The Indo-Pacific is a new concept in China’s strategic radar. In fact, in China’s strategic terminology, there is not yet such term. China sees it as two separate regions with their own respective features and functions, though both of them are increasingly important to China. China is located in West Pacific, and naturally China takes most of its strategic interest in the region. And to make it more convincing, the ongoing disputes over territory and sovereignty between China and some of its maritime neighbors are taking place in the region as well, attracting increasing attentions from the Chinese public and becoming big concern for Chinese decision-makers, to whom The Indian Ocean is more or less irrelevant. In the meantime, with dramatic increase of China’s imports and exports, The Indian Ocean as the most important sea lanes for transportation has been more important to China. There are already a number of academic papers in Chinese journals discussing what is known as China’s Indian Ocean strategy, which actually does not yet exist at all according to all the white papers issued by the Chinese defense ministry. On the other hand, there are talks about China’s strategy of string of pearls in both U.S. and India also focusing on what China is going to do in the Indian Ocean. These elements provide a complicated picture about China’s interests and roles in the Indo-Pacific.

West Pacific: China’s immediate periphery
As far as geographic location is concerned, West Pacific is naturally China’s strategic focus.  For years, especially after the end of the cold war, China has tried its most to cultivate the region by establishing all kinds of communications and exchanges with the countries in both Northeast Asia and Southeast Asia.  The efforts have resulted in enormous achievements in terms of economic development, regional stability and lasting peace.  China’s strategic aim since then remains unchanged.  That is to strive for peaceful periphery as stable as possible.  China believes that the goal will benefit China and all its neighbors in the region, even though there are unresolved disputes and negative legacy left over from history.

Having seen strong growth and common prosperity in the region over the last two decades, West Pacific now witnesses a new power equation coming up.  First, there are rising powers represented by both China and India.  Simply due to their huge size, the rise of the two Asian powers is going to insert enormous impact on any possible restructuring in Asia.  For China, it is a Pacific power and its increasing capacity will lead the nation to a new status.  For India, though it is not a Pacific country, it does take enormous interest in the region.  By its Look East policy starting in early 1990s, India has developed a complete set of new Asia policy which tends to focus more on Asia-Pacific trying to break out of its traditional bond.  Having resumed its traditional ties with Southeast Asia nations in the first stage of the policy, India has built up more extensive vision in the vast West Pacific, which finally led to its membership of East Asia Summit ( EAS ).  It is believed that it marked the deeper stage of its Look East policy.  Apparently, India will continue its engagement in Asia-Pacific. 

Second, the United States keeps its leading role in Asia-Pacific as far as security is concerned.  It is mainly due to the old structure in the region, represented by US-led security alliances.  However, the previous decades did not see further enhancement of American power in the region.  And US investments in Asia-Pacific seemed playing less important role when the region saw very dynamic development in all the aspects from trade to people to people contacts between the nations.  One of the explanations on this phenomenon is that the U.S. was too busy with its warfare in both Afghanistan and Iraq, and that American influence in the Asia-Pacific inevitably declined, even though the U.S. still plays a decisive role in security arena.  That argument helps elaborate the rational of the Obama administration’s new strategy to Asia, which is labeled as the Asia-Pacific rebalancing strategy.  In Asia, it is also interpreted as America’s return to Asia, despite the fact that the U.S. never really left Asia. For most Asian nations, whether the U.S. is declining or will decline is a critical issue, and by the same token, what the goal the U.S. is pursuing in its new strategy has significant implications for many Asian nations.

Third, regional organizations represented by ASEAN are playing less important role, partially due to increasing disputes among the parties and also to the uncertain US intention vis-à-vis its new Asian strategy.  ASEAN has been perceived as the core in developing regional integration,  but the organization is not empowered to handle sensitive issues like territorial disputes in the region between the parties, and unfortunately there have been more disputes as such recently, reducing mutual trust and the positive role that ASEAN could play, because some parties in the organization try to use it as means or some sort of entity to deal with China when they have disputes with the latter, or still some parties try to introduce more outside forces to intervene into regional disputes, which is also likely to reduce the role of ASEAN.

Fourth, regional architecture for security is yet not in position.  After the end of cold war, how to build up a regional security architecture has remained as one of the most important issues in the Asia-Pacific.  The failure to do so is attributed to many factors.  The fact that regional security has to be maintained through a variety of bilateral and sub-regional arrangements reflects the complex reality in the Asia-Pacific.  With the rise of emerging powers in the region, the equation has been changing, but the structure remains unchanged.  That has caused concerns, and the demand for a regional architecture may be on agenda again.
Apparently, as China’s immediate periphery, the Asia-Pacific has seen more difficult issues coming up than before.  And the rise of China and other developing powers like India may be both the problem and solution.

The Indian Ocean: necessary to work out a national strategy?
The Indian Ocean is not China’s periphery.  So far, China does not have an Indian Ocean strategy, and in all the defense white papers issued by Chinese Defense Ministry, the Indian Ocean is almost unmentioned except China’s anti-piracy fleet in the Gulf of Aden.  But that does not have much relevance with a real national strategy in the Indian Ocean.  This situation is changing.  As China became No. 1 exporter and No. 2 importer in the world, safety of sea lanes has been extremely important, and those on the Indian Ocean are the most important routes for China’s trade and energy transportation indeed.  According to incomplete estimate, 80% of oil China imports from the Gulf states have to go through the sea lanes in the Indian Ocean, and 65% of China exports have to do it, too.  Also, the pipeline through Myanmar to China’s Yunnan Province is going to be completed by the end of 2013, which will have the capacity of transporting oil as much as 25 million tons annually according to the design.  All the oil will be transported through the Indian Ocean lanes in the first place.  From a strategic viewpoint, China does need to work out a set of new policy and adopt new actions to be engaged in the Indian Ocean more deeply. 

For that purpose, China has to handle a number of new issues properly.  The Indian Ocean is not a power vacuum area.  The U.S. is the dominant power in the region, and its Fifth Fleet set up headquarters in Bahrain.  For decades, the U.S. has contributed a lot to safeguarding the security of sea lanes and tried to manage very disturbing situation in the Gulf region.  But the first and foremost purpose has been to ensure energy supply form the Gulf by deterring any possible hostile forces that could block the lanes.  The latest case was Iran’s threat to block the Strait of Hormuz if Iran was attacked in a perceived crisis about nuclear weapons.  The strait is one of the most important sea lanes for global energy security.  The international community does not accept that prospect, but the threat seems quite real due to geographic reasons and difficult situation on the Iranian nuclear negotiations.  The U.S. is in the front and has to get ready to deal with the situation, though few would predict that the Obama administration could prefer to use force to handle it.  However, as the dominant power in the region, the U.S. has to take more responsibilities, even if the U.S. is no longer the biggest importer of energy from the Gulf.  China has replaced the U.S. as the largest importer of oil and natural gas, and those from the Gulf states through the strait account for more than 50% of China’s total imports.  The significance of safeguarding international sea lanes is clear, though China does not yet have the position to take more responsibilities in the region.  Actually, it is one of the most important reasons raised by Chinese academia that China needs to work out a national strategy on the Indian Ocean.  Apparently, the U.S. is the most powerful nation China has to discuss with.

Another critical player in the region is, of course, India. Since the term ‘ the pearl string strategy ’ was created, India has been concerned about what has been perceived as China’s threat to India.  India’s argument is based on an assumption that China is not an Indian Ocean nation and therefore China should not have any presence there, though India dose not insist that the ocean be India’s ocean, because it is neither fact nor reality.  India is an influential power in the Indian Ocean, but India is not so powerful as to be able to safeguard the vast region which is crucial to global security, international trade and energy supply.  In this context, safeguarding the Indian Ocean security is public goods requiring collective efforts by the international community.  India’s concerns about China are understandable, but not rational.  China-India relations do have lots of unresolved issues due to various reasons, but it does not mean that the two Asian giants have to face with each other as hostile as enemy, nor does it mean that they could never develop cooperation even in those areas where they share common interests.  Now the question is whether the two share common interests in the Indian Ocean?  The answer perhaps lies in their respective perception of the development of the international system, and the prospect of the roles to be played by major powers on sea in particular.   On the other hand, China is not ready, either, to discuss its engagement in the Indian Ocean with India.  Due to well-known reasons, China and India have failed to build up strategically mutual trust, despite collaborations in a number of other aspects like trade, investment and climate change, etc..  Strategically speaking, Beijing yet finds it hard to consult with India on the sensitive issues such as China’s increasing interest in the Indian Ocean.  China only defends itself by saying that China does not have the ‘ pearl string strategy ’, arguing that China never thinks of containment of India or encircling India, etc..  That is far from enough.  China needs to articulate its Indian Ocean strategy with more details.  And if China does not have one, it is imperative that China should work hard on it and try to produce one as soon as possible.  In such a strategy, how China sees India and handles the latter would be critical part.

Indo-Pacific: China’s interests and roles
With the changes of geopolitical landscape, the Indo-Pacific has become a new agenda.  Arguably, both China and the U.S. are the major Pacific powers with the U.S. dominating not only the Pacific but also Indian Ocean, and India is mainly a major power in the Indian Ocean, though India shows increasing interest in the Pacific.  That structure reflects traditional interests and influence of the players. The changes that have led to a new geopolitical area labeled as the Indo-Pacific are mainly driven by the rise of the emerging powers, China and India in particular.  Also there is a new American interest to the Asia-Pacific labeled as rebalancing strategy coming up in the first term of the Obama administration.  That strategy is expected to continue in its second term of presidency with more American concentration on the Asia-Pacific.  If that is the case, then what will happen to the American presence in the Indian Ocean?  There is little doubt that the U.S. will pay good attention to the Indian Ocean as it has done in the past half a century.  The case like the Iranian nuclear issue is likely to be one of the focuses of the U.S. in the near future.  However, the U.S. is also developing its own oil and natural gas production in a huge scale on the soil of America, which implies that the U.S. strategic goal in safeguarding energy security in the Middle East and Gulf may be less important in the years to come.  Besides, the Obama administration has also faced severe challenges in budgets and other financial problems.  It has promised to reduce defense budget on a gradual basis in order to meet the demands to reduce budget deficits.  It is not clear whether the budget cut would impact American presence in the Indian Ocean.  But there is little doubt that the U.S. wants to see its allies and partners share more responsibilities in security arena. When both State Secretary Hillary Clinton and Defense Secretary Panetta visited Australia and India successively, there were reports covering their talks with the counterparts focusing on US strategic expectation for the two countries in the Indo-Pacific.  Also it was perceived as a US strategic decision to deploy 2500 marines in Darwin of Australia, which already started in April 2012.  US policy-makers ask both its old and new allies to pay more attention to the Indo-Pacific. 

When there are more debates on whether US strategies in both the Pacific and Indian Ocean aim at China, the latter is more determined to be engaged in both the oceans.  In October 2012, Beijing conducted the 18th Congress of the Communist Party of China ( CPC ) which put new Chinese leadership in position.  During the meeting, China announced that building up the nation into a maritime power be a national strategy.  Although it dose not elaborate in what way or in what particular oceans China’s maritime strategy will focus on, it is well discussed in the Chinese academia on China’s stakes in both the Pacific and Indian Ocean.  In a very much simple way, China’s interests could be divided into two parts, that are security interests and economic interests in general.

Arguably, some Chinese analysts believe that China’s maritime strategy should focus on the Western Pacific in the first place because it is the gate through which China might get more access to the oceans.  But given China’s limited capacity, China should give first priority to the region where China has disputes with some neighbors on territorial issues in either East China Sea or South China Sea.  In other words, security interests would be more important.  Unless China could defend its legitimate rights at its own door, China won’t be able to go to the oceans for the purpose of building up a maritime power.  This argument does not exclude the Indian Ocean from China’s strategic radar, but believes that the challenges China faces are from its periphery.  This is to say that the road to a maritime power is highly relevant to the way China will handle its maritime territory in the first place, which is now facing severe challenges due to the disputes over sovereignty and maritime rights.

Another important goal for China’s maritime strategy is economic prosperity that China expects to develop with its neighbors.  Over the years, China and its maritime neighbors have cooperated in Asia’s regional framework such as ASEAN, 10 3, China-Japan-South Korea FTA and others.  Cooperation has led to common prosperity.  It is not only the three economic powers in Asia that have become great trading partners, but also the ASEAN members that have benefited from strong growth in the region.  Regional integration in Asia has shown powerful dynamics with economic cooperation between the Asian nations.  China values this process and has been both the active participant and great contributor.  In this context, China’s new strategy in maritime pursuit must be an add-up to China’s external strategy which is aimed at creating stable and peaceful international environment.  In this regard, China’s interests will be actually much more beyond the Pacific, and the Indian Ocean is only too important to China’s economic ambitions for both energy security and trade.  The stress on economic importance has been maintained for decades with huge achievements, and China is likely to continue this approach to enhance collaboration in surrounding areas.  The relevance of this approach with China’s maritime strategy lies in a sort of expected accommodations with regard to sovereign disputes, and China’s contribution to international collaboration in the oceans.  It is decided by China’s vast stakes which are demonstrated through its expanding trade and huge demands for energy. 

Apparently, the argument of peaceful approach is based on economic priorities which will be critical to China’s state goal that, by the year 2020, China will have been built up into a moderately wealthy nation with per capita GDP approaching USD ten to fifteen thousand ( now is about USD six thousand ).  That magnificent goal, if realized, could make China become the largest economy in the world.  Most Chinese analysts believe that such a status of China in the international community would make the nation’s interests spread all over the globe, and that China would have to take much more international responsibilities and obligations.  And before that, in the process of China’s development in the next two decades, China is expected to continue its peaceful development strategy in order to consolidate a sustainable periphery which is increasingly important to China.  Economy first will be the way to handle most of the problems and challenges China faces.

Yet there is another argument that tends to believe that China should pay more attention to its western periphery and further the Indian Ocean rather than focusing on the Western Pacific where there are too much disputes.  This argument arguably predicts that the United States will step out of this region after two major wars in Iraq and Afghanistan.  The American withdrawal will create a new geopolitical landscape in the region where China has increasing interests.  While the U.S rebalancing strategy is going to focus on the Asia-Pacific, whether it aims at containing China or not, China may not have to take a face-to-face deal with the U.S. in the Pacific.  Instead, China might be better-off to turn to another side of Asia and the Indian Ocean where China does not have too much difference with the U.S. in terms of interests.  More importantly, China does have enormous interests in the region, and China will have to enhance its engagement in the years to come.  That argument defends the necessity to work out an Indian Ocean strategy now.  Although this view is not popular and somewhat unacceptable to those who believe safeguarding national security in the Asia-Pacific is a more urgent demand, it provides a new vision for China’s external strategy in the new era which is featured with some sort of fundamental changes in the balance of power of the international structure.  While the direction of the changes is not yet clear, China is likely to be given a new position to judge where its real interests lies, and how to defend its interests.  In that process, the Chinese role would be formed on the basis of increasing awareness of more international responsibilities and obligations.

As for the Indo-Pacific, China has not yet thought of it as an integrated region in strategic sense.  However, with persistent priority to the Pacific and increasing presence in the Indian Ocean, the Chinese navy might take relevant actions to prove the integration of both Indo and Pacific.  Actually, General Su Zhiqian, commander of China’s East Fleet, went to Sri Lanka last December for a naval forum on the Indian Ocean where he delivered a speech about China’s intention in the ocean, arguing that the Chinese navy went to the ocean for more cooperation and better understanding of the Indian Ocean.  And of course, the East Fleet usually gives its military priority to the Pacific.

Possible interactions with the U.S. and India
As far as naval capacity is concerned, China is a Western Pacific power, India is an Indian Ocean power, and the U.S. is a global power.  That structure will evolve with development of their respective interests. 
First of all, the US new strategy to Asia is supposed to attract more Chinese attention in security and military arenas.  The U.S. labels the strategy as rebalancing, which naturally leads to further question on who it is to rebalance.  While there are more than one rising powers in Asia, analysts in Washington would not try to make the game more confusing.  By consolidating the bilateral alliance and building up new coalitions, the U.S. strategy is likely to aim at preventing any possible challenger to the American dominance in Asia-Pacific.  And the most possible challenger would be China.  That vision and relevant deployment by the US military has led to more interactions between China and the U.S., not really in operational level but in strategic vision.  Meanwhile, with a variety of dialogue mechanisms between China and the U.S., the two sides are trying hard to avoid misunderstanding and misperception of each other’s behaviors and moves.  When the U.S. announced it would deploy 60% of its naval forces to the Pacific, Chinese side did not interpret it as a U.S. containment. The dialogue mechanism plays a role.  Now that the two new leaderships are in position, the two sides are exploring new possibilities to maintain bilateral stability which is perceived by both sides as quite a high priority.  One of the new possibilities might be collaboration on the sea.

In the Indo-Pacific, China and the U.S. need establish new channels for communications.  There is already a bilateral mechanism on the Asia-Pacific for strategic and security dialogue, which has played an important role in making each other’s intentions understood as well as possible, but the two sides do not have anything like this in the Indian Ocean nor in Indo-Pacific.  The U.S. has established contacts with both India and Australia, the two Indian Ocean powers.  With increasing presence of China in the region, it seems more imperative than before that the two sides need to expand their contacts, whether it be a new dialogue mechanism or a new agenda in the present mechanism.  Another area where China and the U.S. could develop more contacts might be China’s participation in multilateral operations and exercises in the Indo-Pacific.  The U.S. navy usually takes the lead in such operation or exercise.  The Chinese navy’s participation would enhance mutual understanding and improve transparency. 

Regarding India, the power in the Indian Ocean, it is extremely important for China to make its intention well understood, because the two militaries have trust deficit.  Although the two navies began to conduct joint exercises in 2003, there are not many progresses.  Besides, India is concerned about China’s activities in the Indian Ocean.  In the meantime, with the development of Look-East Policy, India has expanded its naval presence in the Western Pacific, especially in some sensitive areas like South China Sea.  Does that situation create a favorable condition for China-India cooperation?  The answer is NO.  But the two sides do not have any intention to make the other side hostile like an enemy despite some tough issues and difficulties existing in the bilateral relationship.  Over the years, the two leaderships have made great efforts to enhance mutual understanding.  Some progress has been made such as maintenance of stability and peace in the border areas, and enhancement of trade and investment, etc..  As far as sea is concerned, it is important that the two countries do not have disputes over sovereignty or rights, with only a small deviation.  That is the Indian state oil company’s participation in a Vietnam-led exploration of the oil fields in the South China Sea where China and Vietnam have sovereign disputes.  But that is not big deal.  As for the sea, the real issue for the two countries is their respective perspectives on the other side’s intention in the sea.  On the Indian side, it is China’s increasing presence in the Indian Ocean, perceived and described as the pearl string strategy which is intended to dominate the ocean and to threaten India’s national security.  On the Chinese side, India’s declaration that India has to defend its vast interests in Asia-Pacific is virtually groundless, only used to cover India’s real intention to get more leverages to handle China.  Vocal accusations are often seen in the media of the two sides.

Regardless distrust, the two countries’ interactions in the sea are increasing.  In the Indo-Pacific, China and India are both significant players.  It is interesting to see two forthcoming pictures.  One is China’s more presence in the Indian Ocean and the other is India’s proactive participation in the Western Pacific.  It is not a mutual containment.  Actually, the two sides’ stakes in the sea are expected to increase, and their vision on maritime strategy will get mature in the years to come.  During that process, the two countries will have to build up more dialogue mechanisms as the first step, just like what the U.S. and China have already done.  China and India have to strengthen their military ties by more exchanges and exercises, and among them, naval communications account for a particular part.
Finally, the three parties in the Indo-Pacific should explore new ways in terms of creating public goods and maintaining regional stability, especially after the US withdrawal from Afghanistan in 2014.  Nobody now could possibly predict what would happen after 2014 in the nation, but everybody wants to see peaceful transition and lasting stability there because chaos, violence and continuing fighting after 2014 in Afghanistan and other neighboring countries would not fit interests of all the parties. The Afghan issue may not be the main issue for the US navy, but it is a main issue for both China and India, even though it is not clear that the issue should be included in the Indo-Pacific.  From Chinese perspectives, the Afghan situation is part of South Asian development, which is highly relevant to China’s southwest periphery.  What would happen in the region will impact China’s external strategy seriously.  For this matter, China and India already conducted their first round talks in Beijing in April this year, and China also established trilateral framework with both Afghanistan and Pakistan.  It should be worth thinking of other multilateral mechanism such as China-US-India or even plus Pakistan.

Cooperation between China, U.S. and India in the Indo-Pacific will be a new and creative initiative.  To realize it requires two-level interactions.  One is on the governmental level, especially on the military level, aiming at practical and operational goals, which seems not yet mature for the moment.  The other level is on the non-governmental level, especially on the think tank second track level, for intensive talks about all kinds of possibilities, strategic visions and policy options, which are needed and should develop further.  On the Chinese side, the problem does not really lie in whether the three parties should open up more discussions and collaborations, but in how.  When the Chinese navy’s application for participating in the Indian Ocean Naval Symposium was turned down, the issue of how could have been more acute.  But the trust deficit between China and India or China and the U.S. is not the whole story of the bilateral relationship, and for the trilateral interactions, there are certainly more prospects and possibilities.  China will continue to work on confidence building measures with both India and the U.S. with the hope that the three parties will share more common grounds in the year to come.

Conclusion
The concept of the Indo-Pacific is now gradually unfolding.  Who would be the main players is not yet a determined issue.  There are uncertainties.  Big powers are going to play roles, but what about middle powers, and further what about major producers of strategic resources, etc.. Besides, there are regional organizations that could also play a role in promoting trust and confidence among the parties. As the most important trading routes, the Indo-Pacific may include a number of stake holders.  China is fully aware of the reality and determined to pursue its strategic goal through creative approaches.  The new Chinese leadership will continue the peaceful development strategy, trying its best to realize two fundamental goals.  One is to create new type of big power relations with the major players in the international arena, and the other is to build up peaceful and stable environment in its surrounding areas.  Both the goals are likely to relate to China’s moves in the Indo-Pacific in the future.  At this point, one may argue that what would happen in the Indo-Pacific between China, the U.S. and India could be a test to China’s fundamental goals in its external strategy in the years to come.      

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