by Staff Writers
Beijing (AFP) Dec 2, 2011
As Myanmar's biggest foreign investor, China has benefited from the isolation of its resource-rich neighbour, buying up vast amounts of oil, gas and timber as it offered unwavering diplomatic support.
The Asian powerhouse has long been Myanmar's staunchest ally, shielding it from global opprobrium and the impact of sanctions with trade ties, arms sales and through its veto-wielding permanent membership of the UN Security Council.
Once seen as a pariah state, Myanmar now appears to be trying to limit its dependence on Beijing by reaching out to the United States -- as evidenced by US Secretary of State Hillary Clinton's trip there this week -- and other nations.
Nevertheless, China's economic, political and military involvement in Myanmar is all-encompassing.
Trade between the two countries hit $4.4 billion in 2010, up 53 percent from the previous year.
China's biggest interests by far are in oil, natural gas and hydroelectricity, as it seeks to fuel its breakneck economic expansion.
The world's second largest economy has begun construction on twin oil and natural gas pipelines going from the Myanmar port of Kyaukpyu on the Bay of Bengal to Kunming, capital of southwest China's border province of Yunnan.
The pipelines are due to be completed in 2013, and will allow China to import at least some of its oil supplies without going through the Strait of Malacca, one of the busiest waterways in the world.
Around 80 percent of China's oil imports from the the Middle East and Africa are currently transported through the strait, which Beijing fears could be choked off in the future due to geopolitical disputes.
China is also building a road from Kyaukpyu to Yunnan, giving it access to the Indian Ocean across northern Myanmar, providing it with a strategic gateway to South and Southeast Asia.
China has signed a 30-year deal with Myanmar for the right to buy natural gas from its Shwe fields, and is also involved in building dams on the nation's Irrawaddy river in a bid to secure hydropower.
But some projects have caused resentment in Myanmar, due to environmental damage and the displacement of populations.
In a surprise decision in September, Myanmar's new President Thein Sein ordered work on the huge $3.6 billion Chinese-backed Myitsone Dam to stop due to local pressure -- sparking anger in Beijing.
China is a major supplier of arms to Myanmar, providing low-scale equipment such as military trucks and guns. Its military cooperation has given it strategically valuable access to Myanmar's naval bases on the Indian Ocean.
Chinese entrepreneurs are active in Myanmar's gemstone industry, dealing mainly in jade, much of which is traded over the border into Yunnan's Ruili town.
Many Chinese firms also invest in the timber and agricultural sectors in Myanmar border areas controlled by ethnic rebels.
Politically, China has tried to push for greater engagement between the Myanmar government and rebel ethnic groups, after 30,000 refugees flooded into Yunnan to escape fighting between Myanmar's army and ethnic rebels in 2009.
Experts say the extent of China's investments in Myanmar is difficult to assess, partly because some Chinese firms use local partners to gain preferential treatment and partly because some projects are classified as loans or aid.
China's commerce ministry says Beijing directly invested $875.6 million in its smaller neighbour in 2010, up 132 percent from the previous year. Data from Myanmar for the 2010-2011 financial year puts the figure in the billions of dollars.
Overall though, experts agree that China's involvement in Myanmar is fuelling local resentment.
Cheap consumer goods are exported from Yunnan to Myanmar, where shops are crammed with China-made products -- a move that some argue damages the Southeast Asian nation's own manufacturing industry.
Educational and employment opportunities in northern Myanmar are low despite the investment projects of the Chinese, who often bring their own workers.
But Myanmar -- which held historic elections last year that saw the junta disband and several reforms introduced -- is now reaching out to other nations.
Clinton's visit this week -- the first by a senior US official in more than 50 years -- is seen as highly symbolic. President Thein Sein also visited India in October, where he was given red carpet treatment.
Myanmar's new military chief Min Aung Hlaing chose Vietnam for his first overseas trip -- and not China like his predecessors did.
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China urges end to Myanmar sanctions
Beijing (AFP) Dec 1, 2011
China called Thursday for international sanctions against key ally Myanmar to be lifted, as US Secretary of State Hillary Clinton made a historic visit to the isolated nation. Myanmar has surprised observers with a series of reformist moves in the past year - including shutting down work on a controversial dam project backed by Beijing - leading to speculation it is trying to diversify its ... read more
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