Myanmar Is Pivoting Away from China
Beijing’s hosting of Aung San Suu Kyi smacks of desperation.
YANGON — Not that long ago, it would have been unimaginable for Myanmar’s most famous political leader — former dissident and Nobel Peace Prize laureate Aung San Suu Kyi — to travel to Beijing at the invitation of the ruling Chinese Communist Party (CCP). For decades, Beijing helped prop up Myanmar’s military junta that had placed Aung San Suu Kyi under house arrest. In mid-June, however, it rolled out the red carpet for her and her party, the National League for Democracy (NLD). In a telling break from protocol, the opposition leader even scored a meeting with Chinese President Xi Jinping himself. “The invitation,” China’s state news agency Xinhua rather blithely wrote in an editorial just before the visit, shows that the CCP “stands ready to engage with any political parties as long as they are willing to promote the sound development of relations with China.”
If only. Beijing’s effort at currying favour with Aung San Suu Kyi and the NLD is borne partly of desperation, and indicates how swiftly Beijing’s stock in Myanmar is falling. China was Myanmar’s main backer and largest investor during its years of international seclusion, supporting strategic infrastructure projects such as oil and gas pipelines, ports, and dams. Between 1988 and 2013, China accounted for a whopping 42 percent of the $33.67 billion in foreign investment that flowed into Myanmar. But the nature of these projects — including concerns about forcibly-relocated populations, land confiscation, environmental hazards, and the inflow of cheap goods and labor — made China unpopular with the Burmese public (the extent of such sentiments is impossible to determine, in the absence of reliable public-opinion surveys.)
Myanmar’s military was even more reliant on China: Almost 60 percent of the country’s arms imports during that same period came from the Middle Kingdom. And until recently, the military remained favorably disposed to their northern neighbor. Yet Beijing appears to have ruined the one good relationship it had going in the country. The suspension of the Chinese-backed Myitsone dam on the Irrawaddy River in 2011 — a project initially agreed between Myanmar’s military junta and the state-owned China Power Investment Corp. in 2005 — hurt ties. But it was the killing of five Chinese citizens by Myanmar’s air force in March, while conducting raids on rebels along the border, and China’s response, that has significantly widened the rift with the military. Although Naypyidaw offered a grovelling apology, Beijing’s provocative decision to stage live-fire military exercises along the border in early June further tarnished relations with its one real constituency in Myanmar.
The deteriorating relationship between China and Myanmar’s military has coincided with the latter’s economic and political opening. As recently as seven years ago, Myanmar was perhaps the most isolated country in the world, barring North Korea. So great was the ruling junta’s paranoia about regime change that in 2005 (at a moment selected by the personal astrologer of then-dictator Than Shwe) they moved the capital from Yangon to remote Naypyidaw, a town designed for crowd control. Two years later, the government violently suppressed the so-called Saffron Revolution, led by the country’s Buddhist monks. In 2008, Cyclone Nargis devastated parts of the country, and the regime’s woeful relief efforts exposed the weakness of its strategy of deliberate international isolation. Two years later, the junta finally released Aung San Suu Kyi from house arrest, a critical moment for the country’s liberalization under President Thein Sein. But so ingrained was Myanmar’s isolation that, as recently as 2013, it had lower per capita imports than North Korea, and was receiving fewer than 1000 foreign visitors per day.
Today, the economic aspects of liberalization and diversification are visible on the streets of Yangon. The likes of Coca-Cola and Samsung jostle for billboard space with Norway’s largest mobile service provider Telenor, India’s Tata Motors, and even China’s consumer electronics giant, Haier. Yangon’s handful of five-star hotels are filled with suit-clad American, European, and Japanese businesspeople. McKinsey & Company and the Economist have organized international conferences here. By some estimates, Myanmar is now the world’s 13th fastest-growing economy.
Myanmar’s political opening — which has empowered civil society and enabled greater public criticism of China’s intentions — is less pronounced, but nonetheless real. Many formerly exiled dissidents have returned to the country. Organized opposition politics is no longer underground; over 70 political parties have registered to compete in the general elections scheduled for November. Media outlets like the exile-founded Mizzima News and the Australian-led Myanmar Times are making inroads, and foreign broadcasters such as Japan’s NHK and Singapore’s Channel News Asia have been allowed to establish a presence. And in a familiar signal of democratic liberalization, George Soros has arrived as the Medici-like benefactor of the country’s NGOs. It is significant that such developments — once closely associated with Eastern Europe and the collapse of the Soviet Union — are now taking place in what was once considered China’s exclusive sphere of influence.
So who really benefits from China’s deteriorating ties with Myanmar? India. For Myanmar’s other large neighbor, the country’s opening has been nothing but good news. India was Myanmar’s other partner of consequence during its international isolation, along with China. But that relationship was driven largely by fears of Chinese influence and the necessity of cooperation with the junta in countering militants straddling the Indo-Myanmar border. While India is now ceding economic influence and strategic space in Myanmar to the West, Japan, and other new arrivals, its primary concern — that of Chinese dominance along its eastern border — is being assuaged.
Moreover, members of Myanmar’s political and policy establishment are favorably disposed toward India, and are at pains to emphasize the problem-free nature of bilateral relations. One new area of opportunity exists in New Delhi’s reestablishing relations with the large number of ethnic Indians in Myanmar, believed to be as many as 1 million, who have long been considered a “lost” — or, more accurately, forgotten — diaspora.
The relationship is not without its complications. India still requires cooperation with Myanmar in dealing with insurgent groups along the two countries’ border. Military operations in early June by the Indian Army in retaliation for an ambush by separatist groups sheltering in Myanmar underscore the degree to which this is still a major national security threat. In this matter, Naypyidaw has generally been cooperative with New Delhi at the political level, but corruption and the limited reach of government ensure that militant refuges remain.
Some in Myanmar, meanwhile, express frustration at India’s inability to deliver on promises, whether on major infrastructure projects or investment. “India is unable to compete with China. It’s simply impossible,” one opposition politician told me ruefully.
Of course, these changes are no guarantee of Myanmar’s seamless democratization, nor do they herald a complete loss of Chinese influence. “There is no change that is not reversible,” one local journalist cautioned me. The strong arm of the state is still visible in many respects. State media still predominates, with predictably drab press release-style coverage of domestic affairs. Of greater concern is an absence of government accountability. Major decisions still go unexplained: whether on proposed constitutional reform, the release of sensitive census data relating to minorities or, indeed, the fate of major Chinese-backed infrastructure projects.
As Aung San Suu Kyi’s visit to China underscores, there is unlikely to be a wholesale rejection of Chinese investment and assistance, whatever the outcome of November’s general elections may be. But it is difficult to envisage a scenario whereby the country reverts to complete isolation and with it, an over-dependence on Chinese investment and political support. That is largely to the benefit of Myanmar’s populace.
In fact, the only real loser is China. And for its mishandling of relations with Myanmar’s military and neglect of Burmese civil society, Beijing can only fault itself.