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Striving to hold

China’s geopolitical interests in Myanmar may face complication

The much awaited Myanmar gas has started flowing to China as part of Myanmar-China natural gas pipeline project marking the start of trial operations, but analysts believe this may lead to fresh competition among some energy hungry neighbors and finally brewing internal trouble for Myanmar which has just integrated with Asian mainstream.

The valves at the Kyaukpyu gas station where the pipeline starts in Rakhine state in western Myanmar had opened last month marking the start of much publicized energy operations.

The 12 billion cubic meters/year pipeline is operated by CNPC’s (Chinese National Petroleum Corporation) subsidiary Southeast Asia Pipeline Company and it will transmit gas from the offshore Shwe gas fields in the Bay of Bengal to China’s southern province of Yunnan.

The Shwe natural gas and Myanmar-China oil transport projects are two of Myanmar’s largest energy projects. Two pipelines running through Myanmar will transport gas from the Shwe fields in Myanmar, and oil from the Middle East and Africa, to China.

The Shwe gas project in Arakan State of Burma is expected to provide the government more than USD 24 billion in 30 years.

However, there are allegations that the government’s lack of transparency and benefit sharing make no benefit to the people of Arakan and the rest of people in Burma.

Although Myanmar suffers from chronic electricity shortages, over 80 percent of gas and hydropower export to neighboring Thailand and China. Even though Arakan state has the vast natural gas and other resources, Arakan state is the second-poorest state in the country’ and 90 per cent of households use wood for cooking fuel.

There are many concerns over the China-Myanmar gas pipelines from a wide range of people and experts working in this area.


The construction of a refinery plant in Kunming, Yunnan Province, China, which was reportedly planned in support of the Myanmar-China oil pipeline project faced two major protests over health concerns in May.

The oil pipeline starts at Maday Island and the gas pipeline at Ramree Island, both in Rakhine state, on the west coast of Myanmar, with the two lines entering into China at Ruili, Yunnan province.

The project is considered crucial for China to reduce its dependence on the Strait of Malacca, from where most of China’s oil is shipped before reaching the South China Sea, an area facing intensifying territorial disputes.

Although unrest in Burma’s northeastern Kachin State is a headache for Beijing, it is also an opportunity to promote Chinese strategic aims in the country. Thus, Beijing would like to unleash geopolitical game currently playing out in Burma.

Despite ceasefire talks, tensions between the Kachin Independence Army (KIA), which has been fighting for greater autonomy since 1961, and the Burma military continue to rise.

La Nan, spokesperson for the Kachin Independence Organization (KIO), the political wing of the KIA, last reported on Feb. 6 that fighting occurred in the northern part of Shan State between the KIA’s 4th Brigade and three government army battalions.

A low-scale skirmish also took place south of Kachin State’s capital Myitkyina, in the KIA border town of Laiza, just north of the Chinese oil and gas pipeline, involving the KIA’s 1st brigade and government troops.

These clashes temper already distant hopes that emerged after ceasefire talks in Ruili, China, where the high-ranking government minister Aung Min met with the KIA’s number two, Gen Gun Maw.

Also at the meeting were Chinese officials, representatives from Burma’s diverse ethnic groups and the Myanmar Peace Center, a government-run, EU-funded one-stop-shop for ceasefire activities.

Indeed, there was no breakthrough in Chiang Mai talk. In fact, no senior-level KIA officials were even present.

Discussions between the negotiators have focused on ways to stop the fighting, which has reached unprecedented levels since last December, when the Burmese military began bombarding KIA strongholds with artillery, followed by the first employment of air assaults with Russian-made Mi35 gunships and Chinese-made Hongdu JL-8 attack aircraft.

Beijing is concerned. This recent and aggressive offensive by the Tatmadaw, Burma’s military, is both a gift and a burden for the Chinese, worried about an influx of Kachin refugees, of which it already houses a significant number.

The Kokang incident of August 2009 is a recent pertinent reminder of the chaos that can ensue during government and rebel skirmishes.

An estimated 30,000 to 50,000 refugees were reported to have fled to Yunnan Province from northern Shan State when the government, without warning to Beijing or Chinese citizens in Burma, went on the offensive. China was furious and demanded a cessation of hostilities.

The proximity of the skirmishes to the Chinese border inflates Beijing’s worries. Most of the recent larger scale battles have taken place around the hills of Laiza, a town of about 20,000, which is home to the headquarters of the Kachin rebels.

In January, a Tatmadaw artillery shell landed on the Chinese side of the border. The repeat incident prompted a strong reaction from Beijing which called for a cessation of hostilities. The Chinese also took direct action, they increased surveillance, increased the number of border troops in the area, and heightened alert levels.

As a result, high-level meetings took place in Rangoon between Burma’s President, Thein Sein and Special Envoy Fu Ying as well as high-ranking officers from the Chinese People’s Liberation Army.

The Chinese government is now in a strong position to mediate between the KIA and the government. The talks that took place in Chiang Mai focused on the increasing role of China in the peace process. This is just one more link in a long chain of contact that has been renewed amid the fighting in Kachin.

As can be seen by China’s willingness to facilitate ceasefire talks in Ruili just across the border in Yunnan province, Beijing is welcoming greater dialogue. Chinese government-run newspapers also show the appetite for such activities, without of course mentioning the strategic benefits for China.

Declining influence

Over the past 12 months, China has been on the back foot in Burma. They were shocked at the suspension of the Chinese-funded Myitsone dam, an investment of US $3.6 billion. This was the crack of the starting pistol in the race for Burma. It signaled that the generals, fearing Chinese dominance, were ready to explore Washington’s Asia re-engagement policy.

The entry of Europe through aid agencies, multinational organizations, and world-class companies all offering grants, technical assistance and business opportunities, added to Burma’s swing to the West, and therefore China’s angst.

In an increasingly hostile climate, China must play its cards right. This is why recent unrest in Kachin is important. It is a small piece of the puzzle in the overall geopolitical game currently playing out in Burma.

If China can successfully maneuver itself between the Kachins and Naypyidaw it will be in an excellent brokering position, allowing maximum influence regarding the current Kachin conflict.

China needs to revamp its image. “Brand China” is often regarded negatively and suspiciously on the world stage. Beijing needs to bolster its global image as a responsible actor promoting peace and development.

For this to happen, it must start with the local Burmese people and temper anger amid claims of growing Chinese imperialist tendencies in northern Burma. These claims are regarded as supported by China’s quest for local resources such as jade, timber and hydro-power, and the fact that it has, through foreign direct investment, taken over large parts of the national and local economy.

Locally in Kachin, where pro-Chinese sentiment is at an all-time low, a stake in the talks could also help improve its image as a responsible neighbor. It also helps quell the worries of Christian Kachins living in Yunnan, as well as other concerned Yunnan residents.

Increasing Chinese involvement in the negotiations will also be welcomed by the United Wa State Army (UWSA), the largest military non-state actor, with about 30,000 active, well-armed troops.

Developments in Kachin have been followed closely by the Wa who fear that after a KIA defeat they would then be in the Tatmadaw’s crosshairs. The Wa people have historical, geographical, cultural and linguistic ties to China.

The PLA supplied the UWSA with PTL02 Military Tank Destroyers in mid-2012 and before that Man Portable Air Defense Systems (MANPADS) as a military deterrent, subtly warning the Burmese government not to entertain the idea of a KIA-style offensive on the UWSA. The UWSA have threatened war if hostilities do not stop in Kachin.

China’s oil and gas pipelines, which run from Sittwe to Kunming, are now started resuming operations, effectively giving China something it has never had: Indian Ocean access and therefore the ability to bypass the expensive and time-consuming Strait of Malacca.

An active role in the KIA/government negotiations will give China an added diplomatic option and therefore greater ability to push developments along paths that are favorable to Beijing.

Indeed, the ongoing conflict in Kachin is just one piece on the chess board. If played correctly it could be used to promote overall Chinese strategic aims in the battle for influence in Burma. If not, it could see a long and costly civil war too close for comfort.

But Myanmar is looking beyond China. In that situation other neighbors who are keen to play a role in Myanmar may step in without the knowledge of Beijing.