Beijing’s hold on Myanmar fuels South China Sea risks

The fate of Myanmar has major implications for a free and open Indo-Pacific.

An undemocratic Myanmar serves no one’s interests except China, which is consolidating its economic and strategic influence in its smaller neighbor in pursuit of its two-ocean strategy.

Since the coup, China has been – by far – the main source of foreign investment in the country.

This includes US$2.5 billion in a gas-fired power plant to be built west of Myanmar’s capital, Yangon, that will be 81% owned and operated by Chinese companies.

Among the dozens of infrastructure projects Beijing is funding are high-speed rail links and dams. But its most strategically important investment is the China-Myanmar Economic Corridor, encompassing oil and gas pipelines, roads and rail links costing many tens of billions of dollars.

The corridor’s “jewel in the crown” is a deep-sea port to be built at Kyaukphyu, on the country’s west coast, at an estimated cost of $7 billion. This will finally give China its long-desired “back door” to the Indian Ocean.

Contested waters

Natural gas from Myanmar can help China reduce its dependence on imports from suppliers such as Australia. Access to the Indian Ocean will enable China to import gas and oil from the Middle East, Africa and Venezuela without ships having to pass through the contested waters of the South China Sea to Chinese ports.

About 80% of China’s oil imports now move through the South China Sea via the Malacca Strait, which is just 65 kilometers wide at its narrowest point between the Malay Peninsula and Indonesia’s Sumatra.

Overcoming this strategic vulnerability arguably makes the Kyaukphyu port and pipelines the most important element of China’s Belt and Road initiative to reshape global trade routes and assert its influence over other nations.

Most of China’s infrastructure investment was planned before Myanmar’s coup. But whereas other governments and foreign investors have sought to distance themselves from the junta since it overthrew the elected government in February 2021, China has deepened its ties.

Beijing is the Yangon regime’s most important international supporter. In April Foreign Minister Wang Yi said China would support Myanmar “no matter how the situation changes.”

In May it used its veto power on the United Nations Security Council to thwart a statement expressing concern about violence and the growing humanitarian crisis in the country.

Work continues on projects associated with the China-Myanmar Economic Corridor. New ventures, such as the aforementioned power station, have been approved.

More projects are on the cards. In June, for example, China’s embassy in Myanmar announced the completion of a feasibility study to upgrade the Wan Pong port on the Lancang-Mekong River in the east of the country.

In 2020, before the coup, Myanmar’s auditor general Maw Than warned of growing indebtedness to Beijing, with Chinese lenders charging higher interest payments than those from the International Monetary Fund or World Bank.

Foreign debt

At that time about 40% of Myanmar’s foreign debt of $10 billion was owed to China. It is likely to be greater now. And it will only increase the longer a military dictatorship, with few other supporters or sources of foreign money, remains in power, dragging down the economy.

Efforts to restore democracy in Myanmar should therefore be seen as crucial to the long-term strategic interests of the region’s democracies, and to global peace and prosperity, given the increasing belligerence of China under President Xi Jinping.

Now president for life, he recently told the People’s Liberation Army to prepare for war. A compliant and indebted Myanmar with a deep-sea port controlled by Chinese interests tips the scales toward that happening.

A democratic and independent Myanmar is a counter-strategy to this potential.

China’s ‘back door’ to the Indian Ocean

At the same time, Myanmar’s “democracy” movement wants the international community to impose tough sanctions on the junta. But few have responded.

The United States and the United Kingdom have gone the furthest, banning business dealings with military officials and state-owned or private companies controlled by the military.

The European Union and Canada have imposed sanctions against a more limited range of individuals and economic entities.

South Korea has suspended financing new infrastructure projects. Japan has suspended aid and postponed the launch of Myanmar’s first satellite. New Zealand has suspended political and military contact.

Australia has suspended military cooperation – with some pre-existing restrictions on dealing with military leaders imposed following the human rights atrocities committed against the Rohingya in 2017. But that is about it.

Tougher approach

Myanmar’s closest neighbors in the 10-member Association of South-East Asian Nations are still committed to a policy of dialogue and “non-interference” – though Malaysia and Indonesia are increasingly arguing for a tougher approach as the atrocities mount.

The Armed Conflict Location and Event Data Project has said that the only country now more violent than Myanmar is Ukraine. Given its unique geo-strategic position, self-interest alone should be enough for the international community to take greater action.

Htwe Htwe Thein is an associate professor at Curtin University.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of China Factor.