Over the years, China has expended considerable effort to improve its neighborhood relations, with the goal of maintaining stable borders and a viable trading environment. In so doing it has undertaken significant diplomatic efforts in maintaining networks among governments and governing elites. As time passes, one of the main shortcomings of this policy approach is becoming evident: China is increasingly finding itself at odds with non-governmental actors. Myanmar is a case study.
China’s interests and investments in ethnic areas of Myanmar, and Kachin State in particular, are increasingly touching on fundamental questions of political self-determination and with it national conciliation. The issue of disposition over land and resources is a matter of a constitutional process, something that Chinese actors seem to ignore.
In dealing with issues concerning Kachin State, a larger pattern of uncoordinated actors and self-serving interference has become evident. Until the transition from the Tatmadaw to civilian rule and the gradual lifting of international sanctions, China almost had carte blanche in its dealings with Myanmar. Deals with the elite did not go unnoticed but had no serious repercussions either inside or outside the country. Now, however, with an evolving civil society and greater prominence of inter-ethnic reconciliation on the national agenda, China’s operations have come under increasing scrutiny.
Officially, China has in the past described its interests in Myanmar as stability, border security, security of its investments, and connecting landlocked Yunnan Province to neighboring markets. In pursuing these interests, however, it has become difficult for Beijing to cover up its shortcomings and deal with increasingly negative perceptions across Myanmar society.
Beijing is being forced to realize that its focus on strictly inter-governmental relations, taking a revisionist stance on the 1947 Panglong agreement on a diplomatic level, while ignoring the needs and interests of ethnic nationalities, no longer serves its interest. Halfhearted engagements at the local level and poor crisis management have added to the widespread perception that China is solely concerned about the security of its business operations. In view of ethnic groups having potentially a greater impact on government policies and with existing investments at stake, China’s approach has become more ambiguous with respect to its intentions and stance towards domestic issues in Myanmar.
In Kachin State, two Chinese investments with diplomatic relevance had been at stake: the Myitsone confluence hydroelectric power plant project and the Sino-Burma pipelines owned by China National Petroleum Corporation (CNPC). In both projects Chinese SOEs by and large lacked long-term vision and ignored the investment environment. Myanmar so far lacks a system that would provide titles for land. Companies such as CNPC and China Power Investment Corporation (CPI) took profit from facile resettlement processes. However, they failed to provide sufficient compensation to enable those displaced to rebuild their livelihoods.
Unlike the pipeline project, the newly formed civilian government suspended the Myitsone Dam construction. The confluence area remained a restricted zone. According to local sources, Chinese companies were using the area for gold mining. As in other places, Chinese companies were able to bring in heavy machinery, thereby putting local extraction enterprises out of business. Mining agents cause major environmental degradation, polluting water sources and are becoming a public health issue.
Charm offensives on the part of Chinese SOEs and agencies to redress negative perceptions among the local population, with the ultimate goal of resuming the project under the next presidency, might backfire and achieve the opposite result. CPI negotiators tried to offer greater incentives by better providing for local needs. Yet, the devil is in the details, and the idea that China is playing a double game is already deeply ingrained in perceptions on the ground. To make a difference, China would have to show sincere interest in developments on the ground and understand the changing political context of its engagements.