China: a hidden danger in the reform process

Published on Jan 19 2013 // Featured Analysis, News Update, Related News, Slide Show

Hostesses wait in Tiananmen Square as delegates arrive at the Great Hall of the People for the start of the closing ceremony of the Communist Party Congress in Beijing Wednesday, November 14, 2012. (AFP)

United States President Barack Obama visits Myanmar today.

This milestone is one of many over the past year of reform for the once-pariah state also known as Burma. These reforms and the consequent improvement of US-Myanmar relations appear to be an unalloyed good.

In the past year the reformist government of Present U Thein Sein has released many political prisoners, allowed progressively greater political participation by the democratic opposition and made significant progress towards ending ethnic insurgencies that have troubled the country for decades.

As Myanmar has reformed, the US, which once imposed a harsh sanctions regime, has sought to encourage and support the process. US Secretary of State Hillary Clinton visited Myanmar in December 2011.

The US has lifted or suspended most of its economic sanctions. This, in turn, paves the way for aid, investment and advice from the US, its allies, and multilateral financial institutions. For US and Western firms Myanmar holds the promise of rapid-growth investment opportunities in an underserved market of 60 million people.

But behind these positive developments lurks a danger: the sensitivity and potential reaction of China, Myanmar’s neighbour to the north, to increased US involvement.

For China, the relationship with Myanmar has economic and strategic value. Myanmar is a market for Chinese goods. Myanmar also supplies or will supply China with primary products ranging from agricultural and fisheries to minerals and natural gas.

China is also deeply involved in infrastructure construction in Myanmar, including several hydropower projects and a special economic zone in Kyaukpyu in Rakhine State. China is also building gas and oil pipelines and a transportation corridor across Myanmar from Kyaukpyu to Ruili, on the China border.

The natural gas will come from fields off Myanmar’s west coast but the oil will be brought from Africa and the Middle East. The pipeline allows China to bypass the Strait of Malacca, a potential choke-point subject to control by the US Navy.

Chinese descriptions of China-Myanmar relations invariably stress harmony between the two peoples from time immemorial. These often use the Burmese word “Pauk Paw” for the special fraternal nature of the relationship. This narrative glosses over historical conflicts, the last of which ended only in the mid-1980s when China shifted from supporting revolution to encouraging trade.

China’s vision of “Pauk Paw” harmony also papers over the anti-Chinese sentiment prevalent in Myanmar. The perception in Myanmar is that Chinese companies use bribes and the Chinese government’s support for Myanmar at the United Nations to obtain preferential concessions for resource and infrastructure projects. This popular view holds that the Myanmar military, the Tatmadaw, has been selling out the nation to the Chinese.

As long as the Tatmadaw was exercising dictatorial authority, the model that Chinese companies brought to Myanmar worked, as it does in China. In China the key to any project is having good government connections.

There is no need to develop relations with affected locals, civil society or other stakeholders. When the political situation in Myanmar changed and the new civilianised government began to make reforms that reflected popular will, Chinese projects, not having developed support among non-government stakeholders, were vulnerable.

In fact, despite precursors, the reform period in Myanmar can be dated from the September 30, 2011 presidential decision to suspend work on the main dam (of seven) in the Chinese-backed Myitsone Hydropower Project.

Despite public outcry against the Myitsone project over its perceived negative impact on the natural environment and cultural heritage, less than a month before the suspension Myanmar’s Minister for Electric Power 1, U Zaw Min, told the press: “We will not back down just because environmental groups are against it.”

He may have actually been correct, as the suspension appears to have had more to do with the perception of the project as Chinese exploitation. In a country suffering from chronic power shortages, 90 percent of the electricity produced was to be sold to China.

More recently protests against the expansion of a Chinese-operated copper mine at Letpadaung in central Myanmar have drawn national and international attention. The Chinese pipeline project has been criticised by local and exile non-government organisations over land use, compensation and environmental problems.

International NGOs have criticised it for construction in conflict zones, and members of the democratic opposition have privately called the project a violation of Myanmar’s national sovereignty.

Many Chinese policy intellectuals see the improvement of US-Myanmar relations, the reform process in Myanmar, and problems for Chinese projects there as part of a US-directed plot to contain China.

Yuan Peng of the American Research Centre at the China Institute of Contemporary International Affairs (CICIR) wrote in the July 31 overseas edition of the People’s Daily that “the US will avail itself of various non-military means to delay or hinder China’s progressive rise”.

Yuan said these include “[s]trengthening alliances and enhancing partnerships while undermining China’s relationships with the North Korea, Pakistan and Myanmar”. The Obama administration’s “Pivot to Asia” has only fed this dominant and paranoid strain in Chinese thought.

Why should Chinese anxiety about improvement in US-Myanmar relations matter? It might be tempting to see problems that Chinese projects have as just desserts for not taking account of a broad range of stakeholder interests.

But Myanmar and China share a long border and, despite a slowdown in its growth, China is still an economic powerhouse. Its influence in Myanmar will continue to be large. Support from China and Chinese companies for Myanmar’s reforms and development will help quicken and deepen their implementation.

Opposition could contribute to their stagnation.

What should President Obama do on his visit to Myanmar to assuage Chinese anxiety? First, he should make clear that China-US-Myanmar relations are not a zero-sum game in which any gain for the US is a loss for China. Myanmar needs support from the US, China, ASEAN and its other neighbours to successfully implement sustainable and equitable reforms.

Second, President Obama should frame US support for reform in terms that the Chinese use: stability and “win-win” outcomes. Reform in Myanmar will make the country more stable and a more stable Myanmar will better protect China’s long-term interests by pushing Chinese investors to reach out to stakeholders.

Chinese support for reform in Myanmar will result in a “win-win-win” situation which benefits Myanmar, the US and China.

Josh Gordon is a PhD candidate in anthropology at Yale University and his dissertation research is on Chinese identity in the China-Myanmar borderlands. Josh has been conducting research in Myanmar since 2003, and has conducted fieldwork both in Myanmar and on the China-Myanmar border. He has also worked as a project consultant for Chinese companies researching investments in Myanmar’s energy sector.

Myanmar Times