A debt trap, resource grab, and infra projects that mainly benefit Beijing are threatening to make Myanmar a satellite of China.
The situation in Myanmar, once home to the famous Pagan kingdom and Theravada Buddhism—the hallmarks of a proud and unique civilization—has a familiar ring. Already in Pakistan, China has spread its tentacles into the nation’s economic core through the China Pakistan Economic Corridor (CPEC). Recently, Iran also blipped on China’s radar. Beijing and Tehran are negotiating a $400-billion deal, which will allow China strategic access in the Indian Ocean through the port of Jask, the New York Times earlier reported.
Now, a similar attempt of turning it into a dependency could be unfolding in Myanmar, unless the leadership in Naypyidaw switches on to the challenge, which may sap the country’s sovereignty. Fortunately, there are signs that Myanmar’s hardnosed civilian and military leadership is waking up, aware of the trap that the Middle Kingdom 2.0, led by Xi Jinping, general secretary of the Communist Party of China (CPC), is setting up to turn Myanmar into a 21st century tributary state.
China is unfolding its plan in Myanmar through the China Myanmar Economic Corridor (CMEC). The Chinese have proposed that the CMEC would take the shape of an inverted Y. Starting from China’s Yunnan province, it could head towards Mandalay, Myanmar’s former royal capital on the banks of the Irrawaddy in the northern part of the country. From there, it could extend towards the east and west to Yangon New City and Kyaukphyu Special Economic Zone, in the western Rakhine province.
During Xi’s big visit to Myanmar this January, two agreements of deep strategic significance were signed. One was on establishing the Kyaukphyu Deep Sea Port (KDSP), and another, on an adjoining Special Economic Zone (SEZ).
By setting up KDSP, the Chinese hope to lower their dependence on the Malacca Strait, which is China’s main trade artery linking the Indian and the Pacific Oceans. With a new cold war with the United States on the horizon, the Chinese are desperate to reduce their over-dependence on the Malacca Strait, which is militarily dominated by the Indo-Pacific command of the US.
Besides, Chinese fears are aggravated with the rapid maturation of the Indo-Pacific naval Quad group, comprising India, US, Australia and Japan, capable of projecting enormous naval and air power in the region.
The Kyaukphyu harbor is also critical for China’s energy security. The port is home to an oil and gas pipeline, ferrying energy to Yunnan, China’s strategic gateway to Asean, as the province shares a land border with three countries—Myanmar, Laos and Vietnam.
Xi’s visit yielded 33 Memorandums of Understanding (MoU), agreements and exchange letters—the blueprint for institutionalizing an unequal relationship with Myanmar. They identified important projects such as establishing the New Yangon City, the Muse-Mandalay Railway and Ruili-Muse Border Economic Cooperation Zones.
The China Railway Eryuan Engineering Company has already submitted its ‘Preliminary Technical Report’ on Muse-Mandalay railway project to the Myanmar government.
As in Sri Lanka, Pakistan and Maldives, the Chinese have tried to snare Myanmar in a debt trap. Currently, Myanmar’s external debt is estimated at around $10 billion, out of which a hefty $4 billion, at a significantly higher annual interest rate of 4.5 per cent, is owed to China.
But resisting enormous pressure, the government headed by de facto leader Aung San Suu Kyi, is showing visible signs of resistance.
Myanmar's refusal to be steamrolled by China became transparent during Chinese Ambassador Chen Hai's visit to Kyaukphyu Township last year. During that visit, Tun Kyi, coordinator, Kyaukphyu Rural Development Association, asserted that Chinese projects that do not benefit local Rakhine people should be opposed. He cited the rejection of the China-backed Myitsone Dam Hydropower Project in the Kachin State, in the north-east, as a useful precedent.
In September 2011, the Myanmar government had halted the project, which was meant to generate 6,000 megawatt of electricity, which was mainly intended for export to Yunnan.
Recently, senior commanders of the Myanmar Army have also been resentful of China, suspecting Beijing of arming several ethnic armed groups battling Naypitaw. These include the United Wa State Army (UWSA), Kachin Independence Army (KIA), Ta’ang National Liberation Army (TNLA), Myanmar National Democratic Alliance Army (MNDAA) and the Arakan Army (AA). In August last year, during a meeting with China’s Special Envoy on Asian Affairs Sun Guoxiang, the Commander-in-Chief of Myanmar Defence Forces, Senior General Min Aung Hlaing confronted the Beijing official with photographs of Chinese-made weapons, which had been recovered during clashes with the Northern Alliance (NA), a four-member coalition, which includes Arakan Army, people aware of the details of the meeting told this writer.
Myanmar’s ability to wriggle out of Beijing’s grip is likely to receive a high-octane boost. Last week, US Secretary of State Mike Pompeo virtually announced the beginning of a new cold war with China, wrapping up 50 years of engagement with Beijing. The US official has made it plain that Washington intended to forge a new coalition to counter China, with the 10-nation Asean, which includes Myanmar as one of the keystones.
So far, isolated by the West for its role in triggering the exodus of Rohingya Muslims to Bangladesh, Myanmar may no longer have to over-rely on China for support, thus removing a critical component of the Beijing-Naypitaw bond.
On July 18, George N. Sibley, the US charge d’ affairs in Myanmar, spelled out the marked shift in US policy. In an article posted in Myanmar’s The Irrawaddy newspaper, the US official wrote: “The United States supports Asean in standing up to Beijing’s troubling foreign policy and economic practices, just as for more than 70 years the United States has stood as a friend and partner to the people of Myanmar.”
The transformation of the US from engagement to cold war-style containment, and Myanmar’s re-accommodation in the geopolitical mainstream, follows China’s show of military belligerence in the Indo-Pacific, ranging from its intrusion across the Line of Control (LAC) in Ladakh to the South China Sea in the West Pacific.
A budding collective response by the Indo-Pacific quad to China’s military assertion, backed by aggressive Wolf Warrior diplomacy, opens new strategic pathway for Myanmar to realign its foreign policy by bonding with a broad based coalition of more like-minded democracies..