Living Next Door to China

By Aung Zaw 6 March 2015

When a New York Times editorial in January criticized China’s “wholesale looting” of Myanmar’s natural resources, the Chinese foreign ministry was quick to dismiss the charge as distorted.

However, if there was a reliable opinion poll to gauge how ordinary people in Myanmar view their giant neighbor, the results would likely be mixed.

Many Myanmar remain suspicious of Chinese investment and resent past Chinese mega projects that have had negative social and environmental impacts. Thus, a quick embrace of Japanese, South Korean and Western businesses has been evident as the country opens up.

When President U Thein Sein suspended the controversial Chinese-led Myitsone dam project in Kachin State in September 2011, many people applauded the decision. But a more courageous and comprehensive review of controversial development projects, including Chinese-backed ventures, is needed—in consultation with local communities.

China remains Myanmar’s largest source of investment, channeling between US$14- to $20 billion into the country since 1988. The energy-hungry country has poured money into hydropower projects in Myanmar’s ethnic regions, and its three major oil corporations have a strong foothold.

After the government suspended the Myitsone dam project, and following public outcry over the controversial Chinese-backed Letpadaung copper mine project, some civil society groups felt a wholesale review of Chinese investment was imminent. After all, some of these projects that attracted widespread opposition had become political time bombs for Naypyitaw.

What few realize are the extent of ties, reinforced through lucrative contracts and kickbacks, between Myanmar generals and Chinese businessmen. The government has generally shown a reluctance to confront these connections and push back against unscrupulous Chinese investors.

The political dimension to anti-Chinese sentiment in Myanmar also cannot be overlooked. Following the crushing of the 1988 democracy uprisings in Myanmar, China became a major arms supplier and supporter of the ruling junta, filling the void left by Western nations who slapped sanctions on the repressive regime.

In the view of many people, it was China that propped up the junta.

However, under Myanmar’s current quasi-civilian government, policy toward Beijing is beginning to change—at least on the surface. The suspension of the Myitsone dam project seemed the first sign that a review in China policy may be on the cards.

The political opening in Myanmar, and the courting of allies in the West, surprised Beijing. The US appointed an ambassador, eased economic sanctions and President Barack Obama made his first historic visit to the country in 2012. The United States has even allowed for limited military engagement with the once pariah state.

Beijing has also observed officials of Myanmar’s newly found American and European allies visit areas along the border with China. It is a testing time for Beijing which must be re-evaluating the extent of its political influence in the country. Indeed, political and economic reforms in Myanmar since 2011 have only raised the stakes higher.

Myanmar is undergoing a strategic rebalancing that is intriguing, to say the least. Recent conflict in border areas such as Laukkai (also spelled Laogai), where martial law was declared last month, and the slow but steady reassertion of influence in “Chinese cities” in Myanmar, will be vital to watch.

The military seems determined to assert its power and authority in areas close to the Chinese border. Perhaps this demonstrates that the Myanmar Army now feels confident it can control ethnic ceasefire groups further south, such as the Karen and Mon, and turn its attention toward territories along the China border, where it has never fully established its presence.

This strategy runs the risk of attracting the ire of Beijing, which doesn’t want to see instability along its border. Further complicating bilateral relations between the two neighbors is the fact that some Chinese officials in Yunnan Province remain sympathetic to certain ethnic armed groups across the border.

Beijing well understands Myanmar’s strategic importance as a gateway to the Indian Ocean and will not easily surrender influence in its smaller neighbor. Parallel oil and gas pipelines linking Rakhine State’s Kyaukphyu with Yunnan Province—now both operational—are just one example of the important ongoing economic linkages between the two countries.

In the past, Myanmar’s leaders have habitually feared China. The late Prime Minister U Nu, who held numerous meetings with Chinese leaders to settle several disputes, once publicly expressed this national anxiety in a statement after the Chinese Communist Party assumed power in 1949.

“Our tiny nation cannot have the effrontery to quarrel with any power,” he said. “And least among these, could Burma afford to quarrel with the new China?”

U Nu was quite correct. But it remains to be seen how the contemporary government, both before and after national elections slated for late-2015, will manage evolving relations with the regional superpower.

Naypyitaw could start by heeding the grievances of local communities and reassessing Chinese-bankrolled development projects that are destroying the environment. This could form the crux of a more equitable and constructive relationship with Beijing that puts people over profit.

This article first appeared in the March 2015 issue of The Irrawaddy magazine.