China faces the Malacca dilemma

Chinese President Xi Jinping () has prioritized modernizing the Chinese People's Liberation Army (PLA) to rival the US military, with many experts saying he would not take action on Taiwan until the The PLA would not be fully prepared to confront American forces.

At the 20th Congress of the Communist Party of China in 2022, Xi emphasized accelerating this modernization, setting 2027, the centenary of the PLA, as the new goal, replacing the previous goal of 2035. Agencies U.S. intelligence said Xi had ordered the PLA to prepare for a possible invasion of Taiwan by 2027, although no decision has been made on whether to launch an attack.

Whether or not the PLA achieves its modernization goals on time, there remains a significant logistical obstacle that could make war impossible: the Malacca dilemma. China is strategically vulnerable due to its heavy reliance on the Strait of Malacca, a narrow but crucial maritime passage connecting the Indian Ocean to the South China Sea.

China depends on the waterway for 90 percent of its trade and 80 percent of its oil imports, and its dependence on foreign liquefied natural gas is expected to rise to 62 percent in the coming years. According to the China Institute of Aerospace Studies, China's main maritime transportation route passes through the South China Sea, the Indian Ocean and the Red Sea via the Strait of Malacca. In the event of war, a US-led blockade of the strait could cut off fuel supplies, cripple China's economy and seriously affect the civilian population.

Beijing has explored several alternatives to reduce its reliance on the vulnerable Strait of Malacca, but each faces significant challenges. In its 2025 climate goals, China initially stepped up efforts to reduce its domestic energy consumption, but has since abandoned that plan, recognizing the need for energy to power its economy. This has slowed the transition to renewable energy, leaving China dependent on imports.

Expanding its naval presence in the South China Sea is another way for Beijing to secure key shipping lanes, but the dominance of the U.S. Navy makes uncontested control unlikely. Efforts to establish partnerships with regional players such as Indonesia and Malaysia, as well as establish military bases in Cambodia and Djibouti, are complicated by regional geopolitics and a potential backlash from rival powers. The Belt and Road initiative, initially intended to meet China's resource needs, is encountering resistance from partner countries in financial difficulty and concerned about debt overhang.

China is exploring Arctic shipping routes as climate change makes them more accessible, but several factors limit their viability. Harsh weather conditions make routes usable for only a few months per year, and the region's underdeveloped infrastructure requires significant investment. Additionally, Russian dominance in the region presents a geopolitical obstacle that could delay or hinder China's use of the routes. Environmental concerns also add to the controversy surrounding this option, making it a long-term prospect rather than an immediate solution.

China is working to develop three main land routes to strengthen its energy security: the China-Pakistan Economic Corridor (CPEC), the China-Myanmar Economic Corridor and the Power of Siberia 2 pipeline project which would connect China to Russia via the Mongolia. However, each of these projects faces significant challenges and is expected to experience delays.

Under CPEC, launched in 2013 as a flagship project of the Belt and Road Initiative, Beijing has pledged $62 billion in investments to improve Pakistan's infrastructure, while offering China a direct access to the Indian Ocean via the port of Gwadar. One of the main objectives of CPEC is to bypass the vulnerable Strait of Malacca by establishing a land route for oil and gas imports from the Middle East.

However, after a decade, the initiative has stalled, marred by corruption, political instability, financial crises and frequent terrorist attacks. Delays have affected major projects including Main Line 1, and efforts to establish special economic zones have fallen behind schedule. The future of CPEC remains uncertain, with frustrations growing on both sides. Although the project is moving slowly, its full operational capability is uncertain and, given security concerns, it may never provide a fully reliable alternative for China. Full completion and operational safety could still take years.

The China-Myanmar Economic Corridor aims to create a direct infrastructure and energy route from Kunming, China to the deep-water port of Kyaukphyu, Myanmar, on the Bay of Bengal, providing a strategic alternative to Strait of Malacca. Despite some initial progress, including the signing of 33 agreements in 2020, the project faces significant setbacks due to a military coup in Myanmar and the country's escalating civil war.

Anti-China sentiment and instability in the country have hurt Chinese investments and raised security concerns along the route, particularly in conflict-prone regions like Shan State. Although the junta needs China's support and would likely defend the project, it faces more uncertainty and delays as Myanmar's situation worsens.

Like other land-based solutions to the Malacca dilemma, the Power of Siberia 2 project is another critical project aimed at diversifying China's energy imports. The pipeline would connect Russia's Siberian gas fields to China via Mongolia. China was initially reluctant to move forward with the project because existing contracts were sufficient to meet its gas needs until 2030, leading to speculation that China was waiting for a better price for Russian gas.

However, if tensions with the United States escalate, experts predict that China could accelerate the project. At the same time, Mongolia's exclusion of the Soyuz Vostok pipeline and Power of Siberia 2 expansion from its 2024-2028 National Action Plan raises doubts about the project. Pricing, cost sharing and control of the Mongolian section have delayed progress, complicating the chances of its completion.

Beijing does not appear to have a viable solution to the Malacca dilemma that could be resolved by 2027. While it is possible that China invades Taiwan without resolving the problem, perhaps hoping that the United States stays out of the problem conflict or that their maritime energy supplies could escape U.S. forces, the unresolved dilemma adds another layer of uncertainty, complicating Xi's strategic calculus.

Antonio Graceffo, a Chinese economic analyst with a Chinese MBA from Shanghai Jiao Tong University, studies national defense at the American Military University in West Virginia.