ‘Duty Paid Value’

The Landed Cost is increased by the percentage entered in the $Rate/Pct field. If the Landed Cost is $100 and a 3% is entered, the following calculation is used to determine the new Landed Cost:

Current Landed Cost * $Rate/Pct = Duty Paid Value Factor.

To determine the new Landed Cost:

Current Landed Cost + Duty Paid Value Factor = new Landed Cost.

The new Landed Cost is $ 101.97.

Landed cost software available in Market.

SAP R/3-SD-Foreign Trade Module, GTS and GTM.

Oracle - Global Trade Management.

Amber Road – Landed cost calculator.

I prepared one excel based landed cost calculator for my requirements, based on Indian customs perspective. You can find screen shot below.

Figure 4 : Landed Cost Calculator.

In the next article, I want to share the significance of software in running a Global Trade Business.

License and Letter of credit management through SAP GTS.

Company needs to get licenses for exports or imports. Many products require licenses. Licenses can be maintained in SAP GTS as a master and track its validity period and residual quantity and value. There is no single licenses available in all the countries. I discuss this topic keeping US requirement into consideration. SAP GTS allows you to determine the license and if at all missed in Sales order (or) delivery created in feeder system, block it for further processing.

Product you are planning to export needs to be classified for Export Control Classification Number (ECCN). If you need to import the product then you need to classify for Import Control Classification Number (ICCN). What is ECCN. This is just five character codes, what basis classification happening we saw it in previous articles.

Let me explain to you again by taking one ECCN as an example : 3A001.

we divide these into three parts :-

Capítulo 3 & # 8211; Product Category (Electronics)

Validity A – Product Group (System, Equipment and Component)

ECCN 001 – Reason for control.

0 = Nuclear materials, facilities and equipment (and miscellaneous items)

1 = Materials, Chemicals, Microorganisms and Toxins.

2 = Materials Processing.

5 = Telecommunications and Information Security.

6 = Sensors and Lasers.

7 = Navigation and Avionics.

9 = Propulsion Systems, Space Vehicles, and Related Equipment.

A. Systems, Equipment and Components.

B. Test, Inspection and Production Equipment.

Reason for control.

If Your Item is Not on the Commerce Control List – EAR99.

If your item falls under the jurisdiction of the U. S. Department of Commerce and is not listed on the CCL, it is designated as EAR99. The majority of commercial products are designated EAR99 and generally will not require a license to be exported or reexported. However, if you plan to export an EAR99 item to an embargoed country like iran, to a party of concern like Denied person list , or in support of a prohibited end use can be used as a nuclear product, you may be required to obtain a license.

Three factors important to determine whether license is required or not :-

1) Destination country / Country groups.

2) End user (or) Ultimate consignee.

What is important to understand here is License determination is transaction specific not Product specific.

You have to define number scheme in the export list. You can define it as US ECC.

It comprises of :- Structure of Export list / Coding Schemes / External unit of measures.

This configuration settings is the basis for building up ECCN master data in GTS side.

Assigning the defined number scheme with a Legal Regulation. Legal Regulation is nothing but governing rule needs to be set either to meet requirement of particular country or country groups. In this case we take EAR Legal Regulation . Need to assign EAR with USECC.

Number scheme needs to maintain as master data in GTS. We will see how we can maintain in our example USECC.

Dual use items which has ten categories as we have seen in Step 1 ;

For example , Category 5 related to Telecommunication.

5A002.a.2 – equipment designed or modified to perform cryptanalytic functions.

5D002.c.1 – only “software” having the characteristics, or performing or simulating the functions, of equipment specified in 5A002.a.2.

This function enables you to define, under specific legal regulations, different groupings of products with a description for each grouping. You can then assign individual products to the groupings. These groupings reduce the workload for import and export legal control and the license determination service. The system uses control groupings, for example, to determine which license types can be used for importing and exporting specific products that belong to a specific control grouping.

In the Area menu, you need to create groupings as master data. The grouping controls the legal control process and the assignment of licenses to a product depending on the legal regulation. You can group products with different control classes into one group if they require the same export or import management process. As the export and import regulations for a product are not based directly on the product or the assigned control class, the grouping you assign to the product in the product master is used in legal control to determine the type of license.

But this activity need to do carefully, but this exercise helps definitely for client in terms of workload.

Sometimes Products having same Export Control Classification number have different controls, in those cases we can take advantage of Peculiarity code and grouping in conjunction with license determination.

Determination strategy decides how active legal regulation needs to be determined :-

-Country / Country level.

-Country/Country group level.

-Country group level.

-Country group / Country level.

-Country group / Country group level.

License type needs to be created for determination purpose. For example if you need to create Individual Validate license for EAR US LR. You can create EARUS+IVL.

Foreign trade organization.

Control class (export control classification number)

Document number from feeder system.

Country of departure/destination.

Import code number.

Check first doc. in doc flow.

Country of Dest / Dept.

Business Transaction type.

License can be decrement value and Quantity update. Again this feature depends on the requirement. You can have only Quantity update as well.

Visio Flow – License determination flow.

License can be maintained as created, applied, active and expiry. The license will get detected only when it is in the active state.

Licenses will get decrements quantity and value, when it is utilized against a transaction. Licenses acquired against volume of shipment.

decrements only quality. Value based licenses deducts value against shipment. The user can see residual value against total value in the.

Letter of credit management.

In SAP GTS system, License and letter of credit management shares same processes. The tables also shared between licenses and LoC.

Letter of credit process.

The above process flow is a simple Letter of credit transaction. We can see step by step business flow.

& # 8211; Received inquiry from the customer.

& # 8211; Submitted Quotation . Inform SWIFT details of your bank.

& # 8211; Agreed for Letter of credit.

& # 8211; Buyer (Importer) opens a letter of credit with his relationship bank. The relationship bank here is issuing bank.

& # 8211; The advising bank of you receive L/C through SWIFT.

& # 8211; Now you have to create a master data for LoC in GTS side. Update values like Maximum value, Date of expiry, Presentation date, Last date of shipment and any other additional clauses you require to adhere while submitting the document for negotiation to bank. If the partial shipment is allowed you can see residual value if it is not allowed you have to complete by one shipment. This settings you can do it R/3 side itself to disallow partial shipment.

Letter of credit determination you can have following strategy.

Country level / country group level / partner group level . you can develop combination of these three. Ideally keeping partner group level in search is better and will give flexibility for change .

Since license and letter of credit sharing the same table, there is a problem if any changes you are trying to do in the letter of credit that impacts license as well. I am not able to understand why SAP has developed logic sharing and licence and LoC though both are conceptually different.

You can expect regular updates from me ….

Next topic …. Customs Duty Calculation …..

Sanctioned party list screening in SAP GTS.

G overnance, R isk and C ompliance (GRC) automate controls to facilitate compliance with financial, environmental, health and safety and trade regulations, enforce internal controls, increase the efficiency of audits, identify risks and employ proper governance procedures to keep all these activities up to date and effective.

A sanctioned party list contains a list of persons and companies with whom trade is prohibited by law. These boycott lists are issued by government agencies and can be obtained from data providers. All traders must comply with these lists.

The Sanctioned Party List (SPL) Screening service in SAP GRC Global Trade Services (SAP GRC GTS) lets you check business partners’addresses (such as the consignee) automatically against the sanctioned party lists before goods are exported. It is a system-independent solution that performs and logs the SPL check and is fully integrated into the complete business process.

Master data including sanctioned party lists, business partners and comparison. You can also monitor lists that are due to expire soon and that can be archived.

SPL Screening for Logistics.

With respect to US export regulations, a person or firm that has been formally denied export privileges by the US Commerce Department. The names and addresses of Denied Parties are published by the Commerce Department in the Denied Persons List and are listed in the Company’s Restricted Parties List (RPL).

& # 8211; SPL Screening while initiating the business with customer.

& # 8211; SPL Screening when business partner change the address.

& # 8211; SPL Screening when document partner change the address.

& # 8211; Periodic check on business partners.

& # 8211; Periodic check when document partner changes address.

& # 8211; Simulated SPL screening of Business partners.

& # 8211; Simulated SPL screening of document partners.

& # 8211; Releasing blocked Business partners.

& # 8211; Releasing blocked Documents.

& # 8211; Monitoring Sanctioned party lists’

& # 8211; Monitoring positive / negative lists.

& # 8211; Monitoring Blocked business partners.

& # 8211; Monitoring Blocked documents.

An “economic boycott” is a program under which a country (or group of countries) refuses to do business with another country, its companies, or citizens in an attempt to cause economic damage. Under U. S. law, an “unsanctioned economic boycott” is a boycott against a country friendly to the United States.

“Boycott-related requests” are requests to comply with a boycott, or to furnish information which will be used in support of a boycott. “Boycott-related requests” may be formal or informal, oral or written.

The US and other national governments prohibit direct or indirect participation in certain economic boycotts, for example, the League of Arab States Boycott of Israel. US law and regulations require that most requests received by US firms to enter into agreements, furnish information or take actions supportive of such boycotts be reported to the Government.

The primary boycott of Israel bars the importation of Israeli goods or services into the boycotting Arab State. There is also a secondary aspect of the Arab Boycott, which precludes dealings with firms or persons in third countries that have been blacklisted by the Central Boycott Office because of their relationship with Israel.

The countries which currently enforce the boycott of Israel and blacklisted parties are: Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, the United Arab Emirates, and Yemen. Iraq is not included in this list, but its status with respect to future lists remains under review by the Department of Treasury.

The following boycott-related terms, phrases and conditions are illustrative only and not exhaustive.

A certificate of origin must be provided stating the products contain no origin product.

A certificate must be provided stating that selling company does not have facilities in a .

A certificate must be provided stating that company has no reason to be blacklisted by the Arab Boycott Office.

Negotiations by banks whose names are included in the Israeli Boycott blacklist are not acceptable.

A certificate must be provided that company has no facilities in a nor does it employ persons of any particular origin or faith.

A certificate must be provided stating that company does not have any foreign partners or foreign ownership.

Instruction that no six-point star may be used on the goods, packing, or case.

Instruction that company agrees to abide by the laws of , including the laws relating to the boycott of a .

A certificate must be provided that the aircraft is otherwise eligible to enter the airports of .

A bill of lading must be provided that states that the carrying vessel is allowed to enter .

Contract clauses such as: “The Tenderer agrees to comply with all the laws of ” or “The Vendor shall abide by and comply in all respect with the rules of ”.

Mandatory Trade due Diligence Screening of End-Users.

Note: An End-User is defined as the company or person that ultimately receives and uses the products and/or services. An End-User cannot be a broker, freight forwarding agent, intermediary or a warehouse location.

US and other national government laws/regulations and Global Trade policies require end-user and ultimate consignee information made known to exporting company to be screened in accordance with exporting company’s Restricted Parties List (RPL), Non-Proliferation (NPS), Trade Sanctions & Embargoes, and Diversion Risk screening policies.

The purpose of mandatory screening is to ensure that exporting company complies with US and other national government export regulations to neither directly nor indirectly conduct business with sanctioned/ embargoed parties, countries, or end-users engaged in prohibited activities without having obtained prior government authorization.

BOYCOTT OF ISRAEL The United States and other national governments consider the boycott of Israel to be an “unsanctioned economic boycott”. The following countries are known to or may participate in the boycott of Israel. Special care must be taken when processing transactions for these countries to ensure company does not comply with “boycott related requests”.

Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates, Yemen.

Note: This list is for information purposes only. “Boycott-related requests” may originate from countries other than those listed above. Absence from this list does NOT mean company is relieved from responsibility for screening for “boycott related requests”.

WHAT IS DIVERSION RISK SCREENING?

“Diversion” is the transfer of products or services to individuals, companies, countries, or uses without appropriate government export authorization.

The exporting company must exercise due diligence in dealing with customers to ensure that exports and reexports of commodities and technologies are not used for or “diverted” to end-uses prohibited by applicable export regulations. “Diversion Risk Screening” helps ensure products and services will not be diverted to unauthorized parties or uses.

Examples of “diversions” include the delivery of products or services to a Restricted Party or sanctioned or embargoed country, or for proscribed uses such as the development of weapons of mass destruction. A “diversion” can take place without physical movement of a product if persons use the product for unauthorized activities. “Diverters” try to act as normal customers but often give themselves away by leaving signs or indications to their illegal intentions. These signs or indications are called “diversion risk indicators” or “red flag indicators”.

Diversion Risk Screening should be used at all phases of the order processing system.

DIVERSION RISK SCREENING REQUIREMENTS.

Compliance manager must be alert for any unusual transactions, delivery instructions, or requests that are “out of the ordinary” and may signal a potential diversion. The Diversion Risk Indicators Checklist contains examples of “out of the ordinary” requests that may signal a potential diversion. This Checklist may be used for diversion risk awareness purposes, or to document Diversion Risk Screening for specific transactions where evidence of screening is required under national record retention requirements.

Diversion Risk Screening must occur at all phases of order processing and anytime the customer requests changes to the existing order. For non-revenue shipments, screening must be performedby the requestor of the shipment.

Any transaction indicating a potential diversion risk must be placed on export hold and escalated to Compliance Manager for advice and resolution in accordance with the Diversion Risk Escalation Procedure of the individual company. All records must be retained for audit purposes.

Check list for Diversion Risk.

& # 8211; Whether the customer is using Intermediate consignee, whether its location is incompatible with ultimate end user.

& # 8211; Whether the customer wants only Ex works , delivery terms.

& # 8211; Check whether the customer is suspected to have dealings with embargoed countries.

& # 8211; Whether the customer ask for only cash payment not interested in LoC payment.

& # 8211; want the document through non - banking channel only.

& # 8211; whether the products received by the imported can be diverted to embargoed country. Say for example the product export to Afghanistan can be easilTy reexported to Iran.

SPL screening for Human Resources.

SPL screening is also possible for your own employees due to integration of SAP HCM with SAP GTS. In fact, SPL screening is possible for the complete movement of humans within organization; this includes foreign travel by the employee for the business purpose, vendor visit to the organization for the purpose of business, and new employee recruit. This requires Governance, Risk and Compliance (GRC) policy framework for an organization to conduct check and monitor the human capital movement within or outside organization.

A person who holds citizenship of an embargoed , has NO other citizenship, NO green card, NO permanent residency in another country, NO refugee or asylum seeker status in another country.

Embargoed Party As defined by the US, a person or firm acting on behalf of or as an agent of a country subject to US embargo. The US Department of Treasury Office of Foreign Assets Control (OFAC) publishes lists of these parties (the list of “Specially Designated Nationals & Blocked persons”). US firms are prohibited from doing business with any party on the list or with any other party owned by or acting on behalf of an embargoed country, with few exceptions. The names of Embargoed Parties published by OFAC should be included on the SAP GTS Restricted Parties List (RPL)

SPL Screening for Financial Accounting.

The incoming and outgoing payments are required to monitor for the companies doing transactions globally. These includes bank and insurance companies also need to be screened along with payer and consignee’s address. Financial institutions can insure that sanctioned persons, groups and organizations are recognized in advance of payment transactions taking place, and, as a result, freeze funds or financial resources to prevent transactions being performed. These sanctioned parties are published and updated on a regular basis in different countries and by different organizations, and may contain, in some cases, the same sanctioned parties.

The compliance policy needs to screen the bank from which company receives L/C if the organization involves in letter of credit payment transaction with customer. For example, a U. S. bank would have to reject a wire transfer between two third-country companies (non-SDNs) involving an export to a non-SDN company in Sudan. Since there is no interest of the Government of Sudan or an SDN, there is no blockable interest in the funds. The U. S. bank cannot process the transaction because that would constitute a transaction in support of a commercial activity in Sudan, which is prohibited by the Sudanese Sanctions Regulations. Similarly, a U. S. bank could not be involved in the financing of a prohibited transaction. A U. S. bank cannot so much as advise a letter of credit if the underlying transaction is in violation of OFAC regulations. Please note that the Iranian Transactions Regulations contain no blocking provisions (refer: treasury. gov/resource-center/faqs/Sanctions/Pages/answer. aspx). Insurance companies and banks are required by laws such as the Patriot Act (Providing Appropriate Tools Required to Intercept and Obstruct Terrorism) in the U. S. to prevent payment transactions taking place with people who appear on the sanctioned party lists.

The “Sanctioned Party List Screening” service in SAP Compliance Management enables you to screen your business partners, thereby ensuring that you comply with national and international embargoes against countries and sanctioning of individuals and companies. To do so, you can perform compliance checks and legal controls at every stage in your logistics process, from quotation creation right through to billing document creation.

The integration of SAP GTS and Financial Accounting covers the following functions:

● Creation of sanctioned party lists.

● Transfer and replication of the relevant FI business partners to SAP GTS.

● SPL screening of the relevant business partners.

○ SPL checks against account holders.

○ SPL checks against notes to payee.

○ Synchronous checks of the business partners against SPL data during the payment transactions.

● Manual post processing of the checked business partners.

The Sanctioned Party List Screening service can also be integrated with SAP for Insurance and SAP for Banking, among others.

To use SPL Screening for Financial Accounting, SAP Global Trade Services (SAP GTS) and Financial Accounting – Current Accounts (FI-CA), can either run on the same system or on different systems using Remote Function Calls (RFCs).

The tab pages for the business areas Logistics, Human Resources, and Financials contain the following:

Periodic Screening of business partners and document partners (in dialog and in the background)

Sanctioned party list screening of business partners with updated sanctioned party lists (in dialog and in the background)

With this function you can simulate the SPL screening for a business partner. This is very useful as a test SPL check to see whether a new partner address would be blocked by the system for business transactions in a live SPL check.

Analysis of audit trail data (SPL screening logs)

You have to log and save all sanctioned party list (SPL) screening activities to keep them accessible for official audits within the statutory retention period. SAP GRC Global Trade Services (SAP GRC GTS) logs the results at the legal regulation level. The logs enable you to keep a record of all the SPL screening your company has carried out, giving you an important source of documentation for legal purposes. You can archive these logs to reduce the load on your system and delete them from the tables once you have done this. The audit trail provides you with proof you need to present periodically to customs authorities, to demonstrate exactly which checks were performed, on which parties and when, and to show the results of these checks.

The 21 st century Maritime Silk Road.

Selim Pass that was part of the old Silk Road.

The current Chinese leadership seems fairly optimistic in its effort to reshape the country’s global profile in a bold and creative way––a key element of which is to build up an economic system with China at the centre of it. Undoubtedly, the proposal of reviving the ancient Maritime Silk Road (MSR) demonstrates this innovative approach. The 21 st century Maritime Silk Road, together with the Silk Road Economic Belt, has emerged as a signature foreign policy initiative and is the first global strategy for enhancing trade and ‘fostering peace’ proposed by the new Chinese leadership under President Xi Jinping. This paper discusses the Chinese rationale behind the MSR proposal and examines where it fits in China’s ‘grand strategy’. In so doing, it also analyses the potentials and challenges of the MSR.

21 st Century Maritime Silk Road.

China has proposed to revive the centuries-old ‘Silk Road of the Sea’ into a 21 st century Maritime Silk Road. This proposal has attracted enormous interest among policy makers and scholars. Is there a confluence of maritime interests or is the idea to revive the Silk Road of the Sea an instrument of Chinese ‘grand strategy’? Grand strategy denotes “a country’s broadest approach to the pursuit of its national objectives in the international system”. [1] A state’s grand strategy provides an understanding of its long-term foreign and security policy goals. One important aspect of China’s grand strategy is ‘strategic access.’ [2] China is going out in search of natural resources and developing overland transport networks in pursuit of its national interest. As part of its strategy, China is developing roads, railways, ports, and energy corridors through its western region, across South Asia and beyond. [3] The idea of reviving the MSR manifests Chinese innovative approach and its grand strategy.

Why strategic access or the politics of routes is so important to China? The politics of routes in South and Southeast Asia has played a key role in the region’s military affairs, in political development, economic growth, and cultural change. It enhances an understanding of the nexus between security and development issues. Routes are “the means for the movement of ideas, the dominant culture and ideology of the political centre, to its peripheries”. [4] Routes can define the territorial reach and physical capabilities of the state and are integral to the achievement of its political, economic, and military potential. [5] Control over and expansions of routes are important to obtain optimum economic benefits from trade with other states. To increase their economic productivity, security, and market size, states may also form integrated regional groupings in which conditions of access are eased for member-states relative to non-members. Such regional integration policies often involve the joint expansion of physical channels of communication and transport. Moreover, maritime access plays a significant role in the formation of strategic alliances and security ties. The proposal to revive the MSR should be seen in this light. This initiative aims to seize the opportunity of transforming Asia and to create strategic space for China.

The MSR in its New Avatar.

The idea of the MSR was outlined during Chinese President Xi Jinping’s speech in the Indonesian Parliament [6] and Premier Li Keqiang’s speech at the 16 th ASEAN-China summit in Brunei, [7] in October 2013. Chinese leaders underlined the need to re-establish the centuries-old seaway as the 21 st Century Maritime Silk Road. The main emphasis was placed on stronger economic cooperation, closer cooperation on joint infrastructure projects, the enhancement of security cooperation, and the strengthening of maritime economy, environment technical and scientific cooperation. The figure below gives a glimpse of proposed Silk Road. The MSR will begin in Fujian province and pass Guangdong, Guangxi, and Hainan before heading south to the Malacca Strait. From Kuala Lumpur, the MSR heads to Kolkata and Colombo, then crosses the rest of the Indian Ocean to Nairobi. From Nairobi, it goes north around the Horn of Africa and moves through the Red Sea into the Mediterranean, with a stop in Athens before meeting the land-based Silk Road in Venice. In a new map, South Pacific has also been included. So, there are two directions of the MSR – one from China through the South China Sea to the Indian Ocean coastal ports, extending to Europe; the second is through the South China Sea from the Chinese coastal ports extending eastward to the South Pacific.

Figure 1 - The Proposed Route of the Belt and Road.

Source: Xinhua at news. xinhuanet/english/2016-04/17/c_135286862.htm.

Aims and Objectives of Reviving the MSR.

The MSR emphasises connecting the Asia-Pacific economic circle in the east and the European economic circle in the west by building a network of port cities along the Silk Route, linking the economic hinterland in China. According to one report[8], the Belt and Road Initiative is currently the longest economic corridor with greatest potential in the world––directly impacts 4.4 billion people, around 63% of the world’s population, and deals with an economic aggregate of $21 trillion, 29% of the global volume. Besides, it aspires to improve the Chinese geo-strategic position in the world. According to the “Vision and Actions on Jointly Building Silk Road Economic Belt and 21 st Century Maritime Silk Road”[9] issued by the Chinese government, the essence of the initiative is an inclusive project open to all countries and international organisations.[10] The initiative features five major areas of cooperation––policy communication, road connectivity, unimpeded trade, money circulation and cultural understanding. The Chinese Foreign Ministry spokesperson Hua Chunying outlined the aims and objectives of the MSR in following words:

China proposed to build the Maritime Silk Road of the 21st century with the aim of realizing harmonious co-existence, mutual benefit and common development with relevant countries by carrying out practical cooperation in various fields, such as maritime connectivity, marine economy, technically-advanced environmental protection, disaster prevention and reduction as well as social and cultural exchanges in the spirit of peace, friendship, cooperation and development. [11]

The Chinese leadership has promised to transform China through a national rejuvenation in order to realise the “Chinese dream”. Beijing is also responding to the region’s need for investment and development and aims to unlock massive trade potential and bolster economic development through this initiative. It has become a defining strategy for economic outreach to China’s partners. The MSR initiative, in fact, is an attempt to create a favourable international environment conducive to China’s continuing development, and thus, it manifests an important element of Chinese grand strategy. This ambitious initiative will receive funding from seven capital pools, among which, the Silk Road Fund, the AIIB, BRICS Bank, and the SCO Development Bank are likely to play major roles. With full political and financial support from the Chinese government, the Belt and Road Initiative has become one of the key tasks in China’s diplomacy to comprehensively promote this strategy.

The salient points of this Chinese grand strategy can be summarised as follows – first, this strategy reflects a shift from China’s low profile international strategy to a more pro-active international strategy to help shape a new international and regional order. Second, China seeks to reap the benefits of its growing economic power and expanding influence across the globe. Third, the initiative reflects China’s growing confidence and also a response to American ‘pivot’ strategy. Finally, the initiative is comprehensive, focussed and President Xi Jinping’s “pet project.” Through this grand vision, the ambition of China’s new leader is to significantly upgrade China’s status in the world.

Several Chinese scholars claim that the initiative is also part of the new round of China’s “opening up” strategy. China is facing challenges of overproduction and overcapacity, particularly in the steel and construction material sectors. This initiative aims to create more overseas demand, and thus could help in addressing China’s domestic economic problems. There is now a growing need for China to invest more in foreign countries. Labour market is becoming more competitive and cost is going high. So, through this initiative China could aim for its economic restructuring. Moreover, the initiative is expected to drum up development initiatives in the less developed regions of China to narrow income gaps between regions. Also, the initiative could be an excellent overseas investment opportunity for the Chinese private sector.

Advantages of the MSR.

The MSR initiative is a manifestation of China’s growing significance in the global arena––economically, politically, as well as strategically. The proposal will boost trade, shipping, tourism and development of maritime infrastructure, and enhance connectivity. It aims to promote better mutual understanding between and among people. By promoting such plan, China seeks to ease its territorial disputes with the ASEAN claimant states in the South China Sea and strengthen mutual trust. The MSR proposal is likely to generate huge economic and employment opportunities. It complements and reinforces ASEAN connectivity. It can provide a channel of overseas investment for Chinese companies and capital, either in infrastructure construction, or in manufacturing and foreign commodity trade and service sectors. Thus, an active cooperation can also narrow the huge infrastructure development gap among ASEAN members. For China, such outward infrastructure investment is important for boosting its manufacturing sectors, addressing its domestic production overcapacity and stimulating domestic economic growth. [12]

Over past few decades, China has emerged as a major maritime power and offering maritime infrastructure development to friendly countries. India needs to make major policy changes to develop maritime infrastructure, offshore resources and exploit these on a sustainable basis. Therefore, the MSR should be seen as a welcome opportunity for India. [13] India can also harness Chinese capabilities to improve its maritime infrastructure, including the construction of high-quality ships and world-class ports. More importantly, it will also help India-ASEAN maritime connectivity that has been languishing due to the lack of infrastructure. India and China can also work together on the Humanitarian Assistance and Disaster Response (HADR), with the Indian Navy and the PLA Navy cooperating and developing best operational practices for HADR operations. [14]

In the case of Southeast Asian countries, the MSR initiative offers new opportunities for China and ASEAN to cooperate in many sectors including trade, infrastructure and cultural exchange, etc. In general, Southeast Asian states have welcomed China’s initiative in building the new Maritime Silk Road. China has the experience and technology in infrastructure construction as well as the capital. The MSR could spur the economic development of ASEAN. Besides, it could also promote the people-to-people contact and enhance understanding between China and ASEAN as well as among ASEAN countries. However, there is cautious optimism among ASEAN countries. So far, the MSR has not kicked off in ASEAN. There is a widespread perception in the region that “mutually beneficial” development projects often benefit China more than the host country. Indeed, Chinese MSR initiative is more about deepening ties with regional governments and providing work for Chinese industrial companies. Substantial investment in port facilities and related infrastructure in various locations – including in Pakistan, Sri Lanka, Bangladesh, Indonesia, Myanmar and Malaysia – is planned or are underway. It is believed that new, expanded or more advanced capacity will improve connections between sea and land legs of trade movements, raising overall transport efficiency and reducing costs. Though, enthusiasm for the projects under the MSR initiative has been limited in South Asia and Southeast Asia, except Pakistan where projects seem to have limited economic logic.

Desafios

Despite emphasis on economic links, there is a lack of clarity on “how and what” of the Chinese proposal. Overlapping of diverse goals (political, economic and security) and involvement of multi-level actors (central government, provincial governments, think tanks, private sector, bureaucracy) make the initiative highly attractive in China, but leaves much room for confusion to outside observers. ‘Trust deficit’ is another major hurdle in this initiative. There are also concerns about what this implies for broader regional strategic partnerships. [15] China has a very specific understanding of security––what drives it and what it aims to achieve––one that many of the countries on this proposed route would not share. Further, there is some anxiety within ASEAN states over Chinese actions that are often in contradiction to China’s stated intentions of goodwill and peaceful cooperation. For example, China’s recent moves in the disputed territory in the South China Sea. In the aftermath of the South China arbitration case and China’s continued assertiveness in maritime Asia, the big question is: How to deal with China when it’s challenging international laws? Certainly, this episode has not only amplified the ‘trust deficit’ among China and its neighbours but it has also forced countries to take a re-look at their approach in handling ties with China.[16] Therefore, China needs to work harder to explain its proposal if trust of countries in South and Southeast Asia were to be gained.

Governance in many countries and regions on the route of this proposed initiative is weak. There could always be political and security risks in implementing the project. Change of government or domestic factors may cause significant delays and cost overrun while implementing the various projects associated with the MSR. Sri Lanka and Myanmar are good examples of such problems. Amidst global economic pressure, low economic returns/no economic returns (in short to medium term) from projects under this initiative will put further pressure on the slowing economy.

Conclusão.

While the MSR proposal is an innovative idea and aims to create opportunities and bring peace and stability, it is still an unfolding idea. China’s maritime renaissance, however, is being led by its dynamic commercial sector, with maritime business leading the way. Naval development is following the merchant marine development. China’s path to the sea is different, distinguished by seaborne commerce leading the way, trailed by naval development. [17] After two decades of rapid growth, Beijing is again looking beyond its borders for investment opportunities and trade. As China rises, with the sea as its main highway for incoming investment, technology and outgoing exports, China is studying the past and thinking about the future. The MSR places China in the ‘middle’ of the “Middle Kingdom” mindset and is an effort in initiating a ‘grand strategy’ with global implications. The MSR offers several opportunities for South and Southeast Asia in its new avatar . However, there is scepticism about Chinese stated objectives and its actual intentions. China needs to convince the MSR-impacted nations and regions that the proposal is for win-win cooperation and to do this Beijing needs to engage and listen to other countries and regional institutions to make this initiative more inclusive.

[1]Robert H. Dorff, “A Primer in Strategy Development”, in Joseph R. Cerami and James F Holcomb, Jr. (eds.), U. S. Army War College Guide to Strategy, Carlisle Barracks, P. A., Strategic Studies Institute, 2001, p. 12.

[2] The term ‘access’ normally subsumes all types of bases and facilities (including technical installations), aircraft over flight rights, port visit privileges, and use of offshore anchorages within sovereign maritime limits. The term strategic access is used more broadly to include, for instance, access to markets, raw material sources, and/or investments, penetration by radio and television broadcasts, and access for intelligence operations. See Robert E. Harkavy, Great Power Competition for Overseas Bases: The Geopolitics of Access Diplomacy , Canada: Pergamon Policy Studies on Security Affairs, Pergamon Press Canada Ltd, 1982, pp. 14-43.

[3]See Rajeev Ranjan Chaturvedy & Guy M. Snodgrass, “The Geopolitics of Chinese Access Diplomacy”, German Marshall Fund of the United States Policy Brief , 29 May 2012.

[4]Jean Gottmann, “The Political Partitioning of Our World: An Attempt at Analysis”, World Politics , Vol. 4, July 1952, p. 515.

[5]Mahnaz Z. Ispahani, Roads and Rivals: The Politics of Access in the Borderlands of Asia , London: I. B. Tauris & Co. Ltd. Publishers, 1989, p.2.

[7]“Premier Li Keqiang Attends the 16th ASEAN-China Summit, Stressing to Push for Wide-ranging, In-depth, High-level, All-dimensional Cooperation between China and ASEAN and Continue to Write New Chapter of Bilateral Relations”, 10 Oct 2013, available at chinaembassy. nz/eng/zgyw/t1088098.htm.

[9]National Development and Reform Commission (NDRC), People’s Republic of China, “Vision and Actions on Jointly Building Silk Road Economic Belt and 21 st Century Maritime Silk Road”, 28 March 2015, available at en. ndrc. gov. cn/newsrelease/201503/t20150330_669367.html.

[10]So far, China has ignored regional associations that do not include China. This strengthens the impression of mismatch between Chinese stated and actual intentions.

[11]Chinese Foreign Ministry Spokesperson Hua Chunying’s Regular Press Conference on 13 February 2014, available at sc. china-embassy/eng/fyrth/t1128254.htm.

[12] Yu Hong, “China’s “Maritime Silk Road of the 21 st Century” Initiative”, EAI Background Brief , No. 941,30 July 2014, available at eai. nus. edu. sg/BB941.pdf Also see, “ASEAN welcomes China’s new Maritime Silk Road initiatives”, China Daily , 15 August 2014, available at usa. chinadaily. cn/business/2014-08/15/content_18322921.htm.

[13] Vijay Sakhuja, “ Maritime Silk Road: Can India Leverage It?”, #4635, 1 September 2014, available at ipcs/article/navy/maritime-silk-road-can-india-leverage-it-4635.html. Also see, Vijay Sakhuja, “The Maritime Silk Route and the Chinese Charm Offensive”, in IPCS Special Focus: The Maritime Great Game India, China, US & The Indian Ocean, p. 6, available at ipcs/pdf. /SR150-IPCSSpecialFocus-MaritimeGreatGame. pdf.

[14] Rajeev Ranjan Chaturvedy, “Xi Jinping’s visit should mark new era in Indo-China relations”, The Economic Times , 10 September 2014.. Chinese state councillor Yang Jeichi proposed a dialogue between the two navies on freedom of navigation and Humanitarian Assistance and Disaster Response (HADR) at the 17 th Annual Dialogue of the Special Representatives of India and China in New Delhi. See, Ministry of External Affairs, Government of India, Press Release, “17th Round of Talks between the Special Representatives of India and China on the Boundary Question”, New Delhi, 11 February 2014, available at mea. gov. in/press-releases. htm? dtl/22861/17th+Round+of+Talks+between+the+Special+Representatives+of+India+and+China+on+the+Boundary+Question.

[15]Arun Sahgal, “China’s Proposed Maritime Silk Road (MSR): Impact on Indian Foreign and Security Policies”, July 2014, available atccasindia/issue_policy. php? ipid=21.

[17]Andrew S. Erickson, Lyle J. Goldstein, and Carnes Lord (Eds.), China Goes to Sea: Maritime Transformation in Comparative Historical Perspective , Annapolis: Naval Institute Press, 2009, p.345.

Indo-Pacific economic corridor: A vision in progress.

The BCIM economic corridor: Prospects and challenges.

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China's 21st Century Maritime Silk Road.

China's Maritime Silk Road and One Belt One Road Initiatives Explored through Chinese Media.

Bill Gates to work with China on world poverty problems.

As China’s economy matures, it is making bold and difficult choices on challenges like energy and pollution. And China is assuming a greater role on critical global issues like climate and development. This matters now more than ever as the world navigates a time of change and uncertainty.

In some rich countries, there is skepticism about how well globalization works for ordinary people. The results of the U. S. presidential election and the Brexit vote in the UK underscore the temptation to turn inward on issues like migration, security, and global development.

It’s great to see China stepping up to fill the leadership vacuum. It is uniquely well-equipped to do so. No other country has accomplished what China has achieved in the last few decades—breaking the relentless cycle of poverty and disease for hundreds of millions of people while modernizing its economy at a scale and speed unprecedented in human history.

Although China can’t be expected to fill a gap in development aid from wealthy countries, it has made a smart choice in tripling its commitment to African development. China has long understood that helping other countries lift themselves out of poverty creates a more stable and secure world for people everywhere.

And by encouraging investment through innovative financing mechanisms like the China-Africa Development Fund, China is strengthening not only Africa’s economic capacity, but also, over time, markets for Chinese goods.

It’s also great to see President Xi’s commitment to eliminate extreme poverty in China by 2020. China did a great job lifting millions out of poverty. But progress has been uneven. Forty-three million people are still living in extreme poverty.

Our foundation looks forward to a new partnership with China that will focus on innovative ways to reduce poverty—through better nutrition and healthcare in rural areas, and by increasing access to financial services for the poor.

China isn’t just striving to reach new heights at home. It is using its own experience fighting poverty and disease to help other countries tackle similar challenges. When I was in Beijing a few years ago, Vice Premier Wang Yang said something that stayed with me. He said: “Africa today is our yesterday.” Now, China is using the lessons it has learned to usher in a new tomorrow for Africa, too.

This is a pretty incredible time to be a young person in China. Your generation’s entrance into the workforce will coincide with your country’s rise as a center of global progress and innovation. The world’s eyes are on China . . . and as the generation now coming of age, the world’s eyes are specifically on all of you…

Hong Kong stock exchange opening to regional investors, Kazakhstan.

Follow this hyperlink to Hong Kong’s website that is dedicated to One Belt One Road . This video is specifically about Kazakhstan’s state-enterprises and how state-led investments encourage development in Central Asia. The post discusses Kazakhstan’s move to privatization because of dreams to become Central Asia’s financial center. What do you think about such aspirations?

2nd “Maritime Silk Road” international tourism festival unveils in Fuzhou.

China News Service, 11/13. The second “Maritime Silk Road” International Tourism Festival kicked off in Fuzhou with participants from Australia, Jordan, Malta, Korea, Cyprus, and 10 “One Belt One Road” countries, as well as over 300 individuals in the tourism industry. Tourism is a key aspect of growth for the fledgling 21st Century Maritime Silk Road. Key topics were discussed, such as promoting mutual gains during this new chapter of development.

11/13, 3 pm. Along with performances of singing and dancing, the 2nd “Maritime Silk Road” International Tourism Festival in Fuzhou was unveiled.

This year’s Maritime Silk Road festival had guests from Indonesia, Columbia, Jordan, Malta, South Korea, Cyprus, and 10 countries along the line of “One Belt One Road,” as well as tourism industries, and over 300 in the tourism industry.

Fujian’s Vice Governor Huang Qiyu expressed how Fujian is building the 21st Century Maritime Silk Road’s core center, and also unearthing the Maritime Silk Road’s travel potential. The tourism festival will embody elements of internationalism, showcase Fuzhou and attitude toward international cooperation, and also propel Fuzhou’s assimilation to the international tourism industry, along with other “One Belt One Road” countries that will also promote planned development.

A representative from the Ministry of Tourism of the Dominican Republic, Richard J. H said, “The Maritime Silk Road International Tourism Festival is very significant. It enables people to directly understand the advantages of travel in the Dominican Republic, and also allows travel industries to develop more easily.”

Richard J. h told China News Service that the festival allows countries along the Maritime Silk Road to gather together not only to interact but also to promote each country’s tourism industry development.

In addition to the silk route of the sea, there is another major highlight to be talked about, and that is, the Internet + S mart Tourism . The M aritime Silk Road Smart Tourism Summit Forum is the current and one of the main activities of the Tourism Festival.

It is understood that the “Silk Road of the Sea” Smart Tourism Forum invited the Bureau of Information Center’s deputy chief engineer of the Chinese Academy of Electronic Science and other keynote speeches on Smart Tourism, and also set up a “technology – how to make sure travel is full of wisdom” as the theme of the dialogue session. This tourism festival and “Internet +” promotes tourism and industry innovation and also makes use of VR and other emerging technologies, so that people with have face-to-face access to science and technology and the newest that tourism has to offer.

It is reported that the second Maritime Silk Road international tourism festival will also be have a carnival, a Fuzhou International Marathon and other activities.

The Pursuit of Peaceful Expansion: China’s Maritime Silk Road of the 21st Century through Offensive Realism and Complex Interdependence.

The 21 st Century Maritime Silk Road was introduced by Chinese President Xi Jinping in October 2013. The initiative is now supported in Southeast Asia, South Asia, Africa and the Middle East. Designed to deepen economic and maritime cooperation from its starting point in Guangzhou across the Indian Ocean to the Mediterranean Sea, the 21st Century Maritime Silk Road consists of port development, strengthened trade agreements, and the development of the Asian Infrastructure Investment Bank. While Chinese-led investments and infrastructural projects bring benefits to host nations, skepticism abounds regarding the establishment of footholds along the Indian Ocean rim. These maneuvers come at a time of contested island disputes within the South and East China Seas as well as a greater naval presence within the Indian Ocean region. I use the theories of offensive realism and complex interdependence to explain the why China has created the 21 st Century Maritime Silk Road. My synthesis of the realist and liberal perspectives leads me to hypothesize that China seeks to re-define regional dynamics and act as a developmental leader for many countries along the Maritime Silk Road.

Introdução.

Since President Xi Jinping assumed office in March 2013, The 21 st Century Maritime Silk Road ( 21shiji haishang sichouzhilu) and the Silk Road Economic Belt have been publicized in official documents and in the media. The two Silk Road projects aim to revive trading routes. The Silk Road stretched through Asia as early as 2000 years ago during the Han Dynasty (206 BCE-220 CE). The route is known as a flourishing trade passage that linked the East and the West, from China to the Mediterranean Sea. The lesser-known Maritime Silk Road (MSR) was ostensibly set as part of Admiral Zheng He’s seven journeys through the Indian Ocean during the Ming Dynasty (1368-1644). Zheng He’s seafaring voyages have set China’s presumed legitimacy as a maritime power. His MSR route now serves as the basis for a new initiative that seeks economic integration from China across the Indian Ocean — the 21 st Century MSR.

The two silk routes have been revived through official economic dialogue, sponsored by the Chinese government, and through cooperative pacts with South Asian countries. The two initiatives are being promoted as “ One Belt One Road ” ( yidai yilu ). Together, the Silk Road and the MSR form a circular pathway, linking continental China to Europe through Central and South Asia Asia. The MSR connects China’s coastal cities, Southeast Asian hubs, eastern Africa and the Mediterranean Sea.

China’s Minister of Commerce, Gao Hucheng (2014), declares “China’s ‘ One Belt One Road ’ as the most powerful cooperative economic belt with the widest span in the world. In July 2014, Chinese foreign affairs expert Dai Bingguo also spoke of the historical significance of the Silk Road and how this legitimizes China’s current ambitions among the maritime routes:

As we know, in the course of over 2,000 years, our ancestors traversed thorns and waves and opened the ancient Silk Road and the Maritime Silk Road, making immense contribution to the exchanges and integration between the East and the West as well as human civilization and progress…Over those 2,000 years, the exchange of goods, people and technologies via the overland and maritime Silk Roads greatly improved productivity and the lives of people of all countries and contributed to the prosperity of all nations along the way.

The historical precedent of the routes provides the impetus for the formal unveiling of both projects in November 2013 at the 18 th Central Committee of the Communist Party. The initiatives continue to receive ongoing support through forums and diplomatic speeches. In June 2014, the China-Arab States Cooperation Forum accented the Silk Road initiatives. The Asia Cooperation Forum on Silk Road Cooperation in May 2014 also placed emphasis on economic cooperation. Furthermore, the 20th China-ASEAN Senior Officials’ Consultation, held in in April 2014, is another forum that was designed to strengthen regional ties. As a result of extenuated diplomacy and Silk Road dialogue, China has received cooperative feedback from the Association of Southeast Asian Nations (ASEAN) and also the countries Yemen, Kuwait, Brunei, Sri Lanka, Maldives, Kenya, Saudi Arabia and Pakistan.

Cooperative measures have been extended to all countries along the traditional route, even to countries suspicious of China’s maritime ambitions, such as India. The initiatives are designed to reduce trade barriers and strengthen China’s participation in regional economies. Minister Gao remarked that the countries along “ One Belt and One Road ” are mainly developing countries, with about 4.4 billion in population and almost USD 21 trillion of economic aggregation. All countries along the route are highly likely to engage in mutual cooperation efforts with China.

While the “Silk Road Economic Belt” proposes to stretch across inland China, Central Asia and Europe, the 21 st Century MSR is designed to connect key harbors and littoral countries along the East China Sea, the South China Sea, and the Indian Ocean. The proposed beginning points are coastal cities in the provinces Fuzhou, Guangdong and Guangxi. Ideally, trade routes will flourish from these economic hubs and extend toward the Strait of Malacca, western Asia, to finally meet the continental Silk Road in Venice. This thesis will primarily focus on the 21 st Century MSR due to the range of complexity China faces within the South China Sea and the IOR.

China is gaining footholds in the IOR because of growing economic interests and rising concerns for oil security. China is now the world’s number one importer of oil (EIA 2014), thus the pursuit of sea lane security is seen as growing. The rising stakes of oil transportation has led the Chinese government to promote this peaceful route that also encourages regional prosperity. Despite China’s initiation of the 21 st Century MSR and plans to connect 97 coastal cities between China and Europe, details of the 21 st Century MSR implementation remain limited. Following my thesis, I will devote research to its advancement in the follow years – 2015, 2016, 2017, and onward.

The initiative is turning a Chinese history of sea-faring endeavors into modern-day legitimacy for developing connectivity in South Asia. Bilateral agreements and peaceful diplomatic consultations are playing a major role in China’s southward relations. In addition, the “good-neighbor policy” of the People’s Republic of China (PRC) is spurring regional partnerships and functioning to assuage any fears of China’s imminent rise. The structuring of the 21 st Century MSR will take shape as China’s relations improve with neighboring countries and as China forms deeper alliances within Gulf States and Africa.

Map 1: Historic Routes of “ One Belt One Road “

The path has been likened to a “string of pearls,” a phrase generated by US defense contractor Booz Allen Hamilton to describe China’s ambition of securing port bases that along the IOR. Realists in the United States see this as China’s attempt to overturn a US naval influence in the region. This conjecture is vehemently denied among Chinese policy makers as unmerited speculation by distrustful US observers. As opposed to formulating a strategic string of pearls, the 21 st Century MSR is deemed an economic calling for connectivity and regional development. The stationing of Chinese naval forces at ports has not been mentioned in recent speeches.

Wei Jianguo (2014), former Vice Minister of Commerce, disagrees with the “string of pearls” strategy and notes that the 21 st Century MSR is a circle, not a line. With Fuzhou as the starting point, the 21 st Century MSR incorporates ASEAN, the African Union, the Arab League and the European Union, connecting a total of 97 coastal cities and ports and continental Asia. Economic agreements provide the momentum for cooperation. The participation of the navy and military is denied. Wei Jianguo says the combination of the MSR and the land silk route will include 92.5 percent of the global economy and 87.3 percent of the world’s population (Wei Jianguo 2014). China’s enhanced regional initiatives have been referred to as “peripheral diplomacy” ( zhoubian ) (Ranade 2014).

Map 2: China’s Connecting Links for the 21st Century MSR.

Research Question and Hypotheses.

My study asks why China has created the 21 st Century MSR. I seek to discover why China has gone to such an extent to emphasize maritime cooperation through diplomatic strategy. Do power politics and relative military capabilities of surrounding countries such as the US and India play a part in the development of the 21 st Century MSR, or is the initiative a benign attempt at furthering regional integration? To answer these questions, the 21 st Century MSR is approached through realist and liberal perspectives.

John Mearsheimer’s theory of offensive realism makes predictions about the behavior of great powers in an anarchic system. He determines that great powers strive for endless power maximization with a final goal of hegemony. The survival of the state is the foremost goal in offensive realism. The relative distribution of power within the system and the military wherewithal of surrounding states is deemed as determining state decisions and initiatives. The theory predicts that powerful states seek hegemony within their own region and to ensure no adversary can dominate another region of the world.

Based on offensive realism, I hypothesize:

China will use the 21 st Century MSR as an effort to assert a new regional order. China seeks to expand its navy, displace the US from the western Pacific, and to work toward regional hegemony.

While realism argues great powers use institutions and cooperative efforts to pursue power maximization, liberals would see the 21 st Century MSR as following a tradition of supporting the spreading of ideas, social forces and political institutions. Complex interdependence, a theory within the paradigm of liberalism, argues for a cooperative relationship among states. Unlike offensive realism, within the theory of complex interdependence, states do not make decisions based on the relative military capabilities within the system. Economic interdependence , multiple channels of communication between societies, and a non-hierarchical state agenda determine state decisions. China’s maritime ambitions are, therefore, caused by state goals that emphasize integration—not security—and a mitigated role of force. Speeches, international forums, diplomatic consultations and online articles devoted to the 21 st Century MSR reveal the emphasis China places on institutions, cooperative frameworks, and on free markets in working toward peace and regional growth. States, as well as sub-national actors, play the part in legitimacy through alliances and institutions, all forging a network of communication and prosperity.

Based on this theory, I reach the following hypothesis:

The 21 st Century MSR will act as an integrative tool through multiple channels and a mitigated role of the military. China will not consider power politics and the role of the military in its development of the 21 st Century MSR and will, instead, seek cooperative interaction and economic interdependence.

The exploration of China’s Silk Road initiatives completed in later chapters of this thesis has led me to a third hypothesis. Because of explanatory shortcomings within both theories—the former overemphasizing power expansion and military concerns and the latter preoccupied with goals of peace, engagement and prosperity–I synthesize the two theories and have determined:

The promotion of the 21 st Century MSR is not China’s attempt to become a regional hegemon, but is rather a measure for re-defining China’s role without fear of US opposition. Power and military prowess will play a role in future regional dynamics; however, China seeks a peaceful means of expansion and to form developmental pathways for the developing world.

In this sense, China does not seek to overturn the current world order and to dislodge the United States. Instead, China aspires to establish tighter cultural and economic relations with South Asia to hedge against future conflicts. At the same time, power politics is essential in calculating state policy, and the role of the navy will become an important feature along the 21 st Century MSR. All in all, liberalism is the paradigm utilized by Chinese politicians to emphasize peace and integration. Realism is useful to understand strategic concerns along the Indian Ocean rim.

Structure of Thesis.

The analysis of the 21 st Century MSR will be explored through the promotional work of the Chinese government during the year following its unveiling in October 2013. This thesis was written in 2014, but I am continually updating my blog with more information about the development along the MSR. Speeches and foreign policy initiatives will be examined, as well as historical documents regarding the Silk Road’s place in China’s history. An understanding of the Chinese perspective toward maritime activity will be explored through Chinese journals and online Chinese articles. Journals regarding China’s strategic needs within South and South Asia will also be investigated as well as recent commentary by Chinese and foreign naval strategists regarding the critical issues within the world’s sea lanes.

Chapter 2 of this thesis explores the paradigms of realism and liberalism. The respective theories of offensive realism and complex interdependence are used to explain why China has created the 21 st Century MSR. Chapter 3 gives a descriptive analysis of 21st Century MSR and its history as well as how its creation is tied to the overall foreign policy objectives of the Chinese government. Chapter 4 discusses China’s involvement along the maritime silk route and the role of Chinese investments along the route in countries such as Pakistan, Myanmar, Bangladesh and Sri Lanka. In Chapter 5, the strategic concerns along the MSR will be addressed, including China’s oil demands, the navy’s role in the transport of energy products, and the ongoing territorial disputes in the South China Sea.

The theories of offensive realism and complex interdependence are applied to the analysis of the 21 st Century MSR in chapters 6 and 7. As stated, offensive realism explains decisions of great powers based on the structure of the system. China is, therefore, promoting the 21 st Century MSR vis-à-vis liberal institutions to displace the threat of US forces within Pacific waters. Chapter 7 details the explanatory variables within complex interdependence that can determine why China is furthering its maritime initiatives. Within complex interdependence, economic interdependence, multiple channels of communication and an absence of a hierarchical concerns for state security are determining factors that explain state behavior. The 21 st Century MSR would be seen as a cooperative objective and as an institution encouraging welfare among states.

Very few—if any—scholarly articles are devoted to the 21 st Century MSR and theory, and my research seeks to fill this gap.

Teoria.

The paradigms of realism and liberalism have flourished since the writings of Thucydides and John Locke. Established figures within realist history include Thucydides, Niccolò Machiavelli and Thomas Hobbes,[1] while traditional figures within the liberal tradition include philosophers such as John Locke and Immanuel Kant (Daddow 2009). The central difference between the two paradigms is between a negative view of human nature and a preoccupation with security versus a positive view of mankind and the belief that peace is possible through cooperation and institutions. The antithetical paradigms have encouraged a range of scholarship, and during the 20 th Century, the branches of realism and liberalism flourished. Well-known theories have been formulated (i. e. the balance-of-power theory, the hegemonic stability theory and the democratic peace theory), and schools have also been created that combine the traditions of realism and liberalism[2]. Neorealism, neoliberalism, the English School and constructivism are among international relations theories established in the 20 th Century with contending positions and competing theories.[3]

According to Kenneth Waltz, “Theory isolates one realm from all others in order to deal with it intellectually” (1979, 8). Observed realities are made apparent through the use of theory, and theory in international relations can be seen as a simplifying method that abstracts from the real world in order to use events to predict outcomes based on causal factors. This chapter provides an account of the evolution of the the two main paradigms in international relations and how the theories of offensive realism and complex interdependence function when explaining China’s advancement of the 21 st Century MSR.

Offensive realism seeks to explain regional dynamics as determined by structural variables, and the theory predicts state power maximization at whatever cost. Complex interdependence, on the other hand, employs features such as multiple channels of communication, the absence of hierarchical concerns among states, and a mitigated role of the military as variables leading to state decisions.

Realism claims a long theoretical tradition as the oldest paradigm in international relations. Balance of power politics, relative gains, and a pessimistic view of the world relations are common themes within realist scholarship. Assumptions within realism include that the world is anarchic, survival of the state is the principal concern, states are rational actors, and power determines international relations (Wohlforth 2008, 141-142). There are many variants of realism, and realism has given rise to the strands neorealism, neoclassical realism, as well as other schools.

Hans Morgenthau’s Politics Among Nations (1960) elevated the theoretical school of realism to new heights during the Cold War. Morgenthau writes of the struggle for power, anarchy, self-interested states, and distribution of power as an attempt to coalesce classical realist texts into a theory of international politics. A classical realist, Morgenthau determined that outcomes are largely based on social forces dictated by the nature of humans and that “all politics is necessarily a pursuit of power” (1960, 87).[4] In Politics Among Nations , Hans Morgenthau writes of the internal nature of states and the psychological state of man. Instead of laying out a concise, scientific theory of international politics, he engages in a Cold War dialogue system and discusses the various causes of war, policies, ideologies and variables that lead to war.

In 1979, Kenneth Waltz posited a more scientific model of realism in his book, Theory of International Politics , known as neorealism. Neorealism varies by emphasizing the structure of the system , instead of the policies created by man, as the driving factor for state behavior. International politics is composed of states or ‘units’ that respond to their environment and according to the relative balance of power within the system (Waltz 1979, 195). Unlike Morgenthau’s theory of international politics, which emphasizes the power drives of individuals, Waltz essentially turned states into “black boxes” influenced solely by the system and not by ideology or government type. [5] Like Morgenthau, Waltz writes of balance-of-power politics; however, Waltz emphasizes a system of “units” that are composed of differing relative capabilities. He determines changing relative capabilities as having a great effect on the structure of the entire system itself (Waltz 1979, 199). While classical realists are concerned with questions of change at the domestic, regional and international levels, neorealists do not consider human nature. The structure of the system forces states to pursue power, security and wealth (Mearsheimer 2010, 78). He theorizes a bi-polar system of two superpowers to be more stable than a multi-polar system led by three or more major states (Waltz 1979, 199-204), and his theory at a systemic level undoubtedly influenced many scholars of international relations writing during the bipolar system dominated by the US and the Soviet Union. While many scholars such as Alexander Wendt and Robert Keohane opposed the disconnection between the global structure and the state, many scholars reacted to his theory of international politics by forming their own neorealist theories (Wohlforth 2008, 138).[6] Protégés of Waltz include Stephen Walt and his balance of power theory as well as Glen Snyder and Joseph Grieco, who enhanced neorealism with game theory (Wohlforth 2008, 138).

Offensive Realism.

While defensive realists believe incremental gains to be necessary, the pursuit of hegemony is seen as irrational. Offensive realists postulate that states should continue to search for opportunities to maximize power (Mearsheimer 2010, 81). John Mearsheimer’s The Tragedy of Great Power Politics (2001) unravels the theory offensive realism and predicts that great powers will strive for endless power expansion with a final goal of hegemony. Mearsheimer’s offensive realism, like Waltz’s defensive realism, assumes the international system to be made of unitary states driven by a desire for security. Mearsheimer’s theory lays out a causal explanation wherein anarchy and the structure of the international system determine state decisions and future dynamics. His theory is used to explain historical events—such as the French Revolution and the two World Wars—and claims to be able to predict the behaviors of great powers. States search for power maximization through relative gains and to balance the system in one’s favor. Balancing efforts can be undertaken economically, militarily or diplomatically (Mearsheimer 2001, 32-34).

Mearsheimer’s theory begins with five characteristics of the world system: (1) states operate in a state of anarchy; (2) military capabilities are maintained by great powers; (3) uncertainty exists amongst states regarding the intentions of other states; (4) state survival is the principle goal of a state, and; (5) states are rational thinkers (2001, 30-31). Mearsheimer’s theory asserts that powerful states seek hegemony within a region and then ensure no adversary can dominate another region of the world.

He distinguishes between “potential powers” and “actual powers.” Great powers are formed based on large populations as well as immense wealth that can be converted into military forces. Great powers can furthermore demonstrate control over the behaviors of other powerful states (2001, 43-45). A great power is, thus, a state that has military capacity, wealth and a comparatively large population. At the same time, great powers realize they must rely on their own capacity to ensure survival, because of the threats to existence that come in living in a self-help system (Mearsheimer 2010, 80).

While defensive realists, such as Waltz, argue that balancing occurs when a state becomes too powerful, offensive realists maintain that balancing does not happen nearly as often as defensive realists claim. Mearsheimer argues that “buck-passing” occurs when “threatened states…attempt to get other states to assume the burden of checking a powerful opponent while they remain on the sidelines” (Mearsheimer 2010, 83). Global hegemony is nearly impossible for great powers, however, because of difficulties sustaining endurance throughout the system. States do seek to prevent competing states from achieving the similar status of regional hegemon (Brzezinski and Mearsheimer 2005). Becoming a “status quo power” is out of reach most of times. According to Mearsheimer, “It is virtually impossible for any state to achieve global hegemony” (2001, 41).

States cannot act upon military ambitions and must instead calculate aggression and limit military expenditures (2001, 37). The optimal outcome of a great power is regional hegemony and the possible control of another nearby region (2001, 41). Measheimer’s theory mainly differs from Waltz’s structural realist theory in that Mearsheimer sees states as seeking an unlimited amount of power. Waltz views the anarchy within the system as leading states to act defensively in pursuit of survival and state security. Defensive realists do not see the benefits of state power maximization within the system. “The pursuit of hegemony, they argue, is especially foolhardy” (Mearsheimer 2010, 78).

Neorealism evolved following the collapse of the bi-polar system and following the systemization of United States’ hegemony within the Western Hemisphere (Mearsheimer and Brzezinski 2005). According to offensive realism, the United States, having achieved hegemony in the Western Hemisphere, is now “free to roam” across the globe and into the backyards of other countries due to no potential aggressors on the American sub-continent. Although the US is the only regional hegemon in North America, other countries, such as Japan, Germany and France, have fought wars in pursuit of the United States’ current status, and Russia has succeeded in achieving such a position.

Realism and China.

Many scholars have used realism to analyze China’s rise and approach to regional politics. Realist scholars highlight China as the greatest threat to US hegemony within the current uni-polar system that developed following the collapse of the Soviet Union (Li 2004, 25). The question of whether China will descend to challenge the uni-polarity of the current system is often explored by realists. According to Mearsheimer (2010, 91):

One might argue that China’s ascendancy will lead to bipolarity, which is a relatively peaceful architecture, even if it is not as pacific as uni-polarity. After all, there was no shooting war between the superpowers during the Cold War. Indeed, the security competition between them was not especially intense after the Cuban Missile Crisis…China and the US, however, would have the benefit of all that learning that took place during the Cold War, and could deal with each other from the start much the way that Moscow and Washington dealt with each other after 1962.

At the same time, there is much speculation within realism regarding the global implications of China’s rising military expenditures and economic development. Many argue that China’s combination of military modernization, population and outstanding economic achievements provides a realist formula that calls for upsetting the regional order and displacing the United States’ military presence in Asia. To many realists, China seeks to end the hegemony of the United States or at least weaken its position in the Asia Pacific in order to defend national security interests and regain lost territories (Li 2004, 25). A favorable situation for China within the theory of offensive realism would be a situation wherein Brazil or another South American country worked toward regional hegemony south of the United States, thus leading the US to revert attention to North America and away from the Asia (Mearsheimer and Brzezinski 2005).

Rozman (2010) provides a realist outlook toward China and international politics within Northeast Asia and among Russia, ASEAN countries and India. He examines the enhanced regional partnerships and explains political decisions as based on balance-of-power politics. Some realists configure the United States as building ties with India and Japan in efforts to curb China’s growing influence in the region. Other realists determine China as aligning with Pakistan, Bangladesh and Myanmar as an attempt to avoid containment by Indian and the United States (Sidhu and Yuan 2003). Bert (2003) writes of the power transition theory, or the conversion of power into a new international order, and the prospect of an ascendant and dissatisfied China running head-to-head with the United States. According to Bert (2003), interconnectivity and economic ties are unlikely to inhibit conflict when it comes to China’s fundamental security interests. Despite interdependence, China’s national security issues take precedence over a peaceful environment for development. China’s military and economic growth challenges US hegemony and poses a possibility of the unmasking of a bipolar system (Bert 2003, 105-106).

According to the theory of offensive realism, China should make efforts toward dominating Asia and assuming greater power status than Japan and Russia. China is ascending the ladder to act as the regional hegemon of Asia, just as the United States acts as the regional hegemon in the Western Hemisphere. Common topics of exploration within realism include China’s “peaceful rise” and whether China’s peaceful foreign policy will turn out as benign as it seems. According to Mearsheimer (2005), “China cannot rise peacefully, and if it continues its dramatic economic growth over the next few decades, the United States and China are likely to engage in an intense security competition with considerable potential for war” (Mearsheimer 2005). China’s unprecedented growth, developing military capacity, and huge population are all factors assumed to contribute to China’s expected role as regional hegemon. As opposed to maintaining a defensive stance within world politics, the active pursuit of hegemony is viewed as the most likely method to assure a great power’s survival (Mearsheimer 2008, 89).

Criticism of Mearsheimer’s theory (and of all 20 th century realism for that matter) includes its emphasis on the power status of the United States in the system. Critics argue that the theory might not necessarily explain the strategies of China or the distinctive traits within societies. The theory has a skewed view toward history and leaves out cases that do not fit within the framework of offensive realism. Other criticism of offensive realism includes the fact that realism isolates the international system as an independent variable. By deducing great power behavior based on a limited number of variables, the most important being the regional distribution of power, explanatory power is limited. Domestic politics and concerns for economic development are left out of the equation within offensive realism, and beyond that, the conduct of great powers is assumed as a predestined fact (Mearsheimer and Brzezinski 2005). While realism can offer complex causal explanations, economic interdependence, the actions of actors, as well as political systems are all ignored. The isolated system as a whole suffices in explaining the outcomes. Kirshner (2010) argues that offensive realism is a realist approach but not the realist approach, and stresses a return to the classical roots of realism as supported by theorists such as Hans Morgenthau.

China’s involvement in Southeast Asia and along the route of the 21 st Century MSR can also be analyzed from the position of an offensive realist. The military and naval capabilities of India, China and the United States are all weighed as explanatory factors that determine China’s involvement in the region. The balance of power within Southeast Asia and along the Indian Ocean is also deemed a significant factor that influences China’s decisions.

There is extensive literature regarding China’s involvement in the Indian Ocean region and the realist issues at stake. The maritime capacity of China has become increasingly central in recent years due to territorial disputes with the Philippines, Vietnam and Japan. Additionally, energy is a crucial element for state survival and economic development. Over half of China’s oil imports come from the Middle East, with 80 percent of this oil arriving via oil tankers that traverse the Indian Ocean and its chokepoints (EIA 2014). According to Marketos (2009), it can be judged that China’s dependence on the Indian Ocean for the passage of oil “gives America a political weapon with which to contain China…in the Gulf and elsewhere in the Indian Ocean, if not Taiwan, and could cut off its vital energy resources” (2009: 123).

To realist, China is aware of the goal of the United States to balance powers within the Pacific. Some authors discuss China’s “two ocean” strategy and expansive interests in South Asia due to the fact that the Indian Ocean is now that world’s busiest sea line of communication (SLOC), responsible for the transport of one-fourth of the world’s goods. The mission for China in South Asian waters is to assure that both India and the United States do not encircle China. China surmises India as strategically wanting to control the Indian Ocean region; however, due to limits in military capacity, India still faces a disadvantage. China thus sees the Indian Ocean region as an arena to construct a blue-water navy. Regions that help actualize this aim include Pakistan, Sri Lanka, Bangladesh and Myanmar. These countries can serve as strategic footholds in South Asia. China’s aim of escaping the “Malacca Dilemma” ( maliujia kunju ) as well as the encirclement of Japan and the United States can be achieved through regional enhancements (Li 2014). South Asian maritime territories are areas for China to break free from the American military reign that dominates the East. Energy security and naval modernization are crucial topics for scholars analyzing China from a realist point of view. These issues and how they fit into the construction of the 21 st Century MSR will be discussed in length in later chapters.

In a publication by Zhongguo Hanyang Bao [China Ocean News], Cao Wenzhen stresses China’s need to become both a naval and continental power. He emphasizes advances in military hardware as part of the “China Dream.” Based on his analysis, one can determine the paramount importance that many put on naval capacity in China. According to Cao, “Oceans are the source of life, the home of storms, the treasure chest of resources, the arteries of economies, and the outpost of national defense” (Cao 2014).

Zhang Wenmu (2006), a professor at the Center for Strategic Studies in Beijing, writes of China’s need for great maritime development as a means of protecting China’s SLOCs as well as increasingly oil imports from East Africa and the Middle East. Protecting SLOCs secures the economic development of China and interdependency among countries through trade paths. According to Zhang, China’s economic engine depends on growth and greater participation in global markets for access to energy security. He calls for increased naval activity to safeguard China’s borders and for broader security forces to extend beyond China’s territory. Current military capacity renders China unable to defend beyond its own borders, as opposed to the capacities of the United States’ navy and military, which can reach well-beyond US borders (Zhang 2006). In a separate article, Zhang Wenmu writes that China’s navy “must be prepared as early as possible. Otherwise, China may lose everything it has gathered in normal international activities…in a military defeat” (in Holmes and Yoshihara 2008, 127).

While the 21 st Century MSR is promoted diplomatically and through economic packages, offensive realism predicts the initiative to expand into fields beyond economic cooperation. For offensive realists, China’s liberal diplomacy and economic engagement with the periphery is just another way of building regional trust while treading a path toward hegemony. The theory of offensive realism leads to the hypothesis that the 21 st Century MSR is designed to contribute to China’s pursuit of naval expansion, regional hegemony, and the dislodgment of the United States from the Asia Pacific.

Liberalismo.

Liberalism came to lead much of political and economic dialogue during in the Enlightenment period of eighteenth-century Europe through principles such as lawfulness, freedom and opportunity, social and economic rights as well as democratic participation (Doyle 2008, 50). Liberalism is linked to classical theorists such as John Locke and Immanual Kant who supported the establishment of peace through human progress (Jackson and Sorensen 2010, 105). Like realists, liberals view states as the principle actors in international politics. However, further importance is also given to the domestic characteristics of states. Scholars of liberalism see the liberal international order as having evolved over the last two centuries with the rise of democracy, rule-based institutions, free trade and a system of laws as well as organizations such as the United Nations (Ikenberry 2011).

Over time, three main theories have reappeared within the liberal tradition, the first being that prosperity and commercial interdependence throughout the world discourages war and conflict (Mearsheimer 2001, 9). Commercial liberalism argues that economic interdependence has made war a costly risk for all states (Viotti and Kauppi 1993, 231). The second theory asserts that democracies do not go to war. Democratic liberalism proposes that republican and democratic systems determine war as something not initiated by military elites, but instead aroused through domestic political groups. The third theory reoccurring within liberalism is explained using regulatory liberalism. This theory asserts that international institutions encourage states to build constructive relationships as a way to avert wars. Regulatory liberalism views international law and the “rules of the game” as contributing to international peace and global cooperation (Mearsheimer 2001, 9; Viotti and Kauppi 1993, 231).

According to Daddow (2009), neoliberalism, a descendant of the liberal tradition, was developed to explain the developments in the world after the end of World War II. This school primarily focuses on international institutions and regimes such as the European Union and ASEAN (Daddow 2009, 97). Complex interdependence, a theory within the neoliberal tradition, views states as dependent on one another and views such interdependence as a means for progress, not a vulnerability. Liberals see interdependence as the “reciprocal effects among countries or among actors in different countries” (Keohane and Nye 1989, 8). Although there are costs or sensitivities within interdependence, interdependence generally exhibits the benign implications of states (Keohane and Nye 1989). This theory will be further elaborated in the following section. All in all, from the democratic peace theory to the theory of complex interdependence, liberals are generally proponents of democratic systems, rationalism, international institutions as well as trade ties that can lead to a sustained peace and a mitigated chance of war (Russet 2010, 96).

Complex Interdependence.

In Power and Independence (1989) , Robert Keohane and Joseph Nye argue that we live in a period of complex interdependence , an alternative to the realist world defined by power politics (1989, 23). The theory is also referred to belonging within the traditions of neoliberalism or neoliberal institutionalism. Interdependence in world politics refers to mutual dependence and reciprocity among nations and actors and usually involves international transactions wherein benefits usually exceed costs (1989, 8-9). Keohane and Nye seek to determine the features of world politics given extensive economic interdependence. The three assumptions of complex interdependence are: (1) all societies are interconnected through organizations, arrangements and informal ties, (2) there remains no hierarchical agenda within states (as opposed to realism wherein the state security plays the crucial role), and (3) complex interdependence precludes military force among governments (1989: 24-25). The three characteristics of complex interdependence are useful in explaining a range of global and economic issues when interdependence is in place.

First, multiple channels are seen as connecting societies through informal ties, transnational organizations and nongovernmental elites that serve to establish rules and institutions created by governments to control interstate relations (Keohane and Nye 1989, 5). While realism sees the role of organizations as minor, the theory of complex interdependence determines organizations as agenda-setters, political resources, and a tool for weak states (Keohane and Nye 1989, 37). Multiple channels can explain state behavior, policy objectives as well as the relationship between states in the international system.

Second, the absence of hierarchical issues among nations determines that states make decisions for a variety of reasons, and not simply because of concerns for security. The concern for citizens’ welfare, living standard, economic prosperity, and environmental challenges are all critical issues that determine state policy (Keohane and Nye 1989, 31-40). According to Keohane and Nye (1989, 25):

The agenda of interstate relationships consists of multiple issues that are not arranged in a clear or consistent hierarchy. The absence of hierarchy among issues means, among other things, that military security does not consistently dominate the agenda. Many issues arise from what used to be considered domestic policy, and the distinction between domestic and foreign issues becomes blurred.

Third, as military force plays a lesser role in the overall dominance of the system, states are led to depend on influence, economic interdependence, organizations and transnational actors as tools of power. They argue that the strengthening of interdependence and economic ties between nations has led to a decrease in military force as a means for policy. Within realism, “nonmilitary problems will not only be subordinated to military ones; they will be studied for their politico-military implications” (Keohane and Nye 1989: 30). This fixation on state power is viewed as exaggerated and not based on a reality of integration and transnational activity within world politics. Actors within states decide world politics, and power and wealth does not constantly dictate the agenda (Keohane and Nye 1989: 24-25).

According to Keohane and Nye, “The concept of complex interdependence—defined by the absence of force, the lack of hierarchy among issues, and the presence of multiple channels of contact between societies—is an abstraction rather than a description of reality” (1989, 165). Therefore, complex interdependence may be evident in a variety of situations but not all. The important point is to analyze a situation based the presence of the three variables to determine whether complex interdependence is at play.

Can complex interdependence explain the rationale behind the creation of the 21 st Century MSR? The causal mechanism for determining the construction of the 21 st Century MSR is based on existing multiple channels of communication, the absence of a hierarchical agenda, and the absence of a concern for the military. The initiative would be assumed to be promoted through sub-national actors, such as leaders, diplomats and corporations. Constructive dialogue through regional forums such as the Boao Forum and the ASEAN-China Summit are also variables that could lead to the creation of the silk route of the sea. According to complex interdependence, power politics plays little role in its formation. The creation of the 21 st Century MSR is not explained based on the structure of the system; rather, a focus is placed on a multiplicity of variables guiding state behavior. Essentially, economic integration through multiple actors and the mitigated role of the military are the factors that determine state decisions. Later chapters will elucidate on the silk route of the sea and determine whether this hypothesis holds true.

Complex Interdependence and China.

Various scholars have provided a liberal perspective to uncover China’s approach to Asian regionalism. Many liberals determine China as building institutional legitimacy, enhancing domestic freedoms, promoting international institutions and working toward solving disputes through negotiations and democratic means. It is recognized that China maintains a peaceful foreign policy, fiercely promotes economic interdependence and is modernizing with the prospect for citizens’ greater participation in the decision-making process (Li 2004: 31). The liberal belief that a democracy will lead to peace in Asia is based on the theory of democratic peace within the liberal tradition (Li 2004, 31). According to Doyle, “China market forces have stimulated the formation of thousands of business and professional groups and greater village level (democratic) self-management” (Doyle 2008, 67). Freeman (2010) discusses democracy leading to trust between China and the United States and between other countries within the international system. Doyle (2008) writes that China’s market forces have led to private businesses and village-level democracy, and he poses that democracy often “creeps” into society subconsciously through enhanced rule of law and village elections (Doyle 2008: 67). Barma and Ratner (2006), however, determine China’s system to be ‘illiberal’ because it promotes notions of governance and international norms that counter democratic liberal theory (Barma and Ratner 2006). Many scholars assert that China opposes Western-style democratic liberalism by practicing capitalism without democracy and by supporting illiberal sovereignty and the inviolability of national borders in the face of international intervention (Barma & Ratner, 2006, p.57). The prospect for democracy in China is largely questioned, but many find that China is moving toward democratization and liberalization, albeit at a slow speed (Li 2004, 32).

The liberal theory of economic interdependence is strongly linked to China’s position within the liberal international order. Liberals see China’s growing economic influence as contributing to China’s greater role in the system and as dissuading against conflict. Economic interdependence liberals view China and its trading partners as having common interests in strengthening prosperity through the enhancement of absolute gain (Li 2004, 32-34). Findlay and Watson (1996) argue that China maintains an interdependent relationship with the world economy and that China depends on outside countries for the exports that allow for a prosperous and stable domestic state of affairs. They write, “China’s interaction with the world economy has created a level of trade interdependency that has transformed both China’s international role and the way in which the rest of the world relates to China” (Findlay and Watson 1996, 107). Indeed, following China’s open-door policy, outside investors have rushed into China and many companies have benefited from such liberal economic reforms (Li 2004, 33). China is now the largest trading partner of ASEAN and the second largest trading partner of the United States. More scholars focus on China’s evolving interconnectivity within the international order. Ikenberry (2011) concludes that the liberal international order is evolving and that China and other rising powers are adapting and growing in influence as a means of promoting domestic agendas. China is seeking its own opportunities to engage with an evolving liberal international order and therefore maintains an interest in the current liberal order though an interest in an open system based on rules.

Li (2013) writes from within the “black box” concept espoused by realism by explaining the complexity of political decisions that go into shaping China’s relations with Southeast Asian countries. Another scholar, Hurrell (2006), argues that China has shifted toward institutions to encourage neighboring states of China’s peaceful intent. Chinese scholar, Zha Dongjiong, asserts that China’s objectives are to integrate into the global economy through working with neighboring states on issues such as energy security, an issue that greatly affects China as well as all surrounding states (Zha 2005, 15). China’s naval expansion is therefore viewed by many liberals in the context of working toward securing global energy resources and SLOC protection. Using the theories offensive realism and the power transition theory, Fravel (2010) uncovers that the costs of territorial expansion outweigh the benefits and determines China’s rise as better explained by liberal theories based on economic interdependence. Growing interdependence increases the cost of conflict and can thus wield a controlling effect on the actions of China.

The 21 st Century MSR maintains many of the features of an institution. Institutions can constrain power states through established rules and norms. Garrison (2009) writes of China’s regional relations from the viewpoint of complex interdependence. According to his view, “one expects China to support the current interdependent economic structure and seek to avoid alienating economic partners because it is this system that spurs economic development. Thus, China would work to avoid confrontation because its advantages are small in a world where modern economic power depends on technological innovation at least as much as acquiring resources” (2009, 9). Thus, as complex interdependence is formed through multiple channels without military force, China is restrained by the institutional regime (Li 2004, 33). The theory of complex interdependence assumes China’s behavior to be based on multiple channels, an absence of hierarchy among issues, and the mitigated role of the military. Through the theory of complex interdependence, liberals would determine China’s initiatives for the 21 st Century MSR as a cooperative measure. China’s growing interdependence with the world economy is considered to be a reason for the maintenance of peace in East Asia. The 21 st Century MSR promotes technological innovation and the acquirement of resources while also functioning as an international institution to provide guidelines and restrict certain kinds of behavior.

Criticism of liberalism includes that it over-emphasizes interdependence and the benefits of state interaction. Problems embedded in interdependence are often ignored within liberal theory. Areas of potential conflict given economic interdependence include China’s relationship with Japan as well as Cross-Strait relations between China and Taiwan. Both situations reveal pervasive economic interdependence that may not necessarily preclude political conflict.

Diplomacy on the Silk Road.

The Silk Road through Time.

The history of the trade networks and cultural exchanges encouraged by the silk routes across Euroasia has sparked an array of research. The Silk Road commenced as a field of study around the nineteenth century among scholars in Europe and resulted into expeditions into areas such as Xinjiang as well as publications such as Foreign Devils on the Silk Road [7] (Christian 2000, 3). The term “Silk Road” was coined by a German geographer named Ferdinand von Richthofen as a description of a trade route that existed roughly 2,000 years ago from eastern parts of the world to the west (Waugh 2010). He used the term “ Die Siedenstrassen ” to describe the multiplicity of routes connecting China, India and Central Asia; the terms “roads” or “routes” are also used in scholarship to describe the Silk Road (Christian 2000, 2). Eurasian archeological research has now developed a deeper understanding around historiography of the Silk Road as well as the evolution of “transcivilizational” and “trans-ecological exchanges” (Christian 2000). Items carried on the silk road included silk—because of its aesthetic quality and value—and also glass, precious metals, gems, ceramics, livestock, languages, diseases and religions (Christian 2000, 2-3).

The “transcivilizational exchanges” of the Silk Road occurred within three main (sometimes seen as four) time periods: during the end of the first millennium BCE, between the sixth and eighth centuries BCE, and during the Mongol Empire (Christian 2000, 4). Among the first empires along the route included the Han Empire, the Kushan Empire, Parthia as well as Rome (Christian 2000, 4). One of the first recorded travels on the Silk Roads are those of Zhang Qian of the Han dynasty (206 BCE – 220 CE), who was sent by Emperor Wudi with important commercial messages to Central Asia between 139 and 125 BCE (Waugh 2010; Christian 2000, 5). Centuries later, during the Tang dynasty (618-907), the transmission of religion and Buddhism was propelled along the Silk Road by figures such as the monk Xuanzang, who journeyed through Central Asia to India and back to Xi‘an to translate key Buddhist works (Waugh 2010). The 13 th Century journeys of Marco Polo as well as the Franciscan monks John of Plano Carpini and William of Rubruck are documented as being some of the first European travelers in Asia (Waugh 2010). During the Ming Dynasty (1368-1644), the MSR was founded due to the giant fleets and expeditions of Zheng He within the Indian Ocean. According to Lin and Heuer, the ports along the maritime silk route had already been established during the Qin (221 BCE-206BCE) and Han Dynasties by connecting renowned ports in Guangdong to South Asia, India and Africa (Lin and Heuer 2014). According to Christian, the “golden age of the Silk Roads ended after the Mongol period, when they began to be eclipsed by other trade routes, including sea routes, and when pastoralist communities as a whole began to fall into decline” (2000, 6). By the 15th century, European powers commenced the opening of maritime routes for the control of commerce, transforming maritime trade and disrupting many overland routes used by the traditional Silk Road (Waugh 2010, 18). The below image provides the historical routes of the Silk Road.

Map 3: Ancient Trade Routes along the Silk Road.

Source: Waugh 2010.

One important method of exploring China’s “Silk Road Diplomacy” is through China’s references to historical figures. The hype surrounding the renowned admiral of the Ming Dynasty has re-emerged during the past year. Online publications as well as numerous museum exhibitions are all devoted to showcasing the naval feats that had put China’s seafaring tradition ahead of the rest of the world. Commander of seven voyages of trade and discovery through Southeast Asian and South Asian to the Middle East and Africa from 1405-1433, Zheng He is the quintessential figure of China’s maritime history. Zheng He was a eunuch under the emperor Zhu Di. He is hailed for having reached as far as the Red Sea and Kenya, on the east coast of Africa.

Zheng He’s journeys signify China’s tradition of maritime exploration and non-aggressive way of dealing with other countries in commerce and cultural exchange. Wade explores the speeches of PRC academics, politicians and other historians and their praises of Zheng He during special events such as the celebration of the 600 th anniversary of Zheng He’s explorations in 2005. The rhetoric and praises of Zheng He among Chinese politicians is often as follows:

From the age of Zheng He until the new period of socialist construction, the achievements of Zheng He during his voyages to the Western Ocean have been excellent materials for conducting patriotic education for the Chinese nation.

These were…friendly diplomatic activities. During the overall course of seven voyages to the Western Ocean, Zheng He did not occupy a single piece of land, establish any fortress, or seize any wealth from other countries. In the commercial and trade activities, he adopted the practice of giving more than he received, and he was welcomed and lauded by the people of the various countries along his routes (Wade 2005, 37-38).

Zheng He’s renowned missions in South Asia provide a gateway for Chinese diplomats to assert the peaceful intentions behind Chinese maritime endeavors. The historical precedent of China as a sea power is set in stone, as Zheng He’s travels extend further back in history than even the travels of Christopher Columbus, a fact that Chinese leaders such as Wen Jiabao and Hu Jintao have spoken of.[8] When writing of China’s use of soft power to secure maritime rights, Holmes and Yoshihara write, “Beijing has used Zheng He to fashion a maritime diplomacy that bestows legitimacy on China’s naval aspirations in Southeast and South Asia, mollifying littoral nations skeptical of Chinese pretensions; [this] undercuts America’s claim to rule the waves in the region; and appeases Chinese nationalism, thereby helping the communists regime maintain that rule” (Holmes and Yoshihara 2008, 124).

The voyages of Zheng He made use of tens of thousands of men as well as hundreds of ships, but some academics have remarked that his missions may not have been as peaceful and far-stretching as presented (Graff 2007). Edward L. Dreyer’s book Zheng He: China and the Oceans in the Early Ming Dynasty, 1405-1433 argues that “Zheng He’s master, the Yongle emperor, was in fact engaged in power projection aimed at bringing distant states within the ambit of the Ming tributary system” (Graff 2007). Dreyer’s book also questions whether Zheng He’s fleets reached Kenya and the Red Sea. He does, however, corroborate that his wooden ships were almost certainly the largest at that point in history (Graff 2007).

Zheng He is being promoted in editorials and newspaper articles across the Chinese internet.[9] During the Youth Olympic Games, occurring from August 16 to 28 of this year, his Ming Dynasty model ships and discovery routes were displayed. In addition, his feats are prominently displayed at an expedition in Beijing. Many articles publicize Zheng He’s naval feats that paved the way for China’s destiny as a maritime power and describe his undertaking as allowing for the building of the 21 st Century MSR. During the Ming Dynasty, even though China possessed the most magnificent fleets in the world, China’s naval capacity soon came to an end following the feats of Zheng He. One article determines that the missions were either too successful to call for further maritime action or that there was no immediate threat to mainland China that required further naval exploration during the Ming dynasty (Zhang 2014).

The 21 st Century Maritime Silk Road.

Chinese President Xi Jinping’s official presentation of the 21 st Century MSR in October 2013 took place at a speech to the Indonesian parliament. The introduction occurred during Xi Jinping’s first speech in a member country of ASEAN since assuming presidency in March 2013. The deal is seen as signaling his administration’s overall policy of good-neighborliness toward peripheral states. A series of multi-billion dollar contracts in Indonesian sectors ranging from infrastructure to telecommunications were signed, and the year 2014 was dedicated as the year of “China-ASEAN Cultural Exchanges” (Wu 2013). China’s Premier Li Keqiang promoted the 21 st Century MSR at the 16 th ASEAN-China Summit in Brunei in October 2013 by highlighting China as the biggest trading partner of ASEAN. He put forth a guiding principle for China’s intentions for increased regional connectivity through the “2+7 framework.” The guideline includes two political consensuses and seven regional proposals, including the upgrading of the ASEAN-China free trade area (ACFTA), and the creation of a China-funded Asian Infrastructure Investment Bank (AIIB) and heightened security collaboration (Li Keqiang 2013).

In March 2014, Fuzhou, the capital city of Fujian province, dedicated a ceremony to Fuzhou’s decision to act as the starting point of the 21 st Century MSR. The cities Quanzhou and Xiamen have also made arrangements to act transportation hub along the route (“Fuzhou on course”). A traditional port city, Quanzhou has a long history of acting as a transport point and once functioned to serve one of the world’s largest ports during the Yuan Dynasty (1271-1368) (“Fuzhou on course”). Cities such as Guangzhou, Guangdong; Beihai, Guangxi; and Haikou, Hainan are also posed to increase their roles as Asian trade and transportation hubs. Guiyang, in the southwestern province of Guizhou, makes up another important piece of the route. In July 2014, Guiyang hosted the Eco Forum Global Annual Conference, a council dedicated to environmental protection and the effects of rapid industrialization and urbanization. At the forum, a speech was presented by Dai Binguo regarding the need for sound ecology and environmental protection within along the silk routes. Furthermore, during mid-September 2014, the 11 th China ASEAN Expo was held in Nanning Guangxi province. The exposition hosted over 2,300 companies from China and ASEAN countries under the theme “Jointly Building the 21 st Century Maritime Silk Road” ( Xinhua News Agency 2014b).

Other connecting points of the route include Kuala Lumpur, Malaysia; Kolkata, India; Nairobi, Kenya; the Horn of Africa; Athens, Greece; and Venice, Italy. Even though the 21 st Century MSR was only established one year ago, there have been various promotional speeches that attempt to form an overall plan to which countries along the route can adhere. Li Keqiang (2013) put forth a “2+7 framework” containing two political consensuses and seven regional proposals as one mechanism to guide cooperative measures between China and ASEAN. The two political goals are for strengthened mutual trust as part of the good neighbor principle and economic cooperation for a win-win relationship. The regional proposals include:

the eventual signing of the China-ASEAN good neighbor cooperation agreement enhanced collaboration on security issues upgrading the ACFTA the creation of an infrastructure investment bank and support in infrastructural measures (the AIIB) assuring regional financial cooperation and risk-prevention maritime cooperation partnership cultural exchanges between the peoples of China and ASEAN in the realms of the humanities, science and environmental protection.

Demonstrably, enhancing maritime security, free trade enhancement, and financial cooperation are among serious concerns for China regarding its relationship with ASEAN countries. At the China-ASEAN Foreign Ministers’ Meeting, Wang Yi insisted on maritime connectivity through dialogue and cooperation. The South China Sea dispute was discussed as well as environmental issues, disaster prevention and other security issues. In a recent diplomatic speech at the Boao Conference in April 2014, Li Keqiang stressed to security issues to ASEAN member countries and the fact that China pursues peaceful development and a peaceful resolution to territorial disputes within the South China Sea:

We are firm in our resolve to uphold China’s territorial sovereignty. We also follow a clear-cut policy of seeking peaceful solutions to disputes. We will give full support to initiatives that help strengthen maritime cooperation. We will not accept acts that undermine stability in the South China Sea…A peaceful and stable South China Sea is in the interest of all littoral countries, including China. China is ready to steadily advance consultation on a code of conduct in the South China Sea within the framework of the Declaration on the Conduct of Parties in the South China Sea, and work with other countries to ensure peace, stability and freedom of navigation in the South China Sea. China loves peace and cherishes development. It is ready to work with other countries in the region to build a peaceful, prosperous and open Asia and maintain peace, stability and tranquility in our neighborhood by enhancing political mutual trust.

Financial cooperation, risk prevention and free trade development are being achieved through a variety of regional forums. In August 2014, the holding of future negotiations for the updating the ACFTA were agreed upon by economic ministers representing ASEAN and China. According to trade records, ASEAN’s total trade with China reached over USD 350 billion in 2013, or 14 percent of ASEAN’s total trade. The partners are committed to reaching a joint trade volume target of USD 500 billion by the end of 2015 (The Economic). China is further attempting to reach USD 1 trillion in two-way trading between China and ASEAN countries. China is expected to import around USD 3 million in goods from ASEAN and invest over USD 100 billion (Li Keqiang 2013). The AIIB is a key project China is undertaking as a mechanism for funding infrastructural projects within ASEAN. This is the fourth goal listed in Li’s proposal and is planned to be headquartered outside of China. As detailed at Xi Jinping’s introductory speech of the 21 st Century MSR in front of the Indonesian Parliament, the AIIB is proposed to provide the much-needed infrastructure into poorer parts of Asia that lack funds for certain projects (Bali 2013). When speaking of the bank at a speech at the Boao Forum, Li Keqiang (2014) remarked:

China is ready to intensify consultations with relevant parties in and outside Asia on the preparations for the Asian Infrastructure Investment Bank and hopes that the bank can be officially launched at an early date. Industrial complementarily is a key aspect of integrated development. We the Asian countries should take advantage of our geographical proximity to deepen cooperation across the upstream, mid-stream and downstream industrial chains, and build an industrial network and economic system that draw on our respective comparative strengths.

China also plans to make use of the China-ASEAN Investment Cooperation Fund and the China-ASEAN Maritime Cooperation Fund as methods of ensuring maritime links through port construction. Further efforts for assuring regional financial cooperation include the promotion of the Regional Comprehensive Economic Partnership (RCEP) as well as financial liberalizations and cooperation in the energy sector (Liu 2014). The RCEP is a trade initiative that extends throughout Asia and could potentially create the biggest global trading bloc for regional trade by combining ASEAN+3 (ASEAN plus China, Japan and South Korea) and the Comprehensive Economic Partnership, which includes India, Australia and New Zealand. The bloc would represent nearly half of the world’s population and around 30 percent of the world’s GDP (Wingnaraja 2013). All in all, the 21 st Century MSR strategy seeks to facilitate China’s opening up by promoting trade development ties South Asian nations. Key goals include developing strong ocean partnerships, seeking diplomatic solutions to territorial disputes, encouraging the smooth of flow goods through trade agreements, as well as improving financial cooperation and cultural exchanges.

“One Belt One Road”

Understanding the 21 st Century MSR requires an understanding of the “Silk Road Economic Belt” and the overall objectives of “Silk Road Diplomacy.” Both Silk Road initiatives promoted under the leadership of Xi Jinping—referred to by the new leadership as “One Belt One Road”–seek to fuse Pan-Asian connectivity from China’s coastlines to Central Asia and Europe. The route of the “Silk Road Economic Belt” is to stretch from China’s Gansu province to Xinjiang and then from Central Asia toward Iran before reaching Iraq, Syria, and Turkey. The route will then reach the European countries Bulgaria, Romania, the Czech Republic and Germany. The final points of the economic route before tying to the 21 st Century MSR are Duisburg, Germany; Rotterdam, the Netherlands; and Venice, Italy.

According to an article printed in the China Daily, China has now invited seventeen countries to participate in the “One Belt One Road” initiative, with nearly half of the world population in agreement (Xinhua News Agency 2014). According to China’s Minister of Commerce, Gao Hucheng, the countries that make up both silk routes contain nearly 4.5 billion people with an economic aggregation of USD 21 trillion, forming the most powerful “economic cooperative belt with the widest span in the world” (Gao Hucheng 2014).

The project is represented as fulfilling China’s goals of regional prosperity, opening China as “one body with two wings,” and forging new regional cooperative interests (Gao Hucheng 2014). The leadership argues that China’s goal of creating “one body with two wings” is not only for China’s internal development but also for the development of countries in Central Asia. Efforts to achieve China’s broader goals include the fortification of free trade between China, ASEAN and in the Gulf Cooperation Council (GCC). The development of the AFCTA has been proposed for Southeast Asia, and within in Central Asia, initiatives such as the Bangladesh-China-India-Myanmar Forum for Regional Cooperation (BCIM) are being augmented. Investments in infrastructure are among goals, and projects such as the Eurasian Continental Bridge, the New Eurasian Continental Bridge, and the Sino-Pakistan Economic Corridor are picking up speed. Moreover, environmental protection and greater communication between energy consumers and producers is also highlighted as a goal of “One Belt One Road.”

China’s efforts through the two silk routes can be seen as part of China’s greater “Go West” ( xi jin ) strategy, established in 2012. China has succeeded in opening up its eastern cities, while development in western provinces and territories lags behind. The western areas China seeks to engage include western China, Central Asia, South Asia and the Middle East (Sun 2013). The “Go West” strategy preceded the Silk Road initiatives. According to Holslag, “Only when Beijing advanced in its ‘Go West’ strategy did it start to promote reviving the Silk Road and other ancient corridors to Central, South, and Southeast Asia” (Holslag 2010, 652). Aside from sluggish development, further concerns within western territories include security concerns in areas such as Tibet and Xinjiang province. According to Minister Gao (2014), China intends on building the infrastructures of the developing economies while also contributing to China’s opening up of the border areas within central and western China (Gao Hucheng 2014). So far, the government has made plans to transform cities such as Urumqi and Kashgar in Xinjiang province into trade centers and points to connect the eastern and western parts of Eurasia (Holslag 2010, 646). Holslag asserts that the “Go West” strategy was created by the leadership because of a goal for the promotion of stability and unity and also for gaining strategic influence within Asia. Within the strategy, sub-state governments and international organizations do play a role; however, the directive and implementation for the ‘Go West’ strategy is largely a product of the central government (Holslag 2010, 662). China has succeeded in reaching commercial agreements with many countries in Central and South Asia as well as within the Arab world (Sun 2013). In June 2014, Foreign Minister Wang Yi attended the China-Arab States Cooperation Forum (CASCF) for boosting relations through Silk Road initiatives. The “1+2+3” initiative for multiplicity and expansiveness was put forth as part of “One Belt One Road.” This cooperation layout regards energy as the key realm in which trade and investments will take place (Wang 2014).

Peripheral Engagement and Foreign Policy.

The two-thousand year evolution of the Silk Road undoubtedly provided the momentum for the re-creation of both the 21st Century MSR and the Silk Road Economic Belt last year. At a speech at the Asian Cooperation Dialogue Forum on Silk Road Cooperation on May 28, 2014, Assistant Foreign Minister Liu Jianchao emphasized China’s perspective toward regional cooperation within the Silk Road concept:

Asia’s development is rooted in its traditional cultures and builds on Asian people’s tradition of achieving strength through unity. Over 2,000 years ago, our ancestors overcame many hardships and difficulties and traveled across mountains and rivers to open the world-renowned Silk Road….It had been a road of peace, cooperation and friendship, and more importantly, a cultural bond that brought Asian countries together. And today, to carry forward the Silk Road spirit is important for promoting common development and striving for new achievements in Asia.

Since President Xi Jinping’s introduction of the 21 st Century MSR in October 2013, more and more Chinese leaders have been busy promoting its worldwide benefits as well as historical significance. Chinese Premier Li Keqiang, Foreign Minister Wang Yi, the Assistant Foreign Minister, Liu Jianchao as well as the Minister of Commerce, Gao Hucheng are among figures who have spoken about the silk road in recent months. At the China-ASEAN Foreign Ministers Meeting, Wang Yi designated 2015 as the “year of maritime cooperation” between China and ASEAN countries. This demonstrated “peripheral diplomacy” stresses China’s ties to Asia as an effort of confidence-building under China’s “peaceful rise.” Bilateral agreements and regional forums are ways to secure the domestic aims of the “China Dream” and “national rejuvenation” (Ranade 2014). China’s leadership is well-aware of the need to show commitment to favorable for economic growth, conflict aversion and integration into the international economic framework (Bert 2003, 101-103).

In 2003, the concept of China’s “peaceful rise” was introduced as part of official foreign policy under the administration of former President Hu Jintao (Glaser and Medeiros 2007). According to Glaser and Medeiros, China’s peaceful ascension refers to the evolution of China’s economic development and improving living standard over the next few decades and is a pledge that China will aim for stability and harmony within the international order (2007, 295). This message of China’s harmonious worldview has not been completely accepted by all neighboring countries due to a lack of trust as well as territorial disputes in the South and East China Seas. In September 2005, Hu Jintao presented the concept of a “world of harmony” at an Asian-African Summit and stressed multilaterialism and as well as regional safety for reaching peaceful development (Yee 2008, 100).

The new administration has adopted “Silk Road Diplomacy” as further emphasis of this harmonious worldview that refuses China’s behavior as threatening. The “China threat” theory stresses China as an emerging power that is dissatisfied with the United States as the world leader. Proponents of the “China threat” stress China as the main competitor to the US. The theory that China’s behavior is menacing to security is not only accepted in many parts of the US but also in countries such as Japan and India (Buzan 2010). When asked about the “China threat” in 1993, former Foreign Minister Qian Qichen replied:

The modern history of China was written in blood and tears as the nation was subjected to untold sufferings under the aggression, suppression, bullying and humiliation of imperialism and colonialism…As a country having regained independence and sovereignty, China does not, and will not, impose hegemony and power politics on others and will not threaten or bully any one’ (in Bert 2003, 224).

According to a government announcement released in 2006, China seeks peaceful settlements to all international disputes and opposes hegemony and a zero-sum mentality. China will continue to adhere to the common interests of all peoples for reasons of peaceful development. The release stressed that China cherishes win-win deals for development and prosperity for all countries and will not intervene in the internal affairs of other countries ( Chinese Government Network ). According to Ji (2013), the main principles of China’s foreign policy include:

a priority for domestic stability an extension of the strategic opportunity period the maintenance of the status quo when not presented with a ready solution the aversion of crisis through diplomatic means the isolation of one event from the overall foreign policy the use of soft power over military pressure (Ji 2013, 5).

China’s foreign policy is also highlighted by principles such as the “New Security Concept.” This model was developed in 1997 and is viewed as a substitute to the zero-sum mentality that extended throughout the Cold War. The theory is seen as both displacing the “China Threat” theory within Asia as well as proposing an alternative to the US-led international order. Based on mutual trust and common interests, the “New Security Concept” strives to achieve security through regional forums, such as the Shanghai Cooperation Organization (SCO) and the World Trade Organization (WTO), while also promoting environmental and technological advancement (Kumar 2012).

Engagement in the Indian Ocean Region.

The historical evolution of the 21 st Century MSR has been discussed, as well as China’s overall strategy to integrate ASEAN and Asia, but what is China’s current involvement along the route of the 21 st Century MSR, and how will China’s engagement within the Indian Ocean expand in the future? As China accelerates its ties with nations in the Middle East and Africa through regional forums and trade ties, China is becoming a greater player within littoral nations along the MSR. China has already begun the building of ports and other industrial projects in countries such as Pakistan, Sri Lanka, Bangladesh and Myanmar for reasons such as assuring energy security and achieving footholds in the Indian Ocean. Energy security has been a key element in China’s in economic ties with the Middle East and can explain much of China’s realignment strategy in promoting ties along the silk route of the sea.

Engagement with Littoral States.

Long before the development of the 21 st Century MSR, China was engaging with littoral states in the Indian Ocean region. President Xi Jinping’s introduction of the 21 st MSR in October 2013 has provided a basis for the deepening links between China and the nations along the coast of the Indian Ocean. A number of commercial ports have been popping up that are owned and operated by Chinese firms in countries such as Pakistan, Myanmar, Sri Lanka and Bangladesh.

In April 2014, Li Keqiang spoke of the importance of trade liberalization and regional and sub-regional cooperation through free trade areas. He discussed the possibility of launching the Free Trade Area of the Asia Pacific (FTAAP) and initiatives such as the RCEP, the BCIM Economic Corridor and the China-Pakistan Economic Corridor. Pakistan, Bangladesh, Maldives, Seychelles, Sri Lanka and Myanmar are nations that have recently undertaken Chinese investment projects in ports and re-fueling stations. Close relations with such littoral states allow China to strengthen its presence in the region without too glaring of a reaction from the international community.

In Pakistan, China has invested in the construction of a deep-sea port along the Arabian Sea coast in the city of Gwadar and has also developed railways and roads running from Gwadar to Xinjiang province in China’s northwest. China sees Pakistan as a possible energy corridor for the transportation of oil and gas from Iran, as Gwadar is located at a critical point near the Strait of Hormuz in South Asia and the Middle East (Seaman 2010, 32). The port facility in Gwadar was constructed in 2002 through joint efforts with Islamabad, and it serves China’s interests in the safe shipment of energy supplies from the Persian Gulf. The deep water port in Gwadar, with investments totaling around USD 1 billion dollars, serves not only as a transport center but also functions to bolster China’s position in the Indian Ocean region and the Arabian Sea while also contributing to China’s ties with both Pakistan and Iran (Parmar 2013, 19).

Some contend that the port could develop into a naval base and allow for the Chinese monitoring of the Indian and US navies. According to Holmes and Yoshihara (2008), the People’s Liberation Army Navy (PLAN) shows little means of defending the port against cruise missiles or against naval air strikes. In addition, the Gwadar port does not necessarily present a strategic advantage for China given that the US Navy could block Chinese oil shipments within the Persian Gulf, rendering the port no use as no oil would be able to reach the port (Holmes and Yoshihara 2008). Further plans include linking Gwadar, Kandahar and Islamabad through a highway and a railway connecting Urumchi and Kashgar in Xinjiang province (Marketos 2009, 20). Moreover, the Chinese-financed Karakorum Highway is the highest road in the world and will lead from Kashgar to Islamabad to link China to the Gwadar port for the export of goods (Kazim 2012). Other projects are also being called for through the construction of the Sino-Pakistan Economic Corridor. China’s over-dependence on shipping lanes within the Indian Ocean has led to a proposed pipeline between Gwadar and Kashgar, which could also function to hedge against potential blockades along the Strait of Hormuz or the Strait of Malacca (Marketos 2009, 109; Barber et al. 2011, 2).

China’s cooperation with the country formally known as Burma has hit the spotlight in recent years, particularly since the 2009 beginning of oil and gas pipeline construction. Bilateral agreements for the “Burma-China pipelines” commenced following the memorandum of understanding between China National Petroleum Corporation (CNPC) and Myanmar’s Ministry of Energy (Kong 2010). According to Zhao (2011), cooperation efforts though port and pipeline projects not only guarantee China’s energy security but also form strengthened bi-lateral relations between China and Myanmar and improve China’s integration into Southeast Asia. Aside from Myanmar’s natural resources, natural gas reserves and extensive border with China (reaching 2,185 kilometers) (Myint-U 2011, 205), Myanmar’s proximity to the Indian Ocean and Andaman Sea make the country geopolitically significant to China (Zhao 2011, 91).

Myanmar’s two energy projects, the Shwe Natural Gas Project and the Burma-China oil transport project, were agreed upon by Myanmar’s Ministry of Energy and the CNPC (“The Burma-China Pipelines” 2011). The oil pipeline is posed to transport Middle Eastern and African oil from Myanmar to Yunnan province, while the gas pipeline will come from Myanmar’s gas fields in Shwe (Chen 2010, 11). The gas pipeline is 1,123 miles and plans to deliver 12 billion cubic meters of natural gas per year (Kong 2010). In July 2013, the China-Myanmar gas pipeline began transporting gas for natural gas found offshore from Myanmar’s Rakhine coast in the Bay of Bengal to Yunnan Province (Yhome 2014, 4). The oil pipeline, costing USD 2.3 billion (Zhao 2011), had not yet reached completion as of September 2014 due to construction delays and controversy. Covering 690 miles, the crude pipeline begins at the port of Kyaukphyu in Myanmar’s Rakhine State and traverses to Kunming in Yunnan Province. The pipeline is proposed to transport 22 million tons of oil per year or 440,000 barrels of oil per day (Kong 2010, 57). With the construction of “Burma-China Pipelines,” China’s transport routes for oil and gas would total four: the Sino-Kazakhstan crude oil and natural gas pipelines, a Sino Russian oil pipeline, ocean shipping via Malacca Strait and, lastly, oil and gas transports through the Myanmar-China pipeline project (Zhao 2011, 95).

Once completed, an economic channel is expected to be created along the pipeline routes. China’s “Go West” strategy commenced as an effort to develop infrastructure in the poorer regions of the country, and pipeline development though Myanmar and into China’s southwest regions is posed to strengthen underdeveloped parts of Yunnan province. Southeast China has no oil refineries at present, so imported oil is required with long-distance pipelines from refineries in Guangdong and Gansu provinces through the Maoming-Kunming and Lanzhou-Chengdu-Chongqing oil pipelines (Zhao 2011, 98). Through economic pacts and the potential for an oil refinery, Yunnan province is poised to become a petroleum center for southwest China as well as a bridgehead to connect to Southeast Asia (Zhao 2011, 99). China has further assisted Myanmar in upgrading radar facilities and developing a deep-water port.

Outros links.

In Bangladesh, China has constructed a deep-water port at Chittagong, Bangladesh’s primary harbor. Aside from handling 92 percent of Bangladeshi trade, the port could also function as a hub for the development of transportation networks. A pact was agreed upon between China and Bangladesh, wherein China is allowed to use the harbors of Chittagong as a refueling station and a station for aircraft (Barber et al. 2011: 2-5). It is, however, unlikely that China will build a naval base at Chittagong, as Bangladesh sees Chittagong as an entirely commercial hub for trade flows within India, Nepal, Burma, Bhutan and China (Kostecka 2010).

In Sri Lanka, China has played a role in constructing terminals within the Port of Colombo as well as the Port of Hambantota. Following a construction contract signed in 2007 between China Harbor Engineering Company Limited, Sino Hydro Corporation Limited, and the Sri Lanka Ports Authority, China allotted USD 360 million for the development of the Port of Hambantota. The port includes a harbor, cargo terminals and a refueling depot (Kostecka 2010). As the placement of the port is along the way to the Strait of Malacca, the Gulf of Aden and the Strait of Hormuz, the Port Hambantota has been suggested as a locale for ship supplies or the refueling of ships traversing the Indian Ocean. The crucial link of the port is the entrance granted to China within the southern Indian Ocean (Parmar 2013, 19).

Colombo, Sri Lanka’s largest port, has also made headlines in recent years due to Chinese efforts to modernize the port through container development. In August 2013, Sri Lanka opened a USD 500 million dollar container terminal located at the Colombo Port. The container terminal is named the Colombo South Container Terminal, which was constructed by a company named the Colombo International Container Terminals Limited, which is a joint venture between the China Merchant Holdings Company Limited and the Sri Lanka Ports Authority. The container port is located at one of the world’s largest container ports in the world, and China Merchants Holdings Company Limited has the majority of the ownership. Ties are readily being sought between China and Sri Lanka, such as a free trade agreement that is currently being looked into (Gao 2014).

Further links along the 21 st Century MSR include Maldives, Mauritania and Seychelles. According to news reports, in 1999 speculation started that China would set up monitoring stations or a submarine base on Marao Atoll (Kostecka 2010). Recent research, however, reveals that the establishment of a Chinese base in the Maldives is unlikely due to India’s strong relationship with Maldives. China does not seek to shake its relationship with one of its closest neighbors. According to Parmar (2013), China is also looking into opening an embassy in Maldives and plans for other projects such as a submarine base (Parmar 2013, 19). In Mauritania, China is considering a USD 1 billion investment in a special economic zone. China has also undertaken efforts to build the Port of Friendship through a loan of USD 295 million dollars. The project port qualifies as one of China’s largest investments in Africa. In Seychelles, located near the Indian Ocean Ridge, China has adopted ship facilities for anti-piracy missions, and China has also provided Seychelles with Y12 aircrafts (Parmar 2013, 19).

The” String of Pearls”

The belief that China intends to build navy bases in the Indian Ocean has become known as the “string of pearls” theory. This conjecture, posed by US defense contractor Booz Allen Hamilton, refers to China’s geopolitical ambition for expansion through bases or ports aligned along the Indian Ocean rim. Pakistan, Sri Lanka, Bangladesh, Myanmar, Maldives and Seychelles are all deemed as likely contenders to allow for Chinese investments for the construction of ports and bases. The string would act as defensive positioning that stretches from the Middle East to Hainan province in South China Sea (Barber et al 2011, 20). The theory is based on the fear that China’s concerns in the Indian Ocean reach beyond the transport of energy products. China is seen as attempting to hedge against India’s “Look East” policy and carve a new sphere of influence without the involvement of the United States.

China’s ambitions within the region include motivations for new markets and also a route that can bypass the Strait of Malacca, which receives most of China’s oil shipments from the Middle East. China has yet to build naval bases in the Indian Ocean and has only configured such littoral stations and ports as places for naval ships to refuel and restock (O’Rourke 2014, 37). The term “base” denotes a military establishment provided by one nation to be used by an invited nation and therefore cannot apply to China’s port investments in littoral states. Analysts have, instead, determined that China is instead establishing “facilities” or “places” within the Indian Ocean region (Parmar 2013). Despite friendly maneuvers, it is clear that China is making grounds forming regional connections through diplomacy, commercial maneuvers as well as some military action.

China first began engagement in the Indian Ocean region through investments in Myanmar and Sri Lanka, and advancing ties are seen as occurring within Maldives and Seychelles (Parmar 2013, 18). Realists view these countries as posing an arena for China to balance against the United States and check India’s rise by monitoring naval activities (Holmes and Yoshihara 2008, 125). Infrastructure development, pipeline building and diplomatic efforts are proving to be China’s only method for gaining footholds within the Indian Ocean region at the present time. Some analysts speculate that while a base in Myanmar could have been possible a few years ago, Myanmar’s reorientation toward the West through high-level visits has subverted the possibility of a base within Myanmar (Parmar 2013, 18).

Overall, China is seeking to steadily strengthen its capacity within the Indian Ocean. According to Marketos (2009), Beijing has taken advantage of the United States’ conflicts in Iraq and Afghanistan by “carving a sphere of influence for itself” (Marketos 2009, 55). China’s strategy is to weaken the influence of regional competitors such as Japan, India and Taiwan, weaken the role of the United States, and also to improve relations with Pakistan, Myanmar and Bangladesh for access to the Indian Ocean (Marketos 2009, 55). In South Asia, China has invested billions in infrastructure through projects such as the port Hambontota in Sri Lanka as well as the port Gwadar in Pakistan. Despite the array of projects, it is unlikely that China has the military wherewithal to fully support these ports. Alliances in the region are weak despite the amount of construction in the region. In addition, forming outposts in the Indian Ocean does not necessarily hedge against the US interdiction of oil, as the US could just as easily stop the shipment of oil in the Strait of Hormuz before shipments even reached the ports (Holmes and Yoshihara 2008, 126). Given Sri Lanka’s proximity to India, developing bases would be a serious liability to China, and a base at Hambantota would also be too costly. Sri Lanka considers ports as contributing to economic development and sees military presence as a hindrance (Kostecka 2010). At the same time, Pakistan and Sri Lanka have both responded positively to the initiatives of China due to India’s alleged attempts at regional expansion and as a balancing act against India’s growing military expenditures. Here a zero-sum game for influence in the Indian Ocean region is more obvious. Furthermore, offensive realists would determine China’s footholds as precautions for an unpredictable future. According to Holmes and Yoshihara (2008, 125), “Securing beachheads in the Indian Ocean basin represents a precursor to a more vigorous future strategy in the region.”

Sea Lane Security.

In recent years, a maritime emphasis has become profound in Chinese foreign policy. China’s economic development is increasingly dependent on sea-borne trade and imports of oil. Ensuring the safe passage of oil and energy security in the Indian Ocean region has become a major factor that has led to China’s southward orientation. China’s oil security and naval capacity are two crucial realms of policy that have contributed China’s focus on the 21 st Century MSR.

Securing the Passage of Oil.

China is now the world’s largest importer of oil, with over half of its imports coming from the Middle East and nearly a quarter originating in Africa (EIA 2014). According to Kalicki and Goldwyn, energy is often a main premise of nation’s security and is crucial for a nation’s prosperity (in Hadfield 2008). Energy security is “assurance of the ability to access the energy resources required for the continued development of national power…and adequate infrastructure to deliver these supplies to the market” (in Hadfield 2008, 323). States now view energy security in a similar way to military and economic security. In a white paper on energy released in 2012, China emphasized energy as a national priority and stressed the importance of global cooperation through international forums such as the Asia-Pacific Economic Cooperation (APEC), ASEAN, the International Energy Forum, and the Organization of Petroleum Exporting Countries (OPEC) (IOSC 2012).

Energy import concerns coupled with China’s increasing economic ties in littoral nations have led to questions such as whether China’s naval involvement in the eastern part of the Indian Ocean involves more than just the protection of shipping lanes and sea lane security. Territorial disputes with the Philippines and Vietnam and naval exercises that stretch beyond the South China Sea highlight the fact that energy security may not be the primary realm of concern to the Chinese government. Oil security and naval expansion are both critical factors that can determine China’s interest in creating the 21 st Century MSR.

China’s need for imported oil due to a lack of domestic production has led to securing resources from the world’s largest producers in Africa and the Middle East. The Middle East supplies China with most of its crude oil imports, and these imports are expected to rise. In 2013, China imported 59 percent of its oil, with 52 percent of imports originating in the Middle East and 23 percent coming from North Africa (Jiang and Ding 2014, 10-11). From 2004 to 2013, China’s crude oil imports from Arab countries grew more than 12 percent annually (Zhao 2014). Although China is an oil producing country (the world’s fifth largest), China became a net oil importer in 1993. In 2013, China imported 5.64 million barrels of oil per day (mb/d) of crude, compared with 5.1 mb/d in 2011 (EIA 2014) and 4.11 mb/d in 2007. The Middle East will continue as one of China’s main oil providers in the years to come, and it is predicted that one-third of China’s consumed oil will originate from the area by 2030 (Sharan and Thiher 2011, 6). According to the EIA, the current Five-Year Plan, covering the period 2011 to 2015, aspires to cap China’s oil imports at 61 percent of total demand by the end of 2015. However, imports are forecasted to reach over 66 percent of total demand for by 2020 (EIA 2014).

Eighty-percent of Chinese crude and petroleum products are shipped from the Middle East and East Africa through the Indian Ocean (Erickson and Goldstein 2009, 51). Shipment occurs using marine vessels as well as pipelines. As the maritime transport of oil is less expensive than overland shipping methods, China is showing increasing concern for oil shipments through its sea lines of communication SLOCs (Erickson and Collins 2012: 89). Kenneth Lieberthal and Mikkal Herberg note that “China’s increasing dependency on [sea-borne] oil flows…is potentially accelerating China’s development of the naval capabilities necessary to protect those lanes” (in Collins, Erickson and Goldstein 2008, 300) Figure 4 details the shipment possibilities for China’s vast oil supplies. The passage of oil through the Strait of Hormuz and the Strait of Malacca are strategic concerns to China, and—as China’s oil imports rise—the strategic interest in these areas will continue in the decades to come.

Map 4: Shipping Routes of Oil Tankers.

Source: Sharan and Thiher 2011.

Energy imports from the Middle East render the chokepoints of the Strait of Hormuz and the Strait of Malacca significant to China’s oil security. The Strait of Hormuz is considered the key corridor for the international passage of oil and gas, as roughly 20 percent of the world’s oil supplies traverse this small but vital passage (Sharan and Thiher 2011, 6). The strait is an oil chokepoint because the gateway is the route taken by the greatest oil exporters of the world. Furthermore, a blockade initiated by Iran in the event of tensions with the United States is also a potential hazard to China’s oil shipments (Shelala 2013). In such an event, Iran would pose a threat to shipping lanes, drive up oil prices and trap transporting vessels. Such an assault is seen as improbable, however, due to Iran’s dependence on the strait for trading with partners such as China (Shelala 2013). In 2001, Hu Jintao visited Iran and completed cooperative pacts for the transport of crude oil, further enhancing ties between the national oil companies of China and Iran (Lai 2009a, 30-32). In May 2014, Xi Jinping met with Iranian President Hassan Rouhani in Shanghai to discuss increasing bilateral ties in industries such as oil, gas and petrochemicals and also to promote ties through the Silk Road Economic Belt and the 21 st Century MSR (“Xi Jinping Holds” 2014). Saudi Arabia, China’s number one oil provider, relies on both the Gulf and the Red Sea for its oil exports and thus can navigate beyond the Strait of Hormuz for oil transports to China (Shelala 2013, 32).

The main chokepoint for the passage of oil to China is the Strait of Malacca. Energy security planning in China takes into account this strategic point due to the tremendous amount of oil traded through these narrow straits coupled with a limited naval means (Chen 2010; Kong 2010; Zhao 2011). The Strait of Malacca connects the South China Sea to the Indian Ocean and serves around one-third of global trade and half of the world’s trade of oil (Sharan and Thiher 2011, 11) as well around 80 percent of China’s oil imports (EIA 2014). The strait is about 800-km long and located between the east coast of the Indonesian island of Sumatra, Malaysia’s west coast and the southern part of the Strait of Singapore (Chen 2010, 3). In 2011, the Middle East and Africa supplied roughly 15.2 million mb/d of crude and petroleum products through the straits (EIA 2012). China deeply knows the strategic disadvantage this strait poses and has deemed this the “Malacca Dilemma.” In November 2003, former Chinese President Hu Jintao described having to depend on the strait for economic and geopolitical security as the “Malacca Dilemma” ( maliujia kunju ) and called for new strategies to alleviate China’s weaknesses in the straits due to the strategic control of the straits by “certain major powers” (Chen 2010, 2). China has yet to develop the means to defend its trade routes. It would be fairly easy for the US Navy to intercept Chinese oil imports. The United States is the country with the largest naval presence in the Indian Ocean for the purposes of guaranteeing freedom of navigation, conducting operations during conflicts in the Persian Gulf as well as maritime security operations, such as counter-trafficking and counter-terrorist missions (Michel and Sticklor 2012, 13). The Strait of Malacca is patrolled by the forces of Indonesia and Malaysia (Marketos 2009, 33).

Efforts have been taken by the Chinese government to disentangle China from the Malacca dilemma through solutions such as diversifying China’s energy sources, increasing focus on consumption measures, adopting new shipping lanes lead to an avoidance of the Strait of Malacca, and intensifying naval involvement in the Indian Ocean (Chen 2010). Oil pipeline development through Myanmar has become a viable alternative for obtaining Middle Eastern oil over the past very years. Moreover, ship re-routing alternatives through the Straits in Lombok or the Sundra Strait have also been posited (EIA 2012). Alternatives for pipelines have been discussed in Pakistan and within Southeast Asia, and further actions have taken that would increase oil imports from Russia and Central Asia (Lai 2009b, 50). Despite the risks posed by the “Malacca Dilemma,” the maritime shipment of oil has proven successful, and the Strait of Malacca is the most convenient link for Persian Gulf oil suppliers and their Asian markets (EIA 2012).

In addition to pipeline and re-routing alternatives, China is attempting to hedge against energy security threats by building a more capable shipping industry. China Shipping Tanker Company Limited, China Merchants Energy Shipping Company Limited and other Chinese companies are constructing more Very Large Crude Carrier (VLCC) vessels, a strategy supported by central government (Bao Zhiming 2014). The goal is to increase the domestic shipping of Chinese oil to 85 percent from 2011 to 2015. In 2013, this figure only reached 40 percent (Bao Zhiming 2014). Some strategists believe that Chinese-flagged tanks allow for secure oil shipments from unstable areas in Africa and the Middle East. Naval capabilities allow countries to guarantee the save shipment of oil along critical SLOCs (Erickson and Collins 2007, 676). As of 2012, China owned 59 VLCCs, putting China behind only Japan and Greece in terms of VLCC fleet capacity (Jallal 2012). While Chinese shipping companies have begun constructing tanker fleets with the ability to improve control over oil imports, China’s naval involvement in the Indian Ocean region remains limited.

To work toward China’s expanding oil needs, a strategy known as “going out” has led national oil companies (NOCs) to form strategies for diversifying the transit routes for oil imports (Lai 2009a: 28). Chinese NOCs–now present in 42 countries–are working aggressively in the oil and gas fields of African and Middle Eastern countries (Jiang and Ding 2014, 7-8). Oil and gas produced by NOCs accounted for roughly 2.5 m/bd by the end of 2013, with 26 percent of oil production occurring in Iraq alone (Jiang and Ding 2014, 7-8). In January 2014, Xi Jinping met with the GCC delegation in Beijing to discuss the progress of a free trade area and to publicize the Silk Road Economic Belt and the 21 st Century MSR (“Chinese President meets” 2014). Commenting on the importance of the Middle East in carrying out the Silk Road Economic Belt and 21 st Century MSR, Foreign Minister Wang Yi stated the need for Arab countries to act as a connecting point for both routes. At the China-Arab Cooperation Forum in June 2014, he noted, “Arab countries are located toward the western end of the intersection of the Silk Road Economic Belt and the 21st Century Silk Road on the Sea.” China’s leaders have determined many Arab nations as natural and important cooperation partners for building “One Belt and One Road” (Wang 2014).

Naval Modernization.

Securing SLOCs has become a major rationalization for China’s growing naval activity in the Indian Ocean along the route of the 21 st Century MSR. In important speeches before the PLAN, former President Hu Jintao and current President Xi Jinping have called for the adoption of a powerful blue-water navy and emphasized the importance of naval modernization. In his 2006 speech, Hu Jintao expounded upon the accelerated role of the navy as part of China’s path to modernization. He stressed China’s role as a maritime country in pursuit of defending national sovereignty, safeguarding maritime rights, and military modernization with Chinese characteristics (NDRC 2006).

In April 2014, Xi Jinping called for the strengthening of China’s navy, and the State Ocean Administration developed a guide on maritime development through new planes, vessels, and heightened China’s maritime rights ( Xinhua News Agency 2013b). Within the South China Sea and the Indian Ocean, China’s biggest concern is that the United States will cut off China’s supply lanes. According to Collins, Erickson and Goldstein (2008: 320), Chinese naval strategists are “painfully aware of the US Navy’s superiority over the PLAN. Analysts in China see the importance of PLAN’s role in securing energy security and hedging against any potential blockades.

It has become the subject of debate whether naval enhancement outside of the periphery is a method of securing energy supplies or a strategy to challenge regional power relations and the dominance of the US Navy. The deputy political commissar for PLAN, Yao Wenhua, has asserted that the transportation of energy resources requires the work of China’s armed forces:

Maritime transport and strategic passageways for energy resources have already become lifelines for the development of the national economy and society. Particularly for oil and other key strategic supplies, our dependence on sea transport is very great, and ensuring the security of strategic seaways is extremely important. We must fully recognize the actual requirements of protecting our country’s developmental interests at sea, fully recognize the security threats our country faces at sea, and fully recognize the special status and utility of our navy in preparing for military conflict (in Kennedy 2010,142).

During the 18 th Party Congress, beginning in November 8, 2012, Hu Jintao presented his final speech as the leader of the Chinese Communist Party and highlighted the prospect of strengthening the country’s maritime status (Xinhua News Agency 2012). One Chinese naval strategist sees the 18 th Party report as determining part of the geopolitical destiny of China and maritime goals of the Chinese people. The feat is seen as requiring strategic management, institutional development, talent acquisition, and a concerted expansion of marine science and technology (Cao 2014). Among recent strides in the development of military technology, China is now developing land-based anti-ship ballistic missiles, land-based air force aircraft armed with anti-ship cruise missiles, long-based long-range radars for ship-tracking and land-based surface-to-air missiles (O’Rourke 2014).

According to O’Rourke (2014, xx), one goal of naval modernization is forming an “anti-access/area denial force—a force that can deter US intervention in a conflict in China’s near-seas region over Taiwan or some other issue, or failing that, delay the arrival or reduce the effectiveness of intervening US forces.” According to Bert, the two realms that could trigger the use of force by the Chinese include the issue of Taiwan and the territorial disputes over the Spratly Islands (Bert 2003, 113). Since the early 1990s the PLAN has focused intently on the Taiwan Strait (Lai 2009b, 53). One of the biggest concerns of Beijing is a Sino-American crisis over Taiwan that would drive Beijing into using its military forces (Cole 2008, 348). China has repeatedly demonstrated its concerns about Taiwan re-unification, and yet the relationship between the two countries remains hostile despite a high level of economic interdependence. One Chinese naval scholar, Ni Lexiong, stresses China’s decision to build up its naval capacity around the Taiwan-Strait in order to assure against “threats posed to our ‘out-ward leaning economy’ by some strong nations” (in Holmes and Yoshihara 2008, 128). According Li (2004), the US has sent signals to China regarding its intentions toward Taiwan through the deployment of two aircraft carriers. While many scholars contend that the Taiwan Strait crisis could be the one area within China’s national interests that could erupt in a war between the United States and China, other scholars contend that China “seeks no armed confrontation just because of territorial disputes” (Ji 2013, 4). The Chinese navy and military are seen as seeking to avoid war at whatever cost.

According to Ji (2013), core national interests in China exist at both global and domestic level. “Two parameters define the bottom-line of China’s core national interests: domestic politics and calculation of the trigger of war” (Ji 2013, 4). The South China Sea gained most of the attention of the PLAN from the 1970s to the early 1990s due to conflicting territorial claims between China and Vietnam (Lai 2009b: 53). China has designated the South China Sea as an area of “core interest” to the country (Michel and Sticklor 2012, 15). The strategic importance of the South China Sea is owed to historical claims and to the fact that three-fourths of the world’s oil and gas traverse its sea-lanes. The South China Sea also contains great potential for oil and gas exploration. According to Garafano, despite the fact that no large territorial dispute existed until hydrocarbon deposits were discovered in the 1970s, China, Taiwan, Vietnam, Malaysia, the Philippines and Brunei all hold claims within the South China Sea. China claims the whole South China Sea, including the Spratly islands, while the Philippines claims a number of smaller islets. Malaysia also claims various islands, and Brunei also has asserted rights to a narrow portion of the Spratlys (Garafano 2008, 281).

Aside from the Taiwan-Strait and territorial issues within the South China Sea, further concerns include the lawful right to govern foreign military missions in a 200-mile maritime exclusive zone, expelling fortified US forces from the western Pacific, and defending China’s status as a regional power (O’Rourke 2014, 4). Other territorial issues less pressing than Taiwan include separatist movements in Tibet and Xinjiang, as well as the dispute with Japan over the Diaoyu/Senkaku islands (Bert 2003, 113). According to Ji (2013), the Diaoyu/Senkaku territorial dilemma has also been identified as a core interest. According to Dutton, even though China, Vietnam and the Philippines signed a cooperative development agreement in 2005, the situation remains direr between Japan and China. Dutton writes:

Even with China’s accelerated economic development, Japan still possesses the second - largest economy in the world and consumes a proportional share of global petroleum resources—resources China may also need to continue its economic rise and the rejuvenated international status it desires. More important, however, is the fact that Beijing sees Tokyo as a potential rival for preponderance in Southeast Asia, a perception that despite a recent thaw in relations makes the possibility of long-term cooperation and compromise in the East China Sea less likely (Dutton 2008, 254).

Although China’s navy does not qualify as “blue water” with capabilities to defend SLOCs, China’s maritime capacity along its periphery and within parts of the Indian Ocean is significant and growing. According to white papers produced in 2013, the navy’s role is to participate in anti-piracy missions in the Gulf of Aden and around Somalia, safeguard the security of international shipment lanes, engage in joint efforts with Russia, and perform anti-piracy operations in accord with Korea, Pakistan and the United States (IOSC 2013). The subject of PLAN’s activities outside China’s immediate periphery—within the Gulf of Aden, the Mediterranean Sea and the Horn of Africa—is seen by many scholars as having implications for China’s advancement of the 21 st Century MSR.

Anti-Piracy Efforts.

Piracy, terrorism and natural disasters hamper the flow of goods from ports to their destinations. Piracy around Somalia is becoming severe and is seen as a threat to regional security and to Bab-el-Mandeb, a corridor for the shipping of oil and gas to European markets (Parmar 2013, 14). According to Hebert-Burns (2012), by the end of 2011, piracy groups around Somalia had plundered 214 vessels and hijacked 31. Furthermore, 8 vessels remained awaiting release for the payment of ransoms, 497 seafarers were held captive, and 10 seafarers died (Herbert-Burns 2012, 24). Solutions to piracy and terrorist activities require the maintenance of the Gulf of Aden and the ensured security of maritime transports. Since 2008, Beijing has been engaged in the Gulf of Aden and anti-piracy operations. The 2008 deployment of ships to the Gulf of Aden was the PLAN’s first attempt to safeguard shipments and humanitarian supplies from Somali piracy (IOSC 2010). China maintains a three-ship presence in the Gulf of Aden as a means of protecting Chinese merchant ships as well as commercial operations reaching China’s coasts (O’Rourke 2014, 37). By 2010, the PLAN had dispatched 7 sorties, 18 ship deployments, 16 helicopters, and 490 Special Operation Forces on escort missions (IOSC 2010). The navy has further protected over 3,000 ships under both foreign and Chinese flags, has rescued 29 ships from attacks, and has released ships in captivity (IOSC 2010; Gerin 2013). According to Parmar (2013), a cooperative effort called Shared Awareness and Deconfliction was established for nations with ships to thwart the threat of piracy and other security threats (Parmar 2013: 15). In September 2012, the PLAN worked alongside the US Navy along the Horn of Africa on anti-piracy missions (Gerin 2013).

China’s deployment is part of a reaction to counter the threat of piracy but can also be interpreted as a wider strategic move. According to Cole, despite a limited role of the Chinese navy within the Indian Ocean, the PLAN may station repair ships in various locations, such as Socotra, in the Gulf of Aden. In addition, China could eventually engage in refueling through the ports of host nations (Cole 2008: 345).

Involvement in the Indian Ocean.

A concerted effort to build a naval presence throughout Asia is lacking. China’s navy operations now do not extend into more distant waters, nor do joint operations occur with China’s military. In addition, antisubmarine warfare is deficient, reliance on foreign suppliers for certain components is too pervasive, and the navy is short of a high degree of operational experience (O’Rourke 2014, 3). According to Mulvenon, the Chinese navy is still considered a “brown and green water navy,” meaning it is it has not reached the standard of a “blue water navy” and capable of far seas expeditions. China’s navy does not have sufficient auxiliary oil replenishment ships, and also remains unlikely to develop the full support of foreign naval bases, unlike the navy of the United States (Mulvenon 2008: 6).

China has prospered from the freedom of navigation guarantees set by the US Navy but also views its protection under the United States as a potential hazard (Mulvenon 2008: 4). The US Navy has a history of interference in Pacific maritime affairs, as first demonstrated in 1993 through the Yinhe incident. During this time, the US Navy trailed a ship thought to be carrying chemical weapons, only to later discover that no such weapons existed. Furthermore, in 1995-1996, a missile test near Taiwan lead to the deployment of the US military, causing the PLAN to react to a potential conflict with the navy (Mulvenon 2008, 5)

According to one source, “Although the PLAN in the near term likely will not seek to develop the ability to establish sea control or sustain combat operations in the Indian Ocean against a modern navy, PLAN operations within weapons range of US bases and operating areas in the region probably will become more frequent as China expands and modernizes its fleet of submarines and surface combatants” (USCC 2014, 2). Examples of extending influence along the maritime route are becoming more present in recent years. In 2010, as part of a tour within the Indian Ocean, China participated in its first mission to port within Myanmar using two Chinese warships (Yhome 2014, 2). In China’s first evacuation operation, a PLAN warship made its way to the Mediterranean Sea to relieve Chinese citizens working in Libya in February 2011 (Gerin 2013). In 2012, PLAN began the deployment of intelligence ships capable of gathering signals and conducting electronic intelligence in the Indian Ocean region (USCC 2014, 4). During the same year, China embarked upon seven naval exercises in the West Pacific involving surface ships and submarines passing near the Diaoyu/Senkaku disputed territories (Cole 2013). In early 2013, PLAN undertook deep-water navy drills in the western Pacific as part of training for long-distance operations. The combat and supply missions lasted days and included two guided-missile destroyers, two missile frigates, a supply ship and shipboard helicopters (Cole 2013; Gerin 2013). In Summer 2013, China’s naval hospital ship, Peace Ark, reached India, Bangladesh and Myanmar within the Bay of Bengal as part of a humanitarian mission to assist in medical services (Yhome 2014, 2).

In February 2014, China held a three-ship naval exercise in the Indian Ocean. As part of what were called anti-piracy exercises and search and rescue missions, the force sailed through the Lombok Strait near Indonesia and toward the Philippines. This mission consisted of the Chuangbaishan, China’s largest landing ship as well as two destroyers, the Wuhan and the Haikou (Xinhua News Agency 2014). The mission was part of a naval deployment that lasted a total of 23 days. The mission helped the operational abilities for antisubmarine warfare, electronic warfare, air defense, and logistics (USCC 2013, 2). Training was also conducted as part of a preparation effort in the event of conflict over disputed islands in the South China Sea. All in all, these efforts reveal that China can now extend its presence within the Indian Ocean region (USCC 2014, 2). In March 2014, China called on India to allow for the sending of four naval vessels to the Andaman Sea in the northern part of the Indian Ocean as part of the search mission for the missing flight MH370, a Malaysia Boeing 777 airplane. India declined this request due to its own extensive naval efforts, which included four naval warships and a P-81 aircraft (Krishnan 2014). Later, the PLAN deployed eight vessels within the South China Sea to carry out the search. Naval warships were also sent to the southern Indian Ocean where four Indian naval warships were also engaged in a search for the debris from the missing flight MH370 (Krishnan 2014).

Furthermore, China was invited for the first time to attend the US-led Rim of the Pacific Exercise (RIMPAC) in the summer of 2014 near Hawaii. At RIMPAC, China displayed four warships, a destroyer, frigate, a supply ship, and also carried out gun firing and participated in search and rescue missions as preparation for dealing with unexpected humanitarian crises or other conflicts at sea (Deng 2014). According to China’s South China Sea Fleet commander Admiral Jiangwei Lie, “The goal of the mission is cooperation. The 21 st century is the century of the sea, so the Chinese navy must become a master of the 21 st century within the ocean, but within the realm of peaceful development” (Deng 2014).

Naval weakness is deemed a strategic challenge by Chinese policymakers. A blockade by the United States is, however, unlikely to occur due to the fact that Chinese oil tankers only transit about 10 percent of oil and also due to the fact that oil transports are destined for several countries and various tanker owners. A blockage would require the agreement of all tanker owners. Shipments would then be cut off to Korea, Japan, the Philippines, as well as other places (Barber et al. 2011, 17). Having the title of a blue water navy, however, is a feat China would like to achieve.

All in all, China’s deployments to the Gulf of Aden are expected to continue as are naval exercises within the South China Sea. Focus is expected to turn toward naval capacity and the safeguarding the SLOCs between China and the Middle East. China’s strategic concerns along the route of the 21 st Century MSR also include territorial disputes, and the 21 st Century MSR has been formed as one means of forming peaceful resolutions to conflicts that are satisfactory to China.

Offensive Realism and the 21 st Century MSR.

Mearsheimer has used his theory of offensive realism to predict the actions of states in the international system. He utilizes pre-World War I Germany and pre-World War II Japan as examples of countries that started wars despite remarkable economic achievements, thus providing an argument against many popular liberal theories (Mearsheimer and Brzezinski 2005). Within offensive realism, power, security and wealth are the most important motives that determine state behavior (Barnett 2008, 195). According to Mearsheimer, given China’s rising wealth and power, the prospect of conflict is not unreasonable. “A wealthy China would not be a status quo power but an aggressive state determined to achieve regional hegemony” (Mearsheimer 2001: 402). Whereas complex interdependence can explain state behavior based on economic interdependence and a mitigated concern for force, Mearsheimer’s offensive realism explains state behavior based on the structural qualities of the system. The relative capabilities of the US, India, ASEAN as well as other countries are all considered when explaining the creation of the 21 st Century MSR. According to Rozman (2010, 201):

For China, Southeast Asia is an arena in which great powers compete for strategic influence. As in the Vietnam War when the United States battled to dominate the region, the focus remains on US determination to keep its hegemony in the face of opposition, now supported by China’s putatively opposite strategy of treating others equally, building mutual trust, and fostering joint development.

China is gaining greater leverage in the region through initiatives such as the silk route of the sea. While neoliberals point out the positive effects of such multilateral initiatives, offensive realists see institutions as power-gaining mechanisms and as insufficient in promoting peace and prosperity. Institutions bear little influence over state decisions but can be used for relative gains. China is therefore engaging in regional efforts such as ASEAN+3, the AIIB, and the promotion of the 21 st Century MSR as an unthreatening means of having more influence within the system. Offensive realists argue that interdependence may not always led to peaceful relations. Japan, Taiwan and ASEAN cooperate with China in trade deals to a high degree, and yet China continues to maintain claim to the disputed territories in the East and South China Seas and also remains steadfast on Taiwan re-unification. According to one realist scholar, “China’s behavior…suggests that China does not feel that the fruits of economic interdependence are at risk when it pursues its irredentist agenda or seeks greater international status, or else that these are short-term prices worth paying for a greater good” (in Li 2004, 28). China is thus forging involvement in the South China Sea and areas of interest for potential wealth purposes and to gain the natural resources that are needed for supporting the growth of the Chinese economy (Li 2004, 28).

Other important “units” to consider when analyzing China’s maritime goals include Australia, New Zealand, India and Japan (Rozman 2010, 201). For instance, realists see one reason for the increasing presence of the US in Asia as due to the threat felt by Japan and the acquiescence of regional partners (Buzan 2010, 26). Buzan argues that the intense power rivalry between Japan and China may elicit a challenge to China’s goal of a “peaceful rise,” as having a rival so close to home limits the chance of regional hegemony (Buzan 2010, 27).

The structure of the system and China’s search for power, security and resources has prompted the creation of the 21 st Century MSR. The role of history and economic integration are not considered as factors leading to the creation of the silk route of the sea. Instead, offensive realism would argue that “peripheral diplomacy” functions to provide China with a stable neighborhood for growth and power accumulation. Forums such as the China-ASEAN Expo are seen as mechanisms for achieving the necessary elements for power expansion. The infrastructural projects in littoral countries discussed in Chapter 4 are seen as necessary in China’s pursuit of wealth and energy security. According to Sun (2013), China’s “Go West” strategy is a zero-sum effort to balance against the US in areas such as the East and South China Seas. Through increased concentration on western development, conflicts such as the Diaoyu/Senkaku dispute are mitigated, allowing for China to avoid confrontation with the US in East Asia (Sun 2013). In addition, the reinvigorated emphasis on historical figures such as Zheng He exemplifies a geopolitical ambition that stretches beyond China’s coastal territories. Zheng He’s legacy gives legitimacy to China’s naval aspirations in South Asia.

Chaper 6 describes the strategic maritime concerns of China along the silk route of the sea. Oil security, naval capacity and territorial disputes are all realms of power that require China’s attention. According to Yao (2009), oil security only goes as far as a state’s political and military power. China’s approach to energy security in Asia has been described as merchantilist, rather than liberal, due to the extensive role of the state and NOCs, instead of markets, in pursuing energy security (Yao 2009: 87). Instead of emphasizing market-based trade, China is seen as fulfilling goals for energy security in certain industries while also using trade protectionism and subsidies in others. As demonstrated, NOCs are increasingly heading to the Middle East and Africa through China’s “go out” strategy. The central government plays a critical role in China’s energy strategy in the Middle East (Yao 2009: 87-88).

China’s naval modernization and advancement of weapons systems have led scholars to argue that China is taking an offensive stance to regional politics. Despite China’s inferior military and economy, China is rising, and the future prospect of dispelling the US from Asia is seen as likely within offensive realism. As the structure of the system is the main explanatory variable in offensive realism, it is necessary to unveil balance of power politics in Asia and how offensive realism sees this as leading to the creation of the 21 st Century MSR.

Os Estados Unidos.

The fear of another power superseding the United States in Asia has existed since the Vietnam War. According to Waltz (1979), American leaders have never claimed the status world police. However, according to former US President Lyndon Baines Johnson, “There is no one else who can do the job” (in Waltz 1979, 206). Forty years following the conclusion of the Vietnam War, this neorealist view toward balance-of-power politics in Asia continues to exist. A principal subject of Mearsheimer’s The Tragedy of Great Power Politics is the hegemony of the United States and the fact that the United States does not seek regional competitors. According to offensive realism, as China ascends and becomes a military powerhouse, China’s goal is to prevent the US from having forces stationed in its backyard. To counter China’s potential threat to US hegemony, the US should contain China and display similar behavior toward Chinas as displayed toward the Soviet Union during the Cold War (Mearsheimer 2010: 90). The US would be advised to hinder China’s rise instead of encouraging it (Mearsheimer and Brzezinski 2005). According to Rozman (2010), and one mechanism to counter China’s gains would be through “supra-regionalism,” or greater cooperation with APEC and an APEC free trade area. This would slow much of the assimilative forces at work within the 21 st Century MSR. The US can further counteract through military alliances with Japan, Vietnam, Indonesia and other countries (Rozman 2010, 201). Thus, as regional hegemons do not like peers, China’s pursuit of regional hegemony will be contained by the United States. According to Mearsheimer (2010, 90):

If offensive realism is correct, we should expect a rising China to imitate the US and attempt to become a regional hegemon in Asia. China will seek to maximize the power gap between itself and its neighbors, especially Japan and Russia. China will want to make sure that it is so powerful that no state in Asia has the wherewithal to threaten it. An increasingly powerful China is also likely to try to push US military forces out of Asia, in much the same way as the US pushed the European great powers out of the Western Hemisphere during the nineteenth century…China’s neighbors are also sure to fear its rise, and they too will do whatever they can to prevent it from achieving regional hegemony. In fact, there is already evidence that countries like India, Japan and Russia, as well as smaller powers like Singapore, South Korea, and Vietnam, are worried about China’s ascendancy and are looking for ways to contain it.

Offensive realists can present the 21 st Century MSR as China’s means of achieving regional hegemony by weakening the role of the US in Asia. Despite the fact that China does not have the naval wherewithal to outdo the United States, Mearsheimer argues that one state can never be absolutely certain of another state’s future capacity; foresight is an important preemptive strategy against a threat (2005). China would be advised to build its economy and avoid conflict until growth has risen to the point of becoming a military might that can dominate Asia. China would be well-advised to reap the benefits from a peaceful and integrated Asia and Indian Ocean region. According to Sun (2013), extension into South Asia, Central Asia and the Middle East is a way for China to reach into a space not yet filled by the US for a reestablishment of regional order. This maneuver is also seen as helping the US by assisting in the stabilization of areas such as Afghanistan and Pakistan as the US retreats from such areas in the Middle East (Sun 2013).

China’s focus has shifted to South Asia and maritime security in part due to structural changes surrounding India. India’s economic reforms, nuclear tests, naval build up, and strengthened ties with the United States are all areas that require strategic reactions within offensive realism. According to Yhome (2014), under Xi Jinping, China has adopted a westward approach to international relations, and at the same time, India has developed an approach known as “Look East.” While India’s strategic proximity to the Indian Ocean provides India with a better opportunity for engagement along the 21 st Century MSR, China views India’s pervasiveness in South Asia as allowing for an opportunity to balance. China can use certain countries along the Indian Ocean rim to keep India’s naval ambitions in line and also to shape the region’s development in China’s favor.

Many realist scholars see the two powers as vying for influence in the region. Certain areas of strategic competition for relative gains include infrastructure projects in Myanmar and in Southeast Asia where both countries are eager to increase influence. According to Yhome (2014), in Myanmar, CNPC as well as the China National Offshore Oil Corporation (CNOOC) are active players in the construction of the gas pipeline running from the Rakhine coast in Myanmar to Kunming, the capital of Yunnan province. India is also eager to form connections with Myanmar because of domestic energy interests and the desire to tie India’s land-locked northeastern regions to the sea through the development of new roads. Land connectivity networks are being urged as part of India’s “Look East” policy, and both countries are seen as competing within Myanmar and around the Bay of Bengal for strategic influence (Yhome 2014). The two countries are also viewed as strategically competing for influence in other neighboring countries. China’s arm-sales to countries such as Nepal and Pakistan are seen as China’s attempt to balance region in South Asia (Sidu 2003). China also suspiciously eyes India’s relations with Tibet, Taiwan and Japan. India’s ties to Japan and the United States are efforts to assure Asia’s security is not dominated by one rising hegemon. Given tense relations, China still sees no reason to affront India given India’s close ties to the United States. States strive to maximize power within offensive realism, but are also careful to calculate costs and benefits.

In 2005, India and the United States agreed to work toward full nuclear cooperative efforts, leading China to judge US-Indian ties more carefully (Rozman 2010, 212-213). China now takes into consideration India’s strengthening naval capacity and the effects this could have on regional power dynamics. India—a country with a long seafaring tradition–already possesses a substantial naval force that includes an aircraft carrier and a TU-142 long-range marine patrol aircraft (Collins, Erickson and Goldstein 2008, 323). While China does not view India as equally powerful, the “China threat” theory is still pervasive in India. India’s main concerns are national security and the defense of territories, but India also acknowledges China’s potential development of a “string of pearls” within surrounding countries such as Sri Lanka, Bangladesh and Pakistan (Yhome 2014). According to one realist point of view, “China will, inevitably, follow up with its commercial footholds in the Indian Ocean with naval ones. The purpose of China’s naval expansion is to create a strategic space for itself in the western Pacific and then move into the Indian Ocean gradually, in preparation for which China is learning to operate far from its shores…in the Gulf of Aden, for instance” (Sibal 2014).

Within offensive realism, domestic politics is rarely considered as an explanatory variable leading to state decisions. Integrative efforts such as the BCIM and other cooperative ties are not considered as having a bearing on state behavior. Although India has been invited to join the 21 st Century MSR, realists within India maintain hesitancy toward China’s adamant promotion of regional ties spun through a cooperative framework that emphasizes the Indian Ocean region.

The first hypothesis of this thesis predicted that China will use the 21 st Century MSR to achieve power at whatever cost. Naval strength, a new regional order, and the eventual displacing the US from the Western Pacific were all predictions of offensive realism. This hypothesis cannot be corroborated based on the fact that China’s naval activity in the Indian Ocean region does not extend beyond preliminary expeditions within the South China Sea and along the western part of the Indian Ocean through humanitarian expeditions and anti-piracy missions. China reveals no intention of displacing the US from the western Pacific and will continue to partake in cooperative patrol efforts due to the need for SLOC protection.

Liberalism and the 21 st Century MSR.

While offensive realism focuses on the material concerns of states as leading to an inevitable conflict, liberals and neoliberals emphasize the possible routes to peace and cooperation. Integration and economic prosperity are topics of regional dialogue within Asia, and the 21st Century MSR is viewed as one way of resolving potential conflicts and forming institutionalized cooperation between states. Within complex interdependence, the absolute gains of the state and region are viewed as important, and state security and zero-sum politics is downplayed. Brzezinski offers one criticism of offensive realism and its predictions about state behavior:

How great powers behave is not predetermined. If the Germans and the Japanese had not conducted themselves the way they did, their regimes might not have been destroyed…For its part, the Chinese leadership appears much more flexible and sophisticated than many previous aspirants to great: power status (Mearsheimer and Brzezinski 2005).

Thus, realism predicts state behavior based on alignments of power within the system and does not consider internal politics or economic integration. State priorities for economic gains, prosperity and cooperation are all undermined in favor of a structural, “black-boxed” outlook on international relations. Keohane and Nye (1989) seek to understand world politics given extensive economic interdependence. They highlight the fact that military security is not always the principle concern of states. Priorities originate from international and domestic issues, and national priorities are not easy to define (Keohane and Nye 1989, 37). While realism predicts security and power to be the main goals of states, complex interdependence theory postulates state goals to be complex and varied. China’s ambitions include promoting national rejuvenation, regional prosperity, peaceful development as well as a common prosperity among nations. The three conditions for complex interdependence include: 1) multiple channels of connection; 2) an absence of hierarchical concerns, and; 3) a mitigated role of the military (1989, 24-25).

Is the neoliberal approach of complex interdependence present within the 21 st Century MSR? First, a multiplicity of channels—government departments, non-state actors, corporations, sub-national actors, bureaucrats and ministers—is a feature of China’s relationship with countries along the 21 st Century MSR. Institutionalizing the 21 st Century MSR is a process that involves more than just the isolated, black-boxed state. China interacts with ASEAN, African countries, the GCC and other South Asian countries through international forums and through sub-national actors such as corporations. When promoting the 21 st Century MSR, China’s financial ties with Silk Road countries are repeatedly stressed as well as the cultural and economic interests that have tied ASEAN, Africa and the Middle East for centuries.

However, while Silk Road connectivity among countries along the route are complicated and multi-faceted, evidence shows that the Chinese government is the number one player in promoting links through this specific network. Leaders in the GCC and ASEAN do applaud the integrative aspirations of the project; however, it is the Chinese government that has played the key role in orchestrating and propagandizing the 21 st Century MSR. At the same time, the reasons why the Chinese government is promoting the initiative can be explained by Keohane and Nye’s theory of complex interdependence. Deep-rooted economic links between ASEAN and China have called for the creation of the 21 st MSR. The Silk Road initiative contains many guiding principles regarding how future regional connectivity can be implemented and how cooperative efforts can mollify potential conflicts.

Second, the 21 st Century MSR reveals an absence of a hierarchical concern for the military. Speeches by Chinese politicians focus strictly on the commercial aspects of the 21 st Century MSR and steer clear from the naval implications of expanded southward ties. This is in sharp contrast to realist assumptions that stress state security. While China does place military security as a national priority, peace, economic growth and achieving the “China Dream” are also hailed as priorities to achieve. Promoting extensive economic interdependence can explain China’s reasoning for the creation of the 21 st Century MSR. Through its advancement, China will gain influence and power and also obtain the “national rejuvenation” of the Chinese people. In an official government publication printed in 2006, China’s stance toward military force was exemplified:

When taking the course of peaceful development, we must resolutely oppose all forms of hegemonyand power politics, never seek hegemony and never seek expansion. Peaceful development is formed to break the tradition of countries being bound to tyrants. China will adhere to a defensive national defense policy and will not engage in any arms race in different countries. China will not engage in aggressive expansion or old hegemonic behavior. China will adhere to the common interests of the Chinese people and to the interests of people of in all countries with a positive attitude. China will also play a constructive role as a responsible member international affairs, fight against interventionism and combine all forces within international society to deal with global challenges collectively for the creation of a beautiful future (Chinese Government Network).

The third assumption of complex interdependence—when complex interdependence prevails, military action becomes less useful—can be used to explain China’s sponsorship of the 21 st Century MSR. Even though possessing some degree of military capacity is important within all countries, China feels unthreatened enough in ASEAN and South Asia to embark upon a geopolitical ambition that encompasses Asia, some of Africa, the Gulf and parts of Europe. Within complex interdependence, the balance of power in the system is not seen as the principle reason that states make certain decisions (Keohane and Nye 1989, 32). Even though China is faced with a superior US military as well as an apprehensive India, China’s leaders are still seeking to deepen economic ties through the 21 st Century MSR because silk routes and an expanding military are seen as mutually exclusive. China’s foreign strategy is repeatedly touted in international forums. When delivering a keynote speech in Hainan Province at the opening ceremony of the Boao Forum in April 2014, Premier Li Keqiang emphasized the leadership’s liberal view toward the Asian periphery:

We should stick to the overarching goal of common development and build an Asian community of shared interests. In the age of economic globalization, no Asian country can achieve development in isolation, still less can they pursue development as a “zero-sum game.” Rather, with our interests closely entwined, we Asian countries, need to seek mutually beneficial cooperation where “one plus one can make more than two” and also produce a multiplying effect in which “two plus two makes more than four.

Clearly the administration is approaching the 21 st Century MSR as a counter to realist predictions about state behavior. When analyzed from the theory of offensive realism, China’s peaceful ascension and global initiatives are looked at suspiciously. According to Garrison (2009), the peaceful presentation of China’s ambitions worries many countries in Southeast Asia, but Chinese leaders assert peace and harmony as a contrast to the fates of many great powers of generations past (Garrison 2009: 9). According to Ikenberry (2011) China is embracing the current liberal international system as it grows more powerful, and this is used as a method of reassuring neighbors. China participates in regional institutions and the forming of initiatives such as the 21 st Century MSR, the ASEAN Regional Forum, and the East Asia Summit as a method of defining the new rules of the game and showing support for peace and prosperity throughout lesser developed parts of the world. (Ikenberry 2011). According to Ikenberry (2011), “If China hopes to convince its neighbors that it has embarked on a ‘peaceful rise,’ it will need to become more integrated into the international order” (Ikenberry 2011). The institutionalization of the 21 st Century MSR gives China a greater leveraging power in the world economy. According to Keohane and Nye (1989), institutions set agendas, provide a realm for bargaining, help governments focus on specific issues, and give greater opportunities to developing countries for pursuing linkages (1989, 35-36).

The second hypothesis predicts that the 21 st Century MSR will act as an integrative tool through multiple channels of connectivity and a mitigated role of the military for all participating countries along the route. While the 21 st Century MSR is demonstrated as encouraging economic development through regional forums and achievements such as the AIIB, the initiative is largely promoted by the country’s heads of state such as President Xi Jinping, Premier Li Keqiang and Foreign Minister Wang Yi. China’s energy security policy stresses the use of PLAN for patrolling SLOCs, safeguarding against piracy and securing the safe shipment of energy products; however, naval modernization efforts and critical territorial disputes also reveal the potential for military involvement along the 21 st Century MSR. At the same time, China’s naval ambitions should not be over-emphasized. While complex interdependence can explain the development of policies and initiatives given economic interdependence, offensive realism must also be considered when asking why state leaders are the sole proponents of an initiative that emphasizes maritime issues within critical sea lanes.

Conclusão.

Much has been presented in the Chinese media regarding the popularization of the 21 st Century MSR during the year after its official unveiling in October 2013, but an understanding of China’s intentions along the silk route of the sea is far from sufficient. This thesis has detailed the significance of sea lanes in China’s foreign policy initiatives. Chinese leaders highlight the historical precedent of China’s naval prowess, and speeches at international forums are devoted to ensuring peace and connectivity from South Asia to the Mediterranean Sea. The buildup surrounding China’s maritime dialogue is due to certain strategic concerns, including oil transport security, territorial disputes, piracy and the comparative naval capacities of the United States and India.

To offensive realists, China created the 21 st Century MSR as part of a larger objective to maximize naval power and displace the US from the Western Pacific. Those who focus on the liberal tradition and the theory of complex interdependence reach more optimistic conclusions regarding China’s maritime endeavors. Complex interdependence theory would argue the 21 st Century MSR to be an integrative tool that hardly considers military capacity or balance of power politics. While offensive realism over-emphasizes the pursuit of power and structure of the system as leading to the creation of the 21 st Century MSR, complex interdependence gives too much credit to multiple channels of connectivity as leading to critical state decisions. The peaceful dialogue that characterizes the silk route also comes at a time of heightened concerns for energy security and the need for a stable surrounding environment to ensure growth and development.

A synthesis of both theories leads to the discovery of China’s peaceful intentions through offensive maneuvers. The initiative reveals China’s diplomatic pursuit to deepen involvement in areas such as the Middle East, East Africa and throughout ASEAN countries. The promotion of the 21 st Century MSR is not China’s attempt to become a regional hegemon but rather a measure for re-defining China’s role without fear of US opposition. It can further be concluded that China seeks to lead developmental pathways for many countries in the developing world.

In terms of additional analysis of the Silk Road initiatives, other schools of international relations could be explored. Neither offensive realism nor complex interdependence place much emphasis on history, ideas, and intercultural connectivity as well as the regional ties that have formed 2000 years since the commencement of the silk routes. A framework that underscores history and culture may lead to a better understanding of the cooperative bonds achieved through exchanges on the silk routes. This may be a place for exploration within the schools of constructivism or the English School.

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[1] For classical realist texts, see: Thucydides’ History of the Peloponnesian War , Hobbes’ Leviathan, and Machiavelli’s The Prince .

[2] See, for example: Rose, Gideon. “Neoclassical Realism and Theories of Foreign Policy.” World Politics 51(1): 144-172, 1998.

[3] Also see, neoliberal institutionalism: Keohane, Robert. ”Multilaterialism: An Agenda for Research.” International Journal 45(4): 731-764, 1990. For the English School and relations with China, see: Buzan, Barry. 2010. “China in International Society: Is ‘Peaceful Rise’ Possible? The Chinese Journal of International Politics 3: 5-36, 2010.

[4] For other realist texts of the 20 th Century, see: E. H. Carr’s The Twenty Years’ Crisis, 1946.

[5] Concerning Morgenthau’s theory, Waltz wrote “Among political scientists, Morgenthau and Kissinger are considered to be traditionalists—scholars turned toward history and concerned more with policy thanwith theory and scientific methods” (1979: 63). Wohlforth writes of Morgenthau, “Key concepts such as the ‘national interest’ or ‘balance of power’ were either undefined or defined in multiple and mutually contradictory ways’ (2008: 137).

[6] For constructivism, see: Wendt, Alexander. “Anarchy is What States Make of It” International Organization 46(2): 391-425, 1992.

See: Lobell, Steven E., Norrin M. Ripsman, and Jeffrey W. Taliaferro. Neoclassical Realism, the State, and Foreign Policy, 2009.

[7] Hopkirk, Peter. Foreign Devils on the Silk Road: The Search for the Lost Treasures of Central Asia. Oxford: Oxford University Press, 1980.

[8] Holmes and Yoshihara (2008) refer to Premier Wen Jiabao’s speech wherein he touts Chinese historical naval prowess. A speech by former President Hu Jintao in Australia where also discusses Zheng He’s travels as a grounding for current Sino-Australian relations.

[9] See, for example, “China and ASEAN should focus on the whole picture of China-ASEAN relations.” People China Daily, March 5. english. peopledaily. cn.

The article writes, “Zheng He’s great voyage to Southeast Asia laid a solid foundation for the friendship between China and Southeast Asia.”

Pacific Ocean.

Pacific Ocean , body of salt water extending from the Antarctic region in the south to the Arctic in the north and lying between the continents of Asia and Australia on the west and North and South America on the east.

Of the three oceans that extend northward from the Antarctic continent, the Pacific is by far the largest, occupying about a third of the surface of the globe. Its area, excluding adjacent seas, encompasses about 63.8 million square miles (165.25 million square km). It has double the area and more than double the water volume of the Atlantic Ocean—the next largest division of the hydrosphere—and its area more than exceeds that of the whole land surface of the globe. The Pacific Ocean stretches from the shores of Antarctica to the Bering Strait through 135° of latitude, some 9,600 miles (15,500 km). Its greatest longitudinal extent measures some 12,000 miles (19,300 km) along latitude 5° N, between the coasts of Colombia in South America and the Malay Peninsula in Asia. The mean depth of the Pacific (excluding adjacent seas) is 14,040 feet (4,280 metres), and its greatest known depth is 36,201 feet (11,034 metres)—in the Mariana Trench—also the greatest depth found in any ocean.

In the Northern Hemisphere the Pacific Ocean meets the Arctic Ocean in the Bering Sea. In the Southern Hemisphere the Pacific and Atlantic mix in the relatively narrow Drake Passage between Tierra del Fuego in South America and Graham Land in Antarctica. The separation between the Pacific and Indian oceans is less distinct, but generally it is considered to lie along the line of islands extending eastward from Sumatra, through Java to Timor, thence across the Timor Sea to Cape Londonderry in Australia. To the south of Australia the boundary extends across the Bass Strait and thence from Tasmania to Antarctica. The portion of the Pacific near Antarctica sometimes is considered to be part of the Southern Ocean.

Because of the pattern of major mountain systems of the globe, a relatively small proportion (one-seventh) of the total continental drainage enters the Pacific—a total drainage area of less than about three times the total area of Australia. Of the rivers that drain into the Pacific, those of China and Southeast Asia are of the greatest importance; the basins of those rivers support more than one-fourth of the world’s population.

The eastern boundary of the Pacific is associated with the American cordilleran system, which stretches from Alaska in the north to Tierra del Fuego in the south. Except for its extreme northern and southern sections, which are characterized by fjords and their numerous off-lying islands, and except for the deeply indented Gulf of California, the coastal boundary is relatively regular and the continental shelf narrow. The western, or Asiatic, coastal boundary, in contrast, is irregular. Although the mountain systems there lie roughly parallel to the coast, as they do on the eastern Pacific coastlands, the western Pacific is noted for its many marginal seas. From north to south they include the Bering Sea, the Sea of Okhotsk, the Sea of Japan (East Sea), the Yellow Sea, the East China Sea, and the South China Sea. Their eastern boundaries are formed by southward-jutting peninsulas or island arcs or both. It is of oceanographic significance that the great rivers of eastern Asia—including the Amur, the Huang He (Yellow River), the Yangtze, the Xi and Pearl (Zhu), and the Mekong—enter the Pacific indirectly by way of the marginal seas.

This article treats the physical and human geography of the Pacific Ocean. For discussion of the physical and chemical oceanography and marine geology of the Pacific, see ocean.