Trouble For China Spreads From The Irrawaddy To The Mekong

More trouble for Beijing on its unruly southwestern reaches beyond Yunnan. Pirates seized two Chinese freighters on the upper reaches of the Mekong river in northern Thailand, killing at least 11 of their 13-strong crews and purloining the vessels to run drugs from Myanmar. Some of the sailors appear to have been executed. The attacks took place on October 5. Thai river police retook both boats in a gunfight. Some 900,000 methamphetamine tablets worth more than $3 million were reportedly recovered.

Chinese vessels plying the river as it flows through the Golden Triangle have long been targets for pirates who have sought protection money or used the boats for drugs running. Thai authorities suspect that the ethnic Shan drug trafficker Nor Kham is behind the attacks, including the latest ones. Yunnan provincial authorities have now suspended all Chinese passenger and cargo shipping on the Mekong. Nine out of ten the 130 ships involved in international shipping on the Mekong are Chinese-flagged, according to Chinese authorities responsible for maritime trade on the river.

The latest incident follows a succession of attacks on Chinese-backed hydroelectric dams on the headwaters of the Irrawaddy river in Kachin State in northern Myanmar, culminating in the suspension of work on the Myitsone dam amidst growing anti-Chinese sentiment in the country and a call from Beijing to protect the interest of Chinese firms operating there.

Update: The foreign ministry on Tuesday confirmed 12 deaths with one sailor still missing.

Second Update: Thai authorities say a group of renegade soldiers have admitted responsibility for the killings.

China, Myitsone And The Company It Keeps

There are three partners in the controversial Myitsone Dan project that Myanmar has just suspended. One is China Power Investment Corp., one of the five biggest state-owned power companies, producing 10% of China’s electricity. Its subsidiary, Sinohydro, one of the world’s largest dam contractors and now doing an IPO on the Shanghai exchange, is the primary subcontractor on Myitsone, along with another Chinese state-owned dam builder, China Gezhouba, the main contractor for the Three Gorges Dam and which gets half its business outside China.

The Ministry of Electric Power-1 is Myanmar’s partner along with Asia World Co., part of a politically well-connected Myanmar conglomerate founded in 1992 by Lo Hsing Han, a storied Chinese militia leader from the Golden Triangle who has been described by the U.S. Treasury as “one of the world’s key heroin traffickers” since the 1970s. Asia World is managed by one of Lo’s four sons, Law, also known as Steven Law and Tun Myint Naing, who was denied a visa to visit the U.S. in the mid-1990s because, we understand, of his suspected connections to drug trafficking.

The Asia World group of companies is currently subject to U.S. sanctions imposed by the Bush administration against supporters of the military junta that ran Myanmar before the current military-backed civilian government. Lo and Law, were described as “two key financial operatives of the Burmese regime”. Included in the sanctions were 10 Singapore-based companies owned by Law’s wife, Cecilia Ng, who is Singaporean.

Law, now in his mid-50s, is said to be one of the wealthiest individuals in Myanmar in part on the back of a series of lucrative government contracts Asia World won for the construction of ports, highways and government facilities in the country. The group also has interests in trading, manufacturing, real estate and transport. It has done well out of China’s estimated $8 billion of investments in Myanmar, being involved in the oil and gas pipeline being built to connect southern China with the Indian Ocean, the construction of a deep-water port at Kyauk Phyu, which is also the terminus for the pipeline, and the Tasang hydroelectric dam as well as the one at Myitsone. Law was included in the delegation President Thein Sein led to Beijing in May.

When Xinhua reported on the sanctions imposed by the U.S. in 2008 against Asia World, it made no mention of its founder being an illicit drugs kingpin. There is no credible evidence that the Asia World companies are directly involved in drug trafficking but there can be little doubt that it wouldn’t have got off the ground in the same way without it’s founder’s money and contacts.