ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
International relations

China and Myanmar agree to accelerate key Belt and Road port

Deep-sea project will give Beijing vital access to Indian Ocean

Myanmar State Counselor Aung San Suu Kyi shakes hands with Chinese President Xi Jinping at the Presidential Palace in Naypyitaw on Jan. 18. (Pool photo)   © Reuters

NAYPYIDAW/BEIJING -- China and Myanmar on Saturday signed 33 agreements that will further strengthen economic ties between the countries, including a port project that will give Beijing a crucial pathway to the Indian Ocean.

Chinese President Xi Jinping and Myanmar's State Counselor Aung San Suu Kyi agreed to the projects in a meeting in Myanmar's capital. The meeting presented Xi an opportunity to accelerate the China-Myanmar Economic Corridor (CMEC) as part of Beijing's Belt and Road Initiative at a time when Western nations are pulling back from Myanmar over its treatment of ethnic minority Rohingya. 

According to Myanmar government officials, the two sides signed agreements related to a deep-sea port project at Kyaukphyu Special Economic Zone, accelerating China's $1.3 billion project to gain strategic access to the Indian Ocean.

Both parties also signed a memorandum of understanding to explore connecting their power grids and signed several protocols to expand exports of Myanmar's agricultural products to China.

The main purpose of Xi's visit was apparently to accelerate the CMEC. Myanmar had been cautious moving forward on projects out of concerns of amassing debt and public backlash until now, although it had welcomed Chinese investment.

One subject of public backlash is the $3.6 billion Myitsone Dam project, which was halted by then-Myanmar President Thein Sein in 2011. There was no mention of reviving the project during Xi's visit, signaling China's compromise on the issue. This was apparently out of consideration for Naypyidaw, which is facing protests against the project over its potential impact on the Irrawaddy River, the country's main waterway.

Xi's two-day trip marked the first visit to Myanmar by a Chinese president in 19 years. He attended a ceremony marking the 70th anniversary of diplomatic ties between Myanmar and China. Apart from his meeting with Suu Kyi, Xi met Myanmar's President Win Myint, and Gen. Min Aung Hlaing, the commander-in-chief of the country's powerful military.

As part of CMEC, which was agreed on by Suu Kyi and Xi in Beijing in 2017, China seeks to build a port in Kyaukpyu in western Myanmar, and connect it to Kunming, southern part of China, by a highway and railways. 

A joint statement released Saturday said the two sides agreed to "transit from a concept sketching into concrete development" on the CMEC project. Both sides also agreed to "endeavor to promote the three pillars of the CMEC," namely Kyaukphyu, Myanmar-China Border Economic Cooperation Zone, and development of the New Yangon City project.

The strategic location of Myanmar is important to Beijing in terms of security as it would give China a pathway through land to the Indian Ocean. Kyaukpyu is also the starting point of a pipeline that can send liquefied natural gas and oil to China. Establishing this route would give added energy security to China, which is currently dependent on resources shipped through the Malacca Strait.

Beijing's move to expand political and economic ties with Myanmar is part of its geopolitical ambition to expand its clout in the Indian Ocean. China is proceeding with the so-called String of Pearls strategy, in which Beijing finances port projects along the Indian Ocean to secure routes for foreign oil and trade. Kyaukpyu is part of this strategy, raising concerns from India and other regional players, as well as the U.S., over the military capabilities of the ports.

Since the democratization of Myanmar in 2011, Myanmar has tried to modify its diplomatic position to "neutral," rather than rely on China as it was the case during its 23 years of military rule. But after Suu Kyi's National League of Democracy took power in 2016, the country is leaning back to China, partly because Beijing maintains strong influence over ethnic militias near the Chinese border that have helped end decades-long conflicts.

Toshihiro Kudo, a professor at Japan's National Graduate Institute for Policy Studies, said that "from Myanmar's perspective, there is no other way but keeping a good relationship with China," given that the two countries share more than 2,000 km of border.

The International Court of Justice said this week that it would issue a decision on Jan. 23 whether to order Myanmar to put an end to what human rights groups say has been a campaign of genocide against the country's Rohingya Muslim minority. The ruling could increase international pressure on Myanmar, giving China an opportunity to support Naypyidaw and expand its influence over the country.

In the meeting, Xi reaffirmed to Suu Kyi that his government "will continue to speak out for Myanmar in the international arena, and support Myanmar to safeguard its legitimate rights and interest."

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more