John Liu and Thompson Chau
In September, the Chinese Communist Party (CCP) invited a representative from Myanmar’s National League for Democracy (NLD), the party of detained former leader Aung San Suu Kyi, to its virtual summit for political parties in South and Southeast Asia. The overture came shortly after Beijing’s special envoy for Asian affairs, Sun Guoxiang, paid a low-key visit to Myanmar, where he asked to meet Aung San Suu Kyi and was denied access by the authorities. Sun made another unannounced visit this month.
These moves underscore China’s desire to maintain its rapprochement with the NLD, which the military ousted from government on Feb. 1, even as it shifts toward recognizing the junta’s rule. A September editorial from the Global Times, a CCP-owned newspaper, called the NLD the “legitimate party in Myanmar.” But Beijing sees a fine line between supporting the NLD and supporting the underground National Unity Government (NUG), which seeks to overthrow the junta and upend the pre-coup status quo. Although the NUG is stacked with NLD members and former ministers, to China it appears a force of instability.
Increasingly, China is now operating under the assumption that the junta will eventually establish effective control of Myanmar and so has moved toward de facto recognition of its authority. More than nine months since the coup, Chinese officials have largely normalized engagement with the regime, even if they harbor some doubts over the generals’ ability to run the country. While maintaining a line of communication with the NLD, Beijing now seeks to sit out the deepening crisis and push ahead with its own interests in Myanmar with the group that holds power.
China was reluctant to get behind the military regime and its leader, Min Aung Hlaing, immediately after the coup. But unclaimed attacks against Chinese factories in a Yangon industrial zone in March marked a major turning point for Beijing, raising concerns about instability. Protests outside Yangon’s Chinese Embassy and anti-China sentiment in the wake of the military takeover didn’t help assuage them. China has called for dialogue between the junta and those fighting against it, but it has cited noninterference as justification for not putting more pressure on the generals—a position that puts it at odds with Japan, South Korea, and the West.
China effectively normalized relations with the junta in August, when it resumed working-level business with Myanmar’s government ministries after a long break. Since then, Chinese ministries and local governments have engaged with junta officials on health care, the Regional Comprehensive Economic Partnership, commerce, and other areas, according to Jason Tower, the Myanmar country director for the United States Institute of Peace. That same month, the two sides inked a deal for China to transfer $6.1 million to Myanmar for 21 development projects.
China’s engagement in Myanmar has long been high stakes: For decades, Beijing has sought to keep its neighbor to the southwest within its sphere of influence. Investments through the China-Myanmar Economic Corridor—part of the Belt and Road Initiative—provide direct access to the Indian Ocean, and Beijing can’t turn away from a crisis that risks spilling over the border. Since the coup, attacks on Chinese investments, most notably a $2 billion oil and gas pipeline, have raised concerns. In late February, Chinese officials demanded the junta enhance the pipeline’s security.
Moreover, China has sealed off its border with Myanmar, and it has supplied medical equipment and vaccines to both the military regime, known as the Tatmadaw, and to some ethnic armed organizations, or EAOs, which have fought against the government for decades. “Officially the junta has China’s full support, but unofficially China is supporting also the northern ethnic armed organizations and Arakan Army [in Rakhine state] in their respective campaigns for greater autonomy,” Tower said. “It is also limiting the Tatmadaw’s ability to use lethal force in the border region against the northern EAOs.”
China’s slow recognition of the junta comes after months of regime efforts to court its leaders—most significantly through attempts to speed up major infrastructure projects. In the fiscal year that ended on Sept. 30, Myanmar’s economy contracted by an estimated 18 percent. As other foreign companies pull out of the country, Chinese investments could provide a facade of legitimacy to the junta. “To show its legitimacy, the military government is desperate for economic recovery,” said Wu Qingxiang, a Burmese researcher of Chinese descent at Xiamen University in China who focuses on Southeast Asia.
Chinese investments could provide a facade of legitimacy to the junta.
The military government approved a $2.5 billion Chinese-financed liquified natural gas power project in Mee Lin Gyaing, Ayeyarwady region, in May—the only major foreign investment proposal greenlighted by the regime so far. It has also reorganized three committees that are instrumental to China-Myanmar Economic Corridor projects, replacing them with its own appointees. The investment projects, which include economic cooperation zones in Kachin and Shan states and a special economic zone in Rakhine state, are part of a corridor connecting Yunnan, China, to the Myanmar cities of Mandalay, Kyaukphyu, and Yangon.
“My understanding is that [junta officials] have been urging China to resume major infrastructure projects that were stalled, but China has not shown its willingness to go ahead and has remained cautious,” Wu said.
The regime has signaled its intent to renegotiate proposals for a deep-sea port and the special economic zone in Kyaukphyu, Rakhine state. In 2018, the NLD government had renegotiated a higher ownership ratio for Myanmar. But in late July—amid a major COVID-19 wave—the junta began a tender for legal service to move ahead with the project. As China resumes its relationships with Myanmar’s government, the state-owned Chinese conglomerate CITIC Group recently signed a deal to conduct a field investigation for the project.
Meanwhile, China has refused to engage with the NUG, which has sought official recognition in foreign governments since it was established in April and has made unofficial lines of contact with other countries. The NUG has challenged the junta by disrupting the government machinery through its support for the civil disobedience movement, pressuring companies to cut ties with military-owned firms and backing some anti-coup ethnic armed organizations. NUG-aligned resistance fighters have mounted targeted attacks against military personnel and regime officials.
Chinese scholars and other experts say Beijing sees the junta as the likely ultimate winner in Myanmar, driving its decision not to work with the NUG. “The military has the upper hand, and the NUG holds no sway, even if the latter has the support of the international community as well as the people of Myanmar,” said Fan Hongwei, the director of the Center for Southeast Asia Studies at Xiamen University. “Even if China sympathizes with the NUG, it is not convenient for China to openly have close contacts with it.”
NUG cabinet sources say China is among the few major countries that have totally given the cold shoulder to the underground civilian leaders, often only communicating via a third party. “To our surprise, China is too stubborn to talk to us,” said Sasa, the NUG’s spokesperson and international cooperation minister, who goes by one name. China’s state news agency Xinhua and TV outlets have interviewed junta officials but have not extended the invitation to the NUG. “It is a huge mistake for Beijing to only talk to the military junta, which itself is contributing to instability in the region. Chinese officials know that the people of Myanmar do not accept Min Aung Hlaing as their leader,” Sasa added.
Less than a decade ago, Beijing rolled out the red carpet for then-opposition leader Aung San Suu Kyi—and it could turn its back on the junta if it loses control. Having placed its bets on Myanmar’s generals for now, China might clash with the international community and the resistance movement. The turmoil and public backlash have certainly raised the stakes for Chinese President Xi Jinping’s ambitions in the country. But behind the scenes, China may be bracing for the possibility of another failed state on its border.
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