At the close of 2021 China remains one of the few foreign partners for Myanmar. Amid ongoing public resistance to the junta and violent protest suppression, Beijing and the new regime in Naypyidaw are looking for a new mode of mutually beneficial coexistence. The junta tries to buy China’s support and recognition through new bilateral projects, while China aims to create a safety net for its long-term interests in the country.
Almost a year after the February 2021 coup the confrontation between Myanmar’s military regime and resistance forces has reached a dead end, with both sides determined to prevail yet unable to strike a decisive blow. Amid the crisis, the latest World Bank report expects an 18 percent contraction in Myanmar’s economy. The immediate results could be a loss of around 1 million jobs and a significant decline in incomes. Moreover, the share of the population living in poverty is expected to double by the beginning of 2022, compared to 2019 levels.
China has strong interests in Myanmar and remains its key partner. It is concerned with security along their shared border, implementation of the multi-million China-Myanmar Economic Corridor (CMEC), and acquiring a strong position in the Indian Ocean. Although the bilateral relationships immediately after the coup were chill, in the latest months they evolved into a de facto Chinese recognition of Myanmar’s new regime. Nevertheless, they are still far from “pauk-phaw”, a word used historically to describe a special brotherly relationship between Myanmar and China. The military regime seeks to achieve international recognition through a partnership with China, while Beijing tries to hedge risks to its short and long-term ambitions in the country.
The Thaw between Former Adversaries
China and Myanmar have a long and complicated relationship affected by pervasive Chinese economic presence and multiple regime changes in Myanmar. Due to Western sanctions, China is one of the main arms suppliers for the Tatmadaw, Myanmar’s military, which has become overly dependent on this relationship. At the same time, the Tatmadaw for many years criticised China’s growing engagement in Myanmar’s ethnic conflicts and peace processes, which have been ongoing since the founding of the country in 1948. China is accused of selling arms to ethnic armed organizations (EAOs), and of blocking their participation in a ceasefire agreement with the central authority.
Years of diplomatic efforts allowed China to establish partner relations with the previous democratic government and its leader Aung San Suu Kyi, which resulted in several ambitious projects within the CMEC framework. When Chinese projects sparked protests, Aung San Suu Kyi often performed as a mediator between China and the local public. The military coup constituted a serious setback in China-Myanmar relations.
Although China kept its distance from the new regime, limiting itself to calls to stop violence, and restore peace, Beijing nevertheless blocked the UN resolution against the military government. Before the coup China was one of the biggest foreign investors in Myanmar, however, some of its projects were halted due to public resistance. To ensure that this support lasts, the Tatmadaw has had to buy cooperation through new bilateral projects and acceleration of the old ones. In May, the military junta approved a new $2.5 billion Mee Lin Chaing power plant that would be built and operated by Chinese companies, which will retain 81% ownership. Interestingly, the project was underway already in 2018, and faced accusations of lack of transparency. Later, an Anti-Corruption Commission initiated an examination of accounts of then energy minister Win Khaing, and there were no more announcements about the project until 2021.
At the same time, the junta government accelerated another ambitious project within CMEC – the Kyaukphyu Special Economic Zone (KPSEZ), and a deep-sea port project which was delayed several times. The NLD government renegotiated the shareholder agreement and increased Myanmar’s stake from 15 to 30%, and then managed to drastically reduce the scale of the project. Myanmar’s negotiators were wary that the economic prospects of the region would not live up to expectations and lead the country into the so-called “debt trap”. However, in May, the new regime gave a green light to the acceleration of works. This suggests that the junta accelerates highly contentious projects with the goal of buying Chinese support.
Staying Friends with Everyone
It is hard to make a clear judgment on whether the junta’s efforts paid off. Although Beijing blocked the UN resolution against the new regime, China could not help to warm up its relations with ASEAN. Beijing lobbied Southeast Asian Nations to let Min Aung Hlaing, the current leader of Myanmar, participate in the China-ASEAN summit in November, but faced strong opposition from ASEAN member-states. ASEAN countries are wary of being associated with the junta, which has meant that no member of the military government could be Myanmar’s representatives at ASEAN summits. The easiness with which Beijing accepted this decision also casts doubt on China’s reliability as the junta’s advocate.
Despite de facto recognition of the new regime, China follows its long-running strategy of maintaining ties with all political actors, for example, the ousted National League for Democracy (NLD), the former ruling democratic party. China has long-term interests in Myanmar and must mediate risks in case of prolonged violent resistance to the junta or another overturn. In April, media in Myanmar reported that a counsellor from the Chinese embassy in Yangon had a call with members of the Committee Representing Pyidaungsu Hluttaw (CRPH), Myanmar’s Parliament. The committee was founded by NLD lawmakers in February to challenge the legitimacy of the new regime. In August, China’s special envoy for Asian affairs, Sun Guoxiang, requested a meeting with Aung San Suu Kyi but was rejected by the Tatmadaw.
The confrontation between the Tatmadaw and EAOs is a long-lasting security issue spilling over to Chinese territory. Recently the Chinese border town of Wanding has become its victim when an artillery shell landed in the town and gunfire from Myanmar hit a private house. As conflicts with many EAOs only intensified after the coup, China has made vaccine diplomacy a new way to draw their support. The Kachin Independence Army (KIA) reported that they were able to vaccinate more than 20,000 people. Due to rising numbers of recorded cases, tough access to vaccines, and a crackdown on health workers who protested against the new regime, China has become the key source of vaccines for EAOs and their people.
Costs or Benefits
Although the key motivation behind Chinese diplomacy in Myanmar is to secure its interests in the country, security threats kept gradually escalating throughout the year. Chinese enterprises and assets in Myanmar were subjected to attacks by anti-coup forces. The first of them have already started in March 2021, just one month after the coup. In Yangon several garment factories were attacked, and an ambitious twin pipeline project became the centre of public outrage online when social media users started vaguely threatening that it might be blown up. Public response was sparked by the leaked document revealing that Beijing held an emergency meeting with officials from the Home Affairs and Foreign ministries demanding to ensure the security of the project. Internet users interpreted it as a demonstration that the only thing China cares about is projects. Social media users applied official Chinese discourse against its creators saying that attacks on Chinese pipelines, as well as the coup, are nothing but internal affairs of Myanmar, so no other foreign force has the right to interfere. They threaten Chinese projects to be destroyed if Beijing does not exert pressure on the Tatmadaw to stop violence and reverse the coup.
Chinese actions in Myanmar send contradicting signals for interpretation. On the one hand, the cooperation with the new regime has accelerated and intensified. On the other hand, China makes efforts to maintain backup options like its ties to the democratic opposition and rebel groups on the border. Acceleration of long-negotiated projects is undoubtedly a benefit for China; however, this position has already cost Beijing the costs of reduced security and damage to their diplomatic and public image on the global stage, as well as within Myanmar. Bilateral relationships between two countries do not make an impression of “pauk-phaw” but rather look like a burden with benefits in which each side is unsatisfied with another, but in which advantages of cooperation still outweigh limitations. With this in mind, it would be too easy to assume that China will unite with any government that can advocate China’s interests. To ensure their interests China must take into account all political actors and create a safety net for its long-term ambitions in Myanmar. Increasing divergence between Chinese rhetoric of non-interference and actions on the ground, playing with both the junta and the ousted democratic government, suggests that there is no real long-term strategy other than staying fluid and pragmatic.