China behind Myanmar's course shift

Narkive News Group Archive

Chiang Mai - Recent developments in Myanmar, including talks between new
President Thein Seen and pro-democracy icon Aunt San Suo Kyiv, a relaxation
of media censorship and the release of some political prisoners, have
stunned many foreign observers and sparked speculation that the historically
military-run country is on the verge of a new era of democracy and openness.

The Brussels-based International Crisis Group has published optimistic
reports claiming that fundamental changes are under way in the country's
political landscape, while Norwegian Deputy Foreign Minister Espen Barth
Eide recently exalted after a mid-October whistle-stop to the country: "I
almost left the country thinking they're moving a little too fast. I never
thought I would say that about Myanmar."

After decades of broken promises and fake reforms, Myanmar's population has
been tellingly less enthusiastic and optimistic about the future. Zarganar,
Myanmar's most famous comedian, said in an interview shortly after his
release from prison on October 11: "Originally, I was encouraged by the new
government. But not anymore, not since I was released. We [jailed
dissidents] are like hostages in the hands of Somali pirates. It now begs
the question, for what ransom was our freedom secured?"

Indeed, what was the behind-the-scenes "ransom" paid for the release of
approximately 200 political prisoners, and what is the reality behind recent
seemingly daring moves by Thein Seen, a former general and prime minister
under the old military junta?

As an army commander and later government leader, he was not known for his
initiative, boldness or liberalism. In May 2001, for instance, while serving
as chief of the Myanmar army's Golden Triangle Command, he said in a speech
before local leaders in Mong La on the Chinese border: "I was in Mong Ton
and Mong Hsat for two weeks. U Wei Xuegang and U Bao Youri from the Wa group
are real friends."

Wei is named in several US drug reports as the kingpin of the Golden
Triangle narcotics trade and both American and Thai law enforcement
authorities have a bounty on his head. Both of Thein Sein's "real friends"
have been indicted by US courts for their involvement in the Golden
Triangle's narcotics trade.

There are also questions about the foreign company the supposedly reformist
president keeps. On August 1 last year, the Pyongyang's official news
service, the Korea Central News Agency, reported on a visit by Thein Seen,
then prime minister of the previous military junta, where he "noted with
high appreciation that the Korean people have made big strides in
strengthening of the military capability and economic construction under the
wise leadership of Kim Jong Il ... The government of Myanmar will continue
to strive for strengthening and development of the friendly and cooperative
relations between the two countries."

These are less the statements of a reform-minded liberal and more of a
puppet leader who takes and exercises obediently orders from above.

It is becoming clear that there are serious disagreements within the
military over relations with North Korea, and more importantly Myanmar's
heavy dependence on China. This became evident on September 30 when Thein
Seen announced that he had decided to suspend the China-backed US$3.6
billion joint-venture Myitsone dam project in Myanmar's far north Kachin
State.

However, the official explanation that the project was "against the will of
people" is hardly credible in a country where popular sentiments have long
been ignored and popular calls for political change met consistently with
brute military force.

The dam would have flooded an area bigger than Singapore, 90% of the
electricity was scheduled for export to China, and once online would have
done grave harm to the Irrawaddy River, the nation's economic and cultural
artery. A massive popular movement against the dam was gaining momentum and
an escalation of anti-China tensions could have led to riots even more
serious than in 1967, when angry mobs ransacked businesses and homes owned
by ethnic Chinese in Yangon, then the national capital.

China's commercial presence is more pronounced nowadays, as tens of
thousands of Chinese merchants and migrants have recently settled in the
country, mainly in the old royal capital of Mandalay. China's domination of
local commerce and rising ownership of local lands has stoked Myanmar
nationalist sentiments and risks potentially destabilizing splits inside the
still ruling Myanmar military.

It is this dynamic that is mainly driving Thein Sein's political course
shift, not a newfound desire for democracy and human rights.

My friend, my enemy

The controversial dam project reflects the strained relationship Myanmar has
always had with its powerful northern neighbor. From the establishment of
the People's Republic of China in 1949 until Myanmar's 1962 military putsch,
Beijing maintained a cordial relationship with the non-aligned democratic
government of prime minister U Nu.

Myanmar, then known as Burma, was in fact the first country outside of the
communist bloc to recognize the new regime in Beijing. Trade was negligible,
but the common border was demarcated and relations were friendly.

After General Ne Win's 1962 coup, the Chinese, long wary of the ambitious
and sometimes unpredictable general, began to prepare for all-out support
for the insurgent Communist Party of Burma (CPB). The 1967 anti-Chinese
riots in Yangon, orchestrated by military authorities to deflect public
anger at a rapidly deteriorating economy, provided a convenient excuse for
China to intervene directly in Myanmar's internal affairs. On New Year's Day
1968, the first armed CPB units entered northeastern Myanmar from China's
southwestern Yunnan province.

During the decade spanning 1968-78, China poured more aid into the CPB
effort than any other communist movement outside of Indochina. Assault
rifles, machine-guns, rocket launchers, anti-aircraft guns, radio equipment,
jeeps, trucks, petrol, area maps, and even kitchen utensils were sent across
the frontier into the CPB's revolutionary base area.

Thousands of Chinese "volunteers" also streamed across the border to provide
additional support to the CPB. Mao Zedong's death in 1976, and more
importantly the return to power of the pragmatist Deng Xiaoping a year
later, marked the beginning of the end of massive Chinese aid to the CPB.

It was no longer seen to be in Beijing's interest to support revolutionary
movements in the region, but neither could the Chinese completely cut off
the CPB, which still controlled most of the strategic border areas inside
Myanmar. Chinese support continued, albeit on a much reduced scale, until
the hill tribe rank-and-file of the CPB's army rose in mutiny in 1989 and
drove the entire Maoist Burman leadership into exile in China.

The CPB subsequently split along ethnic lines into four different regional
armies. All of them soon entered into ceasefire agreements with the
government, which also made cross-border trade possible for the first time
in decades.

It was also clear that China coveted Myanmar's forests and rich mineral and
natural gas deposits, as well as its hydroelectric power potential. In fact,
China first mooted its intention to build Myitsone in an article in the
official Beijing Review in September 1985.

Entitled "Opening to the Southwest: An Expert Opinion", the officially
written article outlined the possibilities of finding an outlet for trade
for China's landlocked southern provinces of Yunnan and Sichuan through
Myanmar to the Indian Ocean. It also mentioned that the Myanmar railheads of
Myitkyina and Lashio in the northeast and the Irrawaddy River as possible
conduits for Chinese exports.

At the time those trade links were a remote dream, but the 1989 CPB mutiny
ushered in a new, more cordial era in Sino-Myanmar relations. Apart from
supplying Myanmar with vast quantities of military hardware at a time when
the West shunned and sanctioned the military regime's abysmal human-rights
record, Chinese experts also assisted in a series of infrastructure projects
to rehabilitate Myanmar's poorly maintained roads and railways.

Chinese military advisers formally arrived in 1991, the first foreign
military personnel to be stationed in Myanmar since Australia dispatched a
contingent to train the Myanmar army in the 1950s. Soon after the Chinese
officials arrived, cross-border trade between China and Myanmar began to
boom.

By the late 1980s, China had begun to penetrate the Myanmar market through
an extensive economic intelligence reporting system. This network monitored
the availability of domestically produced Myanmar products as well as the
nature and volume of trade from other countries in the region such as
Thailand, Malaysia, Singapore and India.

When the border was opened for trade in the early 1990s, more than 2,000
carefully selected items were reported to be flooding the Myanmar market -
among them bicycles, sewing machines, beer, soap, cigarettes, cheap
textiles, stationery, spare machinery parts, radios, medicines, and petrol.
These goods were priced deliberately cheaper than those from other
neighboring countries and Myanmar-made products.

In March last year, China's official People's Daily Online reported that
bilateral trade between the two countries hit US$ 2.9 billion in 2009, an
increase of 10% over the previous year and up from virtually zero in the
late 1980s. The trade balance weighed heavily in China's favor: in 2009,
Chinese exports amounted to $2.3 billion, while its imports from Myanmar
totaled a mere $646 million. More current trade figures are not publicly
available, but are believed to be even higher and still weighted in China's
favor.

While Myanmar has been denied access to international monetary institutions
due to US and European Union sanctions, China has provided Myanmar with low
interest loans and major investment capital. That is particularly true of
the energy sector.

An agreement to build a gas pipeline from the Bay of Bengal will be
supplemented with an oil pipeline designed to allow Chinese ships carrying
fuel imports from the Middle East to skirt the congested Malacca Strait. In
September last year, China agreed to provide Myanmar with $4.2 billion worth
of interest-free loans over a 30-year period to help fund hydropower
projects, road and railway construction, and information technology
development.

Myanmar's growing economic and financial dependence on China has caused
considerable consternation its military leadership. Aunt Lynn Htut, a former
intelligence officer who sought political asylum in the US in 2005, wrote in
a September 30 commentary for exile-run The Irrawaddy that the country's
military leaders have not forgotten that they once fought against the
China-backed CPB and that many of their comrades were killed by Chinese
arms.

For instance, Tin Aunt Myint Oo, the current first vice president, earned
his title thiha thura (brave lion) in 1989 after taking part in heavy
battles with the CPB just before the mutiny. According to Aunt Lynn Htut,
many of his officers and soldiers, including his commander, died on the
battlefield.

Despite the deepening of Sino-Myanmar relations, China still maintains close
contacts with the United Wa State Army (UWSA), the main successor to the
CPB. The UWSA is equipped with modern weapons, including artillery and
anti-aircraft guns, obtained from what is euphemistically called the "black
market" in China, but which is more a "gray market" as it is run mainly by
former Chinese military officers.

The UWSA today is much stronger and better equipped than the CPB was in the
last years before the 1989 mutiny. Chinese duplicity in maintaining
relations with Naypyidaw and the armed militias opposed to its rule has made
many Myanmar army officers wary of China's long-term intentions.

Survival instincts

According to many Western observers, recent positive developments in Myanmar
reflect a power struggle between "reform-minded moderates" and "hardliners"
within the government and the military that controls it. But the "moderates"
have to tread carefully, one cautious step at a time, to avoid upsetting the
"hardliners" waiting in the wings, the analysis goes. It may appear that way
on the surface, but the political reality is far more convoluted and
complicated.

Myanmar's new 2008 constitution and last year's rigged elections were not
implemented to change the country's basic power structure that has been in
place since the military first seized power in 1962, but rather aim to
institutionalize it by creating a national parliament, regional assemblies,
and a superficially civilian-led government.

Since 1962, Myanmar's military has viewed itself as the sole force capable
of protecting the country's independence and unity. The ruling military is
not divided over how much democracy should be allowed, or the degree of
respect it should show for human rights. Rather, disagreements within
Myanmar's military are more over questions of national sovereignty, internal
security and, most importantly, regime survival.

Vice President Tin Aunt Myint Oo is often referred to in the Western media
as a "hardliner". But that characterization is misleading as it is the state
of relations with China, not degrees of democracy, that historically has
caused the biggest rifts inside the Myanmar military. Apart from the
Myitsone dam issue, sources familiar with the inner workings of the Myanmar
military assert that hostility towards China is growing among the officer
corps, especially when it comes to ongoing Chinese support for the heavily
armed UWSA.

By suspending the controversial dam project, Thein Seen took the wind out of
the sails of a situation that could have caused a serious conflict inside
the military and been channeled to the public at large. For now, Thein Seen
has weathered the storm, but by suspending rather than canceling the project
he strategically left a door open for future negotiations with China.

Myanmar cannot turn its back to China: the two countries share a long
border, while the United States and the European Union are distant powers of
lesser importance to the long term survival of the regime.

The forces behind Thein Seen have skillfully played the China card vis-a-vis
the West in a new bid to lessen the country's dependence on China and smooth
over potential conflicts brewing within the armed forces.

On September 29, Myanmar Foreign Minister Wunna Maung Lwin met in Washington
with newly appointed US coordinator on Myanmar Derek Mitchell, Assistant
Secretary of State for East Asian and Pacific Affairs Kurt Campbell, and
human-rights official Michael Posner. It was not a coincidence that the next
day Thein Sein's government decided to suspend the Myitsone dam until 2015.

Even before Thein Seen started to send reform signals, the US had started to
rethink its punitive policy towards Myanmar. Ever since the 1988 massacres
of pro-democracy demonstrators in Yangon, Washington has been the military
regime's fiercest international critic. When Barack Obama took over the US
presidency in January 2009, a new policy of "engagement" was adopted to
shift that course. In April that year, US senator Jim Webb, known to be
close to Obama, became the first top-level US politician to visit Myanmar in
years.

While paying lip-service to democracy and human rights during talks with
then junta leader General Than Shwe, Webb revealed his real motives at a
breakfast meeting with defense reporters in Washington after returning from
his trip:

We are in a situation where if we do not push some kind of constructive
engagement, Myanmar is going to basically become a province of China ... we
all respect Aunt San Suo Kyiv and the sacrifices she has made. On the other
hand, how does the US develop a relationship that could increase stability
in the region and not allow China to have dominance in a country that has
strategic importance in the region?

That view, if widely held, represents a significant shift in Washington's
perspective. In March 1989, a senior US diplomat in Yangon told the
Washington Post: "Since there are no US bases and very little strategic
interest, Burma [Myanmar] is one place where the United States has the
luxury of living up to its principles."

With China's fast rise and US concerns about Myanmar's budding military
relations with North Korea, strategic interests have now returned to the
forefront of Washington's Myanmar policy.

Myanmar is now in the process of rebalancing its foreign relations to ensure
the regime's survival and future cohesion of the armed forces. Thein Seen
and the powerful military forces that back him realize that there must be
some icing on the cake for the US and the European Union to accept his
nominally civilian regime and consider lifting sanctions.

That is the "ransom" that has been paid for the release of dissidents like
Zarganar and warming overtures towards Suo Kyiv. While Myanmar may have
embarked on a more palatable political course, it has more to do with regime
survival than a desire to supplant military rule with democratic governance.

Bertin Linter is a former correspondent with the Far Eastern Economic
Review and author of several books on Burma/Myanmar. He is currently a
writer with Asia-Pacific Media Services.