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China's Policy Towards Myanmar

In the history of the Peoples Republic of China (PRC), there had always been firm links between its domestic goals and foreign policy. In the Mao Zedong era, the national goal of “self reliant development” was accompanied by an external strategy of “leaning to one side” i.e. with socialist allies, in order to resist “imperialist” interventions in China. China’s internal priorities underwent a major change in the post-1978 period, with veteran leader Deng Xiaoping initiating a path of “socialism with Chinese characteristics”. Correspondingly a foreign policy based on ‘open-door, anti-hegemony and independence’ principles was evolved. Basically, this continues till today, with some nuanced positions introduced by the post-Deng leadership. President Jiang Zemin, visualising three major tasks for the country – modernisation, unification of Taiwan and safeguarding world peace, fine-tuned Deng’s foreign policy, calling it as an “independent foreign policy of peace”. Under the regime of his successor Hu Jintao, China’s GDP-centric development model hitherto adopted, has been replaced by one aiming at balanced development leading to the creation of a “harmonious socialist society” at home. This is being matched by a foreign policy based on the concept of “harmonious world” which seeks to achieve a ‘win-win situation in international relations’. It was left to the Chinese Premier Wen Jiabao to unambiguously elucidate the linkage between the PRC’s domestic and foreign policy goals. He has said, “What China needs for its development first and foremost is an international environment of long term stability and a stable surrounding environment” . A “peaceful periphery” has thus emerged as a pre-requisite for realisation of China’s modernisation task and the PRC’s policy specifically towards its neighbour, Myanmar, needs to be understood in that context.

What are the motivating factors behind China’s policy to strengthen economic, political and military ties with Myanmar? Firstly, as pointed out above, China perceives that stability in Myanmar is essential for its development and that the same is contributing to the security of its borders with Myanmar where a sizeable ethnic Chinese population live. Second come the economic imperatives for China based on the need to tap Myanmar’s rich energy resources to benefit its modernisation efforts. Beijing’s energy security requirements are compelling it to build pipelines from Myanmar to China’s bordering Yunnan province as an alternative to the shipping of resources through piracy-prone Malacca Straits, through which much of energy requirements from abroad are being shipped. Thirdly, the strategic location of Myanmar has become important for China. The PRC’s port construction activities in Myanmar are part of its “string of pearls” strategy aimed at protecting the sea-lanes of communication (SLOC) in the region, vital for the country’s energy imports. Whether such strategy would ultimately lead to China’s projection of naval power into the Indian Ocean, is anybody’s guess.

Given the motivating factors as above, it is not surprising that China is actively wooing Myanmar with energy contracts, trade deals and regular, substantial economic assistance, not to speak of its political support including blocking sanctions against Myanmar in the United Nations and other international bodies on issues like human rights. As a notable instance, Beijing is downplaying the negative impact coming from some bilateral political tensions, which have arisen of late. It has cautiously responded to the Myanmar army’s attacks in August 2009 on the Myanmar National Democratic Alliance Army (MNDAA) consisting of ethnic Chinese in Kokang region bordering China, which resulted in an influx of refugees into the Chinese territory. This clearly shows that Myanmar continues to be important for China.

Energy cooperation occupies a prominent place in China-Myanmar relations. It is natural that Myanmar, with proven oil and gas reserves, has emerged as China’s important target in terms of energy sources. Demonstrating the same has been the January 2007 agreement between the PRC’s State-owned CNPC and the Myanmar Oil and Gas Enterprise (MOGE) providing for Chinese exploration of oil and gas at an area of approximately 10,000 square kilometres off the Arakan coast. The PRC signed a contract with Myanmar worth US$ 2.5 billion in the same year on building a 2000- km cross border oil and gas pipeline, linking the latter’s south-western port of Sittwe with Chongqing municipality in south-western China after passing through Ruili and Kunming (both in Yunnan) and Guizhou province. The political nature of the contract became clear, as its signing closely followed the Chinese veto of a punitive resolution in the UNSC against Myanmar on human rights issue. The pipeline’s construction is to start in the first half of 2009 as part of Yunnan’s overall energy development plan for the year worth US$ 15.9 billion (72 billion Yuan). Once completed, it would strengthen China’s access to Myanmar’s rich energy reserves and more importantly, would reduce the level of China’s dependence on the piracy-prone Malacca Straits, which also involves long distances, for energy transport.

Worth paying attention is also China-Myanmar cooperation in infrastructure building. China is also to help in the development of hydroelectric projects in Myanmar . A China- Myanmar-Bangladesh tri-nation road network is also being planned. Beijing has a transport project in Myanmar, known as ‘Irrawaddy corridor’ which envisages establishment of road links between China’s Yunnan province with Myanmar and a railway connection between Kunming (China) and Lashio (Northern Myanmar). The corridor is expected to facilitate the economic development of the three southwestern provinces of China – Sichuan, Guizhou and Yunnan, through achieving their connectivity with Myanmar.

On China’s trade with Myanmar, it is on the rise concomitant with their deepening energy ties. According to Chinese official statistics, from January to December in 2008, bilateral trade between the two nations stood at US$ 2.626 billion, a rise of 26.4 percent from the corresponding period in 2007. China has become the No.4 foreign investor in Myanmar as against its No.6 rank in the past.

Military cooperation is another area defining China-Myanmar ties. China is also wooing Myanmar with arms sales. Its military supplies to Myanmar include F-7 fighters, K-8 Trainer aircraft, C-801 Ship-to-Ship missiles and ship-borne diesel engines for Chinese naval patrol ships.

Politically, China’s attitude towards Myanmar seems to have undergone a modification since 2006. The Chinese exhortation to Myanmarese Junta to move towards political reforms and adopt a less confrontational course with the UN (State Councillor Tang Jiaxuan, Feb 2007) is an example. This, however, does not mean any basic change in the Chinese position of opposing sanctions against Myanmar; such a stand is being viewed as reflecting the PRC’s new approach of ‘real politic’ towards Myanmar in recognition of the presence and prominence of the regional normative structure and its firm support to it .

China is however, increasingly coming under compulsions to respond to latest political trends emerging in Myanmar. The first is the apparent US policy shift towards Myanmar. The US Assistant Secretary of State, Kurt Campbell, is to pay a visit to Myanmar in the near future to hold discussions with the military Junta besides holding talks with pro-democracy leader Aung San Suu Kyi as well as representatives from ethnic communities. Strong voices in the US prefer an end to the US policy of isolation towards Myanmar in the past few decades, which had resulted in China’s growing political and commercial influence in Myanmar. Suu Kyi has met Junta’s liaison officer Aung Kyi following which she was allowed to meet with representatives from the US, Australia and the European Union. Prime Minister Thein Sein is expected to take part in the APEC Summit, scheduled in Singapore in November 2009, when he may attend a meeting between President Obama and the ASEAN leaders. Beijing should be closely watching the shifting US policy towards Myanmar. For it, a US-Myanmar détente will definitely be against China’s strategic interests. Some PRC officials are even reportedly suspecting the US hand behind the aforesaid Myanmar army’s attack against Kokang rebels in August 2009, linking it with the visit of US Senator Jim Webb to Myanmar . Secondly, China may have to respond to some internal developments in Myanmar. Elections in Myanmar are in the offing in 2010 and the country will have a new constitution. Democracy leader Aung San Suu Kyi has been disqualified from participating in the election and the army is to have 25 per cent of the parliamentary seats reserved for it.

Beijing may also have to deal with the hypothetical situation concerning Myanmar – North Korea nuclear co-operation. Based on information given by Burmese defectors, some Australian academicians suggested in August 2009 that Burma might be constructing two nuclear reactors – one with Russian assistance under IAEA safeguards and the other with North Korean assistance in Naung Laing near Mandalay. If the information is true Myanmar – ASEAN relations may come under strains, which, in turn, will affect China-Myanmar ties.

The key question now is whether China’s policy towards Myanmar can change under the new situation? What we can say at the moment is that basically, Beijing would continue to support the military rulers, while at the same time encouraging the reconciliation process in Myanmar, but at terms fixed by the Junta. A signal to this effect, can be seen in Premier Wen Jiabao’s hopes for Myanmar realising ‘stability, reconciliation and development’, expressed during his talks with his Myanmar counterpart, Thein Sein (Hua Hin, 24 October 2009). China would keenly watch the internal dynamics in Myanmar from now on, particularly the developing power-equation between the Junta and democracy leader Aung San Suu Kyi. On the question of US role in Myanmar, Beijing can certainly be expected to be uneasy for strategic reasons.

China’s evolving policy towards Myanmar needs to be studied in the overall context of the former’s latest perceptions on ties with neighbouring nations. As Beijing sees, the negative factors affecting such ties include (i) the ‘historical legacy’ concerning China’s border issues with neighbouring countries, for e.g. Sino-Indian border issue, the Diaoyu (Senkakus) issue with Japan and the South China Sea question. Also, some countries are attempting to actually occupy the disputed areas taking advantage of China’s pacifist policy, so as to create a fait accompli against China in self-interest and strengthen their positions in the border talks, (ii) the changes in the balance of power in the region as a result of China’s rise, for e.g. Japan’s leading economic status in East Asia is getting challenged and to restrict China’s growing influence, it is developing a joint approach with other countries. Also, India is not convinced about China’s rise and so, looking from a political and security point of view, the unresolved border issue dividing them would mean that their ties cannot become quiet within a certain period in future and (iii) The US alliance system, comprising Japan, South Korea, and Australia and partnerships with the Philippines, Thailand, Singapore, India and Pakistan; the US wants to prevent China’s rise and its impact on China’s neighbourhood environment cannot be ignored, though there is a degree of uncertainty in this regard. China wants to remove such negative factors through improving strategic relations with its neighbours giving up its present overemphasis on economic cooperation with the latter. This implies in particular that China will promote ‘strategic’ relation with Myanmar, irrespective of changes that are happening there.

Implications for India

India became the fifth largest consumer of oil in the world during 2006. As its economy grows, the country’s energy consumption is rising; a 50% increase in 2015 is estimated, based on 2005 levels; with no prospects of improvement in the availability of domestic resources, India may have to continue its reliance on imports from abroad. Imports now contribute to 70% of the oil consumed in the country. According to International Energy Agency’s survey, by 2030, oil imports may rise to 90% and gas imports to 40% to meet India’s energy demand. To meet its future energy requirements, India’s partnerships with other countries, which have surplus energy, are necessary. Signing of India-US civil nuclear energy cooperation agreement has been a step to increase the share of non-fossil fuel based energy resources in India’s energy mix. The overall energy situation in India is in essence marked, like in China, by the continuing gap domestically between the energy supply and demand; it is the primary reason for India’s reaching out to the world energy markets in order to get uninterrupted resource supplies essential for the country’s sustainable economic growth. In such a scenario, relations with Myanmar, assume importance for India.

In pursuing its energy drive abroad, New Delhi no doubt faces a tough challenge, against the background of India’s simultaneous rise along with China, a nation conducting an aggressive resource hunt, backed by its active diplomacy through out the world. A Sino-Indian competition in accessing overseas resources looks natural. Their targets are almost the same resource -rich regions, particularly their respective neighbourhood that offers advantages in terms of logistics and cost (Iran, Bangladesh and Myanmar for India, and Russia, Central Asia and Myanmar for China). It would be important for New Delhi to watch for the likely commercial and strategic impact of Beijing’s resource diplomacy on its foreign relations, particularly with energy –rich Myanmar and formulate suitable responses.

India should note that China’s success in accessing resources abroad including in Myanmar, has been due to its strategy of mixing its energy search overseas with trade, aid, diplomacy and arms sales; this point should not be missed by India when it develops relations with Myanmar and other resource-rich nations. Also, India- China energy relations themselves require a further boost. The two sides have already signed a memorandum for enhancing cooperation in the field of oil and natural gas in January 2006. Through their “Shared Vision” declaration (Beijing, 14 January 2008), both have expressed their commitment to make joint efforts to diversify the global energy mix and enhance the share of clean and renewable energy, so as to meet the energy requirements of all countries. Also, Beijing has offered New Delhi cooperation in the civil nuclear energy sector, for the first time.

Beijing is developing military capabilities for use in conflict over resources or disputed territories. It is promoting its investment in military programmes designed to improve ‘extended range projection’. China’s ‘string of pearls’ strategy is meant to establish connectivity between it and the oil sources in the Middle East via India’s neighbourhood. China is making efforts to engage its South Asia neighbours in military and economic fields. Beijing also wants to control the Indian Ocean, a vital transit route for energy import sources from West Asia and Africa. It considers its presence in the Indian Ocean as a strategic leverage against India. The above have naturally become New Delhi’s concerns, requiring it to be watchful of the strategic implications of the same.

In the Asia-Pacific region, India’s counter-strategy vis-à-vis China is already becoming evident. New Delhi is projecting its own power in the region, through naval deployments and maritime diplomacy. It is trying to neutralise the growing Chinese influence in Myanmar through its own initiatives (for e.g. India-Myanmar Kaladan river transportation agreements of April 2008, involving India’s upgradation of Sittwe, a place for refuelling for China’s naval forces, to be connected to Eastern India ports). It is taking steps to expand its reach to areas close to the Malacca Strait. (For e.g., INS Viraat went to the Strait in 2005 and India and other powers held military exercises in an area close to the Strait in September 2007). India’s relations with South China Sea littorals have also grown, to the consternation of Beijing. China specifically objected to Vietnam’s grant of exploratory rights to India near the disputed Paracel islands. India considers its presence in South China Sea as deterrent against Beijing. India is also actively pursuing ‘naval diplomacy’ by intensifying its naval cooperation with littoral nations like Myanmar, Iran and Indonesia. Specifically important has been the beginning of India-Maldives cooperation in patrolling waters along the latter’s Exclusive Economic Zone.

India’s interests lie in ‘engaging’ China both bilaterally and globally, while at the same adopting policies to protect the country’s strategic interests in the region including in Myanmar. New Delhi should be prepared to adopt suitable new policies to deal with the changing political situation in Myanmar. India should build strategic deterrence against China, by seeking strong ties with countries like Japan, Vietnam and Southeast Asian nations, which are all wary of the growing Chinese military strength. India should use its defence relationship with the US for balancing China’s military rise, without being seen as an US ally. In short, the growth in India’s involvement in the wider East Asia including Myanmar under its Look East policy is bound to result in competition with China. India’s foreign policy should aim at reducing any aggravation in this competition, particularly in the context of the continuing core issues still dividing them like the boundary problem. Needless to say that China has an equal responsibility in this regard.

(This formed the basis of a presentation made by Mr.D.S.Rajan, Director, Chennai Centre for China Studies, at a joint seminar organised by the Department of Politics and Public Administration of the University of Madras and the Center for Asia Studies at Chennai on 29 October, 2009).

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