Kachin State Approves Chinese-Backed Business Park in Border Town

By Nan Lwin 27 February 2020

YANGON—The Kachin State parliament approved a proposal on Thursday to implement a Chinese-backed business park project in the border town of Kanpiketi, a part of Beijing’s grand infrastructure plans for its Belt and Road Initiative (BRI).

Proposed in 2018, the Kanpiketi Business Park will cover nearly 70 acres in the border town in northern Kachin State’s Special Region 1. The area is controlled by the New Democratic Army-Kachin (NDAK) militia, which is allied with the Myanmar military.

At an estimated cost of US$22.4 million, the project will be developed by Myanmar Heng Ya Investment Development Company Ltd, a joint venture of Myanmar’s Kampaiti Development Company Ltd and China’s Yunnan Tengying Trading Company Ltd.

According to the Directorate of Investment and Company Administration (DICA), the sons of NDAK militia founder Zahkung Ting Ying are directors at Kampaiti Development. In 2009, the NDAK was converted into a Border Guard Force (BGF), a government-sponsored militia, and still has significant influence in Special Region 1.

Yunnan Tengying Trading company limited is a subsidiary of Yunnan Baoshan Hengyi Industry Group. The Irrawaddy has learned Baoshan Hengyi also operates in the Kachin State capital of Myitkyina under the name Yunnan Tengchong Heng Young Investment Company (YTHYIC). Under that name, the company signed an agreement with the Kachin State government in 2018 to develop the US$400-million Myitkyina Economic Zone on 4,700 acres of land along the historic Ledo Road. The project has drawn criticism for lacking transparency.

State Minister of Finance, Revenue, Planning and Economy U Wai Lin said that the Chinese company holds a 70 percent stake and the Myanmar company holds 30 percent of the joint venture company.

According to the Kachin government, local people in the project area will be displaced but the number of people who will be impacted is still unknown.

Local lawmaker H La Awng told The Irrawaddy he was cautious about the project.

“We are not opposed to projects for development in that area,” he said. “But we warned them that they must have proper negotiations with the local people before the project begins.”

The business park is one of three cross-border economic cooperation zones under the China-Myanmar Economic Corridor (CMEC) agreement. The CMEC will reach from China’s Yunnan Province to Mandalay in central Myanmar and then stretch south to Yangon and west to the Kyaukphyu Special Economic Zone (SEZ) in Rakhine State.

The Myanmar government first agreed to build the cross-border zones during a visit by State Counselor Daw Aung San Suu Kyi to Beijing to attend a forum on the BRI in 2017. Beijing and Naypyitaw then signed a 15-point memorandum of understanding (MoU) on the CMEC in 2018.

The Myanmar government approved three sites in Kachin and Shan states in 2018 at the first implementation meeting of the Economic Cooperation Zones Central Committee in Naypyitaw. The cross-border zones will be developed in Kanpiketi Town, Shan State’s Muse Township and Shan State’s Chinshwehaw in Laukkai Township, a part the Kokang Self-Administered Zone.

The name of the Kanpiketi project was changed from a cross-border economic cooperation zone to the Kanpiketi Business Park Project when the Cross Border Economic Cooperation Zone Central Committee met last October in Myitkyina.

The business park includes plans to construct a South Asia–Southeast Asia Culture Park (Zone A) on 12.65 acres, two Trade and Logistic Zones (Zones B and D) on 8.8 acres and 12.7 acres, a Border Inspection Gate (Zone C) on 5.1 acres and a Business Shop (Zone E) on 1.65 acres.

According to U Wai Lin, the joint venture company will implement Zone C first, which includes a border inspection gate, government staff housing, a waiting area and related facilities. The minister said the company plans to invite other investors to construct the other zones.

The Irrawaddy has learned that the Kachin State government approved the project last Thursday during a government meeting.

“As a part of the BRI, China is working on upgrading the border area. We need to upgrade our infrastructure as well,” U Wai Lin said.

The finance and planning minister added that the government is prepared to sign the MoU with the joint venture company to implement the project. A draft of the MoU was submitted to the offices of the Union and state attorneys general last year.

The state government has also submitted the project to the National Economic Coordination Committee (NECC) for inclusion in the new Myanmar Project Bank.

Launched in 2013, the BRI is Chinese President Xi Jinping’s signature foreign policy project. It aims to build and expand roads, rail lines and shipping lanes linking at least 70 countries from China to Europe through Central and South Asia, the Middle East and Russia to boost trade and investment.

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