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Shan State Army - South (SSA-S) soldiers training at their headquarters in Loi Tai Leng, in Myanmar's northeastern Shan State, February 4, 2015. (KC Ortiz/AFP/Getty Images)

China's Myanmar Headache

John Lee

Last Friday, a Myanmar Air Force plane accidentally dropped a bomb on Chinese soil in Yunnan province. Initially, it was reported that buildings were damaged but without any casualties.

This led to Beijing registering its ‘grave concern’ with officials in Naypyidaw. On Sunday, it seems that China’s official media has now updated the damage to include the deaths of four Chinese citizens, warning Myanmar that it will respond ‘decisively’ without specifying what this means.

The fact that Beijing has publicly revealed that four of its citizens died, having seemingly repressed that information last Friday when the bomb was dropped, suggests that China is not pleased with how Myanmar has responded.

But there are dangers for China in responding ‘decisively’ if that means further picking at the sores of an already fractious relationship with Myanmar. Remember that Myanmar was once considered a Chinese satellite or client state or one heading in that direction.

The reality, like all states said to be in China’s political and strategic orbit such as Cambodia and even North Korea, is much more complicated.

China shares land borders with fourteen countries, a half dozen of those present problems as well as opportunities. Even if we think we have occasional problems with neighbours such as Indonesia, I would much rather be in Canberra’s shoes than Beijing’s.

Firstly, some background which draws from the reality that Myanmar is a country seething with ethnic strife and one that faces accusations of systematic racial discrimination and oppression of various ethnic groups by the government.

Myanmar’s national army has been battling with Kokang ethnic Chinese insurgents, known as the Myanmar National Democratic Alliance Army, for decades. Although generally a low-intensity conflict since a ceasefire was signed in 1989, there have been occasional and alarming spikes in violence.

One such occasion was in August 2009 when the National Army launched a surprise attack against the MNDAA in the northern Shan State in the first significant violation of the 1989 ceasefire agreement. This led to an estimated 30,000 refugees streaming out of Myanmar’s northwest provinces into China’s Yunnan Province. To emphasise the seriousness of this for China, Beijing was forced to deploy the People’s Liberation Army to join its People’s Armed Police to stabilise that particular border.

The fighting has been flaring up again over the past few months. Over this recent period, aid workers estimate that up to 60,000 people have fled into Chinese territory to escape the violence.

As far as Naypyidaw is concerned, China is not an innocent bystander in all of this. Many officials and experts in Myanmar believe that China has long been assisting the MNDAA by offering economic and military aid to the rebels, and even supporting Chinese citizens from Yunnan Province in joining the MNDAA in its fight against the government.

More recently, some Myanmar officials have accused Beijing of assisting former MNDAA rebel leader Phone Kyar Shin (also known as Peng Jiasheng) to make a political comeback. Although all this is denied by China, a retired PLA official was recently quoted by Radio Free Asia as saying that Chinese volunteers had crossed into Myanmar to aid the rebels.

The truth seems to be that China is playing both sides — the Myanmar government and the rebels — against each other and attempting to enhance its own relevance and leverage in doing so. As far as Beijing is concerned, it’s acting out of necessity.

It comes down to geo-strategy and geo-economics. Beijing has a deep interest in the expansion of the economic corridor from Yunnan province, through Myanmar and westward to Bangladesh, India and the West.

This relates to the Bangladesh-China-India-Myanmar Economic Corridor which will include roads, railways and other infrastructure joining the four countries. The BCIM complements the regional framework known as the Greater Mekong Sub-Region, which encompasses Yunnan Province, Myanmar, Cambodia, Laos, Vietnam and Thailand. The Guangxi Zhuang Autonomous Region formally joined the GMS in 2005.

For China, the GMS is seen as a critical component of the country’s national economic strategy. In addition to the desire for a continental trading route that connects Southern China with the mainland of Southeast Asia and South Asia (bypassing maritime routes through the South China Sea and the Malacca Straits), economic integration and growing prosperity in the GMS region is seen as essential for the development of China’s southern provinces.

To aid land-based trade between these Chinese southern provinces and neighbouring countries, as well as to develop the land-based corridor mentioned above, China has poured billions into building roads that connect Yunnan Province with major towns in Myanmar such as Mandalay.

Indeed, the 460km road journey from Ruili in Yunnan province to Mandalay has been continually upgraded to accommodate heavier vehicles and transportation, and now takes 10-12 hours rather than the two-week slog of two decades ago.

China is building highways and upgrading a national road from Longling to Ruili, the most important land trading port in China’s trade with Myanmar. A railway from Dali to Ruili is also being constructed, further entrenching Ruili’s logistical importance to Chinese traders.

The problem for China is that many of these Chinese sponsored logistical routes to major towns and ports in Myanmar go through ethnic controlled territories including some where the MNDAA are active. So, in addition to the affiliation that many Chinese feel with the ethnic Chinese rebels, Beijing needs the support of the MNDAA to enhance its economic footprint in logistically critical areas.

At the same time, Beijing also needs the support of the Myanmar government to realise its larger economic and strategic goals. These are to co-opt Myanmar as a partner in allowing China a trade route that does not go through American-patrolled waters in the South China Sea and to access the broader Myanmar market as an economic outlet for poorer regions such as Yunnan Province.

There was a time not so long ago that Naypyidaw felt it has no option but to allow Beijing to play its two-faced game. After all, its regime was isolated and under US- and EU-backed sanctions and needed Chinese capital, aid, infrastructure-building expertise and a market for its natural resources such as timber.

With the West now embracing Myanmar as the latest and most exciting economic opportunity in Southeast Asia, Naypyidaw suddenly is finding an increased set of options and alternatives. It now knows that China can never fully allow Naypyidaw to enter the embrace of Washington (and increasingly Tokyo).

It is still far from being a case of the proverbial ‘tail wagging the dog’, Myanmar’s political and economic reforms have a long way to go if it is to be truly and fully embraced by the West. The regime in Naypyidaw will never be comfortable with the liberalising pressures that it is being placed under by the West and that are inherent in the process of reform and opening up of its political economy.

China remains a much needed crutch.

So expect China to jump up and down but do little different as a response to this latest incident. And expect Myanmar to appeal for calm whilst not acceding to Beijing’s demands for a full and open investigation of the accidental bombing.

The broader point is that the more ambitious a rising power becomes, the more it needs from friends, enemies and those indifferent to its own sense of high worth.

Myanmar falls into all three categories. This means that even great powers like China have to occasionally learn to grovel (which it is not good at doing) as well as coerce and seduce (which it is much better at doing.)

To Beijing, I would conclude by adding: welcome to the world of great powers.

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