Myanmar Signs 3 Agreements at Belt and Road Forum

By Nan Lwin 26 April 2019

YANGON—Myanmar’s government signed two memorandums of understanding (MOUs) and an agreement letter with China at Beijing’s Belt and Road Forum on Thursday, detailing strengthened cooperation between the countries on the China-Myanmar Economic Corridor (CMEC), trade and technology.

According to the Ministry of Information, Myanmar State Counselor Daw Aung San Suu Kyi and Prime Minister of the People’s Republic of China Li Keqiang were present to witness the signing of the documents.

The ministry’s statement said that a China-Myanmar Economic Corridor cooperation (2019-2030) MOU was signed by Myanmar’s Ministry of Planning and Finance and the National Development and Reform Commission (NDRC), China’s top economic planning agency.

In September, a 15-point MOU for the CMEC was signed. The economic corridor is set to be part of Beijing’s ambitious Belt and Road Initiative (BRI) which aims to construct basic infrastructure connecting key economic centers in Myanmar. Under the MOU, the governments agree to collaborate on projects in a number of sectors including basic infrastructure, construction, manufacturing, agriculture, transport, finance, human resources development, telecommunications, and research and technology.

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).

Myanmar State Counselor Daw Aung San Suu Kyi is currently in Beijing to attend the second Belt and Road Forum and met Chinese President Xi Jinping on Wednesday.

Despite growing wariness among the public regarding unsustainable debt to China, during the meeting Daw Aung San Suu Kyi reassured the president of Myanmar’s support for the BRI and said that cooperating on it would benefit the well-being of the region and the world as a whole.

Many have been eagerly waiting to hear the outcome of discussions likely to be had between the leaders on controversial Chinese projects in Myanmar, especially on the Myitsone dam. However, neither side has announced details of such discussions yet.

During her meeting with Prime Minister Li Keqiang, the State Counselor discussed maintaining the import quota of 100,000 tons of rice from Myanmar to China and having better collaboration while implementing BRI infrastructure projects in Myanmar.

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.

The second MOU on the table at the forum was signed by China’s Ministry of Commerce and Myanmar’s Ministry of Investment and Foreign Economic Relations on cooperation between the countries in trade and the economy. The MOU outlines a five-year collaboration between Myanmar and China for the development of trade and the economic sector.

China is Myanmar’s largest trade partner and last week, the Myanmar government signed an agreement with the government of Yunnan province to practice a barter system at the border in order to promote trade cooperation. According to the agreement, Myanmar will export agricultural products to China at the Muse border trade zone and in return, Myanmar will buy construction materials, farm implements and fertilizers from China.

A third official document, an agreement letter, was signed by Myanmar’s ambassador to China U Thit Lin Ohn and China’s ambassador to Myanmar Hong Laing and outlines the countries’ collaboration on the economy and technology.

Myanmar occupies a unique geographical position in the global BRI plan, lying at the junction of South Asia and Southeast Asia, and between the Indian Ocean and southwestern China’s landlocked Yunnan province.

The proposal to build the CMEC was announced by China’s Foreign Minister Wang Yi following a meeting with the State Counselor in November 2017. Wang said the economic corridor would enhance investment in development and trade as part of the BRI.

The first Belt and Road Forum took place in 2017 and was attended by the State Counselor and saw the signing of an MOU of cooperation within the framework of the “Silk Road Economic Belt and 21st Century Maritime Silk Road Initiative.”

Last year in June, the State Counselor met China’s Defense Minister Wei Fenghe in Naypyitaw to discuss bilateral relations. After the meeting, Chinese media reported Daw Aung San Suu Kyi had vowed to strengthen cooperation on the BRI.

According to the Ministry of Planning and Finance, the chosen projects must align with national priorities as outlined in the Myanmar Sustainable Development Plan (MSDP), which was created to promote sustainability and balanced development arrangements.

China has proposed a total of 30 projects under the CMEC but Myanmar has only approved nine projects so far. Under the CMEC agreement, Myanmar’s government agreed to build three border economic cooperation zones in Shan and Kachin states.

The proposal claims that the CMEC would allow a direct flow of Chinese goods into the southern and western regions of Myanmar and that Chinese industries could transfer here in order to abate the rising labor costs and overcapacity of China’s industries. It said Myanmar would become a major trade hub between China, Southeast Asia and South Asia.

Under the CMEC agreement, China was granted permission to conduct a feasibility study for a Muse-Mandalay high-speed railway which is expected to link the two economic centers in Myanmar.