A look at global maritime routes through the lens of US-China interests

With the growing importance of waterways, global competition ramps up with the potential to exacerbate tensions between nations

Marine traffic of a busy harbour. Nautical vessels cruising close to each other at different directions in the port.
Getty Images
Marine traffic of a busy harbour. Nautical vessels cruising close to each other at different directions in the port.

A look at global maritime routes through the lens of US-China interests

The security of global maritime routes is high on national security agendas, particularly those of the US and China, as both powers seek control over waterways vital to their economic stability and geopolitical ambition.

Attention is most closely focused on chokepoints at high risk of politicisation and physical disruption. Both states share a common interest in securing the continued flow of goods to and from their markets, but each country’s approach differs in line with their respective national priorities, the way they perceive threats and their style of strategic engagement.

For now, a fragile balance exists.

Both nations are pursuing stability through the lens of their own national security interests. Repercussions from the global pandemic and Russia’s invasion of Ukraine — slowed economic growth, competition over access to commodities, high inflation and the fragility of global supply chains — are pushing Beijing and Washington closer towards a tipping point.

Each is currently testing the other’s tolerance threshold, and a fundamental shift in the global balance of power is looming.

Read more: Ghassan Salamé: The birth pangs of a new world order

Shortages of hydrocarbons and food staples have highlighted the importance of the global trading order and its vulnerability to disruption from a range of sources as well as the purely political.

These include the impact of global health crises, climate events, changes to regional power balances, acts of aggression and the re-emergence of inter-state conflict.

Notable chokepoints to trade flows include the Strait of Hormuz, the Bab al-Mandab Strait and the Suez Canal in the Middle East. There are also the Strait of Malacca in Asia and the soon-to-open Arctic routes: the Northern Sea Route and Canadian Northwest Passage, to which the Bering Strait is critical.

It is in the interests of both the US and China to keep these international waterways safe and open, but their differing approaches have set the two states on a collision course.

Different priorities

The US is most concerned with maintaining the existing global order and its dominant role within it. It seeks to contain the expanding influence of rivals that it believes threaten this — be that China, Russia, Iran or any other — and it will take measures of deterrence accordingly.

It will not, however, intentionally engage in conflict, unless provoked. In this way, it maintains the status quo.

In contrast, China views its security as intrinsically linked to its economic growth, which, in turn, is dependent on trade with international markets via global maritime chokepoints. Beijing views these as vulnerable to US influence, thereby threatening the security of China itself.

As a result, it launched the Belt and Road Initiative (BRI) in 2013, a state-funded plan to construct two new trading routes —overland and maritime — to connect China to the rest of the world.

Designed to create an independent trade order that reduces its reliance on the Western economic system and dependence on vulnerable maritime sea routes, its aim is to secure China’s interests by creating economic interdependency with participating countries, accessing an expanded international market for Chinese goods, and providing opportunities for Chinese businesses.

By providing loans for critical infrastructure in manufacturing, transport, construction, energy and other sectors in strategic locations in or near maritime chokepoints, Beijing seeks to enable Chinese economic growth and solidify its position as a major global power.

The policy is conducted in a carefully constructed, layered approach: by using commercial private sector or state-owned entities, China extends its reach into the economic heart of countries located in and around key maritime chokepoints.

These entities are used to collect commercially and strategically sensitive information pertinent to China’s interests. Through integrating Chinese systems and products into trading and shipping infrastructure, China is priming the ground for the next stage of engagement: closer diplomatic ties built on economic dependency.

Military or defence industry collaboration then follows. And the original commercial entities often —surprisingly or not —become dual purpose, able to meet security objectives. In this way, Beijing plays a slow but strategic game of securing its interests across all three portfolios: economic, political and defence.

For this reason, China’s investments in and around globally significant maritime chokepoints have prompted concern from the US, and the Middle East provides some of the clearest examples.

Middle East passageways

The Red Sea’s Suez Canal and Bab al-Mandab —key nodes in China’s Maritime Silk Road component of the BRI — connect the Mediterranean to the Arabian Sea. These two waterways are vital to international trade, with over 1.32 billion tonnes of cargo passing through them in 2021-2022, including between 7% and 10% of the world’s crude oil and 8% of its liquefied natural gas (LNG) transfers.

The Red Sea's Suez Canal and Bab al-Mandab are vital to international trade, with over 1.32 billion tonnes of cargo passing through them in 2021-2022, including between 7% and 10% of the world's crude oil and 8% of its liquefied natural gas (LNG) transfers. 

To the north, Egypt's Suez Canal carries approximately 12% of global trade every year and over 60% of Chinese goods shipped to Europe transit the channel.

This picture on July 7, 2021 shows a view of the Panama-flagged MV 'Ever Given' container ship sailing along Egypt's Suez Canal near the canal's central city of Ismailia.

Its vulnerability to disruption —and the global consequences of such disruption  — was highlighted in 2020 when the Ever Given blocked the canal for six days, preventing the passage of $10 billion worth of daily trade.

China's expected return to pre-pandemic levels of growth will come with an increasing reliance on imports of foreign oil and gas to fuel its industry-led economy and growing population.

The measures being taken by Western allies to sanction Russian supplies is also intensifying competition for resources. This means that controlling access to these resources is a top priority for President Xi.

China is the largest investor in Egypt's Suez Canal Corridor. It views the North African state as a regional manufacturing hub for Chinese businesses given that the canal is the Asian giant's main shipping route to Europe — its largest market.

To the south, the Bab al-Mandab Strait is one of the world's most critical chokepoints, particularly for oil flows. The US Energy Intelligence Administration (EIA) estimates that 6.2 million barrels per day (mbpd) of crude oil and refined products transitedthe strait in 2018, comprising some 10% of total seaborne-traded oil.

Emirati soldier watching from a military plane a ship crossing through the strategic strait of Bab al-Mandab, which separates the Arabian Peninsula from east Africa.

Bordering Yemen, it is both a strategic node in China's BRI strategy, but also particularly vulnerable to overspill from the ongoing conflict on its shores.

On the east side of Saudi Arabia is the Strait of Hormuz — the only sea passage connecting the Arabian Gulf to the open ocean and a vital route for hydrocarbons exports from oil-producing heavyweights to the Asian market.  

Carrying approximately 20% of the world's oil trade, it is a prime target for disruptive activities, mostly directed by Tehran with the twin goals of upsetting the interests of both Riyadh and Abu Dhabi, which export the majority of their hydrocarbons through this route, as well as jeopardising international oil markets and shipping in response to ideological differences with Western powers and the sanctions they impose against Iran.

STRAIT OF HORMUZ (Sept. 17, 2021) The amphibious assault ship USS Essex (LHD 2), right, and the dry cargo and ammunition ship USNS Wally Schirra (T-AKE 8) transit the Strait of Hormuz in formation.

Prioritising the Asian Pacific

As a result, the strait's security has historically been a primary focal point in US Middle East policy. But Washington now prioritises its interests in the Asian Pacific and, by doing so, has started to adjust the parameters of its relationships with Middle Eastern capitals. Its role in assuring the physical security of the region's waterways is set to change.

The Biden administration is seeking to reduce the US' operational presence and responsibility for security in the Middle East, instead pursuing a burden-sharing approach with regional states.

Read more: Biden's security strategy reflects waning US interest in the Middle East

While this is a long-term project managed by US military commands Africom and Centcom, it has started in earnest. But it has a 20-year timeframe during which the US will watch over the waterways given their importance to global commodities supplies and, by extension, prices.

There is also another reason for Washington's continued interest in these waters.

Of the 13.6 million barrels per day that transit Hormuz, 3.5 million barrels, or nearly 26%, go to China. This constitutes approximately 38% of China's total oil imports.

China has refused invitations to participate in naval patrols to secure shipping vessels in these straits. Instead, Beijing has deliberately maintained relations with both Iran and Saudi Arabia — conducting naval training exercises with each — to ensure smooth passage of commodities to Chinese markets.

Its 2020 announcement of a $400 billion investment package for Iran's oil and gas sector is undoubtedly an insurance policy against disruption to its interests in these waters.

China has also sought to minimise antagonism with the US, content to allow Washington to lead on security provision while benefitting from the status quo without having to commit its own resources.

But as tensions between Washington and Beijing rise, China has begun to militarise its approach. It has boosted defence cooperation with Cairo, and further south, established in 2017 a military base in Djibouti — its first permanent overseas military presence. It also plans to construct other defence facilities — or sites with the ability to become dual purpose — in the region.

Read more: Why do so many foreign powers have military bases in Djibouti?

Beijing is hedging against a possible attempt by the US to restrict or curtail energy flows to China in a future conflict or crisis scenario. As a result, the US cannot risk taking its eye off the ball and these waterways will remain of strategic importance to Washington, only now for different reasons.

'The Malacca Dilemma'

Moving eastwards, the Malacca Strait connects the South China Sea to the Andaman Sea and the Pacific and Indian Oceans. It is a narrow stretch of water between the Indonesian island of Sumatra and the Malay Peninsula and remains one of the world's narrowest straits —1.5 nautical miles at its narrowest point, the Phillips Channel near Singapore — making it a particularly perilous place for ships.

Singapore —a major US ally that frequently participates in US naval drills —is located at the mouth of the strait's eastern opening, making the Strait of Malacca a natural strategic chokepoint.

It is one of the busiest shipping routes in the world, with over 100,000 vessels passing through it every year. It also accounts for over 40% of global trade and is geopolitically important to Asia, in particular, China, as 70% to 85% of China's imported oil uses it after already passing through the Hormuz chokepoint on its way from the Middle East.

China became the world's largest oil importer in 2017, surpassing the US. The US Department of Commerce expects that China's oil requirement by 2040 will be 80% dependent upon imports.

Former President Hu Jintao characterised China's oil dependency as the 'Malacca Dilemma', which encapsulated the country's vulnerability to the key waterway.

There are alternatives, should the Malacca Strait be closed, via the Lombok and Makassar Straits. But they are much longer routes and would incur additional shipping costs estimated to be from around $84 billion to $220 billion per year, according to the S. Rajaratnam School of International Studies (RSIS).

It is unsurprising then, that China's leadership has sought to source oil supplies overland, but its dependency on seaborne deliveries remains a major weakness as long as it relies upon hydrocarbons to grow its economy.

US allies Japan and South Korea are also dependent on the Malacca Strait for their oil, liquified natural gas and other commodities. Washington itself views the strait as an essential channel to transport its exports to Asia Pacific markets and for the economic well-being of its allies.

Therefore, as with the chokepoints mentioned above, states in the region and beyond are dependent upon the strait remaining open, navigable, free from piracy, environmental and other risks. There is a clear shared interest in ensuring that trade can flow 365 days a year, and the commercial reasons for preserving a balance of interests are compelling.

The Malacca Strait's strategic importance partly explains the continued presence of the US Seventh Fleet in Yokosuka, Japan — its largest forward-deployed fleet.

Getty Images
A US assault amphibious vehicle (AAV) manoeuvers past Philippine navy's frigate Ramon Alcaraz during the amphibious landing as part of the annual Philippines and US on May 9, 2018.

The US has long-standing security guarantees with its regional allies, including Taiwan. It has also pledged its commitment to support its allies in resisting Chinese territorial claims in the South China Sea. Tensions in the South China Sea, therefore, are prone to rise and fall, correlating with the tide of US-Chinese relations.

For example, Russia's invasion of Ukraine in February 2022 has been a cause for concern amongst policymakers in Washington, as it has for the national leadership in Taiwan and other US ally states.

In response to Beijing's support for Russia, the US has sought to reassure Taiwan of its commitment. The visit of US House Speaker Nancy Pelosi to Taipei in August 2022 carried that message in unequivocal terms.

As an exercise of its deep displeasure, China held joint military exercises around Taiwan, launched ballistic missiles over the island and conducted air and naval operations across the centerline and on the edge of Taiwan's territorial waters. It also suspended or cancelled eight official military dialogues and cooperation channels with the US.

Over the coming decades, political tensions between Washington and Beijing will ebb and flow, especially as the balance of power between the two large countries edges towards equilibrium.

Over the coming decades, political tensions between Washington and Beijing will ebb and flow, especially as the balance of power between the two large countries edges towards equilibrium. However, as long as their commercial interests continue to overlap then the Malacca Strait will remain a secure waterway.

However, as long as their commercial interests continue to overlap — and that looks likely — then the Malacca Strait will remain a secure waterway. Risks of piracy, environmental degradation and congestion will remain among the hazards, but it will be highly unlikely that political or military action will close it.  

Panama Canal

The Panama Canal — responsible for 6% of global trade — is also not immune to Chinese influence. While most trade through the canal benefits the US, some 22% of cargoes in 2021 either started or finished their journey in China, and the waterway acts as a logistical hub for Chinese products entering Latin America.

In fact, Panama was the first Latin American country to sign on to the BRI initiative in 2018. Beijing has port contracts at either end of the channel, along with multiple investments in the logistics, infrastructure and power sectors. China's presence in, and influence over, this area has been steadily rising. 

The Panama Canal's significance to the US is also growing, due to the rise of "near-shoring"— a regionalisation of supply designed to mitigate against risks associated with long supply chains and distant markets highlighted by the global pandemic.

Getty Images
Tugboats pull the Malta-flagged Carpe Kortia container ship after an "outbreak of fire" in the engine room -which left no casualties- at the Panama canal, Panama, on January 30, 2023. 

Tensions over Beijing's more strident posture on both Hong Kong and Taiwan and its activities on the US's doorstep in South America — in Venezuela and Chile  — have, in Washington's view, increased the risk of disruption to the canal's trade and, therefore, US economic security.

Pushback in recent times from both Washington and the current Panamanian administration has somewhat stalled China's ambition — a signal that the central American country is conscious of the need to placate both great powers despite its neutral status and commitment to grant equal access to all nations.

It was this same position that saw Panama resist calls to block the passage of Russian ships following Moscow's invasion of Ukraine in February 2022. But the US has reserved the right to intervene militarily to combat any perceived threat to the canal's neutrality and, in the current climate, China will need to tread carefully to avoid this.

Arctic and Bering Straits

As global warming melts sea ice, the Arctic is gradually opening up, and along with it the possibility of new sea routes that could reduce shipping times by up to two weeks, along with carbon emissions.

However, these new channels face the same prospects of competition borne out of geopolitical rivalry. While littoral states — the US, Canada, Norway, Russia and Greenland — accept that the established Law of the Sea Convention is the most appropriate legal framework through which to govern the Arctic region, differences over interpretation remain, specifically regarding what areas might fall under nationalas opposed to international jurisdiction.

Against this backdrop, tensions with Russia and increased competition to secure access to energy resources look set to continue and making these routes operational will be challenging.

Read more: Will China collaborate with Russia in the Arctic?

As with other maritime chokepoints, the Bering Strait — the sole sea line of communication between the Pacific and Arctic oceans — will become hotly contested.

China has already expressed its desire for uninhibited passage through the Arctic routes but as an observer to the Arctic Council — the primary leadership body for the region — it will need to secure support from the council's other members.

Key ally Russia is also on the outside as the only non-Nato member of the council. But even the relationship between Moscow and Beijing may not be enough for Russia to back China's interests in this space.

Logistical challenges aside, the Arctic routes are a tempting alternative to long and costly shipping routes. But for the exact same reason they, too, will be subject to competition and global geopolitical machinations.  

As the rivalry between China and the US edges the global order towards fragmentation, the importance of maritime chokepoints to national security strategies will only grow.

At present, each great power is gently testing the other's appetite for risk and escalation while pursuing their own interests. But history demonstrates how slow-burning embers can erupt into wildfire with just one spark.

The significance of international waterways — and the battle to control them — may be the match.


font change
Related Articles