Why Burma Must Reset Its Relationship With China

Burma is experiencing its most dramatic moment of political change in more than half a century. In November, the opposition National League for Democracy (NLD) won a landslide victory in parliamentary elections that were the freest and fairest in decades. A new government led by Nobel laureate and opposition leader Aung San Suu Kyi is about to take office. This will represent a remarkable departure from sixty years of authoritarian rule, even though the transition is taking place under a constitution that reserves key powers for Burma’s armed forces, which have ruled the country for decades. The coming months and years will be a critical time for Burma’s still-tentative democratic opening.

Over the past several years, the international media has, quite understandably, focused on Burma’s remarkable liberalization and its opening to the West. By contrast, the country’s relationship with China has received relatively little attention. This is unfortunate. The rise of China is reshaping the world, and nowhere else will its impact be felt more strongly than in neighboring Burma.

The incoming government will have two key priorities: developing Burma’s economy and ending its seven-decade-long civil war. Achieving these goals is essential to securing a sustainable democratic transition — and China has a big role to play on both fronts. Despite Burma’s opening to the West, China is still far and away its most important trading partner, and its outsized influence in the territories along Burma’s northern periphery makes it a crucial player in any peace process.

The potential upside of the relationship is even more important. Burma is one of Asia’s poorest countries — but it sits at the continent’s heart, at the intersection of China, India, and Southeast Asia. Burma’s leaders have a unique opportunity to harness this special geography to the benefit of its people. But this will require moving away from the country’s defensive approach to China and determining how to make the best possible use of the relationship.

Burma’s history with China is complex and troubled, and simply trying to muddle through will not be enough. Instead, the incoming government should embark on a fundamental reset of the two countries’ relationship, placing the interests of the Burmese people front and center while accommodating China’s strategic priorities.

This will not be easy. Though nurturing friendly relations with Beijing has long been a core tenet of their foreign policy, Burma’s rulers have also sometimes viewed China as a possible menace. In the late 1960s, communist insurgents armed by China crossed the border and established a “liberated zone” in Burma’s northeast. In 1989, the insurgency collapsed — but China’s links with various ethnic militias remain, most notably with the 25,000-strong United Wa State Army.

In 2011, the relationship veered into choppy waters. One of the first acts of President Thein Sein’s reformist administration was to suspend work on the controversial $3.6 billion Myitsone Dam, a Chinese project meant to supply electricity to its Yunnan province, which borders Burma. Beijing was not pleased. Later that year, fierce fighting erupted in the far north between Burma’s army and the Kachin Independence Army for the first time in nearly two decades, sending thousands of refugees and stray artillery fire into China. In 2012, protests broke out against a big Chinese-operated copper mine. Investment pledges from mainland Chinese companies, estimated at $8.2 billion in 2010-11, shriveled to under $100 million in 2013-4.

Perhaps unsurprisingly, Burmese public opinion on China has soured considerably over the last quarter-century. Regime cronies and elites within some of the ethnic militias have grown rich from doing business with Yunnan. But many Burmese blame China’s hydropower, mining and agricultural projects for fueling corruption, displacing rural communities, and wrecking the environment. Along with weak state institutions and western sanctions, the impunity enjoyed by Chinese business interests has been an important element of the crony capitalism that drives Burma’s rent-based political economy.

A year ago, a freshly recruited and heavily armed ethnic Chinese Kokang militia crossed into Burma from Yunnan and overran the frontier town of Laogai. Burma’s army responded with a sustained counterattack that enjoyed enthusiastic public support. In February 2015, a top general alleged that the Kokang militia included former Chinese soldiers, something Beijing vociferously denied. In March, when the Burmese air force launched air strikes against the Kokang, some of the bombs accidentally fell on Chinese territory.

All this took place at a time when Burma’s government was putting the finishing touches on a Nationwide Ceasefire Agreement with over a dozen ethnic militias, meant to be the crowning legacy of the incumbent administration. After none of the armed groups along the Chinese border signed the accord, a senior Burmese negotiator publicly criticized China for urging them not to do so.

China, too, has had its concerns. In particular, Beijing has become quite nervous about Burma’s growing ties with the United States. In a way, the Burmese government has been doing exactly what the Chinese have long advised: reforming itself, repairing its relationships with the West, getting sanctions lifted, and reducing its dependence on China’s support in the U.N. Security Council. But Beijing was unprepared for the speed of the transformation, the eagerness with which Burma’s ex-generals sought to “rebalance” their foreign policy towards the West, and the anti-China mood that quickly filled the country’s newly open political space.

Chinese leaders are now waiting to see how the new government led by Aung San Suu Kyi shapes up. Beijing resolutely supported Burma’s previous military regime for over two decades, and worries that the shift in administration to Aung San Suu Kyi’s government will result in a surge of Western influence. But the Chinese seem to have realized which way the wind is blowing. In early 2014, Aung San Suu Kyi traveled to China for the first time, where she met with Xi Jinping himself and repeatedly stressed that she welcomes a good relationship with Beijing.

Now is the right time for Burma to reset its engagement with its giant neighbor. This new relationship could take many forms, but should include three important components. First, rather than letting China take the lead, Burma should formulate its own comprehensive plan for the multi-billion dollar infrastructure development it needs to revitalize its economy. China should be invited and encouraged to play a major role, but only within a framework set by the Burmese government in close consultation with the affected communities.

Second, Burma’s leaders must recognize that development cannot proceed at the expense of peace. The controversy surrounding the Myitsone Dam, for example, is not simply a debate about economics — it is intimately linked to finding lasting solutions to the conflict in the Kachin State. With good reason, local communities fear that Chinese projects will destroy their homes and livelihoods. The future government will need to consider development in ethnic minority areas together with sensitive political issues, such as business interests tied to ethnic militias, or the army’s confiscation of land.

Third, Burma’s peace process should be an arena for global cooperation, not pointless competition. China has become increasingly anxious over what it sees as undue Western and Japanese influence over the Burmese peace process, which has consequences for the future of the Chinese-Burmese border. The needs — from landmine clearance to ceasefire monitoring — are great, but they should be met transparently, perhaps through a new mechanism linked to the United Nations in which China, too, can participate.

Will Burma be able to convince Beijing to a new beginning of the two countries’ relationship? The Chinese will be tempted to push their economic interests and see how far they can get, using their influence over the borderlands as leverage. And they may withhold any decisive support for Burma’s peace process until they see their neighbor address their anxieties about Western influence and move quickly on stalled business projects.

This would be a mistake, igniting a strong nationalist reaction from across Burma’s political spectrum. But it would also be a mistake for Burma’s new government to consider each Chinese demand in isolation, while expecting more help with the peace process. Instead, the two sides must craft a comprehensive and forward-thinking new vision for their relationship.

There are, indeed, things China wants from Burma — and Burma can use these to its advantage. The economic growth of China’s Yunnan province depends on Burma, which is an important consumer market and has for nearly two decades provided a vital supply of primary commodities. Recently completed oil and gas pipelines and hydropower projects in Burma are essential to satisfying the energy needs of Yunnan and China’s wider southwest.

Burma’s position as a land bridge to India and the Indian Ocean is also vital. The “One Belt One Road” transport scheme is Xi Jinping’s signature initiative, and Burma is a lynchpin. China would like a new railway line connecting its interior to a deep-sea port on the Bay of Bengal, highways extended to India, and the Irrawaddy River transformed into a waterway for Chinese freight headed west. All these projects depend on Burmese cooperation.

Finally, Burma occupies an important place in the growing global competition between China and the United States. China is happy to see a peaceful Burma opening up and engaging with the West, as long as this does not lead to even a shadow of a western military presence along the two countries’ 1,300-mile-long frontier.

It is important for Burma’s international friends to appreciate its delicate situation with Beijing and give it the space it needs. Burma should have the best possible relations with all countries, but in ways that benefit the Burmese people. Sound Sino-Burmese ties are in the interests of everyone, including the United States. It’s time for both Burmese and Chinese leaders to recognize the need for a reset and to start making it happen.

In the photo, Chinese President Xi Jinping meets Burma’s pro-democracy leader Aung San Suu Kyi at the Great Hall of the People in Beijing on June 11, 2015.

Photo credit: STR/AFP/Getty Images