Mahan, the Strait of Malacca, and a Fistful of Dollars
Heading to war, somewhere in the Indian Ocean
January 2003
The crew was in high spirits as we finished storing mooring lines below deck on the fantail. It was a blustery winter day with blue skies over Japan as we pulled out to a just white capped sea, the massive 20’ x 30’ battle standard of the stars and stripes flying overhead as we disengaged the tugs with a thumbs up and the guided-missile cruiser headed out of homeport.
I could feel more than hear the engines rev higher, the thrumming familiar hum as the turbines below deck put power to the props, all of us standing on deck subconsciously leaning as the ship banked hard to port, made the turn at the first marker, and headed for open ocean to meet Carrier Strike Group 5, the largest and only forward deployed carrier strike group in the US Navy.
Seventh Fleet was going to war.
You always feel the draw of the horizon when putting back out to sea, like your soul recognizes the same calling that drew the first mariners to cross unknown oceans. Something ancient and powerful in all that water, one of the last environments left on a modern planet like it was a millennia ago.
I sat down on one of the fantail bollards, watching Japan get smaller behind us. My enlistment was almost up having spent nearly three years in Seventh Fleet and been all over Asia. From Bali, Korea, Hong Kong, Kuala Lumpur, to playing old man rules rugby with the Australian Navy lads in Perth last year. ‘Old man rules’ meaning run off the pitch and drink port in the blazing heat before running back to keep playing.
Singapore was practically our second home when we were doing anti-piracy operations in the Strait of Malacca. First time you see the strait from behind a 50-cal machine gun, the jungle and cliffs running right into the water on either side, you wonder how all the ships transiting don’t run into each other. In the narrower places you’d swear you could jump over the railing and just walk from one side of the strait to the other across the decks of ships and not touch water. Big tankers transiting in the middle of the channel, bulk carriers and medium cargo ships on either side, with all kinds of fishing and local traffic closer to shore, Indonesia on one side, Malaysia on the other, pirates and locals in the jungle covered coves and rivers inlets the whole way through.
We had been the first ship out to sea when the spy plane went down in China in 2001. Spent weeks circling with two Chinese destroyers in a constant game of chicken in the South China Sea as we protected a ship that was totally not a spy ship off their coast and absolutely not trying to figure out what they were doing with the plane. Sometimes the Chinese would shoot small arms in our direction so we’d load our main 5” guns and traverse them to point at them and they would stop. Inevitably once or twice a day, they’d turn in to charge at us and we’d do the same, going full throttle, a rooster tail at our wake as we spun past 20 knots, two warships heading straight for each other. The game was simple, which ever Captain blinked first and gave right of way was the coward, and as our Captain said, that wasn’t anyone on this ship. The entire crew was in on it just to break the sheer boredom of trolling at 5 knots in a huge constant circle with two Chinese destroyers off the coast of China. We learned mandarin simply to shout insults as we’d go by each other to the sound of “Fuck You America!” coming from our Chinese counterparts. Sometimes so close the two warships would almost swap paint as we did our best Top Gun diplomacy for America.
Asia was awesome.
I looked back past our wake to see a Japanese Navy Kongo-class destroyer following us out from their base on the opposite side of the harbor.
Their Kongo-class destroyers always reminded me of a tiger stalking its prey through the seas, all low, menacing angles. The Japanese had an incredible knack for being able to take anything American tech, including our destroyers, and making it somehow better, smaller, and faster.
Even down to their toilets.
I had stayed at a buddy’s house the night before after one last night out on the town before pulling out this morning and his toilet was like the captain’s chair of the Starship Enterprise, complete with armrests where you could set a timer for the seat to warm up in the morning, it even had a massager and air dryer for your ass after the bidet.
As I was sitting on the bollard, contemplating how we’d ever beat a country at a world war that made ships like sea tigers and toilets fit for a starship, I caught a glimpse of something I’d never seen before and slowly stood up, goosebumps covering my arms as I stared back at the Kongo.
She was hoisting the Rising Sun, the battle flag of Japan billowing out to catch the breeze, the satin stirring on the wind from its almost six decade slumber as I stood in awe realizing the significance of what I was seeing.
For the first time since World War II, a Japanese warship was going to war and flying the Rising Sun on the high seas.
The last time an American sailor had seen that flag flying was over 50 years ago as battles raged in the Pacific and the last empire fell to American hegemony.
Now here we were, allies heading to war.
Months later we shot some of the first missiles in the Iraq War early one morning in the pre-dawn to Outkast’s Bombs Over Baghdad and would shoot 39 tomahawks in total hitting targets in Iraq and boarding ships in the Persian Gulf. I got gravely ill from my smallpox vaccine, and contemplated actually having to use my atropine injector when the Iraqis shot a scud missile back at us.
We were one piece on a giant chess board playing out Alfred Thayer Mahan’s strategy of hegemony through controlling access to the seas.
The first time I truly knew how insignificant I was in the universe was on my first boarding just past the Strait of Hormuz on a moonless night. As we pulled away from the cruiser in the RHIB (rigid hull inflatable boat) I looked back a few seconds later and saw nothing but blackness even though she couldn’t have been more than a few hundred feet away. The ship was blacked out for war and there was no moon. I couldn’t even see the 870 shotgun I had in front of me as I kneeled in the bottom of the boat and could only make out the swells of the ocean as a moving black line blacker than the sky as the stars disappeared from view and knew another swell was about to come down. I listened to the roar of the engine propelling us through the blackness towards the ship, the slap of the hull on the ocean, shoulder to shoulder with other men, thinking this is how sailors in ancient times must have felt, just a small boat out on a vast, uncaring ocean, their world limited to stars, the blackness of the sea, and the unknown ahead of them.
Alfred Thayer Mahan
The Father of American Hegemony
Most don’t realize it, but the modern world we all live in was shaped in large part by the naval strategy of Alfred Thayer Mahan who was a US Naval Officer, Historian, and lectured at the Naval War College at the end of the 19th century.
He believed a nation’s greatness lied in the ability to dominate the seas, and wrote The Influence of Sea Power Upon History in 1890. His strategy is the very foundation of US hegemony and underpins this modern world built upon global maritime trade of oil, natural gas, petroleum products, and imported food.
Mahan studied sea battles, wars, how shipping and commerce was affected when targeted or not, and even theorized the British lost the Revolutionary War because they split their navy on the Atlantic Ocean between the US and England, when in fact they should have looked at the the entire Atlantic Ocean as one battle space since there were no natural maritime chokepoints between the US and England, and based their entire fleet together in America for overwhelming naval force to control access to the ocean during the war.
Mahan’s doctrine on controlling access to oceans through chokepoints and overwhelming naval force is the bedrock American hegemony is built on.
Which is why Carrier Strike Group 5 is the biggest, baddest carrier strike group in the US Navy and based out of Japan.
Japan has a deep water port facing directly into the Pacific Ocean allowing for total control of Asia by limiting access to the Pacific Ocean through the first island chain and the Indian Ocean via the Strait of Malacca.
The Strait of Malacca is one of the most important pieces of real estate on the planet. The strait determines the economic fate of nearly half the population of the world with oil flowing from the Middle East through this narrow strip of water to Asia.
Yes there are alternative straits, but one is dangerous with shallow depths and tidal currents and the second one, while being wider and deeper than even the Strait of Malacca adds hundreds of miles to a tanker’s trip.
The CCP would love to dig a canal across southern Thailand to bypass the Strait completely, but the deal was scrapped by the Thai government, not for the first time. There have been proposed canals across Thailand going back to the 17th century.
The CCP would also like to do a pipeline out of the deepwater port in Gwadar, Pakistan overland into China, making the sail from Saudi Arabia to Gwadar very short so oil tankers don’t pass by their regional rival of India at all, but that is some of the most unforgiving terrain on the planet in a region where people are not fans of the Belt and Road Initiative. From a civil engineer perspective having actually built a pipeline over the mountains in Utah, good luck.
Never mind how vulnerable pipelines will be to drone warfare in the future.
So the Strait of Malacca is for the foreseeable future the most important piece of real estate on the planet for ensuring modern life continues in Asia.
Both images from Zeihan on Geopolitics, which has the best geopolitical maps and highly recommend the books for a better understanding of how the world works.
But What About The South China Sea?
Sailing in the South China Sea is like sailing in a bathtub.
The CCP’s efforts with manmade islands and developing aircraft carrier killing missiles may appear impressive on first glance, until you remember the US doesn’t want to invade China, and they do not need to sail into the South China Sea to crush China if they wanted to.
The CCP can build all the islands they want in the South China Sea, they are still IN the South China Sea and it does not help their national strategic fatal flaw: 80% of their energy flows through the Strait of Malacca which they need for their continued existence and have zero control over.
All the CCP is really accomplishing in the South China Sea is making enemies of their neighbors and their problems don’t stop there.
China is not a giant monolith, even though that is how the CCP and apparently Bridgewater Associates like to present it. The Cantonese, who have inhabited the Pearl River Delta area for centuries were the first to lead the revolution against the Qing Dynasty in 1911. The Pearl River delta is the area which makes up Hong Kong, Guangzhou (formerly named Canton), and Shenzhen which is just across from Hong Kong. This is China’s major tech hub and critical to their economy…and the people there have their own regional identity.
My one investment in China is based in Shenzhen because of this, where the CEO is the son of a port manager who grew up in the region. My thought is no matter what happens to the CCP in the future, the Pearl River Delta region will be fine.
In fact the most successful pirate to ever live was a Cantonese woman named Ching Shih who rose from being a prostitute to being a fearsome pirate commanding 1,800 ships and over 80,000 men on the South China Sea in the early 19th century. Her Red Flag Fleet went undefeated against both China and the British East India Trading Company until she retired.
With the CCP’s recent treatment of Hong Kong, I wouldn’t be shocked if there is a reemergence of regional discontent in the area. When you try to suppress volatility, it only resurfaces in other ways.
Which leads to Taiwan, a critical link in the first island chain around the South China Sea.
Guanxi is a Chinese term which describes how business deals with someone go beyond business. You have a moral obligation to help someone you are in business with who asks for your help. If you refuse them it is seen as deeply dishonorable.
I do think China wants Taiwan back for three major reasons bad enough they might take it by force: to be ‘One China’ again culturally, strategically important to secure naval base and access to Pacific Ocean (first step in being able to challenge US dominance for Pacific Ocean under Mahan doctrine), and to control critical semiconductor production to assist in rolling out their national digital currency (DCEP).
But not sure how the newly nominated US Trade Rep, Ms. Katherine Tai who is Taiwanese American, specializes in Chinese Trade Enforcement, and is vocal about wanting to reshore jobs to America will factor into the math.
CCP moving against Taiwan would no doubt cause disruption in semiconductor manufacturing, but it would eventually (and should be) reshored to US. South East Asia allies who do not like China, but were cool to a US led coalition, who just wanted to plot their own regional path would suddenly court US support again.
Could the CCP strategy for Taiwan all along be to act like they want to take Taiwan to get the US to strengthen ties and share knowledge and tech, knowing our naval doctrine of controlling access to oceans, in order for CCP to get access to anything the US passes to Taiwan through already developed business links between Taiwan and the mainland thanks to the cultural pressure of guanxi? Possibly.
All of this is going on while the US continues to show the world just how little they really care about peace in the Middle East anymore making the CCP feel like they are running out of time to break out of the South China Sea and control their own fate.
South Korean ship taken by Iran? Don’t care. Iran shipping oil? Thanks we’ll confiscate the entire shipment. And just to make sure everyone got the fax, all sanctions stay on in Iran, plus no new weapons to Saudi Arabia.
The CCP hate their oil supply to modern life being vulnerable, hate watching America not care about peace in the Middle East anymore, but because of the geographic, political, economic, and social aspects of the South China Sea, they only have bad options.
A Fistful of Dollars for Our Allies!
You may be asking, what in the world does American naval doctrine, the South China Sea, the US not caring about Middle East oil stability, and the most important strait for half the world’s population have to do with my personal investing?
I like to look at different angles to help me understand which places will be interesting for investing in the future that will do well outside the US.
In a decentralized world, good geography will be one of the scarcest and most valuable assets on the planet again and it is currently undervalued since for most, they grew up in a world where geography hasn’t mattered.
I was thinking about this reading more of Anthony Deden’s writing; good investments should be scarce, durable, and independent.
I started thinking about geography in a decentralized world, and remembering my time in Asia, thought what is more scarce, durable, and independent than the Strait of Malacca?
This helps me think how to diversify investments geopolitically, while also understanding which areas to avoid in a region, like I think the CCP has serious problems for the reasons outlined above, but am bullish on Asia. Just specific places in Asia, like Singapore, Malaysia, and Indonesia.
The more I thought about how US naval doctrine will dictate responses to anything China does in earnest, it made a lot of sense from a variety of angles that Singapore, Malaysia, and Indonesia will do well. Plus I really like Singapore and Kuala Lumpur as cities, the times I have been there the people are fantastic, they are cosmopolitan cities sitting at the intersection of global trade.
In addition, I like Indonesia and Malaysia’s demographics, which are important for a healthy real economy over this next decade specifically as the developed world grapples with an aging demographic, and I think Singapore only continues to become a stronger Asian financial center with China tightening its grasp on Hong Kong.
The Strait of Malacca is already one of the most strategically important pieces of geography on the planet and will be one of the areas in a decentralized world which the US will always maintain a strategic interest since how goes the Strait of Malacca so goes half the world.
Denying China control and influence over their own most vital maritime chokepoint is an ABSOLUTE and backed by over a century of naval doctrine.
The US Navy started the process of resurrecting the 1st Fleet which has been inactive for over four decades specifically to focus on the Strait of Malacca and the Indian Ocean. We’ll see if this continues under the new President, if it does, I would not be surprised to see 1st Fleet established in Singapore, similar to Bahrain’s 5th fleet, a flagged fleet command where assets are tasked as needed.
Singapore is already a working port for the US Navy, so a lot of that infrastructure is in place for fueling, repairs, vendors, logistics, all resources a Fleet Command would need, although India would make a lot of sense too, maybe more so if there was dollar flow to help with naval projects.
Personally I don’t think it is a big deal one way or the other if 1st Fleet is resurrected or stays in the history books.
Dollar diplomacy goes a long ways, and there is a lot of things the US can do to assist the region without increasing their military presence and in the decentralized future, think we see a more balanced approach (read: dollars for allies) and the Strait of Malacca will be an important area for that.
After all, it is not by chance that the World Economic Forum was held in Singapore, or that Singapore is now being called “The Switzerland of Asia.”
Words and ideas matter, and when you say ‘Switzerland’ you think of neutral, strong, safe, impregnable.
Or in the case of the Strait of Malacca, scarce, durable, and independent. I will be looking for opportunities there in the future, just thought I’d share my thought process.
See you out there, Radigan