02 May 2008

The Container Security Initiative and Maritime Cooperation in the Asia-Pacific

Andrew S. Erickson, “The Container Security Initiative and Maritime Cooperation in the Asia-Pacific,” in 沈丁立, 任晓, 主编 [Shen Dingli and Ren Xiao, chief eds.], 亚洲地缘经济与政治 [Geoeconomics and Politics in Asia], (Shanghai: 上海人民出版社 [Shanghai People’s Press], 2008), 139-73.

1. Asia-Pacific Maritime Security Challenges and Emerging Cooperation

It is well known that the Asia-Pacific region faces significant security challenges, many partially linked to the region’s continued economic growth. There is an urgent need to fight rising terrorism and other security threats. Recent trends in non-state threats include terrorism, piracy, smuggling, and the targeting of critical infrastructure. Maintaining regional security is important for the wellbeing of the region’s people, sixty percent of whom live in or rely economically on maritime zones.

It is also important because of the region’s critical role in international trade and energy supply. Roughly one third of world trade passes through the Strait of Malacca annually. This includes more than 50 000 vessels, twice the number that pass through the Suez Canal by some estimates and many times that which pass through the Panama Canal. It includes 11.7 million barrels per day (bbl/d) of oil. Eighty percent of Chinese crude oil imports, for instance, including virtually all of China’s imports from the Middle East and Africa, flow through Malacca. According to the U.S. Energy Information Agency, if an oil spill, piracy, or terrorism closed the 1.5 mile wide Strait, “nearly half of the world’s fleet would be required to sail further, generating a substantial increase in the requirement for vessel capacity. All excess capacity of the world fleet might be absorbed, with the effect strongest for crude oil shipments and dry bulk such as coal. Closure of the Strait of Malacca would immediately raise freight rates worldwide.” The South China Sea is likewise a vital transport corridor for liquefied natural gas (LNG), carrying 2/3 of the world’s current LNG trade. At present, Japan and South Korea are the region’s primary LNG users. Japan, for instance, imported 58.6 million tons of LNG in 2005, and South Korea 23.1 million tons in 2004, as compared to a smaller amount in Mainland China and Taiwan’s 5.5 million tons in that same year. LNG transport security is also of great interest to China, however, which by 2020 may be importing more than 30 million tons per year.

Of central significance to the economic interests of the U.S., its East Asian partners, and indeed the world, is the security of mega-hubs. Five of these deep-water ports (Singapore, Hong Kong, Ningbo/Shanghai, Kaosiung, Guangzhou, and Yokohama), which can accommodate the 60-foot drafts of the largest container ships, are located in East Asia. The world’s 20 mega-hub container ports send nearly 68 percent of the 5.7 million containers entering the U.S. by sea annually. This is part of a larger pattern in which seaborne trade, which accounts for 80 percent of all international trade, has increased an estimated 4.1 percent (in 2004), and 3.6 percent (in 2005 and 2006).

For all these reasons, such non-traditional security threats as piracy “…can no longer be viewed as someone else’s problem. [Piracy] is a global threat to security because of its deepening ties to international criminal networks, smuggling of hazardous cargoes, and disruption of vital commerce,” former U.S. Chief of Naval Operations Admiral Michael Mullen has emphasized. “Imagine a major seaport or international strait that handles the flow of hundreds of ships and thousands of containers each day—imagine that critical ‘node’ of the world’s economy crippled or disrupted for days or weeks or months.”

2. China’s Growing Maritime Interests

As it becomes an increasingly capable and influential maritime power in all dimensions, China is acquiring a large, comprehensive stake in the security of the oceans. Maritime commerce, in particular, is vital to China’s national program of “peaceful development.” With its over 4 million square km of claimed sea area, 1 400 harbors, and a tremendous number of cargo ships, the world’s largest developing nation generated 10% of its GDP ($270 billion) from maritime industries in 2006, up 14% from 2005. Estimates have projected that it will reach 1 trillion by 2020. With 1 700 ships, China’s merchant marine is second only to Panama in size. A recent article by People’s Liberation Army (PLA) Navy Senior Captain Xu Qi in the prestigious journal China Military Science (中国军事科学) further documents China’s growing global maritime interests, stating that today “[China’s] open ocean transport routes pass through every continent and every ocean [and] through each important international strait [to] over six hundred ports in over 150 nations and [administrative] regions.”  A popular government-inspired study entitled The Rise of Great Powers (大国崛起) suggests that economic development, fueled by foreign trade and safeguarded by a sustainable and non-provocative degree of naval power, drives national development. In this regard, it is worth noting that China imports staggering amounts of raw inputs to fuel its dynamic industrially-intensive economy. As the world’s largest iron ore importer, for instance, China is projected to receive 370-80 million tons in 2007.

China’s strategic thinkers believe maritime energy security to be increasingly vital. Despite extensive exploration of offshore reserves to replace dwindling onshore reservoirs, China receives 85% of its imported oil by sea. A variety of existing and envisioned pipelines, of varying degrees of logistical and economic viability, are unlikely to substantially reduce this dependence on sea lane security. Indeed, according to PLAN Senior Captain Xu Qi, “By 2020… It may be [come] necessary to import three-quarters of [China’s] oil from overseas.” While the central government’s level of support remains uncertain, it seems that a significant increase in Chinese-constructed and -flagged oil tankers is under way, with a view to fostering economic growth in peacetime and energy security in crisis. For example, Luo Ping, an analyst at the Institute of Comprehensive Transportation (ICT), calls for at least 60 percent of oil imports to be carried by Chinese shipping companies. Ministry of Communications’ Water Transport Department senior official Peng Cuihong states that China will expand its tanker fleet to reduce reliance on foreign oil carriers. In addition, despite considerable internal debate and ongoing challenges, China has commenced construction of some form of strategic petroleum reserve (SPR), and related refinery and pipeline infrastructure.

Shipbuilding, with commercial and military applications, is emerging as a major Chinese industrial sector. Having designated shipbuilding a “strategic industry” in need of “special oversight and support,” China launched over 13 million tons of new ships in 2006. If present trends continue, China will produce 20 million tons annually by 2010. Beijing reportedly aims to become the world’s largest shipbuilder by 2015, with 24 million tons of production capacity (35% of global capacity). Already, 275 000 personnel work in China’s shipbuilding industry overall (with approximately 125 000 employed directly in large ship construction). Nearly 1 500 marine engineers and naval architects graduate from Chinese merchant academies and universities annually (approximately 7 times that from U.S. institutions). While the size of China’s current shipbuilding workforce stems in part from employment imperatives and relatively low average productivity per worker, capabilities are rapidly improving. For example, Chinese shipyards have focused primarily on constructing less sophisticated bulk carriers, but are now building significant numbers of oil, chemical, and liquid propane gas (LPG) tankers, and—encouraged by such bureaucratic entities as the National Development and Reform Commission (NDRC)—are even starting to build small numbers of sophisticated LNG carriers. However uneven in its pace and nature of development, China’s large shipbuilding sector will support broad-based maritime and naval development. As Alfred Thayer Mahan once postulated, when determining a nation’s sea power, “it is not only the grand total [of a country’s population], but the number following the sea, or at least readily available for employment on ship-board and for the creation of naval material that must be counted.” Whether it stays primarily commercial or increases in military orientation, Beijing’s growing shipbuilding sector will give it an even greater stake in the security of the global maritime commons. …

6. Conclusion

The Asia-Pacific region boasts increasing maritime commerce but faces growing unconventional security threats. Many experts believe that robust maritime security cooperation initiatives, (e.g., the CSI and global maritime partnerships), can help provide a framework for security. There are other positive indications that analysts in Pacific nations increasingly seek cooperative solutions to maritime security concerns. A major collaborative Chinese study on sea lane security, for instance, calls for emphasizing cooperation in international organizations and conventions, laws and regulations concerning oil transport. Establishing specific security measures, such as CSI, offers prospects for increasing trust, fostering good will, and enhancing maritime security in East Asia. As the world’s largest developed and developing nation respectively, as well as two major Pacific powers, the U.S. and China have a critical role to play in this process. Effective bilateral communication will maximize prospects for positive results.

Beyond the specifics of bilateral cooperation, important questions that need to be addressed by all Asia-Pacific maritime stakeholders in the future include: How have non-state threats combined to form a new challenge to international maritime commerce and security? What is the nature and level of the threat? Will the maritime realm be a continued target for terrorism? How will the national interests of regional states be safeguarded? Are the international responses and reforms accomplishing what they set out to do? Finally, what are the specific implications for East Asia? Each nation will have its own interests and priorities, but it will be important to reach a common understanding on these broader issues.

One issue that all parties can agree on already is that the multiple, complex security challenges that confront the region call for cooperative security measures that are no less sophisticated than the threats that they are designed to address. As former U.S. Chief of Naval Operations Admiral Michael Mullen has emphasized,

Today’s reality is that the security arrangements and paradigms of the past are no longer enough for the future. And today’s challenges are too diverse to tackle alone and require more capability and resources than any single nation can deliver. Our level of cooperation and coordination must intensify in order to adapt to our shared challenges and constraints. We have no choice in this matter because I am convinced that… no nation today… can go it alone, especially in the maritime domain. There is no inherent conflict between a country’s national interests in maritime security and the greater security of the global commons. They are mutually reinforcing and inextricably linked—they are two sides of the same coin in today’s globalized world.







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