Neighbourhood : Indian Interests Hampered by China-Myanmar Pacts

Chinese President Xi Jinping’s state visit to Myanmar on 17-18 January, was a vivid indicator of the region’s changing geopolitics. 33 agreements were signed during a short sojourn of a day and a half.

Chinese President Xi Jinping has promised to assist Myanmar in financing and constructing a range of infrastructure projects under the proposed China-Myanmar Economic Corridor (CMEC). The offer is similar to the one extended to Pakistan under the China-Pakistan Economic Corridor (CPEC).

Joint Statement

A joint statement, issued on January 18, claimed that “a new chapter” had been opened “in the ever-lasting friendship” between the two countries, stemming from the broad understanding to promote “comprehensive strategic cooperation.” It referred to building the “Myanmar-China Community with a Shared Future.” Exchanges of “experience in governance” will be deepened and strategic communication will be enhanced. Besides, the two governments plan to make good use of the 2+2 high-level consultations, comprising the two foreign ministers and defence ministers.

Rohingya Issue

Relationship between the two countries has warmed since 2017 when China refused to join the international outcry against the military campaign to force more than 730,000 Rohingya to flee across the border to Bangladesh.

China is making the case that some of its Belt and Road Initiative (BRI) projects can help alleviate the Rohingya conflict by accelerating the development of the Arakan region. It is also offering projects to promote economic development in the conflict-prone northern frontiers of Myanmar that have long challenged the writ of the central government in the south.

The Chinese also made it clear that the Myanmar government, currently under intense international pressure due to its rigid position on the Rohingya issue, will continue to receive China’s full support. Beijing has positioned itself as the great defender of Myanmar’s legitimate rights, interests and national dignity at a time when the International Court of Justice (ICJ) is about to pronounce on the charges of genocide against the Myanmar military.

Three Pillars of CMEC

Xi met Myanmar’s leaders, including state counsellor Aung San Suu Kyi and army chief Min Aung Hlaing, in the capital, Naypyitaw, on 17 January. Ahead of the visit, Xi wrote an article in the Myanmar newspapers discussing the proposed projects in the economic corridor which will be part of China’s BRI.

“Our two sides need to deepen results-oriented Belt and Road cooperation and move from a conceptual stage to concrete planning and implementation in building the CMEC,” Xi said in the article.

Elaborating, Xi said, “Efforts need to be made to promote the three pillars of the CMEC, namely the Kyaukpyu Special Economic Zone, the China-Myanmar Border Economic Cooperation Zone and New Yangon City.”

Through the agreements signed and discussions held about their follow-up during the visit, CMEC’s three pillars seem to have been consolidated.

The centrepiece of the so called CMEC is a $1.3 billion deep-sea port at Kyaukphyu in Rakhine state, giving Beijing a gateway to the Indian Ocean. A high-speed rail link is also on the cards to connect the port and nearby planned industrial zone with the countries’ shared border. Bilateral trade was worth $16.8 billion last year and Beijing holds the biggest share – around $4 billion or 40% – of Myanmar’s foreign debt.

Myanmar has successfully hammered down the price from $7.2 billion to swerve fears of a Chinese debt-trap, but will still pick up 30 per cent of the bill. Alongside the port, swathes of paddy fields and teak forests are poised to be transformed into a vast industrial zone of garment and food processing factories.

The first segment of the proposed high-speed rail link from China’s landlocked Yunnan province to Myanmar’s west coast will cut through the border town of Muse to former capital Mandalay. But engineering challenges through Myanmar’s hilly Shan State would likely be dwarfed by security concerns. The region is awash with weapons and a centre for meth production as armed rebels and militias jostle for a share of any potential windfall. They will first need to be appeased and reassured the rail link will not jeopardise their income or security.

Yangon authorities hope to revolutionise the sprawling, gridlocked commercial hub by creating a whole new town on the west bank of the city’s river. They say the satellite city will help solve problems of congestion, overpopulation and the lack of electricity and water.

India’s Interests

As China steps into the backwaters of the Bay of Bengal, the littorals of the Bay have a stake in constructing a regional order that limits conflict and promotes cooperation across the Bay of Bengal.China has already acquired the Gwadar port in Pakistan, followed by Hambantota in Sri Lanka in India’s backyard. Instead of seeing itself in irreconcilable competition with Beijing in Myanmar, Delhi should focus on making more effective contribution to Myanmar’s development and security. India needs to focus on quickly completing its own infrastructure projects in Myanmar and develop a new strategy for commercial partnership with Naypyidaw that is in tune with India’s own capabilities and strengths.

Delhi should also strengthen its collaboration with like-minded partners like Japan which has a growing economic presence in Myanmar.

Delhi also needs to bring fresh energy to the dormant dialogue with Beijing on the so-called BCIM corridor involving Bangladesh, China, India and Myanmar. Although India has rejected China’s BRI, it has left the door open for cooperation with China on the BCIM corridor.

By pushing mega projects in a country that has not been of much interest in the past, China looks to consolidate a connection between its South-Western province of Yunnan and Bay of Bengal. The Kyaukpyu deep-sea port being developed by China on the eastern bank of Bay of Bengal, when put together with Chinese ambitions of CMEC, creates a full-fledged and high-potential path for China in its trade route.

China, via the CPEC and the Gwadar port, has already established a foot in the Indian subcontinent. With Gwadar in the Arabian Sea, Kyaukpyu in the Bay of Bengal as well as Hambantota in Sri Lanka, China has seemingly engulfed India from point of view of its presence in the Indian Ocean Region (IOR). And, while these ports offer China immense potential both from strategic as well as trade perspectives, they garner apprehension for India – the only absentee from China’s BRI.

With BRI derivatives all around, India has a cause for concern. Not only has China propagated its BRI, making its outreach to IOR and gulf peninsula a reality, strangely enough, but there has been no check on its expansion by the US – for whom China’s strides matter the most.

In recent years, Chinese debt trap has been instrumental in treading a path for China to reach Indian waters. IOR has been a prime transit route of the global maritime traffic following the inauguration of the Suez Canal. While naturally, India is comfortably positioned to utilise the benefits of strategically paramount IOR, aggressive Chinese advances to form bases in IOR has ensured competition.

China’s growing geopolitical influence in IOR does not sit well with Indian interests. India has also taken steps to curb Chinese dominance of the area by offering a hefty economic package to the Maldives, empowering the latter to come out of the Chinese debt trap and not give in like Sri Lanka.

With three ports covering the entire peninsula of India in a sense, China wishes to tap on the opportunity-galore IOR. Kyaukpyu allows China to access IOR which unlocks entire South-East Asia.

Year by year, Chinese advances ensure a consolidated foot in the IOR while India spectates. Blessed naturally with a most-strategic position – head of IOR – India has to step up and emerge as a leading power in IOR. While India cannot blame China for its expansion, it can certainly counter it, especially in collaboration with its allies.

Impact on Relations With Myanmar

The situation around India has taken an adverse turn in the recent months. Against the general backdrop of consolidation of China-Pakistan relations, Xi’s visit to Nepal, his strategic gains in Myanmar, and forthcoming visit of the Sri Lankan President to Beijing form part of a pattern. It is one of the setbacks and challenges to India’s diplomacy in South Asia. It calls for deep reflection and comprehensive consultations with the finest minds in the country.

For India, China making inroads along its periphery in South Asia has been a major source of concern, and New Delhi will be watching the progress and implementation of the pacts signed during the visit with a wary eye.

Kyaukpyu could end up being a “dual use” facility – ie, for military as well as commercial uses. India will have to stretch its security capabilities to monitor Chinese activities in the Bay of Bengal.

China’s increased presence in Myanmar could mean constraints on India that wishes to deepen cooperation with Myanmar. India’s northeast is riven with insurgencies. Though New Delhi has taken steps in recent years to sign peace agreements with several groups in the region, the situation still needs careful attention. India and Myanmar have conducted several military operations along their borders in close cooperation with each other.

With Myanmar seemingly drawing closer to China under pressure from the West, Beijing could attempt to keep the country under its influence like it does in the case of Cambodia and Laos. The addition of Myanmar to Laos and Cambodia could also weaken ASEAN from within.