China’s Expansion in the Red Sea: Military, Economic, and Digital Influence: By Aparna A Nair

Image Courtesy: The Atlantic

Introduction

The Red Sea is one of the world's most important trade routes, with its southern tip in the Bab el-Mandeb strait (between Yemen and Djibouti) and its northern edge in the Suez Canal and the Gulf of Aqaba (Shay, 2023). The area serves as a gateway to world energy supplies and trade. The Republic of Djibouti is geographically located at the crossroads of Africa, the Middle East, and South Asia. Its access is pivotal to China's policy to guarantee trade and economic cooperation under the BRI. In 2017, China opened the first-ever foreign military base in history for the PLA army in Djibouti. It marked a serious shift in the policy of its foreign and military character. Investment in ports, railways and telecommunications networks has turned it into a big player in the region. In this paper, the role of China in the Red Sea is under analysis, both in terms of its military foothold and its economic presence, especially in Djibouti, where it has gained considerable influence. In the paper, the shift in the balance of power due to China's entrance and the ensuing implications for both regional and international stakeho lders are delved into.

Djibouti is at the crossroads of the Bab el-Mandeb Strait and the Gulf of Aden. China established its only foreign military base in Djibouti for multiple reasons. Geographically speaking, it has long been an area where people, cultures, and commerce crossed (Donelli, 2020). It is the gateway to Africa to advance China’s interests. The prime goal was to provide logistical and naval support for PLAN vessels involved in counter-piracy operations and humanitarian missions. The proximity to crisis areas not only in the Horn of Africa but also in Yemen and Somalia makes it a suitable area for military operations and evacuations. This was coupled with its long-term ambition for freedom of navigation on the Red Sea.

The Red Sea region is crucial to China’s Belt and Road Initiative and the Maritime Silk Road Initiative. The Bab el-Mandeb Strait located in the region, is one of the busiest chokepoints in the world. Approximately 10 percent of the world's maritime traffic passes through it every year. It is a major conduit for goods between Europe and Asia. Hence, China views this route as crucial to its continued economic growth and energy security. The location is important to China’s trade flows. A hold in this critical maritime chokepoint helps secure global trade routes and ensure the safety of its maritime assets. The China’s military footprint not only safeguards shipping lanes but also provides logistical and technical support for China’s ships in the Gulf of Aden and beyond. Finally, it is the most obvious manifestation of the PLA’s new ambitions included in the Chinese Defence White Paper of 2015, which for the first time includes “far sea protection” (yuanhai huawei 远海护卫) and not only near sea defence (jinhai fangyu 近海防御) about its strategic objectives (Cabestan, 2019). 

Through investment in dual-use ports and infrastructure, China aims to accelerate economic, military, and political relations. For instance, the development of Djibouti’s commercial port facilities and its connection to Addis Ababa through a railway funded by China exemplified the integration of the economy of Djibouti into China’s global trade network. International considerations and regional political motivations drove both investments. Furthermore, the Djibouti economy is driven by a port complex and services connected to the Red Sea shipping lanes, as well as rental income from foreign military bases. This strategic location with a relatively stable and peaceful environment has made it an ideal location for foreign powers. The military bases of the US, China, France, Italy, and Japan have made it a small lab of balance and power rivalry. It serves as a control post to observe and manipulate rival states' movements across central-southern Africa's political dynamics (Donelli, 2019).

In addition, it is involved in Djibouti in the area of telecommunications. The region carries crucial Sea Lines of Communication (SLOCs) and underwater communication networks. The projects in the field of communications in Djibouti guarantee national security and present alternatives to Asian and African networks.

Beyond Military Presence: Economic and Digital Expansion

China’s involvement in the region goes far beyond its military base in Djibouti. It has embedded itself in the region’s economic and digital infrastructure. Beijing has made itself a dominant player in the region through telecommunications, financing and dual-use infrastructure. As part of the Belt and Road Initiative, China has invested heavily in digital infrastructure, with projects including Huawei’s Pakistan East Africa Cable Express (PEACE), a submarine fiber-optic cable link that connects Djibouti with Pakistan and extends to Kenya and the Mediterranean. This 7,500-mile network financed by the Chinese Construction Bank enhanced China’s control over regional telecommunications. China reduces its dependence on Western-controlled systems and expands its digital footprint across Africa and the Middle East through its undersea cable networks. This development provides many Asian and African nations with an alternative communications network. Concerns have emerged over the cybersecurity risks and surveillance potential of these Chinese-backed networks, especially with the introduction of 5G technology in BRI partner nations. Western analysts warn that these networks could serve as tools for intelligence gathering and digital dominance.

These projects have raised China’s economic leverage through extensive loans and infrastructure investment in Djibouti. It not only forces the country to bend its policies to align with Bjing’s interest but also raised questions upon financial dependence. The Doraleh Container Terminal dispute is one instance. 

Changing Tides: China’s Influence and Challenges

Djibouti hosts multiple foreign military bases. The US (Camp Lemonnier), France, Italy, and Japan have some prominent bases. According to Chinese media, the People’s Liberation Army claims its navy “continues standard operations” in the Red Sea and Gulf of Aden. However, its increased economic, diplomatic, and military activities altered the regional balance of power.

The Challenge to US Dominance

The United States views Djibouti as a strategic military hub due to its proximity to the Middle East and the Horn of Africa. There are concerns in Washington that the proximity of China's base to the US's Camp Lemonnier could compromise operational security, counterintelligence efforts, and the United States' power projection. The United States has been a vocal opponent of Chinese investment in the region, which had been considered an exclusive sphere of influence for the US. The US is trying to persuade American companies to invest in East Africa as an alternative to Chinese capital. Its presence is viewed as a ‘negative strategic development’, even though China has not shown any interest in stepping in as the region's primary security provider. In the US African strategy, China is identified as a “predatory commercial actor and strategic competitor.” However, it is important to note that Beijing’s engagement through loans and investments via the Belt and Road Initiative provides Red Sea states with an alternative source of finance and infrastructure development. 

Impact on Regional Actors

The majority of the Red Sea countries consider China as an ally due to the economic growth and infrastructure investment via the Belt and Road Initiative (BRI) (United States Institute of Peace, 2020). It includes Djibouti, Egypt, Eritrea, Ethiopia, Oman, Saudi Arabia, Somalia, South Sudan, Sudan, the UAE, and Yemen. This economic dependence often translates to political support. For example, Djibouti, Egypt, Eritrea, Oman, Saudi Arabia, Somalia, South Sudan, Sudan, UAE, and Yemen supported China's position on Xinjiang. 

Although Djibouti has benefited from China’s investments and rental income from its military bases, it has accumulated high levels of public debt to China. It is a question of serious debt distress and risk of economic loss. The Doraleh Multi-Purpose Port, Djibouti International Free Trade Zone, Addis Ababa-Djibouti Railway, and the Djibouti-Ethiopia water pipeline were all financed by Chinese institutions. Between 2012 and 2020, China provided around USD 1.4 billion in investments and loans for infrastructure projects in Djibouti. Djibouti's public external debt had risen to over 70 percent of its GDP, with Chinese lending accounting for over half of this debt burden by 2020. Specifically, Djibouti's total debt obligation to China stood at USD 1.2 billion, representing over 45 percent of its GDP(Carmody et al., 2021). It raised alarms over debt sustainability. The inaction to the Houthi attacks in the Red Sea has gained global attention lately. China's muted response to these attacks in the Red Sea suggests a strategy of “free riding” on the security guarantees provided by US and European forces. Unlike the US, which has retaliated against the Houthi attacks, or European forces, which have condemned them, China appears to be “free riding” on the US and Europe for Red Sea security (Scott, 2024). Despite having deep economic and strategic interests, including Belt and Road investments in major ports, reliance on safe maritime routes, and a military base in Djibouti, China has secured the safety of its commercial ships. In contrast, Western commercial vessels continue to face threats. Beijing’s pattern of abstaining from UN resolutions, criticising the United States, and relying on Iran-supported security guarantees makes clear that China is prepared to shift the costs of security in the Red Sea to others while securing the benefits for itself.

Traditionally, China refrained from direct intervention or active mediation in regional conflicts. The emphasis on economic engagement and a policy of non-interference is now translated into a military footprint through naval patrols, military training programs, exchanges, port visits, anti-piracy operations, and joint exercises, indicating a move towards an active role in the protection of its interests. China is currently the ninth largest contributor to troops, with the great majority of Chinese peacekeeping personnel deployed in Africa. 

Conclusion

What had started as a counter piracy operation has translated into a multi-layered strategy with military, economic and cyber presence. It’s not just about secure sea lanes. This makes China a relevant power in the region that threatens the traditional Western hegemony. As its influence further unfolds, it should look into whether it would still rely upon Western security guarantees. The response will have implications in the balance of power in this major maritime conduit. What is certain is that Beijing's presence in the area will not be ephemeral, but it will be a key characteristic of the new geopolitical landscape in one of the world's most disputed straits.

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(Aparna A Nair is an intern at C3S. The views are reflected are that of the author and does not reflect the views of C3S.)