As Myanmar opens, China alliance starts to fray

When officials first turned up demanding Chen Ching-feng remove the Chinese sign above her clothing shop in Myanmar's biggest northern city, she ignored them.

"When they came back a few days later and asked why the Chinese was still there, I said I had been busy," the ethnic Chinese resident of Mandalay said, speaking in Mandarin. "They made me take them down immediately and sign an undertaking not to put them back."

Other ethnic Chinese shop-owners report similar requests, though enforcement is patchy.

Government officials in Myanmar's capital, Naypyitaw, say there is no official ban on Chinese advertisements, but demands to pull them down in Mandalay, a city dominated by Chinese merchants, illustrate mounting unease over Beijing's expanding influence.

As Myanmar pursues dramatic reforms, its relationship with China -- the Southeast Asian nation's biggest investor and second-biggest trade partner -- is changing. In some cases, long-festering resentment is flaring into the open.

During decades of isolation, the former Burma relied on China as its closest diplomatic and military ally. Wide-reaching Western sanctions put in place after a bloody crackdown on pro-democracy demonstrations in 1988 forced Myanmar to deepen economic ties with China.

But as Myanmar embarks on the road back to democracy, a once-muffled debate about China's role is growing louder. The reforms are also taking place as the geopolitical rivalry between the United States and China has sharpened since the Obama administration's "pivot" toward Asia after preoccupation with wars in Iraq and Afghanistan the past decade.

HISTORICAL FRICTIONS

China's expanding economic influence was never that popular anyway in a country historically suspicious of foreign powers -- memories linger of Beijing's alleged support for the Communist Party of Burma in the 1960s and '70s. China has its grievances, too. Clashes between Myanmar soldiers and various insurgent groups dotting the border with China have killed innocent Chinese and sent refugees streaming across the frontier.

"The government has tried to ban foreign influences before. It seems to be happening again," said Hu Chieh-chi, a restaurateur in Mandalay, who is an ethnic Chinese and a Myanmar citizen, just like clothes store owner Chen.

A two-hour drive away, a grass-roots campaign is forming to halt China's most strategic investment in Myanmar: twin pipelines that will stretch from the Bay of Bengal to China's energy-hungry western provinces, bringing oil and natural gas to one of China's most undeveloped regions.

In interviews with Reuters, the activists say they were emboldened by Myanmar's surprise decision on Sept. 30 to shelve the $3.6 billion Chinese-funded Myitsone dam under public pressure. U.S. officials told Reuters that responsiveness to a public demand was a crucial factor in Washington's historic rapprochement with Myanmar late last year.

Much is at stake. Myanmar provides populous and landlocked southwestern China a crucial outlet to the sea. A friendly Myanmar helps reassure Beijing, which is increasingly worried about being "encircled" by the United States and its allies, from Japan to Australia and India.

TALE OF TWO PIPELINES

From his home overlooking a colonial-era golf course, Kyaw Thiha is clear about what he sees holding back reforms: China.

"This is a democracy. The Chinese ordering us around is not democratic," said the former political prisoner who will contest an April 1 parliamentary by-election as a candidate for the opposition

National League for Democracy, the party of Nobel Peace Prize-winner Aung San Suu Kyi.

The soft-spoken university history tutor, jailed during the failed 1988 uprising, wants the government to stop the 790-km (490-mile) pipeline project that will cut across the country, including near his town in the old British hill station of Pyin Oo Lwin.

Human rights groups say the pipelines will displace thousands, damage livelihoods of farmers and fishermen, and benefit China more than Myanmar, where power outages are chronic.

To Beijing, the pipelines are a vital energy security asset that will reduce its reliance on shipping through the narrow choke-point of the Malacca Strait. Thousands of Chinese workers have been enlisted to build them.

"We want parliament to stop the pipeline. It was not given permission by the people," Kyaw Thiha said in an interview.

A year ago, such talk was dangerous in a country whose critics were regularly locked up by generals who had ruled since a 1962 coup. But reforms led by a year-old nominally civilian government have begun to unwind years of authoritarianism and self-imposed isolation.

The government has relaxed some media censorship, allowed trade unions, begun peace talks with ethnic rebels, freed hundreds of dissidents and showed signs of pulling back from the powerful economic and political orbit of China. It was rewarded in December when Hillary Clinton made the first visit to the country by a U.S. secretary of state since 1955.

GRIEVANCES ON THE INTERNET

Myanmar Energy Minister Than Htay acknowledged public concerns over the pipelines but said they would be completed on schedule next year.

"We solved each and every problem along that pipeline route, and we give compensation for land use much more than previously," he said in a recent interview. "I consider all the potential issues that will be raised by the anti-government groups. I see every day on the Internet many groups raise the problems and the issues to disturb our project."

For many in Myanmar, the pipelines embody all that is rotten about China's influence: environmental destruction, land grabs, cronyism and accusations of corruption.

Thant Lwin is one of many farmers who simmer with resentment when asked about them. Chinese bulldozers have sliced his rice-paddy field in half to make way for the pipeline and service road in his small village.

"We are facing real hardship because of the Chinese," he said from his farm in the countryside near Pyin Oo Lwin, known in colonial times as Maymyo.

"I would be extremely happy if the pipeline gets canceled. But I don't think that will happen," he said. "It is not a matter of hating China. I can only accept the situation. I have no power. Most people are scared to talk out against the project as it is a government project."

Venerable Candobhasa, a Buddhist monk whose land was bisected by one pipeline outside of Pyin Oo Lwin, scoffed at claims that the project, led by China National Petroleum Corp, parent of PetroChina Co Ltd, would bring much-needed money and development to affected villages.

"These are our natural resources. We should keep it for ourselves to help us develop, not sell it to China. We don't have enough power," he said, sitting cross-legged on a sparse floor in his monastery.

"The government does not share the money from the pipeline with us. We want to know where it has gone."

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 2,000 km (1,240 km)," she said in a Yangon café.
 

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