On Jan. 2, Myanmar's military acknowledged that it has been launching airstrikes against Kachin rebels, prompting Washington to condemn such use of military power. Still, the United States remains focused on building relations with Myanmar, threatening China's position as Naypyidaw's dominant patron. China has been Myanmar's only major ally, investor and trading partner since the country became isolated from the West in 1962. Ultimately, Beijing's modern approach to Myanmar stems from China's need to secure energy supply lines and access to the Indian Ocean basin and international sea lanes as well as to maintain border security. As a result, China will likely continue to play a major role in Myanmar.
However, Beijing views the possibility of closer relations between Myanmar and the United States as part of a broader U.S. containment strategy, with Washington strengthening ties with many of China's neighbors. This perceived strategic threat to its interests could drive China to attempt to undermine U.S. support for Naypyidaw by exploiting certain levers of influence it has established in Myanmar.
One of these involves China's strategy to maintain a balance of power between Naypyidaw and Myanmar's various ethnic opposition groups. In the past, China has positioned itself as an arbitrator and, in effect, a translator in ethnic conflicts with the government. China has also demonstrated an ability to inflame ethnic tensions near the Sino-Myanmar border as a way to manipulate the Myanmar government. Maintaining relations with both the Kachin and Naypyidaw gives Beijing the ability to escalate conflicts between them, albeit on a limited basis, since Kachin state lies along the Chinese border. But inciting the Kachin further would likely provoke a more violent response from the Myanmar government, in spite of U.S. and international objections. Such a move could force the United States to lessen its involvement and investment in Myanmar.
A second lever China could utilize is its ability to direct large amounts of investment into Myanmar. The United States does not have such a tool since, unlike Beijing, Washington does not have the authority, ability or desire to direct U.S. companies to invest in other countries. Such an influx of Chinese funding and investment could encourage Myanmar to temper its relationship with the United States.
Myanmar in 2013
This year will be critical for Myanmar. The changes of 2012, such as the nascent political opening, parliamentary by-elections in April, and the official return of democracy activist Aung San Suu Kyi to national politics, were important but largely cosmetic first steps. This year will test the regime's ability to maintain the appearance of opening, as well as to implement the concrete economic and political reforms necessary to attract foreign investment, especially from the West. Doing so would enable Naypyidaw to reduce its overwhelming dependence on Chinese patronage and to further integrate into the Association of Southeast Asian Nations.
This, in turn, would lift one of the major obstacles blocking the United States' own pivot to Asia. The Southeast Asian economic and political bloc is central to U.S. strategy in the region. To strengthen ties with the association, Washington must be able to engage politically with each member, something it could not do until this year. Thus, in addition to those in Myanmar, 2013 will be critical for China's interests in Southeast Asia and the broader Indian Ocean region. If Beijing can succeed in stalling or undermining Myanmar's opening, it will have taken a critical step toward securing its regional interests going forward.