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Catherine Wong

Reuters

China is looking to take a stake of up to 85 percent in a strategically important sea port in Myanmar as part of its “Belt and Road” international trade and infrastructure plan, according to a media report.
China is hoping concessions will be made on projects including Kyauk Pyu port if it abandons the Myitsone dam scheme in Myanmar, according to the Reuters news agency.
The bid to take a higher stake than originally planned in the port project may attract controversy in Myanmar at a time when China is attempting to boost its economic dominance in the country.
Here are five key facts about the port scheme:
What is the primary purpose of the port?
The port in Rakhine State in western Myanmar will be the entry port for a Chinese oil and gas pipeline. Crude oil brought from the Middle East will be stored at the port before it is sent to China through the pipeline.
A consortium led by China’s Citic Group has proposed taking a 70 per cent to 85 per cent stake in the US$7.3 billion deep sea port, according to Reuters.
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The proposed Chinese stake is substantially larger than the 50/50 joint venture proposed by Myanmar late last year, which was rejected by Citic.
The port is part of two projects, which also includes an industrial park, to develop a nearly US$10 billion special economic zone in Myanmar’s western Rakhine State.
Why is the port so important to China?
The deep sea port on the Bay of Bengal would give China a boost in developing maritime infrastructure on the Indian Ocean and diversify its sea trade routes.
Kyauk Pyu port also gives China an alternative route for energy imports from the Middle East that avoids the Malacca Straits.
The new route via Kyauk Pyu Port would save about 5,000km in sailing distance for shipments travelling to China from India and points beyond.
Some analysts have said the port is part of a so-called “string of pearls” strategy in which China invests in a number of regional ports, including Chittagong in Bangladesh, Gwadar in Pakistan and Colombo in Sri Lanka. These would help China’s ultimate goal of naval expansion in the region.
Will Myanmar agree to China taking a higher stake in the project?
The Reuters report cited an unnamed source as saying that Citic was in the “driving seat” on the port project and that Myanmar was unlikely to ask for a stake of more than 30 percent due to opposition from the Chinese firm.
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The ruling National League for Democracy led by Aung San Suu Kyi has made boosting the country’s economic development among its top priorities. The port is part of Myanmar’s plan to revive the economy in one of its poorest regions and could transform the town of about 44,000 people into a thriving business hub.
What obstacles will China face pushing forward this project?
The economic zone faces opposition from activists and residents who criticised the tender process for its alleged lack of transparency and said the development would have a negative impact on local people.
About 20,000 people are at risk of losing their homes and livelihoods due to land acquisition for the zone, according to the International Commission of Jurists, a human rights watchdog.
The project may also add another layer of uncertainty to the stability of already conflict-torn Rakhine State where tensions between Rohingya Muslims and the Buddhist community have led to violence and the displacements of tens of thousands of Muslims over the past five years.
Why has Chinese investments in Myanmar consistently proved so controversial?
Relations between China and Myanmar have become rocky in recent years with concerns over China’s growing economic clout in the region. In particular, the now-aborted, US$3.6 billion Beijing-backed Myitsone dam project - originally designed to supply most of its electricity to China – was met with strong domestic opposition.


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