China’s Dynamic Grip on Myanmar

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China’s Dynamic Grip on Myanmar

Beijing’s influence in Myanmar permeates multiple levels of engagement between the two neighbors.

China’s Dynamic Grip on Myanmar

Chinese President Xi Jinping, right, shakes hands with Myanmar State Counsellor Aung San Suu Kyi at the Great Hall of the People in Beijing, Wednesday, April 24, 2019.

Credit: Fred Dufour/Pool Photo via AP

China’s influence in Myanmar manifests on three different levels. At the bilateral level, the government and the military establishment of Myanmar receives diplomatic dividends for maintaining good ties with China. At the domestic political level, China’s relations with the country’s ethnic organizations makes it an important stakeholder in the ongoing reconciliation process. Finally, at the economic level, a lack of alternatives makes Naypyidaw reliant on Chinese investments, thereby ensuring favorable policies towards China over the longer term, notwithstanding regime changes.   

Despite Myanmar’s increasing outreach to the outside world, Chinese engagement with the military and political elites in the country is still strong. Although Aung San Suu Kyi’s relationship with China has been complicated given her stature as a pro-democracy leader, in her more recent political career as State Counsellor she has a pragmatic route with regard to foreign policy. Her official visits to China have been viewed as largely fruitful, resulting in a greater understanding between the two countries, and helping shield Myanmar from international ostracism.

According to Bertil Lintner, Myanmar’s ruling military junta decided to open up to the West in 2011 in order to reduce its dependence on China, but the Rohingya crisis has pushed Myanmar back toward China. Suu Kyi has been heavily criticized for her silence, but China has shielded her regime and the military in the UN by whittling down a Security Council statement drafted by the UK. Beijing also attempted to stop a Security Council briefing on the Rohingya issue and reduce the budget allocated for investigating the incidents in Rakhine State. Moreover, China has positioned itself as a mediator between Myanmar and Bangladesh, which agreed to the three-step solution to the Rakhine State problems as proposed by China: stop violence, start repatriation and promote development.

Besides being the biggest supplier of military hardware to Myanmar, accounting for 61 percent of weapons imported by Myanmar between 2014 and 2018, China has managed to carve a space in the domestic politics of Myanmar. China is indispensable to all political entities in Myanmar, including the Tatmadaw (Myanmar’s military). China’s inroads into the political roadmap of Myanmar is visibly evident from its role in the nationwide reconciliation with the ethnic rebels in the country. Eight ethnic groups signed a Nationwide Ceasefire Agreement (NCA) in October 2015. However, the more powerful ethnic groups abstained, including those along Myanmar’s northern border with China. Given the instability in its border region and the economic value of Myanmar’s location alongside the Indian Ocean, it is no surprise that China has invested politically in the peace process in Myanmar. China’s ties with the ethnic armed groups is not a recent phenomenon. For example, Beijing has maintained political, business, social and military ties with the powerful United Wa State Party (UWSP).

Weeks prior to the Panglong Peace Conference in May 2017, UWSP led the formation of a new seven-member Federal Political Negotiation and Coordination Committee (FPNCC). Its members include the Northern Alliance Myanmar Democratic Alliance Army (MDAA), Ta-ang National Liberation Army (TNLA), Arakan Army (AA) and the Kachin Independence Organization (KIO). The explicit purpose of FPNCC is to renegotiate the terms of the peace process and find an alternative to the NCA.

While the strength of these ethnic armed organizations (EAOs) and their opposition to the NCA was likely to put the entire peace process in peril, China has used its influence to bring some of the EAOs to the negotiating table in the previous year. FPNCC and Northern Alliance participated in the third Panglong Conference on China’s initiative. Amid increasing clashes between the two sides, China also facilitated negotiations between KIO and the Tatmadaw in Dali. Additionally, China organized a meeting between the other three EAOs of the Northern Alliance and the Myanmar government in Kunming. UWSP and KIO were present as observers. These three EAOs — TNLA, AA and MDAA — went on to issue a joint statement late last year, signalling their interest in joining the peace process. Following this, the Tatmadaw declared a four-month unilateral ceasefire in north and east, in order to improve conditions for negotiations. The ceasefire however, left out the regions were AA operates.

Peace continues to be elusive, as the AA has shifted its focus to Rakhine State, where clashes with the Tatmadaw have reportedly increased in recent weeks. At the same time, the government continues to carry out negotiations with other non-signatory EAOS, including the KIO. The biggest challenge to the effort will continue to be UWSP’s leadership of the bloc demanding a renegotiation of the terms. It is here that China’s intentions and its political maneuverability between the Suu Kyi government and its closest partners among non-signatory EAOs will be tested. At the same time, if the situation between Naypyidaw and the EAOs is maintained at a steady simmer, China will get to maintain its advantage, thereby, preventing other countries from increasing their influence in its bordering region.

A number of projects have been initiated in recent years as a sign of burgeoning cooperation between China and Myanmar. One of the flagship projects of China-Myanmar cooperation is the China-Myanmar Economic Corridor (CMEC), which is a part of China’s Belt and Road Initiative (BRI). CMEC will connect Yunnan province in China to the economic hubs of Mandalay, Yangon New City and the Kyaukpyu Special Economic Zone in Myanmar. This makes Myanmar a major access route to the Indian Ocean and a way to undercut China’s “Malacca Dilemma.” A 15-point Memorandum of Understanding (MoU) was arrived at between China and Myanmar on the CMEC. China’s proposal to build the CMEC was announced during a November 2017 meeting between Chinese Foreign Minister Wang Yi and Suu Kyi.

The fear of falling into a Chinese “debt trap” has been palpable in Myanmar, too. This concern is highlighted when one compares the Kyauk Phyu port and SEZ projects — which was awarded to China’s CITIC group — with the Thilawa and Dawei SEZs, being developed by Japanese investments. Unlike the Japanese projects where Myanmar retains controlling stakes, in Chinese investments, Chinese hold the 51 percent stake. However, it is also true that the CMEC needs financing and China remains the most viable state with the ability to do so.

Despite all the commentary about Myanmar’s political and economic opening, China has continued to be Myanmar’s most important trading partner and source of foreign investment, with Chinese enterprises investing in a substantial number of projects in Myanmar. After much speculation that Myanmar, in its intention to move toward political transition was showing signs of moving toward western countries, growing political bonhomie between China and Myanmar has become visibly significant again, showing the extent of China’s grip over the politics and economics of Myanmar.

Monish Tourangbam is Assistant Professor at the Department of Geopolitics and International Relations, Manipal Academy of Higher Education (MAHE), India.

Pawan Amin is a Research Scholar at the Centre for East Asian Studies, School of International Studies, Jawaharlal Nehru University, India.