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China expands its southern sphere of influence

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23 May 2005
China expands its southern sphere of influence

By Matthew Wheeler

Over the last decade, China has devoted particular attention to developing its interests in the Mekong region, comprising Cambodia, Laos, Myanmar, Thailand and Vietnam.

A major facet of China's strategy, giving form to China's enhanced role in Southeast Asia, has been its investment in transport infrastructure development with the construction of links between China's southwestern Yunan Province and the Mekong region. Some of these routes have been completed and others are due to be finished soon. These links complement the establishment of a free trade agreement between China and the Association of Southeast Asian Nations (ASEAN) and could help bring the Mekong region within a Chinese sphere of influence.

Furthermore, mainland Southeast Asian infrastructure linkages to markets and sea lanes of communication offer China strategic depth and are vital to China's prospective maritime geo-strategic posture. In the long-term, development of multimodal transport links and energy infrastructure through the Mekong region, especially in Myanmar, could offer China access to the Indian Ocean and secure supplies of oil, carrying implications for China's power-projection ambitions and energy security.

Given China's rapid economic growth and the severe strain on its existing energy supplies, access to energy is a critical concern for Beijing and increasingly a factor in its relations with the Mekong region. In 2004, China overtook Japan as the world's second largest consumer and importer of oil, behind the US. Overall, China's demand for oil grew 75 per cent between 2002 and 2004. During the same period, China suffered serious energy shortages, forcing power cuts in some regions that disrupted manufacturing and municipal services.

More worrying still for Beijing is the fact that 40 per cent of China's oil is imported and 80 per cent of these imports pass through the narrow Strait of Malacca. Beijing is acutely aware that its dependence on Middle East oil, combined with its current inability to project naval power beyond its coastal waters, means that its energy supplies are vulnerable to disruption.

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