China Demonstrates Hands-On Non-Interference In Myanmar

CHINA REGARDS THE military coup in Myanmar as an internal affair, and thus not one on which it needs to express any deviation from its default position on non-interference.

Given Beijing’s long-standing ties to the Myanmar military, it is safe to assume that its sympathies do not lie with the overthrown elected civilian government’s supporters. Its blocking of any action at the UN Security Council, such as imposing sanctions over the increasingly bloody February 1 coup, confirms that. So does Foreign Minister Wang Yi’s latest commitment to working with the Association of Southeast Asian Nations, as ASEAN espouses non-interference in member states’ affairs.

That is not to say that China does not have interests in the country. One is the 800-kilometre-long twin oil and gas pipelines that run from Kyaukpyu, the deepwater port that China is building on Myanmar’s Bay of Bengal coast, to Kunming, the provincial capital of Yunan in southwestern China. The pipelines, like Myanmar itself, are a key part of the Belt and Road Initiative. It gives China a short cut to the Indian Ocean, avoiding the chokepoint that is the Strait of Malacca.

The port and the pipelines are centrepieces of the China-Myanmar Economic Corridor, which passes through the rebellious Shan state. China plans several projects in the Shan and neighbouring Kachin states, which lie along the entirety of its strife-ridden border with Myanmar and where China periodically tries to broker peace.

These projects include three cross-border economic cooperation zones, the Myitkyina Industrial Zone in Kachin state and the railway from the Shan border town of Muse to Mandalay, which will provide a through rail link from Kunming to both Kyaukpyu and Myanmar’s largest city, Yangon, where China is also building residential, commercial and industrial facilities.

Many Chinese enterprises are also involved in resources extraction, including jade mining. China is Myanmar’s largest trading partner. The total value of two-way trade was $12 billion in 2019-20, with China running a $1.3 billion trade surplus, according to Myanmar’s Commerce ministry. There is also a lot of cross-border smuggling.

Anti-Chinese sentiment –never far from the surface in days of the former junta — has risen across Myanmar. In the face of threats to blow up the oil and gas pipelines, Beijing reported moved troops to its border opposite Muse at the beginning of the month, although it is unclear what they will do beyond providing a show of force. Moving troops into the country would require a tortuous twisting of the definition of non-interference.

So far, Beijing has just sought assurances from the Myanmar military about the pipelines’ security. With some cause. Fighting between the Kachin Independence Army and Myanmar’s military is reported across Kachin and northern Shan states, where Naypyidaw’s rule is mostly in name and requires repeated military crackdowns.

The Brotherhood Alliance, which includes the Myanmar National Democratic Alliance Army, Ta’ang National Liberation Army and Arakan Army, all of which are based along the Chinese border, says it is ready to join forces with all ethnic minorities to fight the regime if the killing of protesters continues.

The military has for decades fought ethnic armed organisations across Myanmar. Intensification of those conflicts was always likely to be part of the coup’s fallout, a development that Beijing will find difficult to ignore. Quietly, it will continue to provide its old friends in Myanmar’s military with diplomatic, financial and military support while continuing to warn against external interference in an internal affair.

Myitsone Dam Hangs In The Balance

WITH LESS THAN a fortnight left before the commission set up to assess the trade-offs between the economic benefits and the social and environmental damage of planned hydropower dams on the Irrawaddy (seen above) is due to submit its report to Myanmar’s president, word is emerging that the commission may recommend that the controversial Myitsone dam project is scrapped. If so, that would kick a potentially politically prickly decision to President Htin Kyaw (nominally) and (in practice) de facto leader Aung San Suu Kyi’s new NLD-led government.

The $3.6-billion-dollar dam is heavily China-backed. China Power Investment Corp. (CPI) is financing the 4,600MW project and Sinohydro doing the construction — such as it is to date; then Myanmar President Thein Sein suspended work on the dam in 2011 in the face of local protests over village displacement, traditional livelihoods being at risk and dissatisfaction that China will get 90% of the electricity generated.

Beijing has since been pushing hard for a resumption of work, and at times it has seemed set to restart. In March, Vice foreign minister Liu Zhenmin called the project crucial for China.

While China has six other hydroelectric projects in Myanmar, not to go ahead now with Myitsone would rupture relations between Beijing and the new democratically elected government in Naypyidaw. Aung San Suu Kyi has been carefully rebuilding the relationship with Beijing, coloured by its support for the former military dictatorship and her desire to open Myanmar to a broader range of foreign investors.

However, when she visited Beijing in August, the Myitsone dam was conspicuously absent from a range of projects on which she and her hosts agreed to enhance their cooperation. The two sides agreed to no more than “to work together find a solution to the issue of the stalled Myitsone Dam project”. Termination of Myitsone would set precedents for other unbuilt or in-construction Chinese-backed infrastructure projects in the region that would be unwelcome to China’s ‘One Belt One Road’ aspirations.

However, cancellation of Myitsone would be popular within Myanmar. Myitsone is in Kachin state. Many ethnic Kachin reportedly said they voted for the NLD in the recent historic elections because they saw the party as their best hope of getting Myitsone stopped.

Alienating those voters risks making the NLD government’s hoped-for settlement with Myanmar’s ethnic armed groups more complicated. The armed wing of the Kachin Independence Organisation, the Kachin Independence Army (KIA), is one of those still fighting the government.

Beijing will not want an even more unstable border than it has now. Since the breakdown of a ceasefire between the KIA and the Myanmar military in 2011, It has already had to take thousands of Kachin refugees fleeing the conflict into camps on the Yunnan side of the border. It has brokered talks between the KIA and Naypyidaw in the hope of bringing some stability to the area.

There is a thriving but illicit trade in gems, timber, drugs and increasingly people across the border. China is also the biggest (legitimate) purchaser of Myanmar’s jade, has two oil and gas pipelines that pass through Kachin state and six other dam projects apart from Myitsone, the most notable of which is the Dapein Dam 1, which started generating power in 2011.

There is more than a single dam project in play. Myitsone will be being weighed in the balance of that greater calculation in both capitals while frantic efforts are made to see whether there is any face-saving deal that can be struck. Stakes are high on both sides. As a result, we may well not see the details of the commission’s report when it is handed over on November 11.

Myanmar And China Reset Rocky But Key Relationship

 

LITTLE UNDERLINES CHINA’S importance to Myanmar as much as Myanmar’s de facto leader Aung San Suu Kyi choosing to make a meeting with China’s foreign minister Wang Yi , seen above, her first with a foreign leader since her party historically took office on March 30.

China is Myanmar’s largest trading and investment partner, but the two countries have had a rocky relationship over the past few years. Points of dispute have been the fighting in the northeast of the country between Myanmar’s military and ethnic insurgent groups seeking greater autonomy, including ethnic Chinese Kokang, which periodically spills over into China, and controversial Chinese-backed infrastructure projects, notably the Myitsone dam near the headwaters of the Irrawaddy river and an oil and gas pipeline from Yunnan to the Indian Ocean that would let Chinese energy imports from the Gulf bypass the chokepoint of the Malacca Strait.

When Myanmar was still under military rule, China was able to take advantage of crony deals with Myanmar’s generals and some ethnic elites to exploit the country’s natural wealth; huge volumes of illicit timber and jade as well as drugs flow across the border into China.

Former President Thein Sein sent the relationship into a spin in 201o when he unexpectedly and unilaterally suspended the Myitsone project, which was being built by state-owned China Power Investment Corp. and its sub-contractor SinoHydro.

Wang and Suu Kyi at their meeting this week chose to emphasize resetting the relationship on a more positive footing, not discussing what her spokesman described as ‘controversial’ Chinese projects. Wang subsequently said that China would ‘guide’ Chinese companies operating in Myanmar to ‘respect’ Myanmar’s regulations, society, and environment.

That probably means paying a bit more than lip service to local concerns about environmental protection, land-grabs and lack of compensation for displaced communities, and bringing in Chinese labour to build Chinese-financed projects. A deal is likely to be struck to restart Myitsone in some form, probably addressing some of the social responsibility concerns and earmarking more of the electricity the dam will generate for consumption in Myanmar and less to be transmitted back to China.

Nothing is likely to happen until after the end of the rainy season in October at the earliest. However, Beijing has a diplomatic card it can play to support its infrastructure ambitions — helping to broker peace with some of Myanmar’s ethnic insurgent groups. Suu Kyi’s government will need Chinese cooperation if it is to generate the national peace settlement it has said is a priority.

However, while China will remain a key economic and political neighbour, Suu Kyi will want to be careful to avoid over-reliance on Beijing. She will also court U.S. trade, aid and investment and that from other regional powers, notably Japan and India, both of which have reasons of their own or wanting to counterbalance Beijing’s influence in a critical corridor between East and South Asia.

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.

Kachin Refugees Again Facing Harsh Conditions In China

REPORTS FROM THE border with Myanmar say that Kachin refugees fleeing recent fighting between the Kachin Independence Army (KIA) and Myanmar government forces are facing shortages of food and aid in China. This Bystander hears that conditions in the makeshift camps are poor with UN relief officials not being allowed to cross to the Chinese side. This is not the first time refugee conditions have been reported to be poor. China provides safe haven for the refugees but does not really want them there.

At least 3,000 refugees have been displaced since mid-April when Myanmar government forces stepped up their offensive operations against the KIA in Kachin and the northern Shan states. 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.

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.