Xi Courts Myanmar in a Bid for Greater Regional Influence

Myanmar’s State Counsellor Aung San Suu Kyi (above) negotiated with China’s President Xi Jinping. (Kremlin)

Chinese President Xi Jinping signed 33 bilateral agreements with Myanmar’s State Counsellor Aung San Suu Kyi in a historic state visit on January 18. Experts expect the negotiations— spanning trade, power, as well as major rail and port infrastructure projects—to strengthen the ties between the neighboring countries while extending the reach of Xi’s ambitious Belt and Road Initiative (BRI). 

The centerpiece of this series of agreements is the construction of a $1.3 billion deep-water port in Kyaukphyu. This infrastructure project will open another route to transport fossil fuels from the Middle East into China. The Kyaukphyu port would allow foreign oil to be carried north into China’s Yunnan province. Currently, China imports 60 percent of its oil from Middle Eastern and African nations, and about 80 percent of these supplies must move through the congested Malacca Strait, a crucial choke point connecting the Indian Ocean to the South China Sea that could potentially be cut off during military conflicts. 

As Myanmar’s ally and largest trading partner, the PRC has often used its veto in the UN Security Council to shield its southern neighbor from international condemnation over alleged human rights abuses. When Aung San Suu Kyi’s newly-formed civilian government came under fire for a genocidal campaign against the predominantly Muslim Rohingya minority, China proclaimed that Myanmar’s ethnic strife should be handled domestically. 

In return, Myanmar has sided with China in its face-off with U.S. allies in the South China Sea. Moreover, the Southeast Asian nation has generally embraced BRI and cooperated with China’s pursuit of its growing geopolitical ambitions. 

Nevertheless, Suu Kyi has been reluctant to cave to all of Xi’s demands. For example, bilateral negotiations during the state visit left the construction of the Myitsone hydropower dam off the table. The $3.6 billion infrastructural project, which would have submerged a spiritual landmark and generated electricity for China, was deeply unpopular with the local population. As a result, the previous administration decided to suspend its construction. 

Indeed, despite the promise of economic development and potential growth in local employment, BRI has often incited wariness among China’s partners, as they suspect that these projects are intended to propel China to become a regional hegemonic power. Moreover, because BRI money takes the form of low-interest loans rather than grants, large-scale projects could potentially trap governments in debt. For instance, the Sri Lankan government found itself owing China $13 billion after the construction of a major port. 

Despite growing doubts, China’s massive investments in infrastructure and trade might be exactly what the relatively poor nation of Myanmar wants to stimulate growth. 

Indeed, Steve Tsang, director of the SOAS China Institute at the University of London, believes that Myanmar would continue to see China as a reliable and crucial ally. “In general terms Xi can still count Myanmar as on China’s side as he projects China’s image as a ‘friendly giant’ in the neighborhood,” he said.