The diplomatic
bonhomie of last week’s World Economic Forum in East Asia, held in Burma’s new
capital, Naypyitaw, could not hide the reality that there is a new
international scramble for Burma.
The country’s reform has sparked a diplomatic feeding
frenzy as Western, Pacific and Asian governments vie for position and
influence. But for China, is this a case of NIMBY – “not in my back yard?”
Burma is fiercely and rightly protective of its
independence and sovereignty. The new competition offers a new means of
leveraging economic gains and political benefits from the international
competition, including China.
The competition is potentially sharpest within Asia.
Japanese prime minister Shinzo Abe’s recent visit to Burma – the first by a
Japanese political leader in well over three decades – shone a spotlight on the
challenges it poses for China in its own “backyard”. Premier Abe is far from
being alone in courting Burma since it embarked on political reform after
nearly 50 years of military rule – most notably, Barack Obama made advances in
November last year. Tokyo’s new move, however, may resonate more strongly in
Beijing than in other capitals.
Why? The answer lies in an agreement for increased
bilateral economic, political and strategic cooperation – including a closer
dialogue on security and regional issues – as well as the promotion of
co-operation and exchange between their defence authorities. Japan wants a
slice of the economic action, and Abe’s visit, as a Japan Times commentator put
it, could “counter China’s strong influence in the country”. Beijing is not about
to be pushed out.
No friends like old
friends
Politically, China has been a powerful friend to Burma
through the years, protecting it in the United Nations. China’s elite had close
relations with Burmese military and there is also a sizable Chinese-Burmese
community. Now, though, Burma is open to all-comers, which leaves China as one
player among many. Beijing only seemed to wake up to this belatedly with a
high-level delegation last year, concluding its own bilateral agreement to
strengthen relations; Burma’s president, Thein Sein, assured China’s then
vice-president Xi that Burma’s China policy had not altered.
Burma is also politically important to China for the
potential of added regional influence. Next year, Burma takes over the chair of
the Association of Southeast Asian Nations (ASEAN) and will host its summit.
ASEAN has its own economic community coming to fruition and overlaps with
China’s ASEAN-China Free Trade Area.
Burma is, it would seem, in transition and could form
a soft political underbelly for China. This feeds arguments in China that the
West is building a new “containment” ring around China, with Burma as Obama’s
“pivot” and Japan as its willing helper. Nationalistic sentiment picked up on
this in the latest round of the Sino-Japanese spat over disputed ownership of
islands in April and May.
China as backyard
bully?
This is a particularly thorny problem for China as it
tries to avoid claims of demonstrating colonialist tendencies of its own.
Public protests over China’s copper mining and energy pipelines amid
accusations of land grabs, environmental disregard and displacement of peoples
– some of whom were brutally suppressed by Burmese forces – only help to fuel
anti-Chinese feeling. This will not be an easy furrow for Beijing to plough and
is probably beyond its people-to-people cultural diplomacy to overcome.
Economically, the World Bank expects Burma to grow by
more than 6% this year. China is already Burma’s top economic partner,
accounting for a third of Burma’s trade and, with a shift to a manufacturing
and service economy taking place and rising labour costs in China, Burma is set
to become even more attractive to Chinese investors.
Already, Chinese investment tops US$8 billion, far
outstripping Japan. Burma remains a vital strategic economic interest for
Beijing with its large stakes in the mining, oil and gas sectors – in spite of
claims of a black economy in illegal logging and narcotics across the border
into China.
And Burma is strategically sensitive – neo-containment
or not. China imports growing amounts of oil and gas from the Middle East and
Burma offers China an important friend along critical supply routes. China has
US$2.5 billion worth of new oil and gas lines pipelines through Burma – and
while these represent key strategic assets for Beijing, the projects are
nevertheless mired in controversy and local protest. For example, Burma’s
Rakhine State, where the pipeline begins, has seen severe inter-communal
violence.
How to make a bomb in
Burma
Arms embargoes will be the last to go. China was a
vital supporter during sanctions. The Burmese military again took a massive 21%
of last month’s national budget and it is allowed to sell Burma’s resources
such as oil and gas to buy arms. China may feel well placed to meet Burma’s
needs, but the competition may be too much for Chinese manufacturers.
There are nuclear proliferation concerns too. Burma’s
military junta set up a nuclear energy programme – allegedly with North Korean
help – raising safety issues and questions around the facility’s
“weaponisation”. China, already with one nuclear headache on its borders, does
not need a second one on its southern flank.
Has all this any relevance to the UK? There are
obvious historical and emotional ties, with British governments having stood
against military rule, maintained sanctions, supported human rights and continued
to fund development assistance projects, today to the tune of around £43m. The
UK, like other states, has an eye for an economic opportunity. Britain used to
be Burma’s largest foreign direct investor. Consequently, we see trade and
investment minister Lord Green launching a British Business Group in Burma. The
government has security interests too – the chief of the UK Defence Staff, Sir
David Richards, recently visited the sovereign state.
China’s interests in Burma are clear, but its
influence will become less easy to exercise in a more crowded field; trade-offs
between its priorities will be more frequent, complex and problematic and
requiring careful political judgement. But it will depend on the reform process
in Burma and, more disturbingly for the new Beijing leadership, also in China.
Burma could prove a litmus test for China’s relations with South-east Asia and
the wider East Asian region, including Japan. NIMBYism is simply not an option
any more.
Neil Renwick
Business & Investment Opportunities Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.
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