China, with its deep pockets, has made important announcements on a series of major initiatives, that are designed “to place China at the center of Asia’s economic future.” These included the creation of a $100 billion fund for major projects and a 21st Century Silk Road initiatives generally known as the Silk Road Economic Belt. During APEC summit China’s President Xi Jinping announced a $40 billion fund for improving ports and infrastructure along the Silk Road. Earlier 21 Asian countries including China and India had launched a multilateral Asian Infrastructure Investment Bank (AIIB) to facilitate further cooperation on the plan.
China has invested millions of dollars in developing the Gwadar port facility in Pakistan in the Arabian Sea, to secured itself a sea-lane to the Indian Ocean. The Gwadar port’s strategic location connects China to the Arabian Sea and the Strait of Hormuz – a gateway for one third of the world’s traded oil. This approach can be used to provide a steady supply of oil to China overland, through an expanded Karakoram Highway, and serve a significant supply of cargo and oil, to both China and Pakistan.
China has also developed a project to finance a shipping canal across the Isthmus of Kra in Thailand, that would provide an alternate link between the Indian and Pacific Oceans. The project is expected to cost approximately $20 billion and will shorten the sea passage to nearly 2400 kilometers.
If a crisis were to erupt in China’s relations with Japan, India, or the United States, China may face the greatest strategic vulnerability in the Malacca Strait, a major outlet for Chinese cargo headed to the high seas. To address this vulnerability, China needs sea routes where it can operate freely and independently of this weakness. A maritime silk road – joining China with the Indian Ocean and the Mediterranean Sea with a safe passage, is regarded as a major national priority for Chinese officials.