Myanmar’s changing ties with China
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Xi Jinping and Aung San Suu Kyi pictured ahead of their talks on Saturday. Photo: Xinhua

Chinese President Xi Jinping wraps up Myanmar visit with string of infrastructure deals, including strategic Indian Ocean port

  • Trip helps cement ‘new era’ for Beijing’s ties with its neighbour, which is facing growing international criticism over its treatment of the Rohingya Muslim minority
  • Agreements see multibillion plan for Kyaukphyu port revived – a step that could allow China to bypass the Strait of Malacca where its South China Sea claims have faced a growing backlash

Chinese President Xi Jinping wrapped up his visit to Myanmar on Saturday after signing multibillion-dollar infrastructure deals, including one for a strategically important port in the Indian Ocean.

This investment and what both sides hailed as “new era” in relations offered a timely boost for Myanmar, which is facing increasing isolation from the West over its treatment of the Rohingya Muslim minority.

Following his arrival in the purpose-built capital of Naypyidaw on Friday afternoon, Xi met a number of key figures, including President Win Myint and Aung San Suu Kyi, the effective head of the government, as well as military chief General Min Aung Hlaing.

He also meet politicians from areas, some racked by ethnic conflict, where Chinese infrastructure projects are being planned or are under way.

According to local media, the two sides signed 33 memorandums of understanding, agreements, exchange letters and protocols, 13 of which were related to infrastructure.

In a move that observers said could further cement Beijing’s economic and political influence, the two sides also agreed to push forward plans to develop the China-Myanmar Economic Corridor, most notably the Kyaukphyu Special Economic Zone along the coast of the Bay of Bengal.

Under the terms of an initial agreement Myanmar signed with the state-owned bank Citic in 2015, the project would have included a US$7.3 billion deep water port and a US$2.7 billion industrial park.

China sees Myanmar as stepping stone to Indian Ocean, energy security

But in 2018 the budget was slashed to US$1.3 billion because of fears the country would not be able to service the debt.

Neither side has released details about the latest agreement, but in his meeting with Suu Kyi on Saturday morning, Xi said that the construction of the China-Myanmar Economic Corridor was the “priority among priorities” for the Belt and Road Initiative, a global infrastructure drive that has become a cornerstone of Beijing’s foreign policy.

The project is also likely to involve road and railway-building schemes and tie in with the 793km (493-mile) oil and gas pipeline that began supplying China in 2013.

Hu Zhiyong, a research fellow at the institute of international relations of the Shanghai Academy of Social Sciences, said a deep-sea port in Kyaukphyu could open new trade and energy routes to the Indian Ocean that avoid the Malacca Strait and South China Sea, where Beijing’s extensive claims are facing a growing challenge from the US and Southeast Asian countries.

“With the Kyaukphyu port, China could be directly linked to the Indian Ocean through roads and railways via the China-Myanmar Economic Corridor, which means the US-led Indo-Pacific [Strategy] could be put aside,” Hu said.

High expectations for Xi visit to mark 70th anniversary of China-Myanmar ties

Hu continued that the agreement could be seen as a significant step forward for the Belt and Road Initiative.

China’s ambitious plans to develop Myanmar’s infrastructure suffered a major setback after the proposed Myitsone Dam project, a scheme that predates the Belt and Road Initiative, was suspended nearly 10 years ago in face of strong local opposition and scepticism about Beijing’s intentions.

Xi and the Myanmar government did not address the controversial US$3.6 billion project during his latest visit.

The port project in Kyaukpyu has faced local opposition. Photo: Handout

Instead, Xi told Suu Kyi on Saturday that China was a “trusted friend” to Myanmar and said the two sides should push forward with major infrastructure projects, according to state-owned Xinhua.

Suu Kyi responded by saying that mutual respect and understanding were the keys to bilateral ties and said Myanmar would never yield to pressure and intervention on domestic issues such as human rights or ethnic and religion relations.

China turns to Myanmar as the ‘friendly giant in the neighbourhood’

In a separate meeting with armed forces chief Min Aung Hlaing, Xi said Beijing would work with the Myanmar military to ensure the stability of their shared borders and would speak on behalf of its neighbour on international stage.

A joint statement released on Saturday also said that China would support Myanmar’s approach to the Rohingya crisis and would help to relocate refugees, while Myanmar reiterated that it would accept vetted refugees under an agreement with Bangladesh.

The Myanmar government has faced growing international criticism over its handling of the conflict, which has displaced an estimated half a million people in Rakhine state and led to a case accusing it of genocide at the International Court of Justice.

Beijing argues that the plans for Kyaukphyu will help bring stability to Rakhine, but many locals appeared unconvinced and questioned whether the investment would benefit ordinary people.

A day before Xi’s visit, a coalition of 18 civil society organisations issued a statement calling for the port project to be suspended, saying that it failed to offer sufficient information about whether it would bring jobs to the area. It also expressed concern about land disputes that have remained unresolved since work began on the pipeline in 2010.

Nyinyi Lwin, the acting vice-chairman of the Democratic Party of Arakan, wrote on Twitter that he opposed the Chinese-funded projects “unless local people consent” and the Rakhine people benefitted from the scheme.

He said that only China would benefit and warned that if Myanmar officials and businessmen were able to “exploit” the scheme while leaving local people behind it could “create more conflicts in Rakhine”.

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This article appeared in the South China Morning Post print edition as: Myanmese port deal may be game changer for China