Myanmar’s pushback against China, which is trying to widen its influence through the China Myanmar Economic Corridor (CMEC), among other issues has been influenced by Pakistan’s experience in China Pakistan Economic Corridor (CPEC) and Sri Lanka's Hambantota Port project. Myanmar’s all-powerful generals have drawn lessons from these experiences and highlighted reservations against the Chinese investment.
The CPEC model, which has led to Pakistan’s structural dependence on China, is now being felt in the CMEC, according to an opinion piece ‘Rescuing Myanmar From the Chinese Debt Trap’ recently published in Myanmar’s leading English media outlet The Irrawaddy.
In terms of geography, the Chinese have proposed that the CMEC (part of BRI) would start from China’s pivotal Yunnan province, which shares borders with Myanmar, Laos and Vietnam. From Ruili city on the China-Myanmar border, the corridor would head towards Mandalay, Myanmar’s former royal capital on the banks of the Irrawaddy River in the northern part of the country. From there, it could extend towards the east and west to Yangon New City and the Kyaukphyu Special Economic Zone, in the western Rakhine province. During Chinese President Xi Jinping’s state visit to Myanmar in January, two agreements were signed - establishing the Kyaukphyu Deep Sea Port (KDSP) and setting up the Special Economic Zone (SEZ). By setting up the KDSP, the Chinese are hoping to lower their dependence on the Straits of Malacca, which is China’s main trade artery, linking the Indian and the Pacific oceans: an over-reliance on which leaves China vulnerable to geo-political outside factors.
The Kyaukphyu Deep Sea Port is also critical for China’s energy security. The port houses an oil and gas pipeline, supplying energy to Yunnan. It is estimated that under an elaborate plan, China is targeting a massive investment of around $100 billion in Myanmar’s economy—a figure is over and above $62 billion funding for CPEC. China has proposed 38 projects under CMEC but Myanmar so far has approved only nine (six are outlined below). Since last year Myanmar has decided that it will only implement the projects that will be mutually beneficial.
Looking back at the last three decades, Chinese investment in Myanmar reached its peak during the 2010-2011 fiscal years after President Thein Sein’s government took office. In the 2011-2012 fiscal years, Chinese investment began a rapid decline after the controversial $3.6 billion China-backed Myitsone hydropower project was suspended amid public outcry over the dam’s social and environmental impacts. Myanmar continues to suspend the construction of Myitsone Dam. The dam is one of seven hydropower projects planned for the upper reaches of the Irrawaddy River as well as the Mali and N’Mai rivers, at whose confluence the Irrawaddy begins.
It is certain that China will remain to be a decisive economic influence for Myanmar which is also a potentially crucial partner in its BRI and other economic plans. In terms of foreign investment figures, China is now Myanmar’s largest investor as well as biggest trade partner.