Behind Myanmar -China pauk phaw relations

Irrespective of India’s Look East, US sanctions or UK sanctions in Myanmar, China has been out there in Myanmar, parked with a consistent policy and focus—and backed by economic muscle.

myanmar, china
Illustrations: Rohnit Phore

When the mighty fall, they fall hard! What greater irony than witness the beacon of democracy, Myanmar State Counsellor Aung San Suu Kyi, defend the country’s military against genocide (of the Rohingya people, a Muslim minority) at the International Court of Justice in The Hague, and inch towards China’s orbit? Over the last decade, Myanmar has been open to the West, to India and the larger neighbourhood. Pragmatically speaking, because of the Rohingya issue, the ensuing sanctions and the clampdown by the West, Myanmar sees an economic lifeline in China. But China aside, Myanmar will continue to hedge its bets with other countries.

The talk of Myanmar gravitating towards China’s orbit has emerged following President Xi Jinping’s two-day trip to Myanmar, a ‘historical moment’, as Xi called it. The trip, the first in 19 years by a Chinese leader, visibly shored up China’s Belt and Road Initiative (BRI) in Myanmar, with 33 China-Myanmar deals inked through memorandums of understanding (MoU) and agreements. Xi also met military chief General Min Aung Hlaing, singled out for sanctions by the US for the abuses against the Rohingyas.

China, the old hand in Myanmar

That China has recently stepped up its ante in Myanmar is a fallacy. In reality, China is an old hand in Myanmar, maintaining brotherly ‘pauk phaw’ relations, having recently completed 70 years of diplomatic relations with the country.

China’s presence seems exacerbated because of the circumstances and spotlight on China, Myanmar and the diminishing democratic credentials of Aung San Suu Kyi. Myanmar’s controversial 2017 military crackdown and persecution of Rohingyas has been described by the United Nations as a “textbook example of ethnic cleansing.” A million Rohingyas fled to Bangladesh, and are eking out a living in refugee camps in the Cox’s Bazar district of southern Bangladesh.

To be fair, China has long disengaged economics from human rights issues. China and Myanmar are tied by mutual need. Myanmar needs China’s economic support, and China needs Myanmar’s support for its BRI.
China “pulling Myanmar from the sludge”

The Global Times called China-Myanmar relations as a “win-win cooperation based on mutual respect.” But it raised eyebrows saying that China was willing to “pull Myanmar from the sludge, rather than the Western world that badmouths the nation.”

In reality, in the last decade, China has been “pulling Myanmar from the sludge.” China’s landlocked Yunnan province and Myanmar share a long border, which China has turned into an economic opportunity. China’s bilateral trade with Myanmar has been steadily growing from $2.9 billion in 2009 to $4.4 billion in 2010 to $10.8 billion in 2016-17. While Myanmar-India border trade is marginal enough to be overlooked, cross-border trade between China and Myanmar is flourishing.

Four border trade points along China-Myanmar have recorded a trade volume of $3.3 billion between April-September 2018. Muse (a border town in the northern Shan state, connected to Ruili, a border town in Yunnan province) accounts for $3 billion of the total. Cross-border trade accounts for half of China’s trade with Myanmar. China exports machinery and cell phones; Myanmar exports primary products such as agricultural products (mangoes), teak and jade.

China may be an old player, but is not the only player in Myanmar. Thailand is an important player, too, boasting of a bustling cross-border trade with Myanmar. Mae Sot, a district in western Thailand, is connected to Myawaddy, Myanmar, by the Thai-Myanmar Friendship Bridge. For long, Thailand was Myanmar’s largest trade partner and investor. Thailand-Myanmar border trade is going strong, and reached $2.28 billion in 2018-19.

In fact, in the last decade, China and Thailand have been the top two investors in Myanmar. A 2011 study by China experts of the National University of Singapore (NUS) based on Myanmar Statistical Organisation tallied Thailand as Myanmar’s lead investor ($10.4 billion, 60 projects), followed by China ($9.6 billion, 34 projects), the UK ($1.9 billion, 50 projects), the US ($240 million, 15 projects) and India ($220 million, seven projects).

Today, China and Thailand have been overtaken by Singapore as a lead investor. Together, Singapore and China account for more than half of the foreign investment, followed by Thailand and Hong Kong.

CMEC long in the making

Although China’s BRI and the China-Myanmar Economic Corridor (CMEC) have piqued interest and are in the spotlight, they have been around—only weren’t called so.

In 2008, much before the world knew what the BRI was, China and Myanmar signed an agreement to build the 771-km long oil pipeline from Myanmar’s west coast to Ruili, Yunnan (province), operational since 2017. Myanmar-China 793-km gas pipeline, parallel to the oil pipeline, runs from Kyaukphyu to Ruili, operational since 2013. Myanmar joined the BRI formally in 2018, signing a 15-point MoU establishing the CMEC.
China’s plans in Myanmar appear to have been re-framed and re-jigged as the BRI and the CMEC—panned out with components such as the Kyaukphyu Special Economic Zone (SEZ), the China-Myanmar Border Economic Cooperation Zone and the real estate project in Yangon, the New Yangon City Project.

China has long been seeking access to the Indian Ocean via the Bay of Bengal, a “gateway to the Indian Ocean” bypassing the Strait of Malacca. This explains China’s interest in the Kyaukphyu deep sea project, which is part of the Kyaukphyu SEZ led by China’s CITIC Group Corporation and backed by Thailand’s Charoen Pokphand Group. China has much at stake as the port will enable (landlocked) south China access the Indian Ocean. There is a railway project on the cards, too, linking Mandalay to the border town of Muse.

China-Myanmar win-win?

In 2011, Myanmar suspended China-backed Myitsone Dam project on the Irrawaddy River because of popular protests. Farmers and public have protested against China-backed projects, including the oil pipeline and a mining project. The Kyaukphyu port and SEZ are likely to be cleared, but after the necessary environmental and social impact assessments (EIA and SIA).

That China is an old player but one making the best use of the opportunity that the Rohingya issue has wrought on Myanmar is a foregone conclusion. But irrespective of India’s Look East, US sanctions or UK sanctions in Myanmar, China has been out there in Myanmar, parked with a consistent policy and focus—backed by economic muscle.

Although China-Myanmar relations look rosy, it may still be premature to jump to conclusions about Myanmar in China’s orbit. For Myanmar reeling under the Rohingya issue and China, it is business as usual, where, as the adage goes, nothing is a done deal, until it is done.

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First published on: 01-02-2020 at 01:01 IST