Clash of the Titans: USA and China in the Indian and Pacific regions

At the end of June, Seychelles joined a list of small nations worldwide where the United States has established, reestablished, or plans to open an embassy. This is part of a broader effort to counter China’s influence, which had been allowed to grow over two decades of American neglect or indifference, by not considering to merit the cost of maintaining a diplomatic presence. New embassies were also opened in Tonga and the Solomon Islands, and new embassies are planned to open in Maldives, Vanuatu, and Kiribati.

The Indian and Pacific regions are strategically important for China. However, Seychelles’ return to the U.S. diplomatic fold highlights the growing competition between Washington and Beijing in the area.

The Indian Ocean is a crucial waterway bordered by Africa, Australia, India, and the Persian Gulf. It facilitates 80% of global seaborne trade, including over 80% of all trade worldwide. China heavily relies on this region for 80% of its energy supplies.

Amid the Cold War, the U.S. Air Force monitoring station on Mahe Island in Seychelles, which tracked Soviet satellites from the lush tropical forests of the island, played a central role in Seychellois life. American servicemen and technicians residing nearby hosted gatherings, such as barbecues and bar nights, to which all Seychellois were invited. They also distributed cookies and milk to local children and taught them basketball.

However, with the end of the Cold War, the collapse of the Soviet Union, and budgetary reasons cited by the Americans, the tracking station was dismantled in 1996, and the U.S. embassy in Seychelles was closed. At that time, it seemed like an inconsequential corner of the world.

As the United States diverted its attention, China increased its involvement in the Indian Ocean. In 2017, China established its first overseas military facility in Djibouti, on the northwest edge of the Indian Ocean. In a 2020 report, the Defense Department identified five Indian Ocean countries where China might consider opening additional bases, including Seychelles. China is also the only country with diplomatic missions in all six Indian Ocean island nations, which were previously represented by three U.S. embassies.

While Seychelles welcomes the return of the United States, it recognizes that China is a primary motivator for this return, potentially drawing Seychelles into the rivalry between major powers. Seychelles’ Foreign Minister, Sylvestre Radegonde, acknowledges the competition and the importance of countering Chinese influence.

China has invested in Seychelles, building schools, hospitals, homes for low-income families, and public facilities, which has garnered sympathy among Seychellois who felt abandoned after the U.S. departure. Now, the United States is playing catch-up.

Last year, the Solomon Islands made headlines by signing a security agreement with China, which raised international concerns about the potential establishment of China’s first military base in the region. Concurrently, the United States intensified its diplomatic efforts in the Pacific, organizing a significant summit for Pacific leaders and hosting high-level visits, including one by Vice-President Kamala Harris. The U.S. also pledged increased aid to the region and reopened its embassy in the Solomon Islands after a 30-year absence. Australia, which had faced criticism for potentially neglecting its relationships with Pacific nations, also engaged in a diplomatic push amid growing apprehensions about China’s expanding influence in the region.

While China’s ultimate objectives in the Indian Ocean remain somewhat unclear, it is evident that Chinese leadership is actively pursuing capabilities that would enable it to undertake various military missions in the region. Researchers say that China’s objectives are: a) non-combat activities: these activities primarily focus on protecting Chinese citizens and investments in the region, as well as enhancing China’s soft power influence; b) counterterrorism activities: China may engage in counterterrorism efforts, either unilaterally or in partnership with other nations, to combat organizations that pose threats to China’s interests in the Indian Ocean region, c: intelligence collection: China may seek to gather intelligence that supports its operational needs and targets key adversaries in the Indian Ocean region; d) coercive diplomacy: China may employ its military presence to support efforts aimed at coercive diplomacy towards smaller countries in the region, potentially leveraging its military capabilities for political ends; e) conflict operations: in the event of a conflict, China may aim to enable effective operations in the Indian Ocean. This includes the ability to deter, mitigate, or terminate any state-sponsored interdiction of trade bound for China. Additionally, China may aim to meaningfully threaten or hold at-risk U.S. or Indian assets in the event of a broader conflict.

In the Pacific region, since President Xi assumed office in 2013, Beijing has notably increased its engagement. The Pacific includes three U.S. territories and three countries with free association agreements with the United States. These islands hold strategic significance for U.S. defense interests in the Indo-Pacific. China’s involvement in the region has primarily concentrated on expanding economic relationships with the Pacific Islands. However, it has also expanded its presence and influence in the diplomatic and security domains.

A 2022 report from the United States Institute for Peace, co-authored by former senior military officials, suggests that while the advancement of China’s geo-strategic goals in the Pacific Islands region should be a cause for concern for Washington, it does not warrant alarm. The report highlights the need for the United States to counter China’s growing influence in the region and recommends bolstering support for island states in the North Pacific, where historical ties with the U.S. are strongest. The report also notes that although Chinese officials have not publicly declared the Pacific Islands region as an area of heightened strategic interest, the benefits for Beijing in engaging with the region are evident. The Pacific Islands present China with a low-investment, high-reward opportunity to achieve symbolic, strategic, and tactical victories in pursuit of its global agenda.

The report highlights the significance of the Marshall Islands, the Federated States of Micronesia, and Palau, which are sovereign nations known as Freely Associated States (FAS). These states signed compacts in the late 1980s, granting the U.S. defense responsibilities and the right to military bases in their territories. However, these compacts are set to expire in 2023 and 2024, and the report warns that if negotiations with Washington fail, the concerned states may turn to China for funding.

To counter China’s economic assistance in the region, the report recommends that Washington provide an alternative and take steps to address regional perceptions of neglect and abandonment. Additionally, the report emphasizes the need for more resources to monitor China’s increasing activity in the Freely Associated States. Chinese research vessels with potential military utility have been observed operating in the area without permission.

The United States is on its path to regaining influence in the Indian and Pacific oceans, and the return of the embassies represents a significant step in that direction. However, it also underscores the complex web of geopolitical dynamics at play in this strategically vital region.