April 1, 2019

China’s policy towards the Myitsone dam issue has experienced several major changes since Myanmar suspended the controversial project in September 2011. At first, Beijing overtly asked the Myanmar government to promote the implementation of big projects in Myanmar and the Myitsone dam was included. Yet, Beijing adopted a pragmatic attitude towards the Myitsone issue after Myanmar’s National League for Democracy (NLD) took office in April 2016, in which it pursued for Myanmar’s compensation for reneging on the terms of the contract rather than simply resuming the project.

 

The main reasons for China’s softened position on the Myitsone issue are the following: first, Yunnan, the main buyer of the electricity from Myitsone dam, now has an oversupply of electricity and needs to export its growing electricity holding to ease the excess hydropower capacity. Second, China fully realizes that there would be strong national resistance against the Myanmar government’s decision to revive the Myitsone project. Third, China is anxious about Myanmar’s swing to the US due to their disputes over the Myitsone issue. Fourth, China wants to implement other projects at the expense of cooling down the Myitsone dam. Fifth, China is waiting for an opportunity to resolve the Myitsone issue.

 

Yet, China seems to has renewed hope that the Myitsone dam would be restarted as the bilateral ties with Myanmar has been on the upswing since the Rohingya refugee crisis in the mid-2017. During a visit to Kachin in December 2018, China’s ambassador to Myanmar Hong Liang said the Myitsone dam was crucial for both Beijing and Naypyidaw, and that any further delays could hamper bilateral relations. Then, in January 2019, a statement published by the Chinese Embassy in Yangon said “If this issue fails to be resolved... it will seriously hurt the confidence of Chinese entrepreneurs to invest in Myanmar... the two sides should find an acceptable solution as soon as possible”. It also claimed that Kachin political leaders and social organizations have a “positive attitude” toward the dam, leading to a widespread speculation that China wants to revive the controversial project.

 

Why China is so keen to revive the Myitsone dam now? Four reasons could explain China’s significant change in the Myitsone issue. First and foremost, China tries to move forward the China-Myanmar Economic Corridor (CMEC) and Belt and Road Initiative (BRI) by resuming the Myitsone project. As Joe Kumbun, who is a local analyst based in Kachin, said China attempts to provide full electricity to the Economic Cooperation Zone along the Myanmar-China border and the industrial zones in northern Kachin, the key elements of CMEC and BRI, through restarting the Myitsone dam. Second, China tries to revive the Myitsone dam and push forward with others projects by using it as support for Myanmar in the face of mounting international pressures over the Rohingya crisis.

Third, China is getting upset because the Myanmar government has hung up the Myitsone dam for seven years and dragged its heels on the resolution to the Myitsone issue. Fourth, China is increasingly concerned about the serious consequences of the Myitsone project in the general election in Myanmar in 2020. In other words, the Myitsone dam might be a focus in the coming elections and be manipulated by the West to undermine the warm relations between China and Myanmar. Given the factors discussed above, China wants to address the Myitsone issue as soon as possible, thus removing the main barrier in their bilateral ties and promoting the economic cooperation between the two countries.

 

However, Myanmar responded negatively to China’s claims of reviving the Myitsone dam. Soon after the statement issued by the Chinese Embassy in Myanmar, three Kachin political parties and community leaders such as Rev. Hkalam Samson overtly insisted that China’s claims were false and misleading, indicating the persistent local resistance towards the Myitsone project. Being aware of the oppositions from the Burmese society, the Myanmar government is making little progress on the investigation of the project, and avoids releasing the assessment report and sending a clear message to the public.

 

During her trip to the Pyay region in March 2019, Aung San Suu Kyi made a pledge to the local communities that the government will inform the public about the final decision on the Myitsone project once it has been made, and reaffirmed that the government will make decisions based on the comprehensive consideration on the political, social, economic and environmental effects the Myitsone issue will bring onto Myanmar, in order to reduce the local resistance towards the Myitsone dam.

 

Meanwhile, Naypyidaw has to fully consider China’s feelings as well as future cooperation with China. Thus, it has formed an implementation committee of BRI and signed an agreement on jointly building CMEC with China aiming at pushing forwarding Chinese projects. Aung San Suu Kyi, the de-facto leader of the civilian government, said that she will attend the second BRI Forum for International Cooperation (BRIFIC) in April 2019, expressing Myanmar’s firm support for BRI. She participated in the first BRIFIC in April 2017 in Beijing. In addition, Myanmar has also upgraded its comprehensive strategic cooperation partnership with China in order to distract China from the Myitsone dam.

 

Recently, it seemed that Aung San Suu Kyi refreshed her idea on the Myitsone issue as she claimed that the government should keep its promise on the Myitsone dam so that it could attract more foreign investments during her trip to the local communities in the Pyay region. Although it doesn’t mean that the democratic government would approve the resumption of the Myitsone dam, it is sending a clear message to both China and the world that Myanmar would handle such issues in a commercial way, so as to improve the investment environment and therefore promoting the economic cooperation with other states. At the same time, she also reminded the local communities that they should not be misguided by fake news or confusing information. It is the first time that Aung San Suu Kyi mentioned fake news on the Myitsone issue as well as its negative consequences in the public sphere, indicating her discontent with the misleading messages released by various media and civilian groups inside and outside Myanmar.

 

Nevertheless, China should not misunderstand Myanmar’s intentions and thus to pursue resuming the dam by making good use of its supports for Myanmar. Actually, the Myanmar leaders have always been aware of foreign pressures, and would resist any kinds of foreign interference in the domestic affairs. Hence, in spite of China’s efforts in addressing the Myitsone issue as early as possible, it is ultimately up to Myanmar. Given the growing criticism from the opposition parties, the Union Solidarity and Development Party (USDP) in particular, the NLD government is more likely to keep silent on the Myitsone issue until the end of the general elections in 2020. In other words, it is unlikely for the Myanmar government to make any big decisions on the Myitsone dam before the 2020 elections, though it may experience rising pressures from China.

Peng Nian is an Assistant Research Fellow at the National Institute for South China Sea Studies. 

Link: http://www.ippreview.com/index.php/Blog/single/id/926.html

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