China Leaps Into Breach Between Myanmar and West

A raft of new multibillion-dollar deals announced by Xi Jinping worry Washington and New Delhi.

By , a senior staff writer at Foreign Policy.
Chinese President Xi Jinping and Myanmar State Counsellor Aung San Suu Kyi
Chinese President Xi Jinping and Myanmar State Counsellor Aung San Suu Kyi inked a slate of huge investment deals that help restore China’s geopolitical influence over the Southeast Asian nation on Jan. 17. Pool/AFP/Getty Images

A raft of new multibillion-dollar development deals announced by Chinese President Xi Jinping in Myanmar earlier this month show how Beijing is back in business in the country after being sidelined from one of its preferred geopolitical stomping grounds for several years as Naypyidaw turned toward the West.

The new China-Myanmar flirtation is more worrisome for policymakers in New Delhi, looking across the Bay of Bengal at Myanmar. China’s renewed economic offensive, especially the construction of a new deep-water port, threatens to further encircle India, already feeling the squeeze of an increasingly aggressive China across the breadth of the Indian Ocean.

A raft of new multibillion-dollar development deals announced by Chinese President Xi Jinping in Myanmar earlier this month show how Beijing is back in business in the country after being sidelined from one of its preferred geopolitical stomping grounds for several years as Naypyidaw turned toward the West.

The new China-Myanmar flirtation is more worrisome for policymakers in New Delhi, looking across the Bay of Bengal at Myanmar. China’s renewed economic offensive, especially the construction of a new deep-water port, threatens to further encircle India, already feeling the squeeze of an increasingly aggressive China across the breadth of the Indian Ocean.

In the first visit by a Chinese leader in nearly two decades, Xi announced more than a score of big investments in Myanmar, which is still trying to rebuild its infrastructure and jumpstart its economy after laboring under Western sanctions for about 20 years. The deals included, crucially, an announcement on the construction of the long-discussed deep-water port at Kyaukpyu.

The high-profile visit and big accords were seen as particularly significant because Myanmar (also known as Burma) had started to distance itself from Beijing’s longtime influence, beginning around 2011, and had until recently been increasingly open to more engagement with the West. That prompted concern in Beijing, which long supported the army in Myanmar and played an outsized role in the country’s economy, making it a virtual geopolitical appendage in Southeast Asia.

“China viewed Burmese reengagement with the West through a zero-sum prism: It felt better relations with the West were coming at its expense,” said Derek Mitchell, a former U.S. special envoy and ambassador to Myanmar during its opening to the West.

Xi’s visit seems to have turned that around, highlighting how Beijing has been able to take advantage of Myanmar’s recent falling out with the West over allegations of ethnic cleansing against the Rohingya minority and general backsliding on human rights by once-lionized leaders like Aung San Suu Kyi.

“Since the alienation of the West over the Rohingya issue, China has seen a new opening and a new opportunity in this, and they are more able to have their say in Naypyidaw and push their line there,” said Mitchell, now the president of the National Democratic Institute, a nonprofit that supports democracy around the world. “They use it as an opportunity to invest, whether through the Belt and Road or the China-Myanmar Economic Corridor, or the peace process—those are all different ways to ensure that Burma remains in its sphere of influence.”

During Xi’s visit, Myanmar didn’t cave to all of Beijing’s requests, notably resisting calls to restart the stalled hydroelectric project whose cancellation chilled relations in 2011. Even the deep-water port, which China long sought, only came after Myanmar talked down the price from more than $7 billion to a little over $1 billion, leaving it less vulnerable to any Chinese debt trap. And a lot of what Xi announced was long in the works, in some ways turning it into a political stunt helpful to leaders in both countries rather than a new road map for development.

“My sense is that the deals announced were a collection of things already underway and was as much a demonstration of Burma’s desire to resist overwhelming Chinese influence,” Mitchell said. Long history, shared borders, and lopsided demographics have made Myanmar leery of too close an embrace from China. “They have no illusions about China,” he said.

But among the new Chinese projects, the deep-water port in Kyaukpyu stands out as perhaps the most important in advancing Beijing’s geopolitical interests throughout the wider region. For China, a new deep-water port on the western coast of Myanmar, perched just a few hundred miles from the easternmost Indian-held islands, is just the latest chapter in Beijing’s spree of port acquisitions that underwrite the maritime half of its Belt and Road Initiative. Kyaukpyu holds special significance for a country that has spent years fretting about its reliance on imported supplies of energy that must thread the vulnerable Strait of Malacca near Singapore: Kyaukpyu is the terminus of the huge natural gas pipeline China built to bypass Malacca and ensure energy supplies while avoiding the so-called Malacca Dilemma.

From Southeast Asia to the Indian Ocean and Arabian Sea, the coast of Africa, the Mediterranean, the North Sea, and even in Latin America, China in recent years has acquired outright ownership, development rights, or a management concession to a bevy of strategically located ports. Chinese port deals in Pakistan, Sri Lanka, Djibouti, the Maldives, and the Seychelles have all made headlines and chilled Indian planners who fear being choked by a Chinese “string of pearls.”

The ports are meant as commercial trading posts to enhance China’s world-leading shipping industry and bolster the country’s exports. But they have increasingly come to play a potentially more menacing role as dual-use ports that can give the beefed-up Chinese navy a global reach it lacked entirely just a few years ago.

“As I see things, the Chinese are trying this at all possible places and countries,” said Indian Navy Capt. Gurpreet Khurana, former executive director of the country’s National Maritime Foundation, in an email. “Even while the Belt and Road has a predominantly geo-economic motive, it is also being used for this military-strategic end.”

Why exactly would a yet-to-be-built port on the coast of an impoverished Southeast Asian nation give India pause? A lot has to do with how China has meshed commercial and strategic interests in the development of the maritime portion of the Belt and Road. Its investment in the Gwadar Port in Pakistan, for example, has long worried India. Chinese legal directives ordering state-owned shipping companies to offer logistics support to the Chinese navy—as they have done in recent years—turn China’s huge shipping fleet and port operations into a potential adjunct of its growing navy.

The prospect that China would use commercial ports to expand the overseas reach of its navy has been around for years and has yet to fully materialize; while China has openly turned Djibouti into a military facility, other Chinese-owned ports, such as those in Sri Lanka and Cambodia, have only sporadically hosted Chinese naval vessels so far.

But Indian and U.S. naval officers are increasingly concerned that China’s port-buying spree is laying the groundwork to enable its already huge and growing navy to dominate waters far from the Chinese coast. Closing that logistics gap—something the U.S. Navy did at sea during World War II, and with overseas bases in the decades that followed—became a priority for the Chinese navy after its first long-distance naval deployments to fight piracy off Somalia more than a decade ago.

“There are many ports and countries beyond Djibouti where China can obtain military access,” Khurana said. “The real potential today is in Pakistan, but more countries could be added to this list, and this is a matter of concern for India.”

India has in recent years, as part of its eastward orientation in security and foreign policy, shifted some of its naval weight closer to Southeast Asia, including a new naval base in the Andaman and Nicobar islands, not far from where China is building its new port in Myanmar. That’s partly a response to a greatly increased Chinese naval presence in the Indian Ocean: What began as three-ship anti-piracy patrols in 2008 became 10 years later swarms of submarines and amphibious ships, and soon, perhaps, patrols by China’s only operational aircraft carrier.

“They are undeniably preparing for future naval operations in the area to secure their strategic and energy interests,” Khurana said. “All of this is of serious concern to India, seen in conjunction with China’s naval cooperation with Pakistan, including Gwadar, on the western seaboard.”

In one sense, China’s plans for a new port in Myanmar overlooking India’s Andaman and Nicobar naval facilities are more reactive than aggressive. India’s Navy in those islands is in position to interdict shipping in the vital Strait of Malacca, whose vulnerability remains a headache for Chinese leadership. The new port could give China the ability to shadow what it sees as a threat to its own energy lifelines.

“The threat in the east is not so much to the Andamans and Nicobar,” Khurana said. “On the contrary, the Andamans and Nicobar are of concern to China.”

So what is India to do? It has been trying since at least 2012 to modernize and expand its navy to deal with the growing threat from China, but money is tight, and platforms have yet to materialize. That makes it harder to sustain India’s desire to become the go-to security provider in the Indian Ocean, and it makes greater cooperation with regional neighbors and countries like the United States more important.

“The Navy has budget constraints, so their share of the budget hasn’t gone up to match what they would like to achieve,” said Dhruva Jaishankar, an India expert at the Observer Research Foundation. Naval and other security cooperation with countries such as Indonesia, Myanmar, Malaysia, and Singapore “are steps to compensate for India’s inability to do it alone,” he said.

Beginning during the Obama administration, and continuing under U.S. President Donald Trump, India has also shed decades of reluctance to align too closely with the United States and has inked defense deals with Washington that help bolster its naval capacities. In Washington policy circles, greater engagement with India to secure the Indian Ocean is seen as a vital plank in America’s naval rivalry with China, which centers on the Pacific Ocean and the South China Sea, especially the defense of Taiwan, the Philippines, and Japan.

“The United States should pay particular attention to supporting India’s efforts to pose military dilemmas for China,” thus complicating the Chinese military’s ability to concentrate against U.S. assets in the Western Pacific, concluded the Center for a New American Security in a congressionally mandated study on the China threat released this week.

India is also stepping up cooperation with its fellow members of the so-called Quad, including the United States, Japan, and Australia, that are increasingly working together to knit the Indian Ocean into existing defense plans for the Pacific. Just this week, India suggested that it might include Australia in this year’s big Quad naval exercises, which would be something of a step change for New Delhi, long hesitant to turn the informal grouping into an overt security arrangement.

“Cooperation among the Quad is valuable … for what I call ‘strategic deterrence’ against China, by which I mean creating uncertainties in Beijing,” Khurana said. “Having said that, it would not be wise for the leadership of the Quad countries to emphasize the military and security component.”

India could also try to outbid China by seeking to offer development and investment assistance of its own. That’s a route that Japan has taken, with some success, to counter China’s Belt and Road programs throughout Asia. The United States, too, has taken baby steps toward beefing up its ability to play checkbook diplomacy and compete with Chinese financing for much-needed infrastructure projects that Beijing uses to buy influence.

India has built a port of its own in Myanmar, and the Indian government coaxed private sector firms into building a highway across Myanmar to the Thai border, but India doesn’t have the deep pockets and opaque leadership that Beijing enjoys when it comes to buying influence.

“India is more constrained,” Jaishankar said. It has provided about $30 billion for different kinds of infrastructure financing all over the world since about 2003, he estimates, but that pales in comparison to the headline figures of China’s $1 trillion Belt and Road. “It’s not large-scale checkbook diplomacy, and it’s not that significant compared to China, but it’s not insignificant,” he said.

To regain influence in the region, whether for India, the United States, or even Europe, may be less a question of how much and more a question of how.

Myanmar, like so many other countries on the receiving end of Chinese largesse, is desperate for financing to help build roads, ports, power plants, and other heavy infrastructure that will drive economic growth. But Chinese loans come with strings attached—as Sri Lanka discovered—that can create a deadly debt trap, in addition to expanding China’s geopolitical and military reach. And Chinese projects often are ill-vetted, fail to be transparent, and offer little benefit to local populations. That creates an opening for India and other countries to compete with China—and blunt some of its recent gains.

“Burma is interested in the ‘how’—if money comes in transparently, and shows respect for Burmese sovereignty, it will be very competitive,” said Mitchell, the former ambassador. “The ‘how’ is the way to gain an advantage over China.”

Keith Johnson is a senior staff writer at Foreign Policy. Twitter: @KFJ_FP

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