It has been nearly two decades since a Chinese head of state visited its southernly neighbour. The last time a Chinese head of state set foot in Myanmar, the country was still under full military rule and the capital was still Yangon. China was yet to be admitted as a WTO member and the champion of globalisation was still hiding its strength and biding its time.
The situation today, with president Xi Jinping's arrival in Naypyidaw, is quite different. Since Xi Jinping rolled out the Belt and Road Initiative (BRI) in 2013 – a global vision which aims to rewire the world’s economy by initiating a series of “economic corridors”, economically integrating Eurasia (and beyond). One of these corridors runs right through Myanmar: the China Myanmar Economic Corridor (CMEC), and makes Myanmar a focal point in the entire scheme. This corridor starts in Kunming, Yunnan province (China), traverses the border near Muse towards Mandalay, and subsequently forks to Kyaukphyu in Rakhine state and Yangon, the economic capital of the country.
The international backlash against state counsellor Aung San Suu Kyi for her dealing of the Rakhine crisis, which reached new heights during her trip to The Hague, ended the honeymoon period with the West and brought her closer to China. Being the only major power who has defended the Southeast Asian country in this uncanny situation, itself in a similar situation with the international community raising its voice over the situation of the Uyghur population in Xinjiang, makes Xi Jinping maybe even more relatable to her than any democratically elected leader she once shared the stage with.
As per usual, we can expect this visit to be another showcase of all the success the seven decades long diplomatic relationship has brought about in the past. “Win-win cooperation” and lofty pledges of “a shared human destiny” will find their way to the respective speech writers. After all, Myanmar has signed several MoUs – the closest a country can come to signing up to BRI. Reality, however, is somewhat more complex. The conversation between the president and state counsellor that will unfold behind closed doors, will undoubtably be more intricate.
Firstly, the National League of Democracy (NLD) does not have a track-record of cosying up to China, in August 2018, the NLD-led government renegotiation of the Kyaukphyu Deep Sea Port Project resulted in an 80 per cent cost reduction, shrinking the project from USD 7.5 billion to USD 1.3 billion. The rationale behind this trimming of megaprojects was done to counter the risk of an excessive debt burden, as scenarios akin to the 99 years lease of the port of Hambantota in Sri Lanka wanted to be avoided.
Secondly, next to fear of debt, another headache has been the geographic scope of BRI in Myanmar. Due to the location of CMEC projects in conflict ridden Northern Shan, Kachin and Rakhine, fears are that displacements and ethnic conflicts will be reinvigorated. The Tatmadaw (the official name of Myanmar armed forces) has been at arms with the Northern Alliance – an amalgam of armed organization primarily located near the Chinese border. The Chinese strategy was to push for conflict resolution and infrastructure projects in tandem, but these attempts have been unsuccessful. It has now become clear that it will be impossible to achieve results in megaprojects which are located in conflict areas, without first providing a solution to the turmoil in Kachin, Northern Shan and Rakhine. It was already anticipated that China would increasingly play its role as mediator between the involved parties. However, a recent decision by the Tatmadaw not to extend a cease-fire with the Northern Alliance, has put BRI development in further limbo. Adding to this, Chinese authorities have been historically sympathetic of certain faction within the Northern Alliance, creating a mistrust between the two neighbouring countries concerning cooperation in this area.
Thirdly, with the elections upcoming November this year, Aung San Suu Kyi will come to realise that Chinese projects are vastly unpopular in Myanmar. BRI is also looked at with a certain degree of suspicion. The Myitsone Hydropower Project, for example, is facing vast opposition from the public, with a considerable 85 per cent of people opposing it according to a 2017 poll by the Yangon School op Political Science.
Finally, while China’s economic presence is on the rise, it is dwarfed by the historical commitment Japan has shown towards Myanmar – even during the military junta. Through finance mechanisms such as the Asian Development Bank, the Japan International Cooperation Agency, and more recent initiatives like the Japan Infrastructure Initiative, Japan has cemented its reach in Myanmar before China even initiated its grand infrastructure vision of the region. The most obvious materialisation of this has been the Thilawa Special Economic Zone, a 2342-hectare industrial area nearby Yangon, 49% owned by the Japan International Cooperation Agency (JICA).
With the initial aim of linking China’s heartland to the Indian Ocean through an overland corridor – hence bypassing the Malacca Strait – progress in China-Myanmar relations has been troublesome to say the least. Instead of offering a solution to the Malacca dilemma, China is slowly but surely being dragged in another dilemma: a Myanmar dilemma.
President Xi will have to face this challenge by showing further commitment to resolve the ethnic turmoil that has put a hold on China-Myanmar economic integration, at the risk of being reluctantly dragged into ethnic conflicts. Questions remain whether China will manage to live up to this commitment.