International Pressures, Strategic Preference, and Myanmar’s China Policy since 1988 [1st ed.] 9789811578151, 9789811578168

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Nian Peng

International Pressures, Strategic Preference, and Myanmar’s China Policy since 1988

International Pressures, Strategic Preference, and Myanmar’s China Policy since 1988

Nian Peng

International Pressures, Strategic Preference, and Myanmar’s China Policy since 1988

123

Nian Peng National Institute for South China Sea Studies Haikou, Hainan, China

ISBN 978-981-15-7815-1 ISBN 978-981-15-7816-8 https://doi.org/10.1007/978-981-15-7816-8

(eBook)

© Springer Nature Singapore Pte Ltd. 2021 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Contents

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1 1 4 7 7 8 9 13 15 16

2 Myanmar’s Contradictory Strategic Preference . . . . . . . . . . . . 2.1 Myanmar’s ‘Integration’ Strategic Preference . . . . . . . . . . . . 2.2 Myanmar’s ‘Isolation’ Strategic Preference . . . . . . . . . . . . . 2.3 Roots of Myanmar’s Opposing Strategic Preference . . . . . . . 2.3.1 Independent Foreign Policy . . . . . . . . . . . . . . . . . . . 2.3.2 National Characteristics . . . . . . . . . . . . . . . . . . . . . . 2.3.3 Geographical Position . . . . . . . . . . . . . . . . . . . . . . . 2.3.4 Relative Political Isolation and Economic Integration . 2.4 Causes of the Significant Changes in Myanmar’s Strategic Preference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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3 Swung to China: Myanmar’s China Policy (1988–2004) . 3.1 Fierce Sino-US Political Competition . . . . . . . . . . . . . 3.2 U.S. Threats and China’s Support . . . . . . . . . . . . . . . 3.3 Stable Domestic Politics but Rising External Threats . 3.4 Khin Nyunt’s Mixed Personality . . . . . . . . . . . . . . . . 3.5 Myanmar’s Assessment of External Environments . . .

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37 37 40 41 43 45

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Debates Over Myanmar’s China Policy . . . . . . . . . . . . . 1.2 Justification for Using Neoclassical Realist Approach . . . 1.3 Analytical Framework . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3.1 Independent Variable . . . . . . . . . . . . . . . . . . . . . 1.3.2 Intervening Variable . . . . . . . . . . . . . . . . . . . . . 1.3.3 Dependent Variable . . . . . . . . . . . . . . . . . . . . . . 1.3.4 Causal Chain of the ‘Strategic Preference’ Model 1.4 Main Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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3.6 Engaged with China . . . . . . . . . . . . . . 3.6.1 Frequent High-Level Visits . . . 3.6.2 Close Trade Cooperation . . . . . 3.6.3 Increasing Chinese Investment . 3.6.4 Deepened Defence Cooperation 3.7 Expanded Diplomatic Relations . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . .

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47 47 49 54 55 61 65

4 Alienated from China: Myanmar’s China Policy (2005–2010) 4.1 Moderate Sino-US Competition . . . . . . . . . . . . . . . . . . . . . 4.2 Low-Level U.S. Threats and Rising Chinese Interference . . 4.3 Domestic Turbulence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 Than Shwe: Conservative Leader . . . . . . . . . . . . . . . . . . . . 4.5 Myanmar’s Assessment of External Environments . . . . . . . 4.6 Alienated from China . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6.1 Declining Political Exchanges . . . . . . . . . . . . . . . . 4.6.2 Increasing Economic Cooperation . . . . . . . . . . . . . . 4.6.3 Less Defence Cooperation . . . . . . . . . . . . . . . . . . . 4.7 Withdrew from the Region . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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69 69 72 74 76 77 79 79 81 87 88 92

5 Hedged Against China: Myanmar’s China Policy (2011–2015) . 5.1 Increasing Sino-US Competition . . . . . . . . . . . . . . . . . . . . . 5.2 Rising Chinese Pressures and Multiple Benefits . . . . . . . . . . 5.3 Stable Politics but Rising Ethnic and Religious Tensions . . . 5.4 Thein Sein: Reformist Leader . . . . . . . . . . . . . . . . . . . . . . . 5.5 Myanmar’s Assessment of External Environments . . . . . . . . 5.6 Hedged Against China . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6.1 Reduced Chinese Investments . . . . . . . . . . . . . . . . . . 5.6.2 Repaired Damaged Bilateral Ties . . . . . . . . . . . . . . . 5.6.3 Deteriorated Military Relations . . . . . . . . . . . . . . . . . 5.7 Balanced China’s Influence . . . . . . . . . . . . . . . . . . . . . . . . . 5.7.1 Expanded Economic Partnership . . . . . . . . . . . . . . . . 5.7.2 Diversified Foreign Policy . . . . . . . . . . . . . . . . . . . . 5.7.3 Strengthened Defence Cooperation . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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97 97 102 102 104 105 106 106 110 115 119 119 123 126 129

6 Approached to China: Myanmar’s China Policy (2016–2020) 6.1 Rising Tensions in SCS . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 U.S. Criticism and China’s Assistance . . . . . . . . . . . . . . . . 6.3 Increasing Domestic Challenges . . . . . . . . . . . . . . . . . . . . 6.4 Aung San Suu Kyi: Democratic Leader . . . . . . . . . . . . . . . 6.5 Min Aung Hlaing: Conservative Leader . . . . . . . . . . . . . . . 6.6 Myanmar’s Assessment of External Environments . . . . . . .

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135 135 137 138 140 141 142

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Contents

6.7 Approached to China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7.1 Revived Close Bilateral Economic Relations . . . . . . . . . 6.7.2 Properly Handled the Myitsone Dam Conundrum . . . . . 6.7.3 Built Myanmar-China Community with a Shared Future . 6.7.4 Sought China’s Assistance to Address Rohingya Crisis . 6.7.5 Cooperated with China on Ethnic Issue . . . . . . . . . . . . . 6.8 Continued to Counterbalance China . . . . . . . . . . . . . . . . . . . . . 6.8.1 Active Neighbourhood Diplomacy and Multilateralism . 6.8.2 Promoted Regional Economic Integration . . . . . . . . . . . 6.8.3 Enhanced Military Capability . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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144 144 146 151 153 155 158 158 163 164 168

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175

About the Author

Dr. Nian Peng is the Deputy Director and Associate Fellow of the Research Centre for Maritime Silk Road, National Institute for South China Sea Studies (NISCSS), Haikou, PRC. He holds a Ph.D. in Government and International Studies at Hong Kong Baptist University. His main research interests are in the areas of China-Southeast (South) Asia relations, BRI, maritime security of the Indo-Pacific. He authored the book “Leng Zhan Hou Yin Mian Guan Xi Yan Jiu 冷战 后印缅关系研究” [A Study on Indo-Myanmar Relations after the Cold-War] (Beijing: Shi Shi Chu Ban She [Current Affairs Press], 2017). His refereed articles have been notably published in Asian Affairs, Dong Nan Ya Yan Jiu 东南亚研究 [Southeast Asian Studies], Nan Ya Yan Jiu 南亚研究 [South Asian Studies], Nan Ya Yan Jiu Ji Kan 南亚研究季刊 [South Asian Studies Quarterly]. He also contributes his perspectives to various local and international media outlets such as Asia Centre (France), East Asian Forum (Australia), Lian He Zao Bao 联合早报 (Singapore), Zhong Guo Ping Lun Xin Wen 中国评论新闻 (China Review News Agency, Hong Kong), CGTN and Global Times (China). He can be contacted via email: [email protected].

ix

Abbreviations

AA ACD ACTI AIIB APEC ARSA ASEAN BCIM-EC BCP BGF BIMSTEC BOT BRI BRICS CICA CITIC CMC CMEC CNPC COC CORPAT COVID-19 CPIC CPPCC CREC DDSI DOC E3

Arakan Army Asia Cooperation Dialogue ASEAN Connectivity for Trade and Investment Asian Infrastructure Investment Bank Asia-Pacific Economic Cooperation Arakan Rohingya Salvation Army Association of Southeast Asian Nations Bangladesh–China–India–Myanmar Economic Corridor Burma Communist Party Border Guard Forces Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation Build–Operate–Transfer Belt and Road Initiative Brazil, Russia, India, China and South Africa Conference on Interaction and Confidence-Building Measures in Asia China International Trust and Investment Corporation Central Military Commission China–Myanmar Economic Corridor China National Petroleum Corporation Code of Conduct in the SCS India–Myanmar Coordinated Patrol Exercise Coronavirus Disease 2019 China Power Investment Corporation Chinese People’s Political Consultative Conference China Railway Engineering Corporation Directorate of Defence Services Intelligence Declaration on the Conduct of Parties in the SCS Expanded Economic Engagement

xi

xii

ESIA EU FDI FIL FONOPs GMS GSP ICJ ICOE IMBAX IMF IMNEX IR JICA KDNG KIA KNLA KNU KOGAS LMI MEIC MFTB MICC MNDAA MOGE MOU NAM NCA NDF NGO NLD NPCSC NRPC NUP ODA ONGC PCA PLA QUAD RCEP RNDP SCS SLORC SNDP SPDC

Abbreviations

Environmental and Social Impact Assessment European Union Foreign Direct Investment Foreign Investment Law Freedom of Navigation Operations Greater Mekong Subregion Cooperation Generalized System of Preferences International Court of Justice Independent Commission of Enquiry India-Myanmar Bilateral Army Exercise International Monetary Fund India-Myanmar Naval Exercise International Relations Japan International Cooperation Agency Kachin Development Networking Group Kachin Independence Army Karen National Liberation Army Karen National Union Korea Gas Corp Lower Mekong Initiative Myanmar Export and Import Corporation Myanmar Foreign Trade Bank Myanmar International Conference Center Myanmar National Democracy Alliance Army Myanmar Oil and Gas Enterprise Memorandum of Understanding Non-Alignment Movement National Ceasefire Agreement National Democratic Force Non-governmental Organization National League for Democracy National People’s Congress Standing Committee National Reconciliation and Peace Center National Unity Party Official Development Assistance India’s Oil and Natural Gas Corp Permanent Court of Arbitration People’s Liberation Army Quadrilateral Security Dialogue Regional Comprehensive Economic Partnership Rakhine Nationalities Development Party South China Sea State Law and Order Restoration Council Shan Nationalities Democratic Party State Peace and Development Council

Abbreviations

SSA-N TNLA TPC TPP UK UMEHL UN UNCTAD UNGA UNHRC UNSC US USDP USSR UWSA WB WITS YPIEC

xiii

Shan State Army-North Taang National Liberation Army Trade Policy Council Trans-Pacific Partnership United Kingdom Union of Myanmar Economic Holdings Ltd United Nations United Nations Conference on Trade and Development United Nations General Assembly United Nations Human Rights Council United Nations Security Council United States Union Solidarity and Development Party Union of Soviet Socialist Republics United Wa State Army World Bank World Integrated Trade Solution Yunnan Provincial Import and Export Corporation

Myitsone dam

Sino-Myanmar oil and gas pipeline

Laiza

Kunming Ruili Letpadaung copper mine

Laokai

Sino-Myanmar economic corridor

Kyaukphyu deep sea port

Chinese major projects in Myanmar and some important border towns in northern Myanmar. Source The Author

Chapter 1

Introduction

1.1 Debates Over Myanmar’s China Policy As a weak state adjacent to powerful China, Myanmar1 has, ever since its independence, attempted to find ways to manage its relations with China. Since establishing formal diplomatic relations with China in 1950, Myanmar has not joined any military alliance targeting China and has let Beijing know that Myanmar would neither balance against nor bandwagoning with China.2 In this sense, Myanmar was alleged to adopt a neutralism policy, intending to escape from the power rivalry between the United States (US) and Union of Soviet Socialist Republic (USSR), and then China and Vietnam in the Mekong region.3 Nevertheless, it doesn’t mean that Myanmar has keep an equilibrium among the great powers, namely US, USSR and China. Conversely, Myanmar has taken a positive neutralism policy aiming at pursuing benefits from both the US, USSR and China while not align with any of them, so as to please the great powers and avoid their interference in domestic affairs, and consolidate the nascent democratic regime.4 It is within this context that Myanmar developed a harmonious political relationship with China during the 1950s. Yet, the successive regime led by Ne Win, acting leader of the extreme-nationalist, shifted from the positive neutralism to a passive one in which it excluded foreign influences in the country and maintained minimum contacts with the outside world, attempting 1 In

this study, both Myanmar and Burma represent the Union of Myanmar. The major difference between them is that Burma means the country before 1988 while Myanmar refers to the country after 1988, since the military regime changed the country name from Burma to Myanmar. The West usually calls Myanmar Burma, reflecting its rejection of the military regime in Yangon. In contrast, China and ASEAN countries often use the name Myanmar, indicating their respect to the Burmese military regime. In addition, according to the pronunciation of the Burmese language, Myanmar is better than Burma. 2 Myoe [1, pp. 105, 179]. See more in Steinberg and Fan [2, pp. 10–151], Egreteau and Jagan [3, pp. 95–104, 123–137]. 3 See Lians [4]. 4 Ibid. © Springer Nature Singapore Pte Ltd. 2021 N. Peng, International Pressures, Strategic Preference, and Myanmar’s China Policy since 1988, https://doi.org/10.1007/978-981-15-7816-8_1

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1 Introduction

to reduce the risks of external intervention caused by the intense competition among the big powers in the region.5 China, which was committed to export the “Cultural Revolution” to the third world, suffered most from the xenophobic foreign policy of Myanmar. In general, Myanmar’s China policy in the Cold War era was affected heavily by the power games among US, USSR and China. The rising competition for hegemony among the great powers put Myanmar into a difficult position where it has to be neutral, either positive or passive. Therefore, Myanmar formulated a policy of neutrality in dealing with China in the Cold War era, in order to avoid involving in the confrontation between the two major camps of socialism and capitalism while maintaining a normal and stable relationship with China. The junta called the State Law and Order Restoration Council (SLORC)/the State Peace and Development Council (SPDC) installed after the military coup in September 1988 appeared to abandon the neutralist philosophy it had adopted during the Cold War era. Given the hostility from the West, the domestic protests and ethnic conflicts in the border, the junta seemed to align with China to meet its own immediate need for weapons, trade, investments, diplomatic protection, and counter-insurgency cooperation. In other words, Myanmar has ‘accommodated China as its senior’ in a pauk phaw relationship,6 and thus perceived as ‘strategic pawn’, or a ‘client state’, of China.7 In fact, however, the junta pursued an active but limited alignment strategy mainly due to the deep anti-Chinese sentiments in the Burmese society. For instance, the Burmese democrats have criticised China’s support for the junta, and the Burmese radicals such as the “88 Generation Students Group” have attempted to harm Myanmar’s relations with China.8 The Burmese generals and senior officials have inherited the legacy of the traditional xeno-phobic nationalism and thus rejecting domination by China. The Burmese people whose territories border Yunnan denounced the Chinese investors, traders and new migrants for their purchase of real estate and cultural ‘intrusion’.9 Given this, Myanmar aligned with China in selected areas of diplomatic protection, moderate bilateral defence, and security cooperation based on the principle of mutual gain, while avoiding a surrender of political autonomy.10 To be more specific, the junta had sought Chinese diplomatic support and protection to offset the Western pressures and prevent international interference,11 while it has always tried to avoid or even reject Chinese intervention in domestic political 5 Ibid. 6 Malik

[5, p. 362]. [6, pp. 202–203], Egreteau and Jagan [3, p. 240]. 8 Wu [7, pp. 24–25]. 9 Egreteau and Jagan [3, p. 260]. See more in Steinberg and Fan [2, pp. 356–357], Callaban [8, p. 43], Yhome [9, p. 159], Maung [10, pp. 447–459], Paik [11, pp. 455–458], Sudha [12, pp. 13–15], Sun [13, pp. 57–58], Mishra [14, p. 194], Selth [15, pp. 379–402], Harrington [16, pp. 134–135], Zin [17, p. 115]. 10 Haacke [18, pp. 105, 133]. 11 Myoe [1, p. 137], Haacke [19, p. 26], Haacke [20, p. 119], Mishra [14, p. 189], Swanström [21, p. 15]. 7 Malik

1.1 Debates Over Myanmar’s China Policy

3

reforms.12 It has also long pursued Chinese help in persuading and pressuring the ethnic armed groups in northern Myanmar to disarm and accept the government plan of “Border Guard Force (BGF)”, but has been dissatisfied with the lack of Chinese support.13 Due to the historical experience of China’s longstanding political resistance against Yangon by supporting the Communist Party of Burma (BCP),14 as well as its adverse effects on Sino-Myanmar relations,15 the Burmese military did not shy away from escalating the conflict with the ethnic forces in northern Myanmar when the opportunity arose, despite the risk of antagonising Chinese leaders.16 The junta has also “rewarded” China by consenting to economic and infrastructure projects, in order to gain China’s diplomatic support and consolidate control over state territory.17 Nonetheless, it was under growing pressures from the rising civil society to reduce China’s investment in the country, the mega-projects financed by Chinese companies in particular.18 The civil society which was perceived as the “third force” in Myanmar’s politics could influence the decision-making process by activating the two level games negotiation, and thus countering Chinese influence.19 On the one hand, the Myanmar government has to win approval from domestic constituents in dealing with the economic disputes with China to remain in power, and on the other hand, it has to please the Chinese companies so that the cooperation can be sustained. Given this, some Chinese projects, such as the Myitsone Dam, were suspended, while others were continued.20 Since the US has engaged with the civilian government in Yangon, Myanmar intended to hedge against the high risks of relying heavily on China.21 It has allowed economic and political influence from the US so as to balance China,22 while avoid involving in any military activities designed to check China or cripple its power.23 Meanwhile, since China is a “rock that can’t be moved”,24 Myanmar has to maintain close and cordial relations with China and thus to get the maximum benefit.25 In spite of an extensive literature on Myanmar’s China policy since its independence, the research gap are highlighted from the following aspects. First of all, there is lack of an overall and comprehensive study of Myanmar’s China policy after the Cold 12 Haacke [18, pp. 121–122]. See more in Yin and Zheng [22, pp. 633–637], Holliday [23, pp. 480– 500]. 13 Myoe [1, pp. 138–140], Haacke [20, pp. 127–128]. 14 Haack [20, p. 132], Myoe [1, p. 138]. 15 Egreteau and Jagan [3, p. 282]. 16 Haacke [18, p. 128]. 17 Ibid., p. 105. 18 See Chan [24, pp. 674–691], Kiik [25, pp. 374–402]. 19 See Chan [24, p. 675]. 20 See Dossi [26, p. 102]. 21 Fiori and Passeri [27, pp. 7–8], Passeri [28]. 22 Haacke [18, p. 134], Swanström [21, p. 7], Qiong [29, p. 39], Dai [30, p. 23]. 23 Huang [31, pp. 195–196]. 24 Lanteigne [32, p. 37]. 25 Fiori and Passeri [27, pp. 7–8], Huang [31, p. 200], Dai [30, p. 35].

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1 Introduction

War, which mainly includes the key factors of and major evolution in Myanmar’s China policy. Second, the experts have taken a realist approach to analyse Myanmar’s China policy, in which the national interests and power rivalry were investigated seriously, while the strategic culture26 and policy preference27 were undervalued. Third, few theories and methodologies have been used to this study. Given this, this book aims to dive deep into the principal determinants of and significant changes in Myanmar’s China policy since 1988 by adopting an neoclassical realist approach. It argued that Myanmar’s China policy is jointly determined by systemic incentives and unit-level factors, which refers to China-US power rivalry in Southeast Asia and Burmese leaders’ strategic preference respectively. More precisely, Myanmar shifted from a neutral policy to intimate relations with China since 1988 because of the intense political competition between China and US and Burmese leaders’ ‘integration’ strategic preference. During this period, Myanmar consolidated its military regime and reduced the U.S. pressure by relying on China. However, starting in 2005 Myanmar alienated itself from China due to the relieved China-US competition in Southeast Asia and Burmese leaders’ ‘isolation’ strategic preference. During this time, Myanmar restrained its connections with China and withdrew from the region in order to avoid foreign interference in the political reforms on which it focused. From 2011, Myanmar revived close engagement with China while performing a balancing act over it at the same time because of the increasing competition between China and the US in Southeast Asia and Burmese leaders’ ‘integration’ strategic preference. In this period, Myanmar decreased Chinese investments and slowed down the strategic cooperative partnership with China while improving relations with the US so as to counterbalance China. Since 2016, however, Myanmar has upgraded relations with China with the aim to reduce the U.S. pressure while expanding foreign partners to reduce its heavy reliance on China due to the rising tensions in the South China Sea (SCS) and Burmese leaders’ ‘integration’ strategic preference.

1.2 Justification for Using Neoclassical Realist Approach For a very long time, the main international relations (IR) theories of neorealism and constructivism have been used by scholars to explain Myanmar’s China policy. 26 According to Alastair Iain Johnston, strategic culture refers to an integrated system of symbols (such as argumentation structures, languages, analogies, metaphors, etc.) that acts to establish pervasive and long-lasting strategic preferences by formulating concepts of the role and efficacy of military force in interstates political affairs, and by clothing these concepts with such an aura of factuality that the strategic preferences seem uniquely realistic and efficacious. See Johnston [33, p. 36]. So far, only Andrea Passeri explained Myanmar’s China policy through the lens of strategic culture. See Passeri [28]. 27 Only Simone constructed a preliminary framework of policy preference of old and new elite and the influence of external actors to analyse Myanmar’s economic cooperation with China. See Dossi [26, pp. 98–123].

1.2 Justification for Using Neoclassical Realist Approach

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The neorealists argue that if no substantial changes occur in the structure of the international system, there will be no major changes in state behaviours.28 However, states will react differently to similar power structures due to the different state structures, policy preferences, perceptions of threats, cultural legacies, and other domestic factors. Sometimes, the security behaviours of individual states are largely dependent on leaders’ personality, ideology, and perception rather than the constraints and opportunities imposed by the system.29 For instance, the Southeast Asian countries adopt different policies to manage their relations with China when they are faced with similar power structures in the region.30 Another claim that the neorealists make is that state are not likely to adjust their foreign policies unless their positions in the system change. But states could change their foreign behaviours despite their unchanging positions in the international system. For example, weak states, which usually accommodate the powerful states due to their low positions in the international system, could challenge the superiority of great powers because of territorial disputes intensification or domestic political concerns.31 The neorealists cannot effectively explain the formation and evolution of Myanmar’s China policy after the Cold War. First of all, although there are no substantial changes in the power distribution between China and the US in Southeast Asia after the Cold War, Myanmar has continued to adjust its China policy. Since the end of the Cold War there is an increasing power rivalry between China and the US in Southeast Asia while it has never evolved into a Chinese-or American-dominated one. Both sides possess comparative advantages in the region in which Beijing’s advantages are predominantly economic and diplomatic, whereas Washington’s are more multifaceted.32 In the same period, Myanmar has transformed its China policy from alignment/limited alignment in SLORC/SPDC to hedging since 2011.33 In addition, despite the fact that Myanmar has become the least developed country with a highly limited influence in Southeast Asia since the early 1960s, it challenged the powerful China by suspending the Myitsone dam in September 2011. Thus, it’s not simply that Myanmar’s China policy has been determined by systemic imperative. Neoliberalism assumes that international institutions can enable states to achieve their interests through limited collective actions by enforcing rules, by facilitating the making and keeping of agreements through the provision of information, and by reducing transactions costs.34 The main reason for inter-state cooperation is that 28 Waltz

[34, pp. 99–101]. [35]. 30 Some Southeast Asian countries such as Vietnam, Singapore, Malaysia and Indonesia hedge against China while Cambodia and Laos bandwagon with China. See Roy [36], Hiep [37], Womack [38], Pheakdey [39], Ciorciari [40], Fox [41]. 31 There are countless examples among which the most obvious one is the Philippines’ confrontation with China over the territorial disputes in the SCS under Benigno Noynoy Aquino III. See De Castro [42, pp. 5–27, 43]. 32 Shambaugh [44, pp. 87–88]. 33 See Haacke [18], Han [45], Fiori and Passeri [27]. 34 Keohane [46, p. 274]. 29 Jervis

6

1 Introduction

interests may be interdependent due to the increasing interdependence and communication between states. In this context, states may either cooperate or conflict with each other to obtain absolute gain or relative gains.35 When opportunities for joint gains through cooperation are substantial, states will join durable institutions, with explicit rules and organisations, and issue linkage will often facilitate agreement.36 Although neoliberalism provides a new theoretical explanation of the inter-state cooperation in an anarchic world, it underestimates the power distribution in the international system. In fact, many interactions between states in this system are not market failures caused by deceptions and deficient information, it, in the final analysis, is the issue of power distribution.37 In other words, the international institutions claimed by neoliberalists largely depend on great powers. Hence, international institutions may promote cooperation between states and thus to affect the foreign behaviours of states, but they do not always function. For this reason, neoliberalism cannot effectively explain Myanmar’s China policy. Firstly, due to the long-term isolation from regional and international organisations, Myanmar’s foreign policy has been less affected by international institutions. Secondly, both Myanmar and China have made few efforts to institutionalise the bilateral ties by establishing coordination and cooperation mechanisms, which limits the positive impacts of those institutions on Myanmar’s China policy. Thirdly, neoliberalism may interpret the cooperation between Myanmar and China due to their increasing interdependence, but it cannot explain the disputes between them. Constructivists suppose that states’ foreign behaviours, national interests, and their position in the international system derive from social norms, state identity and shared culture that is made in the process of national interaction and domestic environments rather than objective reality.38 While neorealists criticise the constructivists for overestimating the significance of culture, norms, and identity which are remain elusive while underestimating or even denying the importance of the power structure in the international system. Therefore, constructivism has a greatly limited power in explaining international politics.39 The neoliberalists, though they support constructivists’ emphasis on the culture of the international system, claim that foreign behaviours are jointly determined by material and conceptual factors.40 To explain Myanmar’s China policy, constructivism is not an appropriate approach. On the one hand, Myanmar has been distant from the international community ever since Ne Win’s authoritarian regime in the early 1960s, led it to be rarely affected by the culture, norms, and values of the international system. On the other 35 Absolute gains means that both states benefit from their cooperation, and states focus primarily on their own gains rather than gains obtained by others. Relative gains mean that gains from one side are seen as loss for the other. Therefore, absolute gains lead to win–win game while relative gains lead to zero-game. See Keohane [47]. 36 Keohane [48, p. 18]. 37 Krasner [49, pp. 234–240]. 38 See Barkin [50], Wendt [51]. 39 Guzzini [52, pp. 15–46]. 40 Yaqing [53, p. 140].

1.2 Justification for Using Neoclassical Realist Approach

7

hand, although Myanmar’s China policy is alleged to be shaped by its unique strategic culture constructed on geographical determinants, historical precedents, and ideological features,41 it is difficult to interpret why Myanmar actually abandoned neutralism and approached China after the establishment of the military regime in 1988 in the context of the unchanged strategic culture.42 To conclude, the three main theoretical paradigms in IR, namely neorealism, neoliberalism, and constructivism, cannot effectively interpret Myanmar’s China policy due to their overemphasis either on systemic imperatives or domestic factors, such as power structure, international institutions, and norm, culture and identity. While the neoclassical realists believe that the foreign behaviours of nation-states are usually jointly determined by systemic incentives and domestic constraints. In the following, I briefly introduce neoclassical realism and demonstrate how the systemic imperatives and unit-level factors jointly determine the foreign policies of individual states.

1.3 Analytical Framework Neoclassical realists seek to explore how the domestic characteristics of individual states intervene between systemic imperatives and the actual foreign policy. The systemic variable (independent variable), such as the distribution of power and the interactions between great powers, is the first and foremost factor that determines the scope for policy options of states. The unit-level factors (intervening variable) include various elements like national character and policy preference, and can constrain, converse, conduct, or facilitate states’ ability to respond to systemic imperatives. It is a one-way process where the systemic imperatives are the inputs and arrange the scope of predicable results, and states react to the received information and finally make precise foreign policies (dependent variable).

1.3.1 Independent Variable Given the analytic focus of this book, I define the independent variable as the changes in the distribution of power and the interactions between the threatening power and hegemonic state in the region. I clarify the systemic variable defined here from four aspects. First, what the systemic environment brings to the state are not only threats 41 Passeri

[28]. to Alastair Iain Johnston, strategic culture refers to an integrated system of symbols (such as argumentation structures, languages, analogies, metaphors, etc.) that acts to establish pervasive and long-lasting strategic preferences by formulating concepts of the role and efficacy of military force in interstates political affairs, and by clothing these concepts with such an aura of factuality that the strategic preferences seem uniquely realistic and efficacious. See Johnston [33, p. 46]. 42 According

8

1 Introduction

or risks but also opportunities and benefits. When the threats or risks are clear, urgent and serious, the state has no choices but to either submit to the threatening power or balance it. Conversely, the state would choose risk-averse strategies to defend against external threats on the one hand, and pursue benefits to sustain the regime on the other hand. Second, the changes in the external environment come not only from the distribution of power between the threatening power and hegemonic state in the region, but also stem from the changing interactions between them, such as from a friendly relationship to rivalry or from cordial relations to alienated relations. Given this, it is essential for the state to focus on the power structure while paying more attention to the interactions between them. Third, the impact of an independent variable is comprehensive and complex, and includes economic, political, and military aspects. Economically, states, particularly the weak states, have strong driving forces to engage with the threatening country in order to gain economic benefits while avoiding becoming over-dependent on it. Politically, the risks of antagonising the threatening power and thus losing autonomy are persistent concerns for states. In terms of security, some states could be protected under the security umbrella from the hegemonic state, but they could also be entrapped in a supremacy war or be abandoned by it. Fourth, although Elman questioned that whether international or domestic factors matter more is an empirical question and should not be assumed a priority,43 I insist that the systemic condition is the first and foremost factor that restricted the scope for policy options of individual states. The more vulnerable a state is, the more is the impact of the systemic environments.

1.3.2 Intervening Variable I define strategic preference, which refers to the different sets of policy options when states respond to external environments, as a crucial intervening variable lying between systemic conditions and states’ behaviours. To clarify this, three core assumptions are made. First, states do not make decisions, leaders do. Second, the strategic preference is shaped by historical memories about civil conflicts or/and wars with threatening power, national characteristics, and geographical location of nation-states. Third, strategic preference could change due to political dynamics at home and leaders’ changing personality and ideology. The strategic preference could be divided into active/passive integration and active/passive isolation due to different domestic constraints and different styles of leadership. The hypothesis is that if the regime is stable and leaders are reformists, the state is more likely to have an active ‘integration’ strategic preference; alternatively, the state may have an active ‘isolation’ strategic preference. If the regime is stable and leaders are conservatives, the state would have a passive ‘integration’ strategic preference, while if the regime is unstable and leaders are reformists, the state is likely to have a passive ‘isolation’ strategic preference. With an active ‘integration’ 43 Elman

[54].

1.3 Analytical Framework

9

strategic preference, the state is more likely to take positive measures including engagement with and balance to the threatening power through which it expects to maximise benefits while minimising risks. Conversely, if the state has an active ‘isolation’ strategic preference, it will passively react to the external environments. In practice, it is more likely to keep distance from both the threatening power and the hegemonic power in the region, and limit its participation in or even withdraw from regional and international organisations.

1.3.3 Dependent Variable The dependent variable refers to the foreign policy of individual states, which mainly includes balancing, bandwagoning, hedging, hiding, appeasing, accommodating, engaging, and transcending. Walt defined balancing as the strategy where states ally with others against prevailing threats.44 A state would balance a perceived adversary either by enhancing its own defence capabilities and benefits in foreign trade and investment or by allying with other states are facing similar threats or risks. There are two main reasons for states to engage in balancing behaviour: one is to avoid being dominated by those who can; other is increasing states’ influence by joining the weak side.45 If a state borders a rising power that appears aggressive in wartime, the possibility of balancing the threatened state is high.46 Brawley adds that the threatened state is likely to adopt external balancing and spend resources on arms, if it can convert wealth to power quickly and win allies. Otherwise, it may choose internal balancing or bandwagoning. If the threatened state transforms wealth to power slowly and still win allies, it is likely to select external balancing and invest in allies.47 But a pure balancing strategy may prove to be ineffective in safeguarding national security, especially when the weaker side lacks enough power to deter the stronger side, as the evident balancing behaviours of weak states may stimulate the aggressive tendency of the threatening states. Despite powerful evidence that balancing behaviour appear more commonly than bandwagoning, vulnerable states prefer to align themselves with the threatening power in order to either neutralise the threat or gain benefits.48 In this sense, minimising risks or maximising benefits are the major characteristics of bandwagoning behaviour. As Brawley states, since current economic benefits can transfer to future military strength, the bandwagoning state is willing to improve its power via economic policies, so as to maintain its autonomy in the future.49 A number of other reasons, including little contribution to the strength of a defensive coalition, 44 Walt

[55, p. 125]. [55, p. 125]. 46 Ibid., pp. 130–131. 47 Brawley [56, p. 86]. 48 Kang [57, p. 6]. 49 Brawley [58, p. 10]. 45 Walt

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1 Introduction

little influence to affect the outcome and the unavailability of allies,50 also explain the bandwagoning behaviour of weak states. Four hypotheses-the greater aggregate power of the threatening state, the distance to the powerful state, the higher offensive capabilities and intentions of a great power, and the disintegration of alliances-were employed by Walt to determine state’s bandwagoning behavior.51 Bandwagoning can be dangerous because it could not only increase the available resources of the threatening powers to mobilise but could also require the weaker state to continuously trust the threatening power. Engagement is another important strategy adopted by states to ameliorate the nonstatus-quo elements of a rising power’s behavior.52 By engaging with the ascending power, weak states try to achieve multiple goals, which mainly includes binding the great power into the regional and international system, institutionalising their relations with the powerful state and shaping its evolving interests, and thus making it more responsible in the use of its power.53 Additionally, through increasing engagement with the rising power, the weak states could minimise the chances of misperception, thus ensuring stable bilateral ties.54 To achieve the multiple objectives, a range of instruments-from diplomatic, economic, and military, to social contacts-are involved. Similar to engagement, the transcending strategy emphasises on the instruments of multilateral institutions and international norms using which the weak states have the chance to express their concerns about regional and international issues, thus exerting their influence.55 Contrary to the engagement and transcending strategies which focus on shaping the rising power’s behaviour through comprehensive engagement, the hiding, appeasement and accommodation strategies stress on isolation or concession. The hiding strategy, which is similar to neutrality, refers to the policy of ignorance by discounting the threat, hoping that ‘the storm would blow over’.56 Since they are not strong and fear taking high risks of taking sides, it is understandable why weak states choose the hiding strategy. Appeasement means that the weak states not only accept the authority of the great powers in regional and international politics, but also make substantial concessions to appease the ascending powers and thus avoid resorting to armed conflict. As Paul Kennedy observes, by admitting and resolving grievances through rational negotiation and compromise, the intent of states that choose the appeasement policy is to avoid getting involving in military conflict.57 Unlike appeasement, which accepts all the imposed conditions so as to yield to an aggressor, accommodation refers to accommodating some demands but refusing

50 Walt

[55, pp. 129–130]. p. 131. 52 Schweller [59, p. 38]. 53 Medeiros [60, p. 147], Shekhar [61, p. 264], Resnick [62, p. 559]. 54 Twomey [63, pp. 3–29]. 55 Lee [64]. 56 Lee [64]. 57 Kennedy [65, p. 16]. 51 Ibid.,

1.3 Analytical Framework

11

others.58 In a similar vein, accommodation is acknowledging and granting only moderate favour to the rising power, while appeasement could eventually eliminate the state’s capability to maintain independence by giving in to the excessive demands of the ascending power.59 Hedging is increasingly employed by scholars to analyse state’s response to perceived threat posed by a target country. Øystein believes that hedging is a type of risk management behaviour that aims to prevent threats.60 While Ciorciari argued hedging is a special type of limited alignment strategy, which is designed to gain benefits from the engagement with a great power while reducing the risks of entrapment in formal alliances.61 Le Hong Hiep and some Chinese experts tried to combine the two opposite opinions, and concluded that hedging is a hybrid strategy to enable states to deal with the uncertainty in their partners’ future behaviour by relying on a basket of policy tools that include both cooperation and balancing.62 In this sense, hedging is a complex and composite policy instrument containing countervailing and contradictory options, through which states attempt to counterbalance the threatening power to offset risks of foreign interference while obtaining benefits from the close engagement with it. Why states hedge against another? Some scholars, like Jackson, emphasise on systemic imperatives such as the uncertainties about the possible power transition between the great powers. They pointed out that states are compelled to hedge because they can hardly get long-term commitments from the great powers by balancing to or bandwagoning with them under an unstable and fugitive power structure in the region.63 Given this, states tend to hedge in different policy areas to offset risks and optimise benefits.64 Yet, uncertainty is not always the precondition of hedging. States may choose other policies rather than hedging when they are facing with highly uncertain external environments or the external threat appears ambiguous. For instance, some Southeast Asian countries such as Laos and Cambodia accommodate China, despite the latter’s uncertainty.65 States may also hedge against certain external threats, as the US has hedged against China, a major threat perceived by the Americans.66 Other scholars proposed the unit-level variables, mainly including the threats or risks and the distribution of power, to explain state’s hedging behaviour. As Kuik claimed, states are likely to adopt hedging strategy if they are facing with potential or long-term threats rather than immediate threats.67 While states have to take sides 58 He

[66, p. 7]. [56, p. 84]. 60 Tunsjø [67, pp. 32–33]. 61 Fiori and Passeri [27, pp. 686–687]. 62 See Hiep [37, p. 337], Dong [68, p. 38], Yao [69, p. 4]. 63 See Jackson [70, pp. 8–17]. 64 Chwee [71, pp. 124–125]. 65 See Womack [38], Pheakdey [39], Ciorciari [40], Fox [41]. 66 Medeiros [60, pp. 145–167]. 67 Chwee [71, pp. 124–125]. 59 Brawley

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1 Introduction

when they are facing with an intense competition or confrontation among the great powers, no matter what the threat it is. Wang Dong stated that the distribution of power between the host country and target country determines the resources and policy mix that the host country could mobilize and manipulate hedging policy against the target country, and the mutual perception of threat between them determines the hedging behaviour of the host country, intense or moderate.68 But the distribution of power is not a determining factor of states’ hedging behaviour. An evident example is that both the US and the Philippines hedged against China though the US is more powerful than the Philippines.69 Few scholars combine the systemic and unit-level factors except Liu Feng who concluded that hedging is determined by weak competition among the great powers and state’s policy preferences on autonomy, security and welfare.70 However, states may choose other policies rather than hedging even if they are involved in a similar great power rivalry. In addition, every state is committed to pursue for autonomy, security and welfare, but not all of them will choose hedging strategy. In terms of the components of the hedging strategy, Kuik defined two set of opposing policies, namely risk-contingency and return-maximising options. The riskcontingency policy option includes indirect balancing and dominance denial. The former refers to maintaining either a formal alliance or informal defence cooperation with other states, and modernising the army without identifying any specific target. The latter refers to introducing other powers in regional affairs, developing one’s own resilience, and fostering collective diplomatic clout to prevent the emergence of a predominant power.71 Other scholars have defined two sets of balancing strategy, namely hard balancing and soft balancing, within the risk-contingency option. Hard balancing involves enhancing a nation’s military capabilities as well as creating and maintaining informal alliances.72 Soft balancing is a cautious tactic aiming to balance rising power with less provocative measures, such as limited arms build-up, ad hoc cooperative exercises, or collaboration in regional or international organisations.73 Soft balancing can manifest itself in state strategies such as territorial denial, entangling diplomacy, economic strengthening, and signalling of resolve to participate in a balancing coalition.74 The return-maximising option includes economic pragmatism, binding engagement and limited bandwagoning. Economic pragmatism refers to maximising economic benefits from trade and investment cooperation with great powers, regardless of political problems. Binding or direct engagement aims at establishing and maintaining regular and institutionalised interactions with powerful states and

68 Dong

[68, p. 34]. Medeiros [60], Foot [72]. 70 Feng and Zhirui [73, pp. 120]. 71 Chwee [74, pp. 169–170]. 72 Hiep [37, pp. 335–336], Roy [36, p. 306], Lee [64]. 73 Paul [75, pp. 1–28]. 74 Tessman and Wolfe [76, p. 217]. 69 See

1.3 Analytical Framework

13

managing the issues in bilateral relations by conducting diplomatic activities, particularly high-level visits between top leaders. Limited bandwagoning involves only political partnerships, which is manifested in policy coordination on selected issues.

1.3.4 Causal Chain of the ‘Strategic Preference’ Model I integrated the independent variable, intervening variable, and dependent variable into a direct causal chain (Fig. 1.1) in order to analyse how the intervening variable responds to the independent variable and export the dependent variable. Independent variable Intervening variable Dependent variable (Systemic environment)

(Strategic preference)

Changes in the distribution of

High economic

power between

and political

threatening

competition

power and

between

hegenomic state

threatening

(Foreign policies)

Active

Bandwagoning

‘integration’

Accommodation

Passive ‘integration’

Hedging

hegenomic

Active/Passive

Neutralism

state

‘isolation’

Hiding

Active

Alignment

‘integration’

Appeasement

Passive

Engagement

‘integration’

Accommodation

power and Changes in the pattern of relations among them High security and strategic Input threats,

competition

risks and

between

benefits

threatening power and hegenomic

Active/Passive

state

‘isolation’

Balancing

Fig. 1.1 Causal chain of the ‘strategic preference’ model. Source The author

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1 Introduction

As can be seen from Fig. 1.1, the systemic environment is divided into two scenarios: high economic and political competition between threatening power and hegemonic state, and high security and strategic confrontation between them. The strategic preference of individual states also falls under four categories: active integration, passive integration, active isolation, and passive isolation. In the first scenario, the threats and risks posed by the system are not very serious or immediate. Hence, the external environment is inclusive, and states are not forced to take sides. In the meantime, if states have an active ‘integration’ strategic preference, they are more likely to actively respond to the external environments by integrating themselves into the system. In this context, states will bandwagon with or accommodate the threatening power to offset risks or reduce threats, or hedge against the threatening power through active engagement with it, while maintaining high independence and countering threats by balancing that power. If states have a passive ‘integration’ strategic preference, they are more likely to react moderately to the external environments by restricting their integration into the system. In this case, states are more likely to hedge against the threatening power by manipulating the engagement strategy and balancing act. Alternatively, if states have an ‘isolation’ strategic preference, either active or passive, they are more likely to passively react to the external environments by isolating themselves from the system. In this context, states will adopt a number of non-resistance strategies including neutralism, hiding, and transcending to escape from the great power rivalry. In the second scenario, the threats and risks imposed by the system are severe and immediate. States are forced to take sides due to the restrictive external environments. In that case, states will either balance the threatening power to maintain their independence and safeguard national security, or align with or appease and accommodate the threatening power to survive their governments. Only a few weak states with unimportant geostrategic positions or poor natural resources could keep out of regional affairs by taking a neutral stance. In this book, the independent variable is defined as power competition between China and the US in Southeast Asia, the intervening variable refers to Burmese leaders’ strategic preference, and the dependent variable is the foreign policies adopted by Myanmar to deal with the ascending China. The assumption is that when there is an intense economic and political competition between China and the US in Southeast Asia and the Burmese leaders have an ‘integration’ strategic preference, Myanmar would either bandwagon with or accommodate to China in order to maximise benefits from the close Myanmar-China relations, or hedge against China to offset the high risks of being heavily dependent on China. Alternatively, if Myanmar has an ‘isolation’ strategic preference, it is more likely to alienate itself from China or keep neutral in the China-US rivalry.

1.4 Main Content

15

1.4 Main Content The main body is divided into seven chapters. The first chapter introduces the debates over Myanmar’s China policy, the justification for using neoclassical realism, the analytical framework, and the arrangement of the content. Chapter 2 focuses on Myanmar’s strategic preference. First, it briefly examines Myanmar’s opposing strategic preferences of ‘integration’ and ‘isolation’. Second, it examines the roots of these preferences by investigating Myanmar’s independent foreign policy, national characteristics, geographic location, and its relative political isolation and economic integration. Finally, it analyses the major factors of the significant changes in Myanmar’s strategic preference and its impacts on Myanmar’s foreign policy. Chapter 3 analyses the international pressures and multiple benefits imposed by systemic imperatives, and Burmese leaders’ specific strategic preference during the period of 1988–2004. Externally, the fierce political competition between China and the US representes both risks and benefits for Myanmar, mainly in terms of the considerable threats from the US and the cooperation opportunity from China. Thus, Myanmar either had to bandwagon with China to resist the US, or accommodate to the US. Internally, the reformist leaders were inclined to integrate into the region so as to survive the military regime and reduce U.S. pressures. In this context, Myanmar moved to the China side by establishing close bilateral economic, political and military relations with it. Chapter 4 investigates international pressures and multiple benefits imposed by systemic incentives, and Burmese leaders’ precise strategic preference during the period of 2005–2010. Externally, the decreasing competition between China and the US in Southeast Asia led to low risks and benefits for Myanmar. Therefore, Myanmar was more likely to either engage with China to resist the US or distance itself from both sides. Internally, the conservative leaders were inclined to isolate the country from the region due to the unstable politics and serious concerns about foreign interference. In this context, Myanmar attempted to alienate itself from China and shrink their foreign relations so as to offset the risks of foreign interference, though it enhanced economic cooperation with China as well. Chapter 5 examines international pressures and multiple benefits imposed by systemic incentives, and Burmese leaders’ precise strategic preference during the period of 2011–2015. Externally, the increasing economic and political competition between China and the US in Southeast Asia imposed high benefits and risks for Myanmar. These mainly include the opportunity for improved Myanmar-US ties and declining dependence on China, as well as the high risk of Myanmar’s involvement in China-US rivalry. In this context, Myanmar was more likely to either approach to the US to balance China, or accommodate to China. Internally, the reformist leaders were inclined to integrate the country into the world due to the stable politics and the demand for economic growth. Given this, Myanmar hedged against China through rapprochement with the US.

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1 Introduction

Chapter 6 goes into the international pressures and multiple benefits imposed by the systemic incentives, and Burmese leaders’ precise strategic preference since 2016. The rising tensions in SCS indicate high risks and declining benefits for Myanmar. It is thereby under increasing pressures to take sides, and thus either approach to China, or appease the US. Internally, the democratic leaders are inclined to integrate the country into the world while the generals are willing to resist the West. In this context, Myanmar has upgraded its relations with China while expanding foreign partners, so as to seek Chinese help for reducing the U.S. pressures and expect to decrease its overdependence on China at the same time. The last chapter provides a comprehensive conclusion that reviews Myanmar’s China policy, predicts its future development, and points out the shortcomings as well as the future directions of this study.

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46. R.O. Keohane, Institutional theory and the realist challenge after the cold war, in International Relations Theory Today, ed. by B.S. Smith (Pennsylvania State University Press, State College, 1995) 47. R.O. Keohane, After Hegemony: Cooperation and Disorder in World Economy (Princeton University Press, New Jersey, 1984) 48. R.O. Keohane (ed.), International Institutions and State Power: Essays In International Relations Theory (Boulder, Westview, 1989) 49. S. Krasner, Global communications and national power: life on the pareto frontier, in Neorealism and Neoliberalism: The Contemporary Debate, ed. by D.A. Baldwin (Columbia University Press, New York, 1993) 50. S. Barkin, Realist constructivism. Int. Stud. Rev. 5(3) (2013) 51. A. Wendt, The agent-structure problem in international relations theory. Int. Organ. 41(3) (1987) 52. S. Guzzini, Power, Realism, and Constructivism (Routledge, New York, 2013) 53. Q. Yaqing, Quan Li Zhi Du Wen Hua (Power Institution Culture) (Peking University Press, Beijing, 2016) 54. M.F. Elman, The foreign policies of small states: challenging neorealism in its own backyard. Br. J. Polit. Sci. 25(2) (1995) 55. S.M. Walt, Alliance: balancing and bandwagoning, in International Politics: Enduring Concepts and Contemporary Issues, ed. by R. Art, R. Jervised (Pearson Longman, New York, 2013) 56. M.R. Brawley, The political economy of balance of power theory, in Balance of Power: Theory and Practice in the 21st Century, ed. by T.V. Paul, J. Wirtz, M. Fortmanned (Stanford University Press, Stanford, 2004). 57. D.C. Kang, Between balancing and bandwagoning: South Korea’s response to China. J. East Asian Stud. 9(1) (2009) 58. M.R. Brawley, Political Economy and Grand Strategy: A Neoclassical Realism View (Routledge, Oxon, 2010) 59. R.L. Schweller, Unanswered Threats: Political Constraints on the Balance of Power (Princeton University Press, Princeton, 2006) 60. E.S. Medeiros, Strategic hedging and the future of Asia-Pacific stability. Washington Quart. 29(1) (2005) 61. V. Shekhar, ASEAN’s response to the rise of China: deploying a hedging strategy. China Rep. 48 (2012) 62. E. Resnick, Defining engagement. J. Int. Aff. 54(2) (2001) 63. C.P. Twomey, The dangers of overreaching: international relations theory, the US–Japan alliance, and China, in An Alliance for Engagement: Building Cooperation in Security Relations with China, ed. by B. Self, J. Thompson (The Henry L. Stimson Center, Washington, DC, 2002) 64. J. Lee, Hedging against uncertain future: the response of East Asian secondary powers to rising China, in Paper (IPSA, 2012), p. 8. https://rc41.ipsa.org/public/Madrid_2012/lee.pdf. 65. P. Kennedy, Strategy and Diplomacy, 1870–1945 (George Allen and Unwin, London, 1983) 66. B. He, Politics of accommodation of the rise of China: the case of Australia. J. Contemp. China 21(73) (2012) 67. Ø. Tunsjø, Hedging against oil dependency: new perspectives on China’s energy security policy. Int. Relat. 24(1) (2010) 68. W. Dong, Study of the hedging behaviour in international relations: in case of the Asian Pacific States, in Shi Jie Jing Ji Yu Zheng Zhi (World Economy and Politic), vol. 10 (2018) 69. W. Yao, Southeast Asian countries’ hedging strategy towards China—a theoretical explanation, in Dang Dai Ya Tai (Contemporary Asia-Pacific Studies), vol. 6 (2016) 70. V. Jackson, Power, trust, and network complexity: three logics of hedging in Asian security. Int. Relat. Asia-Pac. 14(3) (2014) 71. K.C. Chwee, Smaller states’ alignment choices: a comparative study of Malaysia and Singapore’s hedging behavior in the face of a rising China. Ph.D. dissertation. Johns Hopkins University, June 2010

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72. R. Foot, Chinese strategies in a US-hegemonic global order: accommodating and hedging. Int. Aff. 82(1) (2006) 73. L. Feng, C. Zhirui, Dong Ya Guo Jia Ying Dui Zhong Guo Jue Qi De Zhan Lue Xuan Ze: Yi Zhong Xin Gu Dian Xian Shi Zhu Yi De Jie Shi (Strategic Options of the East Asia States in Dealing with China’s Rise: An Neoclassical Realism Explanation), Dang Dai Ya Tai (Contemporary Asia-Pacific Studies), vol. 4 (2015) 74. K.C. Chwee, The essence of hedging: Malaysia and Singapore’s response to rising China. Contemp. SE Asia 30(2) (2008) 75. T.V. Paul, The enduring axioms of balance of power theory and their contemporary relevance, in Balance of Power: Theory and Practice in the 21st Century, ed. by T.V. Paul, J.J. Wirtz, M. Fortmanned (Stanford University Press, Stanford, 2004) 76. B. Tessman, W. Wolfe, Great powers and strategic hedging: the case of Chinese energy security strategy. Int. Stud. Rev. 13(2) (2011)

Chapter 2

Myanmar’s Contradictory Strategic Preference

Before starting the analysis of Myanmar’s China policy, I first introduce Myanmar’s contradictory strategic preference, namely ‘integration’ and ‘isolation’. Then, I investigate the deep roots of it by examining Myanmar’s independent foreign policy, national characteristics, geographical position, and the relative political isolation and economic integration. Finally, I briefly analyse the main causes of the significant changes in Myanmar’s strategic preference.

2.1 Myanmar’s ‘Integration’ Strategic Preference The ‘integration’ strategic preference, which refers to the active way in which Myanmar responds to external environments, has been evident ever since its independence. The Burmese leaders who have an ‘integration’ strategic preference believe that the best way to offset the risks of involving in the great power rivalry is to maintain friendly relations with them and actively participate in regional and international organisations, rather than isolating the country from the world. In this context, Myanmar has taken a series of positive measures, such as expanding economic relations, diversifying diplomatic ties, and strengthening defence cooperation, in order to offset risks while gaining benefits. U Nu, the first Premier of the Myanmar government, implied that neutralism should not dictate a passive role of his government in foreign relations, and assumed a more active role in world affairs.1 In practice, he expanded foreign partners and was actively involved in regional and international affairs throughout the 1950s. In the context of a straight confrontation between West and East during the Cold War, Myanmar established honeymoon relations with the Communist China while receiving economic assistance from the Western camp at the same time. It even abstained from the voting process regarding imposing sanctions on China, despite 1 Johnstone

[1, p. 77].

© Springer Nature Singapore Pte Ltd. 2021 N. Peng, International Pressures, Strategic Preference, and Myanmar’s China Policy since 1988, https://doi.org/10.1007/978-981-15-7816-8_2

21

22

2 Myanmar’s Contradictory Strategic Preference

the fact that Myanmar was pursuing aid from the US.2 Myanmar also built a cordial relationship with India, another giant that borders the country, and expanded its relations with Southeast Asian neighbours. On regional matters, Myanmar opposed the United Nations (UN) proposal that accused China of being an ‘aggressor’ after the Korean War,3 and jointly announced the famous Five Principles of Peaceful Coexistence with China and India. Myanmar was also a strong advocate and one of the founding members of the Non-alignment Movement (NAM), a loose political organisation created by some Asian, African, and Latin American countries to support their independence and oppose the influences and rivalries between the great powers.4 Although the ‘integration’ strategic preference evolved into an ‘isolation’ one when Ne Win seized power in 1962, it was revived in the SLORC era and the early SPDC era. To relieve the mounting Western pressure, the Burmese generals actively promoted the integration of Myanmar into the region rather than isolating it from the world. First, the Burmese economy was opened to foreign traders and investors from countries around the world, resulting in massive capital flows from Thailand, Singapore, China, and some Western countries. Second, the Burmese generals travelled to China, Thailand, Indonesia, and India frequently in order to extend cooperation and garner support. The Myanmar leaders even held their first high-level meeting with U.S. officials in November 1994, intending to resume diplomatic relations with the US. Third, Myanmar started negotiating with an Association of Southeast Asian Nations (ASEAN) troika to become a member of the regional organisation in late 1993, and successfully became a member state in May 1997, reflecting Myanmar’s growing interest in integrating itself into ASEAN. Although Myanmar’s ‘integration’ strategic preference returned to an ‘isolation’ one after the purge of the former Premier Khin Nyunt, it was then inherited by President Thein Sein of the quasi-civilian government established in 2011, and Aung San Suu Kyi, the de facto leader of the democratic government built in 2016. Since 2011, Myanmar has launched market economic reforms with the aim to reintegrate Myanmar into the world economy. It has also carried out a series of measures to proceed with the democratisation process and thus to improve its relations with the West. The Myanmar leaders have readjusted its foreign relations by consolidating relations with neighbouring states and improving relations with the West, and participating in regional and international forums. In the meantime, the Bumese gernerals have embarked on an active defence diplomacy in order to modernise and improve its military capability and reduce its heavy reliance on Chinese military hardwares.

2 Huang

[2, p. 197].

3 Ibid. 4 General

Background [3].

2.2 Myanmar’s ‘Isolation’ Strategic Preference

23

2.2 Myanmar’s ‘Isolation’ Strategic Preference The ‘isolation’ strategic preference, which means the passive way that Myanmar reacted to external environments, was also observed during the Ne Win era and the second half of the SPDC era. The Burmese leaders who had such a preference assumed that keeping away from the great power rivalry, withdrawing from regional and international forums, and strengthening self-reliance were the best ways to offset risks. In this context, Myanmar implemented some isolationist policies such as restricting foreign business, minimising foreign relations, and reducing involvement in regional and international affairs, so as to avoid external intervention. Ne Win, who was the successor of U Nu through a military coup in 1962, abandoned U Nu’s ‘positive neutralism’5 and switched to cutting off Myanmar’s connections with the outside world. He heavily emphasised external threats and self-reliance according to his long experience of fighting against the Burmese communists, and thereby was committed to restoring Myanmar to ‘self-mastery’ and to maintaining its independence.6 Following his isolationist ideology, Myanmar implemented a series of radical policies, mainly including nationalising foreign investments and even the private property of foreigners, remaining strictly neutral between the US, USSR, and China,7 and withdrawing from the NAM.8 Although the ‘isolation’ strategic preference changed to an ‘integration’ one during the 1990s and the early 2000s, it was revived in the middle-late 2000s. After the cabinet reshuffle in 2004, Chairman of the SPDC Than Shwe and his follower Premier Soe Win (and later Thein Sein, because Soe Win died of an illness in 2007) decided to isolate Myanmar from the world, so as to avoid foreign interference in domestic political reforms. In that case, the military regime seemed to distant from the neighbouring countries, resulting in decreasing political ties with China, Russia, India, and ASEAN states. It also sharply reduced its diplomatic activities in regional and international organisations by forgoing ASEAN chairmanship in 2005, so as to focus on domestic affairs and avoid Western criticism of its democratic transition and national reconciliation. Nonetheless, the junta allowed foreign trade, investment, and development aids with the aim to sustain the regime financially, and maintained minimum military contacts with a few partners in order to strengthen the army’s powers to deal with the ethnic conflicts and external threats.

5 Johnstone

[1, pp. 77–116]. [4, p. 4]. 7 Lians [5, pp. 233–234]. 8 Because of the disputes over the political status of Cambodia which was occupied by Vietnam, Burma decided to withdraw from the Non-alignment Movement in 1979. 6 Taylor

24

2 Myanmar’s Contradictory Strategic Preference

2.3 Roots of Myanmar’s Opposing Strategic Preference 2.3.1 Independent Foreign Policy Since Myanmar regained its independence in 1948, an independent foreign policy has become the core element of Myanmar’s diplomacy. In 1957, U Nu stated that Myanmar was no one’s stooges, and claimed to adopt an independent foreign policy.9 Since Ne Win seized power in 1962, his government officially announced an independent foreign policy in 1971.10 This independent foreign policy was then declared in Article 26 of the 1974 Constitution.11 In April 1974 and December 1978, the Myanmar government published two small booklets to illustrate the independent foreign policy, in which they stated that Myanmar would take an independent position and would stand firm on what it considered to be the truth or the righteous in international issues.12 The SLORC/SPDC continued to practice the independent foreign policy in the 1990s and 2000s. In its Declaration 3/88 in 1988, the SLORC announced that Myanmar would not align itself with any bloc on international issues, except to consistently stand on the side that was right.13 In September 1993, the SLORC presented three principles related to foreign affairs, in which the first was the independent, active, and non-aligned foreign policy.14 In September 1996, General Than Shwe further explained the independent foreign policy by saying that the nation should not be swayed or/and pressured by foreign states, and it should maintain constructive relations with the world nations.15 This independent foreign policy was designated in Article 41 of the 2008 Constitution. It stated: The Union practices an independent, active, and non-aligned foreign policy aimed at world peace and friendly relations with nations and upholds the principle of peaceful coexistence among nations.16

The quasi-civilian government led by Thein Sein has continued to practice the independent foreign policy. In his inaugural address on 30 March 2011, he outlined the new government’s foreign policy: Regarding the foreign affairs policy, they all exercised non-aligned, independent and active foreign affairs policy and dealt with other countries in line with the Five Principles of Peaceful Coexistence. In addition, they never came under the influence of any powers. They remained

9 Butwell

[6, p. 177]. [7, p. 130]. 11 The Constitution of The Union of Myanmar [8]. 12 Myoe [7, p. 131]. 13 Myanmar [9]. 14 Myoe [7, p. 132]. 15 SLORC [10]. 16 Myanmar Government [11, p. 11]. 10 Myoe

2.3 Roots of Myanmar’s Opposing Strategic Preference

25

neutral in international relations. They never permitted any foreign troops to deploy within the borders of the Union.17

This independent foreign policy was inherited by National League for Democracy (NLD) which formed a democratic government in March 2016. Aung San Suu Kyi, State Counsellor as well as the new Foreign Minister of Myanmar, stated that Myanmar has long adopted an independent, non-aligned, and active foreign policy and has dealt closely and warmly not only with neighbouring countries but also with the other states of the world.18 In addition, the refreshed information related to foreign policy on the website of the Ministry of Foreign Affairs of Myanmar indicated: In practicing its Independent and Active Foreign Policy, Myanmar will not align itself with any bloc on international issues except to consistently stand on the side that is right. Myanmar also actively participates in activities for world peace; opposes war, imperialism and colonialism; and maintains friendly relations with all countries.19

The main characteristics of Myanmar’s independent foreign policy are the Burmese leaders’ strong resistance to external pressure and foreign interference. Since Myanmar was occupied by British invaders in the late 1800s, the Burmese nationalists began to resist colonial rule and seek independence. Aung San, the ‘Bogyoke’ (great general), and other comrades gave of themselves wholeheartedly and without complaint to strive for the independence of Burma.20 Even after Myanmar won independence in 1948, pursuing an independent role in international affairs was a national duty for the Burmese leaders. U Nu once said that the Burmese intensely dislike any kind of subjugation or control and would resist attempts at this.21 These thoughts were then promoted by Ne Win, who adopted a policy of eliminating all foreign influence in Myanmar.22 The legacy of repelling foreign pressure and external intervention was inherited by the succeeding leaders of the SLORC/SPDC, especially Than Shwe, who repeatedly stressed that Myanmar has never taken any foreign aggression lying down and has repelled it courageously.23 The newly elected President Thein Sein has seldom made public statements on combating external intervention, whereas the Burmese gernerals have been increasingly aware of the foreign interference on the ethnic conflicts in border areas. Since the NLD established a democratic government in March 2016, it has committed to consolidating friendly relations with the rest of the world rather than claiming to resist intervention forces. Also, political propaganda around foreign penetration, such as ‘against the neo-colonialists and their stooges, lackeys or puppet’ was abandoned by the new government. Nonetheless, the Myanmar leaders have resented West’s interference in the Rohingya refugee crisis. Moreover, the Burmese generals, who were 17 Sein

[12].

18 Myanmar

[13]. of Foreign Affairs of Myanmar [14]. 20 Naw [15, p. 52]. 21 Nu [16, pp. 254–255]. 22 Steinberg and Fan [17, p. 92]. 23 Myanmar [18]. 19 Ministry

26

2 Myanmar’s Contradictory Strategic Preference

influenced heavily by years of political propaganda would not support the changes in foreign policy that threatened Myanmar’s unity, stability, or sovereignty.24 Given this, defending the country from foreign invasions has continued to be the main aim of the Burmese military. For instance, Senior General Min Aung Hlaing stated in February 2016 that Myanmar needs to always be cautious and prepared for foreign interference because of its strategic land and water location.25 The independent foreign policy that Myanmar has elaborated ever since the independence is the basic background of Myanmar’s strategic preference, in which Myanmar has always taken serious concerns over the foreign interference and the high risk of over-reliance on foreign partners that could considerably threaten its independence. Therefore, Myanmar is inclined to isolate itself from the world in order to avoid foreign intervention, whereas it is also likely to integrate itself into the world to when there is no urgent and serious threats to national security.

2.3.2 National Characteristics 2.3.2.1

Burmese Deep Distrust of Foreigners

The Burmese, as a people, are obsessively suspicious of foreigners. This tendency is summarised as a self-contradictory national character by Lucian Pye. According to him, the behaviour of the Burmese is much like a boy who seeks to gain protection from his unpredictable mother and maintain a stable dependent relationship, while remaining independent because of his distrust of a relationship that is often determined by his unpredictable mother.26 Basically, it is reasonable for the weak states like Myanmar, which is fraught with persistent domestic conflicts and external threats, to be vigilant of foreign interference and avoid depending completely on foreign partners. Further, the anxiety over external vulnerability would be deepened if domestic conflicts are closely connected with foreign actors, the great powers in particular. The stress caused by internal and external pressures, compounded by policy failures and growing alienation from the world has pushed many Burmese senior officers into a siege mentality bordering on paranoia.27 Consequently, in the eyes of the Burmese leaders, foreign countries as well as their lackeys in Myanmar either prepare for overthrowing and dominating the military regime or undermining national interests. For instance, in an October 1982 speech, Ne Win told his audience that the Indians and Chinese were smuggling goods out of Myanmar by colluding with their relatives in Myanmar.28

24 Selth

[19]. [20]. 26 Pye [21, p. 157]. 27 Myanmar [22, p. 5]. 28 Egreteau and Jagan [23, p. 63]. 25 Myanmar

2.3 Roots of Myanmar’s Opposing Strategic Preference

27

This rooted suspicion of foreigners continued to shape the mindset of the Burmese leaders within the SLORC/SPDC, who had spent their whole life fighting against the ethnic rebels backed by foreigners. Moreover, the great powers’ military intervention in small states-such as the Gulf War, Kosovo, East Timor, and Afghanistan War after the Cold War, further consolidated the Burmese generals’ siege mentality and fears. For example, Than Shwe warned the citizens that the neo-colonialist countries and their puppets were intervening in the domestic affairs of Myanmar, and were even perpetrating terrorist acts against the country in his 79th Anniversary of National Day speech in December 1999.29 In January 2001, Than Shwe accused the great powers attempting to dominate and manipulate Myanmar.30 After the bloody clash between the government supporters and NLD members in May 2003, the Burmese leaders who were denounced seriously by the West focused more on external penetration and foreign interference. They estimated that certain foreign states would not only impose economic sanctions aimed at undermining the power of the junta, but would also overthrow the military regime by intervening militarily in the ethnic conflicts and supporting the democratic movements in Myanmar. In his Union Day Message in February 2007, Than Shwe warned that the great powers were trying to dominate Myanmar, stirring up ethnic conflicts to split the country, and imposing economic sanctions as well as politically interfering to undermine the economic development of Myanmar.31 From late 2007 to early 2011, Myanmar proceeded with the drafting of a new Constitution, holding general elections, and establishing a civilian government. The accelerated democratization aroused anxiety about foreign interference among the Burmese leaders. In January 2009, Than Shwe reiterated that the neo-colonialists were practicing various forms of neo-colonialism to force the other states to serve as puppets.32 In his last public speech on the occasion of the 63rd Anniversary Independence Day in January 2011, Than Shwe reminded the citizens to be aware of foreign political control over Myanmar.33 After the inauguration of the civilian government in March 2011, the Burmese leaders continued to criticize foreign interference. In March 2011, President Thein Sein said that the neo-colonialist countries were attempting to intervene in the domestic affairs of Myanmar due to its important strategic location.34 He again called for the citizens to be aware of foreign interference on the occasion of the 64th Anniversary Independence Day in January 2012.35 Since then, Thein Sein has rarely publicly criticised foreign interference, resulting in decreasing distrust of foreigners among the Burmese leaders. Notwithstanding, the Burmese generals were upset about China’s connections with the ethnic rebels in northern Myanmar.

29 Shwe

[13]. [24]. 31 Shwe [25]. 32 Shwe [26]. 33 Myanmar [27]. 34 Sein [12]. 35 National Unity [28]. 30 Shwe

28

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Their distrust of China was deepened due largely to the involvement of Chinese weapons and individuals in the ethnic conflcits in Myanmar. The growing trust towards foreigners, the West in particular, was much advanced in the early NLD era. Aung San Suu Kyi, who was continuously supported by the West in the past three decades, has committed to reconstructing amicable ties with Western countries and initiating active neighbouring diplomacy to further integrate Myanmar into the international community. However, the harmonious relations between Myanmar and the West have been broken by the Rohingya refugee crisis in 2017, led to Burmese rising resentment against the West, the US in particular. The Burmese leaders have opposed external forces interfering in Myanmar’s internal affairs and defended Myanmar from accusations of genocide at International Court of Justice (ICJ), the UN’s main judicial body.36

2.3.2.2

Ethnocentrism

Ethnocentrism, the belief that one’s own ethnic group or culture is better or more significant than others, can explain the Burmese leader’s cult of independence. Fundamentally, the rooted ethnocentric outlook contributed to an artificial barrier to the flow of capital, technology, people, and values, which not only strengthened the Burmese leader’s sense of isolationism to some extent, but also restrained mutual understanding between Myanmar and foreign countries, the West in particular. In practice, the Burmese elite who take pride in their brilliant and gorgeous culture, have long perceived it to be their natural responsibility to prevent the penetration of foreign values and safeguard their unique culture, especially in the process of globalisation. As early as the late 1800s, when Myanmar was conquered by the British, Buddhism, the core of Burmese culture, was used by the educated Burmese to incubate new forms of opposition to British rule. After independence in 1948, developing Burmese culture was a significant agenda of the Myanmar government. U Nu, a devout Buddhist, made great efforts to promote the development of traditional culture. When Ne Win seized power in 1962, Buddhism was employed to not only enhance the legitimacy of the military regime, but was also utilised to defend the critiques from the democrats. In order to cultivate patriotism and thus to strengthen the junta’s capability in defending itself against external threats, Than Shwe was committed to encouraging the development of Burmese culture extraordinarily. In March 1995, Than Shwe said that the government was reconstructing and preserving traditional cultural heritage in order to promote love for cultural traditions and to revitalize patriotism, thus safeguarding the nation from falling into servitude again.37 In January 2002, on the occasion of the 54th anniversary of Independence Day, he stressed that Myanmar had stood as an independent nation, with its own culture, for thousands of years because of the efforts to preserve national prestige and integrity and strictly adhere to social 36 Aung

San Suu Kyi [29]. [30].

37 SLORC

2.3 Roots of Myanmar’s Opposing Strategic Preference

29

codes of conduct.38 Additionally, propaganda for the four social objectives defined by the junta, including the upliftment of national prestige and integrity, the preservation and safeguarding of cultural heritage and national character, was published every day in the official daily newspaper so as to consolidate national patriotism. Yet, President Thein Sein has said little on public occasions about the significance of defending traditional culture. Instead, his addresses have focused more on foreign investment, technology, assistance, democratic experience, and cultural exchanges. Further, the three main national causes were replaced by new propaganda of ‘Nondisintegration of the Union, Non-disintegration of National Solidarity, Perpetuation of Sovereignty’, in which the item- ‘traditional culture’ was removed. The reduced emphasis on safeguarding traditional culture has continued in NLD era, where the democratic leaders have committed to integrating Myanmar into the international community. Another dimension of Burmese ethnocentrism is to maintain its own way of life in the modern world, but it has not been an easy job for the Burmese leaders, especially in today’s global age. In fact, there have been persistent clashes between traditional and modern values in Myanmar ever since the British ruled Burma. The Burmese elite, therefore, committed themselves to encouraging and even compelling the popular values to accommodate Burmese culture. U Nu had ever said that the Burmese prefer their own way of life to any other, and stressed that they would not give it up in exchange for some other way of life.39 Speaking at the cusp of the formation of ASEAN in August 1967, Ne Win stated that every nation would be free to live its own life in its own way.40 During the SLORC/SPDC era, the propaganda of ‘disciplined democracy’, which combined the core elements of Burmese culture such as order and harmony and some democratic values, was employed by the junta to maintain its authoritarian rule at home and defend against outside interference. In June 1993, Than Shwe claimed to have chosen human rights and democratic norms that were suited to Myanmar’s traditional customs.41 However, since the civilian government took over in March 2011, the Burmese leaders have emphasised common democratic values such as protecting human rights, rather than forcing popular democratic ideas to accommodate Burmese culture. In fact, President Thein Sein, Speaker Shwe Mann, and Foreign Minister Wunna Maung Lwin all broadcast the progress that democratic Myanmar was making to the international community. For example, Thein Sein stated that Myanmar would like to become a member of the United Nations Human Rights Council (UNHRC).42 Novertheless, the civilian government was under great pressure to end the ongoing human rights violations against minority communities while avoiding provoking the majority Buddhist Burmese. The NLD which has long been influenced by the prevalent democratic values for almost three decades has continued to promote social and 38 Shwe’s

[31]. [6, p. 82]. 40 Taylor [4]. 41 SLORC [32]. 42 Sein [33]. 39 Butwell

30

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cultural integration, but it was still criticised by the West due to its deliberate silence on racial conflicts between Buddhists and Rohingyas in Rakhine State.

2.3.2.3

Egocentrism

The national character of egocentrism is rooted in the collective Burmese mind because they were born and raised to tenaciously cling to this egocentric motive.43 The Burmese, even the educated Burmese, were used to focusing on the ego’s demands since their behaviour is so strongly determined by emotional ties and obligations to friends and relatives as individuals rather than abstract groups.44 At the national level, this egocentrism is manifested in the power rivalry within the leadership, in which everyone commits to ‘maximising their incomes while reducing their risks’.45 Actually, in the power politics in Myanmar, the most powerful leader usually has an entourage around him/her to do the worrying over necessary decisions and prevent behaviour that could weaken the power or status of their leader.46 In practice, Myanmar has faced the question of how to survive in the great power rivalry in the region ever since it’s independence. The Burmese leaders, therefore, devoted themselves to establishing and maintaining friendly relations with the countries around the world, including both communist and capitalist, to avoid outside interference. In a speech given in April 1955, U Nu said that by living in peace with the rest of the world, regardless of differing ideologies, Myanmar could avoid external interference.47 The ‘Burmese Way to Socialism’ in the Ne Win era was an attempt by Burmese leaders to satisfy their ego demands, which refers to legitimising and consolidating their military rule at home. Given this, the egocentric Burmese leaders had nationalised all the foreign trade and investment under socialist doctrines, resulting in a thrust in its relations with neighbouring states, particularly China and India. In a similar vein, in order to avoid getting entangled in power blocs and to protect Burmese sovereignty and national integrity, the Burmese leaders deliberately subsequently isolated themselves from the world, letting the ‘weak’ Myanmar fall behind the modern world. In the SLORC and SPDC era, the self-serving Burmese leaders harshly suppressed democratic movements, especially the ‘Depayin Incident’ in May 2003 and the ‘Saffron Revolution’ in September 2007, in order to sustain the military regime. What’s more, they manipulated the democratic process to suit their ways despite great pressures from the West and some neighbouring countries. They even rejected relief from Western countries when Cyclone Nargis struck Myanmar in May 2008 due to their fears of military intervention from the West. Since the function of the 43 Bekker

[34, p. 31].

44 Ibid. 45 Pye

[35, p. 70]. p. 151. 47 Butwell [6, p. 193]. 46 Ibid,

2.3 Roots of Myanmar’s Opposing Strategic Preference

31

civilian government in March 2011, the Burmese leaders have inherited the egocentric character and sought a delicate balancing act to serve their own good. As the official newspaper, The New Light of Myanmar, concluded on 21 May 2012: Thanks to our geographical position, many countries including our two giant neighbours are eager to enhance trade and diplomatic relations with us which in reality are an opportunity we must wisely use for our own good.48

Actually, both Burmese and Chinese scholars believe that the own needs of Myanmar, especially the security needs, are the most important driving force behind Myanmar’s diplomacy. Sometimes, Myanmar would sacrifice the Myanmar-China relations for their political needs.49 The Burmese national characteristics which mainly refers to their distrust of foreigners, their ethnocentrism and egocentrism are the cultural background of Myanmar’s contradictory strategic preferences. On the one hand, Myanmar is fearful of the foreign interference and thus to isolate itself from the world, slightly or substantially, and on the other hand, it wants to integrate into the region and world so as to consolidate the governing rule and gain economic benefits.

2.3.3 Geographical Position The highly important geostrategic location of Myanmar, which includes the junction of Southeast Asia and South Asia and key access to the Bay of Bengal, greatly influences its foreign policy. In September 1950, U Nu compared Myanmar’s dangerous geographical position to that of a tender gourd among cacti.50 To be sure, being surrounded by powerful states such as China, India, and Thailand, Myanmar has to estrange itself from the great power rivalry and thus to maintain its independence. In practice, Myanmar adopted an independent and neutral foreign policy to avoid entangling itself in international and regional disputes during the Cold War. After the Cold War Myanmar began to get sandwiched between the two giantsChina and India. Both of them perceive Myanmar as a significant trade hub and stable supply of energy as well as key access to the Indian Ocean and thus competing for influence in the country. In response, Myanmar sought to maintain cordial relations with both of them while avoiding getting involved in the power rivalry between them. This idea was evident in a statement put out by the Ministry of Foreign Affairs of Myanmar, which said that Myanmar is geographically situated between India and China and desired to be independent and non-aligned.51 Since U.S. President Obama’s ‘Pivot’ and ‘Rebalancing’ to Asia and President Trump’s ‘Indo-Pacific’ strategy, as well as China’s Belt and Road Initiative (BRI), Myanmar 48 Geographical

Opportunity [36]. [37]. 50 Myanmar [22, p. 7]. 51 Ministry of Foreign Affairs of Myanmar [14]. 49 Zhu

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2 Myanmar’s Contradictory Strategic Preference

has been caught in an increasing China-US strategic competition. Neither aligning with Beijing against Washington nor embracing Washington to contain Beijing, the Burmese analysts felt strongly about the need to balance both sides to maximise Myanmar’s policy options and benefits.52

2.3.4 Relative Political Isolation and Economic Integration Although Myanmar adopted an active diplomacy in the 1950s, it isolated itself from the world in the following decades. Ne Win, the successor of U Nu, cut off most of external connections and highly emphasised on self-reliance. The SLORC/SPDC had also been isolated by the West, economically and politically, for more than 20 years. Even the new democratic government has been heavily criticised for abuse of the human rights of the Rohingya refugees by the West. The long political isolation undoubtedly deepened the cult of isolation among the Burmese leaders, and supported their passive responses to the external environments. Therefore, the conservative Burmese leaders preferred to enact a policy of isolationism to protect Myanmar from outside interference and avoid getting involved in the intense competition between the great and major powers. Nonetheless, Myanmar has to pursue financial assistance and economic cooperation with foreign countries, so as to maintain economic growth and thus to enhance the government’s legitimacy. U Nu, the first president of Myanmar, never refused to accept economic aid from both the US and USSR, and utilised the foreign capital to develop the country. Despite the fact that Ne Win was committed to erasing the foreign influence, he too received foreign aid from the West with the aim to survive the regime. The SLORC/SPDC improved trade and investment relations with China, India, and ASEAN states greatly, and joined regional economic cooperation organisations such as the Greater Mekong Sub-region (GMS), so as to reduce the adverse effects of economic sanctions imposed by the West. Since 2011, Myanmar has liberalised the economy and reintegrated the country into the world economy. The increasing economic integration and interdependence of national, regional, and local economies across the world, on the other hand, created a deep sense of integration among the Burmese leaders, in which they try to benefit from the foreign trade and economic cooperation and thus to consolidate governments and develop the country.

52 Yun

[38, p. 9].

2.4 Causes of the Significant Changes in Myanmar’s Strategic …

33

2.4 Causes of the Significant Changes in Myanmar’s Strategic Preference As I have discussed here before, Myanmar has two opposing strategic preferences, and has gone back and forth between two. The main reasons for these changes are the political dynamic, the different personalities of leaders and changing external environments. In general, the Burmese policy-makers are more likely to have an ‘integration’ preference in the context of an inclusive external environment where there is an economic and political competition between the great powers in the region and stable domestic politics and reformist leaders. Yet, they will show an ‘isolation’ preference in an inclusive external environment if the domestic politics are unstable and the conservative leaders seize power. They will also have an ‘isolation’ preference in an exclusive external environment where there is an intense security and strategic competition between the major powers. In the view of Burmese leaders, strong political power is a precondition for a booming economy and powerful defence. As Than Shwe said in March 2001, political stability is a necessary preparation for economic reform and economic growth.53 Thus, Myanmar would narrow down its foreign relations if riots erupt at home while expanding its economic and diplomatic relations when its domestic politics are stable. In addition, the reformist leaders will be inclined to integrate Myanmar into the world and thus to facilitate national development, and an inclusive external environment will promote their efforts. In practice, Myanmar has push forward the multi-faceted cooperation with other countries and actively participated in regional and international cooperation mechanisms since 2011 because of its political stability and reformist leaders such as Thein Sein and Aung San Suu Kyi. Alternatively, it is reasonable for Burmese leaders to be concerned about the external intervention when the domestic politics remain tense and turbulent. In that case, the Burmese leadership is more likely to focus on domestic affairs and isolate the country from the world so as to avoid foreign interference. Myanmar will further distance itself from the world if conservative leaders seize power. For example, the hawkish generals-Than Shwe and Soe Win restored the isolation strategic preference during the SPDC era due to nationwide protests mainly including the bloody clashes between the government supporters and democrats in May 2003, and the ‘Saffron Revolution’ in September 2007. In short, (in)stable domestic politics, reformist or conservative leaders, and an inclusive or exclusive external environment have jointly contributed to the major changes in Myanmar’s strategic preference.

References 1. W.C. Johnstone, Burma’s Foreign Policy: A Study in Neutralism (Harvard University Press, Massachusetts, 1963) 53 Chairman

of the State Peace and Development Council [39].

34

2 Myanmar’s Contradictory Strategic Preference

2. C.C. Huang, Balance of relationship: the essence of Myanmar’s China policy. Pac. Rev. 28(2) (2015) 3. General Background, Non-alignment movement, https://namiran.org/background-general/ 4. R.H. Taylor, General Ne Win: A Political Biography (Institute of Southeast Asian Studies, Singapore, 2015) 5. C.S. Lians, Burma’s Foreign Relations: Neutralism in Theory and Practice (Praeger Publishers, New York, 1990) 6. R. Butwell, U Nu of Burma (Stanford University Press, Stanford, 1963) 7. M.A. Myoe, Myanmar’s foreign policy under the USDP government: continuities and changes. J. Curr. SE Asian Aff 35(1) (2016) 8. The Constitution of The Union of Myanmar (1974), https://www.burmalibrary.org/docs07/197 4Constitution.pdf 9. Permanent Mission of the Republic of the Union of Myanmar to the United Nations, Foreign Policy, https://www.mmnewyork.org/index.php/country-information/foreign-policy 10. SLORC Chairman Senior General Than Shwe Addressed the Concluding Session of the Annual Meeting of the Union Solidarity and Development Association, The New Light of Myanmar, 15 Sept 1996, https://www.ibiblio.org/obl/docs3/BPS96-09.pdf 11. Myanmar Government, Constitution of the Republic of the Union of Myanmar (Ministry of Information, Rangoon, 2008) 12. President U Thein Sein Delivers Inaugural Address to Pyidaungsu Hluttaw, The New Light of Myanmar, 31 Mar 2011, https://www.burmalibrary.org/docs11/NLM2011-03-31.pdf 13. Strength of the People, The New Light of Myanmar, 23 Apr 2016, https://www.burmalibrary. org/docs22/23_April_16_gnlm.pdf 14. Ministry of Foreign Affairs of Myanmar, Emergence of Foreign Policy, https://www.mofa.gov. mm/?page_id=32 15. A. Naw, Aung San and the Struggle for Burmese Independence (Nordic Institute of Asian Studies, Copenhagen, 2001) 16. U. Nu, U Nu Saturday’s Son (Yale University Press, New Haven, London, 1975) 17. D.I. Steinberg, H. Fan, Modern China-Myanmar Relations: Dilemma of Mutual Dependence (NIAS Press, Copenhagen, 2012) 18. Message From the Chairman of the State Peace and Development Council Senior General Than Shwe on the 81st Anniversary of National Day, The New Light of Myanmar, 10 Dec 2001, https://www.burmalibrary.org/NLM/archives/2001-12/msg00010.html 19. A. Selth, Myanmar foreign policy under Aung San Suu Kyi, Australian Institute of International Affairs, 28 Mar 2016, https://www.internationalaffairs.org.au/australian_outlook/myanmar-for eign-policy-under-aung-san-suu-kyi/ 20. Military Might Important Be Always Cautious and Prepared-Senior General, The New Light of Myanmar, 28 Feb 2016, https://www.burmalibrary.org/docs21/GNLM2016-02-28-red.pdf 21. J.P. Ferguson (ed.) Essays on Burma, vol. 16 (E.J. Brill, Leiden, 1981) 22. Myanmar, The military regimes view of the world, Report, ICG, No. 28 (2001), https://www. crisisgroup.org/asia/south-east-asia/myanmar/myanmar-military-regimes-view-world 23. R. Egreteau, L. Jagan, Soldiers and Diplomacy in Burma: Understanding the Foreign Relations of the Burmese Praetorian State (NUS Press, Singapore, 2013) 24. Chairman of the State Peace and Development Council Commander-in-Chief of Defence Services Senior General Than Shwe Gave Guidance to Trainees of the Primary Teachership Course No. 33 of the University for Development of National Races, The New Light of Myanmar, 30 Jan 2001, https://www.burmalibrary.org/NLM/archives/2001-01/msg00019. html 25. Senior General Than Shwe Sends Union Day Message, The New Light of Myanmar, 12 Feb 2007, https://www.ibiblio.org/obl/docs2/NLM2007-02-12.pdf 26. Senior General Than Shwe Sends Independence Day Message, The New Light of Myanmar, 4 Jan 2009, https://www.burmalibrary.org/docs6/NLM2009-01-04.pdf

References

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27. After the Nation Sees a New Government Elected by the People in Line with the New Constitution, All National People Have to Participate Harmoniously in Building a New Nation with Already-built Foundations, The New Light of Myanmar, 4 Jan 2011, https://www.burmalibr ary.org/docs11/NLM2011-01-04.pdf 28. All the People Should be Well Aware of the Fact that National Unity is of Utmost Importance, The New Light of Myanmar, 4 Jan 2012, https://www.burmalibrary.org/docs12/NLM2012-0104.pdf 29. Aung San Suu Kyi Defends Myanmar from Accusations of Genocide, at Top UN Court, UN, 11 Dec 2019, https://news.un.org/en/story/2019/12/1053221 30. SLORC Chairman Senior General Than Shwe Addressed the Opening of the Management Course No. 5/95 for Union Solidarity and Development Association (USDA) Executives, The New Light of Myanmar, 24 Mar 1995, https://www.ibiblio.org/obl/docs3/BPS95-03.pdf 31. Chairman of the State Peace and Development Council Senior General Than Shwe’s Message on the Occasion of the 54th Anniversary Independence Day, The New Light of Myanmar, 4 Jan 2002, https://www.burmalibrary.org/NLM/archives/2002-01/msg00005.html 32. Speaking at the Final Day of the First 1993 Four-monthly Meeting of SLORC, The New Light of Myanmar, 3 June 1993, https://www.ibiblio.org/obl/docs3/BPS93-06.pdf 33. President U Thein Sein Urges EU to End Submission of Reports on Human Rights Situation in Myanmar at UN General Assembly, The New Light of Myanmar, 18 Oct 2014, https://www. burmalibrary.org/docs19/GNLM2014-10-18-red.pdf 34. S.M. Bekker, The concept of Anade: personal, social and political implications, in Essays on Burma, vol. 16, ed. by J.P. Ferguson (E.J. Brill, Leiden, 1981) 35. L.W. Pye, Politics, Personality, and National Building: Burma’s Search for Identity (Yale University Press, New Haven, London, 1962) 36. Geographical Opportunity, The New Light of Myanmar, 21 May 2012, https://www.burmalibr ary.org/docs13/NLM2012-05-21.pdf 37. Interviewed with Associate Professor Zhu Xianghui at Yunnan University, Kunming, 26 Oct 2017 38. S. Yun, Myanmar in China-US Relations, vol. 3 (The Stimson Center, 2014), https://www.sti mson.org/wp-content/files/file-attachments/Myanmar_Issue_Brief_3.pdf 39. Chairman of the State Peace and Development Council Commander-in-Chief of Defence Services Senior General Than Shwe Delivered an Address at the 56th Anniversary Armed Forces Day Parade, The New Light of Myanmar, 28 Mar 2001, https://www.burmalibrary.org/ NLM/archives/2001-03/msg00028.html

Chapter 3

Swung to China: Myanmar’s China Policy (1988–2004)

The fierce political competition between China and the US during the period of 1988–2004 presented serious threats and opportunities to Myanmar, in which the junta had to engage with China in order to resist the U.S. threat and survive the military regime. Given this, the moderate Burmese leaders who were in charge of foreign affairs were committed to seeking Chinese help to reduce U.S. pressure while expanding Myanmar’s foreign partners with the aim to obtain more political support and economic assistance.

3.1 Fierce Sino-US Political Competition After the end of the Cold War, Sino-US relations were tangled with a series of ideological and diplomatic disputes, resulting in a fierce political and diplomatic competition between the two countries in the first decade of the post-Cold War era and the early 2000s. These mainly included the Tiananmen Incident in 1989, the Chinese People’s Liberation Army (PLA) missile test in the Taiwan Straits in 1995, the US bomb blast on the Chinese embassy in Yugoslavia in 1999, as well as the aircraft clashes between the US and China in Hainan in 2001. Nonetheless, the intense China-US competition did not extend to Southeast Asia due largely to Chinese weak influence and U.S. strong alliance system in the region. During the 1990s and the early 2000s, a number of bilateral and multilateral mechanisms have been established by China and ASEAN to advance the bilateral ties. As early as 1991, China-ASEAN dialogue was launched and China was eventually accorded full dialogue partner status in July 1996. In December 1997, the first ChinaASEAN joint statement aiming at promoting economic and social cooperation on bilateral and multilateral levels was declared in Chinese President Jiang Zemin’s presence at the first informal China-ASEAN Summit.1 Meanwhile, Beijing’s careful 1 Centre

for International Law National University of Singapore [1].

© Springer Nature Singapore Pte Ltd. 2021 N. Peng, International Pressures, Strategic Preference, and Myanmar’s China Policy since 1988, https://doi.org/10.1007/978-981-15-7816-8_3

37

38

3 Swung to China: Myanmar’s China Policy (1988–2004)

Table 3.1 ASEAN’s total trade with China and US (1993–2004) (USD billion)

Year

China

US

1993

8865.1

75,720.9

1994

11,062.8

88,572.4

1995

13,330.6

101,428.8

1996

16,691.7

112,526.9

1997

22,650.8

131,725.4

1998

20,414.1

115,562.2

1999

21,922.5

116,072.0

2000

31,150.6

120,909.4

2001

45,511.3

108,438.0

2002

42,759.7

104,954.4

2003

55,222.0

111,199.2

2004

81,764.6

128,544.3

Source ASEAN statistical yearbook and ASEAN merchandise trade statistics database

responses to the Asian economic crisis, mainly refers to China’s pledges to maintain economic growth, eschew devaluation of Chinese currency, support the International Monetary Fund (IMF) rescue efforts, and provide supplementary support of 1 billion USD to Thailand, were well received in the region.2 Then, China signed a China-ASEAN joint declaration to enhance the dialogue relationship to a strategic partnership and acceded to the Treaty of Amity and Cooperation in Southeast Asia in October 2003.3 In addition, China enhanced cooperation with ASEAN nations in various regional organisations, such as the Asia-Pacific Economic Cooperation (APEC,1993), the ASEAN Regional Forum (1994), the Asia-Europe Meeting (1996), the ASEAN 10+3 (1997), the Forum for East Asia and Latin America Cooperation (1999), the ASEAN+3 Foreign Ministers’ Meeting (2000). Southeast Asia has emerged as a major market for Chinese goods since China’s reform and opening up policy initiated in the late 1980s, which slowly challenged US’s economic “dominance” in the region. As shown on Table 3.1, ASEAN’s total trade with China has experienced steady growth since 1993, and the percentage of China-ASEAN trade to US-ASEAN trade increased dramatically from 10.67% in 1993 to 63.61 in 2004. China also increased its investment in Southeast Asia, but it remained far behind that of the US. As shown on Table 3.2, China’s Foreign Direct Investment (FDI) in Southeast Asian countries experienced a slow growth before 2004, which was less than 10% of US in the region. China has signed and upgraded a number of economic agreements with ASEAN, such as the Framework Agreement on Comprehensive

2 Sutter

[2, 77, p. 20]. for International Law National University of Singapore [3].

3 Centre

3.1 Fierce Sino-US Political Competition Table 3.2 FDI inflows into ASEAN by China and US (1995–2004) (USD million)

Year

39 China

US

1995

152.3

2119.0

1996

103.7

4586.5

1997

74.9

3669.4

1998

272.2

3427.1

1999

43.6

4992.3

2000

26.4

2404.6

2001

148.3

3150.0

2002

−136.8

−350.8

2003

157.0

1439.8

2004

505.2

4321.3

Source ASEAN statistical yearbook and ASEAN Foreign direct investment statistics database

Economic Cooperation (2002), in order to facilitate the bilateral trade and investment cooperation. In order to reduce ASEAN’s growing fear of “China threat” and to shape a stable surrounding environment to pushing through its domestic reforms, China has strengthened its security cooperation with ASEAN by signing joint declarations, attending bilateral and multilateral defence meetings, and holding joint military exercises. In November 2002, China and ASEAN signed a Declaration on the Conduct of Parties (DOC) in the South China Sea (SCS), temporarily mitigating the territorial disputes in the waters. In spite of the expanding engagement between China and Southeast Asian countries, China was perceived as an incompetent competitor by America due to its quite limited influence in the region and its focus on national development. Indeed, China was far behind the US, an only existing hegemonic power which has a dominant economic, political and military influence in Southeast Asia. Moreover, China simply shaping a stable, peaceful, and prosperous regional environment that China requires for its own development.4 Therefore, there is no need to fear that Chinese control of the SCS would give it additional military, economic, or political power to achieve regional hegemony.5 And China’s rise need not inexorably result in the eclipse of the US as a regional power, since Sino-US relations are not a zero-sum game.6 Such assessments and realities makesure that the China-US competition in Southeast Asia is less fierce, led to an inclusive external environment faced by Myanmar.

4 Dalpino

and Steinberg [4, 76, p. 1]. et al. [5, p. 69]. 6 Shambaugh [6, p. 91]. 5 Sokolsky

40

3 Swung to China: Myanmar’s China Policy (1988–2004)

3.2 U.S. Threats and China’s Support Since the establishment of the military regime in Yangon in September 1988, Myanmar has been confronted with multiple threats from the US which took an openly aggressive and hostile foreign policy towards Myanmar. In fact, US’s Myanmar policy was determined by the role of Aung San Suu Kyi after the general elections in May 1990.7 It attempted to remove the military dictatorship and replace it with the parliament elected in 1990 under the leadership of Aung San Suu Kyi by harshly criticised the legitimacy of the Burmese junta and put great pressure on the Burmese leaders to transfer power to Aung San Suu Kyi and her NLD in various regional and international organisations, such as the UN and ASEAN.8 The US also supported the democratic movements in Myanmar and the Burmese exile government (National Coalition Government of the Union of Burma) formed by the electoral winners in the 1990 elections. For instance, Sein Win, who was the premier of the exile government and the cousin of Aung San Suu Kyi, visited the US in 1991 to make their case better known.9 The Burmese economy suffered most from American economic sanctions and the suspension of aid programs. Soon after the Burmese military took over the government in September 1988, the US, one of the three major aid donors for Myanmar in the Cold War era (the two others being Japan and West Germany), suspended its aid programs.10 Later, the US imposed severe economic sanctions on new US investments in Myanmar in May 1997 due to the de facto house arrest of Aung San Suu Kyi in September 1996. In June 2003, the US government issued the Burma Freedom and Democracy Act, mainly including a visa ban on senior military officials of the junta, the prohibition of trade with Myanmar, and an assets freeze to isolate the military regime in Yangon.11 In addition, the national security of Myanmar was seriously threatened by the US army, which was suspected of backing the Karen rebels at the Myanmar-Thailand border with the help of Thailand, the ally of the US in Southeast Asia. Nonetheless, the US has never planned to interfere militarily in Myanmar because of its low priority in US policy in Asia and its military actions in the Middle East. Compared to the serious US threat, China provided great opportunities for Myanmar to consolidate the renascent regime and reduce U.S. pressures. First, China was one of the few supporters of the military regime due to the similar pressures from the West. Since the popular uprising in the late 1990s both China and Myanmar suffered economic sanctions and diplomatic isolation from the West. In that case, China not only overtly voiced support for the Burmese junta but perceived Myanmar as a reliable ally against the American hegemony in Asia, the main objective of Chinese diplomacy at that time. During his first trip to Myanmar in December 1994, 7 Steinberg

[7]. [8]. 9 Steinberg [9]. 10 Guyot and Badgley [10]. 11 Holliday [11, p. 609]. 8 Yawnghwe

3.2 U.S.Threats and China’s Support

41

Chinese Premier Li Peng criticised the foreign interference practiced by the West and promised to work together with Myanmar to establish a fair and equitable new international political and economic order. Thus, Myanmar could take shelter from Western pressure under Chinese diplomatic protection and resist the US by engaging with China. Second, followed by the reform and opening policy, China was committed to expanding its economic relations with Southeast Asian countries, Myanmar is included. From Chinese perspective, economic development of the Southwest China would be promoted by the booming economic cooperation with Myanmar, and the turbulent Sino-Myanmar border would also be stabilised. In this context, compared to any other period of the history, Chinese trade exploded in the late 1990s with the liberalist economic policies carried out by Myanmar.12 Flourishing trade with China was necessary for the junta to save the weak national economy, which had deteriorated after the suspension of the Official Development Assistance (ODA) from Japan and the West in the late 1990s. Additionally, China also offered economic aids to Myanmar to foster economic relations and bilateral ties with the country. Hence, China could be a reliable economic partner as well as a main donor for Myanmar. Third, China could be a major weapon supplier and defence partner for the Burmese military. Despite the fact that the Chinese PLA was a strong backer for the Burmese communists during the Cold War era, it withdrew support for them in the late 1990s. Moreover, the Chinese PLA intended to build close military relations with Myanmar by conducting frequent military exchanges, selling advanced weapons, and offering training programs to Myanmar. The Tatmadaw, which was under arms embargo imposed by the West, needed to be modernised with the help of China so that it could defend internal and external security challenges coming from the ethnic armed groups and the US. In this way, Myanmar could strengthen its military power through defence cooperation with China and thus consolidate the military regime and maintain national security.

3.3 Stable Domestic Politics but Rising External Threats Despite the brutal repression in August 1988, constant protests held by the democrats and university students broke out in Yangon in the early years of the SLORC. Moreover, the power rivalry within the top leadership of Myanmar also threatened the fragile regime. Nonetheless, the demonstrations were soon harshly suppressed by the military in which the major opposition leaders such as Aung San Suu Kyi and Tin Oo were successively arrested, resulting in a sharp decrease in the threat from domestic opponents. In this context, the junta initiated a series of policies aiming at restoring order, such as the reopening of universities in August 1992, and the removing of martial law and curfew in the next month.13 Meanwhile, Saw Maung, 12 Guyot

and Badgley [10]. [12].

13 Steinberg

42

3 Swung to China: Myanmar’s China Policy (1988–2004)

the former Chairman of SLORC who was heavily accused by the democrats inside and outside Myanmar, was replaced by a military commander Than Shwe. Additionally, a number of regional military commanders were nominated as ministers of the expanded cabinet, ensuring that the regional commander fell into the centre government and did not become too powerful, or from factions divorced from the SLORC.14 Then, Than Shwe reshuffled his cabinet in November 1997 and thus became the most powerful leader in both the government and the military. In the meantime, the junta continued to cruelly suppressed the democratic movements in which the democratic leaders to be kept locked up. Owing to these significant and timely measures, the Burmese generals strengthened their governing power. Nevertheless, the junta had been condemned considerably by the West due to its illegitimate governing ruling and human rights abuses. Therefore, the junta has to seek political support to enhance its legitimacy and relieve external pressures. Due to the shortage in consumer goods such as petroleum and rice, and a lack of foreign currency caused by the increasing trade deficit in the late 1980s, the junta initiated a series of economic policies to liberalise the economy. The first step was to lift restrictions on private trade, which ensured that Myanmar would not only expand imports to meet its growing demand for consumer goods but would also promote export to increase foreign currency deposits. Furthermore, a large proportion of gains from trade were also used to strengthen the armed forces and consolidate the military regime.15 However, Burmese goods had been banned from entering the European and American markets, the major foreign markets for Burmese exports, since 1997, because the US had imposed economic sanctions on Myanmar and the EU revoked Myanmar’s trade preference.16 In this regard, the Burmese generals had to expand economic cooperation with their neighbours and other regional states in order to sustain economic growth. Despite the fact that the Burmese army achieved several major successes in the operations against the Kachin Independence Army (KIA) in Kachin State and the Karen National Union (KNU) in Karen State in the late 1980s and successfully reached peace treaties or ceasefire agreements with more than 10 ethnic armed groups in the early 1990s,17 diverse insurgent factions posed a major threat to the military regime. The junta feared that these anti-government groups would join forces with the West in an attempt to overthrow the military regime due to the close connection between insurgences and foreign countries.18 Meanwhile, US serves as another external threat due to its hostility towards Myanmar. In the mid-1990s, the US had imposed an arms embargo on Myanmar, banning the sale of all arms between the two countries, which forced the Burmese army to look for other weapons suppliers. In addition, the U.S. first air-strike against Iraq during the Gulf War in 1991 shocked the generals in Myanmar, as they were experiencing severe anxiety over potential 14 Ibid. 15 Steinberg

[9]. [13]. 17 Haseman [14]. 18 Selth [15, pp. 16–17]. 16 Guyot

3.3 Stable Domestic Politics but Rising External Threats

43

U.S. military offensives. Given this, the Burmese generals were forced to seek other weapon buyers to modernise the weak army and thus to safeguard territorial integrity and national security.

3.4 Khin Nyunt’s Mixed Personality Historically, the leadership style, worldview, and personal experience of leaders have shaped Myanmar’s foreign policy behaviour and the patterns of its foreign relations.19 It is therefore necessary to explore Burmese leader’s personality and ideology before analysing Myanmar’s diplomacy. During the SLORC/SPDC eras, General Saw Maung, General Than Shwe, General Khin Nyunt, and General Maung Aye were the most powerful leaders of the military regime. Among which Khin Nyunt who was the First Secretary of SLORC, seemed to be more powerful than Saw Maung, the Chairman of SLORC. For instance, Khin Nyunt appeared on state television and in state newspapers more frequently than any other senior official, sat right next to Saw Maung, and always walked in front of senior officials during state ceremonies.20 The main reasons are that Khin Nyunt controlled the significant Directorate of defence Services Intelligence (DDSI), and he had a close association with Ne Win’s trusted and ambitious daughter, Sanda Win.21 Due to these close relations with Ne Win, who supposedly retired from politics in July 1988 but is thought to have continued to be an influential figure behind the scenes until about the late 1990s, Khin Nyunt was seen as the most powerful official in the military government. In addition, before the rise of Than Shwe in the late 1990s,22 Khin Nyunt appeared to be the de facto decision-maker, and usually announced important government policies, particularly foreign policies. In terms of policy-making and strategy, Khin Nyunt called the shots.23 In general, Khin Nyunt was in charge of the intelligence and foreign relations during the whole of the 1990s, especially the China affairs, though Than Shwe also had a veto power. Therefore, it is safe to state that the personality and ideology of Khin Nyunt influenced Myanmar’s responses to external environments the most in the 1990s. Starting in the late 1990s, Than Shwe consolidated his power through the cabinet reshuffle and the nomination of his followers for key positions. Moreover, he did not have to submit himself to anyone’s order after the death of Ne Win in December

19 Myo

[16]. [17, p. 163]. 21 Guyot and Badgley [10, p. 190]. 22 Despite the fact that Than Shwe was appointed as the Chairman of SLORC in 1992, he had to submit himself to Ne Win’s command because Ne Win was still the influential political leader in Myanmar. However, after the cabinet reshuffle in November 1997 and the death of Ne Win in December 2002, Than Shwe eventually became the No. 1 in the SPDC. 23 ‘We Restored Order’ [18]. 20 Hlaing

44

3 Swung to China: Myanmar’s China Policy (1988–2004)

2002.24 Nonetheless, Khin Nyunt was still the most influential figure that affected Myanmar’s foreign policy because of his control of the intelligence and foreign service. For instance, Khin Nyunt was the Chairman of the Committee of Foreign Affairs, and the foreign minister and most of the ambassadors to the foreign countries were his followers before his resignation in October 2004. Khin Nyunt was born in Moulmein, the capital of Mon State, in October 1939. He is of Burmese Chinese descent. His ethnic Chinese parents were Hakkas with ancestry from Meixian, Guangdong and his wife is ethnic Chinese from Singapore.25 He graduated from the 25th batch of the Officer’s Training School in 1960, after dropping out of Yangon University in the late 1950s. He spent three years being trained in the American intelligence agencies after college, and then worked for the Burmese Intelligence. He was ordered back to Yangon in 1983 after the terrorist attacks on a visiting South Korean delegation, and was appointed as Chief of Intelligence by Ne Win. He was then promoted to brigadier general in 1986 and took the post of the First Secretary of SLORC in 1988. Afterwards, he grew fast, and became a major general, lieutenant general, and general in 1990, 1993, and 2002, respectively. Eventually, he was appointed as the Premier of SPDC in August 2003, and became the No. 3 in the military government. Yet, he resigned one year later and was soon arrested by government, disappearing from Myanmar politics. Khin Nyunt’s Chinese family, university and military education, training experience in the US, and extensive military experience shaped his mixed personality. On one hand, Khin Nyunt was probably influenced by Chinese traditional culture, such as harmony and cooperation. In this regard, he released a number of reform policies aiming to integrate Myanmar into the region, so as to consolidate the military regime and relieve external pressures. For instance, he announced new policies to liberalise the national economy after the resignation of Saw Maung,26 and pursued foreign trade, investment, and assistance to sustain economic growth. He also signed a peace agreement and ceasefire agreement with ethnic armed groups in 1993, 1994, and 2003, respectively, to maintain stability in the peripheries,27 and unveiled a sevenpoint roadmap for democratic transition in Myanmar in 2003 to reconcile with the oppositions.28 On the other hand, he was deep in the Burmese military ideologies, which mainly includes the fear of economic domination, political interference, and military invasion from foreign countries, and worries about the close connections between the insurgent 24 Hlaing

[17, p. 170]. Jiao Guan Chen Bao Liu Kou Shu: Wo Yu Mian Dian Gao Ceng De Jiao Wang [19]. 26 Steinberg [12, p. 176]. 27 The Myanmar government reached peace agreement with ten ethnic groups in 1993, and ceasefire agreement with four ethnic groups in 1994 and 2003 respectively, see Badgley [20, p. 153], Callahan [21, p. 205], Kyaw Yin Hlaing, [22, p. 90]. 28 The seven-point roadmap for democratic transition includes reconvening the National Convention (NC), drafting a new constitution according to the principles adopted at the NC, holding a national referendum for the new constitution, holding free and fair elections, convening the Hluttaw (parliament), and establishing a new, democratic government, see Kyaw Yin Hlaing [22, p. 89]. 25 Wai

3.4 Khin Nyunt’s Mixed Personality

45

groups, domestic democrats, and foreign states.29 Given this, he was committed to consolidating the military regime while weakening the oppositions by making good use of his intelligence institutions. Additionally, although Khin Nyunt expanded Myanmar’s relations with regional states, China in particular, he was concerned about the growing foreign influences. He never compromised Myanmar’s political autonomy with China, though he was seen as a pro-China Burmese leader. He also distrusted the Americans and feared a U.S. military invasion, despite regarding the US as highly important. In general, Khin Nyunt was described as a moderate Burmese leader30 who tried to balance the views of his more forceful and isolationist colleagues around the powerful army head Maung Aye, and the growing ranks of young reformist officers who wanted to see Myanmar open up faster and embrace modern technology.31 When dealing with foreign affairs, Khin Nyunt tried to expand Myanmar’s foreign partners and reduce external pressures through dialogues and cooperation while refusing to compromise on matters of principle.

3.5 Myanmar’s Assessment of External Environments Due to the serious U.S. threats and China’s assistance, the moderate Burmese leaders sought Chinese help to resist the US rather than isolating Myanmar from the world. The Burmese generals believed that Myanmar and China could make joint efforts to take against the West which had imposed similar pressure on both countries. For example, Khin Nyunt expressed support for Chinese efforts against foreign interference and hoped to boost Myanmar-China relations when he met Chinese Ambassador to Myanmar, Chen Ruisheng, on 13 June 1989, one week after the Tiananmen Square incident.32 Three months later, Khin Nyunt sympathised with China again and praised the Pauk Phaw relations between the two countries when he inspected the construction site of the National Theatre, which was donated by China.33 Than Shwe also praised the traditional Pauk Phaw relationship and thanked China for taking the right stance on the turbulence in Myanmar when he led the first senior delegation to visit China at the end of October 1989.34 Then, during his first state visit to China in August 1991, Senior General Saw Maung talked about the similar attacks on both Myanmar and China from certain Western nations, and expressed a great desire to promote friendly relations with China. In December 1994, General Than Shwe expected to have a stronger and more active cooperation with China in the near future when he met Chinese Premier Li Peng. In the first Sino-Myanmar 29 Steinberg

[23, pp. 294–300]. [24]. 31 ‘We Restored Order’ [18]. 32 Mian Dian Li Jie Tong Qing Wo Zheng Fu Li Chang [25]. 33 Chinese Theatre Visited [26]. 34 Big Delegation to China [27]. 30 Guyot

46

3 Swung to China: Myanmar’s China Policy (1988–2004)

Joint Declaration in December 2001, both sides agreed to enhance coordination in regional and international forums.35 In January 2003, Than Shwe expressed gratitude for China’s diplomatic support of Myanmar in regional and international affairs during his second China tour.36 China was also perceived as a major economic partner for developing the poor economy in Myanmar. Therefore, the Burmese leaders often travelled to Beijing to seek Chinese trade and technical cooperation. In September 1994, Khin Nyunt visited China to promote a mutually beneficial economic cooperation between the two countries. In the first Sino-Myanmar Joint Communique during Than Shwe’s China tour in 1996, both sides agreed to push forward bilateral economic and technical cooperation by exploring new ways and new areas. Since the inauguration of SPDC, it took measures to encourage Chinese investment in Myanmar’s resource market. In the first Sino-Myanmar Joint Declaration in December 2001, Myanmar claimed to enhance bilateral cooperation with China in the fields of trade, investment, agriculture, fishery, forestry, and tourism based on the principles of equal and mutually beneficial, pragmatic, and complementary advantages.37 Subsequently, Myanmar finalised a number of agreements with China on the promotion and protection of investments, which mainly included the 21 agreements and MoUs on economic cooperation during Chinese Vice-Premier Wu Yi’s Myanmar tour in March 2004. Myanmar also sought to expand its military ties with China, so as to transform the Burmese military from a counter-insurgency force into a conventional army that could defend the country against foreign invasion.38 Despite their good words for China, the Burmese leaders feared about the undue Chinese influences in Myanmar.39 Historically speaking, Myanmar had been entangled in intricate interactions with China ever since the feudalism era, when the Burmese Konbaung Dynasty was involved in several wars with the Qing Empire. Later, Myanmar pursued Chinese help to defeat Japanese invaders during the World War II and established a Pauk Phaw friendship with communist China in U Nu’s time. Whereas, this friendship ended during Ne Win’s time and then revived in SLORC/SPDC era. Furthermore, Burmese generals had not forgotten the combat experiences against BCP backed by Beijing over the past three decades. The danger of a rising China was actually acknowledged by the Burmese generals who harboured traditional Sinophobic sentiments in the mid-1990s.40 As the memoirs of some former

35 Zhong Guo He Mian Dian Guan Yu Wei Lai ShuangBian Guan Xi He ZuoKuangJia De Lian He Sheng Ming [28]. 36 Senior General Than Shwe [29]. 37 Zhong Guo He Mian Dian Guan Yu Wei Lai ShuangBian Guan Xi He ZuoKuangJia De Lian He Sheng Ming [28]. 38 Myoe [30, p. 11]. 39 Steinberg [23, pp. 294–300]. 40 Egreteau and Jagan [31, p. 168].

3.5 Myanmar’s Assessment of External Environments

47

Burmese senior generals have revealed, the Chinese were usually blamed for financially and militarily supporting the BCP, which made the hard-fought battles against the BCP a struggle against a foreign invasion by proxy.41 All of these mixed interactions with China-cooperation and conflict-helped shape the rooted distrust of the Chinese among the Burmese, which encouraged the junta to approach other regional powers, particularly those in Southeast Asia. In practice, the hardliners within the Burmese leadership and the commanders who fought against the ethnic rebels in northern Myanmar had long been discontented with Khin Nyunt’s pro-China stance and the fast-growing Myanmar-China relations. For instance, the conservative general Maung Aye was perceived as a pro-India leader who tried to balance the country’s relations with China by approaching India. In July 1998, nationalist Than Shwe said that ASEAN was an intimate friend of Myanmar while the rest were distant friends.42 In addition, the Burmese leaders also attempted to gather more political support, economic assistance, and military hardware from other countries instead of depending solely on China. Hence, the junta also expanded its foreign relations with ASEAN, India, Japan, and Russia, and maintained minimum contact with the US with the aim to further consolidate the military rule and reduce foreign pressures.

3.6 Engaged with China 3.6.1 Frequent High-Level Visits The Burmese leaders frequently travelled to Beijing to seek Chinese political support for curtailing Western interference since 1988. As can be seen from Table 3.3, as many as five top Burmese leaders including Chairmen Saw Maung and Than Shwe toured to Beijing for six times to garner Chinese support during the SLORC period. During Than Shwe’s first China tour in January 1996, the first Sino-Myanmar Joint Communique was declared. China, too, also paid five reciprocal visits to Myanmar to support the Burmese regime and criticise the foreign interference practiced by the West. These visits includes Chinese Premier Li Peng’s Myanmar tour in December 1994, during which both sides agreed to work together against American hegemony. After the SLORC transformed to SPDC, the warm relations between Myanmar and China were much advanced. As shown on Table 3.3, the newly appointed top leaders of the SPDC, including Secretary-1 Khin Nyunt, Foreign Minister U Win Aung, Secretary-2 Tin Oo, and Vice Chairman Maung Aye, travelled to China to promote bilateral cooperation soon after the establishment of the new government. In return, Chinese President Jiang Zemin paid his first visit to Myanmar in December 2001 to upgrade Sino-Myanmar relations. During this visit, the first Sino-Myanmar 41 Burmese 42 Ibid,

[32, pp. 119–120]. p. 12.

48

3 Swung to China: Myanmar’s China Policy (1988–2004)

Table 3.3 High-ranking visits between Myanmar and China (1988–2004) Year

Name

Position

Oct 1989

Than Shwe

SLORC member

Aug 1991

Saw Maung

SLORC Chairman

Sep 1994

Khin Nyunt

SLORC Secretary-1

Nov 1994

Tin Oo

SLORC Secretary-2

Jun 1995

U Nyunt Shwe

Vice Foreign Minister

Jan 1996

Than Shwe

SLORC Chairman

Jun 1999

Khin Nyunt

SPDC Secretary-1

Dec 1999

U Win Aung

Foreign Minister

Apr 2000

Tin Oo

SPDC Secretary-2

Jun 2000

Maung Aye

SPDC Vice Chairman

Jan 2003

Than Shwe

SPDC Chairman

Jul 2003

U Win Aung

Foreign Minister

Aug 2003

Maung Aye

SPDC Vice-Chairman

Jul 2004

Khin Nyunt

Prime Minister

Jul 2004

Soe Win

SPDC Secretary-1

Jan 1991

Luo Gan

State Counsellor and Secretary-General of the State Council

Feb 1993

Qian Qichen

State Counsellor and Foreign Minister

Dec 1994

Li Peng

Prime Minister

Mar 1997

Luo Gan

State Counsellor and Secretary-General of the State Council

Oct 1997

Wu Bangguo

Vice Prime Minister

Jul 2000

Hu Jingtao

Vice-President

Dec 2001

Jiang Zemin

President

Mar 2004

Wu Yi

Vice Prime Minister

Visits from Myanmar

Visits from China

Source Collected from People’s Daily, The (Global) New Light of Myanmar, Myanmar Times

Joint Declaration was announced to expand and deepen bilateral cooperation in the fields of trade and investment, culture and people-to-people exchanges, border management, and policy coordination in regional and international forums.43 In the years following, the Burmese senior officials continued to go to Beijing to seek Chinese political support, economic cooperation, and financial assistance. In January 2003, Than Shwe toured to Beijing to maintain the close relations with the new Chinese leadership. During the visit, Jiang Zemin promised to strengthen 43 Zhong

Guo He Mian Dian Guan Yu Wei Lai Shuang Bian Guan Xi He Zuo Kuang Jia De Lian He Sheng Ming [28].

3.6 Engaged with China

49

Table 3.4 Myanmar’s import from and export to China (1990–2004, from April 1 to March 31), (USD million) Year

Import

Export

Total

Balance

1990–91

193.94

1995–96

254.98

63.76

257.70

−130.18

34.70

289.68

2000–01

−220.28

285.11

175.98

461.09

−109.13

2004–05

489.65

290.90

780.55

−198.75

Source Statistical Yearbook of Myanmar 2011; Myanmar Statistical Information Service, https:// mmsis.gov.mm/sub_menu/statistics/statDbList.jsp?vw_cd=MT_ZTITLE Note Certain years were absent from the Statistical Yearbook of Myanmar 2011

the traditional Pauk Phaw friendship and promote bilateral cooperation.44 After the bloody incident between the government supporters and NLD members in May 2003, Than Shwe sent the President’s Special Envoys Foreign Minister Win Aung and Vice Senior General Maung Aye, to China in July and August 2003, respectively, and successfully garnered China’s understanding.45 Nearly one year later, Khin Nyunt, who unveiled a seven-point roadmap for the transition to the democratic government in August 2003, toured China to win Chinese support. He successfully achieved this goal since Chinese President Hu Jintao showed support for the military regime and expressed the desire to further strengthen mutually beneficial cooperation.46

3.6.2 Close Trade Cooperation The official trade connections between Myanmar and China before 1988 were very loose and counted for little in bilateral ties. However, from 1988 (see Tables 3.4 and 3.5), official Myanmar-China trade witnessed a stable growth during the SLORC and the early SPDC years. According to Myanmar’s trade statistics, the total value of Myanmar-China trade was 257.70 million USD in 1990, accounting for 18.88% (see Table 3.6) of Myanmar’s overall trade, which was six times that in the Ne Win era. While such numbers were much lower than what the Chinese sources indicated, in which the volume of formal trade between China and Myanmar was 327.62 million USD, taking up 24% of Myanmar’s foreign trade. By 1995, the volume of official Myanmar-China trade increased to 289.68 million USD in Myanmar’s trade sources (see Table 3.4), and 767.40 million USD in Chinese data (see Table 3.5). The share of Myanmar-China trade in Myanmar’s overall trade declined to 10.62% (see Table 3.6) in 1995, indicating China’s declining significance in Myanmar’s foreign trade.

44 Senior

General Than Shwe [29]. Jin Tao Hui Jian Mian Dian Ke Ren Zhi Chu Zhong Guo Zheng Fu He Ren Min Zhen Shi Zhong Mian ‘Bao Bo’ You Yi [33]. 46 Ministry of Foreign Affairs of The People’s Republic of China [34]. 45 Hu

50

3 Swung to China: Myanmar’s China Policy (1988–2004)

Table 3.5 China’s import from and export to Myanmar (1988–2004, from January 1 to December 31), (US$ million) Year

Import

Export

Total

Balance

1988

114.79

140.83

255.62

1989

103.13

184.27

287.40

81.14

1990

104.09

223.54

327.62

119.45

1991

109.52

286.17

392.09

180.25

1992

131.27

259.17

390.44

127.90

1993

164.83

324.66

489.49

159.83

1994

143.28

369.11

512.40

225.83

1995

149.55

617.85

767.40

468.30

1996

137.41

521.12

658.53

383.71

1997

73.41

570.09

643.50

496.68

1998

62.04

518.86

580.90

456.82

1999

101.48

406.55

508.03

203.59

2000

124.82

496.44

621.26

371.62

2001

134.19

497.35

631.54

363.16

2002

136.89

724.82

861.71

587.93

2003

169.53

907.71

1077.24

738.18

2004

206.90

938.45

1145.49

731.69

26.04

Source Yearbook of China’s Foreign Economic Relations and Trade, 1991–2003; China Commerce Yearbook, 2004–2014

Table 3.6 The share of Myanmar-China trade in Myanmar’s overall trade, (US$ million) Year

Import A

Export B

%

C 63.76

Total D

%

E

F

%

476.5

13.38

257.7

1365.1

18.88

1990

193.94

888.6

21.83

1995

254.98

1831.9

13.92

34.70

896.9

0.39

289.68

2728.8

10.62

2000

285.11

2319.1

12.29

175.98

1960.9

8.97

461.09

4280

10.77

2004

489.65

1973.3

24.81

290.90

2927.8

9.94

780.55

4901.1

15.93

Source [35] Note A Myanmar’s import from China; B Myanmar’s overall import; C Myanmar’s export to China; D Myanmar’s overall export; E Myanmar-China trade; F Myanmar’s overall trade

This was partly due to Myanmar’s fast-growing trade with other Asian countries, mainly Thailand, Singapore, and Japan. Myanmar’s imports from China grew greatly between 1988 and 1995 due to Myanmar’s ‘import first’ policy that aimed at filling the large gap between supply

3.6 Engaged with China

51

and demand created by the junta in the Ne Win era.47 Owing to geographical proximity and lower prices, Chinese products poured into the emerging consumption goods market in Myanmar.48 For instance, Chinese textiles occupied nearly 40% of total Chinese exports to Myanmar from 1988 to 1991. Meanwhile, Myanmar’s exports to China either decreased, as indicated in Burmese data, or expanded very slowly, as shown in Chinese sources, due to its weak competitive advantages and its government’s maintenance of a monopoly and restrictions on major export items such as teak and rice. This resulted in an increasing trade surplus enjoyed by China. Between 1996 and 1999 (see Table 3.4), the increasing trend in Myanmar-China trade was reversed. This was, in part, because the Myanmar government made major adjustments to its trade policy. In order to respond to the severe shortage of foreign currency caused by an increasing trade deficit and the negative effects of the Asian financial crisis in 1997, Myanmar rescinded the ‘import first’ policy and replaced it with an ‘export first’ policy in mid-1997. In July 1997, Myanmar established a new extra-ministerial trade committee, the Trade Policy Council (TPC), according to which importers could import only against export earnings.49 In March 1998, Myanmar’s Ministry of Commerce announced its Office Order No.4/98 to restrict the import of consumer commodities.50 As a result, Myanmar’s imports from China dropped sharply from 1997 (570.09 million USD) to 1999 (406.55 million USD). In the meantime, Myanmar’s exports to China also experienced a dramatic decline from 1996 (137.41million USD) to 1998 (62.04 million USD) due to Myanmar’s strict controls on exports and the recessionary economy caused by the Asian financial crisis. Since the early twenty-first century, the imports and exports as well as the total value of bilateral trade entered a new period of growth. First, Myanmar’s imports from China enjoyed steady growth from 2000 to 2004, due largely to Myanmar’s increasing foreign currency from the growing gas and mineral exports and Myanmar’s consistent demands for Chinese consumption goods, as well as the reluctance of Western countries to trade with Myanmar because of low profits and high costs.51 Second, Myanmar’s exports to China have grown greatly, increasing from 175.98 million USD in 2000 to 290.90 million USD (see Table 3.4) in 2004. The main reasons were that: the promotion of exports in Myanmar, China’s demands for Myanmar’s natural resources, and the economic sanctions implemented by the West. Since the ‘export first’ policy was rolled out in mid-1997, the Burmese leaders have been committed to expanding exports to promote economic growth, thereby enhancing the military regime’s legitimacy and consolidating its political control.52 Furthermore, Myanmar applied low tariffs, which was less than one-half of the average

47 Naing

[36]. and Mieno [37, p. 12]. 49 Ibid, p. 7. 50 Koji [38, p. 4]. 51 Alamgir [39, pp. 981–985]. 52 Brown [40, p. 178]. 48 Toshihiro

52

3 Swung to China: Myanmar’s China Policy (1988–2004)

Table 3.7 Myanmar’s trade with major trade partners, (1990–2004), (USD million) Year

Thailand

China

Singapore

1990–91

151.68

257.70

221.75

India 90.33

HK

1995–96

329.67

289.68

499.09

245.70

94.04

491.48

2000–01

585.70

461.09

674.76

345.29

210.96

286.40

2004–05

1455.33

780.55

745.41

425.08

137.15

288.68

45.09

Japan 181.15

Source [35]

of other developing countries to stimulate trade.53 China has, meanwhile, demonstrated an insatiable appetite for importing natural resources from Myanmar, the raw materials and wood in particular, in an effort to promote industrialisation at home. Also, Myanmar’s efforts to access Western markets had been severely hindered due to import bans from the West, resulting in it’s increasing reliance on the Asian trade partners, particularly China. Nonetheless, China was not the biggest trade partner for Myanmar during the period of 1988 to 2004. As shown on Table 3.7, Thailand and Singapore were the two most important trade partners for Myanmar in 1990s and the early 2000s while China was ranked No. 3. What’s more, the total bilateral trade between Thailand and Myanmar was 140.09% of China-Myanmar in the same period. China’s withdrawal of its support for BCP and the cordial bilateral ties, as well as the termination of ODA from the West in the late 1980s prompted the normalisation of border trade between Myanmar and China. In April 1987, Myanmar reached a 15-point agreement on border trade with China. One year later, it concluded other contracts with China, mainly including another agreement for sale and purchase of goods between the Myanmar Export and Import Corporation (MEIC) and the Yunnan Provincial Import and Export Corporation (YPIEC), and a banking agreement between the Bank of China (Yunnan Branch) and the Myanmar Foreign Trade Bank (MFTB).54 Since the establishment of the Burmese military regime, a number of trade agreements and MoUs have been signed by both sides. In August 1994, Myanmar and China signed a MoU on border trade, in which it defined border trade as bilateral land borne trade and exchanging goods by border residents between Yunnan and Myanmar.55 By signing such an agreement, Myanmar could achieve multiple goals such as deepening trade relations and strengthening its friendship with China, keeping the informal border trade on the track of conventional trade and thus levying more taxes, and facilitating the flow of goods and private trade.56 53 Alamgir

[39, p. 985]. [41, p. 9]. 55 Memorandum of Understanding on Border Trade of China and Myanmar, xxgk.yn.gov.cn/newsview.aspx?id=123341 in David I. Steinberg and Hongwei Fan, Modern China-Myanmar Relations: Dilemma of Mutual Dependence (Copenhagen: NIAS Press, 2012), p. 213. 56 Naing [36]. 54 Myoe

3.6 Engaged with China

53

Table 3.8 Myanmar’s border trade with China (1991–2004), (USD million) Year

Import

Export

Total

Balance

Total border trade

% of border trade

1991–92

54.47

52.52

106.99

−1.95

139.27

76.82

1992–93

131.24

58.50

189.74

−72.74

257.93

73.56

1993–94

90.23

27.04

117.27

−63.19

248.04

47.28

1994–95

65.08

29.96

95.04

−35.12

231.87

40.99

1995–96

229.31

22.03

251.34

−207.28

335.95

74.81

1996–97

158.68

29.82

188.50

−128.86

357.13

52.78

1997–98

59.37

86.44

145.81

−27.07

257.06

56.72

1998–99

99.41

94.88

194.29

−4.53

300.27

64.71

1999–00

94.90

96.39

191.29

+ 1.49

344.39

55.54

2000–01

100.11

124.38

224.48

+ 24.28

411.74

54.52

2001–02

115.85

133.12

248.96

+ 17.27

505.83

49.22

2002–03

132.57

158.17

290.74

+ 25.60

460.57

63.13

2003–04

163.84

177.26

341.10

+ 83.42

531.80

64.14

2004–05

176.37

246.46

422.83

+ 70.09

687.88

61.47

Source David I. Steinberg and Hongwei Fan, Modern China-Myanmar Relations: Dilemma of Mutual Dependence, (Copenhagen: NIAS Press, 2012), p. 217

Besides, Myanmar built several border trading offices in Lashio, Muse, Kyukok, Namkham, and Kunlong in August 1988, and opened them on 2 December 1988.57 A new border trade post was established in Muse in August 1995 and upgraded it to a fully functional port with a ‘one-stop’ border gate service in January 1998. Other trading posts were also started, including Lwejel (August 1998) and Chinshwehaw (October 2003) in Shan State. Additionally, a series of trade policies were issued by the Myanmar government to promote the border trade with China. These mainly refers to abolish the previous rule of imposing trade restrictions on cooperative societies and private traders in August 1989, allow the border traders to use the local currencies of Myanmar Kyat and Chinese Yuan for exchange (temporarily banned from 1997 to 2000), and remove tariffs for 478 items.58 Moreover, Myanmar formed border trade supervision committees in 1991 and the Department of Border Trade under the Ministry of Commerce in August 1996 with the aim to manage border trade.59 But despite the efforts of Myanmar, its imports from and exports to China through border trade fluctuated greatly and remained low from 1991 to 1999 (see Table 3.8), which prevented it from being economically important to Myanmar. As demonstrated on Table 3.8, the percentage of Myanmar-China border trade in Myanmar’s overall

57 Myoe

[41]. [42, p. 42]. 59 Toshihiro [43]. 58 Xixin

54

3 Swung to China: Myanmar’s China Policy (1988–2004)

border trade was more than 70% in the early 1990s and 50% in the mid-to-late 1990s. Yet, the border trade between Myanmar and China grew steadily since 2000.

3.6.3 Increasing Chinese Investment According to the United Nations Conference on Trade and Development (UNCTAD), prior to 1988, foreign investments in Myanmar only amounted to 3 million USD.60 However, it increased sharply post-1988 due to the new economic policies implemented by Myanmar to open and liberalise the poor economy. For example, the Union of Myanmar Foreign Investment Law (FIL) was passed on 30 November 1988 to redress the capital deficiency caused by the suspension of the flow of ODA and to save the worsening economy by attracting foreign investments.61 In 1994, the Myanmar Citizens Investment Law was enacted and the Myanmar Investment Commission was established, both of which are aimed at regulating and promoting foreign investments. In spite of these attractive investment policies, Chinese investment in Myanmar was negligible, and thus contributing little to Myanmar’s fragile economy in the 1990s. This is mainly becasue serving domestic demands from the flourishing trade cooperation with China and gaining benefits from China’s financial aid rather than expanding Chinese investment was the top priority for the Myanmar government at that time. In fact, apart from the political ties, trade and aid were the most important topics of discussion during the high-ranking visits between Myanmar and China in the 1990s. Yet, after the economic sanctions imposed by the West and the outbreak of Asian financial crisis, Myanmar greatly desired to attract foreign investments to maintain economic growth. In May 1997, the US imposed the Executive Order 13,047 to prevent American from making new investments in Myanmar. As a result, the Western companies either forced to withdraw from Myanmar or stop investing in new projects in the country. Moreover, the international financial institutions funded by the West, such as the World Bank (WB) and International Monetary Fund (IMF), also refused to provide assistance and loans to Myanmar because of the U.S. pressure. Myanmar, therefore, had to seek foreign investment and development aid from its Asian neighbours, chiefly Singapore, China, and Thailand.62 Given this, the Myanmar leaders have repeatedly travelled to China to pursue trade and investment cooperation and development aid. In 2000, three senior generals, 60 According to the UNCTAD, the FDI flowed in Myanmar in the period of 1971–1973, 1976–1983 and 1985–1986 was zero. It only showed positive outcomes in certain years, such as 1 million USD in 1974, US$ 3 million in 1975, 1 million USD in 1984. Meanwhile, the negative value was appeared in 1987, which was -2 million USD. Therefore, the overall value of FDI flowed into Myanmar from 1971 to 1987 was only 3 million USD, UNCTAD, https://unctadstat.unctad.org/wds/TableViewer/ tableView.aspx. 61 Maung Than [79, p. 355]. 62 McCarthy [44, p. 242].

3.6 Engaged with China

55

including Secretary-2 Tin Oo, Vice Chairman Maung Aye, and Secretary-3 Win Min, visited China. During which a joint declaration on a cooperation framework for bilateral relations was signed to consolidate and promote bilateral cooperation in various areas to reach an investment protection agreement in proper time.63 Later, the first formal agreement on the promotion and protection of investments between Myanmar and China was reached during Jiang Zemin’s Myanmar tour in December 2001. As a result, Chinese FDI in Myanmar reached 126.55 million USD in 2004, more than one hundred times that of it in 1995.64

3.6.4 Deepened Defence Cooperation Since 1988 the Burmese senior generals repeatedly travelled to China to boost military ties with China, so as to consolidate the military regime and strengthen military power and thus to defend against outside threats from the West. In October 1989 (see Table 3.9), Deputy Commander-in-Chief of the Myanmar army Than Shwe led a 24-member delegation comprising top officials from the government and military to China for their first visit. Although no agreements on military cooperation were achieved, Than Shwe’s first China trip ushered a new era of closer military exchange between the two armies after the Myanmar military seized power in September 1988. Thereafter, frequent high-ranking visits between senior officers of the two armies took place during the SLORC era. For instance, Major General Tin Oo toured to China in December 1989 and November 1994 respectively, Major General Thein Win visited China in April 1992, General Chi Haotian paid his first visit to Myanmar in July 1995. In May 1996, General Zhang Wannian, Vice Chairman of China’s Central Military Commission, led the first highest-level military delegation on a visit to Myanmar during the SLORC/SPDC era. During this visit, Than Shwe promised to push forward bilateral relations, a sentiment that was echoed by Zhang Wannian.65 To reciprocate Zhang Wannian’s Myanmar trip, Maung Aye visited China five months later. Both sides signed a concrete agreement on expanding military cooperation and pledged to exchange intelligence on threats to their respective countries.66 In November 1997, the position of regional commander was occupied by new commanders with extensive combat experience under SPDC. Compared to the old generals, the young commanders preferred to rely on high-tech military hardware bought from China to safeguard national security. In June 1998, Major General Kyaw Than, the new Commander-in-Chief of the Air Force, went to Beijing to close a deal to purchase jet trainers from China. Myanmar also purchased a large number of weapon from China, intending to modernise the Tatmadaw. As shown on Table 3.10, Myanmar imported an estimated 63 A

Joint Declaration [45]. Yearbook of Myanmar [35]. 65 Mian Dian Ling Dao Ren Hui Jian Zhang Wan Nian [46]. 66 Rodman [47]. 64 Statistic

56

3 Swung to China: Myanmar’s China Policy (1988–2004)

Table 3.9 The visits of senior military officers between Myanmar and China (1989–2004) Year

Name

Position

Visits from Myanmar Oct 1989

General Than Shwe

Deputy Commander-in-Chief

Dec 1989

Major General Tin Oo

Chief of Staff (Army)

Apr 1992

Major General Thein Win

Commander-in-Chief (Air Force)

Nov 1994

Major General Tin Oo

Chief of Staff (Army)

Oct 1996

General Maung Aye

Deputy Commander-in-Chief

Sep 1997

Lt. General Tin Ngwe

Commander-in-Chief (Air Force)

Jun 1998

Major General Kyaw Than

Commander-in-Chief (Air Force)

May 2000

Major General Tin Oo

Chief of Staff (Army)

Sep 2001

Major General Myint Swe

Commander-in-Chief (Air Force)

May 2002

Vice Admiral Kyi Min

Commander-in-Chief (Navy)

Dec 2002

Lt. General Shwe Mann

Chief of Staff (Army, Navy, and Air Force)

Aug 2003

Vice Senior General Maung Aye

Deputy Commander-in-Chief

Jul 2004

Lt. General Soe Win

Chief of Air Defence

Nov 1991

Lt. General He Qizong

Deputy Chief of General Staff

Jun 1994

General Li Junlong

Commander, Chengdu Military Region

Visits from China

Jul 1995

General Chi Haotian

Minister of National Defence

May 1996

General Zhang Wannian

Vice Chairman of China’s Central Military Commission

Jun 1999

Lt. General Li Jinai

Political Commissar, PLA General Armaments Department

Apr 2001

General Fu Quanyou

Chief of General Staff

Dec 2003

General Wu Quanxu

Deputy Chief of General Staff

Dec 2004

Lt. General Sun Zhiqiang

Deputy Chief of General Logistic Department

Dec 2004

General Ge Zhengfeng

Deputy Chief of General Staff

Source Collected from People’s Daily, The (Global) New Light of Myanmar, Maung Aung Myoe, In the Name of Pauk-Phaw: Myanmar’s China Policy Since 1948 (Singapore: ISAS, 2011), p. 147

13.54 billion USD worth of Chinese weaponry between 1989 and 1997, which made up 85.21% of its total arms deals in this period. Specifically, the volume of Chinese weapons purchased by Myanmar was more than 100 million USD per year, except in certain years (1989, with 34 million USD; 1992, with 14 million USD; and 1994, with 93 million USD). The share of Myanmar’s arms imports from China was more than 78.00% of its total arms imports, except in 1992 (when it was only 21.54%). The share of Chinese weapons in Myanmar’s total arms imports peaked at 100% in three years: 1989, 1993, and 1996. This indicated that China had become a main weapon

3.6 Engaged with China

57

Table 3.10 Myanmar’s arms imports from China (1989–2004) (USD million) Year

Arms imports from China

Total arms imports

1989

34

34

From China/total arms imports (%) 100.00

1990

217

266

81.58

1991

182

232

78.45

1992

14

65

21.54

1993

323

323

100.00

1994

93

97

95.88

1995

176

223

78.92

1996

118

118

100.00

1997

197

231

85.28

1998

156

156

100.00

1999

116

141

82.27

2000

3

16

18.75

2001

50

149

33.56

2002

9

157

5.73

2003

57

95

60.00

2004

74

194

38.14

Source SIPRI Arms Transfers Database

resource for Myanmar since 1988. While Myanmar was China’s No. 4 arms client (spending 1354 million USD from 1988 to 1997) after Pakistan (No.1, with 2750 million USD), Iran (No. 2, with 1540 million USD), and Thailand (No. 3, with 1400 million USD).67 Yet, since 2000, the total value and the share of imported Chinese weapons in Myanmar’s total arms imports had declined dramatically. In some years, the number of weapons exported to Myanmar from China was almost negligible, such as 3 million USD in 2000 and 9 million USD in 2002. In practice, the main arms deals were finalised at special ‘friend prices’ during the high-level visits between the two armed forces, and the Chinese military equipment was usually delivered to Myanmar after these visits. In addition, due to financial constraints, the Myanmar military usually sought Chinese concessional loans for purchasing weapons or paid for them with the revenue from the trade of resources such as mines, oil and gas, and timber, and even from the drug trade. As shown on Table 3.11, Myanmar imported large amounts of land force equipment, including different types of tanks and armoured personnel carriers, as well as air defence weapons such as multiple rocket launchers, surface-to-air missiles, radars, and aircraft from China during the SLORC era. This clearly reflects the Tatmadaw’s intention of strengthening its military power in order to fight against the ethnic rebels

67 Collected

ues.php.

from SIPRI Arms Transfers Database, https://armstrade.sipri.org/armstrade/page/val

58 Table 3.11 Myanmar’s arms imports from China (1988–2004)

3 Swung to China: Myanmar’s China Policy (1988–2004) Year delivery Number Type 1988

3

1989

55

JLP-40 air search radars Type-63 light tank

1989

30

Type-69 tank

1989

100

Type-85 APC

1989–1991

3

JLG-43 height-finding radar

1990

2

F-6/J-6 fighter aircraft

1990

12

1990

200

1990

75

PL-2 SRAAM

1990

10

Type-037/Hainan Patrol craft

1990

4

1990

24

1991

2

Y-12 light transport aircraft

1991

4

Y-8 transport aircraft

1992

12

1992

1

1992

225

1993

50

1993

30

1993

150

1994

50

1995

50

1995–1997

6

F-7M air-guard fighter aircraft HN-5A portable SAM

Type-311 fire control radar Type-74 37mm AA gun

F-7M air-guard fighter aircraft JY-8A fire control radar PL-2 SRAAM Type-63 light tank Type-63 107 mm Towed MRL Type-85 APC C-801 anti-ship missile Type-69 tank Type-037-1G/Houxin FAC

1997

12

Karakorum-8 trainer/combat aircraft

1997–1998

24

A-5C/Fantan FGA aircraft

1998–1999

100

1998–1999

40

PL-2 SRAAM

1998–1999

12

F-7M airguard fighter aircraft

1998–2002

5

Type-76A 37 mm Naval gun

2001–2003

2

Anawrahta Corvette

2001

8

AK-230 30 mm Naval gun

2001

30

C-801 anti-ship missile

5

EFR-1 fire control radar

2002–2003 2004 2004–2005

25 3

PL-5B SRAAM

Type-59D Tank Type-344 fire control radar

Source SIPRI arms transfers database

3.6 Engaged with China

59

armed with advanced ground weapons, and enhancing its air defence capabilities to defend against possible air attacks by foreign invaders, particularly the US. In October 1989, Than Shwe travelled to China for the first time, during which he inspected F-6 and F-7 fighter air-craft at Shijiazhuang at a rocket factory operated by the Chinese state-run defence company Norinco, visited Shanghai’s naval shipyards, and attended the first firepower show in Nanjing.68 Although no arms deals were signed during this first visit, the first and most important weapons deal with China was finally signed by Major General Tin Oo and his Chinese counterpart in December the same year. It covered the delivery to Myanmar of 10 Chengdu F-7IIK fighters and two GAIC FT-7 twin-seat trainers, patrol boats, tanks and armoured personnel carriers, field and anti-aircraft artillery, and small arms and ammunition.69 According to the SIPRI Yearbook, Myanmar purchased 20 to 24J-6 fighters and 10 to 12J-7 fighters, as well as 4 Shanghai or Hainan-class patrol boats from China between 1980 and 1991.70 According to Bertil Lintner, Myanmar received 36 F-7 fighters, 24 NAMC A-5M close support aircraft, 2 SAC Y-8D medium range transport planes, with a further two on order, 10 Hainan-class naval patrol-boats, and had ordered 3 1865t Jianghu 053 frigates until 1994.71 Besides, more than 200 light and medium tanks, including T-63 and T-69IIs, the Chinese version of the Soviet PT-76 light amphibious tanks (T83), armoured personnel carriers and infantry fighting vehicles, at least 30 Type-63107 mm multiple rocket launchers, a sizeable quantity of 37 mm single barrel anti-aircraft guns, HN 5A shoulder-fired surface-to-air missiles, 290 million USD worth of light arms and ammunition, artillery pieces, radio sets for military use, night vision devices, nearly 1,000 5t Jiefang trucks, and radar equipment were transferred to Myanmar until 1994.72 In March 1994, the Myanmar Navy contracted with China for 6 Houxin-class Fast Attack Craft (UMS 471 to 476). The first two were delivered in November 1995 and the rest arrived in 1996 and 1997.73 In November 1994, Tin Oo signed another significant arms deal with China during his second China tour, in which Myanmar brought an estimated 400 million USD worth of helicopters, artillery pieces, armoured vehicles, naval gunboats, military parachutes, and small arms.74 Since 2000, the Myanmar military was committed to enhancing its air and sea defence capabilities by importing large numbers of aircraft, air search radars, antiship missiles, and warships from China. It seemed that what the Burmese generals really feared was sudden strikes from their foreign enemies from air and sea. For 68 Lintner

[48, p. 28], [49], Myoe [50, p. 150]. Lertcharoenchok, Beijing, Rangoon Ink $1.2 Billion Arms Deal, Nation, November 27, 1990 in Andrew Selth, Transforming the Tatmadaw: the Burmese Armed Forces since 1988 (Canberra: Australian National University, 1996), pp. 22–23. 70 Bitzinger [51]. 71 Lintner [52]. 72 Ibid. 73 Myoe [50, p. 150]. 74 Bertil Lintner, US$400 m Deal Signed by China and Myanmar, Jane’s Defence Weekly, December 3, 1994, p. 1 in Andrew Selth, Transforming the Tatmadaw: the Burmese Armed Forces since 1988 (Canberra: Australian National University, 1996),p. 23. 69 Yindee

60

3 Swung to China: Myanmar’s China Policy (1988–2004)

instance (see Table 3.11), Myanmar procured 12 Chinese two-seat Karakoram-8 jet trainers that could also be used as light attack aircraft, with a 23 mm gun pod and fittings for air-to-air missiles, and 57 mm rockets or bombs weighing up to 250 kg, in a 20 million USD deal financed by China in 1997.75 It was estimated that the Myanmar Air Force had received 58 F-7IIK fighters, 4 FT-7 twin seat air-craft, 2 FT-6 trainers, and 30 PT-6 trainers from China between 1990 and 2000, as well as 36 A-5C aircraft from 1992 to 2000.76 To help soldiers familiarise themselves with and learn to operate the advanced Chinese weapons, and promote modernisation and professionalism of the military, Myanmar sent many officers to China to receive trainings. China, for its part, could build closer personnel connections with the Burmese officers, export their military ideas and expand their influence within the Tatmadaw by providing training programs. In the past three decades China has offered various training programs to Myanmar in the operation and maintenance of the equipment it has sold to Myanmar.77 In November 1994, 70 Chinese naval personnel, over half of whom are middle rank officers, were sent to teach Burmese soldiers how to operate the boats, to train local crew, and maintain the newly installed radar equipment.78 Two years later, China trained 300 Burmese air force and naval officers and offered additional staff places in Chinese staff colleges.79 Many Burmese officers have received trainings from Chinese PLA, but no details were available. Myanmar has sought to develop its strategic military facilities with the help of China since 1988. As far back as the early 1990s, rumors that China was providing technical assistance to Myanmar in the construction of the Hainggyi Island facility on Great Coco Island in the Andaman Sea were prevalent in the region.80 In the following years, it was extensively reported that China was involved in the radar installation on Coco Island-which is the gateway to the Indian Ocean-in order to monitor regional military activities. Although both sides denied Chinese involvement at the naval bases on Coco Island, experts believed that both Burmese and Chinese technicians were working together in the area to operate the military equipment. As Desmond Ball said, the Chinese technicians only provided new equipment, repaired existing equipment, or provided technical assistance.81 Apart from Coco Island, there were a number of other sites where Chinese military involvement was suspected. According to Andrew Selth, these included the port of Bassein which is close to Yangon, the naval facilities at Sittwe and Mergui, as well as many small intelligence collection stations along the coast of Myanmar.82 Additionally, Myanmar has also developed its local defence industry capabilities with Chinese assistance. In 1991, Chinese 75 South

China Morning Post [53, p. 151]. [50, p. 151]. 77 Selth [15, p. 190]. 78 Lintner [52, p. 23]. 79 Rodman [47]. 80 Selth [54, p. 4]. 81 Desmond Ball Unbound [55]. 82 Selth [54, pp. 13–15]. 76 Myoe

3.6 Engaged with China

61

engineers inspected a site near Magweto to build a factory to produce M21 semiautomatics, M22 assault rifles, and M23 light machine guns, as well as 7.62 mm ammunition for these weapons.83

3.7 Expanded Diplomatic Relations Despite the close engagement with China, Myanmar attempted to advance its external relations so as to get more support and assistance while slightly reduce its fastgrowing reliance on China. From at least the mid-1990s, Myanmar began improving its cool relations with regional states, such as India, ASEAN, Russia, Japan, and maintained minimum connections with the US. From the Burmese perspective, India is another main source of political support and economic assistance for Myanmar. In addition, the Burmese generals expected to introduce India to the region to reduce its serious concerns about the cordial Sino-Myanmar relations. Meanwhile, New Delhi made a major policy shift to engage with the Burmese military regime due to several economic and strategic considerations mainly including the ‘look east’ policy, the ethnic rebels in northeast India, and China’s rising influences in Myanmar.84 Given this, Burmese diplomats began to contact their Indian counterparts and tried to repair the damaged relations deteriorated during the late 1980s and early 1990. Nonetheless, the bilateral ties had not reach big progresses in the 1990s because of the mutual distrust between the two governments. Actually, although India stopped criticising the junta, it has taken few measures to restrain the exiled Burmese democrats. Myanmar also turned a blind eye to the Indian rebels who sheltered in the Western Myanmar and used them as a bargaining chip to win India’s support. Myanmar-India relations have gained strong momentum since 2000 because of Myanmar’s high demands for political support and economic assistance. Myanmar started to see India as a significant partner and a strong counterbalance to China with the rise of India. In January 2000, Maung Aye paid his first state visit to India, during which both sides discussed joint operations against the insurgencies and terrorist attacks in the border areas, economic relations, physical connectivity, and tourism, and agreed to strengthen economic and security cooperation.85 Ten months later, he visited New Delhi again and promised to take pragmatic actions to safeguard the peace and stability along the border.86 In October 2004, Than Shwe visited New Delhi, the first visit by a top Burmese leader as well as the highest-level visit between the two countries over the past two decades. During this visit, Than Shwe reaffirmed Myanmar’s zero tolerance of the anti-Indian activities on Burmese soil, signed an agreement with India on fighting against the Indian rebels based in northern Myanmar, and supported India’s efforts to become a permanent member of 83 Capie

[56, p. 58]. and Jagan [31, pp. 295–296]. 85 Annual Report 1999–2000 [57, p. 7]. 86 Annual Report 2000–2001 [58, p. 7]. 84 Egreteau

62

3 Swung to China: Myanmar’s China Policy (1988–2004)

the United Nations Security Council (UNSC). He also encouraged further expansion of trade and energy cooperation between the two countries, and convinced India that Myanmar could play a crucial role in India’s ‘look east’ policy. Myanmar pledged to continue to work closely with India within regional organisations, such as The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), ASEAN, Asia Cooperation Dialogue (ACD), and the Ganga-Mekong cooperation.87 Through the remarkable visit, Than Shwe substantially transformed Myanmar-India relations from an economic relationship to a political and strategic one, where Myanmar would not only focus on economic cooperation, but would also pursue more political and strategical benefits, especially obtaining India’s support for its political reforms and balancing the growing Chinese influence. Myanmar has maintained a low level military relations with India throughout the 1990s and the early 2000s. In January 2001, the Indian Chief of Naval Staff, Admiral Sushil Kumar, visited Yangon, the first visit led by an Indian Naval Chief in the last two decades. To reciprocate, Burmese Chief of Navy Staff Vice Admiral Kyi Min travelled to Delhi, Mumbai, and Kolkata for his first official visit in November this year. Thereafter, frequent mutual visits by the senior officers of the two navies have taken place, thereby pushing the navy-to-navy cooperation between the two countries. Apart from the frequent high-level visits, both Myanmar and India have also initiated active port visits and regular military exercises to expand the military cooperation between the two navies. In December 2002, the first Indian flotilla called at Thilawa port in Yangon, after permission from the Burmese government. In the following May 2003, two warships from the Indian Coast Guard called at Thilawa. Myanmar has been included in various military exercises led by the Indian Navy, such as the first Myanmar-India joint naval exercise in the Andaman Sea in 2003. It was reflected that Myanmar tries to diversify military relations by increasing more connections with other significant military powers. Besides, Myanmar has started to import various military equipment, including tanks, guns, air-craft, transport helicopter, radars, and sonars, from India since 2000. Meanwhile, the Burmese leaders began negotiations with a troika of the ASEAN to become a full member of the regional organisation in late 1993, so as to enhance national security and regime security.88 In November 1996 and July 1997, Myanmar was granted official observer status and accepted as a full member of the ASEAN respectively. Since then, ASEAN has become a major economic partner, political supporter, and diplomatic shelter for Myanmar, which helped Myanmar improve its external relations and reduce its reliance on China. In November 1999, Than Shwe participated at the 3rd ASEAN informal summit held in Manila in order to promote bilateral cooperation between Myanmar and the ASEAN nations.89 Since 2000, Myanmar has continued to benefit from ASEAN’s political support and diplomatic protection in various regional and international forums. For instance, at an International Labor organisation’s Governing Body meeting in November 2000, 87 Speech

by Senior General Than Shwe [59]. [60, pp. 3–4]. 89 Senior General Than Shwe [61]. 88 Myoe

3.7 Expanded Diplomatic Relations

63

where sanctions were imposed on Myanmar, some ASEAN countries proposed an alternative draft that would delay the measure.90 ASEAN has continued to take Myanmar’s side on human rights issues and has successfully blocked Western attempts to isolate Myanmar in bloc-to-bloc relations.91 It also stood by Myanmar at informal and formal ASEAN Ministerial Meetings, ASEAN Summits, ASEAN-EU Dialogues, ASEAN-US Ministerial Meetings, and ASEAN-US Dialogues, with the intent of maintaining cohesion within ASEAN and encouraging continuous progress on the democratic transition in Myanmar. Even there was an outcry about Myanmar’s bloody suppress on the democrats in May 2003 from the West, Myanmar was not only permitted to attend the ASEAN Summit, but received strong political and diplomatic support from ASEAN. Some ASEAN states even successfully resisted US President George W. Bush’s attempts to denounce Myanmar at the APEC Forum.92 Whereas, ASEAN began to push for Myanmar’s democratic transition in the mid-2000s due to the rising pressure from individual member states and the Western countries, and the demand for raising the international profile of ASEAN.93 This upset the Burmese generals very much. In fact, in July 1998, Myanmar had rejected a flexible engagement policy proposed by Thai Foreign Minister Surin Pitsuwan to mediate between the military government and NLD at the ASEAN Summit. The foreign ministers of ASEAN members had also discussed the junta’s detention of Aung San Suu Kyi at the ASEAN Foreign Ministerial Meeting in June 2003, though no measures were taken against Myanmar.94 At the ASEAN Summit in November 2004, some member states had privately asked the military regime to proceed with the democratic transition in Myanmar.95 ASEAN’s growing concerns over the Myanmar from 2003 onward made the Burmese generals reassess their relations with ASEAN,96 resulting in Myanmar’s withdrawal from the regional forum and leading to a setback in Myanmar’s friendship with ASEAN. In order to gain another diplomatic shelter and weapon supplier and reduce its high dependence on Chinese military hardware, Myanmar embarked on developing a warm relationship with Russia in the early 2000s. It coincided with Russia’s strategic intention of getting a foothold in Southeast Asia through Myanmar.97 In 2000, Myanmar and Russia signed a joint declaration that defined the basic principles of bilateral relations, paving the way for defence and energy cooperation between the two countries in the following years.98 Nevertheless, the bilateral ties were quite limited, which only focused on arms procurement. From 1988 to 2004, Myanmar purchased a total value of 422 million USD worth of Russia weaponry, which was 90 Maung

Than [62, p. 120]. p. 154. 92 Hlaing [22, pp. 90–91]. 93 Katanyuu [63, p. 825]. 94 Hlaing [22, pp. 90–91]. 95 Hlaing [64, p. 178]. 96 Stephen McCarthy [65, p. 912]. 97 Ludmila Lutz-Auras [66, p. 167]. 98 K Yhome [67]. 91 Ibid,

64

3 Swung to China: Myanmar’s China Policy (1988–2004)

41.98% of Myanmar’s total arms imports in the same period. Russia, therefore, has overtaken China to become the biggest weapon supplier for Myanmar since 2000. In spite of the cooling relationship during the SLORC era, both Myanmar and Japan expressed growing desires to reengage with each other from the late 1990s. For the Burmese leaders, the Japanese development aids could be employed to modernise the country and help Myanmar reduce its reliance on Chinese economic resources. While the Japanese government was under great pressure from the business circle, which had built close connections with Myanmar in the pre-1988 period, to adjust the previous non-engagement policy. Furthermore, the Japanese diplomats believed that diplomacy and aid could combine to entice Myanmar back into the international community through encouraging democratization.99 And the Japanese strategists were concerned about the fast-growing China-Myanmar relations and decided to do something that could balance the Chinese influence in Myanmar.100 Given this, Japan’s Myanmar policy shifted from a ‘critical stance’ to ‘quiet dialogue’ in the latter half of the 1990s, in which it placed growing importance on human rights and democracy on the one hand, and preferred to use negotiation rather than sanctions to achieve its goals on the other hand.101 As the first step of quiet dialogue, Japan provided 2.5 billion yen for making improvements to Mingaladon Airport in Yangon in the name of humanitarian aid in February 1998. It reflected Japan’s resumption of an ODA provision for Myanmar for the first time in ten years.102 In January 1999, the Japanese Foreign Ministry invited Brigadier Kyaw Win, who was the director of the Burmese military intelligence, to visit Japan, a step further in its quiet dialogue policy urging the junta to democratize.103 During the visit, Kyaw Win promised to hold general elections after the adoption of the new Constitution in the coming years, while the Japanese participants expressed full understanding.104 In November 1999, Than Shwe met Japan’s Premier, Obuchi Keizo, at the ASEAN Summit held in Manila, the first highest-level contact between Myanmar and Japan since the military coup in 1988. Two days after the ASEAN Summit, former Japanese Premier Ryutaro Hashimoto led a 48-member private business delegation organised by the Nippon Foundation to visit Myanmar. Since then, Japan stepped up its pace to engage with the junta by increasing development assistance and maintaining frequent informal and formal interactions with Myanmar, so as to promote the democratization in Myanmar and expand Japan’s multiple interests in the country. Meanwhile, the junta also intensively lobbied for the Japanese government to officially resume ODA to Myanmar. In May 2002, Japan renewed its ODA to Myanmar to repair a hydroelectric generating plant, though it decided not to extend yen loans to Myanmar because of its weak debt paying

99 Black

[68, p. 346]. [78, p. 37]. 101 Seekins, [69, p. 93]. 102 Seekins [70, p. 18]. 103 Seekins [71]. 104 Brigadier General Kyaw Win [72]. 100 Schoff

3.7 Expanded Diplomatic Relations

65

ability.105 Although Japan was disappointed with SPDC’s detention of Aung San Suu Kyi in May 2003 and claimed to suspend new aid to Myanmar, it resumed a small-scale grant to the Non-Governmental Organisations (NGOs) in Myanmar in October 2003 and a large grant of 3.4 billion yen for reforestation in July 2004.106 The Burmese generals realised the high importance of the US and thus maintained minimum contact with the US in the area of anti-drug and humanitarian assistance.107 In November 1994, the junta allowed Thomas C. Hubbard, deputy assistant secretary of state for East Asia and the Pacific, to visit Myanmar, the highest level official visit between Myanmar and the US since the military coup in 1988.108 In July 1995, the junta released Aung San Suu Kyi, which resulted in the resumption of a training program offered by the US to the Burmese narcotics officials and financial cropsubstitution projects in the opium-growing regions of Myanmar.109 However, the de facto house arrest of Aung San Suu Kyi in September 1996 further deteriorated the fragile bilateral relations, led to severe economic sanctions being imposed by the US in May 1997. In the years following, the junta took various measures to de-legitimise Aung San Suu Kyi and marginalise her NLD in order to consolidate the military rule. These deliberate tricks, including the house arrest of Aung San Suu Kyi, the detention of NLD leaders, the closure of NLD branch offices, and the suppression of NLD supporters, resulted in more serious sanctions from the US. It imposed an arms embargo and a visa ban on senior Burmese military officials, and announced the prohibition of trade with Myanmar and an assets freeze to isolate the Burmese junta.110

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3 Swung to China: Myanmar’s China Policy (1988–2004)

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33. Hu Jin Tao Hui Jian Mian Dian Ke Ren Zhi Chu Zhong Guo Zheng Fu He Ren Min Zhen Shi Zhong Mian ‘Bao Bo’ You Yi [Hu Jintao Received Myanmar Guest and Pointed Out China Government and People Sino-Myanmar Pauk Phaw Friendship], Ren Min Ri Bao [People’s Daily], 22 Aug. 2003. https://www.ziliaoku.org/rmrb/2003-08-23-1#1283191 34. Ministry of Foreign Affairs of The People’s Republic of China, Hu Jintao Met with Myanmar Primer, 13 July 2004. https://www.mfa.gov.cn/chn//pds/gjhdq/gj/yz/1206_23/xgxw/t142949. htm 35. Statistic Yearbook of Myanmar, 2011, Myanmar Statistical Information Service. https://www. mmsis.gov.mm/sub_menu/statistics/fileDb.jsp 36. D.Z.Z. Naing, Trade Policy Reform in Myanmar, Economic and Social Commission for Asia and the Pacific (ESCAP). https://www.unescap.org/sites/default/files/Trade%20policy% 20reform-Myanmar_Daw%20Zin%20Zin%20Naing.pdf 37. K. Toshihiro, F. Mieno, Trade Foreign investment and Myanmar’s economic development during the transition to an open economy, Discussion Paper, Institute of Developing Economies (IDE), No. 116, Aug. 2007, p. 12. https://www.ide.go.jp/English/Publish/Download/Dp/116. html 38. K. Koji, Trade Policies and Trade Misreporting in Myanmar, Discussion Paper, Institute of Developing Economies (IDE), No. 326, Feb. 2012 p. 4, https://www.ide.go.jp/English/Pub lish/Download/Dp/326.html 39. J. Alamgir, Myanmar’s Foreign trade and its political consequences. Asian Surv. 48(6) (2008) 40. I. Brown, Burma’s Economy in the Twentieth Century (Cambridge University Press, Cambridge, 2013) 41. M.A. Myoe, Sino-Myanmar Economic Relations since 1988, Working Paper, Asia Research Institute, No. 86 (2007) p. 9. https://www.burmalibrary.org/sites/burmalibrary.org/files/obl/ docs2/MmEcoRelations.pdf 42. L. Xixin, Zhong Mian Bian Mao Fa Zhan Jin Cheng [The Development of Sino-Myanmar Border Trade], Dong Nan Ya Yan Jiu [Southeast Asian Studies], No. 5 (1997) 43. K. Toshihiro, Myanmar’s Border Trade with China: Situation, Challenge and Prospects in Mitsuhiro Kagami ed., Japan and Korea with the Mekong River Basin Countries, BRC Research Report, Bangkok Research Center, No. 3 (2010) p. 272. https://www.researchg ate.net/publication/265283185_Myanmar%27s_Border_Trade_with_China_Situation_Challe nge_and_Prospects 44. S. McCarthy, T Years of Chaos in Burma: Foreign Investment and Economic Liberalization under the SLORC-SPDC, 1988 to 1998. Pac. Aff. 73(2) (2000) 45. A Joint Declaration About the Cooperation Framework Documents of Bilateral Relations between China and Myanmar. Ren Min Ri Bao [People’s Daily], 12 Dec. 2001. https://www. people.com.cn/BIG5/shizheng/252/7057/7061/20011212/625175.html 46. Mian Dian Ling Dao Ren Hui Jian Zhang Wan Nian [Myanmar Leaders Met with Zhang Wannian], Ren Min Ri Bao [People’s Daily], 1 May 1996. https://www.ziliaoku.org/rmrb/ 1996-05-01-3#1045737 47. P.W. Rodman, The Burma Dilemma, The Washington Post, 29 May 1997. https://www.burmal ibrary.org/reg.burma/archives/199705/msg00582.html 48. B. Lintner, Lock and load, Far Eastern Economic Review, 13 Sept. 1990 49. The Delegation Returned to Yangon. Working People’s Daily, 30 Oct. 1989. https://www.ibi blio.org/obl/docs3/BPS89-10.pdf 50. M.A. Myoe, In the Name of Pauk-Phaw: Myanmar’s China Policy Since 1948 (ISAS, Singapore, 2011) 51. R.A. Bitzinger, Chinese Arms Production and Sales to the Third World, RAND, (1991), p. 6. https://www.rand.org/pubs/notes/N3334.html 52. B. Lintner, Myanmar’s Chinese connection, International Defence Review, (1994), p. 23. https://www.asiapacificms.com/articles/myanmar_chinese_connection/ 53. South China Morning Post: Beijing Backs Jet Trainer Purchase. The Burma Net News, 25 June 1998, https://www.burmalibrary.org/reg.burma/archives/199806/msg00441.html

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54. A. Selth, Chinese Military Bases in Burma: The Explosion of a Myth, Regional Outlook Paper (Griffith Asia Institute, No. 10, 2007) 55. Desmond Ball Unbound, The Irrawaddy, 12 Oct. 2016. https://www.irrawaddy.com/from-thearchive/desmond-ball-unbound.html 56. D. Capie, Small Arms Production and Transfers in Southeast Asia, Canberra Papers, Strategic and Defence Studies Centre at Australian National University, No. 146 (2002) 57. Annual Report 1999–2000, Ministry of External Affairs of India, New Delhi (2001) 58. Annual Report 2000–2001, Ministry of External Affairs of India, New Delhi (2002) 59. Speech by Senior General Than Shwe. The New Light of Myanmar, 31 Oct 2004, https://www. ibiblio.org/obl/docs/NLM2004-10-31.pdf 60. M.A. Myoe, Regionalism in Myanmar’s Foreign policy: Past, Present, and Future, Working Paper, Asia Research Institute, No. 73, September 2006 61. Senior General Than Shwe Attends 3rd ASEAN Informal Summit and Meetings of Heads of State/Government of ASEAN Nations and Heads of State/Government of Dialogue Partners. The New Light of Myanmar, 29 Nov. 1999. https://www.burmalibrary.org/NLM/archives/199912/msg00001.html 62. T.M.M. Than, Myanmar (Burma) in 2000 More of the Same? Asian Surv. 42(1) (2001) 63. R. Katanyuu, Beyond non-interference in ASEAN: the Association’s role in Myanmar’s national recociliation and democratization. Asian Surv. 46(6) (2006) 64. K.Y. Hlaing, Myanmar in 2004 another year of uncertainty. Asian Surv. 45(1) (2005) 65. S. McCarthy, Burma and ASEAN: Estranged Bedfellows. Asian Surv. 48(6) (2008) 66. L. Lutz-Auras, Russia and Myanmar-friends in need? J. Curr. Southeast Asian Aff. 34(2) (2015) 67. K. Yhome, Myanmar and Russia: Strengthening Ties, Institute of Peace and Conflicts Studies (IPCS), 4 Apr. 2007. https://www.ipcs.org/article/southeast-asia/myanmar-and-russia-streng thening-ties-2256.html 68. L. Black, Bridging between Myanmar and international society-Japan’s self-identity and Kakehashi policy. Pac. Rev. 26(4) (2013) 69. D.M. Seekins, Burma and Japan Since 1940: From ‘Co-prosperity’ to ‘Quiet Dialogue’ (NIAS Press, Copenhagen, 2007) 70. D.M. Seekins, Burma in 1998 little to celebrate. Asian Surv. 39(1) (1999) 71. D.M. Seekins, Japan’s ‘Burma Lovers’ and the Military Regime, Working Paper, Japan Policy Research Institute (JPRI), No. 60, Sept. 1999. https://www.jpri.org/publications/workingpa pers/wp60.html 72. Brigadier General Kyaw Win and Delegation Successfully Concludes Visit to Japan, Burma Library, 28 Jan. 1999. https://www.burmalibrary.org/reg.burma/archives/199901/msg00433. html 73. A.L. Clark, Burma in 2002 a year of transition. Asian Surv. 43(1) 2003 74. M.P. Callahan, Burma in 1995 Looking beyond the release of Aung San Suu Kyi. Asian Surv. 36(1) (1996) 75. B. Vaughn, W.M. Morrison, China-Southeast Asia Relations: Trends, Issues, and Implications for the United States, Congressional Research Service (CRS) Report, 4 Apr. 2006. https:// www.fas.org/sgp/crs/row/RL32688.pdf 76. China Will Never Interfere in Myanmar’s Internal Affairs: General Khin Nyunt Calls on PRC President Hu Jintao, The New Light of Myanmar, 19 July 2004. https://www.ibiblio.org/obl/ docs/NLM2004-07-20.pdf 77. D. Singh (ed.), Southeast Asian Affairs 2010 (Singapore, The Institute of Southeast Asian Studies, 2010) 78. J.L. Schoff, A US-Japan Foreign Policy Alliance for Myanmar. Asia Pacif. Rev. 21(2) (2014) 79. T.M.M. Than, State Dominance in Myanmar: The Political Economy of Industrialization (ISEAS Publishing, Singapore, 2007)

Chapter 4

Alienated from China: Myanmar’s China Policy (2005–2010)

After the purge of the moderate leader Khin Nyunt in October 2004, civil unrest and natural disaster successively happened and thus challenged the military regime’s authority. Meanwhile, the US still remained a major threat, and the rising Chinese influence constituted another danger to Myanmar. For these reasons, the Burmese conservative leaders returned to isolationism and focused on domestic affairs, resulting in a distant relationship between Myanmar and China as well as a faded active diplomacy.

4.1 Moderate Sino-US Competition Sino-US relations improved in the mid-2000s due largely to China’s overt support for US’s anti-terrorism war in the Middle East and South Asia and the joint cooperation on anti-terrorism. In this context, China seized the opportunity to expand its influence in Southeast Asia without raising serious concerns from the US which placed the anti-terrorism as the top priority. Since the early 2000s, China sharply enhanced its trade and investment cooperation and cultivated cordial political relations with ASEAN, and actively participated in ASEAN forums, resulting in a fast growing strategic partnership between China and ASEAN. As shown on Table 4.1, ASEAN’s total trade with China has experienced a steady growth since 2005, which led China to become ASEAN’s first biggest import source since 2007 and ASEAN’s first largest export source since 2012. Moreover, China’s bilateral trade with ASEAN surpassed the US-ASEAN trade for the first time in 2008, and China eventually became ASEAN’s largest trade partner in 2010. China has increased its investment in Southeast Asia under the “go global” strategy launched in the early 2000s, but it was still far behind the US. As shown on Table 4.2, China’s FDI in Southeast Asia experienced a very slow growth before 2003, a relatively steady rise from 2004 to 2009, and a dramatical increase after 2009. As

© Springer Nature Singapore Pte Ltd. 2021 N. Peng, International Pressures, Strategic Preference, and Myanmar’s China Policy since 1988, https://doi.org/10.1007/978-981-15-7816-8_4

69

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4 Alienated from China: Myanmar’s China Policy (2005–2010)

Table 4.1 ASEAN’s total trade with China and the US (2005–2010) (USD billion)

Year

China

US

2005

113,393.6

153,918.3

2006

140,049.4

161,274.3

2007

171,089.0

178,188.7

2008

196,863.3

185,295.1

2009

178,223.1

148,780.1

2010

231,855.6

186,542.7

Source ASEAN Statistical Yearbook and ASEAN Merchandise Trade Statistics Database

Table 4.2 FDI inflows into ASEAN by China and US (2005–2010) (USD million)

Year

China

US

2005

451.7

2,949.3

2006

815.1

2,629.3

2007

899.4

7,166.0

2008

1,587.1

4,853.9

2009

1,125.8

41.9

2010

2244

11,341

Source ASEAN Statistical Yearbook and ASEAN Foreign Direct Investment Statistics Database

indicated in Table 4.2, China’s FDI in ASEAN in 2010 was 22.44 billion USD, which was only 19.5% that of the US in the same year. China signed and upgraded a large number of economic agreements with ASEAN with an attempt to promote trade and investment cooperation. These include the Framework Agreement on Comprehensive Economic Cooperation (2002), the Agreement on Trade in Goods of the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and PRC (2004), the Agreement on Trade in Services of the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and PRC (2007), and the Agreement on Investment of the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and PRC (2009). The China-ASEAN FTA came into effect on 1 January 2010 and was praised as a milestone in China-ASEAN economic ties by both sides. Additionally, a series of cooperation mechanisms, including ASEAN+3 Economic Ministers Consultations (2000) and the China-ASEAN Expo (2003), were created for a prosperous economic relations between China and ASEAN. As a main instrument to expand influence in Southeast Asia, China offered a large amount of financial aid-including the construction of infrastructure projects, technical and human resources cooperation, humanitarian assistance, and debt relief-to ASEAN countries, and became the largest bilateral aid donor in Southeast Asia.1 1 Lum

[1].

4.1 Moderate Sino-US Competition

71

Since China offers assistance without attached preconditions, it often garners appreciation that is disproportionate to the size of its aid from the recipient governments.2 In comparison, the US often places economic or political preconditions on foreign aid and therefore usually refused by the recipient states. In the following years, China-ASEAN relations were promoted substantially through a series of diplomatic arrangements by both sides. These mainly involved the appointment of China’s first ambassador to ASEAN in December 2008, and the East Asia Summit (2005) to improve China-ASEAN relations. China’s fast growing influence in Southeast Asia drew increasing attentions from some American scholars who see China playing a long-term game aiming at curtailing US influence and weaving a close-knit economic and security community with China at the centre.3 In their opinion, China has constantly committed to expanding its influence at the expense of the US and other powers in Southeast Asia.4 Consequently, China’s rise and its growing presence in Southeast Asia have been key factors in the US’s expanding engagement with Southeast Asia.5 Specifically, the thriving China-ASEAN trade and investment relations have successfully weakened American economic supremacy in the region, resulting in a consensus that Southeast Asian states have relied heavily on China rather than the US for economic development. What’s more, China’s improved relations with the maritime Southeast Asia and its dominant influence in mainland Southeast Asia have aroused concerns among the American, who believes that China is trying to restore its traditional leadership in the periphery by re-establishing either a ‘tributary system’ or a ‘sphere of influence’. In addition, China’s fast-growing military strength is developing beyond only preventing national secession, and is posing serious challenges for US security leadership in Asia.6 In fact, China took a series of actions to reform the Asian security architecture, which has traditionally been dominated by US bilateral alliances.7 Faced with challenges of Beijing’s rising economic influence in Southeast Asia, Washington has working on many ways to expand US-ASEAN economic ties.8 In 2006, the US-ASEAN Trade and Investment Framework Agreement (TIFA) was signed, which opened opportunities to further trade and commercial ties between the US and ASEAN.9 After President Obama took office in 2008, the US launched TPP in 2008 with the aim to integrate the great economic powers and potential rising economies of Asia Pacific into a board free economic community. Besides, the US has constructed a predominant political role based on its alliance networks in Southeast Asia ever since the Cold War. In the past decades, Washington constantly 2 Ibid,

pp. 4–5. and Steinberg [2]. 4 Sutter [3, 74, p. 24]. 5 Cook [4, 76, p. 39]. 6 Sutter [3, p. 49]. 7 International Institute of Strategic Studies, Strategic Survey 2003/4: An Evaluation and Forecast of World Affairs (London: Oxford University Press, 2004), p. 226 in Vaughn and Morrison [5, p. 8]. 8 Limaye Satu [6, 75, p. 46]. 9 US-ASEAN Business Council [7]. 3 Dalpino

72

4 Alienated from China: Myanmar’s China Policy (2005–2010)

strengthened old alliances and built new partnerships with some Southeast Asian states with the intent of balancing the growing Chinese influence in the region. For instance, the US signed the ASEAN Treaty of Amity and Cooperation in 2009 and became the first non-ASEAN country to name an ambassador to ASEAN in 2008, as well as the first to establish a permanent mission to ASEAN in 2010. Nonetheless, ASEAN was inferior to anti-terrorism which was the U.S. Administration’s primary task in the 2000s, which limited growth of U.S. influence in Southeast Asia. Due to U.S. predominance in Southeast Asia, it still occupied the favorable position in the competition with China, which ensured a asymmetrical competition between the US and China in the region. Moreover, as the US devalued the significance of ASEAN in its Asia policy, it had not spent a large number of resources on containing China in Southeast Asia, led to a moderate competition between China and the US in the second half of the 2000s. Additionally, the US-China power rivalry in Southeast Asia was confined to the areas of economy and politics in this period. In that case, Myanmar could foster relations with China, and thereby maximise benefits from the close Myanmar-China relations, and had to be aware of the rising Chinese influence and the U.S. threat at the same time.

4.2 Low-Level U.S. Threats and Rising Chinese Interference Given the perceived lack of genuine political reforms in Myanmar since 2004, the Bush Administration renewed the Burma Freedom and Democracy Act 2003 in August 2006, extending economic and financial sanctions on Myanmar.10 What’s more, the US proposed a resolution taking against the regime at the UNSC in January 2007, so as to impose further pressures to Myanmar. Half a year later, the junta suffered from global outcry due to the brutally repression on anti-government demonstrations in September 2007. The US, together with the EU, expanded a list of military officials and their associate business under a travel ban and assets freeze, and banned the import of gems and timber from Myanmar.11 During the following Cyclone Nargis in May 2008, the junta faced the most serious military threat from the US since the U.S. navies had vessels anchored off Myanmar’s coast in order to offer relief supplies to Myanmar. However, since Obama came to office at the end of 2008, the US shifted from the hostile policy to the pragmatic engagement with the junta due to the failed sanction policy adopted by previous American governments. During her Asia trip in February 2009, U.S. Secretary of State Hillary Clinton said U.S. policy would retain sanctions but also promote engagement with the regime.12 It resulted in increasing diplomatic contacts between the US and Myanmar in the following years. These included U.S. 10 Thawnghmung 11 Thawnghmung 12 Seekins

[10].

and Myo [8]. and Myo [9].

4.2 Low-Level U.S. Threats and Rising Chinese Interference

73

senator from state of Virginia James Webb’s Myanmar tour in August 2009, and U.S. Assistant Secretary of State for East Asian Affairs Kurt Campbell’s Myanmar trip in November 2009 and May 2010. Yet, the US failed to promote substantial progress in the democratisation in Myanmar through its “Action to Action” policy. As a result, it took a negative stance on Myanmar’s general elections in November 2010 by asserting that the polls would be ‘neither free nor fair’, intending to pressure the junta to push forward the democratic process. Despite the increasing economic cooperation between China and Myanmar in the second half of the 2000s, China had operated at or near the bottom of parallel ladders of intervention in the political transition in Myanmar.13 Actually, despite its veto on the UN resolution proposed by the US to take against the Burmese regime in January 2007, Chinese ambassador to UN, Wang Guangya, made several demands on the junta at the UNSC meeting in the following days. These included giving due consideration to the recommendations from the international community and ASEAN, speeding up the process of inclusive dialogue and reforms, and supporting the Secretary General’s good offices.14 Wang’s speech was observed as a key shift in Beijing’s Myanmar policy since China had begun to express discontent on public occasions with the slow progress on the political reforms in Myanmar.15 Soon after the ‘Saffron Revolution’ in September 2007,16 China required the junta to restore political stability as soon as possible, properly resolve related issues, and firmly proceed with the democratic process to suit the national reality of Myanmar.17 Several days later, Li Baodong, the ambassador and permanent representative of China to UN at Geneva, endorsed a resolution on the situation of human rights in Myanmar in the UNHRC.18 It was the first time that China had approved such a resolution, strongly deploring the Myanmar government’s bloody repression of peaceful protesters, revealing China’s rising discontent with the junta. China also contacted the opposition parties in Myanmar so that its interests would not be affected in case the military regime collapsed.19 In general, China made constant efforts to influence policy-making in Myanmar in order to maintain stability in Myanmar, and thus severing Chinese economic and strategic interests. In order words, China’s main concern was not the regime type, but domestic stability in Myanmar.20 Myanmar, therefore, has to avoid Chinese interference, though it could benefit from the close China-Myanmar relations.

13 Holliday

[11].

14 Ibid. 15 Holliday

[11, p. 489]. ‘Saffron Revolution’ refers to the demonstrations launched by monks in Myanmar in September 2007. 17 Tang Jia Xuan Hui Jian Mian Dian Guo Jia He Ping Yu Fa Zhan Wei Yuan Hui Zhu Xi Te Shi [12]. 18 US Department of State [13]. 19 Li and Yongnian [14]. 20 Ibid. 16 The

74

4 Alienated from China: Myanmar’s China Policy (2005–2010)

4.3 Domestic Turbulence Since the house arrest of Khin Nyunt in October 2004, the top priority of the junta was to remove Khin Nyunt’s influences within the government and end the longstanding factional struggle between the intelligence and army units. As a first step, the junta fired Khin Nyunt’s intelligence community, and the new intelligence agencies were under control of the military.21 In addition, most senior diplomats were recalled and replaced by appointees favourable to Than Shwe.22 Second, it announced major ministerial shuffles and significant promotions within the Tatmadaw to increase efficiency in policy implementation and ensure institutional continuity through the recruitment of younger military officers.23 Third, it designed the basic principles of the new Constitution with an attempt to protect the military interests mainly. These mainly included the requirements that the commander-in-chief control 25% of the seats in the parliament, the appointment of the vice president and three key positions-defence, home affairs, and border affairs, and the authority to dismiss a civilian government and re-establish martial law.24 But despite that the junta consolidated its power bases through political purges, personnel appointment, and new Constitution, it was seriously challenged by antigovernment demonstrations and outside interference mainly from the West. After the bloody clashes between the government supporters and democrats in May 2003, the junta took various measures to de-legitimise Aung San Suu Kyi and marginalise her NLD. These deliberate tricks mainly included the house arrest of Aung San Suu Kyi, the detention of NLD leaders, the closure of NLD branch offices, and the suppression of NLD supporters. Consequently, the NLD members launched sporadic protests against the military regime and thus caused considerable international concerns. The West and even the Asian states were increasingly discontented with the slow process of pushing political reforms in Myanmar, and therefore pressed the Burmese junta to speed up the democratic process. Then, the anti-government demonstrations called “Saffron Revolution” in September 2007 constitutes the military regime’s most serious test. Given the fierce domestic protests, the Burmese generals tightened their control of society by refraining from impeding the activities of local civil society groups, attempting to prevent them from organising more effective actions against the regime. Soon after the “Saffron Revolution”, Myanmar suffered most from the natural disaste-Cyclone Nargis in May 2008. The junta was not only anxious about the armed intervention from the West which sent its fleet to Myanmar’s coastal areas in to help provide disaster relief, but also criticised heavily for its restrictions on foreign aid. In the meantime, in order to forbid Aung San Suu Kyi from becoming president, the junta set a special rule that persons married or once married to foreigners could 21 Hlaing

[15]. [16]. 23 Thawnghmung and Myo [8, p. 195]. 24 Seekins [17]. 22 James

4.3 Domestic Turbulence

75

not hold political office in the 2008 Constitution.25 As a result, the NLD boycotted the elections and accused the military of manipulating the elections, and the West claimed the elections to have been neither free nor fair. In the context of the mounting internal and external pressures, the Burmese generals tried to isolate Myanmar from the world and mainly focused on implementing its roadmap to the ‘disciplined democracy’,26 so as to avoid foreign interference in its democratic process. On one hand, the junta fielded its own proxy party, the Union Solidarity and Development Party (USDP),27 before the 2010 elections with an attempt to win those elections. On the other hand, it increased exportation and foreign investment in order to consolidate the economic foundation of the military rule which was adversely affected by the Western economic sanctions and the natural disaster. In practice, the Burmese economy was growing due to the exportation of high-value raw materials to neighbouring countries, such as teak, gemstones, and especially oil and gas.28 Most of the revenue generated from such exportation and investment was used to strengthen the military rule, which makes the junta to become increasingly impervious to external criticism.29 Given the careful preparation, the USDP successfully won a landslide victory in the general elections held in November 2010. According to the announcement of the Myanmar government, the USDP got 259 seats (58.86% of the total seats) in the Pyithu Hluttaw and 129 seats (57.59%) in the Amyotha Hluttaw, and the National Unity Party (NUP) captured 12 seats (2.73%) and 5 seats (2.23%) respectively. Meanwhile, the main opposition party, the NLD, was excluded from the elections, and the National Democratic Force (NDF), which had split from the NLD, won only 8 seats and 4 seats respectively. In addition, minority parties were also marginalised in the elections. For example, the Shan Nationalities Democratic Party (SNDP) won 18 seats (4.09%) and 3 seats (1.33%), and the Rakhine Nationalities Development Party (RNDP) won 9 seats (2.05%) and 7 seats (3.13%) respectively. The dominance of the pro-government parties and the military representatives in the parliament guaranteed the generals’ continued rule in Myanmar.

25 Ibid. 26 The ‘disciplined democracy’ is defined by the SPDC to identify the democratic process in Myanmar. It is totally different from the democracy expected from the West. In essence, it means that the democratic process must be manipulated by the military, and the generals’ transition ensured a return to civilian rule without relinquishing de facto military control of the government. See Bünte [18]. 27 The new established USDP is an offshoot of the Union Solidarity and Development Association (USDA), a mass organisation with approximately 12 million members established by SLORC in 1993 to support its political agenda. See Bünte [18]. 28 Seekins [17, p. 172]. 29 Thawnghmung and Myo [8, p. 197].

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4 Alienated from China: Myanmar’s China Policy (2005–2010)

4.4 Than Shwe: Conservative Leader Despite the fact that Than Shwe had a veto power in the policy-making, especially after the death of Ne Win, foreign affairs had been controlled by Khin Nyunt. However, following the purge of Khin Nyunt in 2004, Than Shwe took over the diplomatic service by replacing the foreign minister and ambassadors, and remained the arbiter of power in foreign affairs. Therefore, it is necessary to investigate the personality and ideology of Than Shwe and his decisive influence on Myanmar’s diplomacy. Whereas, it is difficult to draw an accurate image of Than Shwe, a tyrant nobody knows and who seems to have been several different people. For example, a senior UN envoy considered him to be ‘quite a vain guy’ who ‘dresses well, sits straight and looks good.’ To a former Thai diplomat, however, he was ‘a stout man with glasses and teeth covered in red spots from betel nut’.30 Given this, this section tries to summarise the main characteristic of Than Shwe by examining his education and career experience, as well as his government policy. Than Shwe was born in Minzu village near Kyaukse, a tiny town in Mandalay, in February 1933. He completed his high school education in Kyaukse in 1949, and worked at the Meikhtila Post Office as a postal clerk. Later, he was enrolled in the ninth intake of the Army Officer Training School, and started his military career after graduation in 1953. He then worked his way up from a squad leader to a brigadier general in 1984. He was rapidly promoted to major general, lieutenant general, and senior general in 1986, 1987, and 1992, respectively. Meanwhile, he also became the Chairman of the SLORC/SPDC and Command-in-Chief of Tatmadaw in 1992, the most powerful figure in Myanmar after the Cold War. His extensive military experiences, especially in the operations combating the ethnic rebels and their foreign backers, jointly shaped Than Shwe’s world view and style of leadership. As many scholars concluded, Than Shwe had a deep siege mentality due to his long battle with the ethnic minorities.31 In practice, he was involved in various military operations carried out by the 77th LID in Karen State, Irrawaddy Delta region, and Bago Hills between 1969 and 1971, and was also involved in offensive operations against various insurgents carried out by the 88th Light Infantry Division in Bhamo region, northern Shan State, southern Shan State, and eastern Shan State starting in 1971.32 Hence, Than Shwe heavily emphasised the risks of foreign invasion, and countered any form of external influence-not just political, but also economic, social, and cultural.33 For instance, to rid itself of the surveillance of ‘unfriendly forces’ who could be in collaboration with ‘foreign agents’ in Yangon, and to keep away from the coastline where it was certainly vulnerable to amphibious warfare, Than Shwe moved the capital from Yangon to a new place in central Myanmar called Naypyitaw in November 2005.34 In May 2008, he rejected the 30 Myanmar’s 31 Myanmar: 32 Shwe

Than Shwe: A Tyrant Nobody Knows [19]. The Military Regime’s View of the World [20].

[21]. [22]. 34 Myo [23]. 33 Haacke

4.4 Than Shwe: Conservative Leader

77

relief supplies delivered by the West through naval vessels and helicopters, because he viewed such intervention as an intrusion of national sovereignty.35 At the same time, he rarely travelled abroad and avoided summit diplomacy, where Myanmar was usually criticised.36 In July 2005, the junta suddenly announced that it would relinquish the ASEAN Chairmanship, reflecting its reluctance to become the centre of international concern and its preference for concentrating on domestic priority.37 All of the above clearly show Than Shwe’s ‘isolation’ strategic preference in international relations, which caused its negative responses to the external environments. Internally, Than Shwe was perceived as a hardliner who harshly suppressed antigovernment forces and rejected any concessions on the democratisation in Myanmar. Obviously, he refused to reconcile with Aung San Suu Kyi and even rejected meeting with her, though he was under great pressures from the West to do so. In fact, he was dissatisfied with Khin Nyunt’s moderate stance on Aung San Suu Kyi and her NLD, which might be one of the significant reasons why Khin Nyunt was fired. Further, although reaffirmed the government’s commitment to the ‘Seven Points Roadmap’, he took control of the democratic process and firmly rejected any suggestions and pressures on it. Finally, he maintained the military veto power in the country even after the successful transition of the military regime to a civilian government. Nonetheless, Than Shwe supported Myanmar’s participation in ASEAN and pursued cooperation with regional powers for relieving external pressure. He also relaxed some state control over the national economy and allowed the foreign business activities in Myanmar, but he was aware of the undue economic influence of foreign states and its political consequences. In addition, he welcomed foreign aid, but refused to compromise with the democratization process. In short, Than Shwe could be identified as a conservative leader, if not a hardliner, due to his strong refusal of internal and external stress. Compared to Khin Nyunt, he was too sensitive to threats, and thus overreacted to risks. For this reason, the junta did not take the chance to either approach to the US or bandwagon with China. Conversely, Than Shwe focused on implementing the ‘discipline democracy’, and kept minimum foreign connections with the aim of obtaining political support and economic assistance.

4.5 Myanmar’s Assessment of External Environments The US was the leading Western power against the Burmese military regime because of the stagnant political reforms and the house arrest of Aung San Suu Kyi, which makes Washington a major danger to Myanmar. However, when the US announced a pragmatic engagement policy towards Myanmar in early 2009, the junta saw a possible thaw in relations between the two countries. By initiating conservations with the U.S. diplomats and allowing US’s contatcs with Aung San Suu Kyi, the 35 Seekins

[17, p. 168]. [24]. 37 James [16, p. 165]. 36 Myo

78

4 Alienated from China: Myanmar’s China Policy (2005–2010)

junta delivered an unequivocal message that Myanmar wanted better relations with the US.38 Nevertheless, the Burmese generals did not really trust the Americans. Rather, they feared U.S. interference and refused to make any concessions related to the elections, especially with regard to holding political dialogue with Aung San Suu Kyi.39 Given this, the junta did not seize the good opportunity to turn pro-America and thus to reintegrate into the international community. Meanwhile, the junta was increasingly aware of and uncomfortable with falling under China’s shadow and the presumed growing Chinese influence in Myanmar.40 First of all, Chinese pressures on Myanmar’s democratic process were perceived as foreign interference and therefore resisted by the Burmese generals. Second, the junta was increasingly concerned about the adverse consequence of Chinese mega-projects. In fact, since the Myitsone Dam project has been proposed, the local communities and various national and international NGOs have criticised it heavily for harming the environment. In October 2009, two month before the construction of the Myitsone Dam, the Kachin Development Networking Group (KDNG), a major civil society group inside Kachin State and abroad founded in September 2004, released its second report—‘Resisting the Flood’ against the construction of dams on the Irrawaddy River.41 Later, the first bomb blasts targeting the Myitsone Dam occurred on 17 April 2010 and resulted in one Chinese worker being injured, reflecting the locals’ growing resentment towards the project.42 Given this, a growing mutual distrust and discontent emerged between Myanmar and China in the mid-2000s, led to decreasing political exchanges between the two countries. Third, there was rising discontent among the Burmese commanders, who complained about the poor quality of Chinese weapons. For instance, the Y-8 trains were grounded for nearly one year because of a lack of spare parts, and anti-aircraft missile simulators were faulty too.43 The Myanmar military, therefore, was prompted to procure more advanced and better quality military equipment from other countries, particularly Russia. Further, the fast-growing defence cooperation between Myanmar and China raised increasing concerns from Myanmar’s Asian neighbours, which believed that the national security and regional stability was threatened by China’s suspected involvement in the building of various military intelligence stations and other military infrastructure along coastal Myanmar, and the deployment of Chinese naval technicians to operate this intelligence equipment.44 The rising external pressures put Myanmar in the difficult position of reducing its heavy reliance on Chinese military hardware, and thereby mitigating the growing anxieties of neighbouring countries. 38 Quinn

and Chatterjee [25]. [26]. 40 Myo [24]. 41 Resisting the Flood [27]. 42 Appendix, Chronology of the Myitsone Dam at the Confluence of Rivers Above Myitkyina and Map of Kachin State Dams [28]. 43 Myoe [29]. 44 Bodansky [30]. 39 Haacke

4.6 Alienated from China

79

4.6 Alienated from China 4.6.1 Declining Political Exchanges China’s long-time intention to further advance its economic and strategic interests in Myanmar was frustrated due to the ousting of pro-Beijing leader Khin Nyunt in the late 2004. Many Chinese scholars concluded that the dismissal of Khin Nyunt was the most important effort taken by Than Shwe to reduce Chinese influence in Myanmar. Since then, a growing rift was emerged in China-Myanmar relations, among which the first one is the slight decline in the political exchanges between the two countries. After the political reshuffle in October 2004, the high-level visits between Myanmar and China were suspended until April 2005 when Senior General Than Shwe met Chinese President Hu Jintao at the Asian-African Summit. In the following months, two meetings were held between the top leaders of the two countries in multilateral forums, which included Myanmar Premier Soe Win’s China tour at the Second GMS Summit and ASEAN-China Business and Investment Summit in July and October 2005. In July 2005, Chinese Foreign Minister Li Zhaoxing went to Myanmar to show support for Myanmar’s decision to relinquish the ASEAN Chairmanship for 2006.45 Nevertheless, Soe Win did not pay a state visit to China until February 2006, nearly one and a half years after he took office. Additionally, the bilateral ties were adversely affected by the junta’s secret decision of moving the Capital from Yangon to Naypyitaw in November 2005 without notifying China in advance. Three months after Soe Win’s China tour, the junta initiated a number of actions to marginalise the opposition parties, especially the extension of Aung San Suu Kyi’s house arrest in May 2006. It caused intense reactions from the West which construed the junta’s behaviour to be a lack of progress in the democratization process.46 China, along with Russia, vetoed the US resolution by clarifying that the matter was a domestic affair for Myanmar.47 Although the Burmese leaders appreciated China’s help, they started to be aware of its growing discontent, as China had attempted to push Myanmar’s democratic process forward. Nearly three weeks after the veto at the UNSC, Vice Chairman Li Tieying of the Standing Committee of the National People’s Congress (NPCSC) travelled to Myanmar to support the junta and hoped that Myanmar could achieve political stability, national reconciliation, and economic development.48 One month later, Chinese State Councilor Tang Jiaxuan made a oneday trip to Myanmar to continue to advice the junta to speed up political reforms and the national reconciliation.49 To mitigate China’s considerable concerns, Thein Sein paid his first visit to China as the acting Premier of Myanmar in June 2007. During

45 Myoe

[29, p. 121]. and Myoe [8]. 47 UNSC [31]. 48 Mian Dian Ling Dao Ren Hui Jian Li Tie Ying [32]. 49 Myoe [29, p. 121]. 46 Thawngmung

80

4 Alienated from China: Myanmar’s China Policy (2005–2010)

this trip, he pledged that Myanmar would complete the draft of the new constitution as early as possible and would proceed with the remaining steps.50 However, the mutual distrust has not yet reduced due largely to China’s growing interference in Myanmar’s political reforms. Soon after the ‘Saffron Revolution’ in September 2007, China required the junta to push forward the democratic process. Yet, the junta didn’t yield to China. Rather, it harshly cracked down on the peaceful protesters two weeks later, resulting in worldwide condemnation. The US urged China to press the Burmese junta to facilitate a peaceful transition to democracy,51 which forced China to lost patience with the junta. At a regular press conference on 27 September 2007, Chinese Foreign Ministry spokeswoman Jiang Yu called all parties in Myanmar to exercise restraint and properly address the issue.52 Meanwhile, China continued to play the constructive role of a mediator between UN Special Envoy Ibrahim Gambari and the Burmese leaders by securing a visa for Gambari and urging the junta to cooperate with him.53 Initially, the Chinese efforts paid off, since Gambari held a successful meeting with Than Shwe.54 But then the talks failed because the junta turned down the UN’s proposal to hold talks with Aung San Suu Kyi, which resulted in a UNSC Presidential Statement being issued. It was not until February 2008 when the junta announced the timeline for the roadmap that China relieved its rising pressures on Myanmar. As Vice Foreign Minister of China, Wang Yi, said that the situation in Myanmar was developing in a positive direction.55 Since then, the junta began to coordinate efforts with China in order to get China’s support and soften international pressure. In the months following, Myanmar issued a statement in support of Chinese government’s efforts to deal with the ‘Tibetan unrest’ in March and sent Premier Thein Sein to China to attend the Olympic Games in Beijing in August. In return, China provided humanitarian aid to help Myanmar deal with the aftermath of Cyclone Nargis, made mediation efforts of convincing the junta of accepting the international aid, and supported Myanmar’s constitutional referendum in May. Moreover, China renewed efforts to reach economic cooperation agreements with Myanmar in the areas of oil and gas, hydropower resources, financial assistance, as well as economic and technical cooperation during Foreign Minister Yang Jiechi and member of the Standing Committee of the Political Bureau of the CCP Central Committee Li Changchun’s Myanmar trips in December 2008 and March 2009, respectively. In addition, China firmly supported the Burmese judgment on Aung San Suu Kyi’s house arrest and opposed a draft presidential statement proposed by the US deploring the verdict at a UNSC meeting.56 China also practiced restraint during the armed clashes between the government force 50 Secretary-1

Lt-Gen Thein Sein Meets Mr Wu Bangguo [33]. [34]. 52 Foreign Ministry Spokesperson Jiang Yu’s Regular Press Conference on 27 September 2007 [35]. 53 China’s Myanmar Dilemma [36]. 54 UN Secretary-General’s Special Envoy Mr Gambari Pays Courtesy Calls on Head of State Senior General Than Shwe and Acting Prime Minister Secretary-1 Lt-Gen Thein Sein [37]. 55 2008 Nian 2 Yue 19 Ri Wai Jiao Bu Fa Yan Ren Liu Jian Chao Ju Xing Li Xing Ji Zhe Hui [38]. 56 China’s Myanmar Dilemma [36, p. 9]. 51 Mydans

4.6 Alienated from China

81

and the ethnic armed group called the Myanmar National Democratic Alliance Army (MNDAA) in Shan State in August 2009, and thus minimised the adverse effects of the turbulence in the border areas on the bilateral relations. In order to get Chinese support for the coming election, the junta has strengthened exchanges with Chinese leadership since the late 2009. These mainly included the meeting between Chinese Premier Wen Jiabao and Myanmar President Thein Sein at the 12th China-ASEAN Summit in October 2009 and Chinese Vice President Xi Jinping’s Myanmar tour in December 2009. Later, the bilateral ties appeared to reach a peak at the 60th Anniversary of Diplomatic Relations between Myanmar and China in June 2010. During which Thein Sein claimed that China was a good neighbour to Myanmar, while Wen Jiabao echoed that the Chinese people would continue to be good neighbours, true friends, and good partners forever and firmly.57 Meanwhile, a series of celebratory activities, such as the handing over of the Myanmar International Conference Center (MICC) in Naypyidaw, the opening of the Myanmar-China oil and natural gas pipeline project, and the signing of 15 agreements and MoUs on bilateral cooperation in the areas of economy and technology, rail transportation, trade, hydropower, energy, and mining were conducted by both sides to further boost bilateral relations.58 In September 2010, Than Shwe paid his last visit to China to seek Chinese support for the national election in November this year. Nearly two months after Than Shwe’s China trip, the general elections were successfully held. The results unquestionably favoured the generals, as the major government aligned parties won the majority in the parliament. The dominance of the pro-government parties and the military representatives in the parliament guaranteed the generals’ continued rule in Myanmar. The general elections elicited extensive international reactions that were divided into two opposing camps, in which the Western states accused the elections to have been neither free nor fair, while Myanmar’s neighbouring countries applauded them. Soon after the elections, Chinese Foreign Ministry Spokesman Hong Lei praised the Burmese government’s efforts to hold successful elections.59

4.6.2 Increasing Economic Cooperation Starting in 2005, Myanmar’s imports from China experienced a great growth, increasing by 1258.10 million USD (see Table 4.3) in 2010, which is nearly three times that in 2005. Moreover, the share of Myanmar’s imports from China in its overall imports increased to 33.82% in 2010, which is nearly one and a half time that in 2005. The main reason for Myanmar’s rising imports from China was the relaxed controls on imports by the Myanmar government, mainly the invalidation 57 Ceremony to Mark 60th Anniversary of Diplomatic Relations between Myanmar and China Held [39]. 58 Prime Minister U Thein Sein [40]. 59 2010 Nian 11 Yue 9 Ri Wai Jiao Bu Fa Yan Ren Hong Lei Ju Xing Li Xing Ji Zhe [41].

82

4 Alienated from China: Myanmar’s China Policy (2005–2010)

Table 4.3 Myanmar’s import from and export to China (2005–2010, from April 1 to March 31) (USD million) Year

Import

Export

Total

Balance

2005–06

468.24

366.95

835.19

−101.29

2006–07

730.28

615.13

1345.41

−115.15

2007–08

994.99

697.68

1692.67

−297.31

2008–09

1208.16

617.67

1825.83

−590.49

2009–10

1258.10

617.16

1875.26

−640.94

2010–11

2168.52

1203.56

3372.08

−964.96

Source Statistical Yearbook of Myanmar 2011; Myanmar Statistical Information Service, https:// mmsis.gov.mm/sub_menu/statistics/statDbList.jsp?vw_cd=MT_ZTITLE

Table 4.4 The share of Myanmar-China trade in Myanmar’s overall trade (USD million) Year

Import A

Export C

Total

B

%

D

%

2005

468.24

1984.4

23.60

366.95

3558.0

10.31

E 835.19

F 5542.4

15.07

%

2006

730.28

2936.7

24.88

615.13

5232.7

11.76

1345.41

8169.4

16.47

2007

994.99

3353.4

29.67

697.68

6401.7

10.90

1692.67

9755.1

17.35

2008

1208.16

4543.3

26.59

617.67

6779.1

9.11

1825.83

11,322.4

16.13

2009

1258.10

4181.4

30.09

617.16

7586.9

8.13

1875.26

11,768.3

15.93

2010

2168.52

6412.7

33.82

1203.56

8861.0

13.58

3372.08

15,273.7

22.08

Source Statistic Yearbook of Myanmar 2011; Myanmar Statistical Information Service, https:// mmsis.gov.mm/sub_menu/statistics/statDbList.jsp?vw_cd=MT_ZTITLE Note A: Myanmar’s import from China; B: Myanmar’s overall import; C: Myanmar’s export to China; D: Myanmar’s overall export; E: Myanmar-China trade; F: Myanmar’s overall trade

of the Ministry’s Office Order No.4/98 in April 2005.60 Additionally (see Table 4.5), Myanmar’s top six import items from China between 2005 and 2010 were intermediate goods, capital goods, machinery and electrical good, consumer goods, transportation, and metals, which accounted for more than 80% of its overall imports from China. It reflected that Myanmar relied heavily on Chinese industrial products (Table 4.4). Myanmar’s exports to China have either come to standstill, which was shown in Burmese data, or increased mildly, which was reflected in Chinese documents between 2005 and 2010. Moreover, the share of Myanmar’s exports to China in its overall exports increased from 10.31% in 2005 to 13.58% in 2010, reflecting Myanmar’s slow-growing dependence on Chinese market. Three major factors could explain the moderate expansion of Myanmar’s exports to China: the promotion of exports in Myanmar, China’s demands for Myanmar’s natural resources, and the economic sanctions implemented by the West. First, since 60 Koji

[42].

4.6 Alienated from China

83

Table 4.5 Myanmar’s top six items import from China (2005, 2010) (USD million) Year

No. 1

No. 2

No. 4

No. 5

2005

Intermediate goods 419.8 3 (22.76%)

Capital goods Consumer 248.29 goods (13.46%) 233.13 (12.64%)

No. 3

Machinery and Elec 191.24 (10.36%)

Textiles and Metals clothing 180.23 163.81 (9.77%) (8.88%)

2010

Capital goods 1571.46 (22.77%)

Intermediate goods 1163.12 (18.65%)

Consumer goods 673.87 (9.76%)

Transportation Metals 566.45 (8.20%) 523.08 (7.57%)

Machinery and Elec 1115.76 (16.16%)

No. 6

Source The World Integrated Trade Solution (WITS), https://wits.worldbank.org/Default.aspx?lan g=en

the ‘export first’ policy was rolled out in mid-1997, the Burmese leaders have been committed to expanding exports to promote economic growth, thereby enhancing the regime’s legitimacy and consolidating its political control.61 Furthermore, the Myanmar government applied low tariffs, which was less than one-half of the average of other developing countries to stimulate trade.62 Second, China has, meanwhile, demonstrated an insatiable appetite for importing natural resources, particularly from neighbouring Myanmar, with its rich natural resources, in an effort to promote industrialisation. As shown on Table 4.5, raw materials and wood usually ranked as the top two export items that Myanmar exported to China between 2005 and 2010.63 Third, Myanmar’s efforts to access Western markets had been severely hindered due to import bans from the West, which led Myanmar to increasingly depend on its Asian trade partners, particularly China. The overall value of the bilateral trade between Myanmar and China has grown steadily since 2005. As is evident from Table 4.4, the share of Myanmar-China trade in Myanmar’s total trade jumped from 15.07% in 2005 to 22.08% in 2010, revealing Myanmar’s growing trade dependence on China. Besides, as shown on Table 4.6, China, by exceeding Singapore, became Myanmar’s second largest trade partner between 2005 and 2010. Finally, the trade deficit that Myanmar enjoyed has continued to increase since 2005, which reflects its decreasing relative gains in the prosperous trade relationship with China. China has always occupied the most significant position in Myanmar’s border trade. The trade route from Muse to Mandalay via Lashio, which is under Tatmadaw control, is the most important and safest trade lifeline of northern Myanmar and Yunnan. The value of Yunnan’s trade with Myanmar was much higher than other mainland Southeast Asian countries, including Vietnam, Thailand, and Laos. As shown on Table 4.7, Yunnan’s imports from Myanmar, export to Myanmar, and the overall value of Yunnan-Myanmar trade from 2005 to 2010 increased nearly three times. 61 Brown

[43]. [44]. 63 World Integrated Trade Solution (WITS) [45]. 62 Alamgir

84

4 Alienated from China: Myanmar’s China Policy (2005–2010)

Table 4.6 Myanmar’s trade with major trade partners (2005–2010) (USD million) Year

Thailand

2005–06

1598.32

China 835.19

Singapore 823.76

India 569.15

HK 275.92

241.87

Japan

2006–07

2667.30

1345.41

1217.24

892.86

425.12

322.56

2007–08

3193.09

1692.67

1222.08

900.76

668.90

429.16

2008–09

3026.07

1825.83

1882.84

950.20

706.23

349.55

2009–10

3594.36

1875.26

1872.60

1206.66

958.58

436.46

2010–11

3614.27

3372.08

2102.31

1067.05

1903.13

493.78

Source Statistic Yearbook of Myanmar 2011; Myanmar Statistical Information Service, https:// mmsis.gov.mm/sub_menu/statistics/statDbList.jsp?vw_cd=MT_ZTITLE

Table 4.7 Yunnan’s trade with Myanmar (2005–2010) (USD million) Year

Import

Export

A

B

%

D

%

F

%

2005

220.99

274.40

80.7

410.63

1207.42

43.9

631.62

1209.25

52.2

2006

170.95

252.65

67.6

521.13

1690.98

43.2

692.08

1460.07

47.4

2007

232.89

371.06

62.9

640.68

1978.46

37.9

873.57

2062.04

42.4

2008

465.10

647.54

71.8

727.69

2261.24

36.8

1192.79

2626.01

45.4

2009

452.27

646.12

70.0

775.06

2261.24

34.3

1227.33

2907.36

42.2

2010

649.00

964.05

67.3

1110.43

3480.25

31.9

1759.00

4444.31

39.6

C

Total E

Source Steinberg and Fan [46]; Yunnan Statistic Yearbook 2012 Note A: Yunnan’s Import from Myanmar; B: China’s Import from Myanmar; C: Yunnan’s Export to Myanmar; D: China’s Export to Myanmar; E: Yunnan’s Total Trade with Myanmar; F: China’s Total Trade with Myanmar

Many factors, chiefly including Myanmar’s policy reforms in the area of trade and peace and development in border regions, have contributed to the growing border trade between Myanmar and China since 2005. Early in November 2000, the junta announced that traders were allowed to use their local currencies, the Myanmar kyat and the Chinese Yuan, for transactions in border trade.64 Meanwhile, other new policies for the banking system and trade sector which aims to simplify trade procedures and reduce trade costs were implemented. Additionally, the junta set up several institutions and mechanisms aiming at regularising and institutionalising border trade. These mainly included the Myanmar-China border trade exhibitions, the Myanmar-China border trade fairs, and the Border Control Force in 2001, the 150ha Muse border trade zone, the Myanmar-China Joint Border Trade Coordinating, and Cooperating Committee in 2006. Finally, the infrastructure in the border regions and transportation services along the trade routes were also improved and upgraded, which substantially facilitated cross-border trade. 64 Toshihiro

[47, 77, p. 278].

4.6 Alienated from China

85

Table 4.8 Top nine largest foreign investors in Myanmar (2005–2010, from April 1 to March 31) (USD million) Year Country China

Thailand Singapore HK

Korean

UK

Malaysia India

Japan

2005 –

6034.4

–

–

–

–

–

30.58

–

2006 418.22

–

81.00

–

–

135.98 –

47.50

–

137.00 1.37

2007 –

16.22

5.00

–

12.00

–

–

2008 855.99

15.00

–

–

–

–

–

–

3.76

2009 2.50

15.25

39.23

6.00

–

–

237.60

–

–

2010 8269.23 2146.00

226.17

5798.23 2676.39 799.00 76.75

–

7.14

Total 9545.94 8226.87

351.4

5804.23 2688.39 934.98 314.35

215.08 0.27

12.00

Source Statistic Yearbook of Myanmar, 2011; Myanmar Statistic Information Service, https://www. mmsis.gov.mm/sub_menu/statistics/statDbList.jsp?vw_cd=MT_ZTITLE

The total Chinese investment in Myanmar from 2005 to 2010 was 9545.94 million USD, which is 116.03% of Thailand, the second highest source of FDI for Myanmar. As some Chinese investments are in the name of local citizens in the minority areas controlled by the ethnic armed groups, which are excluded from official statistics, the real amount is much higher than the official data (Table 4.8).65 Since 2005 Myanmar has attracted large amounts of Chinese investment in natural resources such as hydropower, oil and gas, the mining sector, manufacturing, and infrastructure. According to the Burmese Embassy in China, by 2011, 63% of China’s investments in Myanmar were in the power sector, while investments in the energy and mining sectors occupied 25% and 11%, respectively. The rest, accounting for 1%, was in the manufacturing and infrastructure sectors, which include economic zones and transportation facilities.66 Most of the projects were contracted by government officials rather than open bids. The largest foreign project in the oil and gas sector in Myanmar was the 2.5 billion USD Sino-Myanmar gas and oil pipeline, which composed of a crude oil pipeline and a parallel gas pipeline. It was initially proposed by Yunnan academics and then became an official project contracted by Myanmar and China in June 2009. The construction began in June 2010, and the gas and oil pipelines were opened in September 2013 and March 2017 respectively. The project was jointly invested in by China National Petroleum Corporation (CNPC), the biggest investor with a 50.9% stake, the Myanmar Oil and Gas Enterprise (MOGE), the Korean Daewoo International Corporation, and Korea Gas Corp. (KOGAS), as well as the India Oil and Natural Gas Corp. (ONGC) Videsh, and GAIL (India) Limited. According to the official agreement, the 2402 km-long oil pipeline, from Maday island (a small island on the west coast of Rakhine) to Gui Gang, a port city near Nan Ning, via Mandalay, 65 See

Steinberg and Fan [46], pp. 228–231; Myoe [48]. [49].

66 Dunn

86

4 Alienated from China: Myanmar’s China Policy (2005–2010)

Muse, Rui Li, Kun Min, and Gui Yang, will supply 10 million tons of oil per year in the early stages of production. This quantity will increase to 20 million tons per year, once normal operations begin, for 30 years. The 2498 km-long gas pipeline, from Kyaukphyu, a small town on the west coast of Rakhine, to Chong Qin, the biggest city in Southwest China, via Mandalay, Muse, Rui Li, Kun Min, An Shun, and Zun Yi, will have an annual capacity of 10 billion cubic meters of gas and will operate for 30 years.67 Myanmar has also invited large amounts of Chinese investments in the mining sector. Eight Chinese state-owned enterprises and three private companies have invested in nine projects in northern Myanmar since the mid-2000s. Of these, the 1.06 billion USD Letpadaung Copper Mine project, with an annual output capacity of 10,000 tons of copper cathode, and the 0.85 billion USD Tagaung Taung Nickel Project, with an annual output capacity of 25,000 tons of nickel metal, are the largest projects undertaken by Chinese companies. The agreement on developing the Letpadaung Copper Mine in Sagaing Region was initially signed by both sides during Chinese Premier Wen Jiabao’s Myanmar trip in June 2010, and was subsequently contracted in 2013, after amendments were made to the product sharing stipulation. According to the new agreement, Myanmar Wanbao Mining Copper Ltd., a subsidiary entity of Wanbao Mining based in China, holds 30% of the benefits. Its partner, Myanmar Economic Holdings Limited (UMEHL) holds 19%, while the remaining 51% belongs to the Ministry of Mines of Myanmar. This project, however, was suspended several times due to local protests. It was not until March 2016 that the project was put into operation. Another mega-project-Tagaung Taung Nickel Project is located at the Mandalay Region. It was jointly invested in by China Nonferrous Metal Mining Corporation (CNMC) and Myanmar’s state-owned No. 3 Mining Enterprise. The contract to develop the project was signed in 2008, in which the CNMC put in all the capital and held 50% of the benefits, and the Myanmar No. 3 Mining Enterprise possessed the mining rights and retained the remaining profits. Quite different from the Letpadaung project, the Tagaung Taung project was successfully completed in 2012, and was put into operation soon. So far, twenty Chinese state-owned enterprises and two private companies invested in Myanmar’s power sector, which mainly included the Sinohydro Corporation, China Power Investment Corporation (CPIC), China International Trust & Investment Corporation (CITIC), Datang Hydropower, Gezhouba Group Corporation, and local power companies in Yunnan. They invested or jointly invested with the Burmese state-owned enterprises in 53 hydropower projects, with the total installed capacity amounting to 42,236.5 MW, in Kachin State and Shan State. Of these, the Myitsone Dam, which locates at the confluence of Irrawaddy River and its two tributaries, is the biggest dam in northern Myanmar. The contract on constructing the Myitsone Dam was signed by the Myanmar Ministry of Electric Power and CPIC in June 2009. According to the Build-Operate-Transfer(BOT) agreement, CPIC will run the dam for 50 years after its completion, and 90% of the generated electricity will be 67 The Agreement on China-Myanmar Oil and Gas Pipeline Project between China and Myanmar [50].

4.6 Alienated from China

87

exported to China while Myanmar attains 54 billion dollars income in total from taxation, equity dividend and free electricity. In addition, Myanmar has attracted Chinese FDI in the areas of manufacturing and infrastructure since the early 2000s. The most important project was the 20 billion USD Myanmar-China Railway, which is comprised of the Myanmar section (from Kyaukpyu to Muse, via Mandalay) and the China section (from Ruili to Kunming), the same route as the Myanmar-China oil and gas pipelines. In China’s overall strategy, the Ruili-Kyaukpyu railway project, which connects the Southern China and the Indian Ocean through Myanmar, would not only enhance its control over the Sino-Myanmar border and further expand its influences in Myanmar,68 but will also extend its strategic presence in the Indian Ocean. For Myanmar, the crossborder transportation was a double-edged sword. It could benefit much from the project on one hand, and on the other hand, it would be threatened by the expanding Chinese influence and the increasing Chinese immigrants. In April 2010, the MoU to construct the Myanmar section was signed by China Railway Engineering Corporation (CREC) and Myanmar Railway Ministry. Both sides agreed to launch the project within three years. The following September, the first meeting of Ruili-Kyaukpyu railway project was held, where both sides agreed to conduct feasibility studies in the Kyaukpyu-Magway section and draw a master plan.69 Myanmar has received a large number of development aid since 2005, mainly including grants and donations, no interest or low interest and concessional loans, and debt relief. In practice, Myanmar got 1 billion RMB and 74.08 million USD to build a chemical fertilizer plant in 2005; 170 million RMB and 200 million USD to upgrade the national power grid, construct new factories, 20 locomotives, and 200 miles of railway tracks as well as a hydro-electric power plant, and to buy a drilling rig in 2006; 350 million RMB to purchase telecommunication equipment in 2007; 14 billion RMB to construct projects, operate and transfer the hydropower projects in Maykha, Malikha, and upstream of Ayeyawady Myitsone river basins, operate and manage the Sino-Myanmar gas and oil pipeline, purchase machinery and build a hydro-electric power in 2009.

4.6.3 Less Defence Cooperation Despite the fact that both China and Myanmar pledged to upgrade military relations, there has less defence cooperation between the two armies since the mid-2000s. For instance, General Shwe Mann, who was the Chief of Staff of Tatmadaw, had not initiated its China tour until January 2007.70 Three years later, Vice Admiral Nyan

68 Steinberg

and Fan [46, p. 295]. First Meeting of Shweli-Kyaukpyu Corridor Project Held [51]. 70 Zong Can Mou Zhang Liang Guang Lie Yu Mian Dian San Jun Zong Can Mou Zhang Ju Xing Hui Tan [52]; Xinhua General News Service [53]. 69 The

88

4 Alienated from China: Myanmar’s China Policy (2005–2010)

Table 4.9 Myanmar’s arms imports from China (2005–2010) (USD million) Year

Arms imports from China

Total arms imports

From China/Total arms imports (%)

2005

23

160

14.38

2006

10

175

5.71

2007

2

138

1.45

2008

10

93

10.75

2009

17

52

32.69

2010

5

68

7.35

Source SIPRI Arms Transfers Database, https://armstrade.sipri.org/armstrade/page/values.php

Tun, Commander-in-Chief of Myanmar Navy, visited China, the first high-level visit from a Myanmar Navy official to China since May 2002. Myanmar has also reduced the arms deal with China since 2005, so as to decline its over-dependence on Chinese military hardware. According to Table 4.9, both the value of Myanmar’s arms imports from China and its share of Myanmar’s total arms imports were decreased sharply between 2005 to 2010. Myanmar, however, was China’s No. 3 arms client, with 971 million USD from 1998 to 2010, after Pakistan (No. 1, with 3,656 million USD) and even Bangladesh (No. 2, with 1666 million USD).71

4.7 Withdrew from the Region Although the junta was aware of the rising Chinese influence in the country, it actually had not made great efforts to counterbalance China due to its main focus on the democratic process. Conversely, it withdrew from the region with the aim to aviod external intervention, let Myanmar to isolate from the world again. First of all, the junta restrained its participation in ASEAN so that it could avoid the foreign interference on Myanmar’s political reforms. Due to rising pressure from individual member states and the West, as well as a demand for raising the international profile, the ASEAN began to push for Myanmar’s democratic transition since the mid-2000s.72 It upset the Burmese generals and caused their decision to forgo the turn to ASEAN presidency in July 2005, the biggest setback that Myanmar had faced since it joined in ASEAN in 1997. In October 2007, Myanmar received its strongest condemnation from the ASEAN, which clearly and strongly expressed outrage at Myanmar’s bloody suppression of the Buddhist monks in September 2007.73 It is therefore alienated from ASEAN. 71 Collected

from SIPRI Arms Transfers Database [54]. [55]. 73 Davies [56]. 72 Katanyuu

4.7 Withdrew from the Region

89

In order to enhance trust with Burmese leaders and thus to consolidate the internal unity, ASEAN performed the role of an effective coordinator between Myanmar and the international community on relief assistance during the Cyclone Nargis in May 2008.74 It then softened its tough tone on Myanmar at the 41st ASEAN Ministerial Meeting in July 2008, in which it acknowledged the Burmese 2008 State Constitution.75 Later, a more moderate tone was employed by ASEAN to push forward the democratic transition in Myanmar at the 42nd and 43rd ASEAN Ministerial Meetings in July 2009 and 2010, respectively.76 But in spite of ASEAN’s goodwill gestures, the junta did not seize the opportunity to reapproach ASEAN except getting support on the constitutional referendum and general elections. Soon after the general elections in November 2010, ASEAN appraised the key step of the democratic roadmap and expressed continuing support for Myanmar’s democratic process, opening a new chapter in relations between Myanmar and ASEAN in the following years. Besides, the junta began to reduce its participation in regional and international affairs dramatically, only narrow it down to several major partners such as India and Russia. Since 2005, Myanmar has expanded India’s economic presence in the country and initiated the joint military actions on fighting against the Indian rebels based in Northwest Myanmar, so as to win India’s support for its democratic process. In March 2005, the Indian Foreign Minister went to Myanmar to discuss the antiinsurgencies operations along the border, the transnational infrastructure projects, and energy cooperation.77 This resulted a MoU on energy cooperation reached by both sides during Indian President’s Myanmar trip in March 2006. In order to maintain the energy cooperation, India was on the side of the Burmese military by citing the deepening cooperation with Myanmar on security and border issue, when a report of the Special Rapporteur on the human rights situation in Myanmar was released in the UNSC in September 2006. Later, Myanmar got India’s support again during the ‘Saffron Revolution’ in September 2007, as India took a moderate stance to encourage the democratic transition in Myanmar. In April 2008, Senior General Maung Aye paid his second visit to India to further strengthen the interaction between the two countries, while India supported Myanmar’s political reforms.78 One year later, Vice President of India Hamid Ansari travelled to Myanmar to provide political support to the Burmese military regime, which was preparing for the coming general elections in November 2010.79 In order to continue getting India’s support, Than Shwe visited India for the second time in July 2010, and successfully reached a number of bilateral agreements in the areas of economic and technical cooperation, as well as cultural

74 Amador

III [57]. Joint Communique of the 41st ASEAN Ministerial Meeting [58]. 76 ASEAN, Joint Communiqué of the 42nd ASEAN Foreign Ministers Meeting [59]; ASEAN, Joint Communiqué of the 43rd ASEAN Foreign Ministers [60]. 77 Visit of External Affairs Minister Shri Natwar Singh to Myanmar [61]. 78 Strengthening of Friendly Relations and Cooperation Brings Benefits to Two Countries, Contributes to Regional Peace and Prosperity [62]. 79 Yhome [63]. 75 ASEAN,

90

4 Alienated from China: Myanmar’s China Policy (2005–2010)

exchange.80 Than Shwe’s India tour was perceived as evident strategic neutrality between India and China, where Myanmar attempted to reduce its reliance on China while enhancing India’s presence in Myanmar.81 In the meantime, the Myanmar navy conducted frequent military exchanges with the Indian navy, purchased naval weapons and received training programs from India, attempting to reinforce its naval forces and relieve the threats from the sea. The highlevel visits between the officers of the two navies mainly included Vice Admiral Soe Thein and Nyan Tun, the Chief of Navy Staff of Myanmar, in 2005 and 2010 respectively, and Indian Admiral Arun Prakash in 2006, Admiral Sureesh Mehta and KS Jamwal in 2007, Admiral Arun Prakash in 2008, Admiral PK Goel in 2009, Vice Admiral Sanjeev Bhasin in 2005. Since 2001, Myanmar has procured a number of maritime aircraft, different types of radars, and sonars from India. In August 2006, India transferred to Myanmar two BN-2 ‘Defender’ Islander maritime surveillance air-craft, deck-based air defence guns, and varied surveillance equipment, though it was criticised by United Kingdom (UK), which has imposed an arms embargo on Myanmar since the 1990s.82 The Indian navy also offered trainings to the Burmese naval officers and sailors in recent years. In September 2009, an Indian delegation comprising military training officers travelled to Yangon, which initiated training cooperation between the two armies. Since the mid-2000s, Russia has occupied the key position in Myanmar’s diplomacy. In April 2006, Maung Aye visited Russia, the first foreign trip to Russia by a Burmese top leader in four decades. During the visit, he emphasised Myanmar’s priority to extend friendly relations with Russia in Myanmar’s diplomacy, and pledged to promote bilateral trade and investment relations as well as policy coordination in international forums.83 Later, Russia, together with China, voted at the UN resolution proposed by the US condemning the junta in January 2007. As the embassy of Russia in Myanmar has described, both sides share similar or close positions on major international issues and cooperate in different international organisations.84 Both sides also signed one MoU on oil and gas exploration and two agreements on narcotic control and information protection.85 It then led to an agreement for exploration and production of oil and gas from the B-2 onshore block between the Oil and Gas Ministry of Kalmykia and MOGE in March 2007.86 In addition, Myanmar turned to Russia’s Atomstroy Export Corporation for help in constructing a 10–15 megawatt light water pool-type research reactor and an isotope laboratory in February 2001 in order to alleviate the severe shortage of electricity.87 Yet, the 80 Senior

General Than Shwe Meets Indian Prime Minister [64]. [65]. 82 Bedi [66]. 83 Main Aim of Goodwill Visit Is to Open New Chapter in Bilateral Relations [67]. 84 Russia-Myanmar, Embassy of Russia in Myanmar [68]. 85 Vice-Senior General Maung Aye, Russian Prime Minister Mr Mikhail Fradkov Attend Ceremony to Sign Two Agreements, One MoU between Myanmar and Russian Federation [69]. 86 Yhome [70]. 87 Ibid., p. 179. 81 Yhome

4.7 Withdrew from the Region Table 4.10 Myanmar’s arms imports from Russia in 2005–2010 (in value) (USD million)

91 Year

From Russia

Share of total (%)

2005

137

85.63

2006

151

86.29

2007

127

92.03

2008

14

15.05

2009

14

26.92

2010

44

64.71

Source SIPRI arms transfers database

nuclear project was suspended indefinitely in 2003 because of Myanmar’s inability to pay construction costs. In 2007, Myanmar reached an agreement with Russia with the aim of resuming the nuclear program, in which Russia agreed to supply Myanmar with its first nuclear reactor and offer training to Burmese nuclear scientists and technicians.88 Although the rising nuclear cooperation did not sit well with the US and raised serious concerns in the EU and international nuclear organisations, the nuclear deal is ongoing. In order to find reliable alternative defence partners to upgrade its arms systems, the Myanmar military increased arms deal with Russia. According to Table 4.10, the total value of arms imports from Russia between 2005 and 2010 was much greater than China’s. Besides, Myanmar received various training programs offered by many renowned military institutions in Russia after Maung Aye’s first Russia tour in April 2006. For instance, about 1,000 Burmese air force officers and technicians travelled to Russia for training in 2006.89 In addition, Myanmar attached additional conditions for training Burmese officers, especially Burmese pilots, as part of its arms deal with Russia in order to ensure that the Burmese soldiers mastered the Russian weapons. Often, the selected Burmese cadets would study in Russia for three years. In the first year, they would learn basic Russian military terminology, before being introducing to specialist disciplines in the remaining two years.90 Because few details about this were announced to the public, it is extremely difficult to estimate the exact number of Burmese officers who received training in Russia. Due to economic sanctions, diplomatic isolation and arms embargo, Myanmar forced to minimise its connections with the West except the anti-drug cooperation and humanitarian assistance. This led to a deadlock in the relations bewteen Myanmar and the West until the late 2009 when the Obama administration proposed a pragmatic engagement policy towards Myanmar. In this new context, the junta contacted the US through meetings between the diplomats from both countries in Myanmar and at the ASEAN Foreign Ministerial Meeting. What’s more, U.S. senator James Webb was granted a visa to travel to Myanmar for talks with Than Shwe, the first meeting between a senior American official and the top leader of the Burmese junta since 88 Harding

[71]. [72]. 90 Ludmila Lutz-Auras [73]. 89 Blagov

92

4 Alienated from China: Myanmar’s China Policy (2005–2010)

1988. The junta then permitted Webb to meet Aung San Suu Kyi, and released Yettaw, who was an American and was arrested by the Myanmar government several days before the meeting. It is evident that the junta attempted to relieve the U.S. pressure by sending goodwill messages and engaging with the American officials. Nonetheless, the main objective of Myanmar’s engagement with the US is to avoid U.S. interference in the general elections rather than building warm relations with the US, as the junta refused to release Aung San Suu Kyi and excluded her NLD from participating in the elections. Given this, the contacts bewteen Myanmar and the West were severely restricted during the SPDC era, resulting in stalemated relations between the two sides.

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39. Ceremony to Mark 60th Anniversary of Diplomatic Relations between Myanmar and China Held. The New Light of Myanmar, 4 June 2010. https://www.burmalibrary.org/docs09/NLM 2010-06-04.pdf 40. Prime Minister U Thein Sein, Chinese Premier Mr Wen Jiabao Discuss matters on constantly cementing bilateral relationships. The Myanmar Times, 3 June 2010. https://www.myanmarge neva.org/10nlm/jun/n100604.htm 41. 2010 Nian 11 Yue 9 Ri Wai Jiao Bu Fa Yan Ren Hong Lei Ju Xing Li Xing Ji Zhe Hui [Foreign Ministry Spokesman Hong Lei Held a Regular Press Conference on 9 November 2010], Ministry of Foreign Affairs of The People’s Republic of China, 9 Nov 2010. https:// www.fmprc.gov.cn/ce/cenp/chn/fyrth/t767721.htm 42. K. Koji, Trade policies and trade misreporting in Myanmar. Discussion Paper, Institute of Developing Economies (IDE), No. 326, p. 4, Feb 2012. https://ideas.repec.org/p/jet/dpaper/ dpaper326.html 43. I. Brown, Burma’s Economy in the Twentieth Century (Cambridge University Press, Cambridge, 2013), p. 178 44. Jalal Alamgir, Myanmar’s Foreign Trade and Its Political Consequences. Asian Survey 48(6), 985 (2008) 45. World Integrated Trade Solution (WITS). https://wits.worldbank.org/Default.aspx?lang=en 46. D.I. Steinberg, H. Fan, Modern China-Myanmar relations: dilemma of mutual dependence (Copenhagen: NIAS Press, 2012), p. 219 47. K. Toshihiro, Myanmar’s border trade with China: situation, challenge and prospects, in Japan and Korea with the Mekong River Basin Countries, BRC Research Report, ed. by M. Kagami. Bangkok Research Center, No. 3, 2010, p. 278. https://www.researchgate.net/publication/265 283185_Myanmar%27s_Border_Trade_with_China_Situation_Challenge_and_Prospects 48. M.A. Myoe, Sino-Myanmar economic relations since 1988. Working Paper, Asia Research Institute, No. 86, p. 14 (2007) 49. C. Dunn, L. Ji, K. Peng, Chinese Investments in Myanmar—A Scoping Study. Global Environmental Institute (2016), p. 7 50. The Agreement on China-Myanmar Oil and Gas Pipeline Project between China and Myanmar. https://faolex.fao.org/docs/pdf/bi-154872.pdf 51. The First Meeting of Shweli-Kyaukpyu Corridor Project Held, The New Light of Myanmar, 14 Sept 2010. https://www.burmalibrary.org/docs09/NLM2010-09-14.pdf 52. Zong Can Mou Zhang Liang Guang Lie Yu Mian Dian San Jun Zong Can Mou Zhang Ju Xing Hui Tan [Chief of General Staff of PLA Liang Guanglie Held Meeting with Chief of General Staff of Myanmar Army], Xin Hua Wang [Xinhua Net], February 1, 2007. https://news.xinhua net.com/mil/2007-02/01/content_5681272.htm 53. Xinhua General News Service: Chinese defence Minister Meets Myanmar Military Leader, BurmaNet News, 27 Feb 2007. https://www.burmanet.org/news/2007/02/02/xinhua-generalnews-service-chinese-defence-minister-meets-myanmar-military-leader/ 54. SIPRI Arms Transfers Database. https://armstrade.sipri.org/armstrade/page/values.php 55. R. Katanyuu, Beyond non-interference in ASEAN: the association’s role in Myanmar’s National Reconciliation and Democratization. Asian Survey 46(6), 825 (2006) 56. M. Davies, The perils of incoherence: ASEAN, myanmar and the avoidable failures of human rights socialization? Contemp. Southeast Asia 34(1), 9 (2012) 57. J.S. Amador III, Community building at the time of Nargis: the ASEAN response. J. Curr. Southeast Asian Affairs 28(4), 19 (2009) 58. ASEAN, Joint Communique of the 41st ASEAN Ministerial Meeting ‘One ASEAN at the Heart of Dynamic Asia’, July 21, 2008. https://asean.org/joint-communique-of-the-41st-asean-min isterial-meeting-one-asean-at-the-heart-of-dynamic-asia/ 59. ASEAN, Joint Communiqué of the 42nd ASEAN Foreign Ministers Meeting ‘Acting Together to Cope with Global Challenges’ Phuket, Thailand, July 20, 2009. https://www.asean.org/wpcontent/uploads/images/archive/PR-42AMM-JC.pdf

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Chapter 5

Hedged Against China: Myanmar’s China Policy (2011–2015)

In light of the increasing competition between China and the US in Southeast Asia, the reformist Burmese leaders seized opportunity to engage with the US and thus to hedge against the high risks of the over-dependence on China since the establishment of the civilian government in 2011. In the meantime, the Burmese generals were becoming increasingly discontented with Chinese interference in the ethnic conflicts and pressured China to cut off its connections with the ethnic groups.

5.1 Increasing Sino-US Competition As a country that is widely considered the biggest threat to China’s rise, American’s intentions and policies for Southeast Asia have always caused considerable concerns for policy-makers in China. Only a few agreed with the positive impacts of the US return to Southeast Asia on China-ASEAN relations. These mainly included: the US contribution to peace and stability in Southeast Asia by eliminating the power vacuum and maintaining the balance of power in the region; U.S. efforts to fight against terrorist and pirate activities and promote economic prosperity in the region, which were consistent with Chinese interests; the US return to Southeast Asia, which might reduce ASEAN’s concerns about Chinese threats; and the US potentially consulting with China on security issues at the ASEAN Regional Forum.1 While the negative impacts have prevailed in Chinese society, especially after the announcement of ‘Pivot to Asia’ and ‘Rebalancing’ strategies. First, the TransPacific Partnership Agreement (TPP), in which China is excluded, has been broadly perceived as a conspiracy aiming at undermining the regional economic cooperation process that China committed to promote over the past decade and thus containing China’s rise.2 Second, the US attempted to alienate China from its Southeast Asian 1 Biwu

Zhang [1]. [2].

2 Xiangyang

© Springer Nature Singapore Pte Ltd. 2021 N. Peng, International Pressures, Strategic Preference, and Myanmar’s China Policy since 1988, https://doi.org/10.1007/978-981-15-7816-8_5

97

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5 Hedged Against China: Myanmar’s China Policy (2011–2015)

Table 5.1 ASEAN’s total trade with China and the US (2011–2015) (USD billion)

Year

China

US

2011

280,149.8

198,767.4

2012

319,484.8

200,027.2

2013

350,508.4

206,855.4

2014

366,526.0

212,429.0

2015

345,419.6

212,330.3

Source ASEAN Statistical Yearbook and ASEAN Merchandise Trade Statistics Databased

Table 5.2 FDI inflows into ASEAN by China and US (2011–2015) (USD million)

Year

China

US

2011

6346

8879

2012

4337

10,981

2013

6616

3672

2014

6990.1

14,748.5

2015

8155.3

12,191.5

Source ASEAN Statistical Yearbook and ASEAN Foreign Direct Investment Statistics Database

neighbours and escalate tensions in the SCS by enhancing comprehensive cooperation with Southeast Asian countries and increasingly getting involved in the territory disputes in the SCS. Third, the Pentagon has committed to increasing its preparedness through the Air-Sea Battle concept to respond to China’s anti-access and area denial (A2/AD) strategy.3 It has also upgraded the defence capabilities of some Southeast Asian countries by providing advanced weapons to and regularly holding joint military exercises with them, intending to deteriorate the external security environment of China. Given this, China has taken various measures to compete with the US for influence in Southeast Asia. In the field of economy and trade (see Table 5.1), ASEAN’s total trade with China peaked at 366.5 billion USD in 2014, which was more than 41 times the amount in 1993. China has become ASEAN’s first biggest import source since 2007 and first largest export source since 2012. In 2015, China’s total trade with ASEAN (345.4 billion USD) was nearly 170% that of US-ASEAN trade (212.3 billion USD), which indicated a remarkable increasing trade gap between the US and China in Southeast Asia. China has increased its investment in Southeast Asia, but it remains far behind that of the US. As shown on Table 5.2, China’s FDI in Southeast Asia rapidly climbed to its highest point, with 81.55 billion USD, in 2015, which was almost 66.9% that of US investment in ASEAN. Currently, the three major sources of FDI in ASEAN are the EU, Japan and the US, China ranked fourth. China also established the Brazil, 3 Zhu

[3, 116, p. 51].

5.1 Increasing Sino-US Competition

99

Russia, India, China and South Africa (BRICS) Bank and Asian Infrastructure Investment Bank (AIIB) in order to reduce the dependence on US-dominated financial institutions. China-ASEAN political ties were promoted substantially through a series of diplomatic arrangements. These mainly involved the inauguration of the China-ASEAN Centre in December 2011, and the Mission of the PRC to ASEAN in August 2012. After Chinese President Xi Jinping took office in late 2012, he and Premier Li Keqiang attended a series of summit conferences and multilateral meetings, intending to selectively boost bilateral ties with some ASEAN states. At the 16th China-ASEAN Summit in October 2013, Li Keqiang discussed with ASEAN the early conclusion of a new China-ASEAN treaty of good neighbourliness, reflecting China’s great efforts to legalise and institutionalise the friendship between the two sides. In order to reduce ASEAN’s growing fear of “China Threat” and shape a stable periphery serving for domestic development, China has strengthened its security cooperation with ASEAN by signing joint declarations, attending defence meetings, and holding joint military exercises. So far, China established dozens of bilateral and multilateral defence cooperation mechanisms and held regular security dialogues with ASEAN. These mainly included the China-ASEAN Defense Ministers’ Informal Meeting, the Joint Working Group and ASEAN-China Senior Officials Meeting aiming at pushing forward the implementation of the Declaration on the Conduct of Parties (DOC) and consultation of Code of Conduct (COC) in the SCS.4 Additionally, China successfully conducted the first joint naval exercise with Malaysia in September 2015, reflecting China’s great desire to enhance pragmatic defence cooperation with Southeast Asian nations. China has largely promoted people-to-people ties with ASEAN states by relying on various government programs and many semi-official as well as civilian organisations. According to ASEAN tourist data, China became the largest source of tourists in Southeast Asia in 2012, at 9.28 million, accounting for 10.4% of the total. Compared to the booming China-ASEAN tourism cooperation, the US is far behind. In 2014, the US ranked only sixth, at 3.25 million, accounting for 3.1% of the total.5 Moreover, although more Americans travelled to Southeast Asia in recent years, the percentage of American tourist arrivals in ASEAN has been reducing. In terms of education cooperation, Thailand was the third (19.9 thousands), Indonesia was the ninth (12.6 thousands), Vietnam was the 11th (10 thousands), Laos was the 14th (6.9 thousands) and Malaysia was the 15th (6.6 thousands) source of foreign student arrivals in China in 2015.6 Meanwhile, the US attracted far fewer Southeast Asian students than China. For instance, Vietnam (ninth, 18.7 thousands) was the only Southeast country in the list of the top 10 places of origin, and the percentage of ASEAN student enrolled in the US in 2014 of the total was only 1.9%.7

4 Chalermpalanupap

Termsak [4, 117, pp. 57–58]. Tourism Statistics [5]. 6 The Statistics of Foreign Student Arrives in China in 2015 [6]. 7 International Students in the United States [7]. 5 ASEAN

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5 Hedged Against China: Myanmar’s China Policy (2011–2015)

China’s rise and its growing presence in Southeast Asia have been key factors in US’s expanding engagement with Southeast Asia.8 The US, therefore, has working on many ways to expand US-ASEAN economic ties.9 Since 2011, the US launched the US-ASEAN Expanded Economic Engagement initiative (E3, 2012), and the ASEAN Connectivity for Trade and Investment initiatives (ACTI, 2015). Moreover, the Obama administration implemented a series of new policies aiming at building extensive diplomatic, security, and economic ties, and social contacts with Southeast Asian nations. Today, the US and ASEAN cooperate in various areas, such as governance and sustainable development, cyber security, education, English language training, disaster management, human rights, nuclear non-proliferation, and maritime security.10 As China has initiated security cooperation with Southeast Asian countries by conducting military-to-military exchanges and proposed the ‘Asian security concept’ in the Conference on Interaction and Confidence-Building Measures in Asia (CICA) in 2013, it could be casted into the role of a regional security provider while the US would be an over-assertive outsider that threatens the stability and security of the region.11 Moreover, some American scholars believed that China has attempted to push the US away from China’s coast and forestalling the its ability to intervene in the conflicts between China and its neighbours in the East Sea and SCS by modernising the military and developing A2/AD capabilities.12 In addition, the growing tensions in the SCS since 2012 contributed to the fast-growing defence cooperation between the US and ASEAN. For instance, the US signed an Enhanced Defence Cooperation Agreement with Philippine and Singapore in 2014 and 2015 respectively. The US also announced to offer 250 million USD defence assistance to Philippine over the fiscal years 2015 to enhance the capabilities of Southeast Asian navies. Under this defence assistance, Philippine will receive a grant of 79 million USD is grant to Philippine and a U.S. Coast Guard cutter and a naval research ship will be handed over to the Philippine Navy. The Pentagon has committed to take more practical measures, like joint naval military exercises, to enhance the combat abilities of ASEAN states. With the aim of deterring China from militarising the SCS, the U.S. Navy launched ‘training cruises’ in the SCS in late 2015 and asked its allies to join this joint training. Such military actions resulted in a number of Chinese countermeasures, mianly including the continuous improvement of artificial islands that China has built in the SCS, regular military exercises, and the close monitoring of U.S. navy ships and fighters in the SCS. The power rivalry between China and the US in Southeast Asia raised considerable concerns about the US’s intention to succumb to the use of force in a bid to deter Chinese ambition.13 If left unattended, it could have led to a growing arms race 8 Cook

[8]. Satu [9]. 10 US-ASEAN Business Council [10]. 11 Cohen [11]. 12 Taylor Fravel and Twomey [12]. 13 Morton [13]. 9 Limaye

5.1 Increasing Sino-US Competition

101

and could even have triggered a military conflict due to the individual commanders’ aggressive behaviour.14 Nonetheless, armed clashes are remote possibility, even if China takes a more aggressive stance on the maritime territory disputes in the East and SCS.15 First of all, China and the US have established a series of risk-reduction measures such as the rules of encounter between naval ships and air-craft to defuse the risks of an unforeseen clash in the SCS. Moreover, both sides have sought to prevent the SCS from becoming a dominant or central element of their bilateral relations, and thus would not fight for it.16 Second, China has conflicting policy goals on territory disputes such as creating a stable external security environment, satiating nationalist ambitions, and expanding regional influence.17 In practice, Beijing has adopted a prudent balancing strategy to promote its multiple policy objectives, where it asserts influence to become a great maritime power on one hand and pragmatically cooperates with neighbouring countries and the US to maintain regional stability on the other hand.18 Besides, China is unlikely to use advanced forces to fight against the US or its allies in Southeast Asia because of the shortcomings in its force projection capabilities and the political and economic disadvantages of premeditated aggression.19 In order words, China is reluctant to launch a war against the US and its allies at the expense of economic and political collapse, unless it is forced into a corner. Third, although the US has been dissatisfied with China’s domestic reforms and foreign behaviours,20 it has engaged with China and committed to develop a constructive long-term relationship with a rising China.21 For one thing, the engagement approach has the very important virtue of being feasible under the political and economic constraints such as the fiscal and budgetary issues, economic challenges and entanglements in the Middle East.22 For another, the US has attempted to expand cooperation with China on significant regional and global issues, mainly including anti-terrorism, climate change and the North Korean nuclear issue, so as to shape China’s behaviour.23 Additionally, the US could achieve the goals of economic prosperity, regional stability, and the rule of law and freedom of navigation through a peaceful resolution of the territory disputes in the SCS.24

14 Glaser

[14, 15]. [16]. 16 Taylor Fravel [17]. 17 Lincoln Hines [18]. 18 Katherine Morton [13, p. 911]. 19 Sokolsky et al. [19]. 20 Harding [20]. 21 Lieberthal and Jisi [21]. 22 Friedberg [22], Advincula [16]. 23 Glaser [14]. 24 Schwartz [23]. 15 Advincula

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5 Hedged Against China: Myanmar’s China Policy (2011–2015)

5.2 Rising Chinese Pressures and Multiple Benefits The growing competition between China and the US in Southeast Asia imposes high threats and opportunities to Myanmar. First and foremost, Myanmar could become a centre of the increasing Sino-US competition since China perceived the America’s re-engagement with Myanmar as an attempt to counterbalance it while the US tried to deter China’s expansion in the Indian Ocean via Myanmar.25 Second, Myanmar’s neutralism in the SCS dispute was challenged by some Burmese who expected progress in the drafting of a legally binding instrument in the form of the COC.26 Third, the Myanmar government was under mounting internal pressures to suspend the controversial Chinese mega-projects due to the serious environmental, livelihood and employment problems, as well as little economic gain in the local communities.27 In the meantime, it was also pressured by Chinese government and state-owned enterprises to resume these projects. Finally, Myanmar was faced with the high risks of Chinese rising interference in the ethnic conflicts in northern Myanmar, as China began getting involved in the peace talks between the ethnic armed groups and the government forces and pressured both sides to stop fighting. But in spite of the high risks, Myanmar would attract trade, investment, and economic assistance from both China and the US for its own development. It would also improve relations with the US to balance the growing Chinese economic and strategic influence, while at the same time expanding cooperation with China to avoid antagonizing Beijing.28 By simultaneously enhancing Myanmar-China relations and Myanmar-US relations, Myanmar could enhance its regional and international prestige and promote its goal of reintegrating itself into the international community. Myanmar could, technically, promote trilateral cooperation between itself, China, and the US in the areas of counter-trafficking, anti-drug training and cooperation, emergency preparedness for earthquake relief, and multiculturalism, national unity, and bilingual education.29

5.3 Stable Politics but Rising Ethnic and Religious Tensions Following its inauguration in March 2011, the new civilian government initiated a series of economic and political reforms to proceed with the democratic process. First of all, the Burmese leaders started to reconcile with the democrats in order to stablise the domestic politics and reduce the Western pressures. Nearly half a year after the establishment of the new government, President Thein Sein talked with Aung San Suu Kyi for the first time at the National Workshop on Reforms for 25 Qingrun

[24]. [25]. 27 Kyi [26], Brown [27]. 28 Hiebert et al. [28]. 29 Steinberg [29]. 26 Shein

5.3 Stable Politics but Rising Ethnic and Religious Tensions

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Economic Development in Myanmar. Soon after the political dialogue, the Myanmar government issued new laws allowing the registration of NLD as a political party, a key step for the NLD to return to politics.30 In April 2012, the NLD was permitted to participate in the by-elections in the parliament and won a majority of the seats. In the meantime, Aung San Suu Kyi was elected to the lower house and paid her first overseas trips to Thailand in April, Europe in June, the US in September, and India in November. Subsequently, Thein Sein held the second meeting with Aung San Suu Kyi in August 2013, reflecting his government’s great desire to reconcile with her. Yet, there was a rift between the government and NLD from mid-2013 due to their disputes on amendments on the 2008 Constitution. Because the Article 59 (f) barred her from becoming president, Aung San Suu Kyi proposed the constitutional amendment issue within the parliament and launched a public campaign for constitutional reform. She also travelled to Germany and France to get support for pressing the government to agree to amend the Constitution and thus enable her to qualify as a presidential candidate. But the Myanmar government refused to make any changes in the articles that she claimed, and passed the Constitution in the parliament before the coming elections. Nevertheless, the government did not suppress the demonstrations and the NLD did not boycott the 2015 elections. In November 2015, the NLD won a landslide victory in the general elections, and Aung San Suu Kyi was endorsed as ‘the future leader of Myanmar’ after meetings with retired Senior General Than Shwe.31 Meanwhile, both the government and military promised to respect the results of the general elections and support the peaceful power transition, which ensured stable politics in Myanmar. Ever since the mid-2011, military conflicts between government troops and several ethnic armed groups renewed in northern and eastern Myanmar. These mainly included the Myanmar National Democratic Alliance Army (MNDAA) and Ta’ang National Liberation Army (TNLA) in Shan State, the Karen National Liberation Army in Karen State (KNLA), and the Arakan Army (AA) in Rakhine State. Due largely to the peace talks on ceasefire agreements and national reconciliation between government, military and the ethnic armed groups, the ethnic clashes have been gradually reduced since the late 2015. In the meantime, a riot broke out in the Rohingya communities in Rakhine State in May 2012, which soon caused the serious religious violence between the Buddhists and Muslims in the region.32 Although President Thein Sein declared his first state of emergency and formed an investigation commission to tackle the issue, continued violence still erupted in Rakhine State in the following years. It led the religious violence to evolved into refugee crisis and terrorist attacks, and thus threatened the national security and increased international pressures on Myanmar.

30 Turnell

[30]. [31]. 32 On May 28, 2012, a Buddhist woman was reportedly raped and killed by three Muslim men. On June 3, a large group of Rakhine villagers stopped a bus and brutally killed 10 Muslim passengers. On June 8, thousands of Rohingya Muslims rioted. See Holliday [32]. 31 McCarthy

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5 Hedged Against China: Myanmar’s China Policy (2011–2015)

5.4 Thein Sein: Reformist Leader Despite the fact that Thein Sein was elected to the new president, Than Shwe was Myanmar’s reclusive boss who had a veto power. But he mainly focused on domestic politics and rarely interfered in the civilian government unless it concerned a major decision, such as the endorsement of Aung San Suu Kyi after the NLD won the elections in 2015. Therefore, it can be stated that Thein Sein was in fact in charge of foreign affairs. Thein Sein was born in Kyonku, a small Irrawaddy delta village near Ngapudaw Township, in 1944. His parents were landless farmers. His father became a Buddhist monk 10 years after his wife’s death, and spent his remaining years this way.33 Thein Sein received the basic education in the capital of the region and graduated from the 9th intake of the Defence Services Academy with a Bachelor of Arts degree in 1968. He then started his military career, and was promoted from second lieutenant to Lieutenant General in 2003. From then on, he took the post of Secretary-2 in 2003, Secretary-1 in 2004, and Premier in 2007 in the government, and eventually became the president of the civilian government in 2011. In spite of the long military career, Thein Sein worked in an office with less combating experience, and thus seemed to be less affected by the siege mentality of the old generals and be willing to contact foreign countries instead of isolating Myanmar from the world. In addition, he preferred to peacefully settle disputes through dialogue and negotiation probably because of the long-term influence of his father’s Buddhist ideas. In fact, Thein Sein was ordained under Ashin Nandamalabhivamsa in a monastery in Pyin Oo Lwin under the monastic name U Santi Dhamma after he left office.34 Once Thein Sein came to office in 2011, he initiated economic reforms aiming at re-integrating Myanmar into the global economy. In a speech he gave on 20 January 2013, he expressed a great desire to utilise foreign technology and resources to enhance economic growth.35 In May, he stressed again that Myanmar was making great efforts to re-join the global economy to promote the development of the country.36 At the 2nd Myanmar Development Cooperation Forum held in January 2014, he talked about the benefits that foreign investment would bring to Myanmar, mainly including an improved standard of living, building a better business environment, creating more jobs, and enhancing the productivity of natural resources.37 Thein Sein also implemented a number of policy reforms aiming at reconciling with the oppositions, so as to push forward the democratic process. These mainly included holding dialogue with opposition leaders, legalising political parties, 33 Keller

[33]. [34]. 35 Nay Pyi Taw Accord to Strengthen Cooperation with Global Partners to Ensure Better Public Service Delivery [35]. 36 Friendlier Relations with World Countries Intend to Ensure Betterment of People, Promote Trade and to Make Them Understand Myanmar [36]. 37 President U Thein Sein Addresses 2nd Myanmar Development Cooperation Forum [37]. 34 Htusan

5.4 Thein Sein: Reformist Leader

105

removing bans on new websites, stopping pre-publication press censorship, and releasing political prisoners. In addition, he initiated the peace talks with the ethnic armed groups and achieved ceasefire agreements with most of them through political dialogues. In short, Thein Sein could be perceived as a reformist leader who is committed to push through economic and political reforms and thus to re-integrate the country into the world due to its Buddhist family and long government working experience.

5.5 Myanmar’s Assessment of External Environments First and foremost, the major threat from the US was dramatically reduced because of its significant policy adjustment towards Myanmar. Despite the fact that the US criticised the 2010 elections for neither free nor fair and discontent with the quasi-civilian government in which the retired generals occupied key positions, it actually adopted an ‘action-for-action’ policy and tried to engage with Myanmar. In this new context, the Myanmar leaders were encouraged to push forward the democratic process and thus to improve the freezing Myanmar-US relations. In his inaugural address on 30 March 2011, Thein Sein claimed that Myanmar would maintain friendly relations with the world’s nations.38 Later, his decision of halting the Myitsone dam was perceived as an effort to sell the Myanmar government as something demonstrably ‘new’ to the international community.39 Second, the Burmese generals with a siege mentality always kept a close watch on the fast-growing Chinese economic influence, which was exerted by the close business networks of the ethnic Chinese, Burmese officials, and crony companies. By some accounts, 60% of the Burmese economy is dominated by Burmese citizens of ethnic Chinese descent and new immigrants from China.40 They were also upset about Chinese economic activities with negative impacts in environmental, community and even cultural ‘intrusion’.41 In addition, the Burmese people has resented Chinese investments ever since the mid-2000s due to the serious environmental consequences and livelihood problems. The public outcry over Chinese megaprojects, the Myitsone dam in particular, eventually evolved into national protests soon after the establishment of the new government in March 2011. Given the rising anti-Chinese sentiments, the Myanmar government decided to restrict Chinese investments in natural resource sector with an attempt to reduce domestic pressures and consolidate its ruling power. What’s more, the Burmese senior generals were aware of falling into Chinese strategic orbit through the comprehensive strategic cooperative 38 President

U Thein Sein Delivers Inaugural Address to Pyidaungsu Hluttaw [38]. [30, p. 160]. 40 Haacke [39]. 41 According to Min Zin, the cultural ‘intrusion’ refers to the penetration of Chinese culture brought by the Chinese immigration, the Yunnanmese in particular, in Burmese society, especially in Upper Myanmar such as Mandalay. See Zin [40]. 39 Turnell

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5 Hedged Against China: Myanmar’s China Policy (2011–2015)

partnership and tried to avoid becoming a centre of Sino-US competition. They were also unwilling to get involved in the territorial disputes between China and ASEAN countries like the Philippines, Vietnam, Malaysia and Brunei over the SCS. It was this new context to put Myanmar to keep its distance from China while approaching the US, as so to avoid China’s political domination and balance Chinese influence. Third, Myanmar were concerned about Chinese interference in the renewed ethnic conflicts in its northern region. In fact, both the senior generals and regional commanders strongly discontent with China’s close connections with the Kokang, Kachin, and Wa armed groups in northern Myanmar. Moreover, the Myanmar military accused retired Chinese soldiers of joining in MNDAA which launched attacks on the government security forces since February 2015.42 Further, it had not yield to China’s diplomatic pressure and military exercise in the border areas and continued to launch massive military offensives against the ethnic forces in northern Myanmar. Given this, Myanmar asked China to decline connections with the ethnic groups on one hand, and on the other hand, it sought Chinese help to pressure the ethnic forces to sign NCA.

5.6 Hedged Against China 5.6.1 Reduced Chinese Investments In order to reduce its serious concern over the booming Chinese economic presence and relieve the anti-Chinese sentiment, Myanmar temporarily suspended the controversial Myitsone Dam and initiated the investigation of mega-projects funded by Chinese companies. It resulted in a sharp decrease of Chinese new investment in Myanmar since 2011. According to Myanmar’s data (see Table 5.3), Chinese investment in Myanmar dropped from 4345.72 million USD with 93.57% of Myanmar’s total FDI in 2011 to 56.92 million USD with 1.39% in 2013. According to Chinese statistics, it has declined from 748.96 million USD in 2012 to 331.72 million USD in 2015.43 Meanwhile, Chinese big projects in Myanmar’s natural resource sector have suffered a great setback due to the constant public protests and the ethnic conflicts in border areas. As early as June 2011, the controversial Myitsone Dam was temporarily suspended due to the increasing risks of confrontation between the government forces 42 Actually, in order to make money and support the Kokang people, some Chinese individuals were definitely employed by the MNDAA. See “Yi Ming Zhong Guo Ren Zai Mian Dian Dang Gu Yong Bing Bao Guo Gan Meng Liao” [41]. In addition, it is extremely difficult for the Chinese government to prevent Chinese individuals from participating in the ethnic conflicts in northern Myanmar the due to the the difficulty of the terrain along Sino-Myanmar border. See, 118. 43 Chinese FDI in Myanmar decreased from 748.96 million USD in 2012 to 475.33 million in 2013, 343.13 million in 2014, and 331.72 million in 2015. See 2015 Statistical Bulletin of China’s Outward Foreign Direct Investment [42].

5.6 Hedged Against China Table 5.3 Chinese FDI in Myanmar (2011–2015, from April 1 to March 31) (USD million)

107 Year

China’s FDI in Myanmar

FDI in Myanmar

Percent (%)

2011–12

4345.72

4644.46

93.57

2012–13

231.77

1419.47

16.33

2013–14

56.92

4107.06

1.39

2014–15

516.90

8010.53

6.45

2015–16

3323.85

9481.27

35.05

Source Myanmar Statistic Information Service, https://www. mmsis.gov.mm/sub_menu/statistics/statDbList.jsp?vw_cd=MT_ ZTITLE

and KIA. Then, in early August, the government’s decision of preparing to resume the construction of Myitsone dam was challenged by the protesters who criticised the project for harming the environment and the traditional culture heavily. The government, therefore, launched propaganda campaigns by publishing articles in the official newspaper, in order to convince the public that the project is beneficial to Myanmar. On 9 and 10 August, two pieces of commentaries aiming to explain the rationale behind the Myitsone dam were published in The New Light of Myanmar. The first one argued that the project would have no adverse effect on agriculture, businesses, and social work.44 The second one called for reasonable attitudes toward the Myitsone Dam and claimed that the project was not designed to trouble the Burmese people, who love the Ayeyawady River.45 Nevertheless, the Myanmar government failed to stop the protests. Rather, the deep suspicion of the project increased greatly with Aung San Suu Kyi’s open letter asking for more thought and studies before the dam construction resumed on 11 August. In September, it turned into a national movement in which experts, NGO leaders and journalists talked about the extensive scepticism around the environmental impact assessment process.46 Moreover, a rift within government was witnessed as some Ministers from Information and Culture, Industrial Development, and Electric Power claimed that construction would restart. Whereas the Economic Advisor to President U Myint suggested that the government was conducting an objective and independent economic and social impact analysis of the dam and would make the final decision after the results of the investigation were in.47 Later, a workshop on the impact of hydropower projects in Ayeyawady Basin and on Irrawaddy River and the natural environment was held in Yangon on 17 September. Nearly all the stakeholders, including government ministers, departmental heads, parliament representatives, NGO leaders, entrepreneurs, journalists, and Chinese Chairman of CPIC attended the meeting. All parties reached a consensus that the ‘natural environment 44 Perpetual

Natural Heritage Relayed with Good Volition [43]. Also Love River Ayeyawady [44]. 46 Appendix, Chronology of the Myitsone Dam at the Confluence of Rivers Above Myitkyina and Map of Kachin State Dams [45]. 47 Ibid. 45 We

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5 Hedged Against China: Myanmar’s China Policy (2011–2015)

report’ should be submitted to the newly reconstituted Ministry of Environmental Conservation and Forestry and the project would proceed in accordance with the decision of that ministry.48 The Burmese ministers promised that they would implement the power projects according to the assignment of the parliament and government.49 Since there would be a long investigation process of the environment report of the Myitsone Dam in the parliament and the ministry, it is quite difficult for the Myanmar government to resume the Myitsone project in the near future. Meanwhile, rising anti-dam forces continued to gather in Yangon to demand the termination of the Myitsone project, and local leaders in Kachin warned of serious consequences of the collapse of the dam. In this context, President Thein Sein announced the government’s decision to suspend the controversial Myitsone Dam on 30 September 2011. He explained that the devastating environmental effects on the Irrawaddy River and the serious commercial and social effects on the local residents are the main reasons for government’s decision.50 This difficult decision was a reflection of Myanmar’s new political reality, in which the quasi-civilian government was attempting to meet people’s demands and thus to enhance legitimacy, while trying to fulfil its international obligations of implementing the project. Caught in this dilemma, the Myanmar government had to choose between either disappointing the citizens by restarting the controversial dam or terminating the project to satisfy the public. Eventually, the Myanmar government suspended the Chinese project and therefore meeting people’s will. As Yin Myo Thu, who is a professor at University of Yangon, analysed, the hybrid civilian government got credibility from public by suspending the Myitsone dam since public through the support of environmentalists strongly protested this project.51 Nonetheless, Thein Sein also clarified that the six other hydropower projects involving the CPIC in Kachin State would be implemented, even though these projects were criticised by locals. He also said his government would coordinate with China to accept the agreements on the Myitsone project without undermining friendly bilateral ties. All these actions revealed Myanmar’s intention of avoiding provoking China and jeopardising Sino-Myanmar relations. Except the Myitsone Dam, other Chinese mega-projects in Myanmar mainly including the Sino-Myanmar oil and gas pipeline and Letpadaung mining project, have also been criticised heavily by local communities. In 2011, the local protesters launched a ‘24-h Electricity’ campaign across Rakhine State under the united banner of ‘Our Gas, Our Future’ against the oil and gas pipeline, which was designed to export the gas to the Chinese domestic market.52 They have appealed to the company and the local government, asking for fair compensation for their land that was confiscated for the project. However, no reply or compensation was forthcoming from the 48 Workshop No (3/2011) on Impact of Hydropower Projects in Ayeyawady Basin on Ayeyawady River and Natural Environment Held [46]. 49 Ibid. 50 The Government is Elected by the People, and It has to Respect People’s Will [47]. 51 Interviewed with Professor Yin Myo Thu at University of Yangon [48]. 52 Campaign for 24-Hour Electricity in Arakan State, Shwe Gas Movement (SGM) [49].

5.6 Hedged Against China

109

company, and the government investigation committee also took no action to resolve the issue.53 This resulted in a peak of the protests in April 2013, when approximately 400 villagers marched to the CNPC’s office and demand adequate compensation for their confiscated lands, better transportation infrastructure, and higher salaries for local workers.54 At the same time, many international NGOs were becoming increasingly concerned about the controversial Chinese energy project in Myanmar. About 130 NGOs from over 20 countries orchestrated a ‘Global Day of Action’ against the Chinese gas and oil project in 2012. The Myanmar-China Pipeline Watch Committee comprising twelve civil society groups was established to conduct a social impact assessment of the project.55 It is clear that both the Burmese people and international NGOs blamed Chinese company for failing to fulfil its commitment. But in fact the land confiscation and compensation are the responsibility of the local government rather than Chinese company. According to a report released by the Shwe Gas Movement in 2013, much of the land used for the project was bought by speculators who acquired the lands by coercing villagers to sign confusing and predatory contracts at unfair prices years before construction began.56 Moreover, Chinese company has spent millions of US dollars on building schools, hospitals, and other public facilities in Rakhine State in order to fulfil its social responsibility and improve the livelihood of the local residents since the construction of the pipeline project began. The Chinese government and company were, therefore, discontent with the continuous protests among the locals and the deep involvement of West-funded NGOs which attempt to undermine Chinese projects in Myanmar. Soon after the mass protests in April 2013, the Myanmar government took a harsh stance on the peaceful protest and arrested many land rights activists under the 2011 Law Relating to Peaceful Assembly and Peaceful Procession in the months following.57 Meanwhile, the Chinese company held a press briefing to explain the benefits of the pipeline and accelerated the construction of it. Owed to the joint efforts, the pipeline was completed on 4 June 2013, which was delayed by four days. In order to operate the pipeline as soon as possible, Chinese State Counsellor Yang Jiechi travelled to Myanmar in June 2013 to reach an MoU with Myanmar. According to the deal, China promised to supply 200 million tons of crude oil per year (about 10% of the total oil carrying capacity) and about 2.4 billion cubic meters (about 20% of the total gas carrying capacity) per year to Myanmar to promote its economic and social development.58 On 28 July 2013, the pipeline began exporting gas to China, but the real carrying capacity was much less than the designated capacity due to the low actual output of gas in Myanmar and the improving condition of 53 Shwe

Gas Field and Pipeline, Myanmar, Environmental Justice Atlas [50]. Charged over China-Burma Pipeline Protests [51]. 55 Yeophantong [52]. 56 Drawing the Line: The Case against China’s Shwe Gas Project, for Better Extractive Industries in Burma [53]. 57 Shwe Gas Field and Pipeline, Myanmar, Environmental Justice Atlas [50]. 58 Yang Jie Chi Ting Qu Zhong Mian You Qi Guan Dao Xiang Mu Hui Bao [54]. 54 Six

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5 Hedged Against China: Myanmar’s China Policy (2011–2015)

the pipeline in Chinese territory.59 In early 2014, a dispute broke out between ethnic Chin and Chinese workers at one of the pipeline’s work sites, resulting in some of the surrounding buildings being set on fire.60 After the gas pipeline operations began, the construction of the oil pipeline and the deep sea port on Maday Island were completed on 30 May 2014 and 30 October 2014, respectively. Although the Chinese company announced that the oil pipeline was set to open at the end of January 2015,61 it had not begun officially operating until April 2017. At the end of 2014, the protest against Letpadaung mining project, another big project invested by Chinese Wanbao mining company, was escalated because several protesters were shot by the police. The Myanmar government promptly banned the demonstrations and arrested the leaders and organisers of the protests. It also formed the Letpadaung copper mine project investigation report implementation commission and made its first announcement on 5 January 2015. According to it, the implementation commission would hold at least one meeting with the locals and community and social development representatives, as well as one discussion and meeting between the working group members and commission members every month to address related issues,62 so that the project could proceed smoothly. In May 2015, the Myanmar government approved the assessment of the social and environmental impacts of the Letpadaung project, one of the most important steps to restart the project. While the Chinese company still has a long way to fulfil the rectification measures, such as compensation for land acquired, environmental protection, and other demands of local farmers. Otherwise, the project could not be resumed. Because of this, the project has not restarted until May 2016 when the democratic government was established.

5.6.2 Repaired Damaged Bilateral Ties One month after his inauguration ceremony (see Table 5.4), President Thein Sein paid his first foreign visit as the head of state to China. During the visit, a number of key issues were thoroughly discussed, as many as 36 agreements were signed, and a joint statement on establishing a comprehensive strategic cooperative partnership between the two countries was released. First of all, both sides, for the first time, promised to promote strategic mutual trust by maintaining close high-level contacts, enhancing foreign exchanges, conducting regular consultation meetings, and increasing coordination and cooperation in regional and multilateral forums.63 It indicated a significant change in China’s 59 Guobao

[55].

60 Yeophantong

[52, p. 12]. and Tun [56]. 62 Lai Bi Tang Tong Kuang Xiang Mu Diao Cha Bao Gao Zhi Xing Wei Yuan Hui Tong Gao [57]. 63 Myanmar, PRC Issue Joint Statement on Establishing Comprehensive Strategic Cooperative Partnership [58]. 61 Rose

5.6 Hedged Against China Table 5.4 High-ranking visits between Myanmar and China (2011–2015)

111 Year

Name

Position

Visits from Myanmar May 2011

Thein Sein

President

Oct 2011

Wunna Maung Lwin

Foreign Minister

Jun 2012

Wunna Maung Lwin

Foreign Minister

Apr 2013

Thein Sein

President

Jun 2014

Thein Sein

President

Apr 2015

Wunna Maung Lwin

Foreign Minister

Dec 2011

Dai Binguo

State Counsellor

Jan 2013

Fu Yin

Vice Foreign Minister

Jun 2013

Yang Jiechi

State Counsellor

Aug 2014

Wang Yi

Foreign Minister

Nov 2014

Li Keqiang

Prime Minister

May 2015

Yang Jing

State Counsellor

Visits from China

Source Collected from People’s Daily, The (Global) New Light of Myanmar, Myanmar Times

Myanmar policy in which the Chinese leaders shifted their changing perception of Myanmar from a political and economic friend to a strategic partner.64 In order words, China has not only committed to maintaining peace and stability along the border and developing thriving economic relations with Myanmar, but intended to accelerate its strategic outreach into the Indian Ocean via Myanmar. In fact, the grand ‘Bridgehead Strategy’ aiming at constructing strategic land access to the Indian Ocean65 and promoting physical connectivity as well as economic integration between Myanmar and China was first proposed by China in 2009 and was formally announced in 2011. Government officials from both Beijing and Yunnan privately acknowledged that China attempted to turn Pakistan and Myanmar into Chinese outposts in its intention of expanding its strategic influence in the Indian Ocean through this ambitious strategy.66 It was in this context that China decided to upgrade Sino-Myanmar relations to a strategic level and expected reciprocal strategic returns from Myanmar. For instance, China announced that it would assist Myanmar in the 2013 Southeast Asia Games, 2014 ASEAN Summit and the GMS meeting,67 support Myanmar’s efforts for national consolidation and political reform,68 planned to import more 64 Yun

[59]. Nan Sheng Sheng Zhang Qin GuangRong: QiaoTouBao Zhan Lue Dui Yun Nan Ju You Hua Shi Dai Yi Yi [60]. 66 Yun [59, p. 84]. 67 China to Assist Myanmar in 2013 SEA Games and 2014 ASEAN Summit [61]. 68 Since the Establishment of Diplomatic Ties over 60 Years Ago, Myanmar and China Have Coexisted Peacefully with Equality, Consideration and Mutual Understanding [62]. 65 Yun

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5 Hedged Against China: Myanmar’s China Policy (2011–2015)

Burmese goods. In return, China expected to get support for its ‘bilateral negotiation’ stance on the SCS issues from Myanmar at the ASEAN Regional Forum in July 2011.69 While Myanmar constantly affirmed its adherence to one-China policy and supported China’s policies towards Tibet and Xinjiang. It also stood by China’s proposal of conducting joint patrols with Myanmar, Thailand, and Laos to secure the Mekong River in October 2011, after the ‘Mekong Murder’ in which 13 Chinese sailors were killed by drug traffickers based on the Mekong River. Protecting Chinese investment in Myanmar and thus stabilising the bilateral ties has increasingly become a top priority for both countries since the establishment of the civilian government. For China, it has started to realise the destructive effect of the local protests on Sino-Myanmar relations and thus discussed measures to prevent environmental disruption caused by Chinese investments with its Myanmar counterparts. During Than Shwe’s China trip in September 2010, Chinese Premier Wen Jiabao discussed with him about the further measures to assist in the smooth and safe completion of the projects being implemented along the border,70 reflecting China’s high expectations from the new Myanmar government to protect Chinese projects contracted by both countries. However, the civilian government has been challenged by the rising anti-Chinese sentiment and the negative perception of economic depredation from China. Additionally, Thein Sein announced the launch of a series of new economic policies in parallel with environmental conservation in his inaugural address in March 2011, resulted in a strong environmentalism in Myanmar.71 In that case, Thein Sein explained that the new government will effectively fulfill its obligations and expeditiously give priority to public wishes during the meeting with Chinese leaders.72 It suggests that he tried to convince Beijing that his government, which was quite different from the previous military regime, would listen to the public and be responsible to the people. Therefore, he, on one hand, could not fully assure the safety of Chinese investments, as the joint statement declared ‘the two sides will … emphasising practical results’.73 On the other hand, Myanmar had to seek cooperation from China to secure Chinese projects, which was also mentioned in the joint statement as ‘the two sides will…work to strengthen healthy, stable and sustainable business ties, make joint efforts to create a favourable environment for trade and investment cooperation’.74 Soon after Thein Sein’s China trip, Myanmar suddenly suspended the Myitsone Dam without any announcement in advance in September 2011. In the meantime, a number of reform measures were launched by Myanmar to please the international 69 Yun

[59, p. 82]. the Establishment of Diplomatic Ties over 60 Years Ago, Myanmar and China Have Coexisted Peacefully with Equality, Consideration and Mutual Understanding, The New Light of Myanmar, May 29, 2011, https://www.burmalibrary.org/docs11/NLM2011-05-29.pdf. 71 President U Thein Sein Delivers Inaugural Address to Pyidaungsu Hluttaw [38]. 72 Since the Establishment of Diplomatic Ties over 60 Years Ago, Myanmar and China Have Coexisted Peacefully with Equality, Consideration and Mutual Understanding [62]. 73 Myanmar, PRC Issue Joint Statement on Establishing Comprehensive Strategic Cooperative Partnership [58]. 74 Ibid. 70 Since

5.6 Hedged Against China

113

community, mainly including the release of political prisoners in November 2011 and January 2012. Such actions brought much reward from the West, particularly U.S. Secretary of State Hillary Clinton’s milestone Myanmar tour in November 2011. The suspension of Myitsone Dam and the acceleration of the democratic transition shocked Chinese leaders who were anxious about Chinese investment in Myanmar as well as the Myanmar-US rapprochement. Actually, there’s a general feeling in China that the US would pressure Myanmar to suspend the oil and gas pipeline and other major Chinese strategic assets in Myanmar, while Myanmar would approach the West by taking actions against Chinese interests.75 Additionally, the US would become deeply involved in the ethnic conflicts in northern Myanmar, so as to create trouble for China.76 Nonetheless, both Myanmar and China could not afford the damaged bilateral relationship and thus making efforts to repair it.77 In February 2012, the newly elected Speaker of the Pyithu Hluttaw Shwe Mann travelled to China to dispel Chinese concerns about Myanmar’s possible ‘leaning to one side’ diplomacy which aimed at approaching the West while estranging Sino-Myanmar relations. As he said, ‘Myanmar would promote friendship and strengthen multifaceted strategic cooperation with China while maintaining relations with international countries’.78 He intended to convince China that Myanmar’s engagement with the West would not harm Myanmar-China relations, since China was a big security wall for Myanmar while Myanmar was a security guard for China.79 He assured China that Chinese economic projects in Myanmar would continue and be protected by the government until they yielded success and mutual benefits, so as to reduce Chinese worries over the safety of Chinese projects. He also pledged to negotiate and cooperate with China to properly handle related issues,80 attempting to minimise the adverse effects of anti-China sentiment on bilateral ties. In September 2012, Chairman of the Standing Committee of the National People’s Congress (NPCSC) Wu Bangguo went to Myanmar to propose four particular suggestions for promoting Sino-Myanmar comprehensive strategic cooperative partnership. First of all, he advised both sides to maintain high-level contact between government and parties, discuss important issues in a timely manner, and formulate action plans to facilitate the comprehensive strategic partnership as soon as possible. It reflected China’s urgent desire to restore close relations with Myanmar, and thus preventing Myanmar from swinging to the West, the US in particular. Shwe Mann agreed to promote friendly interactions between the parliament, government, and parties of the two countries while avoiding mentioning the strategic partnership, which suggested that Myanmar was reluctant to conduct strategic cooperation with China.

75 Xin

[63]. and Zhenyu [64]. 77 Interviewed with Associate Professor Zhu Xianghui at Yunnan University, Kunming [65]. 78 Myanmar Would Promote Existing Friendship and Cooperation with China [66]. 79 Ibid. 80 Ibid. 76 Xiao

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5 Hedged Against China: Myanmar’s China Policy (2011–2015)

Wu Bangguo also asked for active measures to be taken by both sides to ensure the successful implementation of major Chinese projects in Myanmar and to enhance the confidence of both Chinese and Myanmar companies on economic cooperation. In fact, Chairman of Chinese People’s Political Consultative Conference (CPPCC) Jia Qinglin also posed similar requirements when he met with Shwe Mann in February 2011. It seems that China was dissatisfied with Myanmar’s response to anti-China forces, and attempted to pressure Myanmar to do more to protect Chinese megaprojects. Yet, Shwe Mann just replied that Myanmar would promote cooperation on investment, trade, and major projects. Due to the timely high-level visits between the two countries, Myanmar-China relations have been improved in the following years. Two years after his first China trip in May 2011, Thein Sein visited China again in April 2013. The main task of his second China trip is to reduce China’s suspicion of Myanmar-US rapprochement by promising to reach the goal of a comprehensive strategic cooperative partnership and clarifying Myanmar’s independent foreign policy. Two months later, Chinese State Councillor Yang Jiechi travelled to Yangon to sign the long-awaited work plan on the project for implementing strategic cooperation between Myanmar and China. According to the work plan, China, for the first time, publicly encouraged Chinese companies to fulfil their social obligation rather than simply requiring the Myanmar government to manage the anti-Chinese forces. It was a positive response from Beijing to meet Myanmar’s constant demands for more social responsibility from Chinese companies.81 One year later, Thein Sein toured to China for the last time in his term to attend the Conference Marking the 60th Anniversary of the Five Principles of Peaceful Coexistence in Beijing in June 2014. During the visit, Chinese President Xi Jinping told Thein Sein that China was encouraging more Chinese companies to invest in Myanmar and hoped that both sides could jointly create a favourable investment environment and ensure the safety as well as the smooth implementation of the major energy, mining, oil and gas, and hydroelectric projects. It was welcomed by Thein Sein, who said Myanmar would carry out the cooperation agreements approved by both sides.82 Xi’s statement revealed China’s changing policy on its investment in Myanmar, where China has shifted from cutting down new investment since the suspension of the Myitsone Dam to increasing economic activity in the country. Moreover, China has found a flexible way to promote pragmatic cooperation with Myanmar, rather than pushing it to properly handle issues. Xi also invited Myanmar to participate in the twenty-first century Maritime Silk Road, which was officially announced by China in October 2013, and jointly push forward the BangladeshChina-India-Myanmar Economic Corridor (BCIM-EC) proposed in May 2013.83 While no response came from Thein Sein who is very careful about participating in the regional economic cooperation schemes led by China.

81 Zhong

Guo Guo Wu Wei Yuan Yang Jie Chi Fang Wen Mian Dian Quan Jing Sao Miao [67]. Jinping Tong Mian Dian Zong Tong Wu Deng Sheng Ju Xing Hui Tan [68]. 83 Xi Jinping Tong Mian Dian Zong Tong Wu Deng Sheng Ju Xing Hui Tan [68]. 82 Xi

5.6 Hedged Against China

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In November 2014, Chinese Premier Li Keqiang paid a reciprocal visit to Myanmar to upgrade the strategic cooperation between the two countries. First of all, both sides decided to set up several regular or irregular mechanisms in the areas of politics and economy with the aim to manage or handle related important issues in the cooperation process in a timely manner, and thus institutionalising and stabilising bilateral ties. These mechanisms included the Sino-Myanmar vice foreign ministerial irregular consultation mechanism, the Sino-Myanmar agricultural cooperation commission, and the Sino-Myanmar electric power cooperation mechanism. Moreover, Myanmar has switched from a ‘wait and see’ stance on Chinese regional initiatives to a limited participation in BRI, BCIM-EC and AIIB, especially the Sino-Myanmar railway and other physical connectivity projects in accordance with BCIM.84 In fact, the Burmese leaders expressed growing concerns about the adverse effects of the large-scale cross-border connectivity projects on Myanmar, such as the flow of Chinese commodities and illegal Chinese immigrants into Myanmar, as well as strategic and security consequences.85 Given this, Myanmar just implemented the medium and small projects with the help of China, but suspended or canceled the mega-projects. An new consensus on further advancing the comprehensive strategic and cooperative partnership by deepening economic cooperation under BRI and BCIM was reached during Thein Sein’s last China trip in September 2015.86 Yet, this ‘consensus’ was a repeated diplomatic rhetoric, since no agreement or MoU was signed, except an agreement on establishing a cultural centre.87 In the following November, a Chinese delegation led by the Chinese Foreign Ministry’s Special Envoy on Asian Affairs Sun Guoxiang was invited by Myanmar to observe the general elections. China, of course, gave a helping hand to the Burmese generals who were accused of manipulating the election from the West.

5.6.3 Deteriorated Military Relations On 9 February 2015, one of the most serious clashes between MNDAA and government forces since the 2009 ‘Kokang incident’ suddenly broke out in Laukkai township, causing a flood of refugees to flee into Yunnan. The overnight conflict in Kokang immediately raised considerable concerns in Beijing, which officially pressured both sides to end the fighting and warned them not to carry out military actions in Chinese territory. China also tried to persuade the Myanmar government and military to accept 84 Zhong

Hua Ren Min Gong He Guo Yu Mian Dian Lian Bang Gong He Guo Guan Yu Shen Hua Liang GuoQuanMian Zhan Lue He Zuo De Lian He Sheng Min [69]; President U Thein Sein, Chinese Premier Li Hold Talks at Presidential Palace [70]. 85 Steinberg and Fan [71]. 86 Myanmar, China Agree to Step Up Cooperation in Border Management and Work Together to Maintain Peace and Stability in Border Areas [72]. 87 Myanmar, China Ink Agreement on Establishment of Cultural Centers [73].

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5 Hedged Against China: Myanmar’s China Policy (2011–2015)

MNDAA, a key stakeholder that had been harshly suppressed by Myanmar military since 2009, as a formal member in the peace talks, so as to defuse the tension in the border areas. Yet, China failed. Not only the ethnic conflicts were ongoing, but the Myanmar government and military rejected MNDAA’s request for peace talks. What’s more, the Myanmar military began criticising the allies of MNDAA which have close connections with China as well as Chinese citizens for involving in the conflicts. For example, Lieutenant General Mya Tun Oo, the Chief of Military Security Affairs, accused MNDAA of using Chinese mercenaries at a press conference in Naypyidaw.88 The next day, the Minister of Information for Myanmar, Ye Htut, blamed the Chinese local government and business circles for providing weapons, food, and medical care to the Kokang rebels.89 The Burmese generals hoped that China would pressure MNDAA to disarm, prohibit Kokang insurgents from coming inside China, and reign in the Yunnan officials and Chinese individuals who were helping the rebels. China, however, was caught in a dilemma. It wanted to prevent the cordial relations with Myanmar from being undermined by the ethnic conflicts, while continuing to keep its leverage in northern Myanmar through remaining economic and social connections with the ethnic minorities in Shan and Kachin States. Therefore, it was unlikely that Beijing would entirely abandon the ethnic armed groups or even turn into their enemy. Also, although China had prohibited Chinese nationals and organisations from getting involved in the ethnic conflicts, it was quite difficult to manage individual activities in the border areas. In the months following, the Burmese warplanes frequently flew into Yunnan and threw bombs on Chinese territory in order to attack the rebels that were suspecting of concealing near Chinese territory. But it caused five Chinese victims and thus deteriorating the restrained bilateral relations further. China, for the first time, instantly took a series of military and diplomatic measures to respond to the bloody event. First, Chinese fighters traced, monitored, warned, and chased away Burmese military planes that were flying too close to the border. The Chinese PLA soon deployed air force at Lincang to safeguard sovereignty of national air space. Moreover, the Vice Chairman of China’s Central Military Commission, Fan Changlong, urged the Myanmar military to strictly control and restrain its troops to prevent such an incident from happening again. Otherwise, China would take resolute and decisive actions to protect the lives and property of Chinese nationals. It was obvious that the Chinese senior generals believed that the Myanmar military was at fault and should be responsible for the serious incident. Many Chinese scholars also concluded that the Myanmar military attempted to press China to cut off connections with the ethnic armed groups and resolutely fight those ethnic forces by throwing bombs into Chinese territory.90 But the Myanmar government declared that the rebels had launched the

88 Weng

[74]. [75]. 90 Interviewed with Associate Professor Zhu Xianghui at Yunnan University, Kunming [65]. 89 Ei

5.6 Hedged Against China

117

bomb that landed inside China, reflecting its deep suspicions of and resentment over the Chinese who provided shelter to the ethnic forces attacked by Tatmadaw.91 Second, Chinese Deputy Foreign Minister Liu Zhenmin lodged a formal request with the Myanmar government and asked it to investigate the incident thoroughly and immediately take effective measures to prevent the recurrence of similar incidents.92 On the following day, Chinese Ambassador to Myanmar Yang Houlan talked about maintaining the peace and stability in the border areas with Vice President of Myanmar Sai Mauk Kham and Senior General Min Aung Hlaing.93 Meanwhile, Chinese Foreign Minister Wang Yi travelled to Kunming to expound the solemn position of the Chinese government on the current border affairs and coordinate policies with Yunnan government in order to maintain the peace and stability in the border areas, protect the lives and property of Chinese citizens, and safeguard SinoMyanmar relations.94 Since the local governments in Yunnan were repeatedly criticised by Myanmar for maintaining close contact with the Kokang rebels, Beijing’s action of reining in the Yunnan government was perceived as a tactic to appease Myanmar. Additionally, the Chinese PLA announced the trial of Major General Huang Xing, who had allegedly leaked state secrets to MNDAA during the ethnic conflicts in Kokang in August 2009.95 It was another positive measure taken by China to contain Chinese officers’ connections with the ethnic forces. In the meantime, the Myanmar troops failed to wipe out the Kokang forces through military actions, and the civilian government expected to achieve a national ceasefire agreement with the ethnic groups in order to lift the ruling party’s approval ratings in the coming elections. Given the internal and external pressures, Myanmar softened its harsh stance on MNDAA and sought a detente with China. First, the Myanmar government claimed that all stakeholders should be included in the peace process and agreed to hold dialogue with the ethnic groups within three months and initiate a framework process within two months after a formal truce had been called.96 Second, Senior General Min Aung Hlaing urged the ethnic groups to keep their promises and resolve political issues through political means at the 70th anniversary armed forces day parade on 27 March.97 Third, Myanmar Foreign Minister Wunna Maung Lwin, together with Lieutenant General Aung Than Htut, travelled to China on 2 April to deliver an official apology to China over the bomb blast in March. 91 Min

[76]. Foreign Minister Liu Zhenmin Urgently Summons Ambassador of Myanmar to China to Lodge Solemn Representations over the Casualties of Chinese Civilians Caused by Bombs from Myanmar’s Airforce Jet [77]. 93 Chinese Ambassador Yang Houlan Met with Vice President of Myanmar Sai Mauk Kham [78]; Chinese Ambassador Yang Houlan Met with Commander in Chief Min Aung Hlaing [79]. 94 Wai Jiao Bu Zhang Wang Yi Xian Shen Yun Nan Jie Shao ZhongMianBian Jing Shi Wu Shang Yan Zheng Li Chang [80]. 95 Chan [81]. 96 Myint [82]. 97 Defence Services Commander-in-Chief Promises to Support Elections in November [83]. 92 Vice

118

5 Hedged Against China: Myanmar’s China Policy (2011–2015)

Although China accepted Myanmar’s apology and agreed to further accelerate comprehensive strategic cooperation with Myanmar, the major differences on the ethnic issues have still remained. For China, it attempted to exchange the concession of restraining itself from interfering in Myanmar’s peace process with providing economic benefits for obtaining anticipated returns. These mainly included Myanmar’s abandonment of military offensives in border areas, the ceasefire agreement and political settlement of solving the long-standing ethnic conflicts, and the decreasing Burmese resentment toward China. However, the Myanmar military would not stop military offensives in the border areas unless the ethnic forces buckled under. The Myanmar government was unwilling to officially recognise the political status of MNDAA and its allies because it needed to demonstrate the public that it was fully capable of safeguarding national security. Additionally, it had to crack down on the MNDAA and its partners since they had attempted to be a part of the peace process by challenging government authority. Due to the distrust between the stakeholders on the ethnic issues, the conflicts escalated again in May 2015, which undermined Sino-Myanmar relations most since the bloody clashes in March this year. On 14 May 2015, the Burmese fighters dropped six bombs in Chinese territory twice when attacking the ethnic forces that were reported retreated into China, resulting in several Chinese casualties. It is evident that the Myanmar military attempted to completely eliminate the Kokang insurgents who skilfully played ‘hide and seek’ with it along China-Myanmar border.98 Moreover, it intended to pressure both the local governments in Yunnan and the Chinese individuals to cut off connections with the Kokang rebels on one hand, and on the other hand, it could not substantially provoke China.99 The cross-border bombing irritated Beijing which operated a large-scale live-fire air-ground drill exercises without a clear deadline near the conflict zone in June, the first military excercise conducted by Chinese PLA along China-Myanmar border. Nevertheless, China clarified that the drills were a normal activity of the military,100 intending to deter both the Tatmadaw and Kokang forces from escalating the conflicts, while avoiding further deteriorating the bilateral ties. What’s more, China asked Myanmar to stop the warfare, ease tensions, and restore peace in the border areas at the earliest.101 Due to China’s ‘strong requests’ and the consideration of creating a peaceful environment for the coming elections, the MNDAA announced a unilateral ceasefire in the fighting with the government forces.102 Soon after, China called for final bilateral ceasefire between the Tatmadaw and MNDAA. However, the MNDAA’s concessions and China’s clear-cut statement failed to garner positive responses from both the Myanmar government and military. Conversely, Naypyidaw remained sceptical about MNDAA’s declaration by saying it

98 Yun

[84].

99 Interviewed

with Associate Professor Zhu Xianghui at Yunnan University [65]. Ministry Spokesperson Hua Chunying’s Regular Press Conference on 1 Jun 2015 [85]. 101 Foreign Ministry Spokesperson Hong Lei’s Regular Press Conference on June 9, 2015 [86]. 102 Mian Dian Min Zu Min Zhu Tong Meng Jun Jun Shi Wei Yuan Hui (Tong Gao) [87]. 100 Foreign

5.6 Hedged Against China

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would instead monitor the actual activity on ground.103 In fact, the Burmese leaders believed that it was MNDAA’s responsibility to stop the war since it broken previous promises of being pardoned by stopping attacking the government troops made by Peng Jiasheng, who is the leader of MNDAA, in 2012.104 Therefore, MNDAA’s decision of a unilateral ceasefire was not considered as a big compromise for the Burmese leaders. In a similar vein, the Myanmar military continued to launch offensives with heavy weapons on the MNDAA from 12 June, shattering the unilateral ceasefire proposed by the MNDAA two days earlier. In the meantime, it took measures to rein itself in and dismissed Chief of Staff of the Air Force Lwin Oo, who was responsible for the March bombing incident, at the end of June, in order to prevent the clashes from spilling over into Chinese territory. Since no Burmese warplanes crossed the border and no bombs were repeatedly dropped into Chinese territory, China softened its tough stance on the ethnic conflicts. Moreover, China turned to responding to Myanmar’s repeated request for blocking the entry of the Kokang rebels along the border areas and not tolerating their cross border actions or sheltering them from the government forces by steping up its cooperation with Myanmar in border management.105 As Chinese Foreign Minister Wang Yi said, China would call on the two countries to jointly safeguard security in the border areas in November 2015.106 The main reason is that China has increasingly discontent with the Kokang forces who were reigniting ethnic conflicts and threatening border security, civilian safety, border trade, as well as Chinese ambitions to push forward BRI in Myanmar.

5.7 Balanced China’s Influence 5.7.1 Expanded Economic Partnership In order to avoid China’s dominance over its economy and politics, Myanmar has sought to balance against China since 2011. In terms of foreign trade, Myanmar maintained strong economic connections with its traditional trade partners from ASEAN such as Thailand and Singapore, intending to balance the growing Chinese influence in the country. In fact, China has never monopolised Myanmar’s foreign trade, though China-Myanmar bilateral trade experienced great growth starting in 2010. For instance, the average share of Myanmar-China bilateral trade in Myanmar’s total external trade was 32.77% between 2011 and 2015. Besides, Myanmar has expanded 103 Mclaughlin 104 Kachin

and Zaw [88]. Soldiers and Myanmar Government Troops Engage in New Clash, RAF, June 16, 2015

[89]. 105 Myanmar,

China Agree to Step Up Cooperation in Border Management and Work Together to Maintain Peace and Stability in Border Areas [72]. 106 China Confident in Ties with Myanmar after Election [90].

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5 Hedged Against China: Myanmar’s China Policy (2011–2015)

trade cooperation with other powerful economies in Asia, Japan and India in particular. Since 2010 Myanmar has revived close trade relations with Japan which has became No. 4 trade partner for Myanmar. The total value of Myanmar-Japan bilateral trade increased sharply to 1498.22 million USD in 2012 and peaked at 2305.61 million USD in 2014, which is at nearly five times that of it in 2010. Following a fastgrowing relationship between Myanmar and India, both sides have moved the trade relations forward. The total value of Myanmar-India trade experienced a steadily growth between 2011 and 2015, and reached a peak at 1,637.1 million USD in 2013. India, therefore, has became No. 5 trade partner for Myanmar. Due largely to the thawed relations between Myanmar and the West since the late 2000s, the Burmese leaders repeatedly urged the West to lift economic sanctions as soon as possible. In order to continue to push forward the democratic process in Myanmar, the US has begun easing restrictions on trade with Myanmar since 2012. In December this year, the U.S. Department of the Treasury issued a general import license to Myanmar. In August 2013, the Executive Order 13,651 was also issued by U.S. President Obama to further remove restrictions on imports from Myanmar, except those on certain goods such as jadeite, rubies, and jewellery. During Thein Sein’s US trip in May 2013, Myanmar signed a Trade and Investment Framework Agreement with the US. Owing to these measures and agreements, Myanmar-US trade relations got a new momentum. As mentioned in Table 5.5, Myanmar exported an estimated 29.9 million USD worth of goods to the US for the first time in 2013. Since then, exports from Myanmar to the US have increased greatly, with an average growth of 111.89%. Meanwhile, Myanmar’s imports from the US have also increased greatly, from 48.90 million USD in 2011 to 227.2 million USD in 2015, an increase of nearly five times. Still, the US-Myanmar trade remains far less than China-Myanmar trade. To reduce its heavy reliance on Chinese economy, Myanmar reinforced investment cooperation with its traditional partners from ASEAN, opened its markets to Indian and South Korean companies in early 2000, and resumed investment negotiations with Western countries in 2012. Since the late 1988 Myanmar has maintained close Table 5.5 Myanmar’s trade with the US and China (2011–2015) (USD million) Year

Import US

2011

48.90

Export China

US

–

0

Total China –

US 48.90

China –

2012

65.80

2719.47

0

2238.07

65.80

4957.54

2013

145.80

4105.49

29.90

2910.75

175.70

7016.24

2014

92.90

5019.97

92.90

4673.87

185.80

9693.84

2015

227.20

6395.00

143.80

4569.00

371.00

10,992.00

Source United State Census Bureau, U.S. Department of Commerce; Myanmar Statistical Information Service, https://mmsis.gov.mm/sub_menu/statistics/statDbList.jsp?vw_cd=MT_ ZTITLE

5.7 Balanced China’s Influence

121

investment relations with ASEAN states, intending to sustain its economic development and hedging against the large amount of Chinese capital pouring into Myanmar. The total amount of Thailand’s investments in Myanmar was 892.22 million USD between 2012 and 2015, which was 21.61% of Chinese investments in Myanmar in the same period. Starting from 2010, foreign investments from both Chinese and Thai enterprises decreased drastically, while Singapore’s investments increased sharply. The total volume of FDI from Singapore was 11,287.81 million USD between 2011 and 2015, which was 133.18 and 1265.13% of Chinese and Thai investments, respectively. Thus, there was actually a balance of foreign investment in Myanmar between the three countries over the past two decades, in which the total value of Thailand and Singapore’s investment in Myanmar was marginally higher than China. In addition, there was also a tripod between the three countries in Myanmar’s market because of historical links and geographical proximity. In general, Chinese capital was attracted to resource exploitation in northern Myanmar where the ethnic Chinese diaspora governed, and the Thais dominated the investment activities in eastern Myanmar and Singapore invested heavily in Yangon region. Besides, Myanmar has sought India’s capital and technology to develop its crumbling infrastructure and counterbalance the rising Chinese economic influence in the country. India’s investment flow to Myanmar increased by nearly fifty times between 2012 and 2015, with a total amount of 252.90 million USD. Most of the Indian investment goes into cross-border transportation in Myanmar-India border, hydroelectric resources in Sagaing Region and Rakhine State and oil and gas on the southern coast. Since early 2000 South Korean companies have spread into Myanmar market and achieved a remarkable success. So far, South Korea is No. 5 (the four others are China, Singapore, Thailand, and Hong Kong) foreign investor for Myanmar with a cumulative value of 3308.01 million USD between 2000 and 2015. Although Japanese investment in Myanmar has stagnated over the past few years due to the Western pressures, it soon revived after the end of the economic sanctions on Myanmar in 2012. The FDI from Japanese companies jumped to 219.79 million USD in 2015, more than ten times that of it in the 1990s. Japan is also the only foreign country involved in the Thilawa Special Economic Zone, one of the three special economic zones in Myanmar, reflecting Myanmar’s great desire to attract Japanese capital and technology to modernise the country. Because of the much improved political ties between Myanmar and the West, the Western enterprises has reinvested in Myanmar since 2011. As shown on Table 5.6, the FDI flow into Myanmar from Western enterprises grew dramatically from 243.00 million USD in 2012 to its peak at 1,267.34 million USD in 2014, a five-fold increase. Despite falling to 547.71 million USD in 2015, it was more than twice that of it in 2012. In addition, more Western companies have been getting involved in investment activities in Myanmar since 2012. For instance, only two countries-the UK and the Netherlands-had investments in Myanmar in 2012. This increased to three countries in 2013, seven in 2014, and six in 2015. Myanmar has also received a large amount of foreign aid from the West, so as to consolidate the bilateral relations and promote the economic and social development. Ever since 2009, the US has increased economic assistance to Myanmar steadily in

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5 Hedged Against China: Myanmar’s China Policy (2011–2015)

Table 5.6 Western countries and China’s FDI flow to Myanmar (2012–2015) (Fiscal Year Apr. 1–Mar. 31) (USD million) Country

Year 2012

2013

2014

2015

Total

UK

232.70

156.86

721.85

68.71

1180.12

Netherlands

10.30

0

431.30

438.02

879.62

France

0

5.36

67.25

0

72.61

Australia

0

0.53

0

29.73

30.26

Switzerland

0

0

27

1.69

28.69

Sweden

0

0

14.3

0

14.3

US

0

0

2.04

2.61

4.65

Germany

0

0

3.6

0

3.6

New Zealand

0

0

0

6.95

China

231.77

56.92

516.90

3323.85

6.95 4129.44

Source Foreign Investment of Permitted Enterprises by country of Origin, Myanmar Statistic Information Service, https://mmsis.gov.mm/statHtml/statHtml.do; Statistic Yearbook of Myanmar, 2011; Myanmar Statistic Information Service, https://www.mmsis.gov.mm/sub_menu/statistics/sta tDbList.jsp?vw_cd=MT_ZTITLE

order to push forward the democratic process. The total value of America’s aid to Myanmar increased from 31.38 million USD in 2009 to 59.00 million USD in 2012 and 119.20 million USD in 2015. The total amount of the America’s aid to Myanmar in Thein Sein era was 452.68 million USD, which was 543.24% of the aid in the SLORC/SPDC period with 83.33 million USD. Further, the US expanded the aid areas to health, training, and democratic transition, and deepened development cooperation by substantially increasing the economic support fund to encourage consistent progresses in the democratical process in Myanmar. In the meantime, the EU increased development aid from 16.79 million EUR in 2010 to 85.00 million EUR in 2015 to Myanmar to assisting the civilian government’s efforts to maintain inclusive, sustainable economic growth and create a better life for the Burmese people.107 In addition, the total value of the EU’s development aid to Myanmar between 2011 and 2015 was 377.28 million EUR, nearly twice that in the 2000s. Since 2011, Japan, which was once a major resource country of foreign aid for Myanmar during the Cold-War, revived ODA to Myanmar to support its democratic process and compete with China. The total value of Japan International Cooperation Agency’s (JICA’s) aid programs from 2012 to 2015 was 317,643 million yen, with an average share of 15.65% of the total allocated to Southeast Asian countries.108 Myanmar, therefore, became the top recipient of Japanese ODA for the first time in 2012, with a share of 39.2% of the total amount of JICA’s assistance to ASEAN countries. Besides, Myanmar received a total of Rs.1,246 crores from India 107 Myanmar/Burma, 108 Annual

International Cooperation and Development, European Commission [91]. Report (2008–2016) [92].

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for constructing and upgrading its crumbling industrial facilities between 2000 and 2015.109

5.7.2 Diversified Foreign Policy Myanmar has cultivated a diversified set of relationships solely based on its national interests, designed to maximise its benefits from the friendly relations with the states around the world while minimising the risks of its high dependence on China. Sandwiched between China and India, Myanmar is committed to maintain a delicate balance between the two giants and thus to reduce its vulnerability. It is in this context that Myanmar has actively developed relations with India since 2011 by conducting frequent high-level visits and strengthening economic and defence cooperation. Soon after his China trip, Thein Sein led a senior delegation comprising cabinet ministers to New Delhi in October 2011, a landmark event that sought to transform India-Myanmar relations.110 During the visit, both sides signed several agreements on economic and technical cooperation, agreed to collaborate on antiinsurgency operations along the border, and expressed strong political support for each other. The significant visit is definitely the counterbalance measure to balance the comprehensive strategic cooperative partnership between Myanmar and China which was announced during Thein Sein’s China tour in May 2011. Half a year later, Indian Prime Minister Manmohan Singh undertook a three-day visit to Myanmar in May 2012, the first visit by an Indian Prime Minister over the past two decades.111 This significant visit resulted in 12 agreements on economic and technical assistance, trade and investment, border development, physical connectivity, and academic and cultural exchanges. Singh also met with Aung San Suu Kyi for the first time at a public occasion, a major shift in India’s Myanmar policy in which it started to officially engage with the Burmese opposition parties in order to protect India’s interests from being undermined. In November 2012, Aung San Suu Kyi returned to India after a gap of nearly four decades, as part of India’s ongoing engagement with the democrats in Myanmar.112 Since then, India has continued to maintain close contact with the Burmese opposition parties and prepared for the political upheaval in Myanmar. Myanmar has also strengthened multilateral cooperation with India within regional cooperation frameworks, intending to improve its national image and enhance its international reputation. In December 2012, President Thein Sein attended the ASEAN-India Summit held in New Delhi. In March 2014, Myanmar agreed to strengthen cooperation with India on physical connectivity, trade and investment, and tourism among the member states at the 3rd BIMSTEC meeting held in 109 Gottschlich

[93]; India Budget Proposes to Cut Aid for BD, Nepal Myanmar [94]. [95]. 111 Singh [96]. 112 After Four Decades, Suu Kyi Comes to India [97]. 110 Gupta

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Naypyitaw. India encouraged Myanmar to play a greater role in the BIMSTEC, especially in promoting cross-border infrastructure projects along the India-Myanmar border. In November this year, the new Indian Prime Minister, Narendra Modi, attended the ASEAN-India Summit and the 9th EAS held in Naypyitaw. Both sides agreed to further enhance commercial and cultural ties by promoting cooperation in the India-Myanmar-Thailand trilateral highway project, the Kaladan project, the bus service between Imphal and Mandalay, the possibility of India investing in Myanmar’s special economic zones, oil and gas exploitation, India’s agricultural assistance to Myanmar, and the Buddhist connection.113 After the establishment of the civilian government in March 2011, Thein Sein actively participated in various ASEAN forums, successfully held the 2014 ASEAN Summit, and repeatedly claimed for deep integration with ASEAN, attempting to promote integration with ASEAN and thus to reduce its heavy reliance on China. At the 46th ASEAN Economic Ministers meeting in August 2014, Thein Sein urged the ASEAN member states to make joint efforts for regional economic integration through the free flow of goods, services, investment, skilled labour, and capital.114 He also visited some Southeast Asia countries to consolidate Myanmar’s identity of a member state of ASEAN. These mainly included the visit to Laos in July 2011, Singapore in February 2012, Vietnam, Cambodia, and Laos in March 2012, and Thailand in July 2012. Due to the intense regional diplomatic effort, Myanmar has not only strengthened cooperation with ASEAN states but also expanded its influence within ASEAN. Due to the consideration of getting a strong backer in international forums and balancing its ties with neighbouring countries, Myanmar has built close relations with Russia since 2011.115 In June 2011, Shwe Mann travelled to Russia to sign armament deals that had been discussed previously,116 the first foreign trip made by a Burmese top leader to Russia since Maung Aye’s Russia tour in 2006. More than half a year later, Myanmar Foreign Minister Wunna Maung Lwin paid his first visit to Moscow to discuss bilateral cooperation in the areas of trade and investment, information, culture and sports, health and education, science and technology, tourism, military technology, mining and energy, human resource development and capacity building, and regional and international issues.117 In January 2013, Russian Foreign Minister Sergey Lavrov paid a reciprocal visit to Myanmar to further strengthen the friendship between the two countries. In November 2014, Thein Sein talked with Russian Premier Dmitry Medvedev at the East Asia Summit. In 2015, Vice President Nyan Tun and Deputy Minister for Culture Daw Sanda Khin visited Moscow and Saint Petersburg. As relations between Myanmar and the West began thawing in 2009, Japan shifted from limited engagement to full engagement with the junta in order to revive the 113 Nagpal

[98]. U Thein Sein Urges ASEAN Members to Speed Up Regional Integration [99]. 115 Ludmila Lutz-Auras [100]. 116 KoHtwe [101]. 117 Union Foreign Affairs Minister Back from Russia [102]. 114 President

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cordial relations with Myanmar and contain China’s expanding strategic ambitions in Myanmar as well as the Indian Ocean. In the economic area, Japan increased ODA to Myanmar exponentially and waived Myanmar’s unpaid debts to push the democratic process and national reconciliation. After waiving unpaid debt of 3.7 billion USD in April 2011, Japan officially restarted ODA to Myanmar in June this year. Then, in January 2013, Japan waived another loan during the Paris Club meeting. Japan also established a business support centre in Yangon in September 2012 and signed an investment agreement with Myanmar in December 2013 in order to promote economic cooperation with Myanmar. In addition, Japan offered various training and educational programs to Burmese workers and students through the JICA and other institutions. In the political domain, Japan provided diplomatic support to Myanmar on various bilateral and multilateral occasions, such as the Japan-ASEAN Summit and the Mekong-Japan Summit. What’s more, high-level mutual visits have been taken place since 2012, resulting in an advanced friendship between the two countries. These mainly included Thein Sein’s Japan trip in April 2012 and Shinzo Abe’s Myanmar tour in May 2013. Japan also initiated defence cooperation with Myanmar by conducting military exchanges and port visits for the two armed forces, and providing training to Burmese military personnel. Despite the fact that Myanmar has benefited much from the large-scale economic assistance and political support from Japan, it actually avoided the active political exchanges and close military cooperation with Japan as well as its adverse effects on Myanmar-China relations. Soon after the suspension of the Myitsone Dam, Thein Sein received U.S. Secretary of State Hillary Clinton in December 2011. During the milestone visit, Hillary offered a large amount of development aid to Myanmar and pledged to promote cooperation between Myanmar and international financial institutions, attempting to encourage Myanmar’s democratisation and keeping it on the right track under the formula of ‘action-for-action’.118 In response, Thein Sein promised to promote engagement between the two countries and proceed with democratization.119 Nonetheless, sanctions still remained in place until Myanmar continues to push forward democratic reforms. The Burmese leaders fully understood that U.S. engagement would not be guaranteed unless there are continued and substantial progresses in democratic process, especially a political compromise with Aung San Suu Kyi. Given this, Myanmar initiated many reforming policies with the aim to promote the democratisation process and appease the US as well as the international community in the next few months. Since then, a series of significant measures were taken by both sides to normalise bilateral relations. These mainly included the nomination of a new U.S. ambassador to Myanmar in June 2012, the deregulation of sanctions on Myanmar in September 2012, U.S. President Obama’s ‘historic’ trip to Myanmar in November 2012, and President Thein Sein’s first and second foreign visit to Washington in September 2012 and May 2013 respectively. Owing to the active engagement with the US, Thein Sein was widely regarded as a pro-West leader who attempted to balance China’s influence by approaching the US. Although 118 Haacke 119 Peace,

[103]. Stability, Economic Growth and HRD Essential for Democratization Process [104].

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conservative leaders, such as Vice President Tin Aung Myint Oo, were discontented with the quickly implemented reforming policies and the rapprochement with the US, Thein Sein insisted on continuing the reforms and contacting with the US. As the Myanmar-US relations were rapidly warming, Myanmar has increased the leverage of the US in its balancing act to China dramatically. Reengagement between Myanmar and the EU did not commence until October 2009, when Brussels announced a 35 million EUR program called the Livelihoods and Food Security Trust Fund for Myanmar.120 It seemed that the EU was gradually softening its hard-line attitude toward the military regime and trying to encourage democratic reforms in Myanmar. In return, Myanmar also attempted to benefit from the trade, investment and aids from the EU and relieve the external pressures from the West. Given this, both sides normalised relations after the establishment of the civilian government in 2011 and conducted repeated high-level visits and dialogues in the following years. These mainly included Thein Sein’s Europe tour in September 2014, the first most senior official to visit to EU since 1988, Aung San Suu Kyi’s Europe trips in June 2012, October 2013, and October 2014, and the discussions between Burmese officials and their EU counterparts at the ASEAN-EU Ministerial Meeting and Asia-Europe Meeting.

5.7.3 Strengthened Defence Cooperation The Myanmar military has strengthened defence cooperation with Russia and India, and started to engage with the West, so as to further moderlise the Tatmadaw and reduce its high dependence on Chinese military hardware. In June 2013, Senior General Min Aung Hlaing toured Moscow to discuss bilateral defence cooperation and visit a MiG fighter jet plant and the KBP Instrument Design Bureau, one of the main enterprises in the Russian defence industry. It resulted in a popular speculation of Myanmar’s intention of purchasing new weapons from Russia.121 In June 2015, Min Aung Hlaing discussed the matter of providing scholarships for Burmese students to study in Russian institutions, the sharing of experiences between the two armed forces, and expanding technological cooperation with Russian Commanderin-Chief of the Land Forces, General Oleg L. Salyukovhow, in Naypyidaw.122 Except military exchanges, Myanmar has purchased a great number of advanced air- and sea-based weapons from Russia with the aim to develop enough confidence and combined operational capability to subdue a large-scale military offensive that could be launched by foreign countries from the air and sea. The total value of Myanmar’s arms imports from Russia between 2011 and 2015 are 619.00 million USD, accounting for 29.54% of its arms import in the same period. Additionally, 120 Dosch

and Sidhu [105]. of Defence Services Senior General Min Aung Hlaing Visits JSC RAC MiG Plant [106]; Senior General Min Aung Hlaing Visits No 2 Armoured Corps [107]. 122 Senior General Min Aung Hlaing Meets Russian Commander-in-Chief of the Land Forces [108]. 121 Commander-in-Chief

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Myanmar contracted a cooperation deal for the peaceful use of nuclear energy with Russia at the 19th St. Petersburg International Economic Forum in June 2015, a big step in the nuclear energy cooperation between the two countries.123 In the past two decades, nuclear cooperation has become an indispensable component in Myanmar-Russia bilateral ties and thus enhanced the mutual strategic trust. Since 2011, frequent high-level visits between the two navies of Myanmar and India have taken place, led India to consolidate the position of the principal defence partner for Myanmar. In July 2013, Vice Admiral Thet Swe travelled to New Delhi to further strengthen the naval operational, training, and materiel cooperation, pushing forward bilateral military relations and promoting capacity building and capability enhancement.124 In July 2015, Min Aung Hlaing vowed to deepen defence and security cooperation with India, especially in the maritime security domain, when he met Indian Prime Minister Modi in New Delhi.125 Both sides also established a number of bilateral mechanisms aiming at institutionalising defence cooperation, such as the annual dialogue between the two navies. In the meantime, they have increased the number of military exercises to further strengthen naval cooperation in various fields of joint operation, training, and logistics support. For instance, the Burmese warships participated in the ‘Milan’ exercise in February 2012 and held the first naval exercise with the Indian Navy in the Bay of Bengal in March 2013. The Myanmar navy has received various naval weapons and training programs provided by the Indian Navy. During Thet Swe’s India trip in July 2013, he sought Indian assistance in building offshore patrol vessels and for a supply of naval sensors as well as other military equipment to upgrade its weak navy.126 A similar request was made during Min Aung Mlaing’s India tour in July 2015, during which he was keen on India’s offshore patrol vessels after visiting Indian Goa Shipyard Limited. Although project approval has not yet come through due to sanctions, Shekhar Mittal, Chairman and Managing Director of Goa Shipyard Limited, said that it is only a matter of time before approval is given.127 With the thaw in relations between Myanmar and the West, military engagement has been restored. The Burmese generals attempted to upgrade the weak army by cooperating with the powerful Western forces. Aung San Suu Kyi, too, appears to be more supportive of the military interactions between Myanmar and the West than she was in the past.128 While the Western countries have not only intended to induce the Myanmar military to withdraw from politics and submit to civilian control through consistent engagement, but also aimed to balance China’s military influence. In November 2012, Lt. General Francis Wiercinski, the Commander of the

123 Vice

President U Nyan Tun Expects SPIEF to Counter Global Challenges to Energy [109]. Navy Chief visits India, Indian Navy [110]. 125 Sr. Gen. U Min Aung Hlaing, Commander-in-Chief of Myanmar Defence Services Calls on PM, Government of India Prime Minister’s Office [111]. 126 Myanmar Reported as Seeking Naval Support from India, Mizzima, July 30, 2013 [112]. 127 Parameswaran [113]. 128 Hiebert et al. [28]. 124 Myanmar

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U.S. Pacific Command, travelled to Naypyidaw to discuss human rights, the first highlevel visit by a senior US military officer since the early 1990s. This led to dialogue and some training, particularly in the areas of humanitarian aid and human rights, and greater military professionalisation offered by the U.S. defence Institute for International Legal Studies.129 Since then, the Myanmar military has been in contact with the U.S. forces at various bilateral and multilateral forums, such as TrackII dialogue on proliferation related issues and the informal US-ASEAN defence ministers’ meeting. The Myanmar navy has also been invited to visit U.S. warships and observe military exercises led by the U.S. navy. Most significantly, the U.S. military has been working for some time in an effort to expand and deepen military engagement with the Burmese military, so as to influence the mindset and thinking of the ideological Burmese officers through three important mechanisms: International Military Education Training, Foreign Military Financing, and Section 1206 of the National defence Authorization Act.130 In addition, the Myanmar military was keen on customised English training programs that the U.S. army could provide. If this materialised, it could benefit and lead to a culture of reforms within the Tatmadaw, and give its future leaders important tools to play a greater role in various regional security forums.131 Over the past two decades, military interactions between Myanmar and the EU had been suspended due largely to the evident ideological differences. The EU which imposed arms embargo and economic sanctions towards the Burmese military regime had cut off all channels to engage with the Burmese military until 2011. For EU, military exchange is part of the re-engagement policy towards Myanmar and thus should be promoted. While the Burmese generals were lobbying for lifting the arms embargo and trying to receive professional trainings through intermittent engagement with their EU counterparts. In June 2013, the head of UK forces Gen David Richards visited Myanmar, which revived a bilateral military interaction that goes back decades. The landslide visit since the military coup in 1962 resulted in UK’s decision of offering training to Burmese military staff in human rights and the laws of armed conflict in the following month.132 Then, in December 2013, a UK military attaché was sent to Yangon to build productive connections with local contacts. The first defence education course was offered by the UK Defence Academy to promote the rule of law, democratic transition, and human rights in Myanmar in January 2014, in addition to the Strategic Leadership Program focusing on the professionalisation of leadership within the Tatmadaw in January 2015.133 Apart from the UK, France and Germany began transferring weapons to Myanmar in 2014, though the arms embargo had not been lifted. For instance, Myanmar purchased an estimated 16 million USD worth of diesel engines from France between 2014 and 2016, as well as 8 million USD worth of trainer air-craft from Germany between 2015 and 2016 . 129 Haacke

[103, p. 68]. 69–70. 131 Hiebert et al. [28, p. 17]. 132 McElroy [114]. 133 Burma: An Update on Our Defence Engagement, Government of UK, January 23, 2015 [115]. 130 Ibid,

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64. W. Xiao, Z. Zhenyu, Cong Ao Ba Ma Fang MianKan Mei Mian Guan Xi Fa Zhan Bian Hua [The New Changes in US-Myanmar Relations since Obama’s Myanmar Visit], He Ping Yu Fa Zhan [Peace and Development], No. 1 (2013), p. 62 65. Interviewed with Associate Professor Zhu Xianghui at Yunnan University, Kunming, 26 Oct 2017 66. Myanmar Would Promote Existing Friendship and Cooperation with China, The New Light of Myanmar, 28 Feb 2012. https://www.burmalibrary.org/docs13/NLM2012-02-28.pdf 67. Zhong Guo Guo Wu Wei Yuan Yang Jie Chi Fang Wen Mian Dian Quan Jing Sao Miao [Chinese State Councilor Yang Jiechi Visited Myanmar], Mian Dian Jin Feng Huang Bao She [Myanmar Golden Phoenix], 5 July 2013. https://mmgpmedia.com/local/3795-2013-0705-15-52-23 68. Xi Jinping Tong Mian Dian Zong Tong Wu Deng Sheng Ju Xing Hui Tan [Xi Jinping Held Talk with Myanmar President U Thein Sein], Xin Hua Wang [Xinhua Net], June 27, 2014. https://news.xinhuanet.com/world/2014-06/27/c_1111358498.htm 69. Zhong Hua Ren Min Gong He Guo Yu Mian Dian Lian Bang Gong He Guo Guan Yu Shen Hua Liang GuoQuanMian Zhan Lue He Zuo De Lian He Sheng Min [Sino-Myanmar Joint Declaration on Deeping Bilateral Comprehensive Strategic Cooperation], Xin Hua Wang [Xinhua Net], 14 Nov 2014. https://news.xinhuanet.com/world/2014-11/14/c_1113257573. htm 70. President U Thein Sein, Chinese Premier Li Hold Talks at Presidential Palace, The Global New Light of Myanmar, 15 Nov 2014. https://www.burmalibrary.org/docs20/GNLM201411-15-red.pdf 71. D. I. Steinberg, H. Fan, Modern China-Myanmar relations: Dilemma of mutual dependence (Copenhagen: NIAS Press, 2012), p. 296 72. Myanmar, China Agree to Step Up Cooperation in Border Management and Work Together to Maintain Peace and Stability in Border Areas. The Global New Light of Myanmar, 5 Sept 2015, https://www.burmalibrary.org/docs21/GNLM2015-09-05-red.pdf 73. Myanmar, China Ink Agreement on Establishment of Cultural Centers. The Global New Light of Myanmar, 6 Sept 2015. https://www.burmalibrary.org/docs21/GNLM2015-09-06-red.pdf 74. L. Weng, Government Wrong to Suggest Wa, China Involvement in Kokang Conflict: UWSA. The Irrawaddy, 27 Feb 2015. https://www.irrawaddy.com/news/burma/govt-wrong-suggestwa-china-involvement-kokang-conflict-uwsa.html 75. K.K. Ei, Myanmar says Kokang rebels getting help from China’s side of border. RFA 26 Feb 2015. https://www.rfa.org/english/news/myanmar/ye-htut-kokang-02262015162400.html 76. W. Min, Fighting Intensifies in Myanmar’s Kokang Region, VOA, March 18, 2015. https:// www.voanews.com/a/fighting-intensifies-in-myanmar-kokang-region/2685901.html. 77. Vice Foreign Minister Liu Zhenmin Urgently Summons Ambassador of Myanmar to China to Lodge Solemn Representations over the Casualties of Chinese Civilians Caused by Bombs from Myanmar’s Airforce Jet, Ministry of Foreign Affairs of The People’s Republic of China, March 14, 2015. https://www.fmprc.gov.cn/mfa_eng/wjbxw/t1246178.shtml 78. Chinese Ambassador Yang Houlan Met with Vice President of Myanmar Sai Mauk Kham, Embassy of China in Myanmar, March 17, 2015, https://mm.china-embassy.org/eng/xwdt/ t1248060.htm 79. Chinese Ambassador Yang Houlan Met with Commander in Chief Min Aung Hlaing, Embassy of China in Myanmar, March 17, 2015, https://mm.china-embassy.org/eng/xwdt/t1248062. htm 80. Wai Jiao Bu Zhang Wang Yi Xian Shen Yun Nan Jie Shao ZhongMianBian Jing Shi Wu Shang Yan Zheng Li Chang[Foreign Minister Wang Yi Arrived in Yunnan and Introduced the Solemn Position of Chinese Government on the Current China-Myanmar Border Affairs], Zhong Xin Wang [China News Agency], March 17, 2015. https://www.chinanews.com/gn/2015/03-17/ 7135551.shtml 81. M. Chan, Senior Chinese military strategist ‘leaked state secrets, helped rebels in Myanmar’. South China Morning Post, 6 Mar 2015. https://www.scmp.com/news/china/article/1730837/ pla-military-strategist-leaked-state-secrets-helped-myanmar-rebels

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82. Y. Myint, For lasting peace, dialogue must be inclusive of all ethnic groups, The Global New Light of Myanmar, 3 Apr 2015. https://www.burmalibrary.org/docs21/GNLM2015-04-03red.pdf 83. Defence Services Commander-in-Chief Promises to Support Elections in November, The Global New Light of Myanmar, 28 Mar 2015. https://www.burmalibrary.org/docs21/GNL M2015-03-28-red.pdf 84. S. Yun, After Border Bombing, What’s Next for Burma and China? The Irrawaddy, 18 Mar 2015. https://www.irrawaddy.com/opinion/guest-column/after-border-bombing-whatsnext-for-burma-and-china.html 85. Foreign Ministry Spokesperson Hua Chunying’s Regular Press Conference on 1 Jun 2015, Ministry of Foreign Affairs of The People’s Republic of China, June 1, 2015, https://www. fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/t1269123.shtml 86. Foreign Ministry Spokesperson Hong Lei’s Regular Press Conference on June 9, 2015, Ministry of Foreign Affairs of The People’s Republic of China, June 9, 2015. https://www. fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/t1271756.shtml 87. Mian Dian Min Zu Min Zhu Tong Meng Jun Jun Shi Wei Yuan Hui (Tong Gao) [MNDAA Military Committee (Announcement)], Zheng Yi Guo Gan [ Justice Kokang], 10 June 2015. https://blog.sina.com.cn/s/blog_9ce88e820102vjhx.html 88. T. Mclaughlin, H.Y. Zaw, Under pressure from China, Kokang Rebels Declare Myanmar Ceasefire. Reuters, 11 June 2015. https://www.reuters.com/article/us-myanmar-rebels-ceasef ire-idUSKBN0OR0T120150611 89. Kachin Soldiers and Myanmar Government Troops Engage in New Clash. RAF, 16 June 2015. https://www.rfa.org/english/news/myanmar/kachin-soldiers-and-government-tro ops-engage-in-new-clash-in-shan-state-06162015161641.html 90. China Confident in Ties with Myanmar after Election, Xin Hua Wang [Xinhua Net], 12 Nov 2015, https://news.xinhuanet.com/english/2015-11/12/c_134806973.htm 91. Myanmar/Burma, International Cooperation and Development, European Commission. https://ec.europa.eu/europeaid/countries/myanmarburma_en?qt-node_tabs_country_= 2#qt-node_tabs_country_ 92. Annual Report (2008–2016): Japan International Cooperation Agency (JICA). https://www. jica.go.jp/english/publications/reports/annual/index.html 93. P. Gottschlich, New developments in India-Myanmar relations? J. Curr. Southeast Asian Affairs 2, 153 (2015) 94. India Budget Proposes to Cut Aid for BD, Nepal Myanmar. The Daily Observer, 2 Mar 2015. https://www.observerbd.com/2015/03/02/75481.php 95. A. Gupta, Myanmar’s critical role in bolstering India’s look east policy. Institute for defence Studies and Analyses (IDSA), 2 Feb 2012. https://www.idsa.in/idsacomments/MyanmarsCrit icalRoleinBolsteringIndiasLookEastPolicy_agupta_020212 96. U.B. Singh, An assessment of Manmohan Singh’s visit to Myanmar, Issue Brief, Institute for defence Studies and Analyses (IDSA), 1 June 2012. https://www.idsa.in/issuebrief/AnAsse ssmentofManmohanSinghsVisittoMyanmar 97. After Four Decades, Suu Kyi Comes to India. The Hindu, 13 Nov 2012. https://www.the hindu.com/news/national/after-four-decades-suu-kyi-comes-to-india/article4093225.ece 98. D. Nagpal, PM Modi Holds Talks with Myanmar Prez, Stresses on Cultural, Commercial Ties. Zee News, 12 Nov 2014. https://zeenews.india.com/news/india/pm-modi-holds-talkswith-myanmar-prez-stresses-on-cultural-commercial-ties_1497070.html 99. President U Thein Sein Urges ASEAN Members to Speed Up Regional Integration, August 26, 2014, The New Light of Myanmar. https://www.burmalibrary.org/docs19/NLM2014-0826-red.pdf 100. L. Lutz-Auras, Russia and Myanmar-friends in need? J. Curr. Southeast Asian Affairs 34(2), 175 (2015) 101. K. Htwe, Shwe Mann Heads to Moscow. The Irrawaddy, 27 June 27 2011. https://www2.irr awaddy.com/article.php?art_id=21577

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102. Union Foreign Affairs Minister Back from Russia, The New Light of Myanmar, 3 Mar 2012. https://www.burmalibrary.org/docs13/NLM2012-03-03.pdf 103. J. Haacke, The United States and Myanmar: from antagonists to security partners? J. Curr. Southeast Asian Affairs 34(2), 60 (2015) 104. Peace, Stability, Economic Growth and HRD Essential for Democratization Process. The New Light of Myanmar, 2 Dec 2011. https://www.burmalibrary.org/docs12/NLM2011-12-02.pdf 105. J. Dosch, J.S. Sidhu, The European Union’s Myanmar policy: focused or directionless? J. Curr. Southeast Asian Affairs 34(2), 98 (2015) 106. Commander-in-Chief of Defence Services Senior General Min Aung Hlaing Visits JSC RAC MiG Plant, The New Light of Myanmar, 26 June 2013. https://www.burmalibrary.org/doc s15/NLM-2013-06-26.pdf 107. Senior General Min Aung Hlaing Visits No 2 Armoured Corps, Receives Chairman of RussiaMyanmar Friendship Association, President of Novel Oil Company and Chairman of RussiaMyanmar Military Technical Cooperation Joint Commission, The New Light of Myanmar, 28 June 2013. https://www.burmalibrary.org/docs15/NLM-2013-06-28-red.pdf 108. Senior General Min Aung Hlaing Meets Russian Commander-in-Chief of the Land Forces, The New Light of Myanmar, 2 June 2015. https://www.burmalibrary.org/docs21/GNLM201506-02.pdf 109. Vice President U Nyan Tun Expects SPIEF to Counter Global Challenges to Energy, Economy, Geopolitics, The Global New Light of Myanmar, 20 June 20, 2015. https://www.burmalibr ary.org/docs21/GNLM2015-06-20.pdf 110. Myanmar Navy Chief Visits India, Indian Navy. https://www.indiannavy.nic.in/content/mya nmar-navy-chief-visits-india 111. Sr. Gen. U Min Aung Hlaing, Commander-in-Chief of Myanmar Defence Services Calls on PM, Government of India Prime Minister’s Office, 29 July 2015. https://pib.nic.in/newsite/ PrintRelease.aspx?relid=123897 112. Myanmar Reported as Seeking Naval Support from India, Mizzima, 30 July 30 2013, https://archive-1.mizzima.com/news/regional/9762-myanmar-reported-as-seekingnaval-support-from-india 113. P. Parameswaran, India, Myanmar Eye Future defence Cooperation. The Diplomat, 28 July 28. https://thediplomat.com/2015/07/india-myanmar-eye-future-defence-cooperation/ 114. D. McElroy, Britain to offer military training to Burma to help end ethnic conflicts. The Telegraph, 14 July 2013. https://www.telegraph.co.uk/news/worldnews/asia/burmamyanmar/ 10178638/Britain-to-offer-military-training-to-Burma-to-help-end-ethnic-conflicts.html 115. Burma: An Update on Our Defence Engagement, Government of UK, January 23, 2015. https://www.gov.uk/government/world-location-news/burma-an-update-on-our-def ence-engagement 116. D. Singh (ed.), Southeast Asian Affairs 2013 (Singapore, The Institute of Southeast Asian Studies, 2013) 117. D. Singh (ed.), Southeast Asian Affairs 2014 (Singapore, The Institute of Southeast Asian Studies, 2014) 118. Interviewed with Associate Professor Kong Peng at Yunnan University, Kunming, 29 Dec 2017

Chapter 6

Approached to China: Myanmar’s China Policy (2016–2020)

Since NLD assumed office in March 2016, Myanmar’s China policy has experienced with adjustments due to the changing external environments and domestic politics. Externally, the rising tensions in the SCS indicated high risks of getting involved in Sino-US power rivalry for Myanmar. Internally, the deepening cooperative relations between the democratic government and the military ensured the stability in Myanmar while the Rohingya refugee crisis deteriorated Myanmar’s relations with the West. Given this, the Burmese democratic leaders have pursued China’s help for economic development and diplomatic protection while continuing to counterbalance China by practising an active neighborhood diplomacy and multilateralism.

6.1 Rising Tensions in SCS At the end of the second term of Obama administration, the strategic significance of Southeast Asia in U.S. ‘Rebalancing’ strategy continued to increase. As Obama said at the US-ASEAN Summit in February 2016, the U.S.-ASEAN partnership was on a new trajectory that will carry us to even greater heights in the decades ahead.1 In practice, the US has committed to push forward the TPP and get more deeply involved into the SCS disputes, so as to reinforce its predominance and contain China’s rise. In February 2016, the US and some Southeast Asian countries eventually achieved an agreement on implementing TPP, a major step to strengthen America’s economic presence in Southeast Asia and balance China’s rising influence in the region. As Obama claimed the TPP would let America, not China, lead the way on global trade.2 After the SCS Arbitration was released by Permanent Court of Arbitration (PCA) in July 2016, the US has employed various policy instruments to deter China’s legal activism in SCS. These mainly included the accusion of China for violating 1 The 2 The

White House [1]. Washington Post [2].

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international law and militarising the artificial islands in SCS, and the conduction of Freedom of Navigation Operations (FONOPs) near the islands occupied by China. U.S. assertive behavior have not only been viewed with hostility by the Chinese government, but have also been criticised by Chinese nationalists who launched antiAmerican movements on the Internet. In October 2016, a survey by the Pew Research Center indicated that more than half of the Chinese interviewees (52%) think that the US is trying to prevent China from becoming an equal power; only 29% believe that the US is willing to accept China’s rise. In addition, just under half (45%) say the US is a major threat, which is the highest percentage among the seven potential threats tested in the survey.3 Moreover, China has taken a series of countermeasures to safeguard its economic and strategic interests in Southeast Asia and reduce U.S. military deterrence in SCS. First of all, China accelerated the negotiation process of Regional Comprehensive Economic Partnership (RCEP) in order to counter TPP. Second, China refused to accept the SCS Arbitration by condemning the arbitration process and the tribunal’s ruling as illegal and illegitimate. From Chinese perspective, the entire process and ruling were created and manipulated by the US and other powers to weaken China and foment disorder in the region.4 Third, the Chinese PLA enhanced its military deployment in SCS, and monitored and warned away the U.S. warships which illegally ‘invade’ Chinese territorial waters, so as to maintain the territorial sovereignty and deter U.S. expansion in the region. Since Donald Trump took office in January 2017, Southeast Asia has continued to be a focus of U.S. policy towards Asia. Soon after the function of the new government in Washington, the U.S. Secretary of State Rex Tillerson and Defence Secretary James Mattis visited Southeast Asia in August and October 2017 respectively. Later, Trump initiated his first Southeast Asia trip and proposed the ‘Indo-Pacific’ strategy in which the ASEAN remains vital when he attended the US-ASEAN Summit in November 2017. This grand strategy aiming at expanding attention on the maritime space, building closer relationships with allies and partners, strengthening the rule of law, civil society and transparent governance, and promoting private sector-led development,5 which was widely seen as a counterbalance to BRI. This perception was further consolidated in Chinese society since the new U.S. Secretary of State Mike Pompeo announced that the US will provide 113 million USD to support digital economy, energy, and infrastructure and another 300 million USD to reinforce security cooperation throughout the region in July and August 2018 respectively.6 It is evident that the US is committed to enhance its economic and military presence in the region, so as to contain China’s rise. In the meantime, the Trump administration upgraded its military deterrence in SCS by sharply increasing the FONOPs, building Quadrilateral Security Dialogue (QUAD) with Japan, Australia and India, and strengthening defence cooperation with Vietnam, Malaysia and Singapore, resulted in global concerns over the military conflicts in SCS. What’s more, 3 Wike

and Stokes [3]. [4]. 5 US Department of Defence [5]. 6 US Department of State [6, 7]. 4 Swaine

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the US has not only accused China of pushing territorial ambitions even during the COVID-19 pandemic, but overtly supported the claimant states to challenge China in SCS. In March 2019, Pempeo personally claimed that the Philippine-claimed disputed territory falls under the provision of the mutual defence treaty.7 In the recent maritime standoff between China, Vietnam and Malaysia over offshore gas and oil exploration, Pempeo criticised China for exerting military pressure and coercing its neighbors in the SCS and urged the ASEAN countries to call out China’s aggressive behavior in the maritime region.8 In addition, the U.S. warships maintains persistent presence near the drilling facility with the aim to oppose China’s coercive and unlawful actions in SCS.9 U.S. deep involvement and provocative actions in SCS caused China’s forceful countermeasures mainly including the strong responses and extensive military exercise. Since the Sino-US competition have intensified over the past years, Myanmar has been faced with a more restrictive inclusive external environment than ever before.

6.2 U.S. Criticism and China’s Assistance The restrictive inclusive external environment imposed high risks and low benefits for Myanmar, among which the first and foremost is the difficulty in maintaining balance between China and the US. Since Trump became president, the MyanmarUS relationship has stagnated because of the declining significance of Myanmar in America’s Southeast Asia policy and their disputes over the Rohingya issue.10 In fact, Myanmar was excluded from Trump’s first Asia tour and other senior U.S. officials’ Southeast Asia trips, such as Tillerson in August 2017, Mattis in October 2017 and January 2018, and Pompeo in August 2018. Moreover, the Rohingya refugee crisis has sparked a major dispute between the US and Myanmar and has dominated the cool Myanmar-US relations.11 So far, the US has revived sanctions on the Burmese officers, suspended military cooperation with the Burmese army, and imposed pressures on Myanmar government to push the democratic process forward. It has led to a popular resistance against the US in among the Burmese elite and citizens. It is in this context that Myanmar has hardly advanced warming relations with the US and thus to counterbalance China. Additionally, although the US pledged to increase investment and provide development aids to Myanmar after the inauguration of the democratic government in March 2016, the capitals and aids from the US have been actually decreased. Given this, Myanmar has to rely on China, ASEAN, Japan, India and Russia to reduce American pressures while stimulating economic growth. 7 Gutierrez

[8]. [9]. 9 Chatmas [10]. 10 According to Murray Hiebert, the US has no focus on Myanmar except the Rohingya refugees. Interviewed with Murray Hiebert, Senior Associate [11]. 11 Interviewed with Murray Hiebert, Senior Associate [11]. 8 Nguyen

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Second, the anti-Chinese sentiment in Burmese society have been slightly reduced because of China’s active public diplomacy and the growing significance of Chinese investment for Myanmar. On one hand, China has expanded people-to-people exchanges and provided a large number of development aid to Myanmar with the aim to improve its poor national image and build up mutual trust between the two peoples. Meanwhile, the Chinese companies have shared more responsibilities for developing the local communities,12 and enhanced the transparency of the projects by inviting the journalists coming from all around the world to do interviews.13 In addition, they invested few new big natural resource exploitation projects since 2016, which also contributed to the declining resentment of Chinese investment in Myanmar. On the other hand, the Burmese elite who are committed to modernise the country has increasingly realised the significance of Chinese investment.14 Given the decreasing domestic pressures, the Myanmar government has a strong incentive to enhance economic cooperation with China. Third, China continues to be the main diplomatic shelter for Myanmar during the Rohingya refugee crisis started from the mid-2017 as well as an indispensable mediator in the peace talks in northern Myanmar. In practice, China has not only offered its key support for Myanmar reducing the mounting pressures from the West, but helped to bring about an agreement on repatriating the Rohingya refugees fled to Bangladesh between Myanmar and Bangladesh and proposed a three-stage path to resolve the Rohingya issue thoroughly.15 Besides, knowing that the peace process will be a top priority for the NLD government, China would like to play a larger, more positive role in national reconciliation to approach the democratic government.16

6.3 Increasing Domestic Challenges The Burmese new government has not only inherited its predecessor’s legacy but also encountered new challenges, chiefly including the ethnic conflicts and religious tensions in minority areas, and the Coronavirus Disease 2019 (COVID-19) pandemic as well as its adverse effects on national economy. Shortly before the establishment of the democratic government, the Myanmar military renewed its offensives against 12 Interviewed

with Professor Yin Myo Thu at University of Yangon [12].

13 Interviewed with Senior Engineer Guo Yu at Chinese State Power Investment Corporation (CPCI)

[13]. 14 According to my interviews with many Myanmar scholars since 2017, they emphasised that the government officials want to attract Chinese investment to promote the economic development while the local farmers are discontent with Chinese investment. Interviewed with Professor Yin Myo Thu at University of Yangon [12] and Interviewed with Dr. Myint San, Vice Chairman of Dawei SEZ Management Committee of Myanmar [14]. 15 Three-stage Path: first, to effect a ceasefire on the ground, to return to stability and order; second, find a workable solution for the return of refugees; third, to work toward a long-term solution based on poverty alleviation. See Lee [15]. 16 Yun [16].

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the Shan State Army-North (SSA-N), which led to escalated conflicts in northern Myanmar. Therefore, State Counsellor Aung San Suu Kyi, the de facto leader of the democratic government, made national reconciliation the cornerstone policy of her government and took the lead in promoting the peace process. In July 2016, she chaired the new established National Reconciliation and Peace Center (NRPC) and held three rounds of ‘21st Century Panglong’ conferences, attempting to achieve a peace agreement with the ethnic groups. However, due to the determining role of the military in peace talks, she could not really lead the peace process and thus to reach the ceasefire agreement. What’s more, it is quite difficult for her to remove the deep distrust and dispute between the military and the ethnic armed groups during the endless conflicts in the past decades. Given this, some analysts even concluded that the Myanmar government could not solve the ethnic issue, though Aung San Suu Kyi expected to do it.17 The tensions between the Burmese Buddhist and Rohingya Muslims in Rakhine State eventually evolved into bloody conflicts in October 2016 and August 2017, causing global outcry over the human rights abuse of the Burmese military and great pressures on the democratic government. Despite the fact that Aung San Suu Kyi established the Central Committee for Rakhine State Peace, Stability and Development and an independent Advisory Commission on Rakhine State in May and August 2016, respectively, and reached an repatriation agreement with the Bangladesh government on resettling the Rohingya refugees, Myanmar has continued to be criticised by the West. In the meantime, the terrorist attacks from the Rohingya insurgent group called Arakan Rohingya Salvation Army (ARSA) in northern Rakhine State constitute an abiding and clear danger to Myanmar. Given the escalated ethnic conflicts and rising crisis of Rohingya refugees, rumours started to spread in Myanmar that a rift had emerged between Aung San Suu Kyi and Min Aung Hlaing. To be sure, there have been many disputes over the 2008 Constitution, national reconciliation, and Rohingya issue between the Myanmar government and military. But in spite of these disputes, the cooperative relationship between them has still been remaining. First of all, the NLD has actually taken only few measures to review the Constitution until the January 2019 when it proposed the formation of a joint committee on constitutional amendment in the parliament. Nonetheless, the NLD would not to engage in the kind of counterproductive activity that could provoke a military coup, which is the bottom line of the constitutional amendment.18 For instance, although the soldiers rejected all substantive changes in the proposed constitutional amendments in parliament in March 2020,19 the NLD did not only not protest against the military but insist on pushing forward the constitutional amendment within the parliament. Second, Aung San Suu Kyi shifted from refusing to accept the NCA reached by the previous government and several ethnic 17 For instance, Professor Li Chengyang at Yunnan University said that the NLD government could not address the ethnic issue at the conference of “Myanmar Situation in 2017 and Sino-Myanmar Relations”, Kunming, December 28, 2017. 18 Moe [17]. 19 The Economist [18].

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groups, and agreed to push forward the peace process based on it after the NLD seized power. Third, despite a huge amount of stress from the international community, Aung San Suu Kyi has refrained from criticising the Tatmadaw, which is suspected of engaging in a campaign of brutal suppression in Rakhine state. This reflects her willingness to avoid challenging the military on an issue about which many people in her party do not care.20 In addition, Aung San Suu Kyi has frequently engaged with Min Aung Haing and stood with the Tatmadaw in the Rohingya refugee crisis, intenting to build harmonious relations with the military. Since the NLD formed a cabinet in March 2016, the country has experienced more flooding, an earthquake, and a slowing economy locked into falling commodity prices.21 To improve the business environment and thus to attract more foreign trade and investment, the NLD government has initiated administrative and economic reforms. Yet, the Burmese economy has suffered from natural disasters, low agricultural and gas exportation, slow investment flows, and most importantly, the COVID19 pandemic. The COVID-19 risks inflict long-term economic pain on Myanmar which relies heavily on international trade, investment, and technology.22

6.4 Aung San Suu Kyi: Democratic Leader Although Aung San Suu Kyi is not qualified to become president in the 2008 Constitution, she is the de facto leader of the Burmese democratic government. As a foreign minister, Aung San Suu Kyi is in charge of foreign affairs, and thus dominating Myanmar’s diplomacy. Nevertheless, the Burmese generals would not support any change in foreign policy that could threaten Myanmar’s unity, stability, or sovereignty.23 Therefore, one cannot ignore the profound influence of the military on Myanmar’s foreign policy towards China, especially in the security area. In this context, it is necessary to analyse the personalities of both Aung San Suu Kyi and Min Aung Mlaing and their influences on Myanmar’s diplomacy. Aung San Suu Kyi, who is the youngest daughter of Aung San, Father of the Nation of modern-day Myanmar, was born in Rangoon in 1945. She received a university education in India and the United Kingdom (UK), graduating from the University of Delhi in 1964 and the University of Oxford in 1968. She then worked at the UN for three years, and married Michael Aris, a British scholar, in 1972. She was unknown to the public until August 1988, when she first became involved in the power struggle against the military regime in Yangon. Since then, she has been at the centre of Myanmar’s political struggle.24

20 Kurlantzick

[19]. [20, p. 142]. 22 Chau [21] and Bharat [22]. 23 Selth [23]. 24 Silverstein [24, p. 1007]. 21 McCarthy

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Owing to various advantages that Aung San Suu Kyi enjoys, she has accumulated a high reputation that no other person has achieved among the Burmese people, and has grown into the opposition leader in Myanmar. For instance, she is the daughter of her father, the national hero Aung San, one of the few unstained political leaders of the past. She has also won the hearts and minds of Burmese society by reaching out to ordinary people and delivering public speeches to them, and openly criticising the military government.25 Due to her prolonged struggle against the Burmese junta, she remained under house arrest for almost 21 years until 2011 when she was elected as a member of parliament. From then on, she shifted from criticising the junta to engaging with it, and won the general elections in 2015 and established a democratic government in the following year. Her prominent family background, overseas study experience, and long power struggle against the military jointly shaped her unique personality. First, given her close relations with Aung San, she is the most popular leader among the Burmese people. Second, she is perceived as a pro-West Burmese leader due largely to her close connections with the West. She is also a pro-democracy leader with a strong will because of her long resistance against the dictatorship in Myanmar. Third, she is described as a pragmatic leader who would like to cooperate and compromise with the military rather than confronting it, as well as a reformist who has initiated a number of reforming policies. However, she is also denounced as a ‘democratic dictator’ in Myanmar, as she vowed to make all the decisions in Myanmar’s new government.26 Indeed, Aung San Suu Kyi is highly stubborn in that she does not like to listen to the advice of veteran politicians and retired military officers.27 Given her high reputation in the democratic movement and the international community, no one within the NLD can openly challenge her authority. Thus, Aung San Suu Kyi will remain the most important political figure in the near future in Myanmar. Due to the close connections between Aung San Suu Kyi and the West and her deep democratic values, she would prefer to further reintegrate Myanmar into the world and improve relations with the West. At the same time, the pragmatic leader would also like to maintain friendly relations with Myanmar’s neighbours, China and India in particular. This policy should be guaranteed by her popularity and authority in the Burmese society and government.

6.5 Min Aung Hlaing: Conservative Leader Yet, her efforts might be undermined by Min Aung Hlaing. Actually, the Burmese democrats perceived Min Aung Hlaing as a conservative leader who is an obstacle to improving human rights, democratic reform, peace, modernisation, and ameliorating

25 Hlaing

[25, p. 364]. [26]. 27 Hlaing [25, p. 365]. 26 Cartalucci

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health and education in Myanmar.28 Min Aung Hlaing was born on 3 July 1956 in Tavoy, Tenasserim Division, and came from a civil service family. He studied law at the Rangoon Arts and Science University from 1972 to 1973, and enrolled in the Defence Services Academy in the 19th Intake in 1974. After graduation, he went on to command positions in Mon State, and was promoted to commander of the Triangle Regional Command in 2002.29 He was mostly unknown to the public until he led an offensive against the MNDAA in Kokang in 2009. Subsequently, he rose to the top leaders of the Burmese military, and eventually became the command-in-chief in 2011 and the senior general in 2013. Min Aung Mlaing has been heavily accused of ethnic cleansing against the Rohingya people by many human rights organisations since the terrorist attacks in Rakhine State in August 2017.30 He is also a hardliner, essentially blocking any attempts at compromise, especially in political and security affairs. For instance, he has defended the military’s continued role in national politics and refused to make compromises with the government on the constitution amendment. He has monopolised the security affairs and taken a tough stance towards the ethnic rebels, and rejected foreign interference in the ethnic conflicts. It is because of his intransigent position on democratic transition and human rights, Myanmar has to some extent been isolated by the West again. Yet, it is unsafe to say Min Aung Mlaing is a conservative with a reputation as a hawk like Than Shwe who took an aversion to the oppositions as well as the West. Actually, he is willing to share power with NLD, and support its efforts of diversifying diplomatic relations on the basis of the assurance of military privileges. In short, Min Aung Mlaing is the main barrier to NLD’s engagement with the West and monopolises the military affairs on the one side, and, on the other, he would give back to NLD’s active diplomacy in the economic and political area.

6.6 Myanmar’s Assessment of External Environments As Aung San Suu Kyi said in April 2016, Myanmar will adopt an independent, non-aligned, and active foreign policy, and has dealt closely and warmly not only with neighbouring countries but also with the other states of the world.31 In practice, Myanmar has practiced an active neighbouring diplomacy and multilateralism by conducting frequent foreign visits to neighbouring countries and the Western powers, and actively participating in regional and international forums, in order to reintegrate itself into the international community. However, it was thrust into the centre of international concern when the Rohingya refugee crisis hit in mid-2017. The Burmese democratic leaders who have been faced with mounting Western pressure, therefore, 28 Farmaner

[27]. Aung Mlaing [28]. 30 Farmaner [29]. 31 The New Light of Myanmar [30]. 29 Min

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have to be alert for U.S. interference and the deteriorated relations between the US and the Myanmar military as well as their adverse political consequences. In fact, the Burmese general has a long standing perception that the country is threatened by the subversive activities jointly conducted by anti-government forces and the West. For this reason, the democratic government has forced to take a tough position on Western criticism and avoid criticising or even pressing the Tatmadaw, so as to maintain cooperative relations with the military. In addition, the America’s favourable image among Burmese society has been damaged due to U.S. Ambassador Scot Marciel’s use of the word Rohingya as a designation for the Rakhine-based Muslim ethnic group as well as U.S. constant criticism.32 In this context, the US has became a major threat to Myanmar again, led the latter to approach to China. Given the rising ethnic conflicts between 2016 and 2017, the Burmese authorities strongly suspected that China is behind the insurgent groups that attacked civilian targets and security outposts in northern Myanmar.33 Nonetheless, the Myanmar government has fully understood that China holds the key to success for its national reconciliation process, and it is necessary for it to positively engage with China.34 Meanwhile, the Burmese generals’ concerns about Chinese interference in the ethnic conflicts have been eased due to China’s great efforts of cutting down connections with the Kokang forces, pressuring the ethnic groups to participate in peace talks, and prohibiting Chinese individuals from becoming involving in the ethnic clashes in northern Myanmar. Moreover, they were aware of China’s growing discontent with Myanmar military’s escalating offensives in the border areas as well as their damaging effects on the security and stability in Chinese peripheral territories. Given this, the Myanmar military has pursued cooperation with China on pushing forward the peace talks and border management. Since the NLD established a democratic government in March 2016, the base of Myanmar’s foreign policy has consisted of receiving foreign assistance and promoting the socio-economic development of the country.35 To achieve this goal, Myanmar has initiated a series of economic and administrative reforms, and made great efforts to expand trade, investment, and aid from regional powers and Western countries. For instance, during her China tour in August 2016, Aung San Suu Kyi called on China to promote more trade and investment cooperation that would create employment opportunities for Burmese locals, intending to reduce local resistance towards Chinese investments.36 But in spite of that, Myanmar has been increasingly aware of China’s ambitions in the country via the mega-projects with strategic importance under BRI and CMEC. In August 2018, Deputy Finance Minister Set Aung, who was appointed to lead the Kyaukpyu project negotiations in May of this year, said that the project size has been scaled down tremendously due to the fear of ‘debt trap’, where countries are pressed into making sovereignty-surrendering concessions 32 McCarthy

[20, p. 145].

33 Ibid. 34 Myoe

[31, p. 103]. [32]. 36 Myanmar State Counselor Office [33]. 35 Sein

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when they are unable to service their BRI-related debts.37 With the spread of COVID19, Myanmar would increase its dependence on China, economically and politically on one hand, and maintain the balancing act among great powers and thus to avoid the dominance of China on the other hand.

6.7 Approached to China 6.7.1 Revived Close Bilateral Economic Relations Since the inauguration of the new government in March 2016, Myanmar has taken a number of measures to revive the close economic relations with China. First and foremost, Myanmar resumed the controversial mega-projects funded by Chinese companies except the Myitsone dam soon after the function of the democratic government. These mainly included the Sino-Myanmar oil pipeline, the Kyaukpyu SEZ, and the Letpadaung mining project. The Sino-Myanmar oil pipeline which was suspended during the Thein Sein era was opened in April 2017 when a transportation agreement on Sino-Myanmar Crude Oil Pipeline was signed by both sides during Myanmar President Htin Kyaw’s China tour. On 19 May 2017, China received its first consignment of crude oil from Myanmar via the Sino-Myanmar crude oil pipeline, indicating the full operations of the gas and oil pipeline. So far, the carrying capability of the Sino-Myanmar oil pipeline has increased to 1000 tons per year, nearly half of its full-load capability. Another project is the deep-water port and industrial park in Kyaukpyu SEZ in Rakhine State. On 30 December 2015, an international group including the stateowned China International Trust and Investment Corp. (CITIC), China Harbor Engineering Company, China Merchants Holdings, Yunnan Construction Engineering Group, China TEDA Investment Holding, and Thailand Charoen Pokphand Group won the bid and obtained approval from the Burmese government to develop the Kyaukpyu SEZ. According to CITIC’s introduction, the project, which requires an initial investment of 8.3 billion USD and a total investment of 89.2 billion USD over 35 years, consists of a petrochemical industrial zone, a railroad complex, a logistics centre, export processing industries, multi-purpose terminals, and residential areas, all covering 120 km2 of land and 70 km2 of waterways.38 The construction for the project was originally planned to begin in February 2017, but it failed to start. In April 2017, a new agreement on constructing the Kyaukpyu SEZ was signed by CITIC and the management committee of Kyaukpyu SEZ, in which both sides agreed to carry out the environmental and social assessments as soon as possible so that the construction can start in 2018.39 Five months later, both sides reached a consensus 37 Kapoor

and Thant [34] and Lintner [35]. et al. [36, p. 38]. 39 Lee and Lone [37]. 38 Dunn

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on the equity distribution of the Kyaukpyu port in which CITIC takes a 70% stake.40 In November 2018, a scaled-down framework agreement on the construction of the Kyaukpyu deep-water port, the most important part of the Kyaukpyu SEZ, was signed by both countries. According to the new deal, both sides agreed to narrow down the port, which is decreased from an earlier version of 10 billion USD and 10 berths to a 1.3 billion USD terminal with two deep water berths respectively.41 In addition, an environmental and social impact assessment (ESIA) will be commenced in a year, and new industrial zones will be negotiated and “about three framework agreements will be made”.42 Then, the ESIA was initiated in July 2019, and the shareholder agreement and concession agreement were signed during Chinese President Xi Jinping’s Myanmar trip in January 2020, but the construction work hasn’t started yet. The NLD government approved the Wanbao Mining Company’s request to resume the Letpadaung project on 5 May 2016, even the local protesters accused the government for going against the investigation report led by Aung San Suu Kyi.43 What’s more, the project was publicised as a national project that was beneficial to the economic development of Myanmar. As U Ohn Win, Union Minister for Natural Resources and Environment, said the government is expected to collect about 20 million USD from the project between 5 May 2016 and 31 January 2017.44 There are four reasons could explain Myanmar’s decision of restarting the Letpadaung project, in which the first and foremost is that such policy would not be concerned for general public and thus causing national protests since only the local communities against it.45 Second, the site of the project was far from the ethnic conflict zone, which prevented the ethnic parties from getting involved in the disputes over the project. Third, the Thein Sein government had not officially announced its intention of suspending the project, and the investigation commission led by Aung San Suu Kyi suggested continuing the project in accordance with the recommendations. Fourth, the NLD government expected to attract further investment from China to maintain economic growth by resuming the mining project. So in fact, the NLD government, in addition to reopen the controversial projects, has also supported the new projects proposed by China. For example, Myanmar agreed to jointly build the CMEC during Chinese Foreign Minister Wang Yi’s Myanmar trip in November 2017. The new proposed multifunctional infrastructure starts from Yunnan, goes down south to the central Myanmar city of Mandalay, and further extends east to the new city of Yangon and west to the Kyaukpyu SEZ, forming a three-pillar giant cooperation pattern.46 In July 2018, a 15-point MoU on building the CMEC was reached by Myanmar and China, in which both sides agreed 40 Lee

and Aung [38]. [39]. 42 Chau et al. [40]. 43 Htwe and Wai [41]. 44 Thant [42]. 45 Interviewed with Professor Yin Myo Thu at University of Yangon [12]. 46 Beining and Shuqun [43]. 41 Marex

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to collaborate on many sectors including basic infrastructure, construction, manufacturing, agriculture, transport, finance, human resources development, telecommunications, and research and technology, and form working groups and joint committees to implement the project.47 As the early harvest results of the CMEC, the MoU on the feasibility study on the construction of the Muse-Mandalay railway was signed by the state-run Burma Railway Company and China Railway Second Board Engineering Group Co. Ltd in October 2018. Under the MoU, the feasibility study-which will assess the environmental and social impact of the project-will be conducted within two years, and will go into operation after the approval from the Myanmar government. In January 2020, China handed over to Myanmar the Muse-Mandalay Railway Feasibility Study Report, which is an initial phase of the strategic railway. During State Counsellor Aung San Suu Kyi’s China tour in May 2017, Myanmar reached a MoU on building Myanmar-China Border Economic Cooperation Zone. Later, the two sides set up a joint committee which are responsible for building the border economic cooperation zone, and decided to implement the Ruili-Muse border economic cooperation zone first. During Chinese President Xi Jinping’s Myanmar visit in January 2020, both sides agreed to accelerate negotiation of the framework agreement on the Ruili-Muse cross-border economic cooperation zone.48 Soon after the establishment of the democratic government, Myanmar approved a 3 billion USD and 100,000 barrels-per-day refinery in Dawei, the largest refinery in Myanmar, to the Chinese state-owned Guangdong Zhenrong Energy Corporation in April 2016. According to the formal deal, the Chinese company has a 70% stake, and three Burmese firms, including Myanmar Economic Holdings Limited, Myanmar Petrochemical Corp., and the Yangon Engineering Group, will split the remaining 30% share.49 In the meantime, Myanmar received 1 billion RMB from China which was used to promote the development of health, education, and agriculture in the border areas of Myanmar in 2016.50

6.7.2 Properly Handled the Myitsone Dam Conundrum The NLD government has been caught in a two-way dilemma in which China has repeatedly claimed and lobbied to resume the Myitsone Dam while the Burmese people has protested against the resumption of the project. On one hand, Aung San Suu Kyi has fully considered China’s feelings and future cooperation with China, thus finding a resolution to the issue without damaging relations with China.51 On the other hand, she has to please the public so that the ruling power could be consolidated. Therefore, she has adopted a risky balancing tactic in which her government 47 Consult-Myanmar

[44]. [45]. 49 Aizhu [46]. 50 Global New Light of Myanmar [47]. 51 Sein [32]. 48 Lwin

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expressed the desire to gradually solve the Myitsone Dam conundrum, while avoiding delivering clear signs or making final decisions of the project in order not to trigger national protests. In July 2016, three months after the establishment of the democratic government, the possible solutions to the Myitsone Dam was hotly discussed in Myanmar. According to Myanmar Frontier, there were four options: (1) cancel the project and be liable to pay 800 million USD in compensation; (2) resume work and earn 500 million USD a year in revenue once the dam was completed; (3) do nothing and pay 50 million USD in interest for as long as the project was suspended; or (4) abandon the Myitsone project and work together on mutually agreed hydropower projects.52 The first three choices were well known and widely seen as not being feasible, while the fourth option seemed to be supported by Myanmar government, as the state-run newspaper Kyemon (Mirror) published an editorial supporting this proposal on 24 July 2016. However, it is extremely difficult for the Chinese government to abandon the Myitsone project due to economic and political considerations. Actually, some Chinese scholars have a high expectation from the NLD and suggested it appoint a commission to consider the merits and weaknesses of big infrastructure projects.53 One month later, President Htin Kyaw announced a 20-member investigation commission consisting of parliament members and experts to scrutinise the Myitsone Dam as well as other hydropower projects on the Irrawaddy River. It was the first actual step taken by the NLD government to address the Myitsone Dam issue on the eve of Aung San Suu Kyi’s first China tour. Five days later, the Chief Minister of Kachin State, together with officials of the investment companies from Myanmar and China, toured the site of the Myitsone Dam. During this visit, the officials from the Myanmar Power Investment Corporation pledged to build a road and a park on the banks of the Irrawaddy River to create a better future for the area,54 intending to win support of the local government and residents. The following day, Aung San Suu Kyi told Chinese Premier Li Keqiang that her government would seek a resolution on the Myitsone Dam issue that would serve the interests of both sides through energy administration cooperation.55 It seems that Aung San Suu Kyi attempted to reduce the political significance of the Myitsone Dam by putting the dam on the agenda of the energy sectors of the two countries and thus preventing it from adversely affecting bilateral ties. NLD’s optimistic statements on and practical actions to solve the Myitsone Dam raised national concerns over the possible reconstruction of the Myitsone project. The NLD members, opposition parties, political groups in Kachin State, and environmental and human rights organisations reminded the public of the considerable consequences of reviving the dam. As an editorial article published on the Irrawaddy warned, ‘resuming the project would seriously tarnish Suu Kyi’s claims to moral and political leadership in Burma, and may even prompt a revolt among her own party 52 Kristensen

[48]. [49]. 54 RAF [50]. 55 Reuters [51]. 53 Yun

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members in the NLD’.56 The Burmese public had already blamed the disregarding of the people’s will in the government’s decision-making process on the Myitsone dam issue. It therefore demanded more transparency and participation.57 The KIA and local political parties in Kachin State were strongly against the restart of the Myitsone Dam and constantly pressured the government to listen to locals’ voice. Given the fast-growing domestic criticism, the NLD government deliberately reduced the pace of solving the Myitsone issue and waited for the strong grievance at home to abate. Aung San Suu Kyi carefully dominated the Myitsone issue by emphasising heavily on the determining role of the investigation commission to assure the public of a fair and transparent final result while removing the dissonance from various domestic groups. In October 2016, the investigation commission prepared to submit the first report to the government. Some commission members disclosed that the consensus among its members was against moving forward with the project, but refused to release any information about the first assessment without the permission of the government.58 It is evident that the commission attempted to pressure the government to cancel the Myitsone Dam. However, Deputy Director General for the President’s Office Zaw Htay clarified that the decision on the Myitsone Dam depended only on the Commission’s report and was independent of the government.59 Eventually, the investigation commission submitted its first interim report without any policy recommendations to President Htin Kyaw on 11 November 2016, and announced that it would continue to conduct further interviews and assessments on the socio-environmental impacts until the final report was ready.60 But the commission did not provide a start date or deadline for the final report and neither did the president give the commission instructions on when the report was to be submitted, indicating Myanmar’s efforts of cooling down the Myitsone issue. The Myitsone dispute warmed up again at the beginning of 2017 due to the wide-spread speculation that China may discard the Myitsone Dam and seek other interesting projects. In February 2017, the New York Times revealed that ‘officials close to Aung San Suu Kyi have said that negotiations were underway for Myanmar to pay China, or apply the money to other projects, if the dam is not built’.61 Later, rumors of the abandonment of the Myitsone Dam spread fast in social networks. On 5 April, only one day before President Htin Kyaw’s China visit, the Reuters reported that China was going to abandon the Myitsone project in exchange for other infrastructure projects, including smaller hydropower projects and the deep sea port of Kyaukpyu.62 On the same day, Chinese Foreign Ministry Spokesperson Hua Chunying clarified that the Myitsone Dam was a commercial cooperation project, and said that China would communicate with Myanmar to properly address the problems 56 The

Irrawaddy [52]. [53]. 58 Mon [54]. 59 Ibid. 60 Mon [55]. 61 Ives [56]. 62 Lee and Myint [57]. 57 Tun

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and difficulties in the process of cooperation and sustain the sound development of bilateral cooperation at a regular press conference.63 According to China’s latest statements on the Myitsone Dam, at least two key points can be concluded. First, China has defined the Myitsone Dam as a lawful commercial project which would be handled through business channels. Second, China would like to negotiate with Myanmar to solve the issues in the cooperation process of the Myitsone project rather than simply cancelling or resuming the dam. It appears that there was a major shift in China’s policy towards the Myitsone issue in which China wanted to focus on solving the consequent issues from the possible suspension of the Myitsone Dam, especially Myanmar’s compensation for reneging on the terms of the contract, rather than overtly asking Myanmar to promote the implementation of big projects. The main reasons are the following. First, Yunnan, the main buyer of the electricity from the Myitsone Dam, now has an oversupply of electricity and needed to export its growing electricity holding to ease the excess hydropower capacity.64 Second, China fully realised that there would be strong national resistance against government’s decision of resuming the Myitsone project. Third, China was anxious about Myanmar’s swing to the US due to their disputes over the Myitsone issue. Fourth, China expected to implement other projects at the expense of cooling down the Myitsone issue and waited for an opportunity to solve it. Nonetheless, China had to maintain its pressure on the Myanmar government before finally solving the Myitsone issue, so that it could get enough returns and thus saving face. In May 2017, Chinese Premier Li Keqiang discussed the Myitsone Dam with Aung San Suu Kyi at the Belt and Road Forum for International Cooperation held in Beijing. During which he hoped that Myanmar would properly handle the Myitsone issue to guide cooperation expectations and boost the confidence of enterprises.65 Once again, Li’s statements confirmed that any way that Myanmar employed to address the Myitsone issue would please the Chinese enterprises which have been reluctant to make new investments in a political climate that could be averse to their interests.66 Otherwise, bilateral cooperation would be suffered. Myanmar understood China’s pragmatic attitude toward the Myitsone issue and wanted to bargain with China on the possible compensations, while making the deal not only fair but also transparent for the public by leaning on the commission’s report. As Myanmar Foreign Affairs Director Kyaw Zay Ya said before Htin Kyaw’s China tour, the final decisions will depend on the commission’s report and recommendations.67 Yet, it has seemed that China renewed the hope that the Myitsone Dam would be restarted as the China-Myanmar relationship has been on the upswing since the outbreak of the Rohingya refugee crisis in mid-2017. During a visit to Kachin State in December 2018, China’s ambassador to Myanmar Hong Liang said the Myitsone Dam was crucial for both Beijing and Naypyidaw, and any further delays could 63 Ministry

of Foreign Affairs of The People’s Republic of China [58]. Xin Wang [China News Agency] [59]. 65 Ministry of Foreign Affairs of The People’s Republic of China [60]. 66 TNI [61, p. 3]. 67 Mang [62]. 64 Zhong

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hamper bilateral relations. Later, a statement published by the Chinese Embassy in Yangon said “If this issue fails to be resolved … it will seriously hurt the confidence of Chinese entrepreneurs to invest in Myanmar … the two sides should find an acceptable solution as soon as possible”. It also claimed that the Kachin political leaders and social orgnisations has a ‘positive attitude’ toward the dam, led to a widespread speculation that China wants to revive the controversial project.68 In addition, two or three Chinese works has still stationed at the Myitsone site, indicating that China has never abandoned the Myitsone Dam without compensation.69 Four reasons could explain China’s significant change in the Myitsone issue, in which the first and foremost one is the implementation of CMEC and BRI. According to Joe Kumbun, who is a Kachin based analyst, China has tried to provide full electricity to the cross-border economic cooperation zone and the industrial zones in northern Kachin by restarting the Myitsone Dam, so as to push forward the CMEC and BRI. Second, China is using its support for Myanmar in the face of mounding international pressures over the Rohingya crisis to try to resume the Myitsone Dam and push forward with others.70 Third, China has been getting very upset about the nine years-long suspension of the Myitsone Dam and the slow progress on the resolution to it. But in spite of that, the Myanmar government has made little progress on the investigation of the Myitsone project, and avoided releasing the assessment report and sending a clear message to the public due to the powerful local resistance. In fact, there has been an increasing concern about the Myitsone Dam in Burmese society soon after the Former Chinese Ambassador Hong Liang’s Kachin visit in December 2018. In January 2019, three Kachin political parties and community leaders Rev. Hkalam Samson overtly argued China’s claims that the Kachin people were not opposed to resuming the project were false and misleading.71 Later, in April, prominent environmentalists, activist and writers formed a nationwide committee to oppose the project and warned the government that there would be further resistance if the dam is revived.72 The growing criticism was escalated as rumors that a final decision on the controversial Myitsone Dam may also be on the agenda for the coming visit from Chinese President Xi Jinping in January 2020. In order to prevent the Myitsone Dam from being revived, nearly 40 civil society organisations, mostly based in Kachin State, issued an open letter to Xi on January 15, two days before his planned visit to Myanmar. The letter said that the Myitsone project lacks transparency and that proponents have failed to respect local customs and cultural values or listen to local voices, and called on Xi to permanently terminate the suspended Myitsone Dam project.73 Given the rising pressures from the local communities and the main 68 Zhou

[63].

69 Interviewed with Staff Du Nvni at Upstream Ayeyawady Confluence Basin Hydropower Co., Ltd.

[64]. 70 Kumbun [65]. 71 Ibid. 72 Lwin [66]. 73 Ibid.

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focus of the COVID-19 and coming elections, the NLD government is unlikely to make any big decisions on the Myitsone Dam before the 2020 elections. In the meantime, Myanmar would continue to push forward BRI and CMEC with an attempt to distract China from the Myitsone Dam. In this sense, the Myitsone issue would still be a headache in the bilateral ties between Myanmar and China.

6.7.3 Built Myanmar-China Community with a Shared Future Myanmar has successfully upgraded the comprehensive strategic cooperative partnership with China by conducting frequent high-level visits and exchanges at other levels, building bilateral dialogue mechanism, and embracing Chinese initiatives in the past five years. In April 2016, Chinese Foreign Minister Wang Yi was invited to visit Myanmar, the first senior foreign official to come to the country after the new government was established. During the visit, he expressed China’s great willingness to continue to be a good neighbour, good friend, and good partner to Myanmar,74 and called both sides to facilitate high-level exchanges as soon as possible in order to jointly map out the next steps in bilateral comprehensive cooperation.75 Aung San Suu Kyi too pledged to work with China to strengthen high-level exchanges and economic cooperation in order to improve bilateral relations.76 Her positive responses have, without question, not only reduced China’s considerable concerns over Myanmar’s alienation from China, but also paved the way for the close interactions between the two countries in the near future. Four months later, a joint press release was issued during Aung San Suu Kyi’s first China trip as the State Counsellor of Myanmar. The first and foremost point of the visit was that both sides affirmed the ‘good neighbour’ policy. In fact, Aung San Suu Kyi has repeatedly assured China of a friendly foreign policy in an attempt to reduce China’s deep suspicions about her close connections with the West ever since her first China visit as the Chairwoman of the NLD in June 2015. In practice, Myanmar has constantly supported Chinese efforts to safeguard its core interests like the one-China principle, China’s anti-fragmentation position on Taiwan, Tibet, and Xinjiang. China also provided help in Myanmar’s democratic transition, economic and social development, as well as national reconciliation.77 Besides, the two sides agreed to make further progress in their comprehensive strategic cooperative partnership by increasing friendly exchanges between parties and peoples at all levels, maintaining close coordination in multilateral forums, and promoting trade and investment cooperation.78 Such partnership was reinforced 74 Xin

Hua Wang [Xinhua Net] [67]. of Foreign Affairs of The People’s Republic of China [68]. 76 Ibid. 77 Myanmar State Counselor Office [33]. 78 Ibid. 75 Ministry

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during the high-ranking visits between the two countries in the following years. These mainly included the consensus on closely coordinating on multilateral platforms such as the UN and China-ASEAN summit during President Htin Kyaw’s China tour in April 2017, the promise to push forward BRI and cooperation on promoting the peace talks and addressing the Rohingya issue during Aung San Suu Kyi’s three China trips in May and November 2017 and April 2019 respectively. During Xi Jinping’s Myanmar visit in January 2020, Myanmar not only signed a total of 33 memorandums of understanding (MOUs), agreements, exchange letters and protocols with China in the areas of infrastructure development, railways, industrial and power projects, trade, investment and human resources,79 but supported Myanmar’s approach to the Rohingya crisis. Moreover, Myanmar agreed to build a community with a shared future with China, an updated version of the comprehensive strategic cooperative partnership between Myanmar and China. In the recent COVID-19 pandemic, Myanmar and China has supported one another, resulted in a more cordial relationship than ever before. As early as February this year when China was in the most difficult conditions, Myanmar donated numbers of masks and other medical materials to China. In May when Myanmar suffered from the COVID-19, China also provided medical supplies and sent two batches of medical experts for Myanmar’s COVID-19 fight. What’s more, Xi Jinping promised to continue to provide firm support and help within its capabilities based on Myanmar’s needs during separate phone calls with Myanmar’s President Win Myint. The Myanmar President stressed that Myanmar would deepen their cooperation in various fields to advance the Myanmar-China Comprehensive Strategic Cooperative Partnership.80 In addition to high-level visits, party-to-party exchanges between NLD and CCP and parliament exchanges have gained a stronger momentum since the democratic government was built. In June 2016, a delegation comprising NLD members paid a 10-day study visit to China, the first party-to-party exchanges between NLD and CCP since the formation of the democratic government.81 Before that, Aung San Suu Kyi led a senior delegation to visit China in June 2015. Later, member of the Central Executive Committee of the NLD, Aung Moe Nyunt undertook his first China trip in January 2017. During the visit, he reiterated that NLD attached high importance to developing relations with CCP, and hoped to learn from the CCP’s experience of party governance, state administration, and how to comprehensively develop bilateral communication and cooperation.82 Ten months later, Aung San Suu Kyi travelled to China for the third time to attend the High-level dialogue between the CCP and the world’s political parties. In the meantime, some young party members of NLD have been trained in Chinese academic institutions in Beijing and Yunnan such as the Institute of Myanmar Studies at Yunnan University. Additionally, parliament exchanges between Myanmar and China have also been observed, mainly included 79 Lwin

[45]. [69]. 81 Democratic Voice of Burma (DVB) [70]. 82 International Liaison Department of CPCCC [71]. 80 CGTN

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Speaker of the Amyotha Hluttaw, the upper house of the Myanmar parliament, Mahn Win Khaing Than’s China trip in June 2018. The two countries has tried to institutionalise the bilateral ties by establishing trustbuilding mechanisms and various working groups. In November 2016, the MyanmarChina Foreign and Defence 2 + 2 High-level Consultation was built to discuss the national reconciliation and other security issues. So far, both sides have held four rounds of consultation in Naypyidaw and Kunming, attempting to minimise the adverse effects of the ethnic conflicts on cross-border projects and maintain peace and stability in border region. In January 2020, the two sides reached several agreements on establishing a working group of the promotion of smooth trade and a Friendship-Province/Region Relationship between Yunnan Province and Yangon Region, as well as a local cooperation mechanism under the framework of jointly implementing the CMEC between Yunnan Province and Mandalay Region, in order to enhance economic cooperation between the two countries.83 In addition, Myanmar agreed to establish a tripartite working group mechanism to evaluate the Rohingya repatriation process on the ground with China and Bangladesh in September 2019, intending to properly address the Rohingya refugee issue with the help of China and thus to reduce its international pressures. Ever since NLD seized power, Myanmar has actively participated in China-led initiatives. It restored the strategic projects financed by Chinese companies and approved Chinese new proposal-CMEC, so as to promote pragmatic cooperation within the comprehensive strategical cooperative partnership. In August 2016, Aung San Suu Kyi agreed to work with China to reinforce mutually beneficial cooperation in various fields when Chinese President Xi Jinping suggested docking development plans between China and Myanmar.84 Eight months later, President Htin Kyaw reached an agreement with China on the long-stalled Sino-Myanmar oil pipeline during his first official visit to China on 6 April 2017, the first significant decision made by Myanmar to enrich its strategic connotation to the cooperative partnership. Since then, Myanmar has accelerated economic cooperation with China mainly including the formation of the Implementation Committee of BRI in November 2018, the final deal on the construction of Kyaukphyu port and dozens of other agreements on BRI projects in January 2020.

6.7.4 Sought China’s Assistance to Address Rohingya Crisis The Rohingya refugee crisis in Rakhine State has emerged as another main trouble for Myanmar since the mid-2017. Internally, the ethnic and religious tensions between the Buddhists and Rohingya Muslims threatened national security and challenged social governance of the democratic government. Externally, Myanmar’s relations with the West and the Islamic world have been undermined. The beleaguered nation 83 Lwin

[45]. of Foreign Affairs of The People’s Republic of China [72].

84 Ministry

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has no choice but to seek foreign assistance, while China seized the good opportunity to revive the cordial relations with Myanmar. In practice, China has defended Myanmar on the global stage and promised to provide necessary assistance since the rise of the Rohingya issue. Given this, Myanmar got Chinese support for rejecting the West’s attempts to bring the Rohingya issue to the UN, and accepted Chinese proposal of a three-phase plan for resolving the Rohingya issue and achieved agreement with Bangladesh on repatriating the Rohingya refugees with the help of China. It also received development assistance from China to improve the living conditions of the Rohingyas and develop the poor Rakhine State. In a recent three-day hearing into allegations of genocide at the UN’s highest court in December 2019, Aung San Suu Kyi was backed by China as Wang Yi toured to Myanmar to show support on the eve of her UN trip. During Xi’s historical visit to Myanmar in January 2020, Aung San Suu Kyi asked China to continue to maintain justice for middle and small countries including Myanmar, while Xi promised to maintain justice for Myanmar on the international stage and support Myanmar in safeguarding its national sovereignty and legitimate interests.85 Owed to the close coordination and cooperation on the Rohingya issue, Myanmar has built a more intimate relationship with China than ever before. But in spite of that, Myanmar invited the Philippine diplomat Rosario Manalo to chair the Independent Commission of Enquiry (ICOE) in August 2018, an independent agency aims at investigating the 2017 crackdown that prompted hundreds of thousands of Rohingya to flee the country and submitting reports to the Myanmar government, so as to relieve the external pressure and reduce its heavy reliance on China’s diplomatic support. Meanwhile, the US is carefully navigating support for the Rohingya while maintaining a positive relationship with Myanmar as it battles China for influence over the Southeast Asian nation.86 In fact, although the US has pressured Myanmar to create necessary conditions for the safe and voluntary return of the Rohingya people to their homeland and maintained visa restrictions and financial sanctions on the senior Burmese generals,87 it has continued to employ an engagement strategy that has recognised the positive steps undertaken to date and to incentivize further reform.88 So far, the US remains the leading contributor to the humanitarian response to Rohingya refugee crisis in Myanmar and Bangladesh. With the new fund of 59 million USD in March 2020, the total humanitarian assistance for this crisis is nearly 820 million USD since the outbreak of violence in August 2017.89 In that case, Myanmar would continue to look for Chinese help to resist U.S. pressure while accepting U.S. assistance and keeping contact with it as well.

85 Baijie

[73].

86 Kiedrowski

[74]. [75]. 88 U.S. Department of State [76]. 89 Ortagus [77]. 87 Quadir

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6.7.5 Cooperated with China on Ethnic Issue Although the NLD government prioritised the national reconciliation and actively promoted the peace talks, it was marginalised by the Tatmadaw which continued to control power in the non-Burmese borderlands and monopolise border affairs.90 Therefore, the NLD government was motivated to cooperate with China on pushing forward the peace talks and increase its leverage in peace process. China also has high expectations of NLD in the role it will play in Myanmar’s national reconciliation and fully supported NLD in its efforts to politically resolve the ethnic issue. During Aung San Suu Kyi’s China visit in August 2016, she appreciated China’s positive and constructive role in its national reconciliation while China supported Myanmar’s political dialogue with the ethnic groups.91 Soon after the visit, the NLD government sought China’s help in persuading many ethnic armed groups to participate in the first ‘21 Century Panglong Conference’ which was organised by NLD to achieve National Ceasefire Agreement (NCA) with the ethnic groups at the end of August 2016. Moreover, it invited Chinese Foreign Ministry’s Special Envoy for Asian Affairs Sun Guoxiang, who is the mediator between the Myanmar government, military and the ethnic groups, to observe the conference. However, as the military excluded MNDAA, TNLA and AA which had not signed NCA with the government from participating in the Panglong conference, the peace process suffered a setback. Additionally, the UWSA representatives withdraw from the conference in advance as they claimed that they suffered unfair treatment at the hands of the Myanmar military, which was suspected to have given the UWSA representatives observer status rather than formal member status. It is evident that the Myanmar military has taken ownership of the peace talks in which it supported the political dialogue between government and the submissive ethnic groups while repressing the Kokang rebels. Given the hardlines of the Myanmar military, clashes between the government troops and the ethnic forces were renewed in the following months. Besides, the Myanmar military discontent with China’s interference in the peace process. In September 2016, Senior General Min Aung Hlaing told General Xu Qiliang, vice chairman of China’s Central Military Commission (CMC), the two countries have been sticking to the stance of mutual respect and mutual support, intending to remind China of Myanmar’s concerns over Chinese involvement in the ethnic conflicts. He also did not respond to China’s suggestion of supporting the constant efforts of the Myanmar government and military to achieve Myanmar’s national reconciliation and domestic peace as soon as possible through peaceful negotiation.92 Realising that, Chinese President Xi Jinping assured that China respects Myanmar’s sovereignty and territorial integrity and hopes the country will achieve national reconciliation as early as possible during Min Aung Hlaing’s China trip in November 2016.93 It is noted that China did not mention the peaceful negotiation, 90 TNI

[61, p. 26]. of Foreign Affairs of The People’s Republic of China [78]. 92 Panyue [79]. 93 Jianfeng [80]. 91 Ministry

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which was a goodwill made by China to appease the Myanmar military. Whereas Min Aung Hlaing did not response positively as he only said Myanmar stands ready to work with China to safeguard stability of their border areas. The ethnic fighting intensified again after the surprising attacks in Laukkai launched by MNDAA and its allies on 6 March 2017, which resulted in a Chinese victim in Kokang district. Faced with pressures from the nationalists from both China and Myanmar, China took a series of diplomatic, economic, and military measures to mitigate the tensions in the border region. One week after the ethnic conflict, Sun Guoxiang travelled to Kunming to severely criticise MNDAA’s military adventures and pressed it to announce a unilateral ceasefire immediately during the meetings with MNDAA leaders and UWSA representatives. What’s more, he suggested the UWSA release a statement degrading the conflict, thereby reining in the MNDAA and its allies. He also tried his best to convince the UWSA of the benefits of the NCA and advised the UWSA to sign it. Yet, the UWSA representatives refused to sign NCA and suggested that China instead persuade the Myanmar military to stop attacking the ethnic armed groups.94 It clearly indicated the decreasing Chinese influence on the ethnic armed groups, which have challenged Chinese interests in the border areas by launching strikes against the government forces. As a punishment, China suspended the bank account that the Kokang group had in the Chinese stateowned Agricultural Bank of China after the meeting between Chinese ambassador to Myanmar Hong Liang and Senior General Min Aung Hlaing.95 At the end of this month, the Chinese PLA staged an air-ground live-fire drill without a deadline along Sino-Myanmar border in an attempt to test the border forces’ capabilities in rapid manoeuvring, precise destruction, vertical blockades, and joint strikes.96 Chinese military analysts believe that the PLA intended to deter the ethnic insurgents from challenging Chinese economic and security interests in the border areas, and it has already prepared to deal with any emergencies spilling over the border by ending the conflict within Myanmar. There are two main motivations for China’s harsher stance on the ethnic armed groups. Firstly, the ethnic groups have shifted from being positive links between China and Myanmar to major obstacles that have been harmful to China’s economic and security interests in Myanmar. Hence, China has to punish the ethnic fighters for military adventurism near the trading post and Chinese projects in the border region on one hand, and on the other hand it attempted to press them to make compromises with government and thus to restored stability in the border areas. Actually, the Chinese scholar estimated that the ethnic armed groups would eventually under control of the Myanmar military, and the only way for them to survive is building political parties and participating in the national reconciliation.97 Secondly, China has been faced with pressures from the Myanmar military which criticised Chinese individuals and weapons for involving in the ethnic conflicts. Given this, China cut off 94 Mian

Dian Zai Xian [Myanmar Online] [81]. of Information of Myanmar [82]. 96 Xin Hua Wang [Xinhua Net] [83]. 97 Interviewed with Associate Professor Zhu Xianghui at Yunnan University [84]. 95 Ministry

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the financial connections between Chinese banks and the ethnic forces and improved the management of border areas in order to reduce the Myanmar military’s concerns over Chinese assistance to the ethnic rebels. After the March conflict, all parties in Myanmar focused on the preparation for the second “21st Century Panglong Conference” in May 2017. The Peace Committee held meetings with the representatives of the ethnic groups with China’s assistance to discuss the possibility of their participating in the Panglong conference and their attitude on signing NCA. The military promised to negotiate a ceasefire agreement with the ethnic groups during the Panglong Conference. China hoped to see a more substantive political dialogue through the conference and thus to sustain the peace in the border areas.98 Hence, Chinese representative Sun Guoxiang advised the ethnic leaders to participate in the Panglong Conference and sign NCA on one hand, and persuade the Myanmar government and military to accept MNDAA and its allies which have not signed NCA to attend the conference on the other hand. Owing to these endeavors, 37 agreements were signed at the conference. Nonetheless, the UWSA, MNDAA, and other ethnic groups in northern Myanmar refused to sign NCA and insisted on achieving another agreement that would be suitable for the practical situation in northern Myanmar with government. It’s not surprising, their claims were rejected by the military which has already excluded any non-NCA schemes. Given this, the UWSA was forced to change its previous negative stance on the NCA and switched to seeking a revised NCA based on its own principles through the peace talks. The limited achievements at the second Panglong Conference indicated the deep-rooted distrust and irreconcilable dispute between the military and the ethnic groups, as well as the decreasing Chinese influence in the peace process. The peace process had not gained much traction at the third session of Panglong Conference held in Naypyidaw in July 2018 because the fundamental issues pertaining to political and security aspects remained absent from the conference.99 Moreover, small-scale military clashes between the ethnic fighters and government forces were ongoing during the meeting, thereby adversely affected the political atmosphere. Nevertheless, both the military and the ethnic groups have been pressured to stop the fighting and restart peace talks. For one thing, the Myanmar army failed to win a decisive victory on its ongoing war with the ethnic forces in the rainy season, and for another, it was accused heavily by the West of its human rights abuses in the Rohingya communities and was asked to stop military offensives in northern Myanmar by China which has repeatedly claimed for the peace and stability along China-Myanmar border and called on political dialogue between the Myanmar military and the ethnic minorities. In the meantime, the ethnic groups released a truce declaration and received positive assessment from China and the Myanmar government. Given this, the Myanmar military soon issued an statement of stop all the military actions in northern Myanmar between 21 December, 2018 and 30 April, 2019 in order to please China and the Myanmar government. In spite of the lingering conflict between the government troops and the ethnic groups in the 98 Chongkittavorn 99 Anand

[86].

[85].

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following years, the Myanmar military extended the ceasefire deadline for three times and thus reduced the pressures from China. The recent one is a unilateral ceasefire that will last until August 31 and cover the whole country except areas where terrorist organisations are based announced the Myanmar military by in May 2020.100 It means that clashes between government forces and AA, a terrorist group declared by Myanmar in March 2020, would not be stopped even during the COVID19 pandemic. Moreover, since AA is a member of the Brotherhood Alliance which is composed of MNDAA, TNLA and AA, the ethnic conflict might extend from the Western Myanmar to northern Myanmar after the end of the COVID-19. As China expects to jointly safeguard peace and stability of the border areas with Myanmar and thus to create favorable conditions for promoting economic development of border areas,101 it would continue to press the Myanmar military to stop the fighting and force the ethnic groups to return to the conference table. In that case, the Myanmar military would resist pressure from China while pursuing China’s help of persuading the ethnic groups to sign NCA.

6.8 Continued to Counterbalance China 6.8.1 Active Neighbourhood Diplomacy and Multilateralism Although the NLD government continues to adhere to the “independent, active, and non-aligned foreign policy” that the previous government announced, the policy will be implemented through multiple tracks in diplomacy with a possibility of stronger focus on people-to-people contacts and multilateralism than regime survive.102 Given this, regional cooperation and neighbourhood diplomacy have occupied the priorities on the diplomatic agenda of Myanmar, through which it can not only obtain political support and economic assistance from neighbouring states and regional and international institutions, but offset the risks of its overdependent on China. In the past five years, Myanmar has made great efforts to deeply integrate itself into ASEAN, built closer ties with its Asian neighbours and great powers, tried to improve relations with the West, and actively participated in multilateral organisations like UN. The shifting of regional dynamics forced Myanmar to gradually warm up to ASEAN to avoid getting involved in the China-US power rivalry. What’s more, the major domestic challenges such as the ethnic conflicts, illegal immigrants and economic downturns demand better cooperation with neighbouring countries. In this context, Aung San Suu Kyi chose Laos as the destination for her first official visit in May 2016 with President Htin Kyaw. The surprising Laos trip reflected the high significance of ASEAN in Myanmar’s diplomacy as Laos held the rotating chair 100 Weng

[87]. Net [88]. 102 Myoe [31, p. 89]. 101 Xinhua

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of ASEAN that year. One month after the Laos trip, Aung San Suu Kyi initiated her second official visit to an ASEAN country-Thailand to sign three important agreements on border and labour cooperation in order to enhance the people-topeople exchanges along the border and allow Burmese migrant workers to work legally in Thailand.103 After the global outcary about the Rohingya refugee crisis in 2017, Myanmar has sought ASEAN’s diplomatic support through policy coordination. It accepted ASEAN’s role of mediator between the Myanmar government and the Rohingya Muslims by inviting the Philippine diplomat to investigate the Rohingya case. In June 2018, the new nominated President Win Min paid his first official visit to Thailand which would assume the ASEAN chairmanship in the next year. It was a positive sign for Myanmar’s warming sentiment towards the regional bloc, ASEAN. In the following years, Myanmar has maintained frequent high-level visits with its ASEAN neighbors with the aim to build closer relations with them. While the ASEAN supported Myanmar’s efforts to address the Rohingya issue and voted against the UN resolutions proposed by the West to condemn Myanmar’s crackdown on Rohingyas. In February 2020, UN failed to take action on International Court of Justice’s order against Myanmar on Rohingya due to China and Vietnam rejection.104 In the meantime, Myanmar has actively participated in the multilateral meetings and forums inside and outside ASEAN in order to promote regional integration and enhance the national prestige. These mainly includes ASEAN summit, East Asia summit, APEC, Asia-Europe meeting, BIMSTEC meeting, Mekong-Japan summit, Mekong-South Korea summit, Lower Mekong Initiative (LMI). India is another pillar of Myanmar’s neighbourhood diplomacy in which it serves as a main source of diplomatic support, foreign trade and technical assistance for Myanmar, as well as a counterbalance to China. India also expressed great willingness to maintain its good relations with the incoming new government after NLD won a landslide victory in the general elections in November 2015.105 Since the establishment of the new government, New Delhi wanted Aung San Suu Kyi to pay an official visit to India, but she made a pragmatic decision to visit China.106 Nonetheless, the Myanmar government conveyed that Aung San Suu Kyi will be coming to India later this year to attend the BIMSTEC meeting.107 Moreover, ten days after Aung San Suu Kyi’s China trip, President Htin Kyaw toured to India to sign four MoUs and issue joint statement with India in order to step up overall bilateral engagement with India and thus to counterbalance China’s influence. The most important message conveyed to President Htin Kyaw was by Indian Prime Minister Modi, who in his statement said, “at every step of the way, 1.25 billion people of India will stand by you-both as partners and as friends.” This message was both in context of bilateral ties as well as in the regional context of providing counterpoise 103 Ministry

of Foreign Affairs of Thailand [89]. [90]. 105 Mizzima [91]. 106 The Irrawaddy [92]. 107 Economic Times [93]. 104 ALJAZEERA

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to China’s increasing influence in Myanmar’s affairs.108 In October 2016, one month after Htin Kyaw’s India tour, State Counsellor Aung San Suu Kyi went to India to enhance the bilateral ties and thus to rebalance its strategic relations with powerful China.109 In the following years, Myanmar has followed the practice of balancing act between China and India through high-level visits. For instance, Myanmar invited Indian Prime Minister Modi to visit the country in September 2017, five months after Myanmar President Htin Kyaw’s first China tour in April this year. After her two China trips in May and December 2017 respectively, Aung San Suu Kyi came to New Delhi to pay her second state visit to India in January 2018. In return, Indian President Ram Nath Kovind initiated a five-day Myanmar trip at the end of this year. During the visit, India handed over the first 50 units of prefabricated houses built in Rakhine State under the Rakhine State Development Programme funded by the Government of India,110 intending to woo Myanmar away from China by increasing its involvement in the Rohingya crisis which it has carefully respond to and often said it is a bilateral issue between Bangladesh and Myanmar.111 In May 2019, Myanmar’s new President Win Myint was invited to attend Modi’s oath-taking ceremony for second term, the only one top leader from the ASEAN states to attend the ceremony. Before that, Aung San Suu Kyi finished her fourth China trip to attend the second BRI summit for international cooperation at the end of April 2019. Soon after Chinese President Xi Jinping’s historical visit to Myanmar in January 2020, President Win Myint went to New Delhi to sign 10 MoUs on protecting wildlife, cooperating in medical researches, and providing development programmes in Rakhine State with India in February this year.112 Owing to the joint efforts of both sides, Myanmar has developed a comprehensive partnership with India in all areas that could complete with China. Due to the similar democratic value and the common interests both sides share, the Burmese democratic government had enough momentum to push for the rapid development of the bilateral ties with Japan. Ever since its establishment, the democratic government has been committed to integrate Myanmar into the democratic world, which coincides with Japanese Premier Abe’s “values-oriented diplomacy”. As Abe said he expressed respect for Myanmar’s efforts on nation building under the leadership of State Counsellor Aung San Suu Kyi who shares the fundamental values of freedom, democracy, human rights, and rule of law with Japan during Aung San Suu Kyi’s first Japan trip in November 2016.113 Moreover, Myanmar has long sought to attract Japanese investment and aid for economic and social development and viewed the robust bilateral ties with Japan as a counterweight to China. While

108 Sajjanhar

[94]. Irrawaddy [92]. 110 Myanmar President Office [95]. 111 Dixit [96]. 112 Myanmar President Office [97]. 113 Ministry of Foreign Affairs of Japan [98]. 109 The

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Japan is eager to seek opportunities in meeting Myanmar’s extensive infrastructure and development needs and thus to compete with China in Southeast Asia.114 In November 2016, Aung San Suu Kyi initiated her first official visit to Japan as State Counsellor. Before that, she has already been to China in August, the US in September, and India in October this year. It means that Japan ranked fourth as a destination for Aung San Suu Kyi’s foreign trip after she became the leader of Myanmar. During her first visit to Japan, Myanmar received 40 billion yen (5years) economic assistance on supporting advances in national reconciliation, and another 800 billion yen (5-years) on promoting the development of public and private sectors.115 Half a year after his China trip, Myanmar President Htin Kyaw paid his first state visit to Japan in December 2017, during which he received Abe’s support for Myanmar’s independent investigation on the alleged human rights violations in Rakhine State.116 It is worth noting that Myanmar did not respond to Japan’s intention to contribute to the stability and prosperity of Myanmar and the region under the Free and Open Indo-Pacific Strategy,117 reflecting Myanmar’s reluctance to provoke China by participating in the Indo-Pacific Strategy which is perceived as a counterbalance to China. In October 2018, Aung San Suu Kyi went to Tokyo to take part in the 10th Mekong-Japan Summit. She was assured by Abe that Japan would contribute to enhancing connectivity and improving the lives of the Burmese people, which met with Myanmar’s ‘people-centred’ foreign policy. Abe, for the first time, promised to encourage the ethnic armed groups who had not yet signed the ceasefire agreements to sign them promptly,118 in order to deepen its involvement in the national reconciliation in Myanmar. What’s more, he said Japan plans to begin construction of housing and other infrastructure in two villages in the northern Rakhine State in late November and will also support improvement of roads, electricity,119 and water supply for the entire State. It reflected Japan’s intention of competing for influence with China, which proposed the “three steps” solution to the Rohingya issue in November 2017. On a recent visit to Myanmar in July 2019, Japanese Foreign Minister Taro Kono vowed to provide full-fledged support for Myanmar’s democratic nation-building, the national reconciliation in northern Myanmar and the repatriation of Rohingya refugees and economic and social development in Rakhine State in particular.120 So far, Japan is the only foreign state that has deeply involved in both the peace process and the Rohingya issue in Myanmar except China, which indicates Japan’s strong desire to deepen bilateral ties with Myanmar and counter China’s influence in the country. Myanmar-Russia relations have developed rapidly and the bilateral cooperation has been expanded into many areas beyond the defence cooperation. As Russian 114 Funakoshi

and Lies [99]. of Foreign Affairs of Japan [98]. 116 Ministry of Foreign Affairs of Japan [100]. 117 Ibid. 118 Ministry of Foreign Affairs of Japan [101]. 119 Ibid. 120 Ministry of Foreign Affairs of Japan [102]. 115 Ministry

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President Vladimir Putin said, there is a good potential for the development of Russia-Myanmar relations which applies to the economy, politics and militarytechnical cooperation at his meeting with Myanmar President Htin Kyaw in Moscow in May 2016.121 During the meeting, both sides discussed a number of issues of bilateral cooperation, mainly including Russian investment in the Burmese energy market, the resumption of an airline between Yangon and Moscow, Russia’s technical assistance to Myanmar, and various training programs offered by Russia.122 Since the outbreak of the Rohingya refugee crisis, Russia, together with China, jointly prevented America from passing UN resolutions to take against Myanmar in UNSC. In December 2018, Russia and China boycotted talks on a British-drafted resolution on addressing the Rohingya refugee crisis.123 One year later, Russia voted against a draft resolution on the human rights situation in Myanmar approved by the UN.124 It is worth noting that Russia is the only great power except China to oppose the UN resolution on criticising Myanmar on the Rohingya issue at every turn. Russia, therefore, has continued to be a strong backer of Myanmar on UN since NLD came to power. Despite the fact that Aung San Suu Kyi made a successful visit to the US in September 2016, the bilateral ties have been locked in the Rohingya refugee crisis after Donald Trump was elected as the American President. The Trump administration has not only sharply reduced the bilateral exchanges with Myanmar, but also applied diplomatic pressures on the country. For instance, Aung San Suu Kyi is the last of the leaders of larger Southeast Asian nations to whom a top official of the new administration has not yet reached out.125 In addition, there has been no highlevel visits between the two countries since Aung San Suu Kyi’s first state visit to America in September 2016. Moreover, the US proposed and supported UN resolutions to condemn the Myanmar government and military, and criticised the Burmese leader Aung San Suu Kyi on ASEAN Summit. In October 2018, the US successfully requested briefing that accused Myanmar military of genocide against the Rohingya minority on UNSC.126 One year later, the US strongly supported the UN resolution on Myanmar’s abuse of Rohingya for approving by the United Nations General Assembly (UNGA). The limited engagement from the US coupled with continued criticism about Myanmar’s crackdown on Rohingya prompted Myanmar to look to China for support and assistance. Due to the close connections between the Burmese democrats and EU, Myanmar expected to build robust ties with EU in order to promote democracy and economic and social development. While the EU is committed to push forward the democratic process and improve the human rights situation in Myanmar through close cooperation with NLD. As the Joint Communication released in June 2016 showed, EU 121 TASS

[103]. President Office [104]. 123 Nichols [105]. 124 United Nations [106]. 125 Hiebert [107]. 126 United Nations [108]. 122 Myanmar

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engagement strategy vis-à-vis Myanmar including the following areas: (1) democracy, rule of law and good governance; (2) the peace process; (3) human rights; (4) poverty reduction and sustainable development; (5) economic engagement; and (6) working together with Myanmar in ASEAN and the region.127 In this context, Aung San Suu Kyi made her first Europe visit in May 2017 to seek EU’s support for Myanmar’s democratic transition as well as its understanding on Myanmar’s Rohingya crisis. However, she failed due to the disagreement on whether an international mission from the UN should investigate the alleged atrocities against Rohingya Muslims by the government security forces between she and EU’s top diplomats.128 Since then, the Myanmar-EU relations have been beset by the Rohingya refugees. The EU has continued to pressure Myanmar to implement the recommendations of the UN report on Rakhine State while the Burmese leaders refused to do. The EU has also supported the UN resolution of condemning Myanmar and revoked Aung San Suu Kyi’s award. Given West’s growing concerns about the Rohingya refugees, the Myanmar-EU relations would continue to be contested in the near future.

6.8.2 Promoted Regional Economic Integration Liberalising the economy and integrating it into the global market has continued to be a priority for the democratic government led by NLD. In the past five years, the NLD government launched the Myanmar Sustainable Economic Development Plan, issued the Myanmar Companies Law, and held the Myanmar Investment Conference, so as to promote trade and investment cooperation with foreign countries. From 2016 to 2018, the total value of Myanmar-ASEAN trade was 28.16 billion USD, which was slightly behind China whose trade with Myanmar was 28.61 billion USD in the same period.129 Additionally, ASEAN is the first largest source of import of Myanmar while China is No. 1 export market for Myanmar. Except ASEAN, Myanmar has resumed close trade connections with EU which has become the third largest trade partner for Myanmar and a main export market for Myanmar goods. The MyanmarEU trade has increased from 1.12 billion USD in 2016 to 1.86 billion USD in 2017, and then decreased to 1.49 billion USD in 2018.130 In the meantime, Japan and India have continued to be the main trade partners for Myanmar as well. The total amount of Myanmar’s trade with Japan and India between 2016 and 2018 were 5.05 and 4.21 billion USD respectively.131 Nonetheless, Myanmar’s overall foreign trade has decreased dramatically since the Rohingya refugee crisis in mid-2017. Not only Myanmar’s trade relations with ASEAN and China have been adversely affected, but its trade cooperation with EU has been reversed. In October 2019, EU 127 European

Union [109]. Global New Light of Myanmar [110]. 129 Collected from Statistical Database [111]. 130 Ibid. 131 Ibid. 128 The

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announced a plan to consider a temporary Generalized System of Preference (GSP) withdrawal after a monitoring mission’s visit to Myanmar.132 Given this, Myanmar’s trade relations with EU would be further damaged in the coming years. What’s more, the US, the world’s largest economy, has been marginalised in Myanmar’s foreign trade due to Myanmar’s crackdown on Rohingya Muslims. In a similar vein, Myanmar’s efforts of attracting foreign investment to modernise the poor country have also been severely undermined by the religious tensions in Rakhine State. Additionally, the worsening conflict between the Tatmadaw and AA, an internet shutdown in northern Rakhine, and accusations of land grabs did not encourage investors.133 In that case, the total value of Myanmar’s FDI was decreased from 6.65 billion USD in 2016 to 1.76 billion USD in 2018,134 among which the major foreign investors such as ASEAN and China cut off their investments in Myanmar heavily. Given the adverse effects of COVID-19 on the global economy, Myanmar would be faced with the economic recession internally and the declining FDI as well as market demand externally.

6.8.3 Enhanced Military Capability Myanmar has been engaged in an active program of defence diplomacy due to its closer economic and political ties with the military powers mainly including China, Russia, India, as well as the Western countries. By conducting military to military exchanges, participating in military drills, receiving training programs and purchasing weapons, Myanmar has strengthened defence cooperation with those states and thus enhanced its military capability of defending external threats. Moreover, Myanmar has reduced its heavy reliance on Chinese military resource by diversifying its military relations and expanding defence cooperation. The Myanmar military has also got critical political support from the defence partners by maintaining its close relationship with them. Soon after the establishment of the new government in Yangon, Myanmar’s defence Minister Sein Win toured Moscow to promote the bilateral contacts and military-technical cooperation in April 2016. Two months later, the two sides reached a new military cooperation agreement, which established a legal framework for collaboration in a range of areas such as military medicine, military education, antiterrorism, peacekeeping, and naval cooperation.135 It is evident that the bilateral military ties between Myanmar and Russia have gone from strength to strength as the political contacts have been activated between the two countries in recent years. More than one year after Sein Win’s Russia trip, Senior General Min Aung Hlaing went to Moscow, a first official visit led by the top leader of the Myanmar military 132 Sainsbury

[112]. [113]. 134 Collected from Statistical Database [111]. 135 TASS [114]. 133 Chau

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to Russia since the democratic government was established. He was believed to gain Russia’s support for the Myanmar military which was accused for seeking the ethnic cleansing of the Rohingya minority in the Rakhine State. In the next few months, he went to New Delhi and Beijing in July and November 2017 respectively, attempting to win support from these two most important partners. In January 2018, Russian Defence Minister Sergei Shoigu travelled to Myanmar to reach an arms deal where Myanmar would purchase six Su-30 fighter jets from Russia. In addition, the two sides also reached an agreement on the entry of Russian warships into Myanmar’s ports, expecting to launch exchange of visits for naval fleets between the two countries.136 Then, Min Aung Hlaing attended the opening ceremony of 8th Moscow Conference on International Security in April 2019, during which he visited the Admiralteyskie Veryf submarine shipyard and discussed purchasing an advanced submarine with the deputy chief of the Russian navy.137 Shoigu, again, stated that Russia considers Myanmar to be a reliable ally and strategic partner in Southeast Asia and Asia–Pacific,138 reflecting Russia’s growing demands for gaining a big foothold in Southeast Asia and the Indian Ocean through the robust RussiaMyanmar military relations. Myanmar has also sought Russia’s help of modernising Tatmadaw by receiving various training programs and purchasing advanced weapons from Russia. During Sein Win’s Russia trip in April 2016, the cooperation on training Burmese military personnel was proposed by Russian Defence Minister Shoigu. In June 2017, Russian Ambassador to Myanmar Nikolay A. Listopadov said around 6000 Tatmadaw students have graduated from the Russian universities and some have received postgraduate and doctoral degrees.139 Due to the growing number of Russian weapons in Myanmar army, more and more technical personnels would come to Russia to receive trainings, the weapon training in particular. In spite of the economic downturns, the Tatmadaw has remained a high-level of defence budget to execute its ambitious arms acquisition program where Russia is a main supplier. From 2016 to 2019, Myanmar imported a total amount of 144 USD million-worth of weapons from Russia, which is nearly half of those between Myanmar and China in the same period. These weapons mainly included 75 Yak-130 trainer/combat aircraft, 6 Su-30MK FGA aircraft, and 16 RD-33 Turbofan.140 It reflected that the Myanmar military has increasingly relied on air power and high technology from Russia because of the poor quality and shortage of spare parts and follow-up services of Chinese-made weapons.141 In the meantime, Myanmar has strengthened defence cooperation with India, another major partner for Tatmadaw. In the past years, Myanmar has maintained close military to military exchanges, conducted joint military exercise, and procuring a great number of weapons from India. In July 2017, when Indian and Chinese 136 Parameswaran

[115]. [116]. 138 Mizzima [117]. 139 Ye [118]. 140 SIPRI Arms Transfers Database [119]. 141 Myoe [120, p. 30]. 137 Myint

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troops are locked in a continuing stand-off near the Sikkim along India-China border, Senior General Min Aung Mlaing paid a eight-day visit to New Delhi to expand defence cooperation with India. His long trip in India raised concerns about the fast growing military relations between Myanmar and India and its following strategic consequence in Chinese society as India is ready to further crank up military supplies to Myanmar to count Chinese strategic inroads into the country.142 In addition, the Tatmadaw is also believed to impose pressure on China which was criticised for interfering in the ethnic conflicts in northern Myanmar by Burmese generals. One year later, Min Aung Mlaing travelled to India to increase the bilateral military ties and better border management after Indian troops’ cross-border military attacks on two camps being run by Naga and Meitei rebel groups in Myanmar’s territory. In a recent visit to India led by Min Aung Mlaing in July 2019, the two countries signed a new MoU on deepening military-to-military ties in the areas of training, maritime security, and joint surveillance.143 Given the closer naval cooperation under this new agreement, both sides would raise the bilateral military ties to a new level in the coming years. As China is expanding its strategic presence in the Indian Ocean, Myanmar’s increasing maritime cooperation with India would not only give India the capacity to monitor China’s naval collaboration closely, and also give Myanmar the continuing opportunity to diversify its military dependency away from China and act as a balance of influence within Myanmar’s Navy.144 Myanmar has established a number of bilateral mechanisms with India, such as the annual dialogue between the two navies, to institutionalise the defence cooperation between the two counties. It also intends to maintain a balance between China and India by building military cooperative mechanisms with them respectively. What’s more, before participating the first China-ASEAN joint naval exercise held in Zhanjiang in 2018, Myanmar has already conducted repeated military exercises with India in various fields including joint operation, training, and logistics support. So far, the two armies have held seven rounds of India-Myanmar Coordinated Patrol Exercise (CORPAT), three rounds of India-Myanmar Bilateral Army Exercise (IMBAX), and two rounds of India-Myanmar Naval Exercise (IMNEX), which started from 2013, 2017 and 2018 respectively. The Myanmar fleet has regularly joined in the multilateral military drill led by the Indian Navy such as the ‘Milan’ exercise in 2012. Followed by the frequent port calls to Myanmar made by the Chinese naval fleet, the Indian warships have also visited Myanmar to enhance exchanges. In recent years, the Indian Missile Corvette INS Khanjar and Sumitra called at Yangon in August 2018 and February 2019 respectively. India has become the third biggest supplier of weapons for Myanmar in the past decade, just behind China and Russia. From 2016 to 2019, Myanmar purchased a total of US$ 112 million-worth of equipment from India, mainly including a US$ 37.9 million deal of procuring Shyena ASW torpedos from India in 2017 (delivered in July 2019), 6 HJT-16 Kiran-1 Trainer aircraft in 2018 and one diesel-electric Kilo 142 Pandit

[121]. [122]. 144 Peng [123, p. 595]. 143 Panda

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submarine in 2019.145 The two countries also talked about ‘training Myanmar sailors on top of the courses taught to its army officers at elite Indian defence institutions’ during Myanmar Navy chief Admiral Tin Aung San’s India trip in September 2017.146 In December 2018, it was announced that India would donate six HAL HJT-16 Kiran jet trainers to the Myanmar Air Force, and station a team in Myanmar to help train their pilots and ground crew.147 It indicated that Myanmar tries to modernise its Tatmadaw by making good use of the advanced Indian weapons and high-technology rather than completely depending on China. Myanmar’s defence cooperation with the West has gain a stronger momentum than ever before due to the improved political ties between them in the early years of the NLD era. Soon after the establishment of the democratic government in Myanmar, General Mikhail Kostarakos, Chairman of the EU Military Committee, toured Naypyitaw in June 2016, attempting to exert positive influence on Tatmadaw, a key political player in the democratic process in the country. Five months later, Senior General Min Aung Hlaing paid a reciprocal visit to Brussels where he assured his European counterparts that the Myanmar military would protect democracy and its role would be re-evaluated when there is a sound guarantee to the nation and its citizens, and asked for non-lethal assistance from the EU in building a “Standard Army”.148 His first European trip, of course, was viewed as an public diplomacy effort through which he wanted to reduce West’s concerns about the key political role of Tatmadaw and promote the bilateral defence cooperation. However, Myanmar’s efforts of developing a working military relationship with the West have suffered a great setback due to the alleged ethnic cleansing and genocide of the Tatmadaw in Rakhine State. The EU initially suspended invitations to Burmese senior military officers and decided to review all the practical defence cooperation in October 2017, and then extended and strengthened its arms embargo on Myanmar and prohibited the delivery of military training and cooperation with the Myanmar army in April 2018 and imposed sanctions on seven military, border guard and police officials in June this year.149 Although one of the sanctioned generals was dismissed and another left the army, the EU has extended the arms embargo and prolonged sanctions against high-ranking officials of Tatmadaw.150 So far, the EU has still maintained a ban on selling weapons to Myanmar as well as the sanctions on the senior Burmese generals. In the meantime, Myanmar-US military ties have also been locked in the Rohingya refugee crisis. The US has not only imposed economic sanctions on the Burmese security forces and issued travel ban on the Burmese senior generals, but freezed

145 SIPRI

Arms Transfers Database [119], Myint [116] and The Economic Times [124]. [125]. 147 Sainsbury [112]. 148 The Irrawaddy [126]. 149 European Union [109] and DW [127]. 150 Emmott and Slodkowski [128] and Al JAZEERA [129]. 146 Routray

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any U.S. assets held by those targeted and prohibits Americans from doing business with them.151 In addition, the US also proposed resolutions at UN to condemn the Myanmar military over human rights abuses against the Rohingya Muslims in Rakhine State. In light of Tatmadaw’s rejection to U.S. accusations and the ongoing conflicts in Rakhine State, it is unlikely that the US would ease sanctions against the Tatmadaw and re-engage with it in the near future.

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Conclusions

By introducing the neo-classical realism, this book created a strategic preference analytical framework and analysed Myanmar’s China policy after the Cold War based on it. It finds an useful way to interpret the origins and evolutions of the foreign policies of individual states. The empirical study shows that the foreign policies of nation-states are jointly determined by systemic condition and unit variable, in which the former sets up the range of policy options while the latter decides the specific policies. Since the neo-classical realism is often criticised as a fairly loose theoretical framework that lacks key variables, this study narrowed down the intervening variables and built a clear logic chain between the independent, intervening and dependent variables. It first proposed the intervening variable-strategic preference lying between the external environment that states are faced with and the specific foreign policies of nation states. In short, the strategic preference can conduct, distort, or reverse systemic imperatives and thus determining state’s different reactions to external environment. By exerting the strategic preference, this study tried to open the black box of ‘state’ in which it explored the way of the Burmese leader’s tradeoff between the external threats and opportunities and domestic politics. It then successfully explained how the Burmese leaders respond to external threats and chances according to their strategic preference and thus to make their China policy. As the most powerful country on Myanmar’s borders, China has always been the top priority in Myanmar’s foreign policy ever since its independence in 1948. This book presented an in-depth investigation of the origins and evolution of Myanmar’s China policy since 1988 by adopting a neoclassical realist approach. From a neoclassical realist perspective, Myanmar’s China policy depends on the Sino-US power rivalry in Southeast Asia, and the Burmese leader’s strategic preference. Specifically, the economic and political competition between China and the US in Southeast Asia creates an inclusive/limited inclusive external environment which is both risky and beneficial for Myanmar. The Burmese leaders have to be aware of the risks of Myanmar’s high dependence on either China or the US, while committing to benefit from the close relations with both countries. The intense military and strategic competition between China and the US in Southeast Asia would create a restrictive external environment and force Myanmar to take sides. Alternatively, the © Springer Nature Singapore Pte Ltd. 2021 N. Peng, International Pressures, Strategic Preference, and Myanmar’s China Policy since 1988, https://doi.org/10.1007/978-981-15-7816-8

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close coordination and cooperation between China and the US in Southeast Asia would offer low risks and little benefits to Myanmar. In that case, Myanmar is more likely to be neutral between China and the US. In short, the Sino-US competition in Southeast Asia narrows the range of policy options for Myanmar, where it would have to choose either risks-contingency policies, benefits-maximising policies, or the both, to manage its relations with China. China’s fast-growing economic relations and close political engagement with ASEAN states have gradually challenged U.S. dominance in the region ever since the early 1990s, leading to a rising power rivalry between the two great powers in Southeast Asia. Moreover, the territory disputes between China and some ASEAN nations in SCS have not only caused fierce Sino-US competition, but has raised increasing concerns about the possible military clashes between the two military powers. Nonetheless, the Sino-US power rivalry in Southeast Asia has been under controlled circumstances where both China and the US is unlikely to initiate a war in SCS. For China, it has focused on national development which could be guaranteed by a peaceful external environment. What’s more, China could not afford a war with the US either in SCS or other places due to its rising but limited economic and political influence and pending military strengthening in SCS. While the main aim of U.S. military activities in SCS is to prevent further Chinese military dominance in the waters rather than fighting against Chinese PLA. Hence, it is safe to conclude that there will be continuing economic and political competition between China and the US in Southeast Asia, but few armed conflicts are likely to take place. Given this, Myanmar has been faced with an inclusive/limited inclusive external environment, and has room to manipulate its relations with both China and the US. The external environment poses specific risks and benefits for Myanmar, thereby affecting the Burmese leader’s perception and assessment of threats and opportunities as well as their foreign policies. To be more specific, during the whole of the 1990s and the early 2000s, the Sino-US relationship was highly strained, resulting in a rising political competition between the two countries. In practice, U.S. economic sanction, diplomatic isolation and military threats imposed great pressures on the Burmese military regime ever since its establishment in 1988, while Chinese economic assistance, political support, and defence cooperation represented the key resources that Myanmar is highly demanded. Therefore, Myanmar is more likely to bandwagon or ally with China to sustain the regime and resist the US or distant itself from both sides. Starting from the mid-2000s, the Sino-US competition was relieved due largely to American pivot to anti-terrorism in the Middle East as well as the improved SinoUS relations. Such inclusive external environment posed little benefits and low risks for Myanmar, which contributed to its isolation from the world. In practice, the US remained a major threat to Myanmar, while China constituted another concern for the Burmese generals who became upset about China’s interference in Myanmar’s stagnant democratic process. Thus, Myanmar is more likely to keep a distance from both China and the US with the aim to avoid foreign interference, or approach China to balance the US.

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Yet, the Sino-US competition has been increased since Obama became the American President, which created a restrictive inclusive external environment for Myanmar. It was faced with the high risks of involving in the power rivalry between the two great powers as well as the great opportunity of gaining benefits from them. Since the Obama administration revised its hostile policy towards Myanmar and switched to engage with it in the late 2000s, Myanmar had chance to build warm relations with the US and thus to reduce its heavy reliance on China. In the meantime, it had to stabilise the Myanmar-China relations so as not to provoke China. Given this, Myanmar is more likely to approach the US to balance China or remain neutral in Sino-US power rivalry. The US has constantly expanded its economic and strategic presence in Southeast Asia through the ‘Rebalancing’ strategy of the Obama administration and the ‘IndoPacific’ strategy of the Trump government, in order to counterbalance China which has also increased its influence in the region by implementing BRI. Moreover, the US has enhanced its military deterrence in the SCS with the aim to prevent further Chinese military activities in the waters, resulting in rising tensions in SCS. The growing competition or confrontation between China and the US caused a limited inclusive external environment for Myanmar which was faced with great pressures on taking sides. As the Trump administration revived its harsh stance on the human rights abuse in the Rohingya communities in Rakhine State, Myanmar had to be aware of the U.S. interference. Meanwhile, China seized the opportunity to draw Myanmar to its side by offering strong political support and economic assistance to the country. In this context, Myanmar has either to defend itself from US criticism through a close relationship with China or keep away from both sides. Despite the fact that the external environment set up the range of the policy options for Myanmar, its foreign policy towards China is finally determined by domestic factor. This refers to the Burmese leaders’ strategic preference which could be divided into ‘integration’ and ‘isolation’ ones. In fact, Myanmar has either integrated itself into or been isolated from the world ever since its independence. The opposite strategic preferences are rooted in the Burmese leaders’ deep cult of independence, their unique national characteristics, Myanmar’s significant geographical position, and its relative political isolation and economic integration. The independent foreign policy is the basis for realising the Burmese leaders’ ‘isolation’ strategic preference, in which they attempted to avoid foreign interference by isolating the country from the world. Moreover, the Burmese leader’s deep sense of independence and isolationism is further consolidated by their distrust of foreigners, their obligation to protect national cultural, and their experience of long political isolation. Nevertheless, due to Burmese’s egoism, Myanmar’s significant geostrategic location, and the economic connection with the world, Myanmar also expects to integrate itself into the global economy so as to develop the poor country. In practice, the local political dynamics and leaders’ ideology and personality are the main causes of the Burmese leaders’ different strategic preference. In general, the conservative leaders would prefer to isolate Myanmar from the world when there is unstable politics at home. Conversely, the reformist leaders would like to integrate Myanmar into the international community in the context of the stable domestic politics.

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Conclusions

After the military coup in September 1988, the Burmese military regime consolidated its governing power by harshly suppressing the oppositions and reaching peace and ceasefire agreements with diverse insurgent factions. In the meantime, moderate leaders such as Khin Nyunt were in charge of foreign affairs and advocated active diplomacy. Therefore, the junta positively responded to external environments, where it perceived China as a major partner of resisting the US while simultaneously being aware of the rising Chinese influences. Consequently, Myanmar made great efforts to promote full cooperation with China in order to reduce the U.S. threat while expanding its diplomatic relations with the aim to consolidate the military rule, relieve Western pressures and reduce its fast-growing reliance on China. However, the continuous domestic protests caused global outcry as well as mounting pressures on the conservative Burmese leaders since the mid-2000s, led them to withdraw from the region and focus on domestic affairs. Given the risks of foreign interference and the domestic disturbance, the junta not only distant itself from China, but also reduce its participation in ASEAN. In addition, it only maintained connections with a few traditional partners like India and Russia, intending to get political support and military equipments from them. Starting in 2011, Thein Sein, who is a reformist leader of the civilian government in Myanmar, initiated a series of reforming policies aiming at moving forward the democratic process and liberalising the national economy, and achieved a nationwide ceasefire agreement with the majority of the ethnic groups. Given the stable political and security situation, Myanmar could play a large role in diversifying diplomatic relations and therefore decreasing its high dependence on China. In this context, Myanmar launched an active diplomacy in which it approached the US and EU and enhanced cooperation with neighbouring countries in an attempt to hedge against China, while suspending Chinese mega-projects and reduced interactions with China. In the NLD era, the democratic government led by Aung San Suu Kyi has carefully maintained harmonious relations with the military, push forward the peace talks in northern Myanmar and resettled the Rohingya refugees. In spite of the sporadic conflicts and religious tensions in the minority areas, Myanmar has remained stable. It ensured an active role of the Myanmar government in external relations. In the meantime, the pro-democratic leader Aung San Suu Kyi announced an active diplomacy aiming at reintegrating Myanmar into the international community. Given this, Myanmar has upgraded its strategic partnership with China in an attempt to resist the U.S. pressures and continued to manipulate the balance act by expanding diplomatic relations and strengthening defence cooperation. Owing to the continuous efforts in the past three decades, Myanmar has partially achieved the expected goals of its China policy. First of all, it has benefited much from its close economic relations with China. Myanmar has gain a large amount of foreign currency from the fast-growing trade cooperation with China, which is used to survive the regime, sustain economic growth and modernise the military. What’s more, it has enhanced the export ability through the booming trade relations with China. It also developed local industry and infrastructural facilities with Chinese

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financial assistance and investment, and received many aid programs and interestfree loans in regional economic cooperation schemes led by China such as AIIB and BRI. Second, Myanmar has got Chinese political support and diplomatic protection for its democratic process, national reconciliation, and the Rohingya refugee crisis through the amicable political ties between the two countries. In fact, China has always been the most important diplomatic supporter for Myanmar in regional and international forums, particularly the UN, which helped Myanmar to avoid international sanctions. It also offered necessary assistance to push the peace talks between the Myanmar government and the ethnic armed groups in northern Myanmar, and practiced restraint when faced with escalating conflicts along the Sino-Myanmar border. In terms of the rising Rohingya refugee crisis, China has not only provided diplomatic support to Myanmar in various international occasions, but proposed the resolution of the Rohingya issue and helped Myanmar and Bangladesh to reach an agreement on repatriating the Rohingya refugees fled to Bangladesh. Third, Myanmar has obtained plenty of weapons, mainly including aircraft, warships, missiles, radars, and armoured cars from China, received various training programs from Chinese military institutions, and constructed and upgraded many military facilities with the help of Chinese military technicians. As a result, Myanmar has not only transformed the weak army into a modern one that could launch joint military operations and defeat foreign invasions, but developed the national defence industry. Fourth, Myanmar has stabilised the relations with China by conducting highlevel visits and promoting bilateral cooperation, which ensured a peaceful and stable neighborly environment for Myanmar. Moreover, it constructed a number of cooperation mechanisms aiming at properly address bilateral issues, thereby avoiding the deterioration of bilateral relations. In addition, Myanmar has maintained close military exchanges and defence cooperation with Chinese PLA, and thus strengthening the defence capability and reducing China’s security threats. But despite that, Myanmar’s close engagement with China has adverse effects on its independence, national security, and economic and social development. Firstly, Myanmar has become increasingly dependent on China through decades of cooperation, leading to an asymmetric interdependence between the two countries in which China has a dominant position. So far, China is Myanmar’s largest trade and technical cooperation partner, and foreign investor. China is also the main aid resource for Myanmar without attached political strings. What’s more, China has long been the main political ally for and principal arms supplier to Myanmar after the Cold-War. Given this, Myanmar has been at high risk for developing dependence on Chinese economic resource, diplomatic protection and military hardware. Second, Myanmar has been with the risks of China’s rising interference in the democratic process and the ethnic conflicts in northern Myanmar. Actually, China has started to pressure the Burmese military regime to push the democratic process forward after the mid-2000s. Chinese activism in the peace talks and its close contact with the ethnic groups in northern Myanmar has raised considerable concerns among the Burmese generals over the independence and national security. In practice,

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Myanmar rejected Chinese request of accepting MNDAA and its allies as formal members of the political dialogue, and invited UN to observe the peace process, which was initially objected by China. While China refused Myanmar’s demand to disarm the ethnic rebels in northern Myanmar, and delivered statement and conducted military drill in the border areas so as to prevent the ethnic clashes from being escalated. Third, in spite of the large benefits from the booming economic relations with China, the adverse environmental and social effects of Chinese trade and investments as well as the anti-Chinese sentiments in Burmese society has emerged and thus challenged the authority of the Myanmar government. In fact, the Burmese have a negative perception of the large amount of poor quality Chinese commodities and Chinese mega-projects in the resource sectors that are harmful to the environment and livelihood of the local residents. Moreover, the Burmese locals regarded Chinese economic activities as economic exploitation, and have accused them of consolidating the military regime rather than benefiting the local communities. In that case, the local organisations have opposed government’s decisions of resuming or implementing Chinese projects and continued to pressure the government to cancel some Chinese big projects. Due to the high risks of its over-dependence on China as well as its adverse consequences, Myanmar has adopted a balancing act to offset the risks. First of all, Myanmar has actually maintained a balance in its foreign trade and investment, in which China, Thailand and Singapore constitute the main trade partners for Myanmar. Since the suspension of the Myitsone Dam in 2011, the new Chinese investment in Myanmar has sharply decreased, whereas the trade, investment, and assistance from ASEAN, India, and Japan has increased greatly. In addition to the active participation in China’s regional initiative, Myanmar has joined in various regional cooperative mechanisms led by India, Japan and even the US in order to balance China’s fastgrowing economic influence in the country as well as the region. Myanmar has also integrated itself into ASEAN with the aim to bind up with it and thus to increase its leverage in the bilateral ties with China. What’s more, it has introduced regional states such as India, Russia and Japan into the region, attempting to balance China’s rising influence in the region. Further, the Burmese leaders has approached the US and EU to counterbalance China. Finally, the Myanmar military has enhanced its operational capability for self-defense by enlarging and deepening defence cooperation with the military powers. It has also expanded its arms suppliers and participated in regional military exercises, thereby declining its high dependence on Chinese military hardware and balancing China’s military influence in the Indian Ocean. However, Myanmar has failed to substantially reduce its heavy reliance on China and thus fully offset the high risks by manipulating the balancing act. Although Myanmar has increased its trade and investment cooperation with Thailand, Singapore, India, and Japan, China has been the most significant economic partner that Myanmar has to rely on. In fact, China has become the second-largest foreign investor in Myanmar with a narrow margin since 2015, and invested a number of new big projects in Myanmar since NLD came to power. China has also been Myanmar’s

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biggest trade partner with a growing margin since 2011. Additionally, despite the fact that Myanmar has received a great number of development aid from Japan, India and the West, China has still been a main donor for Myanmar. Moreover, due largely to the Rohingya refugee crisis, the West has reduced its humanitarian aid to Myanmar, which forced Myanmar to pursue other foreign aids for developing the country. Politically, China, a permanent member of the UNSC, has always been the most important diplomatic shelter and political supporter for Myanmar. Whereas Russia is unlikely to become a reliable political ally for Myanmar due to its quite limited economic and strategic assets in Myanmar as well as its very loose political ties with Myanmar. While India and Japan, non-permanent members of the UNSC, are lack of sufficient influence in international organisations, and thus could not provide key diplomatic support for Myanmar. Actually, Myanmar could not avoid UN sanctions without the vetoes from China and Russia rather than India and Japan in UNSC. What’s more, both India and Japan abstained in the vote on a UN resolution calling for an end to human rights violations in the Rohingya minority areas in September 2019, with only China and the Philippines voting against it. Finally, it is because of West’s scathing critique of Myanmar’s grave abuses against Rohingya Muslims that Myanmar has swung to China again. In spite of procuring large amounts of weapons from Russia and India, China has still been a main arms supplier for Myanmar. In fact, although the Burmese generals have complained about the poor quality of some Chinese aircrafts, they prefer to buy weapons from China because of the low price, large-scale production and fast delivery of Chinese weapons. In comparison, the Russia weapons are often criticised for their high costs and delayed delivery. Due to its quite limited defencespending, Myanmar could not afford to purchase many high-tech weapons from Russia. Additionally, Myanmar is a main client of Chinese arms, whereas it is not a major buyer of Russian weapons. Except China and Russia, the small number of second-hand weapons as well as trainings from India is only a supplement for the Myanmar military. Moreover, the poor productivity of Indian weapons severely restricted the arms deals between India and Myanmar which is in high demand for procuring advanced weapons. In addition, both sides are facing a number of challenges to their military relations, such as Myanmar’s reluctance to suppress the Indian insurgency groups based on Burmese soil, and India’s cross-border military actions fighting against the Indian rebels in Myanmar’s territory. Finally, Myanmar is failed to transfer the West to another arms supplier and major defence partner due to the arms embargo and the Rohingya refugee. All in all, the engagement with China has always been the top priority of Myanmar in which it expects to maximise benefits, while the balancing act has been used to minimise risks of high dependence on China. Due to the internal vulnerability and deteriorated external environment, Myanmar has no choice but to seek to China for surviving the regime and resisting external threats. Meanwhile, in order to mitigate the adverse effects of the asymmetrical interdependence between Myanmar and China, the Burmese leaders have adopted a balancing act. Whereas, Myanmar failed to completely reaching the expected goals of lowering its overdependency on China

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because of its serious internal vulnerability and unreliable external assistance. For the weak states like Myanmar, which has less developed economy, defective democracy, poor governance, civil war and weak army, it is extremely difficult for them to effectively mobilise national resources to sustain the risky balancing strategy, and thereby successfully counterbalancing the growing influence of the great powers in the region. Conversely, it may be forced to rely on the great powers to maintain stability and economic growth. What’s more, the balancing act that Myanmar has performed was often severely affected by the changing external environment, in which it would swing to China to resist the US while approaching the US to balance China. In addition, it could get support and assistance from other powers, such as ASEAN states, India, Japan and Russia, but it depends on their foreign policy towards Myanmar. In other world, Myanmar is not good enough to shape a favourable external environment. Rather, it has to depend on the goodwill of the great powers and afford the total costs of the regional dynamic, favourably or adversely. Myanmar’s China policy would, of course, continue to be jointly affected by SinoUS competition in Southeast Asia and the Burmese leader’s strategic preference. Given the America’s contest with China in the near future, Myanmar would be under increasing pressures to take sides. Since the Trump administration has taken an hostile policy toward Myanmar, it is reasonable for Myanmar to swing to China to resist the US unless the U.S. Myanmar policy revised. As the democrats are predicted to continue to charge foreign affairs after the 2020 elections, Myanmar would integrate itself into the world by engaging in an active diplomacy. In practice, the economic recession caused by the COVID-19 pandemic, the Rohingya conundrum and the ongoing conflicts in minority areas would further increase Myanmar’s vulnerability and thus push it to seek Chinese assistance. In the meantime, Myanmar would expand economic relations, diversify diplomatic ties and improve military capability through closer cooperation with its Asian neighbours and Russia, attempting to consolidate the democracy and balance Chinese rising influence. The Burmese generals, who are faced with mounting pressures from the West, are more likely to support the active diplomacy. While they would not to give up monopolising the security affairs and defend their privilege, which would make some troubles for both the Myanmar government and China. In conclusion, the neoclassical realism provides an useful approach to examine Myanmar’s China policy after the Cold War. In practice, Myanmar’s China policy is a result of the Sino-US competition in Southeast Asia and Burmese leader’s strategic preference. Nevertheless, it is difficult for experts to accurately define the strategic preference of individual states due to its uncertainty and complexity. In other words, states may have different strategic preferences in the same period due to the competing influences imposed by different top leaders, or they may alter their strategic preference according to the significant political changes. What’s more, states may carry out different policies even if they have similar strategic preference and are faced with similar external environment. Therefore, measuring strategic preference and building logical links between strategic preference and foreign policies are large tasks for neoclassical realists. More importantly, it is important to know how

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to make the neoclassical realist model of strategic preference a universal theoretical framework that could be used to analyse other Southeast Asian states’ China policy. In the Myanmar case, since there is a very little access to the Burmese senior officials, especially the generals, the author failed to conduct face-to-face interviews with them. Instead, he talked with some renowned Burmese and Chinese scholars, and few government officials in both Myanmar and China. In addition, some important first-hand materials are absent from this book, mainly including the diplomatic archives and the Burmese leader’s and general’s memoirs. Actually, the author has tried him best to collect a great number of official newspapers in the past three decades in which the Burmese leader’s speeches are carefully investigated, as well as countless academic materials about the origins of Myanmar’s diplomacy and the Burmese leader’s mindset on foreign affairs. Given the above limitations, future directions of such research are provided below. First, more research methods, especially case studies and questionnaire surveys, should be used in the study of Myanmar’s China policy. In fact, the case study of the Myitsone Dam has been intensively studied by some scholars, and the questionnaire surveys about the Burmese perceptions on employment, livelihood, social governance, and politics and diplomacy have been conducted by Yunnan scholars. But these depends on a number of pre-conditions, mainly including funding, field work and language skill. Second, more first-hand materials, such as the declassified diplomatic archives, the memoirs of and interviews with Burmese leaders and generals, if available, should be applied to this study. Third, researchers could employ a more conceptual neoclassical realism model with fewer key intervening variables to examine Myanmar’s China policy. In fact, the author has found out two main causes-internal vulnerability and limited foreign assistance of the poor performance of Myanmar’s balancing act to China. Therefore, it is deserved to go deep into the logic connections between the internal vulnerability, foreign assistance and state’s behaviour, as well as the further studies of Myanmar’s China policy based on the new established analytical framework. Finally, it would be valuable to continue to analyse Myanmar’s China policy after the Burmese general elections in November 2020. To be more specific, how will the Sino-US power rivalry in Southeast Asia change in the context of the uncertain Sino-US relations after the U.S. presidential election in 2020, and how will it affect Myanmar’s China policy? How will the domestic politics change after the general elections in Myanmar and how will the new Burmese leaders and generals adjust its China policy in the post-Aung San Suu Kyi era?