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More daylight between China and Burma

Asia Sentinel - November 18, 2011

Last Monday, Burma's new defense chief, Gen Min Aung Hlaing, arrived in Vietnam for his first trip abroad conspicuously not choosing to visit China as his predecessors always have. That is the latest thumb in the eye for Beijing, from a government that literally owes its existence to China.

The snub follows the decision in late September to cancel the US$3.6 billion Myitsone Dam, which was designed to produce 3,600 to 6,000 megawatts of power, 80 percent of which was to be delivered to China. The dam was under preliminary construction by the state-owned China Power Investment Corp.

Those are dramatic developments in relations between the two countries and they have not gone unnoticed in Washington, DC. Some sources speculated that the Burmese military might be seeking a defense arrangement of some sort with the Vietnamese, China's most vocal adversary in Southeast Asia.

"Burma's been getting a lot of attention lately, for a number of reasons: internal politics and possible liberalization; the protests against the Chinese dam, and Burma's geostrategic relations with both China and India," said a US intelligence official in an email. "I think the (Min Aung Hlaing) trip is a conscious effort on Burma's part to engage in a bit of light hedging. I've also seen a surge in scholarship on Burma lately, mostly for the India-China issue."

Both US President Barack Obama and Secretary of State Hillary Clinton have taken notice of the change, with Obama noting in a speech in Australia that some political prisoners have been released, but that more must be, and cautioning that violations of human rights still persist.

The decision in Naypyidaw, Burma's northern capital, to put a bit of space between the two countries is at least a lull in relations with the Chinese, which have grown increasingly closer since the west imposed an embargo in 1988 after a bloody crackdown against protesters that took hundreds of lives. In a wider sense, it is a demonstration of just how tenuous China's so-called soft power really is. In that, Burma is seemingly at one with other small nationsl on China's flanks, which have become increasingly unsettled as Chinese Authorities have declared no dissent would be tolerated on such issues as hegemony over the South China Sea and other "core interests."

China became by far Burma's most important supplier of military goods as well as a major supplier of consumer and capital goods as well in the wake of the 1988 western embargoes, which have been increasingly tightened (and increasingly broken by Thailand and other countries eager for Burma's natural resources). Major pipelines snake across the entire country from the Bay of Bengal side of the country, delivering oil and gas to China despite the fact that an estimated 70 percent of Burma is without electricity. Chinese money from the purchase of vast amounts of natural resources is regarded as having propped up the junta that preceded the current government, providing the funds that have modernized the Burmese army and air force.

All of that has antagonized Burmese citizens, who complain that they are being colonized by their neighbor.

It is clear that Burma is seeking to step back from China at the same time it is opening to the wider world. Just this week, the Association of Southeast Asian Nations formally named Burma to head the 10-member regional organization at an Asean summit in Bali.

But how far it can step back without rippling the scales of the Chinese dragon remains to be seen.

"I think the Burmese are hedging their bets: don't put all the eggs in the PRC basket," a China-watcher told Asia Sentinel. "Beijing can be a tough taskmaster. The Chinese look upon Burma as kind of a satellite state and the Burmese earned their displeasure by nixing the dam project a while ago."

Nonetheless, as they have opened to the world in the wake of plainly rigged elections a year ago, the government in Naypyidaw has reached out to the United States and a growing number of other countries as a counterbalance. That has been matched by eager regional powers that would prefer to pry Burma somewhat out of China's embrace, partly because of the vast resources of oil, gas and other natural resources in the largely undeveloped country.

As Toshihira Toda pointed out in a recent paper on the imbalance in trade, Burma's imports from China have vastly outpaced its exports.

While exports to China increased nearly seven-fold between the 1990s and 2006, its imports from China increase by nearly 10 times, resulting in a what Toda described as a "huge" trade deficit of US$1.098 billion, 2.4 times larger than its total trade surplus in the same year.

"The Burmese have long realized that they have heavily depended on China so we will see a major shift in coming years," said Aung Zaw, the publisher of Irrawaddy, a Chiang Mai, Thailand-based independent publication. "Burma will find partners in the West (the US) to counter China's growing clout. But it has to be careful, and I think it will be delicate and sophisticated diplomacy. Since Burma has formed a strategic relationship with China this year, Burma cannot afford to upset the big brother. The issue of Myitsone is still unsettling and Beijing is obviously upset."

In reality, Toda writes, Sino-Burmese relations "have undergone a series of ups and downs and China has occasionally posed a real threat to (Burma's) security, such as the incursion of defeated Chinese Nationalist (Kuomintang or KMT) troops into the northern Shan State in 1949, overt and covert Chinese support for the Burmese Communist Party's insurgency against Rangoon up until 1988 and confrontations between Burmese and resident overseas Chinese, including militant Maoist students in 1967. Indeed, the (Burmese) leadership, always extremely sensitive about the country's sovereignty, independence and territorial integrity, had long observed strict neutrality during the Cold War, avoiding obtaining military and economic aid from the superpowers."

Although there has been no detailed announcement about Min Aung Hlaing's to Vietnam, military observers told The Irrawaddy that the visit was intended to cement military bilateral corporation between the two countries at the invitation of Vietnam's National Defense Minister Gen Phung Quang Thanh.

Burma's former Commander-in-Chief Tin Oo, currently one of the leaders of the National League for Democracy (NLD), said that there have not been many instances of military cooperation with Vietnam. He added that the two nations merely conducted research together and Burmese commanders made a case study of the separation of North and South Vietnam.

Tin Oo said, "There's a small difficulty with China since the president declared the suspension of the Myitsone Dam. Although it is just a military delegation, they want to gain some political respect from China by showing military cooperation with Vietnam." Tin Oo also speculated that "the United States is trying to engage with both the Burmese government and opposition groups like our NLD. Therefore, the delegation might also ask for suggestions regarding how to deal with the United States."

Aung Lynn Htut, a former major in Burmese intelligence who defected in 2005 while serving as deputy chief of the Burmese embassy in Washington D.C., said that although Burma and Vietnam are not military allies, there's a historical relationship between the respective armed forces regarding defense strategy during the American-Vietnam war.

Aung Kyaw Zaw, a Sino-Burmese military observer, said that the goal of the trip is more likely to be influencing Burma's relationship with China.

"China might be worried when they see that a Burmese commander-in-chief went to Vietnam which has been in conflict with [Beijing] over the maritime dispute [regarding oil and gas exploration in the South China Sea]. Burma also wants to show China that they can deal with any country," said Aung Kyaw Zaw. "They might also ask to buy some military installations from Vietnam in the future."

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