Geopolitical Report ISSN 2785-2598 Volume 24 Issue 1
Author: Riccardo Rossi

Due to its geographical position in the Asia-Pacific, Myanmar plays a strategic role in China’s regional policy, especially in connection with the Malacca Dilemma.

Since the beginning of Xi Jinping’s presidency in 2013, the People’s Republic of China (PRC) has developed a foreign policy plan called China Dream to return the nation to a leading role internationally. Therefore, among the primary Chinese goals, there is Beijing’s necessity to expand its military and economic influence in the Asia-Pacific region.

In this framework, Myanmar represents a territory of high strategic interest due to its contiguity to the province of Yunnan and the city of Kunming and its peculiar geophysical characteristics.

Against this backdrop, the analysis aims to understand the PRC’s geopolitical value placed on Myanmar to solve the so-called Malacca Dilemma.

Myanmar’s geopolitical importance in Asia-Pacific

For President Xi Jinping, Myanmar represents an indispensable territory in defence of Chinese economic-strategic interests in the Indo-Pacific. An initial explanation for this assessment can be found in the geophysical conformation of Myanmar, which can be summarised in three main points.

1. 1. Geographical location. Myanmar, located on the northern side of Southeast Asia, shares around 2,200 km border with the People’s Republic of China. Furthermore, the country has a strategic position in the South-East Asian region between the Bay of Bengal and the Chinese province of Yunnan. Myanmar is also close to the Strait of Malacca, the obligatory passage for the Sea Lines of Communications (SLOC), which interconnects Beijing’s ports to the maritime trade routes of the Asia-Pacific.
   2. The coastline and island territories. The People’s Republic of China considers the Myanmar shoreline segment a strategic area concerning the Bay of Bengal due to its 1,610 km width and proximity to the Strait of Malacca. From Beijing’s strategic point of view, considering the island territories of Naypyidaw, the islands of Maday and Ramree have great importance because they are the starting point of two pipelines that transport gas and oil to the Chinese city of Kunming.
   3. Water resources. Some of the largest rivers in South East Asia crossed Myanmar, including the Irrawaddy and Mekong. China sees these two waterways as an energy potential to be exploited to support part of its industrial and civil electricity needs.

Due to Myanmar’s territorial conformation and geographical position, Beijing wants to strengthen its economic and diplomatic relations with Naypyidaw to implement the Belt and Road Initiative (BRI) project.

Indeed, in the BRI project, Myanmar has a significant role in finding a solution to the Malacca Dilemma issue. The Xi Jinping administration uses this term to denote a situation of over-dependence of China’s economic-industrial apparatus on the trade traffic passing through the Strait of Malacca and the main Sea Lines of Communications (SOLCs), which through the South China Sea interconnect Chinese ports to the Asia-Pacific sea routes.

Beijing sees this condition as a weakness for the sustenance of its industrial apparatus, primarily due to the increasing strategic-military rivalry with the United States for control of certain areas in the SCS and the Taiwan Strait.

The Xi Jinping presidency, to overcome the Malacca Dilemma and tensions with Washington, has initiated an investment policy in Myanmar, summarised in the project China-Myanmar Economic Corridor (CMEC). This programme aims to preserve and build new infrastructure in parts of Burma’s territory, improving the connection between the Chinese city of Kunming and the maritime trade routes via the Bay of Bengal to Middle Eastern countries and the European market.

The People’s Republic of China, following Naypyidaw over the past ten years, has defined a medium- to long-term investment program by planning and building various infrastructures. Of these, we list four significant projects:

• Between 2009-2017, the China National Petroleum and Natural Gas Corporation (CNPC) built a gas and oil pipeline for 2.5 billion dollars. The 2,402-km-long pipeline runs from the Myanmar island of Maday to the city of Kunming. It entered into service in 2017 and transported 22 million tonnes of oil annually, corresponding to about 6% of China’s annual crude oil needs. Thanks to this infrastructure, Beijing has reduced the passage of its oil tankers from Malacca and the South China Sea trade routes to refineries and storage areas along its coastline. The 2,498-kilometre pipeline runs from the Burmese city of Kyaukphyu on the island of Ramree to the city of Kunming. Operational since 2013, it guarantees Beijing an annual transport of 10 billion cubic metres of gas and is expected to run for 30 years.
• In 2009, Beijing started working on the Myaston Dam construction along the Irrawaddy River, which, in 2011, the Myanmar Government blocked due to protests by the local population. Naypyidaw’s decision to block the work led to a temporary cooling of relations between the two countries, which resumed in 2013 with the appointment of Xi Jinping as President of the People’s Republic of China.
• Beijing planned to build a railway to initially connect Kyaukphyu to Mandalay and then extend it to the city of Kunming. The work has never gone on site but is considered by the Chinese Communist Party leadership as an essential asset to speed up the transport of goods from Yunnan province to ports along the Burmese coast.
• In 2013, China announced its intention to establish a 4,300-acre Special Economic Zone (SEZ) near Kyaukphyu. The SEZ envisages the construction of an industrial park, a deep-water port (7.5 billion dollars) and a built-up area. The total cost of this project was supposed to be 9.5 billion dollars, but in 2018 it was scaled down to 3 billion dollars. The construction of the deep-water port is fundamental for Beijing because it would facilitate traffic and unloading of crude oil cargo from the Gulf countries by its own tankers.

Considering the high Chinese investments in Myanmar (in 2020, they had reached 11.4 billion dollars in exports), Beijing needs to support Myanmar’s stability. Indeed, Beijing is particularly concerned about the illicit trafficking of drugs and people from the Myanmar territory to Yunnan Province and the regular clashes between the armed forces in Naypyidaw with ethnic separatist groups near the border. Regarding the latter, several conflicts between the Myanmar army and the paramilitary forces of the Myanmar National Democratic Alliance Army (MNDAA) took place between 2015-2017, resulting in the deaths of Chinese citizens.

Conclusions

The decision of the People’s Republic of China to strengthen economic-diplomatic ties with Myanmar is an essential manoeuvre in the implementation of the BRI project. It partially makes up for the difficulties encountered in the challenge with the United States in the South China Sea and the control of the island of Taiwan.

Beijing will increase its investment in Burma in the coming years, but this could not be enough to develop an alternative to the Malacca dilemma and the use of the Sea Lines of Communications (SLOC) via the South China Sea to connect its ports to the most crucial global shipping lanes.

In this analysis framework, we should consider the delays in the construction of new infrastructure (see the case of the Myaston Dam) and the reduced transport capacity of the two pipelines connecting the hubs in Myanmar with the city of Kunming. As a result, Beijing will inevitably have to send its oil tankers through the Malacca bottleneck to the major ports of Dalian, Ningbo, Qingdao, Qinhuangdao, Shanghai, Shenzhen, and Tianjin.