Can a Dam Deal Buy Beijing’s Support for Myanmar’s Junta?
China wants an unpopular billion-dollar project restarted, but it has walked a fine line around the coup.
As part of the ongoing military coup in Myanmar, junta leader Min Aung Hlaing recently announced the resumption of unnamed currently stalled hydropower projects. His announcement immediately prompted concern that this might include the massive, and massively unpopular, Chinese-funded Myitsone Dam, construction of which has been suspended since 2011.
Many assumed the worst: that Min Aung Hlaing planned to use Myitsone as leverage to ensure China’s support for his illegitimate regime. This view was understandable, not least since China referred to the coup as a “major cabinet reshuffle” and worked to weaken a United Nations Security Council statement and a Human Rights Council resolution. That’s drawn the ire of protesters, who launched daily demonstrations in front of the Chinese Embassy in the commercial capital of Yangon, openly borrowing tactics from and building virtual solidarity with their anti-authoritarian counterparts in Hong Kong, blaming China for supplying the junta with crowd-control gear, and accusing China of helping the junta to disable the internet.
In dangling Myitsone as a quid pro quo in front of the Chinese, Min Aung Hlaing potentially scrambled a delicate strategic calculus that Beijing has been managing since the project was suspended in 2011. China’s response to this gambit not only potentially impacts Myanmar’s internal affairs and its own relations with Myanmar, but it also can give the world important insights into the Chinese party-state’s strategic thinking in the age of Xi Jinping.
For the people of Myanmar, Myitsone is existential. It is ultimately about the “mother river” of the country—the Irrawaddy—and its sacred importance. The anti-Myitsone movement started locally, among the Kachin people most immediately impacted by the dam’s construction in a remote corner of upper Myanmar. In their origin myth, the Myitsone confluence is the birthplace of the Kachin people. Construction of the dam would flood an earthquake-prone area the size of Singapore, displacing 47 villages and approximately 12,000 people. It was yet another grievance in the long list held by a minority that has long resisted Burman-Buddhist rule, including through armed struggle since 1948. Myitsone is also the headwaters of the Irrawaddy, which runs the length of Myanmar. In addition to cultural and civilizational importance, the Irrawaddy’s floodplain is the country’s most important agricultural zone.
For its part, China has consistently misunderstood and underestimated opposition in Myanmar to Myitsone. When China Power Investment initiated the project with the secretive State Peace and Development Council military junta in 2001, very few people outside the parties and the local communities knew much about it. By 2008, there were protests over forced relocations and uncompensated land seizures. International anti-dam activists also took notice, as nascent Myanmar environmental organizations raised dire warnings about disastrous environmental damage and downstream implications. A leaked 945-page environmental impact report compiled by a joint China-Myanmar team of researchers concluded the dam should never be built. Nonetheless, during a 2009 visit to China by then-deputy junta leader Maung Aye, then-Chinese Vice President Xi Jinping oversaw the signing of a new contract to expand the project.
After the Tatmadaw turned over executive power to a nominally civilian government in 2010, efforts to stop the project had a new target: elected authorities who potentially could be influenced. The “Save the Irrawaddy” campaign became a national cause célèbre, featuring not only a network of grassroots civil society organizations with international connections but also famous actors and extensive use of various media platforms.
The campaign highlighted the extensive cultural, environmental, and social costs of the project, including that 90 percent of the energy it produced would be sent to China. Given the parlous state of Myanmar’s electric grid, this was an effective point of attack. The Tatmadaw’s contribution to the project’s problems was to break a 17-year cease-fire with the Kachin Independence Army in June 2011, leading to active fighting in the area. In September 2011, President Thein Sein announced the Myitsone dam was suspended for the remainder of his five-year term.
China was stunned. Instead of acknowledging the legitimate concerns and organic movement that led to the suspension, Chinese authorities initially lashed out and blamed the United States. For its part, the U.S. government, despite having provided small amounts of funding to some of the civil society organizations that participated in the campaign, was equally surprised. The Obama administration seized on the suspension as proof that Thein Sein and his government were genuine reformers who wanted to reduce Beijing’s stifling influence. While second part was true, the first part was less so.
Buoyed by their success, Myanmar civil society mobilized other campaigns targeting problematic Chinese-affiliated projects, including the Letpadaung copper mine and the Kyaukphyu Special Economic Zone. None proved remotely as successful as the anti-Myitsone effort. After security forces were accused of using white phosphorous against protesters at Letpadaung mine in 2012, Thein Sein appointed newly elected Member of Parliament Aung San Suu Kyi to head an inquiry.
At the time, local commentators speculated this was a shrewd effort to set her up for failure. After a presiding over a series of public meetings, the inquiry produced a report that endorsed the continuation of the project with minor changes, outraging the local community. Nonetheless, national attention faded, and the mine is operating today despite periodic local agitation. This pattern—local grievance, brief national attention, superficial government engagement—became the norm, especially after Aung San Suu Kyi’s National League for Democracy (NLD) won the 2015 elections.
The difference in outcomes across these projects can be traced to a number of factors. One important element is NLD governance. As clearly seen in the Letpadaung incident, the NLD enjoyed much greater popular support and legitimacy in dealing with unpopular Chinese projects, effectively short-circuiting national advocacy campaigns. Whereas these national campaigns had previously served as a proxy for criticizing the quasi-military government, after 2016 there was markedly less enthusiasm for doing so. The NLD, to its credit, tried to rein in malinvestment, including successfully renegotiating projects like Kyaukphyu to ensure economic feasibility. It also established a new “Project Bank” intended to subject proposed foreign investments to more rigorous environmental and social reviews, and more generally serve as a check on poorly conceived, unsanctioned, unsustainable, or otherwise dubious projects.
After the initial shock and finger-pointing of Myitsone wore off, China launched a massive influence operation targeting actors beyond the Tatmadaw and the halls of government. As always, the purpose was twofold: to better understand and then better shape the operating environment by “telling China’s story well.” There were thousands of study tours for legislators, political activists, local scholars, journalists, religious leaders, and others.
Chinese enterprises launched showy (if cringey) corporate social responsibility campaigns, provided research grants, established cooperative agreements between think tanks, and sponsored conferences. Overall, having experienced numerous bumps elsewhere while pursuing its Belt and Road Initiative, the Chinese party-state was able to apply lessons learned and operate with a more nuanced understanding of why local communities might resist such beneficence. But on a less positive note, since August 2017, China also cynically and assiduously exploited anti-Western sentiment in response to criticisms of the atrocities against the Rohingya by legitimizing Myanmar’s anti-terrorism narrative, cultivating contacts with Myanmar extremists, and reprising its role as Myanmar’s protector at the U.N.
Different Chinese projects also carried different incentive structures within Myanmar’s and China’s systems. For China, the Kyaukphyu pipeline and Special Economic Zone are fundamentally strategic. As the core of the China-Myanmar Economic Corridor, they provids critical access to the Indian Ocean for landlocked southwest Chinese provinces, including for Yunnan-bound oil and gas. From Naypyidaw’s perspective, however, Kyaukphyu had limited impact in the Burman-Buddhist heartland. Rather, both the NLD and the Tatmadaw frequently butted heads with the local ethnic Rakhine communities indigenous to the project site area, leading to further underweighting of local concerns.
Myitsone, however, has stubbornly remained outside this framework for cooperation. For the Chinese side, Myitsone historically was subject to strategic and economic logic. But as other energy resources have come online in Yunnan since 2011, Myitsone is no longer economically or strategically significant. This should have prompted it to slip quietly down a Project Bank rabbit hole. Instead, China has continued to push it at the highest levels, fully aware that Myitsone alienates the people of Myanmar and sits in the middle of an active conflict zone. In fact, restarting Myitsone reportedly is raised in every senior-level meeting, including when Xi met with Aung San Suu Kyi in Naypyidaw during his only trip outside China in 2020. Despite this ongoing pressure and a willingness to move forward with other China-Myanmar Economic Corridor projects, Aung San Suu Kyi would only politely feint at the possibility that Myitsone someday would be resumed.
Knowing all this, why has China persisted with such high-level pressure on Myitsone? One answer may lie in the changes inside Chinese politics since 2011. As with the Belt and Road writ large, Myitsone is seen internally as inexorably linked to Xi’s personal prestige as paramount leader. This traces back to that 2009 signing ceremony in the Great Hall of the People. In light of how Xi’s consolidation and expansion of authority since 2013 has collapsed the distinctions between his personal priorities and those of the party-state, Myitsone has morphed from white elephant to white whale.
For this reason, a seemingly niche issue warrants attention from those who seek to understand Chinese strategic thinking, whether in relation to the Belt and Road or internal foreign-policy deliberations. When she was in charge, Aung San Suu Kyi demurred on Myitsone, knowing there was no domestic upside to restarting this despised project. Likewise, back when Aung San Suu Kyi could endlessly slow-roll decisions, there was little cost to the Chinese side in demanding the restart of Myitsone. Min Aung Hlaing has called China’s bluff in giving Beijing an opportunity to revive the project, and the coup has scrambled the strategic calculus. Whether or not the Chinese system’s need to flatter Xi will outweigh the obvious risks of restarting the project may tell observers something important about Chinese strategic decision-making.
If China takes the bait and resumes this and other deeply unpopular hydropower projects in partnership with the new junta, it is likely to permanently alienate the people of Myanmar, including their democratic leaders. In the past, China has been willing to take this risk, but the stakes are different and higher today—not just in Myanmar but across the entire Belt and Road. It is not a good look for Beijing to have countries think it is willing to support a coup in order to get its way on infrastructure projects. Resumption of the project would be especially destabilizing in Kachin state, which borders China at the Walong tri-junction with India. It is an open secret that insurgent groups attacking India’s northeast are based in Yunnan province, and Myitsone resumption could create incentives for greater cooperation between India and the Kachin and other ethnic armies. Even as efforts to de-escalate the tense situation on the Chinese-Indian border continue, the potential for violence remains high.
Normally, China can be counted on to act rationally and in its own interests in such situations. But the dangers of dictatorships making bad—even catastrophic—decisions emerge most profoundly when their leader’s egos become the justification for the regime’s actions. China under Mao certainly proved this to be true. We may be about to see how far down that path Xi’s leadership has gone.