Despite ongoing battles with the ethnic Arakan Army (AA) in Rakhine State’s Kyaukphyu, the regime remains committed to developing China-backed projects in the area.
At Tuesday’s meeting of the Central Committee on Myanmar Special Economic Zones, deputy junta chief Soe Win stressed the Kyaukphyu Special Economic Zone (SEZ) is crucial to Myanmar’s geopolitical and economic interests, junta media reported.
“This project must succeed,” he told the meeting.
He emphasized that implementation of the Kyaukphyu deep-sea port would also boost cooperation with China, forming a vital link in the China-Myanmar Economic Corridor (CMEC) and the Belt and Road Initiative (BRI).
The Kyaukphyu SEZ and port are key to the planned 1,700-kilometer CMEC from Kunming in China’s landlocked Yunnan province to the Indian Ocean, offering direct access to the Indian Ocean and reducing China’s reliance on the Malacca Strait for energy imports.
However, fighting has been raging in Kyaukphyu Township for weeks, with the AA attacking the regime’s Danyawaddy naval base and the regime responding with airstrikes, according to residents.
The original Kyaukphyu SEZ-port project contract, signed in 2015 under Thein Sein’s quasi-civilian government, granted Chinese state-owned developer CITIC an 85 percent stake and Myanmar 15 percent. In 2018, the now-ousted National League for Democracy government renegotiated the contract, increasing Myanmar’s share to 30 percent and scaling down the project amid concerns of a potential debt trap.
The SEZ has a budget of US$ 1.3 billion, while the port is expected to cost $7.3 billion. They will span 150 hectares on Maday Island and 96 hectares on Ramree Island in Rakhine’s Kyaukphyu District.
In December 2023, the regime and CITIC signed an addendum extending the port’s completion date by 18 months to June 26 this year. No construction progress has been seen on the ground, however.
At Tuesday’s meeting, Soe Win called for progress on the port before the June deadline.
Regime boss Min Aung Hlaing launched the renewed Belt and Road push during Chinese New Year celebrations in late January, emphasizing the BRI’s importance for regional and global economic growth. His announcement came after China intervened to halt the advance of resistance forces in northern Shan State, pressuring the Myanmar National Democratic Alliance Army (MNDAA) into signing a truce with the junta in mid-January.
Last month, the regime passed the Private Security Services Law, opening the door for Chinese security troops to deploy in Myanmar to protect Chinese investments. Residents report that Chinese security personnel have already arrived in Kyaukphyu.
