Opposition within Myanmar to two major Chinese investment projects in the country has shown that Beijing's old approach to maintaining its interests in Myanmar is becoming less effective. Public protests over the Latpadaungtaung copper mine, a joint venture between China's Wanbao company and the Myanmar military government, have continued since September 2012. The mine, a flagship project between Beijing and Naypyidaw, has become the center of political controversy since Myanmar's political landscape opened up. In fact, a commission headed by Aung San Suu Kyi, head of the opposition National League of Democracy party, was established to investigate the project. Another prominent Chinese investment project, the Myitsone dam in Myanmar's Kachin state, met a similar fate when ethnic Kachins, environmentalists and Myanmar's political opposition protested the creation of the dam. The project was suspended in 2011.
Beijing's large investment projects faced more resistance and politicization as Myanmar's calculated opening up allowed more political players to influence domestic policies. Beijing's largely unilateral approach to the military government in Naypyidaw is growing outdated as the Myanmar government attempts to look beyond Beijing and engage with the rest of the world. Moreover, political forces with which China lacks effective engagement are capitalizing on China's relationship with the Myanmar government, turning anti-government sentiment into anti-China sentiment and creating national political controversies about Chinese investment and influence.
China's Shifting Relationships
Beijing's Myanmar policy for a long time relied on a three-pronged strategy: engagement with the country's ethnic forces, many of which share ethnic, cultural and historical connections; ties to political opposition movements, including Myanmar's National League of Democracy; and a relationship with Myanmar's central government. This strategy changed during Naypyidaw's years of isolation beginning in the 1990s. Myanmar's government wanted financial support to sustain its hold on power and allowed Beijing to greatly expand its strategic interests in the country and open up a critical energy corridor. As part of this shift, Beijing reduced its communications with Myanmar's opposition movements and ethnic groups in favor of stronger connections with the government.
Until now, China had not established official communications with the opposition National League of Democracy, even though Beijing actively pursued contacts with the opposition a decade ago to gain leverage in its relationship with the military government. Beijing was the first entity to congratulate the National League of Democracy on its landslide victory in the 1990 election, despite arousing the military's anger, and reportedly maintained close contacts with different opposition forces in Myanmar in the early 2000s. But these connections gradually gave way to Beijing's relationship with the military government, and Beijing avoided acting as a power broker or mediator between the opposition and the government.Additionally, in the early 1990s Beijing's once-strong connections with various ethnic groups began weakening. The lack of a clearly defined border between China and Myanmar, along with some Myanmar ethnic groups' strong cultural, political and economic ties to China, historically gave China incentive to maintain influence in northern Myanmar, a strategic buffer and key supply corridor. This included dispatching an expedition force in the 1930s and 1940s in part to build a supply line from Yunnan to Lashio in northern Myanmar in an effort to counter a Japanese invasion. Beijing also gave ethnic rebel armies direct assistance against a hostile Burmese government from the 1960s through the 1980s, during the country's communist years. However, with the shifting balance in the country in the 1990s, Beijing had avoided directly intervening in ethnic conflicts or openly engaging with ethnic groups, delegating those activities to the provincial government in the southwestern Yunnan province. China's central government, meanwhile, struck a delicate balance between quiet support for militant groups and close ties with the central government and military, relying on this balance to keep the border region relatively stable.
Nonetheless, Myanmar's decision to open up to the rest of the world has brought additional competition for China and reduced Beijing's leverage. Thus, China's central government could find it necessary to diversify its approach and pursue greater engagement with the country's multiple political players to secure its interests in Myanmar.
Renewed Involvement in Ethnic Conflicts
The Chinese Foreign Ministry said Feb. 4 that the Myanmar government and the ethnic Kachin Independence Army rebel group had held a new round of talks in the border town of Ruili in Yunnan province. Unlike previous negotiations, which were mostly presided over by provincial officials, the latest round reportedly was chaired by representatives from China's central government, including delegations from the Foreign Ministry and Defense Ministry. This signals new involvement on Beijing's part in Kachin conflicts and perhaps in the broader ethnic situation in northern Myanmar.
Until recently, Beijing — one of the most important stakeholders in Kachin state — remained largely reticent regarding the conflicts that have erupted since the Myanmar military's offensive there began in June 2011. Nonetheless, the escalating tensions in Kachin state, coupled with the Myanmar military's growing assertiveness toward ethnic groups in recent months have put Beijing in an increasingly uncomfortable position. Driven by Naypyidaw's appetite for unity among its various ethnic rebels, the military offensive in Kachin exemplified Beijing's growing challenges after years of unilateral engagement with the Myanmar government: Not only is the border region harder to stabilize because of Naypyidaw's military actions, but ethnic forces are more strongly resisting Chinese involvement because of Beijing's reluctance to take their political and economic interests into account. As a result, Beijing has found its large investment projects in Kachin state increasingly held hostage by ethnic conflicts.
Moreover, Beijing has found its interests in Myanmar frequently at odds with those of the Yunnan provincial government, which deals directly with the northern Myanmar ethnic groups. Border trade with Myanmar accounts for about three-fourths of Yunnan province's total border trade, and Myanmar's ability to maintain border security is a crucial piece of its ability to bargain for financial support from Beijing. Thus, economic interests often override stability in the Yunnan provincial government's considerations on dealing with ethnic issues in northern Myanmar.
Beijing and Yunnan's conflict of interest was exacerbated by the Myanmar military's attack at Kokang (Northern Shan Special Region 1) in 2009, when Yunnan provincial officials disobeyed Beijing's order to close the border to tens of thousands of refugees from Kokang. Moreover, in order to prevent Beijing's direct involvement in a border issue that affects Yunnan's economic interests, provincial officials and academics from Yunnan often have been reluctant to give Beijing necessary updates, which could have contributed to the delay in Beijing's response to the conflicts in Kachin, during which at least three artillery shells fell within Chinese territory.
Beijing's mediation efforts coincided with an offer reportedly made by the United Wa State Army in Shan state — the strongest ethnic force in Myanmar and Beijing's closest ally among the ethnic forces — to mediate negotiations between the Kachin Independence Army and the government. Moreover, reports have suggested that Beijing is sending more military supplies, including the Chinese-made PTL02 wheeled tank destroyers, to the United Wa State Army as the ethnic fighters prepare to counter potential Myanmar military offensives. Although the Chinese government has denied such claims, that denial does not preclude the possibility of a transfer of military equipment through a third party.
Ultimately, Beijing does not want its interests in the ethnic issue to be sidelined. Particularly with Naypyidaw's attempts to open up to the rest of the world and the resulting increase in competition from Western countries to maintain energy security in Myanmar, Beijing has been compelled to reconsider its approach to the ethnic issue. It has taken a more active role in mediation and increased its involvement with different ethnic groups as leverage against Myanmar's central government to ensure that its broader interests in the country are not threatened. Although Beijing must be careful to not push Naypyidaw too far, it could again diversify its connections with the country's different political players in order to secure China's strategic interests in the country.