The Next Hormuz? What Role Will the Strait of Malacca Play in Possible Sino - American Escalation?

There are growing tensions between the United States and China. A crisis over Taiwan no longer seems unthinkable. In this hostile environment, will the Strait of Malacca be the deciding factor in whether the cooler heads will prevail?

©“150321-N-LX437-771” by Naval Surface Warriors. Licensed by CC BY-SA 2.0   

The “Malacca Dilemma"

In November 2003, Chinese President Hu Jintao coined the term “Malacca Dilemma". This term referred to China’s over-reliance on the Malacca Strait for some of its key imports, especially energy, as well as its importance for transporting Chinese exports. The President suggested that “certain powers have all along encroached and tried to control the navigation through the strait”. It was an obvious, thinly veiled reference to the United States and the Navy’s ability to control sea lines of communication. 

Very little has changed since the statement was made. The Strait of Malacca remains one of the world’s most important maritime chokepoints, carrying around 40% of globally traded goods. One country that particularly relies on and benefits from it is China. Despite efforts to ramp up domestic energy production, China is still one of the largest energy importers on the planet. For instance, China produces only about 4.4 million oil barrels per day while importing around 11.1 million.  Around 80% of China’s crude oil imports are estimated to pass through the Malacca route. China is also the world’s largest Liquefied Natural Gas (LNG) importer, and a substantial share of those imports depends on maritime routes through Southeast Asia, specifically the Malacca Strait.

However, the Malacca Strait supplies China with more than just energy. In the past few decades, China has become the world's manufacturing hub. It is the largest trading partner of many countries. China is the world’s largest goods exporter and accounted for about 14.6% of global merchandise exports in 2024. It is also one of the biggest suppliers of rare earth materials, which are essential for the manufacturing of various sophisticated goods. China has an export-focused economy. Given that two-thirds of its maritime trade passes through the Strait of Malacca, the strait is simply indispensable to China’s economic security. From this angle, Malacca resembles the Strait of Hormuz. Both straits are extremely valuable in terms of the global trade and energy that pass through them.

A Dragon Trying to Break Its Chains

The Chinese leadership understands its over-reliance on the Malacca Strait and has been working hard to reduce it. Even though the effect is limited, China has been trying to ramp up domestic energy production to reduce the Strait’s importance for Chinese energy security. Furthermore, China has been expanding its use of land routes both for trade and energy imports. China has been steadily expanding its infrastructure to increase the amount of energy imported from Russia by land. Its famous Belt and Road Initiative plays a key role in this process. The pipeline and transport infrastructure built to the Myanmar coastline is intended to reduce China’s reliance on Malacca. Other projects were less successful as the building of trade routes through Afghanistan and Pakistan is either incomplete or taking much longer than expected due to local instability and growing insecurity. These factors are likely to prevent China from using these routes as a viable alternative to the Strait of Malacca. 

In light of the substantial time it will take China to meaningfully reduce its overreliance on the Malacca Strait, Chinese leadership has sought other ways to ensure that the strait remains open for ships coming to and from China. The main way China has been trying to achieve that is by a massive military build-up of its navy. China has produced more warships than any other country in the 21st century. Currently, China has the world's largest navy by ship count, although the United States still leads in overall global reach and capability. However, with current trends, China is set to further close the gap with the US Navy's overall naval strength within the next 5-10 years. There is also an infamous island-building campaign carried out by China to strengthen its territorial claims in the South China Sea. To support its ability to navigate in more distant seas as well, China signed agreements with nations such as Djibouti and Sri Lanka for permission to build ports and stage its military ships there. It was achieved by China leveraging these countries' reliance on Chinese investment and financing, as well as China's role as one of their biggest creditors. This is done so that, in the event of a conflict, the Chinese navy does not remain contained within the so-called first island chain, which would limit its ability to protect its interests near the Malacca Strait.

The Current State of Affairs

As of now, despite its growing military, China still has limited influence over the Malacca Strait. It maintains pragmatic and even friendly relations with the three countries that control the strait: Malaysia, Singapore, and Indonesia. This is also what makes Malacca different from Hormuz. In the Persian Gulf the decision to close or open the strait is reserved exclusively by the Islamic Republic of Iran’s leadership. In Malacca, by contrast, the issue is less about one state unilatrelaly closing the route and more about the intricate relationship network between the 3 countries claiming control of the strait. These states are neither American nor Chinese puppets. It cannot be assumed that they would automatically support an American blockade of the strait. All three nations benefit economically from keeping the strait open, incentivising them to avoid picking a side in the possible Sino - American conflict. At the same time, none of them are likely to welcome Chinese dominance over Malacca, especially if it threatens their sovereignty and economic security. In the unlikely but possible scenario where these nations side with the USA in an armed conflict, or if USA and its allies attempt to unilaterally blockade the strait, China has no meaningful way to prevent that . India has been building up its power in the Indian Ocean through a rapid naval expansion. The USA is increasingly adopting an Asia-focused strategy to limit Chinese influence. The US maintains a rotational naval presence near Singapore on a continuing basis, and other regional powers like Vietnam and Taiwan will also oppose any Chinese expansion.

The recent purge of top-ranking Chinese military leaders may complicate future Chinese military planning over Taiwan or elsewhere. China has grown economically and militarily in the last 20 years. It seeks to rival U.S. power and arguably already does so economically. Despite this strength, the Malacca dilemma remains unresolved. This vulnerability may act as an important constraint on any future Chinese escalation over Taiwan. China has acted pragmatically so far, yet this can change if its leadership one day starts to believe that it can seize Taiwan before the blocking of the Malacca Strait inflicts major economic and political losses on the Middle Kingdom. If the 2020s have shown anything, it is that leaders of major powers are increasingly reckless, making accurate predictions about developments in the Southeast Asian region more difficult.

©“Made in China, USA.” by alex roberts. Licensd by CC BY-SA 2.0