Written by Malcolm Davis.
The life-blood of China’s economy is energy. Without access to energy resources, China’s economy will slow, and its prosperity will wane, it will become more vulnerable to internal social and political disorder and the CCP’s grip on power will weaken. Therefore, ensuring China’s energy security affects its foreign and defence policy, and will influence the future development of the People’s Liberation Army (PLA). China’s imported oil demand continues to outstrip diminishing domestic and offshore production and current projections suggest that by 2020 imported oil will make up 66% of its total oil demand, increasing to 72% by 2040.
At the heart of the challenge of ensuring energy security is ‘the Malacca Dilemma’. Chinese President Hu Jintao recognised the strategic significance of the Malacca Dilemma in November 2003 noting that “certain powers have all along encroached on and tried to control navigation through the [Malacca] Strait.”  The significance of the Malacca Strait is that 80% of China’s energy (in addition to much of its trade) moves through a waterway that at its narrowest point is only 1.7 miles across. The nearby Lombok-Makassar Straits (see map) are also strategically significant as most supertankers too large for the Malacca Strait traverse this route. China is attempting to alleviate its dependency on these waterways by building pipelines through Myanmar and via Gwadar in Pakistan, but none of these projects would replace dependence on the sea for China’s energy supplies.
Therefore in considering solutions to resolving the Malacca Dilemma, an obvious step, and one currently being undertaken, is greater cooperative naval diplomacy with other international actors to maintain good order at sea, and counter unconventional non-state threats to maritime security such as piracy and maritime terrorism. Beijing also could support capacity building for littoral states, intelligence exchanges and multi-national training through regional security architecture such as the ASEAN Regional Forum (ARF). But such peacetime practices do nothing to eliminate the Malacca Dilemma given that in a future conflict China still faces the prospect that an adversary could interdict Chinese shipping passing through the Malacca and Lombok-Makassar Straits.
Source: Andrew Erickson, Abraham Denmark, and Gabriel Collins, “Beijing’s Starter Carrier and Future Steps – Alternatives and Implications” in US Naval War College Review, Winter 2012, Vol. 65, No. 1, pp. 22-23
In a recent debate over the effectiveness of the US ‘AirSea Battle’ concept, Thomas Hammes suggested a strategy of Offshore Control that proposes a distant blockade on China and notes that the United States “…could prevent the passage of large cargo ships and tankers. In doing so, it would cripple China’s export trade, which is essential to China’s economy.”  The strategy highlights the importance of the Malacca, Lombok, and Sunda straits, and ensuring routes north and south of Australia were controlled such that “these shipments could be cut off”.
The context of this debate over US strategy is important to consider. China’s rapid rise and its military modernisation has generated a regional security dilemma with its neighbours who see China’s assertive behaviour in managing Asian maritime disputes, and worry that under Xi Jinping, China has chosen to move beyond Deng’s ‘bide your time, hide your strength’ dictum of foreign policy to embrace a more assertive revisionist posture that challenges the existing regional order and the strategic primacy of the United States. Regional states have responded by seeking closer security ties with the United States at the same time as the United States has chosen to rebalance to Asia in response to China’s rise. Thus, a regional ‘pull’ combined with a US’ ‘push’ is emerging. From Beijing’s perspective, the US rebalance, and intra-regional ‘band wagoning’ is indicative of the containment of China, and it has chosen to push back militarily with A2AD. The US and its allies see such a Chinese step as reinforcing their perception of a desire by China to challenge US strategic primacy in Asia. The regional security dilemma is sharpened.
For China, Hammes’ Offshore Control represents the Malacca Dilemma made manifest. In thinking about how China may respond, Storey argues that one path to countering the Malacca Dilemma is “building credible naval forces capable of securing China’s SLOCs.” But what does this really imply for future PLA modernisation? China will need to build credible expeditionary naval capabilities as well as long-range airpower for maritime strike operations in more distant operations in ‘Far Seas’ and ‘Far Oceans’ to ensure an ability to break any distant blockade (see map). China’s introduction of the training aircraft carrier Liaoning in September 2012, is to be followed by up to four more indigenous aircraft carriers potentially by the mid-2020s, and represents a step in the direction of blue water capabilities designed for such a role. But aircraft carriers will need to be fully supported by naval surface combatants as well as appropriate auxiliary vessels designed for at-sea combat sustainment tasks. It is beginning to develop skills in operating naval task forces in more distant operations, such as those engaged on counter-piracy tasks off the Gulf of Aden, but its logistic capabilities are insufficient to sustain a distant task force, especially one engaged in hypothetically high intensity combat operations. Erickson argues, based on analysis by Nan Li, that by 2020 China will only be able to project a modest joint task force for low-intensity operations far from China.
Yet, maintaining China’s energy security in wartime cannot be seen as being of secondary importance, and China is now undertaking a series of political and strategic steps, and building new military capabilities that suggest it is beginning to respond to the threat of distant blockades. At the political and strategic level, President Xi Jinping has recently announced the ‘Maritime Silk Road’ to integrate markets from China to Europe via the Indian Ocean littoral region. The Maritime Silk Road will enable China to develop maritime infrastructure including ports across the region. The Maritime Silk Road strengthens China’s economic and political influence, and thus widens China’s strategic interests across the Indian Ocean. This will not represent a new development per se, as Holmes and Yoshihara note that China has been active in promoting its influence across the Indian Ocean littoral over recent years. But the stakes are now rising. China’s growing investment and its international prestige associated with the Maritime Silk Road must be protected which will in turn demand presence. That must influence PLA modernisation in coming years, and the Maritime Silk Road now provides a key rationale for an expansion of the PLA’s expeditionary warfare capabilities.
At the military level, Erickson suggests a number of potential indicators for emerging blue water and long-range air capabilities, and three specific capabilities are worthy of consideration. Erickson nominates quieter submarines as being important, and O’Rourke notes that the PLAN’s relatively noisy Shang class nuclear submarines (SSNs) are to be replaced with the quieter and more sophisticated Type 095 guided-missile nuclear submarines (SSGNs). Significantly, China has begun operating its existing submarines in the Indian Ocean, much to the concern of India. Erickson also notes that more advanced surface vessels would be a key indicator. The PLAN is deploying the sophisticated Type 052D Luyang III guided missile destroyer (DDG), but is developing an even more capable Type 055 Cruiser, designed to protect aircraft carriers as part of a battle group and with the first potentially commissioned by 2017.
Finally Erickson notes the importance of long-range air power. China is developing a new stealthy long-range bomber known as the H-20 which is designed to “allow the Chinese air force to complement aircraft carrier and amphibious projection capabilities of the [PLAN]” in conjunction with long-range J-20 stealth fighters. More significant is the role of PLASAF’s Anti-Ship Ballistic Missile (ASBM) capability. The DF-21D ASBM has generated concern in regards to its ability to undertake A2AD against US and allied forces within the First Island chain, but future longer range systems could extend A2AD south towards the Malacca and Lombok-Makassar Straits. Mark Stokes suggests that a follow-on capability to the DF-21D would extend PLASAF’s reach against adversary naval capabilities out to 3,000 km. Such a capability, cued by ocean surveillance satellites, would enable China to strike at naval vessels from Hainan Island to well south of the Malacca Strait and just north of the Lombok Strait.
In conclusion, the essential requirement to ensure China’s energy security, and the prestige invested in building the Maritime Silk Road argues for China to begin building the means to protect its interests. From Beijing’s perspective, it cannot merely focus on countering intervention in the event of a conflict over Taiwan, or as a result of maritime disputes in the East China Sea and South China Sea. The task of ensuring China’s maritime trade and energy security, and countering the risk of a distant blockade is emerging as an important strategic interest that must shape the PLA’s future to a greater degree. As has happened before, China may yet surprise us as its military modernisation surges ahead to meet new challenges.
Dr. Malcolm Davis is an Assistant Professor and Post-Doctoral Research Fellow in China-Western relations at Bond University, Queensland, Australia. He is finishing up a book for Routledge UK on Chinese military modernisation in the 21st Century. Image credit: CC by Naval Surface Warriors/Flickr.
 You Ji, “Dealing with the Malacca Dilemma: China’s effort to protect its energy supply”, in Strategic Analysis, 31:3, 467-489, 2007.
 The ‘PLA’ is taken to include the People’s Liberation Army Ground Forces; the People’s Liberation Army Air Force (PLAAF); the People’s Liberation Army Navy (PLAN); the People’s Liberation Army Second Artillery Force (PLASAF) and the People’s Armed Police (PAP).
 Marc Lanteigne, “China’s Maritime Security and the ‘Malacca Dilemma’, in Asian Security, 4:2, 143-161, 2008.
 Ian Storey, “China’s Malacca Dilemma”, in China Brief, Jamestown Foundation, Vol. 6, Issue, 8, December 2009.
 You Ji, op cit., p. 470.; see also Department of Defense, Military and Security Developments Involving the People’s Republic of China – Annual Report to Congress, 2014, p. 27.
 Thomas X. Hammes, “Offshore Control: A Proposed Strategy for an Unlikely Conflict”, in Strategic Forum, June 2012, Institute for National Security Studies, National Defense University, Washington, p. 1-14.; on AirSea Battle, see Department of Defense, Joint Operational Access Concept (JOAC), 17th January 2012.
 Thomas X. Hammes, ibid., p. 5.
 Ian Storey, op cit.,
 Sean O’Connor, “PLAN to get first homegrown carrier by 2017, claims local media” in Jane’s Defence Weekly, 6th November 2014.
 Andrew Erickson, ibid., p. 86.
 James R Holmes, Toshi Yoshihara, “China’s Naval Ambitions in the Indian Ocean”, in The Journal of Strategic Studies, Vol. 31, No. 3, 367-394, June 2008.
 Andrew Erickson, op cit., p. 88.
 Ronald O’Rourke, Chinese Naval Modernisation: Implications for US Navy Capabilities – Background and Issues for Congress, Congressional Research Service, September 8th, 2014.
 Mark A. Stokes, “The Second Artillery Force and the Future of Long-range Precision Strike”, in Ashley J. Tellis, Travis Tanner, Strategic Asia 2012-13 – China’s Military Challenge, National Bureau of Research, Washington, 2013, p. 155.