Myanmar and China on the Path to New Relations

April 3rd, 2016

Awake Goy

Sofia Pale (NEO) : Six months ago, in November 2015, Myanmar held a landmark parliamentary election for the first time in a quarter of a century. The iconic leader of the opposition party, the National League for Democracy (NLD), and Nobel Peace Prize Winner, Aung San Suu Kyi, globally renowned for her struggle for democratic changes in the country, won the election. Many assessed this event as a turning point in the history of Myanmar and expected it to impact the country’s domestic and foreign policy. The wave of subsequent changes has, most likely, affected the China-Myanmar relations.

Myanmar had had rocky relations with the western countries for a long time and had been in a long-standing diplomatic isolation. This contributed to Myanmar’s heavy dependence on the People’s Republic of China that was one of its major economic partners throughout those years. Myanmar is viewed by China as a strategic partner as well. The country is extremely rich in natural gas, which made it to the list of essential export goods after the development of offshore gas fields in the Andaman Sea was launched. But what is even more important, gas and oil delivered to Myanmar’s ports from the Middle East and Africa flow to China through pipelines installed in the territory of Myanmar. This source of energy supply is extremely important for China: it fears that in case of a conflict, the US and its allies might cut the supply of oil and NLG coming through the primary channel in the Strait of Malacca. This fear is well grounded. There has been an escalation in the territorial dispute over the South-China Sea between China and its neighbors. To guarantee its energy security, China is maintaining efforts to strengthen its influence on Myanmar. It also actively participates in the development of Myanmar’s oil and gas infrastructure.

In 2009-2010, the China National Petroleum Corporation and Myanmar Oil and Gas Enterprise launched the joint construction of a new thousand-kilometer-long network of pipelines for the delivery of oil and liquefied gas from Myanmar ports to the Chinese Yunnan province. A pipeline carrying gas from a Myanmar gas field in the Bay of Bengal was commissioned in 2013. The operation of a parallel oil pipeline was launched in February 2015. Citizens of Myanmar, who lost their plots of land because of the construction project and could no longer fish in the areas adjacent to the port as well as those worried about the possible environmental impact of the pipelines, protested the commissioning of the NLG pipeline network.

The number of protesters was significant enough to make the Chinese party nervous. The Chinese leadership was mostly concerned with the prospects of anti-Chinese forces taking office in Myanmar in the wake of the 2015 election. Had that happened, they could have provoked an exacerbation of the negative sentiment among the Myanmar population associated with the network’s construction. However strange it might sound, the then-ruling military party—the Union Solidarity and Development Party that had been running the country since 1988—turned out to be such a force. Initially, this regime promoted amicable relations with China because of heavy sanctions imposed on it by the western world. However, recently, the military wing of the Union Solidarity and Development Party reconsidered its relations with China fearing its continuously expanding influence. Apparently, the party has softened its US policy, which resulted in the lifting of some US sanctions in the few past years. The party has put on hold several important for China projects, which in its opinion led to excessive dependence on China. These projects were designed to amplify the economic influence of China in the adjacent Myanmar regions known for their separatist sentiment. The construction of a hydro-electric power plant in the state of Kachin is one of the suspended projects. Since the middle of the 20th century, waves of revolts and armed rebellions have swept across the state more than once. Inhabitants of the state were demanding independence.

As some sources believe, it was in China’s interests for the NLD to win the election. Though Aung San Suu Kyi is known as an advocate of convergence with the West, the Chinese leadership did not express discontent with her victory. As for the Chinese press, it reported her victory with enthusiasm. One of the reasons the military party lost was the refusal of some separatist groups from the regions of Myanmar bordering on China to sign a nationwide ceasefire. Signing of the agreement could have significantly enhanced the military party’s rating among the Myanmar citizens and increased its chances of winning in the November election. Some Myanmar politicians explicitly accused China of derailing the negotiations.

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If analysts can be believed, Myanmar will be pursuing a two-way policy of strengthening the ties with China, while improving its relations with the West, where Aung San Suu Kyi is seen as a zealous democrat and human rights activist. The visit of Aung San Suu Kyi to China in June 2015 ingrained hope into many Chinese politicians that the suspended investment projects would be continued and new agreements would be signed. During her visit, Aung San Suu Kyi had a meeting with Chinese leader Xi Jinping. The content of their dialog remains undisclosed, but the Chinese press has softened its rhetoric when reporting on the NLD and its leader. It was also underscored that the Chinese party was not seeking to meddle in the development of the US-Myanmar relations or pursue the interests of its state. There are no doubts that China will be keeping close watch on the development of the US-Myanmar relations to assure they are in line with its own interests. Besides, China still has a lever of influence in case its relations with the new Myanmar government go downhill. This lever is the military party that, despite losing the election, has not disappeared from the country’s political landscape. Now that they have lost ground, they will have no other options but to seek the support of the Chinese leadership. Despite their attempts to make deals with the West, the US prefers to build relations with the new democratic leader, a Nobel Prize Winner.

Myanmar’s new leadership has to proceed with caution when developing its policy to gain benefit from the cooperation with both competing camps: the western countries and China assuring there is no tilt to either side. Let us hope that Aung San Suu Kyi has the wisdom to strike a balance between the two geopolitical powers and create favorable conditions for making a great leap forward in the country’s development in the near future.

Sophia Pale, PhD, Research Fellow of the Center for South-East Asia, Australia and Oceania of the Institute of Oriental Studies of the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook.”