China’s pattern of increasing its influence in the world, and Southeast Asia is no exception, often translates into supporting authoritarian governments. Despite Myanmar having gone through a quasi-democratic transition, the fact that an elected government could not do anything significant to control the Rohingya crisis is clear for all to see. The reason for this is because the second largest Southeast Asian country is still under military sway, and in no small part thanks to the active support of Beijing.
China looks at Myanmar as a crucial partner in the ambitious Belt and Road Initiative (BRI). To this end, China has already started investing in several projects in Myanmar through the China Myanmar Economic Corridor (CMEC). The 1,700 km CMEC is an integral part of China’s gargantuan BRI programme. Though China officially aims at constructing basic infrastructure across key economic centres in Myanmar, Beijing considers Myanmar a strong platform from which to project influence in the broader Indian Ocean region. China further believes access to Myanmar will obviate the need to traverse the difficult Strait of Malacca.
The value of bilateral trade between Myanmar and China was US$10.8 Bn in 2016-17 while the nominal GDP of China in 2017 was around US$470 Bn. This points to the level of control China can exert over the Myanmar economy, not to mention political influence. The United States Institute of Peace, an independent body working on the reduction of violent conflict globally, stated in a 2018 report that many Myanmarese have started to harbor questions about China’s ultimate motives. China has made efforts to directly involve itself with primary conflict issues facing Myanmar, seeking to shape the choices and decisions of Nay Pyi Taw. In this context, many have voiced their concerns over a possible `debt trap’ via CMEC projects, as China holds an over 51 per cent stake in projects including the Kyauk Phyu Port and Special Economic Zone. Many critics have further pointed out that the BRI is nothing but a hidden agenda seeking military expansion in the guise of economic and infrastructure development initiatives. The predatory debt policies being implemented by China in countries like Thailand, Sri Lanka, Laos, Cambodia and Sudan are testimony to borrowers being brought to the verge of losing sovereignty.
Instances of pushback against the BRI have since multiplied across several of the 54 countries thus far party to the initiative. A survey of the situation in 2018-19 shows that countries have taken recourse via different mechanisms to protest against the BRI. For instance, in Myanmar’s Myawaddy Township in Kayin State, clashes erupted on September 15 of last year between Chinese nationals and the local population, leading to the formation of a committee tasked with registering Chinese citizens staying illegally in the city, many of whom are allegedly involved in criminal activities like operating casinos and supporting ethnic armed groups in Myanmar.
Similarly, further expansion of the Shwe Kokko urban development project being undertaken in Myawaddy by the Chinese conglomerate Jilin Tati group has reportedly been stopped over growing concerns that the project would increase Chinese influence in the area. Opposition, in short, continues to Chinese projects like the Kyauk Phyu Port and Special Economic Zone and Chinese-backed Myitsone Dam. Moreover, following local protests over the anticipated re-location of villages, monasteries and schools, the government in Sagaing Region cancelled permission on September 30, 2019, previously granted to Myanmar Yang Tse Copper Ltd, a subsidiary of China’s Wanbao Mining Copper Ltd, to jointly operate a copper mine in the area. The Chinese owned Sky Man Steel Factory in Yangon Region was also permanently closed apparently due to financial problems caused by high electricity tariffs.
Myanmar has an international debt of some US$10 billion, of which 40 per cent is held by China. In 2018, policy makers in Myanmar held discussions on the burgeoning debt and urged the government to clear Chinese loans as soon as possible, saying that they had the highest interest rates among all foreign countries that have lent to Myanmar. This dawn in wisdom is better late than never. As a result, Myanmar has started trimming Chinese loans to avoid a potential debt trap. In 2018, Myanmar decided to scale down the Kyauk Phyu Port project from planned Chinese assistance of US$7.3 Bn to only US$1.3 billion due to the alleged predatory policies of China and debt trap concerns. Long-time Southeast Asia based-journalist and strategic consultant Bertil Lintner has added that Chinese investments in the name of economic development convey the shadow of grey zone operations in the Indian Ocean. Lintner asserted after a detailed study that China seeks hegemony and that the Indian Ocean is an increasingly crucial area of operations for it to achieve this. Ultimately, then, only awareness among concerned countries and people affected by Chinese funding can help to reverse this tide.
Jan Lehman is the pseudonym of an expert on Asian affairs