Relationship reset

Relationship reset

Aung San Suu Kyi's visit to Beijing helps both China and Myanmar clarify strategic priorities. By Larry Jagan in Yangon

Myanmar and China have a special relationship that was strengthened further by Aung San Suu Kyi's recent trip to Beijing. The frequency of her trips to China -- more than to any other country -- since she became State Counsellor underlines that relationship.

While no major new agreements were signed during her trip, it was a public demonstration of the growing strategic relationship between the neighbours.

The stated purpose of her visit was to attend the Belt and Road (BRI) Summit, attended by 39 countries and several international organisations, where she also held talks with Chinese President Xi Jinping. It was also a crucial test of the Myanmar government's ability to steer an independent path under enormous Chinese pressure to commit to proposed development projects, some of them highly controversial, including the Mytisone Dam.

But some analysts say the relationship has flourished almost by default, mainly because the West has shunned Myanmar in reaction to the military crackdown on Rohingya Muslims in Rakhine state.

"Reaching out to the West was central to Myanmar's roadmap to democracy," said John Blaxland, professor of international security and intelligence at the Australian National University. "It underpinned the country's search for strategic diversity, but those options have narrowed in the wake of the Rakhine crisis -- with a shrinking circle of friends -- at the same time as China's economic power has burgeoned, leaving Myanmar now much more beholden to Beijing, and its bargaining position severely weakened."

Thaung Tun, Aung San Suu Kyi's national security adviser and Minister for Investment, takes a more optimistic view.

"Myanmar and China share a special relationship," he told Asia Focus, while adding that this would never be at the expense of the country's national interest.

This was also the central message that Aung San Suu Kyi delivered to the BRI Summit. "In view of our geographical proximity, our existing friendly and strategic partnership and our firm good neighbourliness with China, Myanmar has embraced the Belt and Road Initiative," she said.

This was the sort of endorsement the Chinese leadership was hoping for from its ally. "China certainly portrays the summit as a big success -- and much has been achieved in the past six years under the BRI, though it is well known that China is slowing down with many of its BRI projects and investments," said Yun Sun, an expert on China and its regional relationships at the Stimson Center, a US strategic think-tank.

Domestically in Myanmar, all eyes were on the Beijing meeting, with fears that Aung San Suu Kyi might capitulate to Chinese pressure and agree to the resumption of the China-backed Myitsone dam, suspended by former president Thein Sein in 2011.

"We are very worried. We hope for the best, but at the same time we are concerned," environmentalist Myint Zaw told Asia Focus. "The decision to implement the project will have many consequences in Kachin State, especially in regard to the environment. We are very worried that a wrong decision will further weaken the already fragile country.

"The overwhelming public message is 'scrap the project': although people are poor, they are willing to pay compensation from their own pockets to get the project scrapped. She needs to take bold steps in the future negotiations."

As it turned out, Myitsone was not even discussed during the meeting of the leaders, according to Myanmar government spokesman Zaw Htay.

"We take it very seriously. We are very careful about public opinion as well as agreements with China. There will be very serious considerations and negotiations on that issue," he said. "We won't do any secret deals [on the dam]. There will be transparency and we will let the public know how we will deal with it."

Given the public outcry against the dam, Beijing would have wanted to avoid adverse publicity during the summit, according to Yun Sun. "The Chinese certainly will not take the chance of letting potential negative comments affect the image and result of the BRI Forum," she said.

Proposals for smaller dams to replace the original site and ideas on how Chinese investment can be transferred to new projects are certainly on the drawing board. Earlier this year, Thaung Tun said the government and Chinese officials were considering all possibilities -- including downsizing the dam or relocating it.

"Our efforts are directed toward saving the lifeline of our country -- the Irrawaddy River as a matter of urgency," said Myint Zaw. "Our focus is on how to save the situation, and set aside the question of who is responsible for it."

Myanmar diplomats believe China's overriding concern on Myitsone is about losing face -- "preventing reputational damage" in the words of one diplomat who asked not to be identified. This could lead to Beijing accepting a reasonable compromise: alternative dam sites, compensation or some other incentive of mutual benefit.

The leaders of both countries understand the situation well, according to Myanmar and Chinese diplomats. "Working-level conversations on Myitsone have been going on for years," Yun Sun told Asia Focus in an email. "What is needed to move this forward now is political will on both sides to make the compromise."

The fact that there was no announcement of specific projects seems to indicate that both sides are committed to "letting sleeping dogs lie", especially on the issue of Myitsone. "While this issue is far from forgotten," she said, "it will need both sides to be willing to make compromises."

Although decisions on Myitsone may have been deferred, as were agreements on other specific projects that may come under the rubric of the China-Myanmar Economic Corridor (CMEC), the two countries did reaffirm their commitment to the overall plan and strategy. The Myanmar government signed two memoranda of understanding (MoU) and an agreement letter with China during the forum.

The MoU on the CMEC -- covering cooperation in trade and the economy -- which was signed by Myanmar's Ministry of Planning and Finance and China's National Development and Reform Commission. It outlines a five-year collaboration, expanding on the 15-point MoU for the CMEC signed last September. The corridor is envisioned as a Belt and Road component with basic infrastructure connecting China with key economic centres in Myanmar.

Collaboration will take place in several sectors including basic infrastructure, construction, manufacturing, agriculture, transport, finance, human resources development, telecommunications, and research and technology. The 1,700-kilometre-long corridor will connect Kunming - the capital of Yunnan province -- to Myanmar through Mandalay in central Myanmar, east to Yangon and west to the Kyaukphyu Special Economic Zone (SEZ).

The second MoU was signed by China's Ministry of Commerce and Myanmar's Ministry of Investment and Foreign Economic Relations. China is Myanmar's largest trade partner, and last week the Myanmar government signed an agreement with the government of Yunnan for a barter system at the border in order to expand trade cooperation.

Under the agreement, Myanmar will export agricultural products to China via the Muse border trade zone. In return, Myanmar will buy construction materials, farm implements and fertilisers from China.

The third official document, an agreement letter, was signed by the two countries' ambassadors and outlines collaboration on the economy and technology.

Also during the summit, China Railway Group Company chairman Li Changjin presented a feasibility report on the proposed Muse-Mandalay railway to Myanmar's Minister for Transport and Communications, Thant Sin Maung.

The railway begins at Muse -- a major land port that borders the southwestern Chinese city of Ruili -- and stretches southward to Mandalay. The 410-kilometre-long line is a key part of the CMEC. The feasibility study was agreed last October, and included a geological survey. Government officials are confident that construction will start soon.

But this close relationship with China should not be without its concerns for the Myanmar government. "Kyaukphyu and the CMEC clearly have strategic ramifications, although they make both economic and strategic sense for both countries," Prof Blaxland told Asia Focus in an interview.

"[Kyaukphyu] lessens China's dependence on the Malacca Straits for the import of oil and gas -- and makes the markets of South Asia, the Middle East and Europe more accessible. But for Myanmar, it ties them closer to China, creating indirect influence while they seek to capitalise on the financial and economic opportunities this offers, while keeping in check Beijing's proclivities for political interference."

This strengthened Sino-Myanmar relationship is both strategic and economic. "It is impossible to separate the strategic from the economic," argued Prof Blaxland. "It clearly poses a significant challenge to Myanmar's independence: is the price of lost freedom worth the gain in prosperity?"

Other analysts, though, believe the relationship is so important to Beijing that it will not endanger it by being too aggressive or demanding. "This good relationship does not mean that either leader will sacrifice their national interests to please the other side, unless they see comparable return on that investment," said Yun Sun.

"China wants the CMEC and BRI to push through Myanmar, but not at the cost of the bilateral relations. China wants to make sure Myanmar remains in China's sphere of influence and does not allow major Western interests -- especially American -- to regain a stronghold in one of China's closest neighbours."

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