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China rolls dice with Myanmar's military, sidelines NUG

Beijing Pursues Infrastructure Projects With Regime Despite Escalating Conflict

China backs Myanmar's military regime while also keeping in touch with pro-democracy groups. (Nikkei montage/AP)

YANGON/TAIPEI -- China is doubling down on its backing of Myanmar's military regime one year after the military takeover, despite widespread and sustained opposition to the generals in the country.

Among the signs that Beijing has decided that backing rather than isolating a pariah regime on its doorstep is its best option, Myanmar became the first country in Southeast Asia to take delivery of a China-manufactured submarine.

The former Chinese Ming-class submarine, renamed the UMS Minye Kyaw Htin, joined the fleet during a ceremony in late December.

The move signals China's support for the Myanmar military amid domestic and international demands for arms embargoes. The U.N. General Assembly last June adopted a nonbinding but politically significant resolution calling for a global arms embargo on the military regime.

For months, China has recognized the authority of the military-established State Administration Council (SAC) while sidelining the National Unity Government (NUG) -- a pro-democracy group set up by previously elected and now-ousted lawmakers.

Myanmar military officials attend the commissioning ceremony of a submarine given by China in December. (Photo courtesy of Myanmar's Ministry of Information)

But worried about COVID-19 and fighting spilling over the border, and keen to see political stability that is necessary for Beijing's pursuit of infrastructure projects, China has kept its options open by backing calls for dialogue between the military and the ousted National League for Democracy, led by Aung San Suu Kyi, who is under arrest. China has also maintained its long-standing ties with some of the ethnic armed organizations historically opposed to the military.

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Beijing threw its weight behind Cambodia's diplomatic engagement with the new pariah. After Cambodian strongman Hun Sen's visit to meet military chief Senior Gen. Min Aung Hlaing in Naypyitaw, Chinese Foreign Ministry spokesman Wang Wenbin said, "China supports ASEAN in properly handling the issues relating to Myanmar in the 'ASEAN way.'"

Min Aung Hlaing was snubbed by ASEAN at its October summit. China then reportedly lobbied, in vain, to get the commander in chief invited to the Nov. 22 China-ASEAN meeting, which marked the 30th anniversary of relations between China and the bloc.

Sino-Myanmar experts have noted that Beijing's decision to resume full official engagement with Myanmar's regime started with a meeting on June 9 at Chongqing, China, where military-appointed Foreign Minister Wunna Maung Lwin met with his Chinese counterpart, Wang.

"By August, it was quite clear that the SAC was in power and the coup was here to stay, so China has to deal with it unless it doesn't want bilateral relations with Myanmar," said Yun Sun, director of the China Program at the U.S.-based think tank Stimson Center.

That month, national and provincial officials began to restore ties with the military regime. Chinese authorities and business lobbies in Yangon also engaged publicly with regime officials and promoted commercial opportunities.

Meanwhile, Beijing has kept in touch with the NLD via party-to-party channels. The Communist Party of China invited the NLD to a regional summit in October alongside the military's Union Solidarity and Development Party.

"China sees the NLD as the only legitimate force among all three," Sun said. "The SAC might lack legitimacy, but the NUG's legitimacy is dubious as well" for Beijing. She said China views compromise between the SAC and NLD as the solution. "If the NLD is dissolved, the instability of Myanmar will continue indefinitely."

Myanmar State Counselor Aung San Suu Kyi shakes hands with Xi in Myanmar on Jan. 18, 2020, before the military takeover.   © Reuters

In contrast, Beijing has continued to dismiss the NUG. Chinese officials have rebuffed the NUG's support of the abolishment of the military-crafted 2008 constitution, under which the generals control key government ministries and appoint a quarter of lawmakers across the country's legislatures.

The NUG's foreign minister, Zin Mar Aung, struck a diplomatic tone when asked about bilateral relationships. It is "not that bad," she said, emphasizing that engagement between the two sides is better than confrontation. "We have channels to communicate our position and our messages to China," the veteran politician and ousted NLD lawmaker told Nikkei Asia. "China needs to have a better understanding of us so that Chinese officials will be able to take this into consideration when setting their policies and making the right decisions."

Beijing's snub of the NUG is echoed by Chinese scholars and state tabloids. Instead of the revolution to achieve democracy that the NUG has called for, a Global Times editorial claimed that "the country needs to face reality and explore a political framework accepted by all sides to realize national and political reconciliation."

Lin Xixing, a Chinese expert on Southeast Asian affairs from Jinan University in Guangzhou, branded the NUG "fake NLD" and accused the parallel government of trying to profit from a confusing situation by pretending to represent the party.

"The Myanmar people, since early February [2021], have not had access to Aung San Suu Kyi and the top echelons of the NLD. Since the beginning of February, those who use the 'NLD' banner are all low-level members, and they are simply not qualified to represent the NLD," Lin wrote in Taiwanese media.

But in a move that reflects some recognition of the NUG's influence, the Chinese embassy in Yangon recently contacted the parallel government to seek protection of their investments from resistance attacks, according to NUG defense minister Yee Mon quoted as saying in local media, Irrawaddy.

Meanwhile, the resumption of significant infrastructure projects backed by China marked the normalization of relations between Beijing and the regime.

Shortly before the military burned down an entire village in the eastern state of Kayah last December, killing more than 30 civilians, the regime announced its intention to restart infrastructure projects backed by China.

The military's information and investment ministries said in a joint news statement that they had reviewed and revised the deals signed between the two countries during Chinese President Xi Jinping's state visit in January 2020, and earmarked investment in the Kyaukphyu deep-sea port and special economic zone as a priority project.

Chinese state-backed conglomerate CITIC announced last week that it had hired Yangon company Myanmar Survey Research as a consultant on the environmental and social impact assessment (ESIA) for its proposed Kyaukphyu port.

Initiated by former President Thein Sein and renegotiated by the NLD government, the China-backed port is key to Beijing's ambitions to access the Indian Ocean via Myanmar under Xi's flagship Belt and Road Initiative. The Chinese developer has continued to press ahead with the project despite calls by protesters and the NUG to suspend planned investments.

Risks for local communities abound. A commission tasked with looking at Rakhine's conflicts, set up by the ousted government and led by the late U.N. Secretary-General Kofi Annan, raised concerns over the project's land grabs in 2017 and warned that an ESIA is insufficient to ensure the project would be responsibly implemented.

It is unclear how the assessment could be concluded properly amid the political turmoil and tensions between the Arakan Army and the Myanmar military.

"The fragile cease-fire [in Rakhine state] of November 2020 hangs in the balance, and over the past 10 days or so fighting between the AA and the Tatmadaw has flared up again. Right now consultations and interviews cannot be conducted in an open and frank atmosphere," said Laetitia van den Assum, a former Dutch ambassador to Myanmar and one of the now-disbanded commission members.

"An ESIA is not a 'tick-the-box' exercise. It should not be undertaken during a time of great instability," the veteran diplomat told Nikkei Asia. An ESIA is required for the port project under Myanmar law.

Meanwhile, China's Yunnan Province city of Lincang christened a new trade route connecting Yangon and Sichuan Province's capital, Chengdu, last August. Hailed as a new China-Myanmar corridor, it seeks to shorten the trade route between the Indian Ocean and China's southwestern region and bypass the Malacca Strait.

"The new corridor cuts right through one of the hottest flashpoints of the current violence in the north, the Lincang-Chinshwehaw border crossing," said Jason Tower, Myanmar country chief of United States Institute of Peace.

This crossing is currently controlled by the military but lies in territory traditionally controlled by a Chinese-speaking ethnic militia force, the Myanmar National Democratic Alliance Army, or Kokang.

Efforts to drive investments will be tested by the worsening security situation, security analysts warn.

Since March 2021, Chinese projects have been targeted by protesters and People's Defense Forces -- both highly decentralized groups of Myanmar resistance fighters -- and have suffered tens of millions of dollars in damages to cover enhanced security costs, insurance, pipeline repairs and compensation to the families of killed guards, according to the United States Institute of Peace.

With omicron cases first reported in Myanmar at the beginning of this year, Beijing remains concerned about the virus spreading over the border and undermining its zero-COVID policy. Myanmar state media reported that China had donated another 1 million doses of Sinovac to the troubled neighbor this month.

For China, "preventing further instability in Myanmar is the priority, and that is even more strategically important than fending off COVID inflow," Sun of the Stimson Center said. "The solution of the COVID problem depends on the return to peace, stability and a functional government of Myanmar."