This battered harbour town on Sri Lanka’s southern tip, with its scrawny men selling even scrawnier fish, seems an unlikely focus for an emerging international competition over energy supply routes that fuel much of the global economy.

Just over the horizon runs one of the world’s great trade arteries, the shipping lanes where thousands of vessels carry oil from the Middle East and raw materials to Asia, returning with television sets, toys and sneakers for European consumers.

These tankers provide 80 per cent of China’s oil and 65 per cent of India’s. Japan, too, is almost totally dependent on energy supplies shipped through the Indian Ocean. Any disruption — from terrorism, piracy, natural disaster or war — could have devastating effects on these countries and, in an increasingly interdependent world, send ripples across the globe. For decades, the world relied on the powerful US Navy to protect this vital sea lane. But as India and China gain economic heft, they are moving to expand their control of the waterway, sparking a new — and potentially dangerous — rivalry between Asia’s emerging giants.

China has given massive aid to Indian Ocean nations, signing friendship pacts, building ports in Pakistan and Bangladesh as well as Sri Lanka, and reportedly setting up a listening post on one of Myanmar’s islands near the strategic Strait of Malacca. Now, India is trying to parry China’s moves. It beat out China for a port project in Myanmar. And, flush with cash from its expanding economy, India is beefing up its military, with the expansion seemingly aimed at China. Washington and, to a lesser extent, Tokyo are encouraging India's role as a counterweight to growing Chinese power.

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