Fri, Feb 17, 2012 - Page 9 News List

As Myanmar opens, China alliance frays

China has long been the isolated Myanmar’s only foreign ally, but the country is chafing at Beijing’s influence, even though the easing of sanctions and opening to trade with the West will have little immediate effect

Reuters, MANDALAY, MYANMAR

Others appear to be almost chafing for a confrontation with China.

“China is going to be shocked as we alone among the Southeast Asia countries are going to stand up to them,” said Khon Ja, a human rights campaigner from northern Myanmar who likes showing visitors a map on her computer outlining exactly why Myanmar is coveted by China, detailing potential road and rail links that could connect southwestern China to the world.

“We have lots of natural resources, are in a very strategic location and have a long border with China, more than 2,000km,” she said in a Yangon cafe.

MYANMAR NEEDS CHINA

China’s pervasive influence will not be easy to roll back.

Though rich in natural resources, Myanmar is one of Asia’s poorest countries. Its new entrepreneurs need the booming border trade and China’s investment money. And the army needs China’s help in ending the unrest along their shared border.

China and its companies pledged more than US$14 billion of investment in Myanmar’s 2010-2011 (April-March) fiscal year, taking total foreign direct investment pledges to US$20 billion from US$300 million a year before, according to official data.

“Myanmar really cannot afford to damage its good relations with China,” said Lin Xixing, a Myanmar expert at Guangzhou’s Jinan University.

Ethnic Chinese are not the only ones who have prospered from China’s largesse.

In Lashio, a town four hours by car from the Chinese border, the matriarch of a large Indian family beamed with pride as she showed a reporter her large, well-appointed house, and then presented a faded picture of a thatched shack where they lived a decade ago.

She explains the change with a single word: “China.”

“They give us very good business,” she said of her auto repair shop. “Lots of trucks go to trade with China. We repair them. Business is very good.”

Lashio’s markets heave with Chinese-made goods, and Chinese is the dominant language of commerce thanks to decades of Chinese immigration, mostly from neighboring Yunnan Province.

With almost no industry of its own, even the most basic goods are usually imported in Myanmar from China or Thailand — from laundry powder to soy sauce. Competing local products are often more expensive.

CHINA’S SUPPLY TRAINS

On Lashio’s main road to China, trucks rumble by all day. Those from China are packed with refrigerators, TVs and other consumer goods. Those leaving are clogged with timber, bags of cheap coal and other resources. Smugglers run drugs, jade and gems into China and beyond.

Many wonder whether this will change if Western sanctions are lifted. Could trade with Europe and the US elbow out China?

That is unlikely, said Aung Zaw Win, who builds machinery in Mandalay and who does most of his business with China and Chinese people.

“China will remain an important market for us. China has well-established supply chains and infrastructure. We cannot substitute for them within the space of only a few years,” he said from his office in central Mandalay.

However, he is making preparations just in case.

A US diplomat stopped by recently to ask Zaw Win about the impact of sanctions on his business. A Japanese company inquired about doing business together.

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