Rebel Strikes Cast Shadow on China’s BRI Projects in Myanmar

By Nan Lwin 20 August 2019

YANGON—A series of recent clashes between the Myanmar Army and an alliance of ethnic armed groups in northern Shan State has raised concerns over the feasibility of Beijing’s push to implement the China-Myanmar Economic Corridor (CMEC), part of its region-wide Belt and Road Initiative (BRI). They have also raised questions about the wisdom of the strategy embraced by both the Chinese and Myanmar governments to move ahead with the scheme before Naypyitaw has reached peace deals with rebels in the region.

In a three-day period last week, Northern Alliance members the Ta’ang National Liberation Army (TNLA), the Arakan Army (AA) and the Myanmar National Democratic Alliance Army (MNDAA) blew up four major bridges along the main route to the two most important trade hubs on the Myanmar-China border. As a result, two major border gates in Shan State—in Muse (across the border from Ruili, in China’s Yunnan Province) and Chinshwehaw in Laukkai Township (part of the Kokang Self-Administered Zone)—have been shut down.

The two locations play important roles in China’s infrastructure plan for Myanmar and in the BRI, Beijing’s grand plan to build an infrastructure network through Europe, Central Asia, the Middle East and Russia to foster trade. Since the CMEC was officially announced in 2017, China has prioritized cross-border economic cooperation zone projects in Muse and Chinshwehaw.

Myanmar officially became a BRI partner country after signing a 15-point MoU establishing the CMEC in September last year. Utilizing the interconnected transportation infrastructure of China and Myanmar, the 1,700-kilometer CMEC will run from Kunming in China’s Yunnan Province through Muse to Mandalay in central Myanmar, and then branch out to Yangon and the Kyaukphyu Special Economic Zone (SEZ) in western Rakhine State.

As part of the CMEC, China plans to implement the Muse-Mandalay Railway project in Shan State. The proposed route originates with the Ruili East Railway in Yunnan and runs through Muse to Mandalay Region. Along the way the railway will run through Kutkai, Theinni, Lashio, Hsipaw and Kyaukme in Shan state—areas controlled by ethnic armed groups and the flashpoints of the current fighting—as well as Mandalay’s Pyin Oo Lwin, which was also struck by a rebel attack last week.

The 431-kilometer (268-mile) railway is envisioned as a key component of the plan to improve connectivity in Southeast Asia and is economically and strategically important for both China and Myanmar.

The railway is an initial phase of a larger strategic rail link that Beijing plans to build, along with a parallel expressway, from Kunming to Kyaukphyu in Rakhine State, along with a separate road running through northern Myanmar, India’s northeastern states and Bangladesh under the Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC).

Experts have already warned that the project will face many challenges, particularly the armed conflicts in project areas and resistance from local people, who have a negative sentiment toward China based on past impressions of the country’s investment in the country.

There are six major ethnic armed groups active in the area between Naung Cho (Kyaukme District) and Namkham (Muse District): the Kachin Independence Army (KIA), Shan State Army-North (SSA-N), Restoration Council of Shan State (RCSS), TNLA, AA and MNDAA. Of these, five have not yet signed the Nationwide Ceasefire Agreement (NCA) and have frequently clashed with the Myanmar military (KIA, SSA-N, MNDAA, TNLA and AA).

Despite the government’s lack of peace deals with the rebels in the area, both China and Myanmar have been pushing forward aggressively with the cross-border economic cooperation zone projects. Last week, the permanent secretary of Myanmar’s Commerce Ministry, U Khin Maung Lwin, told The Irrawaddy that Myanmar is ready to sign a framework agreement on the border cooperation zone projects.

Speaking about the recent clashes in Shan State, Yangon-based ethnic affairs analyst U Maung Maung Soe told The Irrawaddy, “It is a major blow for China’s projects. They weren’t expecting this kind of outcome.”

“The CMEC won’t be successful as long as there is fighting,” U Maung Maung Soe said.

“Since there is a major security issue, they cannot do business. China and Myanmar need to consider not only making peace with ethnic groups, but also granting them their rights,” he added.

China has stepped up its role in the peace process in Myanmar, especially where it relates to conflict areas along the China-Myanmar border. In 2013, China played a role in the first peace talks held between the KIA and Myanmar government representatives, which were held in Ruili, a town on the Chinese side of the border.

In 2017, China acted as an official peace broker between the military and members of the Federal Political Negotiation and Consultative Committee, an organization that includes the KIA, AA, TNLA and MNDAA.

In June, the government met the four members of the Northern Alliance—the KIA, TNLA, AA and MNDAA—for talks on signing bilateral ceasefire agreements in Mong La Special Region 4, which is controlled by the National Democratic Alliance Army. The government has not met with the groups since then, though they were originally supposed to hold more meetings in order to sign bilateral agreements and discuss details of troop deployments and codes of conduct.

Three of the alliance’s members—the TNLA, AA and MNDAA—rejected the government’s proposed venue options (Naypyitaw, Yangon, Myitkyina or Lashio), citing a lack of trust. They have proposed meeting in a neutral place, either in an area of Myanmar not controlled by the government or in China.

Both China and Myanmar have claimed that implementing the CMEC will bring peace and stability to northern and northeastern Myanmar. Chinese think tanks often try to persuade people in Myanmar that the CMEC will support national reconciliation—one of the promises made by the Daw Aung San Suu Kyi-led government.

Not everyone is convinced, however. “Normally when there are Chinese projects, there is more fighting. It is inevitable, because the Myanmar military tries to protect China’s interests or launch clearance operations in the project areas,” said Khon Ja, a Kachin Peace Network coordinator.

“Unless there are negotiations with local people and ethnic groups about the projects, we will see more fighting in those areas,” Khon Ja said.

The TNLA, AA and MNDAA claimed responsibility for the recent attacks, saying that “new counteroffensives were necessary against the military … in order to reduce military pressure” in their regions.

Tatmadaw spokesperson Brigadier-General Zaw Min Tun told The Irrawaddy that the

rebel forces’ main goal is to cut off communications and border trade routes, rather than to attack military outposts.

However, a spokesperson for the TNLA, Mong Aike Kyaw, told The Irrawaddy the attacks are not targeted at CMEC projects or trade routes with China.

“We are not destroying trade routes and China’s business. We launched the attacks …as we already said in the statement [to reduce military pressure],” he said.

He declined to comment on whether China had responded to the alliance regarding the attacks.

In June, China dispatched a new ambassador to Myanmar, Chen Hai. Since his arrival, Chen has met at least twice with each Union minister in the cabinet of the National League for Democracy-led government. Chinese Embassy statements show that he has pushed Myanmar government officials for deeper “practical cooperation” on the BRI.

On Aug. 1, Chinese representatives and officials from Myanmar’s Industry Ministry held the first meeting of the CMEC Industry and Investment Cooperation Group, which aims to promote production-based investment and to implement industrial zones along the CMEC.

The head of the China desk at the Institute of Strategy and Policy (ISP)-Myanmar, Daw Khin Khin Kyaw Kyee, told The Irrawaddy, “Conflicts along the CMEC have not dented China’s enthusiasm. They are pushing the Myanmar government very hard to accelerate those projects.”

When State Counselor Daw Aung San Suu Kyi attended the 2nd Belt and Road Forum for International Cooperation in Beijing in April, the Myanmar government and China signed three agreements including a Memorandum of Understanding on the CMEC Cooperation Plan (2019-2030).

A government statement at the time said economic development would bring peace and stability to the conflict-affected region.

During the forum, Daw Aung San Suu Kyi said BRI projects selected in line with Myanmar’s national plan and priorities would contribute to much-needed improvements in infrastructure, which she said would enhance not only domestic but also cross-border connectivity.

“The Chinese and Myanmar [governments] both believe the ultimate goal of the CMEC is to achieve peace and development at the same time. They need to reconsider whether that is possible,” Daw Khin Khin Kyaw Kyee said.

Looking at the overall proposed route of the CMEC—from the country’s northeast to the west—the corridor’s vulnerability to armed conflict is not confined to northern Shan State, where fighting is ongoing. In Myanmar’s western Rakhine State, AA rebels have been battling with government troops since late last year. The AA is also a member of the alliance that launched the current coordinated attacks in northern Shan State. Rakhine State is home to China’s Kyaukphyu Special Economic Zone (SEZ). In late July, the AA fired rockets at two Myanmar naval vessels, killing an army captain and two naval personnel. The attack happened just 20 km from the SEZ.

On Monday, Chinese Foreign Ministry spokesperson Geng Shuang said China “strongly condemned” the attacks carried out by the ethnic armed groups, saying they posed a threat to peace and stability in that area and caused casualties.

China takes peace and stability in border areas seriously and supports the peace process in Myanmar, he said.

“China has the power to put pressure on the ethnic groups. They could order the fighting to stop, but the halt would only be temporary,” Khon Ja said. “As long as the peace negotiations are just superficial, there will be no long-lasting peace,” she said.

Experts suggested China consider working on a conflict sensitivity assessment along the CMEC, in order to avoid fueling existing conflicts and provoking new grievances among local people.

“Both governments first need to find solutions using political means [with armed groups]. If they push the CMEC without solving [the conflicts], this will only complicate the situation,” Daw Khin Khin Kyaw Kyee said.