Myanmar’s and India. China is emerging as the

Myanmar’s
geo-strategic location, as situated at the tri-junction of South Asia, South
East Asia and East Asia, enhances its strategic relevance to India. Myanmar is
sandwiched between the two most populous nations in the world China and India.
China is emerging as the closest strategic partner of Myanmar. Myanmar is
becoming strategically significant for India also for strengthening its
economic links with South East Asia: for acquiring energy resources and from
the security point of view.  The paper
had studied the mutual relations as Myanmar is gradually transforming itself
towards democracy and implications for region, especially, India. China’s policy towards Myanmar aims mainly at
regaining the Myanmar people’s understanding and reconstructing China’s
positive image towards the China needs to consideration all the various
parties- interests, improve public diplomacy, and increases political mutual
trust and broaden the foundation of win-win cooperation.

 

INTRODUCTION

In the terms of land
area, Myanmar is the second largest country in Association of South East Asian
Nations (ASEAN). Myanmar have a rich resources a pride past and a strategic
location that represents China, India and Southeast Asia in three directions.1  Myanmar shares common borders with five
countries: Bangladesh 193km, China 2,185km, India 1463km, Laos 235km, and
Thailand 1800km. Myanmar shares the coastal waters of the Bay of Bengal and the
Andaman Sea with Malaysia and Singapore. Myanmar’s geographical location gives
itself to be the trade gateway that connects the different emerging economies
in Asia.2

            As a coastal of the Indian Ocean,
Myanmar’s strategic value further increases. Its 1930km long coastline
dominates the east arch of the Bay of Bengal, lean on to the Malacca strait.
Thus Myanmar provides China the shortest land and sea way to South Asia, just
as it provides useful external land and sea communication options to India’s
landlocked northeast states. Myanmar’s sea boundaries are just 30km from the
Andaman Islands increasing its maritime security potential. 3

Myanmar’s given its
strategic location connects the Bay of Bengal and East Asia. It has the
benefits of development form its neighbours and other multilateral factor. Physical
infrastructure in Myanmar is extremely under-developed to aid economic growth
efforts as planned by the government. With only 33,014 kilometers of covered
roads in place and 70% of the total population living in the country in the
rural areas, there is a high request for developing efficient transportation.
At present, railway network covers 5,844 kilometers, and hopefully the
Singapore-Kunming rail connection part of the Trans-Asian Railway project will
take some development of completion.4

 

China- Myanmar Relations

Myanmar was the first
non-Communist country to recognize the People’s Republic of China founded in
1949. In turns the China stood firmly together with Myanmar, even when its
former military-run regime was separate by the international community. China-Myanmar
is interlinked by its Geography, History, Ethnicity, Social development and
Economy. The original Myanmar tribe came down from Tibet and put out the kings
who united the kingdom of Bama in the 12th century and became the dominant
ethnic group of modern Burma, now formally known as Myanmar. The two countries
share a land border of more than 1,300 miles, populated largely by tribes
living on both sides of the border in Myanmar’s east Shan and Kachin States and
in China’s southwestern Yunnan Province.5

However, the situation
improved between 1971 and 1988 gradually strategic affairs. Since the military
junta took over in 1988. The power to do of the Tatmadaw, the Myanmar armed
forces, has been greatly enhanced with the assistance of the China’s (PLA)
People’s Liberation Army. The Chinese had supplied arms amounting of US$ 1 to 2
billion in the early 1990s moved after another US$ 400 million worth of arms in
1994. The People Liberation Army was also being agreement to go with the
training of Myanmar military personnel. Seats were reserved for Tatmadaw
officers in Chinese defense staff colleges. There have also been increasing
economic and diplomatic exchanges between the two countries. 6    A few months earlier, Myanmar leader Aung
San Suu Kyi, after taking office as State Counselor, purposely made her first
officer go to China, before being with the United States. The visit to China is
had belief to be a hard work to repair and strengthen bilateral ties between
the two nations that had once had a much closer relationship. The term “baobo”
brothers and relatives were often used to make be moving in their closeness in
year back. In recent years, mutual ties have been strained especially during
the recent transition period of Myanmar’s new government.  This is likely to change for the better.7

Myanmar is important
for China as a trading outlet to the Indian Ocean for its landlocked inland
provinces of Yunnan and Sichuan. Strategically, Myanmar is potentially
important for China to achieve its long-term two ocean objective. Furthermore,
a China-Myanmar nexus is strategically useful for China to contain India’s
influence in Southeast Asia. Finally, Myanmar is part and parcel of China’s
grand strategic design to achieve its goal of becoming a great power in the
21st century.8

            The
year 1988 marked a significant change in Myanmar’s trade policy towards China.
The first sign of Rangon’s interest in promoting greater economic ties could be
seen from the State Law and Order Restoration Council (SLORC) changed to State
Peace and Development Council (SPDC) in 1997 announcement of legalizing border
trade on 5 august 1988.

Historically, China’s
Yunnan province which has a population of about 43 million was a Southwest Silk
Road trade route, linking Myanmar with Southwest Asia. It has now emerged as a
potential target of China’s long term strategic ambition, transforming the
whole region as part of ‘quadrangle’ regional trade zone involving Yunnan,
Myanmar, Thailand and Laos. This zone could become China’s land ridge to the
Indian Ocean for its maritime trade. Especially, Yunnan could emerge as an
integrated part of the symbiotic relationship established by the State Law and
Order Restoration Council to seek economic and military aid from its giant
neighbor.

The two countries
signed an economic and technical cooperation agreement in which China agreed to
offer an interest free loan of rmb 50 million for the Rangoon Thanhyin rail and
road bridge construction project In December 1989.  From 1961 to 1994, Beijing has given a total
Rmb 500 million in aid to Rangoon and China had completed 18 out of 20 projects
for Myanmar. According to a Taiwanese source, the increasingly closer economic
ties between the two countries could be seen from the sharp jump in the trade
volume between them. The total trade between China-Myanmar reached US$ 76.03million
which was eight times that of the previous year in 1988. The total value of
trade grew to US$ 767 in 1995. China-Myanmar trade declined to US$ 576.49million
in 1998, but in the year 2000, the total trade increased to US$ 621.26million.9

At the state level,
with regard to infrastructure in Myanmar, China was the first to participate in
major infrastructural reconstruction programmers in the country, as the
modernization of Myanmar fell within the scope of its own strategic interests.
Several pacts, special agreements and reduced interest loans were concluded
between the two countries, clearly without any details being communicated. In
the year 1993 signed a joint agreements, yangon committed to buy 30,000 tonnes
of rails and locomotives, as well as motorized vehicles from China and agreed
to export wood to Yunnan in return for the construction of a hydroelectric
power station in the Chins State. In November 1998, another major agreement was
signed between the China International Trust and Investment Corporation (CITIC)
and the Myanmar electric power enterprise for hardly the construction and
operation of a power station in thanphanseik. The necessary funds would be made
available through a loan granted by China import & export Bank. 10

Sources with Ministry
of Commerce said the bilateral trade between Myanmar and China hit over US$ 9.4
billion in first ten months i.e. April to January in 2015-16 fiscal year.
During the period, Myanmar mainly exports oil and gas, agricultural products to
China. The imports from China include industrial products and commodities.
According to official statistics, bilateral trade between China -Myanmar
amounted to over US$ 10 billion in 2014-15 fiscal years. Of the total,
Myanmar’s export to China hit US$ 4.6 billion and its import from China reached
US$ 5.6 billion. According to Myanmar official statistics, China’s investment
in Myanmar amounted to US$15.42 billion in 115 projects, accounting for 26.07
percent of the total as of December 2015 since Myanmar opened to such
investment in late 1988 and standing first in Myanmar’s foreign investment
line-up. 11

China represents one of
the fastest growing economies in the world. The bilateral trade between China-Myanmar
continues to grow from both export and import perspectives. Total trade between
the two countries has been steadily increasing over the years and has more than
doubled between 2008 and 2015.

 

China- Myanmar Bilateral Trade

Year

Import to Myanmar
(USD10 000)

Export to Myanmar
(USD 10 000)

Total Trade
(USD 10 000)

2008

64755

197777

262532

2009

64613

225399

290012

2010

96655

347552

444207

2011

167990

482150

650140

2012

129823

567371

697194

2013

285687

733869

1019556

2014
 

1560128

936765

2496893

 

(Source: National Bureau of Statistics
of China)

 

Major Development Cooperation Projects

Chinese companies are
building roads, dams and ports using low interest loans and export credit.  China is building the Tasang Dam on the
Salween River which will be integrated into the greater Mekong sub region power
grid.

            Since 1988, China has helped the
Myanmar government build 8/9 sugar mills, 20 hydroelectric plants, 13/45 new
factories for the ministry of industry-1, and 12/21 new plans for the ministry
of industry-2. Also China upgraded 6 factories for the ministry-2, provided 6 oceans–going
vessels, and built a dry dockyard in 2006. Chinese firms built 7/11new
hydroelectric plants.12

The 1,420 MW Shweli I,
II, III Cascade, in Shan State near the Chinese border, has also received
significant Chinese support. Yunnan Machinery & Equipment Import &
Export Company (YMEC) began work on the Shweli I Hydropower Plant in February
2004 and following Myanmar’s failure to secure funding, 26 joined with Yunnan
Huaneng Lancang River Hydropower Development Company and Yunnan Power Grid Company
to create the Yunnan Joint Power Development Company in August 2006.

A few months later, Yunnan
Joint Power Development (YUPD) assumed an 80% share in the project after
creating the Shweli River I Power Station Company together with Myanmar, turned
the Shweli I dam into a Build-Operate-Transfer (BOT) project, and increased the
installed capacity from 400 to 600 MW.

In Kachin State,
several Chinese MNCs are involved in the construction of seven large dams along
the N’Mai Hka, Mali Hka, and Irrawaddy River, with a combined installed
capacity of 13,360 MW. In 2007, China Power Investment corporation signed
agreements with Myanmar’s authorities to finance all seven dams, as well as
with China Southern Power Grid Company, Yunnan Machinery & Equipment Import
& Export Company signed with Myanmar’s Ministry of Electric Power in 2006.

The 790 MW Yeywa Dam in
Mandalay Division, which began construction in 2006, is also being financed and
constructed by several Chinese MNCs, including China Gezhouba Group Company, Sinohydro,
China International Trust and Investment Company, China National Electric
Equipment Company, China National Heavy Machinery Company, and Hunan Savoo
Oversea Water and Electric Engineering Company. Additional financial backing
for the project is being provided by the China EXIM Bank.13

China Power Investment
Corporation’s investment in the US$ 3.6 billion Myitsone hydropower station on
the Irrawaddy River has hit a snagged in early October 2011 as Myanmar’s government
suspended construction due to local residents concern about the human,
environmental impact and perceived benefits. Most of the power generated will
be exported to Yunnan province in China and local residents claimed the lack of
community feedback in the planning process. China’s government is declaring Myanmar
will get US$ 54 billion in tax revenue, shared profits, and free electricity.
At stake is China’s huge financial stake in the project and also risk to other
big projects China has in the country. China Power Investment Corporation
stated only five villages with a total of 2,146 needed to displace. 14

 

Oil and Natural Gas

Although Myanmar is
among the world’s oldest oil-producing countries, Chinese oil and gas companies
did not start their oil and gas exploration projects there until recently.
Though Myanmar is not a major energy supplier to China, Chinese national oil
companies and government have demonstrated increasing interest in this
country’s energy resources in recent years. China National Petroleum
Corporation (CNPC), Sinopec and China National Offshore Oil Corporation (CNOOC)
have all started oil exploration projects and competed with other countries
including India and South Korea to secure access to new gas fields and
potential reserves of gas off the west coast. In November 2008, China National
Petroleum Corporation and the Ministry of Energy Myanmar signed an agreement to
build a US$ 2.3 billion crude oil pipeline and US$ 2 billion natural gas
pipeline, and the construction started in October 2009.This on-going China–Myanmar
pipeline project comprises multiple separate projects, each with distinct
contracts ownership structures. The major components are a deep-water natural
gas development project and onshore gas terminal; an onshore natural gas
transport pipeline and an onshore oil transport pipeline from western Myanmar
to China. 15

 

 

 

The
National League for Democracy’s Future China Policy

When they take office
at the end of March 2016, Aung San Suu Kyi and the National League for
Democracy will improve many problems with China from the current Thein Sein
government. The inauguration of the NLD government may also be an opportunity
to start a new era in Myanmar’s relationship with China. The Thein Sein
government has always had a public opinion problem, reducing from past military
dependence on China and friendly relation with Chinese companies, leading it to
feel compelled to satisfy to anti-China sentiment to gain popularity. In
comparison, it will operate from a position of strength domestically and will
start from a clean slate in relations with China. It will therefore be in a
better position to make policy decisions based on the objective merits of
specific projects or issues related to China, allowing it to treat China
rationally and pursue cooperation possibilities on a practical basis without
emotional or historical baggage.  It will
say yes to China’s requests, but when they do say no, it will be more likely to
be based on a fair and transparent judgment out of Myanmar’s national interests
rather than out of special conferred interests.

            Suu
Kyi’s early statements on China have indicated she will go in this direction in
the future. In an interview with the Chinese Xinhua News Agency after winning
the elections, she promised a friendly policy toward China, but emphasized that
China’s investments should be designed to gain the trust of the Myanmar people.
She also reportedly praised China’s One Belt One Road initiative, expressing
the hope that it would benefit all sides. These messages have been welcomed in
China. After all, at this stage, China is no longer expecting preferential
treatment from Myanmar but rather hopes to be treated fairly and equally.
16

 

Conclusion

The relationship
between China-Myanmar today is one of the most important factors in
international geo-politics and regional development. After independence, China-Myanmar
tensions deep as conflict and political confusion cleared both countries. In
recent decades, ties have become closer due to social and political changes on
both sides of the Yunnan frontier. Under previous military governments in
Myanmar, China becomes the largest foreign investor and dominating
international influence in the country.

In the 21st century,
the Beijing government has major ambitions for Myanmar and the trans-Asian
region for economic growth.  It has
become a source of tension in the South China Sea. During the past five years,
on the Yunnan border Chinese interests have made some important policy
adjustments to socio-political change in Myanmar .The Beijing government has
also disclosed an ambitious “One Belt, One Road” vision linking China to
Eurasia and beyond. But there is still a long way to go before equitable and
stable relations are established to the benefit of the peoples of both China-
Myanmar. Progress will depend on political situations and economic relations
that are the major interest of the people of Myanmar. Particularly, China
-Myanmar relations in international standards of mutual respect, transparency
and social accountability can improve bilateral diplomacy, border security, and
economic relations.