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Myanmar-China relations: Glass half-full

Myanmar-China relations: Glass half-full
Published 17 Oct 2016 

By Carrie Zhang, an intern with the Lowy Institute's East China program

Situated between much larger powers and ruled for decades by a military junta, Myanmar is emerging anew under the de facto leadership of its state counsellor and foreign minister, Aung San Suu Kyi. For many of Myanmar’s neighbours, this transition has relatively few implications for the current balance of power – at least for now. The exception is China, for which Myanmar is an important investment destination both in itself and as an enabler via the China-India-Myanmar corridor. Two factors will be particularly influential for the future of Sino-Myanmar relations under Aung San Suu Kyi’s leadership: the economic ties that bound the two nations and leveraging Chinese influence to solve Myanmar’s ethnic conflict.

Suu Kyi’s first priority following the NLD’s sweeping and historic victory in November last year was arguably to cement relations with China. This work was clearly underway even before the election, with Suu Kyi accepting an invitation to go to Beijing in July 2015. Its importance was reinforced with another visit in August 2016, a notable first (outside Southeast Asia) in a series of overseas engagements for Suu Kyi. Much of the focus has been on allaying anxiety in Beijing that Myanmar’s normalisation of relations with the West, which began under Thein Sein’s leadership, would lead to a shift in foreign policy by the new government, given the NLD has been historically pro-West.

Suu Kyi’s desire to broaden relations with her north-eastern neighbour may seem surprising given China’s long history of backing the junta: only in 2013 did China deviate from this by inviting NLD delegations into the country. But while Suu Kyi may have historically leaned West, in both political ideology and education, it is difficult for her to look past the ‘logic of geography’ when considering both economic growth and long sought peace. Striving to find a way to end the ethnic conflict that has waged for decades across Myanmar’s northern border is a massive challenge for Myanmar’s new government; China, with its influence over various armed groups, could be a valuable ally.

For these reasons, disagreement between the two countries regarding the planned Myitsone Dam, arguably the biggest stumbling block in the way of stronger ties, is unlikely to jeopardise relations in the long-term. This is not to say that a solution will come easily; the US$3.6billion project is controversial because of the threat it poses to an area rich in ecological biodiversity and cultural significance. Suu Kyi faces the difficult task of balancing these local concerns with China’s pressing need for a quick resolution. It is unlikely any proposed solution would be clearly favour either party. Recourse may be taken to the Letpadaung Investigation Commission of 2013, which recommended construction of the copper mining project in west central Myanmar continue, under significantly revised terms, in the face of local opposition. The recently initiated Commission into the Myitsone project could return a somewhat similar outcome, one that would allow further development in return for a more favourable division of profits and resources (the current contract stipulates that approximately 90% of the electricity generated will be directed to Yunnan, China).

Given her awareness of the need for foreign investment, Suu Kyi is unlikely to risk the fallout that would eventuate should the project be terminated entirely. Indeed, in retaining a stance favourable to China in her position as Chair of the Letpadaung Commission, Suu Kyi gave investors a sense of consistency and credibility that they had perceived to be almost wholly absent under Thein Sein’s leadership. [fold]

The need to set in place a more robust peace process after decades of ethnic conflict is another important priority for the new government. China is well-placed to offer support on this front, though its assistance will, as Myanmar expects, come at a price. In a demonstration of its capabilities, China helped nudge three armed groups to attend the four-day Peace Panglong Conference in Naypyidaw last month. These three groups (the Kokang, the Arakan Army, and the Ta’ang National Liberation Army) have reportedly received Chinese backing in the past. Many of these relationships date back to China’s support of the Communist Party of Burma in the 1960s and 1970s. When the party fractured across ethnic lines in 1989, China retained its connections to factional leaders and used these to negotiate ceasefire agreements with the Myanmar Armed Forces, the Tatmadaw. Today these links translate into significant influence over attempts to resolve ethnic conflict.

For its part, China also has much to benefit from a consolidated peace process. The 2009 Tatmadaw offensive against Kokang leader Peng Jiasheng drove an estimated 30,000 refugees across the Yunnan border, while shelling in May of 2015 was reported to have injured many Chinese citizens. In addition to presenting a constant challenge to the livelihoods of Chinese nationals, the ongoing Kokang conflict presents an immense challenge to the feasibility of Xi Jinping’s ‘One Belt, One Road’, which numbers among its goals connecting China’s interior to the Kyaukphyu deep-sea port in the Bay of Bengal. Given this project relies heavily on Myanmar support and border stability, Myanmar’s internal peace and security is a pressing concern for both nations and thus an area ripe for improved and sustained cooperation.

Economic outcomes and peace processes will feature strongly in the current and emerging phase of the Myanmar-China relationship. Negotiations around these topics will be delicate. However, they also offer opportunities to achieve important outcomes with lasting and substantial impact.

Photo: Getty Images

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