Alaco

26.09.2016 | Myanmar and China look to build bridges

Myanmar has sought to repair relations with China in an apparent effort to help resolve its long-running civil war and spur economic growth.

America’s recent decision to lift its remaining sanctions on Myanmar overshadowed a no less significant diplomatic triumph for the Naypyidaw government.  Before President Barack Obama’s surprise removal of trade restrictions, announced during a visit by Aung San Suu Kyi, Myanmar’s de facto leader paid a visit to Beijing. There she was given the red-carpet treatment, with President Xi Jinping seemingly as eager as his Burmese guest to press ahead with what they hope will be a new chapter in an often strained relationship between the two countries. 

The visit to Beijing was the culmination of China’s long-standing attempts to cultivate the veteran dissident-turned-politician, especially after relations with Myanmar cooled following the start of its transition to democracy five years ago. Chinese officials have embraced Suu Kyi’s efforts to improve bilateral ties and seem satisfied that under her leadership Myanmar is not about to pivot towards the US.  However, concerns over Naypyidaw’s rapprochement with Washington are likely to have been a key factor in China’s willingness to repair relations with its strategically important neighbour.

During Myanmar’s years of international isolation, Beijing came to its aid, becoming the country’s biggest foreign investor and trading partner. China helped to build hydro-electric plants, oil pipelines, transport infrastructure and developed the mining sector.  But the relationship soured because the Burmese felt they were over-reliant on the Chinese and worried about China’s increasing economic stake in Myanmar and perceived exploitation.

The tensions came to a head in 2011, when the leader of Myanmar’s first semi-civilian government President Thein Sein sought to distance his country from its neighbour. He suspended Chinese construction of the $3.6 billion Myitsone dam – which, on completion, would have exported around 90% of its electricity production to China. The project, which had met with fierce public opposition over its environmental and social impact, appeared to symbolise Beijing’s overbearing influence.  To add insult to injury, Myanmar also put a halt to other Chinese-backed investments, including the development of the Letpadaung copper mine and a railway line running from China’s border to the Bay of Bengal.

The deterioration in relations is said to have put a break on major Chinese investment in Myanmar. But that may well be about to change, particularly if Suu Kyi is able to make progress with moves to resolve a decades-long conflict with ethnic minorities demanding greater autonomy. She sees the peace process as key to sustained economic development.  Significantly, Beijing has pledged to support efforts to end the violence, securing the participation of several rebel groups with links to China in a recent peace conference.

In the past, China has played a double game of supporting its neighbour economically while funding armed groups along the border with Myanmar. But now Beijing officials appear to have calculated that it is in their interest to stop the lawlessness, which some observers believe could give new impetus to Chinese plans to build transport infrastructure connecting China with the Bay of Bengal, strengthening trading links with South Asia and the Middle East.  A China-led consortium has already received the go-ahead to build a deep-sea port and industrial zone at Kyaukphyu in the Bay of Bengal, from where Chinese pipelines carry oil and gas to China.

However, a major test of Myanmar’s improved relations with China will be whether Suu Kyi agrees to revive the Myitsone dam project and other stalled hydroelectric schemes.  Chinese officials are eager for her to do so, but she is keenly aware of public opposition. With civil society activists urging her not to give in to Beijing, she has set up a commission to review the social and environmental impact of the power-generation investments.

In a sign of Beijing’s impatience, an influential Chinese newspaper, the Study Times, warned this month that “extreme  comments”  from some Myanmar media, NGOs and other opponents of the energy projects had been “hugely damaging” for joint cooperation projects.  Beijing officials have told Chinese companies investing in Myanmar to protect the local ecology and environment, yet many Burmese are clearly sceptical.

This poses a difficult dilemma for Suu Kyi. She knows China’s involvement in big infrastructure developments and support for the peace process is required to speed up Myanmar’s economic progress. But she cannot afford completely to ignore those who remain suspicious of China, since their voices are only likely to get louder as Myanmar continues its transition to democracy.