YANGON—Myanmar on Sunday signed a memorandum of understanding (MoU) with China agreeing to establish the China-Myanmar Economic Corridor (CMEC), part of Beijing’s Belt and Road Initiative, according to a statement from the China National Development and Reform Commission.
The agreement was signed by Myanmar Minister of Planning and Finance U Soe Win and He Lifeng, chairman of the National Development and Reform Commission (NDRC). The NDRC, China’s top economic planning agency, aims to construct basic infrastructure across key economic centers in Myanmar.
The estimated 1,700-kilometer-long corridor will connect Kunming, the capital of China’s Yunnan Province, to Myanmar’s major economic checkpoints—first to Mandalay in central Myanmar, and then east to Yangon and west to the Kyaukphyu Special Economic Zone (SEZ).
According to the statement, the two officials discussed the agreements between the leaders of the two countries and ways to promote the economic corridor’s construction.
The 15-point MoU was finalized at the working-group level in February, according to Myanmar’s Directorate of Investment and Company Administration (DICA). Under the MoU, the governments agree to collaborate on many sectors including basic infrastructure, construction, manufacturing, agriculture, transport, finance, human resources development, telecommunications, and research and technology.
To implement construction of the economic corridor, related ministries in both countries are required to form working groups and joint committees, so that the ministries can set priorities in terms of infrastructure development projects.
Chinese Foreign Minister Wang Yi announced the proposal to build the CMEC following a meeting with State Counselor Daw Aung San Suu Kyi in Naypyitaw in November 2017. Wang said the economic corridor would enhance investment in development and trade under Chinese-Myanmar cooperation as part of the Belt and Road Initiative (BRI).
The BRI is Chinese President Xi Jinping’s signature foreign policy project. Unveiled in 2013, it is also known as the Silk Road Economic Belt and the 21st-Century Maritime Silk Road. The project aims to build a network of roads, railroads and shipping lanes linking at least 70 countries from China to Europe passing through Central Asia, the Middle East and Russia, fostering trade and investment.
Myanmar occupies a unique geographical position in the BRI, lying at the junction of South Asia and Southeast Asia, and between the Indian Ocean and southwestern China’s landlocked Yunnan province.
In recent months, Beijing agreed to a new deal with the new chairman of the Kyaukphyu SEZ vowing that the project will not lead to an excessive debt burden on the Myanmar government. Kyaukphyu is a key strategic project under the BRI, as it is expected to boost development in China’s land-locked Yunnan province. The project will provide China with direct access to the Indian Ocean and allows China’s oil imports to bypass the Strait of Malacca.
In June, State Counselor Daw Aung San Suu Kyi met with Chinese Defense Minister Wei Fenghe in Naypyitaw to discuss bilateral relations. At the meeting, Daw Aung San Suu Kyi vowed to strengthen cooperation on the BRI with China, Chinese media reported.
China is Myanmar’s top investment partner. According to DICA, China invested USD20.01 billion between 1988 and May of this year in the country.