On March 8, 2015, a Tatmadaw (Myanmar armed forces) fighter jet battling rebels from the pro-autonomy Myanmar National Democratic Alliance Army (MNDAA) in the Kokang region of Myanmar’s northern Shan State accidentally bombed a village in Gengma county in China’s Yunnan province, destroying a house. Apart from the damage in property, there were no casualties, and the Chinese government asked their Myanmar counterparts to ensure such an incident never happened again (Bi, 2015; Ferraris, 2015). However, less than a week later, on March 13, another Tatmadaw fighter jet bombed a sugarcane field in Lincang prefecture in Yunnan province, killing five villagers and injuring eight. High level complaints from China were issued to Myanmar, and Chinese fighter jets were scrambled to patrol the border, but while Myanmar expressed sorrow for the casualties, they initially blamed the MNDAA rebels for the incident, and only accepted responsibility and offered compensation on April 2 (McMahon, 2015; “Chinese villager injured,” 2015; “China has responsibility,” 2015; “Chinese FM discusses,” 2015; “Myanmar apologizes,” 2015; “Myanmar to offer,” 2015). These incidents were not the first instances of Myanmar’s civil warfare crossing the border into China. In 2013 the Tatmadaw accidentally bombed Yunnan during a fight against the Kachin Independence Army (Ferraris, 2015; McMahon, 2015). Then, as now, China offered to mediate between the warring sides to secure peace along the border (McMahon, 2015; “China-Myanmar ties,” 2015). This is essential given the geography of the borderlands between Myanmar and Yunnan province. As observers note, the Tatmadaw fighter jets were probably within Myanmar airspace when they released the bombs that strayed into Yunnan. This suggests that similar incidents could occur in the future should peace not be secured within Myanmar (“PLA deployment,” 2015). Indeed, a week after the fatal bombing of Lincang, the Tatmadaw resumed its air patrols over the border region, and local residents in Mengdui township near Lincang reported airdrops of unexploded bombs, apparently from Tatmadaw aircraft (Weng, 2015; Qiao, 2015b).
The crisis began a month before, when the sudden resumption of fighting between the MNDAA and the Tatmadaw on February 9 prompted almost 50,000 ethnic Chinese civilians from Kokang to flee across the border to seek refuge in Yunnan (Kyaw & Nang, 2015; Khin, 2015). Chinese officials, not wanting to strain relations with Myanmar by indefinitely hosting these refugees, had begun bilateral talks aimed at restoring stability on the border and organizing the repatriation of the refugees (Gleeson, 2015). Apart from the refugee crisis, the conflict in Kokang has also negatively impacted the transborder traffic of trade goods between Yunnan province and Shan State (Liu, 2015). As we shall see later in this paper, this trade corridor is of strategic importance for China, allowing goods to travel to and from ports on the Indian Ocean without having to pass through the Straits of Malacca and the South China Sea. Hence the peaceful settlement of the Kokang conflict is of utmost importance to China. In order to defuse the Myanmar government’s suspicions of Chinese support for the MNDAA, the Chinese government has cracked down on grassroots-level activism in Yunnan organizing medical and other supplies for the MNDAA rebel effort (Gleeson, 2015; Qiao, 2015a). In addition, the recent arrest of Major General Huang Xing, reportedly for his unauthorized provision of military intelligence to the MNDAA, highlights China’s desire to win the trust of the Myanmar government (Chan, 2015).
The MNDAA and the Ethnic Kokang
The Myanmar government’s suspicions of China are rooted in ethnicity and history. The ethnic dimension is that the Kokang Chinese, the minority group militarily represented by the MNDAA, are descendants of Han Chinese Ming dynasty loyalists who arrived from China in the 17th century to escape from Qing rule, and later, Kuomintang fighters and party members who had chosen to settle in Burma after the 1949 Communist revolution in China. The historical dimension is that the MNDAA was once part of the Communist Party of Burma (CPB). The CPB was supported in its insurgency against the Burmese state by the Chinese Communist Party, and the leaders of Myanmar today continue to recall the challenges of the communist insurgency. While communist subversion emerged in the early years of Burmese independence, it reached its peak during China’s Cultural Revolution, when the Chinese Communist Party sent significant levels of aid to the CPB. Indeed, China continued to support the CPB, albeit at a lower level, into the 1980s, and Tatmadaw forces suffered heavy casualties against the CPB in battles in late 1988. In 1989, when the CPB collapsed to mutiny, China sheltered its ousted leaders and cadres. Myanmar’s current military leaders most likely have personal memories of battle engagements against the Chinese-backed CPB insurgents (Eimer, 2014, p. 195; Haacke, 2011, pp. 119-120; Khin, 1997, p. 154; Matsui, 2015; Mya, 1997, p. 117; Steinberg & Fan, 2012, pp. 68-70).
In 1989, the MNDAA was the first faction to emerge from the collapse of the CPB to sign a bilateral ceasefire with the Myanmar government. In the two decades between 1989 and 2009, Kokang enjoyed a peace dividend from the ceasefire, and the region prospered from the production and trafficking of narcotics, illegal logging, as well as arms trafficking from China to insurgent groups in northeastern India. The funds from these illicit activities financed development projects in Kokang and elsewhere in Myanmar, including casinos, entertainment, real estate, hospitality, retail, and construction. Many of these projects were co-financed by Chinese investors, leading many Myanmar locals to regard the ethnic Kokang as outlaws supported by China, and to support the Tatmadaw’s fight against the MNDAA (Lintner, 2015; Matsui, 2015; Tin, 2015). The anti-Chinese mood among these locals can be seen in their criticism of their government’s offer of compensation to the Chinese victims of the Yunnan bombings. Some of these critics argue that the Myanmar government is being overly influenced by China, and should instead focus on helping the Myanmar civilian victims in the conflict (Pyone & Thin, 2015).
The current struggle of the ethnic Kokang is the latest iteration in a history of failed nation-building in the Burmese state.
In 2009 Kokang’s two decades of peace ended when the MNDAA resisted the government’s instruction to reorganize itself into a paramilitary force under the control of the Tatmadaw. The Tatmadaw commenced hostilities, and MNDAA leader Peng Jiasheng was ousted in a mutiny supported by the government. The violence prompted over 37,000 civilians to flee across the border into Yunnan, a precursor to the refugee crisis of February 2015 (Lintner, 2015; Nang, 2015; Ide & Sun, 2015; Sun, 2012a, p. 75). Peng, who had forged connections with the Chinese Communist Party during his years with the CPB, claims to have spent 2009-2014 in exile in China and other countries in the region (Ide and Sun, 2015). In the middle of 2014, he was back in Myanmar, and on February 9, 2015, he commenced his attempt to retake Kokang with the MNDAA (Lipes, 2015). In the current conflict, the MNDAA has reportedly been supported by other ethnic militias, including the Ta’ang National Liberation Army, the Kachin Independence Army, and the Arakanese Army. Myanmar’s United Nationalities Federal Council, representing a collective of ethnic militias, has voiced its support for the ethnic Kokang, and has asked the government to enter into peace negotiations with the MNDAA (Lipes, 2015; Nang, 2015). A senior Ta’ang National Liberation Army commander explained that the current conflict exposes the ethnic minorities’ unhappiness over their being sidelined by the Myanmar government (“Poppies, Power,” 2015).
In broader historical perspective, the current struggle of the ethnic Kokang is the latest iteration in a history of failed nation-building in the Burmese state. As Bertil Lintner explains, “From the very beginning, the problem has been one that many Burmese rulers and even ordinary citizens are reluctant to admit: Burma is a colonial creation that includes nationalities which historically had little or nothing to do with each other until British authority was established over the old bama kingdom and a horseshoe-shaped ring of surrounding mountain ranges. Even today, there are remote tribal areas where the local people do not even know that they belong to a country called 'Burma,' or even less so 'Myanmar' — the official name of the country since 1989 and which is supposed to encompass the country’s '135 national races,' as if such a term existed in any language.” (Lintner, 2012).
New Trends in Sino-Myanmar Relations
Despite its support for the CPB, China has enjoyed a history of close bilateral relations with Myanmar. The Chinese recall that Burma was the first country outside of the socialist bloc to establish relations with Beijing after the founding of the People’s Republic of China in 1949, helping China break out of the diplomatic isolation imposed by the anticommunist West. More recently, when Burma suffered Western sanctions after the 1988 military crackdown, China provided a diplomatic and economic lifeline, including much-needed concessionary loans and technical assistance for infrastructural and industrial projects. Chinese immigration into Burma increased under the military rule of the State Peace and Development Council (SPDC) (1988-2011), as Western sanctions shielded Chinese investors from Western competition (Walsh, 2009). Sino-Myanmar economic relations further intensified after the turn of the millennium, when China’s globalizing state-owned enterprises turned to Myanmar as a convenient location for the extraction of timber, gems, minerals, and hydropower. By 2010 China had become Myanmar’s largest foreign investor (Haacke, 2011, pp. 115-116; Sun, 2012a, p. 79). Indeed, in May 2011, when Myanmar’s new President Thein Sein visited Beijing, China announced the elevation of its bilateral relationship with Myanmar to a “comprehensive strategic cooperative partnership” (Sun, 2012a, p. 80; Li, 2012, p. 54). The Chinese were hence blindsided just a few months later when Thein Sein suspended China’s Myitsone Dam project, which had faced significant criticism from local people and non-governmental organizations for the population displacement its construction would cause, not to mention the destruction of important sites of cultural and environmental significance (Sun, 2012a, p. 85; Rieffel, 2012, p. 40; Steinberg, 2013, pp. 207-208; International Rivers, 2011). China Power International, the Chinese partner in the project, hopes that the suspension will be lifted when Thein Sein leaves office in 2015. Should the project instead be terminated, however, it may pursue legal channels for reimbursement of its investment of over 1 billion USD (Martov, 2013; Sun, 2015). Chinese officials would later cite the suspension of Myitsone Dam as the third major instance, following 2005’s surprise relocation of Myanmar’s capital to Naypyidaw, and 2009’s Tatmadaw attack on Kokang, of Myanmar’s harming and embarrassing China (Sun, 2012a, p. 87; Thant, 2011, pp. 217-220). As we shall see, Sino-Myanmar relations have subsequently gone into a steep decline.
In counterpoint to China’s reduced influence in Naypyidaw in 2011, the US saw a rapid rapprochement in its relations with Myanmar. The opening was Thein Sein’s meeting with opposition leader Aung San Suu Kyi that August. The subsequent political liberalization saw the lifting of most of Washington’s financial sanctions on Myanmar, the appointment of a US ambassador, well as the resumption of state visits, with US President Barack Obama visiting Myanmar twice, and Myanmar President Thein Sein visiting the US (Wang & Chen, 2015). The Chinese would soon come to see the US as having spoiled their close friendship with Myanmar (Sun, 2014, p. 4). However, as we have seen earlier, Myanmar’s suspicions of the Chinese date back to Beijing’s historic support for the CPB. Myanmar’s close relationship with China during the SPDC period was due to necessity, with the Chinese being the only major power willing to invest in the country. With the US rapprochement of 2011, Myanmar is now free to pursue its preferred foreign policy of neutrality and nonalignment. In practical terms, as we shall see, this has meant the balancing of Chinese and Western interests. While China has not been shut out of Myanmar, it now has to compete with the Americans, Japanese, and other powers (Sun, 2012b, p. 57; Sun, 2014, pp. 7-9).
In late 2011 China recognized the legitimacy of the opposition National League for Democracy (NLD), and the Chinese ambassador has held multiple meetings with NLD leader Aung San Suu Kyi.
The response from Chinese investors to the Myitsone Dam debacle of 2011 was a collapse in new investment in Myanmar. While they continued with the implementation of existing projects, they have opted against signing new projects, in view of the political risks exposed by the suspension of the Myitsone Dam project. From 2012 to 2013, Chinese investment in Myanmar collapsed by over 90%, from over 8 billion USD to just 407 million USD (Sun, 2012b, p. 64; Sun, 2014, p. 8). China accounted for just 0.8% of foreign direct investment (FDI) in Myanmar in the nine months ending in December 2013. The top investors that period were South Korea, Singapore and Thailand (“Myanmar: Has,” 2014). In terms of cumulative investment, however, China remains Myanmar’s largest investor, with 14.25 billion USD invested in the country, especially in the power and oil and gas sectors (Toh, 2014). China also remains Myanmar’s largest trading partner (Kyaw & Blake, 2015). This appears to be changing. Following the lifting of Western sanctions on Myanmar, Thein Sein’s government has sought to diversify the sources of FDI beyond China, leading to the expansion of US and European investment in Myanmar. Since suspending China Power International’s Myitsone Dam project, Myanmar has begun pursuing hydropower investment from US, French and Norwegian multinational corporations (Wang & Chen, 2015). In the oil and gas sector, Myanmar has awarded oil and gas blocks to Euro-American energy corporations including ConocoPhillips, Chevron, and Shell, avoiding the previously favored Chinese energy corporations (Toh, 2014). Russian energy corporations like Bashneft and Gazprom are also establishing their presence in Myanmar’s oil and gas sector (Kamalakaran, 2015).
Politically, China has publicly demonstrated its displeasure of Thein Sein’s turn to the West by drastically reducing the number of official visits to Myanmar from senior officials. However, it has also started to cultivate other inroads into Myanmar. In late 2011 China recognized the legitimacy of the opposition National League for Democracy (NLD), and the Chinese ambassador has held multiple meetings with NLD leader Aung San Suu Kyi. On the cultural front, China has sought to improve its image with a broad public relations campaign. Its Buddhist diplomacy campaign appears especially prescient given the recent revival of Buddhist nationalism in Myanmar (Sun, 2012b, pp. 65-68; Maung, 2013).
The Southwest Passage
The reason China cannot fully disengage from Myanmar is due to Myanmar’s strategic location as China’s southwest passage to the Indian Ocean. Due to the accident of geography, China only has direct coastal access to the Pacific Ocean. Good relations with Myanmar hence have become necessary for China to develop Myanmar as a transshipment passage between Yunnan and the Indian Ocean (Li & Lye, 2009, p. 258). Indeed, the Chinese government’s Five Year Plan of 2011-15 highlights Yunnan’s strategic role as a bridgehead for China’s engagement with the Indian Ocean, thereby transforming China from a “One Ocean” to a “Two Ocean” power (Sun, 2012a, pp. 83-84). As vice-mayor Liu Guangxi of Kunming explained in 2010, the Chinese government plans to transform Yunnan into “a gateway that links to neighboring countries and the Indian Ocean” (Zhao, 2010). A key infrastructural project has been the 2.5 billion USD development of oil and gas pipelines crossing almost 800 km from the Indian Ocean across Myanmar into China. The Shwe gas pipeline, which went live in July 2013, runs from the port city of Kyaukphu to Ruili in Yunnan. The oil pipeline, which went live in early 2015, runs parallel to the gas pipeline, and extends past Yunnan into Chongqing, supplying the energy needs of the growing cities of southern China. These pipelines enhance China’s energy security by allowing oil and gas shipments to bypass the piracy-ridden Straits of Malacca and, more significantly, the South China Sea, where China has significant territorial disputes with regional powers (Igarashi & Saito, 2015; Toh, 2014; Steinberg & Fan, 2012, pp. 168-173; Zhao, 2011, p. 94; “Status Quo Revisited,” 2013). The maintenance and enhancement of these pipelines hence constitute a key infrastructural component of China’s energy security policy, which makes it essential for China’s foreign policy establishment to pursue an improvement of China’s bilateral relations with Myanmar past the changes of 2011.
Likewise, Myanmar cannot afford to fully disengage from China. Despite increases in investment from the US and the West, these are still insufficient for Myanmar’s development. In particular, Myanmar’s long-neglected infrastructure needs to be modernized, and China is a reliable partner in this economic area. Myanmar hence has applied to be one of the founding members of China’s Asian Infrastructure Investment Bank (AIIB), and hopes to receive AIIB financing of infrastructure projects when the multilateral bank opens later this year (“AIIB: Countries seek,” 2015). Myanmar’s embrace of the US and Europe may be tested with the government’s continued use of violence against civilian protests, for example, the police suppression in early March 2015 of student protests in the cities of Yangon and Letpadaung. Such violations of international norms of human rights are especially sensitive to the US and European states, and could potentially derail Myanmar’s recent establishment of closer relations with them (Marston & Morgan, 2015). Close relations with China would be useful for Myanmar should such a situation occur. Finally, as noted earlier, President Thein Sein has stated he will not be running in the 2015 general elections, which are scheduled to be held in either October or November (Panda, 2013; “Burma General Elections,” 2014). Myanmar’s new President and leadership after this, the country’s first democratic elections in a quarter of a century, will determine if Myanmar’s relations with China will shift in new directions. China’s foreign policy establishment will have to prepare for Myanmar’s new democratic leadership.
This paper was originally published in The Asia-Pacific Journal (Lim, 2015). Since that time of writing, Myanmar held its general elections in November 2015. The opposition NLD won 80% of the seats, ending a half-century of military rule. While 25% of the parliamentary seats are constitutionally reserved for the military, giving the military a veto over attempts to revise the constitution, the NLD retains majorities in both houses of parliament. The newly-elected parliament met for its first session on February 1, 2016, and the legislators will have to elect the country’s new president before the end of March when the current president Thein Sein ends his term of office. While NLD president Aung San Suu Kyi is constitutionally prohibited from becoming Myanmar’s next president, she is expected to exercise control over the government through her control of the party. However, observers expect the NLD to cooperate with the military, especially since the military constitutionally retains control over key levers of power in the country (“Democracy in Myanmar,” 2016; “Myanmar’s newly-elected,” 2016). Of interest is the question of Sino-Myanmar relations under the coming NLD-led administration. China has been presciently cultivating good relations with the NLD, and in June 2015 Beijing hosted a well-publicized meeting between Aung San Suu Kyi and Chinese President Xi Jinping. There are indications that China’s careful cultivation will bear fruit. Aung San Suu Kyi has praised China’s “Belt and Road” global development initiative, and she has supported a contested Chinese copper mine project. However it remains to be seen if the NLD-led administration will restart the stalled Myitsone dam project (Chen & Chung, 2015; Min, 2016; Thant, 2016).
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