China’s Unwanted Kokang Conundrum

THE ESCALATION OF the fighting just over Yunnan’s border in the Kokang region of Myanmar’s Shan state leaves Beijing with an unwanted humanitarian, security and strategic headache. China is providing food and shelter for some 30,000 refugees that have fled across the border into Yunnan, state media say. Most of the refugees can be assumed to be Kokang, who are ethnically Chinese, and Chinese migrant workers.

China first set up refugee camps following the outbreak of hostilities between the separatist Kokang National Democratic Alliance Army (MNDAA) and Myanmar government forces on February 9. The clashes have since intensified leaving 70 dead, including at least one Red Cross worker after an attack on a Red Cross convoy. The government in Naypyidaw has declared a state of emergency and martial law in the region.

China does not like such instability along its borders at the best of times and has sent troops to reinforce its side of this particular one. Beijing will initially be hospitable to those fleeing the fighting, firstly because they are Chinese, and secondly because the MNDAA was once part of the Chinese-backed Communist Party of Burma.

The MNDAA’s former leader Peng Jiasheng has been in exile in China, if not very publicly, since being driven out of power in 2009 — an event that triggered a similar influx of refugees fleeing the fighting, and which China was less prepared to deal with then than this time. It is Peng’s return now that has caused the renewed flare-up of fighting, ending the ceasefire than has existed since he was driven out.

Peng’s return, this Bystander would hazard, is neither sanctioned nor wanted by Beijing. It has been trying to broker peace deals between the Myanmar government and a score of ethnic groups in the northeast of Myanmar who want varying degrees of autonomy. Naypyidaw wants to strike a comprehensive peace deal ahead of national legislative elections due to be held later this year.

Beyond ensuring peace and stability along its borders, China’s bigger strategic imperatives in Myanmar have changed. The country has natural resources such as jade and desirable crops such as sugar. But more importantly, Naypyidaw’s growing rapprochement with the United States has undermined Beijing’s position as Myanmar’s principal political ally. It is not going to damage that relationship any further by backing separatist groups.

Myanmar is also an important link in President Xi Jinxing’s ‘One Belt One Road’ strategy. This is the development of the ‘Silk Road Economic Belt’ and the ’21st Century Maritime Silk Road’ — or China’s overland and maritime shipping routes to the Middle East and Europe through which political ties and strategic influence are intended to flow as voluminously as energy, natural resources and manufactures. Myanmar is a particular way station in this endeavour between China and Southeast Asia and the Indian Ocean as well as being a prime candidate for Xi’s ‘periphery diplomacy’.

To that end, Beijing wants a stable Myanmar. Its preference is for Naypyidaw to reach a peace settlement with its ethnic rebels to put and to conflicts such as that with the Kokang and with the Kachins, which flared up in 2012 and 2013. It has called for just that course of action.

If, against the odds, Peng does regain control of Kokang, China will be at least passively accommodative towards him. It has done the same in Pakistan or Afghanistan, where it has proven deft at working with local warlords and the central governments. However, that is not a situation Beijing wants to see as it will furnish it with neither border stability nor strategic leverage.

More Trouble Beyond China’s Western Reaches

PARTS OF YUNNAN’S border with Myanmar have been closed following a flare-up of fighting on the Myanmar side. Deadly exchanges between government forces and Kokang ethnic rebels in north-eastern Shan state have sent thousands of refugees fleeing into Yunnan province.

The Myanmar army has reportedly bombed around the town of Laukai leading locals and Chinese traders to seek safety in Zhengkang and Namping on the Chinese side of the border barely 5 kilometers away. Beijing has sent PLA troops to patrol the border and has created a camp to feed and shelter refugees. A foreign ministry spokesman told Reuters news agency that the refugees ‘had been looked after’. The group involved in the fighting is the Myanmar National Democratic Alliance Army, formerly part of the China-backed Communist Party of Burma.

There has been sporadic fighting in the mountainous area since December between government forces and the rebels. The Kokang have been trying to regain ground around the town lost in 2009, when a long-standing truce broke down and there was a large-scale exodus from the region into China caused Beijing some consternation.

A broad ceasefire agreement between the Myanmar government and some 17 armed ethnic groups in the north of the country seeking greater autonomy remains deadlocked. Achieving one is part of the political and economic reforms Naypyidaw committed to in 2011 to bolster its case for the lifting of international sanctions.

China has played an active role in truce talks between the various parties, particularly those involving the Kachin Independence Army that remains at open war with Naypyidaw, and which controls territory in which Chinese jade miners operate. Beijing again called for talks to resume after the latest clashes. It wants stability along its western reaches and control over what is thought to be smuggling routes for arms to dissidents in Tibet and Xinjiang and drugs into China’s heartland.

Sinohydro Looks To Restart Work On More Myanmar Dams

Sinohydro, the Chinese state-owned contractor for Myanmar’s suspended (for now) Myitsone dam project near the headwaters of the Irrawaddy river and China’s leading dam builder, faces a new environmental and reputational challenge now the government in Naypyidaw has approved construction of the controversial Hatgyi dam on the Salween river.

The isolated Salween is one of the world’s longest free-flowing rivers. It rises on the Tibetan plateau and courses through the canyons and gorges formed when the plates of the Indian subcontinent and Asian mainland met. For much of its 2,800 kilometers, the river flows through Yunnan, where it is called the Nu Jiang. Then it cuts through the eastern edge of Myanmar and marks 120 kilometers of the border with northwestern Thailand, a portion of which is shown in the photo above, before turning back into Myanmar to reach the Andaman Sea at the old teak trading port of Mawlamyaing.

En route, it flows through the watershed known as the Three Parallel Rivers of Yunnan, a UNESCO world heritage site. The river is so environmentally sensitive and biodiverse that local protests forced Beijing in 2004 to cut plans to build 13 hydroelectric dams along its own stretch of the river to four, and then in 2009 to suspended even those pending a still uncompleted environmental review. One of the proposed dams would have been bigger than the Three Gorges dam.

The $1 billion 1,200 MW Hatgyi dam is one of at least five hydropower plants planned for the Myanmar leg of the Salween by a partnership of the Myanmar and Thailand state electric utilities (see map, right, from the environmental group, Salween Watch). Hatgyi’s go-ahead follows the signing of a peace deal between Naypyidaw and ethnic Karen rebels. Sinohydro, which was given the contract to build the dam in 2006 before fighting stopped construction starting, has reportedly been stockpiling equipment and material at the site since mid-April in preparation for a resumption.

Environmental groups are gearing up again to block construction, saying it will destroy traditional village life along the ecologically fragile river, forcibly uprooting local populations and flooding farmland. Periodic local protests against the project have been staged since 2004, the most recent in March.

Sinohydro is also the contractor for another proposed dam on the river that could now go ahead following a peace agreement between Naypyidaw and a different group of ethnic rebels, in this case the Shan. The $6 billion 7,100 MW Tasang dam is planned to be the one of the highest in southeast Asia, taller than the Three Gorges. China’s state-owned Three Gorges Corp., which built and runs the Three Gorges dam, is a sub-contractor to the Tasang dam project. Some 60,000 villagers will have to be relocated to build it. Sinohydro has reportedly started surveying work there. As with Hatgyi, most of the power generated will be sold to Thailand and China.

The Tasang, Hatgyi and Myitsone dams are just three of 56 hydrodam projects in Myanmar proposed, under construction or completed that Chinese companies are involved in, according to a count by International Rivers, a riverine NGO. Sinohydro is involved in at least 17 of them, equivalent to one in eight of all its 132 current dam projects outside China. The international expansion of its business is leading the company to be more environmentally and socially responsive than it was in the past. The extent to which it will need to be in Myanmar may most depend on how rapidly the government in Naypyidaw wants to push ahead with opening the country to rapid development, and how well the economic rationale for projects originally intended to provide export earnings to fund a military dictatorship that has now stepped back from power hold up.

Pressure To Restart Work On Myitsone Dam Intensifies

Beijing continues to press Myanmar to allow a restart to work on the Myitsone Dam. Myanmar’s President Thein Sein unexpectedly and unilaterally pulled the plug last September on state-owned China Power Investment Corp.’s controversial hydropower project in Kachin state near the headwaters of the Irrawaddy river. The issue was again raised by foreign minister Yang Jiechi during his Myanmar counterpart’s visit to Beijing this week.

Meanwhile, CPI is pressing ahead with a new feasibility study addressing the environmental and social impact of the dam, this Bystander understands. It is recruiting a group of international dam-building experts for the task. Contrary to some reports, this is not being done by the Paris-based International Commission on Large Dams (ICOLD), an influential industry standards group, according to a statement the organization issued at the end of last month. It did confirm that CPI had “directly asked experts coming from countries with long term experience in building and operating large dams to assess its work”. It also said that Myanmar had applied for membership of ICOLD, whose current president happens to be from the China Institute of Water Resources and Hydropower Research.

CPI and its sub-contractor Sinohydro have kept about 200 workers on site regardless of the suspension. As we noted before, any resumption of work would have to wait until the end of the rainy season in October. But the increasing pressure form Beijing is making hitting that deadline look increasingly likely.

Work To Resume On Myitsone Dam?

This Bystander is getting reports that suggest Myanmar may be gearing up for the resumption of work on the Myitsone Dam, if not immediately then at least once the summer rains are done. Myanmar’s President Thein Sein unexpectedly and unilaterally pulled the plug last September on state-owned China Power Investment Corp.’s hydropower project in Kachin state near the headwaters of the Irrawaddy river. We now are told that in the past two weeks Myanmar government soldiers have been re-evicting 100 local villagers who were originally relocated from the area but since the project’s suspension have returned to reclaim their old homes. Soldiers have also been leveling the remains of the village, according to Kachin activists.

Ethnic Kachins, who have been fighting the Nawpyidaw government for greater autonomy for their state, particularly since a 17-year old truce broke down last June, have been at the forefront of the opposition to the dam. Environmental groups say it will damage the ecology of the Irrawaddy, the country’s main waterway. Some 2,000 villagers were moved out of five villages in 2009 and 2010 so construction could start. Apart from being removed from ancestral homes that will be submerged by the reservoir created to feed the turbines, they complain that they have been resettled on land too barren to farm.

The latest round of clearances followed by a week a call by China Power Investment’s president, Lu Qizhou, to restart work on the dam. President Thein had said it would remain suspended for the duration of his term of office, which runs until 2016. But we here the sounds of backtracking. Reports say a compensation deal has been hacked out and discussions continue to get work restarted. Yet it remains a thorn in the side of relations  between Beijing and its old ally in Naypyidaw, which is now as less steadfast one as it opens more to the outside world. The fighting in Kachin, refugees spilling over the border into Yunnan and drugs- and gun-running are making China’s western reaches more unsettled than Beijing cares for.

Plus it wants the power. The Myitsone dam was to be the first in a series of seven on the upper Irrawaddy that would eventually supply hydropower to western China. Planning work on the other six has continued and China Power Investment employees have remained on site at Myistone, where, we are told, they have been mining for gold with CPI’s Myanmar partner in the dam project, Asia World, Myanmar’s Mining Enterprise No. 2 and Hka Ka Bo Mining.

Large-scale panning of gold on the Irrawaddy and Chindwin rivers is to be banned when existing one-year mining permits expire later this year. Discharges of mercury and the other highly toxic waste chemicals are polluting the rivers, while the open mining is eroding the top soil. We have no independent confirmation of CPI gold mining, but many gold mines in Kachin state not operated by the military and their friends are operated by Chinese interests. Truckloads of gold-containing earth are seen being driven back to China for processing.

It may be the re-evictions are to prevent interference with the gold-mining operations. One other factor to consider is the weather. Work on the dam would anyway be suspended during the rainy season, from June to October. Many workers from Sinohydro, the sub-contractor building the dam for CPI, were already off-site last year when President Thein made his announcement about suspending the project. Even if work restarted tomorrow, there would be only two months before the rains come. Yet such is the political pressure from Beijing to restart the project, a resumption of work once they cease looks a more than fair bet.

New Kachin Peace Talks Scheduled In Yunnan

A third round of the Chinese-brokered peace talks between the Myanmar government and Kachin groups seeking greater autonomy has been scheduled for March 8th in the Yunnan border town of Ruili, according to the Norway-based Democratic Voice of Burma. Fighting along the Sino-Myanmar border threatens a humanitarian disaster with an estimated 70,000 Kachins being displaced by the hostilities. Some 11,000-15,000 have crossed into China, though they are unwanted there, and their presence is not officially recognized.

The Kachin refugee support group Wunpawng Ninghtoi (the People’s Light) tells this Bystander that Chinese officials have again in recent days been pressing the refugees to return to the Myanmar side of the border. It also tells us that living conditions for the refugees in China are deteriorating, with many living under plastic sheeting or in makeshift shelters of bamboo or sugar-cane. They are said to be short of food, fresh water and firewood. An outbreak of cholera on the Kachin side of the border is said to have spread into Ruili.

Fighting between Myanmar government forces and the Kachin Independence Army broke out last June, ending a 17-years truce. Beijing, increasingly unsettled by the unrest in its western reaches, does not want a repeat of 2009 when a Myanmar offensive against an ethnic Kokang militia in Shan state forced more than 30,000 refugees to flee into China. The most recent meeting in the talks between the two sides that Beijing has been brokering  was held last month. However, the Myanmar government has not so far been able to reach a peace agreement with the Kachins as it has with nine of the eleven armed ethnic groups in the country that also seek greater autonomy.

Thousands of Kachin Refugees Said Still To Be In Yunnan

As many as 15,000 refugees from the fighting in Myanmar’s Kachin province may still be taking shelter in Yunnan province, even though China doesn’t want them there and has denied their presence. The number comes from
Wunpawng Ninghtoi (the People’s Light), a Kachin refugee support group, quoted by the Norway-based Democratic Voice of Burma web site.

Yunnan provincial and local officials have been pressing the refugees they say they aren’t aware of to return to Myanmar. The aid group says those still in China, spread across 19 camps, are relying on aid from locals and religious groups. On the Myanmar side of the remote, hilly border, there are an estimated 70,000 displaced persons living in camps. International aid agencies have been given only limited access to the area by the Myanmar government. They appear to have been denied any access from the Chinese side, despite reports of a fatal cholera outbreak spreading into Ruili, the Yunnan border town that is a hub for Sino-Myanmar trade.

Fighting between Myanmar government forces and the Kachin Independence Army broke out last June, ending a 17-years truce. Beijing has been brokering peace talks between the two sides. The most recent meeting was held last month in Ruili. However, the Myanmar government has not been able to reach a peace agreement with the Kachins as it has with nine of the eleven armed ethnic groups in the country that also seek greater autonomy.

Beijing, already unsettled by ethnic unrest of its own on its western reaches, does not want a repeat of 2009 when a Myanmar offensive against an ethnic Kokang militia in Shan state forced more than 30,000 refugees to flee into China. It has told Naypyidaw to stem this latest flow of Kachin refugees. “Maintaining the peace and stability of the Chinese-Myanmar frontier region concerns the common interests of both countries,” chief government adviser Jia Qinglin told visiting Myanmar lower house speaker and former third-ranking general in the junta, Thura Shwe Mann (via Reuters).

Beijing also wants the considerable infrastructure projects it is building and bankrolling in Myanmar  to proceed smoothly. Relations between the two countries have got testier over the past year following President Thein Sein’s nominally civilian government replacing the long-ruling junta that counted only Beijing and Pyongyang as fast friends. Since then, Thein Sein has started opening up more to the rest of the world and, as he put it in a speech marking the first anniversary of his government, aims to “maintain amity with both East and West”. Myanmar, like Sudan, Syria and the South China Sea, has become yet another place where Beijing is finding its foreign relations to be becoming more complex, and its national interests rubbing up against those of others.

Yunnan Denies Knowledge Of Influx Of Kachin Refugees

Thousands of Kachin refugees, mostly women and children fleeing the fighting in northern Myanmar, have reportedly spilled across the border into Yunnan, a situation Chinese authorities have for months being trying to prevent. The reports come via the Kachin Women’s Association in Thailand, which puts the numbers at between 6,000 and 10,000 refugees, and ChinaAid, a U.S.-based Christian organization, which puts the numbers as high at 25,000 and says they are sheltering in several camps in Yunnan.

Reuters news agency reports Yunnanese authorities denying any knowledge of an influx of refugees. There has been no independent confirmation to date. Kachin refugee aid organizations have previously said that there are 19 refugee camps in China, though China does not acknowledge their presence.

The conflict between Myanmar government forces and the Kachin Independence Army has already spawned makeshift refugee camps housing upwards of 40,000 along the Myanmar side of the border. Large international relief agencies have not been allowed access to the area by the Myanmar government. Local aid groups say food is in short supply in the camps with the onset of winter weather and that outbreaks of dysentery and cholera are being seen. One child is reported to have died from cholera. One report says cholera has also been seen in the Yunnanese border town of Ruili, reinforcing fears of a potential humanitarian disaster in the region.

The fighting broke out after a 17-year old ceasefire broke down last June. It has continued despite last December’s order by Myanmar President Thein Sein to his military to end operations.

Meanwhile, Chinese-brokered peace talks are making slow progress. Two rounds of talks have been held over the past two months in Ruili. But no agreement has been reached between the Myanmar government and the Kachins similar to the preliminary peace deals struck between Naypyidaw and eight of the 11 ethnic groups in Myanmar seeking greater autonomy. A third round of talks due to have taken place last weekend didn’t happen because of disagreement between the two sides over where to meet.

Little Imminent Prospect Of Peace Along China’s Myanmar Border

Slow progress is being made at the truce talks China is hosting between the Myanmar government and the autonomy-seeking Kachin Independence Organization (KIO). Two more days of talks were held last week in Ruili, a border crossing town on the Yunnan side. Naypyidaw’s chief negotiator said afterwards that a lasting truce would not be quickly achieved. Aung Thaung, a former general who is also Myanmar’s industry minister, said the process could take more than three years.

That would not please Beijing, which wants stability along its western reaches and control over what is thought to be an arms smuggling route to Tibetean dissidents in western China, seemingly newly active. Nor would it satisfy Naypyidaw, which needs political settlements with its ethnic minorities to bolster its case for a lifting of international sanctions against the country.

Some 60,000 Kachin have fled their homes in the remote and mountainous region over the past seven months following the breakdown of a 17-years long ceasefire. A few made it into China to seek refuge with relatives, but Beijing has discouraged mass cross-border migration, fearing a large influx of refuges. Instead they are gathering in ever larger numbers in makeshift camps along the border.

Meanwhile, armed skirmishes continue along the Myanmar side of the border with Yunnan between government forces and the KIO’s military wing, the Kachin Independence Army, despite two orders by Myanmar President Thein Sein to his military to end its operations in Kachin. One (unconfirmed) report suggested fighting had spilled at one point across the border into the Chinese province. Further talks between the Naypyidaw government and the KIO are be held, probably in February.

Dai The Diplomat

China’s top diplomat, Dai Bingguo, has been busy in troublesome places for China’s foreign policy just beyond the country’s outer marches, first visiting Myanmar, now Pakistan: two outlets for China’s overland energy routes to the oil of the Middle East, and forming a pincer around India.

The two countries provide mirror image challenges for Beijing’s foreign policy. In Myanmar’s case, a fast ally turning towards Washington; in Pakistan’s case, an ally of Washington, if never a fast one, falling out with its erstwhile friend and turning toward Beijing. In both places, there is unrest: ethnic minorities fighting for autonomy in northern Myanmar along the border with Yunnan; the overspill of the Afghanistan conflict in the other, along the border with Xinjiang, Beijing also believes that its own rebellious Uighurs take shelter in exile in northwestern Pakistan.

Beijing’s interest lies neither in turning allies nor picking sides, however. It is in stability, so it’s strategic commercial interests, such as CNPC’s new oil exploration deal in Afghanistan, can thrive and its hydropower stations, oil terminals, pipelines, and the coaling stations for its blue water fleet — its string of pearls around the Indian Ocean — can be constructed without disruption.