Protesters burn a Chinese flag in Yangon to show their anger at its response to the military coup. (Frontier)
Protesters burn a Chinese flag in Yangon to show their anger at its response to the military coup. (Frontier)

China is walking a tightrope in Myanmar

Instability and anti-Chinese sentiment are endangering Beijing’s plans in the country, but rivalry with the West and its own domestic problems may prevent it from engaging the democracy movement, which remains wary of China.


China has stuck to its foreign policy principles by resolutely opposing international action against Myanmar’s junta, but 100 days after the military coup, public anger against Beijing for its perceived support of the generals could jeopardise its ambitions in the country.

In a first sign that China’s assets were vulnerable, three military guards assigned to the Chinese-financed gas pipeline traversing Myanmar were reported killed by an unidentified group in Mandalay Region’s Kyaukse Township on May 5.

The twin oil and gas pipelines that run nearly 800 kilometres from Kyaukphyu in Rakhine State to Yunnan Province are among China’s most strategically important investments in Myanmar. Beijing pressed Senior General Min Aung Hlaing’s junta in mid-March to guarantee their safety and prevent the spreading of “fake news” against Chinese interests. The plea was made shortly before several Chinese-owned factories were burnt down by unknown persons in Hlaing Tharyar Township on March 14, apparently in response to security forces killing more than 50 protesters in the Yangon industrial suburb.

Although the oil and gas pipelines pre-date the ambitious “China-Myanmar Economic Corridor”, they are a core element of the  multi-billion dollar infrastructure programme, which also involves railways, ports and highways. With the junta facing increased resistance from ethnic armed groups along the borders, as well as the more urban-based civil disobedience movement, China’s plan to build factories, trade hubs and border economic zones tying Yunnan to Myanmar’s economic growth is, at least for now, all but impossible.

Meanwhile, existing Chinese businesses in Myanmar continue to face disruptions and some private companies are mulling a market exit. Although work has begun on a Chinese-financed gas-fired power station near the terminal of the oil and gas pipelines at Kyaukphyu, the future of Chinese solar power developers who won 28 of 29 sites in a solar tender last year remains in doubt.

Unprecedented internet restrictions have also raised questions over Alibaba’s planned US$73.5 million acquisition of shares in mobile wallet Wave Money, while Chinese companies, particularly Huawei and ZTE, are being targeted by public boycott movements.

Although many in Myanmar believe unsubstantiated rumours (hotly denied by Beijing) that Chinese planes transported IT technicians to Myanmar to build an internet firewall and Chinese soldiers were seen in Myanmar streets after the coup, analysts and China experts doubt that Beijing actively backed – or was even happy with – the military takeover on February 1.

The bigger question is why China is now protecting the junta on the international stage, for instance by blocking punitive action along with Russia at the United Nations Security Council, and repeatedly speaking out against countries imposing unilateral sanctions.

Hongwei Fan, a professor at Xiamen University who specialises in Southeast Asia, told the state-controlled Global Times last month that sanctions against the Tatmadaw, such as an arms embargo, cannot coerce the generals to give up political power. The Chinese academic added that ASEAN countries share China and Russia’s scepticism of such measures.

Because European geopolitical interests differ from China and other countries, their “attitude on the Myanmar question is of course different”, Fan said.

One likely reason for China’s stance is its eagerness to prevent Myanmar at its moment of crisis from becoming a stage for foreign influence and possible intervention by its rivals, particularly countries in the West.

“Beijing wants to give the Tatmadaw breathing space and prevent external stakeholders from supporting democratic forces,” said Mr Jason Tower, Myanmar director of the United States Institute of Peace, a US think-tank.

But a defeat for these democratic forces would bring its own dividends for China: “If the Tatmadaw wins, Myanmar will be cornered and forced back into China’s orbit, like the time before Thein Sein’s presidency,” he said referring to the reformist, military-backed Union Solidarity and Development Party government that ruled from 2011 to 2016.

Tied to broader questions of geopolitical alignment, many in Myanmar are also suspicious that China will use the junta’s isolation to press for better terms for its mega-projects, despite their unpopularity in the country. The Thein Sein government gave a preliminary greenlight for a deep-sea port proposal in Kyaukphyu led by China’s state-run CITIC Group, but the National League for Democracy government that was elected in 2015 renegotiated the project to ensure more favourable terms for Myanmar.

An ethnic Chinese-Kokang protester in Yangon who uses the name Aung Htoo expressed a common attitude among the public when he told Frontier, “I suspect that China might be backing the junta regime for their own benefit.”

But just as the Tatmadaw’s tentative move in 2011 to a quasi-democratic system heralded a shift away from over-reliance on China to an attempt to engage the West, the new junta may also be wary of too close a Chinese embrace.

Mr Ari Ben-Menashe, a former Israeli arms dealer whose firm Dickens & Madson Canada has registered as lobbyists for the junta in Washington, is reported as saying that Myanmar’s generals want to move closer to the West and away from China. Daw Aung San Suu Kyi was perceived as being too close to Beijing, the lobbyist said.

Yet, despite this spin, and despite being known to be wary of China’s covert support for ethnic armed groups based along its border with Myanmar, Min Aung Hlaing has brought several old China hands into his team. The new international cooperation minister is U Ko Ko Hlaing; the former adviser to President Thein Sein translated Chinese President Xi Jinping’s book The Governance of China into Burmese and has cultivated ties with Chinese companies and universities. He also criticised the NLD administration for “wasting two years” by reviewing Chinese-backed railway and deep-sea port projects.

Meanwhile, the anti-coup movement has made few discernible efforts to court Beijing, and has instead largely placed its hopes in China’s rivals in the West.

This has defined the approach of Dr Sasa, the minister for international cooperation in the parallel National Unity Government, which was formed in defiance of the junta by a mix of legislators elected in November’s general election and ethnic leaders. The dissident minister has met ambassadors and officials from the US and Europe, including the United Kingdom’s minister of state for Asia, Mr Nigel Adams, and has received support for offices and capacity building.

The anti-coup movement has had only one known meeting with Chinese officials, when the Committee Representing the Pyidaungsu Hluttaw – which formed the NUG in mid-April – held talks with officials from China’s embassy in Yangon.

“China has not been given a chance by the NUG or CRPH. They don’t have a China envoy or a senior representative designated to interact with Beijing,” said Jason Tower of USIP.

Although Xi and his officials managed to build trust with State Counsellor Aung San Suu Kyi and her party and cabinet colleagues, these figures are in detention, Tower said, referring to the junta’s incarceration of the top NLD leadership right after the coup.

Myanmar political analyst Ye Salween (a pseudonym) said the NUG and CRPH were largely following Myanmar public sentiment in leaning westwards and away from China, whose statements and actions since the coup have done little to inspire popular trust.

Democratic leaders like Dr Sasa “cannot afford to lose public support and together with that, the momentum of the resistance movement,” he told Frontier.

However, China appears to be just as unwilling to engage with anti-coup leaders. 

“There are implications for China’s domestic politics if Beijing publicly embraces Myanmar’s democratic movement, with regards to Hong Kong, Taiwan and elsewhere,” Tower said.

China’s state media reflects a sense of being threatened by the social media solidarity between popular movements in these territories, even if there is little evidence of material support between them.

In February, China’s Communist Party mouthpiece The Global Times accused the Milk Tea Alliance, which it called “a loose online coalition of people mostly from regions including Hong Kong and Taiwan, who like to attack China on social media” of stirring up rumours against China in Myanmar. It also blamed Taiwan for exploiting “chaos in Myanmar” to undermine Chinese interests.

A source involved in Chinese diplomatic discussions in Myanmar said Chinese officials and diplomats blamed what they see as Taiwan’s influence in Myanmar for stirring up anti-China sentiment.

China and Taiwan have a tangled history in Myanmar, with both sides contesting for control of border regions after remnants of the fleeing Kuomintang army occupied areas of Shan State during the 1950s, with US logistical support, following their defeat by Chinese Communist forces. Even after many KMT supporters shifted to Thailand, communities stayed behind, building Chinese schools and preserving links that have seen many Myanmar people move to Taiwan for education and work.

Taiwan had little official access to Myanmar during the previous decades of military dictatorship. It opened its de facto embassy, the Taipei Economic and Cultural Office, in Yangon in early 2016 as Aung San Suu Kyi prepared to launch her government after the NLD’s landslide election victory in November the previous year.

But China’s blame game on Taiwan has little to do with the KMT history, the source said. Instead, they regard the promotion by the government of Taiwanese President Ms Tsai Ing-wen of Taiwan as a tourism destination for Myanmar travellers and investment by Taiwanese banks in Myanmar – including Cathay United Bank, E.SUN Commercial Bank and First Commercial Bank – “as a way to stir up problems [for China]”.

However, Tsai has not been active in Myanmar’s current crisis, contrary to what Myanmar protesters want, apart from foreign ministry statements criticising the coup and condemning the violence against civilians.

Taiwan’s national legislature has gone further. It passed a motion last month urging the junta to restore democracy and expressing support for international actions, but stopped short of asking for targeted sanctions. The parliamentary resolution was the first of its kind in the Chinese-speaking world and stands in striking contrast with Beijing’s stance.

Despite the many obstacles to engagement, some argue that the NUG ought to be a little more savvy and should court China by appealing to its desire for stability and a conducive environment for large infrastructure development.

“The NUG should appeal to Beijing’s own interests by making the case that the coup, and Min Aung Hlaing’s illegitimate military regime, is the cause of instability, and that the solution is the establishment of a federal democracy that brings decades of ethnic conflict to an end by recognising the rights of Myanmar’s ethnic nationalities,” said Mr Benedict Rogers, a British human rights activist and author of three books on Myanmar who has spoken on virtual panels alongside Dr Sasa. “Only a civilian, democratic system can ensure the stability that Beijing values above all else.”

Ye Salween agrees, adding that some people in the exiled leadership want to engage with Beijing, but he said it was vital for the NUG to help the public understand China is indispensable for resolving Myanmar’s crisis. “There must be a public reckoning of the importance of China in resolving this crisis,” he said.

Meanwhile, the NUG should be wary of being seen as too close to movements that are explicitly opposed to the Chinese government, said Rogers.

“The NUG itself may wish to keep a little distance publicly from regional democracy movements, although it would be wise for them to maintain private channels of communication as they need the support of democracies and democracy movements,” Rogers added. “Civil society groups in Myanmar can and should continue their involvement in the Milk Tea Alliance, as such solidarity is vital, but it would be understandable if the NUG chose to play a more careful, discreet and diplomatic role in this regard.”

But although the current crisis in Myanmar is hardly conducive to Chinese interests, a victory for pro-democracy forces may be more unfavourable.

“It is extremely uncertain what polity Myanmar would become if the regime falls,” said Tower of USIP, explaining that, for China, “the Tatmadaw is a buffer between Myanmar and the West. The worst outcome for Chinese leaders is to have a Western-leaning and democratic Myanmar right beside its borders, a lot less friendly to Beijing than Suu Kyi or her old team, and without the Tatmadaw balancing its leanings.”

“Also, if the new democratic government wants to clean up the border areas and sort out Wa, Mongla and Kokang [of Shan State] as well as the associated illicit economy and drug trade, this would open a can of worms for China.”

Furthermore, while regime change in Myanmar might end up hurting Beijing’s interests, China’s global standing also allows it to withstand pressure to intervene.

Russia’s open support for the junta and more active diplomacy from ASEAN in recent weeks has helped to shift the spotlight from Beijing, but even if China stood alone in protecting the generals, the US and allied nations would struggle for leverage over it. 

Ms Kelley Currie, a former US ambassador in the Trump administration and a Myanmar specialist, said Beijing is hoping to “sit on the fence” and deal with the winning party without a “moral calculus” and being “outcome neutral” amid the crisis. But creative strategies could eventually shift China off the fence, she argued.

“The US and others need to use the tools at their disposal — the UN, ASEAN, G7, etc. — to force choices that Beijing does not want to make and, at a minimum, raise the costs of Chinese neutrality,” Currie told Frontier.

She said this approach could complement the actions of the Myanmar public, who will remain opposed to China’s plans in the country if it fails to change course.

“Given the fierceness and tenacity of the anti-coup forces – not to mention the strategic direction they have taken of uniting Burma’s previously disparate opponents of military rule – China’s neutrality is increasingly untenable and puts everything they have worked for in Burma at risk,” Currie argued. 

However, it’s questionable how large Myanmar looms in American foreign policy, even within its approach to China.

Mr Hunter Marston, a Canberra-based political analyst, said he doubted the administration of President Joe Biden would tie specific measures in the US-China relationship to cooperation on Myanmar.

“But there’s always the possibility of secondary US sanctions that target Chinese businesses continuing to work with the Myanmar military,” he said. “That could shift Beijing’s level of support for the regime in Nay Pyi Taw.”

For now, he said, both China and the US agree on at least one thing: the importance of ASEAN-led efforts to resolve the crisis. That could provide some room for cooperation. “If Beijing and Washington can both communicate to ASEAN the urgent need for action,” Marston said, “they may be able to provide constructive support for diplomacy.”

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