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As Myanmar Looks West, Relations With China Cool

At the border between Myanmar and China
At the border between Myanmar and China
Wang Ling

BEIJING — Relations between Myanmar and China remain tense after a bomb from a Burmese military plane fell in the Chinese border province of Yunnan last week. The bomb killed four people and injured another nine and also prompted a good number of Burmese to taking refuge on the Chinese side.

China responded to the incident by quickly summoning Myanmar's ambassador to make its displeasure known and severely condemn the incident. It also urged the Burmese government to undertake a thorough investigation and take effective measures to prevent a similar incident from happening again.

In an emergency call one day after the bombing, Chinese Central Military Commission Vice Commander Fan Changlong told the Myanmar defense forces commander to rein in the Burmese military. He also warned that "China will take decisive action to protect its people's lives and property."

The Burmese government, which has promised to cooperate with China in the investigation of the incident, blames the Myanmar National Democratic Alliance Army (MNDAA), a rebel army if the northeastern minority Kokang region led by Pheung Kya-shin. It accuses the MNDAA of trying to sabotage Sino-Myanmar relations.

This isn't the first time the situation in northern Burma has spilled over into China. Over the past two decades, China has acted to a certain extent as a mediator in the conflicts between the Kachin Independence Army, another rebel group in northern Burma, and Myanmar government forces, trying earnestly to safeguard peace and stability along the border.

The two neighbors also maintain important economic and trade ties. Before Myanmar's first generally elected government came to power in 2011, China was undoubtedly Myanmar's longest and closest friend in the eyes of the West. Relations were particularly close during the nearly 20 years of sanctions that the West (except Japan) imposed starting in the mid-1990s as a way to protest Myanmar's then military-led government, which repressed the country's democratic movements.

When Thein Sein, Myanmar's first civilian-elected president, was interviewed by Chinese newspapers in 2012, he noted that his country owed its thanks to China because when the country suffered an economic blockade it was China that provided timely loans.

As Burmese government data shows, before the new government took power in July 2011, more than 40% of the country's foreign capital came from China. During the 2011-2012 fiscal year (April 2011- March 2012), China was Myanmar's biggest trade partner with bilateral trade of about $5 billion, which is three times more than its combined trade with Japan and South Korea.

Branching out

Now, though, the once-close trade link is undergoing changes. As the Myanmar government embarks on a series of economic and political reforms, diversifying its diplomatic relations and trade by increasingly looking West, Sino-Myanmar relations appear to be heading towards a "new normal stage."

Vice Chairman of CITIC construction company Yuan Shaobin and Burmese Minister of Agriculture U Ohn Myint in Myanmar on Feb. 4 — Photo: U Aung/Xinhua/ZUMA

It's not difficult to detect the signs of change. For instance, Thein Sein, upon being elected president, said that in order to respect public opinion the Irrawaddy River Myitsone dam project valued at nearly $4 billion and funded by China was to be suspended. It was a shrewd action directed at public opinion and is deemed a milestone in Myanmar reform as well as an indication of souring relations between the two partners.

Since then, the press has reported problems with numerous Chinese projects. And overall Chinese investment has plummeted.

Europe and the United States, in the meantime, are boosting their relationships with the country as well as exploring business opportunities there. In 2011, U.S.-Myanmar trade explanded for the first time in a decade, up to $300 million. Even though the United States hasn't totally lifted all sanctions against Myanmar, it is gradually easing them back. The EU, for its part, decided in 2013 to permanently abandon, except for a military embargo, all sanctions against Myanmar and its officials.

On top of all that, U.S. President Barack Obama has so far visited Myanmar twice. Thein Sein, in turn, has made trips to the West, including to the United States and Germany, to attract investment.

The Burmese press reports that the country, since halting the Chinese dam project, has switched towards the UK, France and Norway, seeking cooperation with renowned multinational firms with good quality equipment and strong capital for its new hydropower projects.

Economic ties have also improved with Japan. Some Burmese officials even predict that in the 2014-2015 fiscal year Japan will hopefully to become the country's largest investor. David I. Steinberg, a Myanmar expert, doesn't agree. He says Japan is unlikely to break even with China, which is still Myanmar's top investor and trade partner. Steinberg also believes that rapproachment with India and the West will help Myanmar return to a more neutral stance instead of living under China's shadow.

Lasting loyalties

Before the bombing incident took place, China had already foreseen the transition in relations and the challenges implied between the two countries. When Thein Sein attended the 2013 Boao Forum held in China, Chinese Ambassador to Myanmar Yang Houlan pointed out that an increasing number of multinational companies would soon enter the country and that competition would grow much more fierce.

Myanmar, nevertheless, continues to prioritize its ties with China, even if domestically there has been some anti-Chinese sentiment in recent years. Last year, Myanmar took the rotating chair of the ASEAN summit. When interviewed by the press, a Burmese diplomat said that the country wouldn't change its active, independent and non-aligned foreign policy and that it wished to maintain peaceful relations with all countries, China in particular.

Myanmar will hold a presidential election this year. There have been rumors recently that possible candidate Aung San Suu Kyi, the charismatic leader of the National League for Democracy as well as a Nobel Peace Prize laureate, will visit China. No matter how the bilateral Sino-Myanmar relations develop, the imperative is that Chinese people's lives and safety must be guaranteed.

Chen Lixiong, Caixin's special correspondent to Singapore, also contributed to this report.  

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