'China Didn't See This Coming'

What Burma's opening to the U.S. and the West means for Beijing

Myanmarprotestsnormal.jpg Anti-China demonstrations have become more frequent in Burma. (Soe Zeya Tun/Reuters)

Strolling through the border town of Ruili, one could be forgiven for forgetting they're in China. Palm trees line narrow streets throughout the city. Many signs are in Burmese. Brightly dressed Dai, Jingpo and De'ang locals share the sidewalk with Burmese and the occasional bearded Bangladeshi or Pakistani.

Zhubaojie, or "Jewelry Street", in Ruili's north is one of the best areas to see what drives the city's economy. A pedestrianized four-block strip of road, Zhubaojie is nothing but jewelry shops, most of which specialize in jade.

In a city buzzing with the sounds of the Yunnanese, Burmese, Dai and Jingpo languages, Zhubaojie is one of the few places in Ruili where one is likely to hear Mandarin. These speakers of China's official language are well-to-do tourists from China's cities and business-savvy Burmese traders, many of whom are ethnic Chinese themselves.

Chinese tourists come to Ruili to buy jade and hop across the border into Burma (also known as Myanmar). Some indulge in the prostitution or illegal drugs for which Ruili is known. The Burmese, for their part, are here to sell a precious gemstone which is almost exclusively found in their country.

China and Burma have a history of trade, but it has skyrocketed in recent years. Official Chinese investment in Burma during the fiscal years of 2010 and 2011 exceeded $12 billion, roughly eight times China's total investment in the country from 1988 through 2009, according to statistics in a 2012 paper by Japan External Trade Organization (JETRO). Most of this investment has been focused on energy and mining.

Following the violent repression of civilian protests by the Burma military in 1988, the country - once an economic bright spot in Asia - was hit with sanctions aimed at the ruling State Law and Order Restoration Council (SLORC). A year later, with China isolated by the fallout of its handling of the Tiananmen protests, a SLORC delegation led by Vice Chairman Than Shwe secured military and economic assistance from China, creating the Sino-Burmese special relationship of paukphaw, a Burmese word for brotherhood. By the early 1990s, Chinese engineers were helping the Burma government upgrade civilian ports and naval bases.

China's strategic relationship with Burma appeared rock-solid.

Over the following two decades, China was Burma's cash-rich ally with a protective veto in the UN Security Council. For its part, Burma's government, which rebranded itself as the State Peace and Development Council (SPDC) in 1997, provided China with resources, energy and access to the Indian Ocean.

After 2000, Burma approved increasingly ambitious Chinese projects including the massive Myitsone Dam project, a major copper mine near Monywa and twin gas and oil pipelines from Burma's coast to Yunnan's fast-growing capital, Kunming.

These projects all hold major strategic importance for China. Electricity generated by damming the Irrawaddy at Myitsone is earmarked for booming Yunnan. China's construction frenzy hungers for the copper within the large reserves at Monywa. The pipelines connecting Kyaukpyu on the Andaman Sea with landlocked Kunming will provide southwest China with crude oil from Africa and the Middle East, plus natural gas from off the Burmese coast.

In May 2011, China and Burma signed a Comprehensive Strategic Cooperative Partnership, bringing the neighbors even closer. The agreement was signed by Chinese President Hu Jintao and new Burmese president U Thein Sein. China was the largest foreign investor in Burma and would soon surpass Thailand as its biggest trading partner. China's strategic relationship with Burma appeared rock-solid.

The Burmese People Speak

On September 30, 2011, Thein Sein shocked China by announcing the five-year suspension of the $3.6 billion Myitsone dam project. The project's suspension --     which lasts the remainder of Thein Sein's presidency -- is viewed by many as the end of Burma's overwhelming reliance on China for revenue and legitimacy.

Thein Sein said his announcement respected the will of the Burmese people. Put another way, the Burmese people could suffer the giant sucking sound of Burmese resources into China no longer. Burma's reliance on China had become domestically untenable. Paukphaw was dead.

"There is a growing anti-China sentiment in Burma because many feel it is too close to China, and China is too obvious," said David Steinberg, an expert on China-Burma relations at Georgetown University. "The Chinese have supported about three dozen dams in Burma, mostly for electricity for Yunnan province. One of the issues at Myitsone was that more than 90 percent of the electricity would go to China, and that was a problem."

A Burmese restaurant manager of Chinese descent working in Ruili, requesting anonymity, said many Burmese feel China cares little for them. He attributed the Myitsone suspension to relaxing of media laws by the Burma government, which ended its advance censorship of media reports in August 2011.

"Before, nobody, not even the Burmese government, could hear the voice of the Burmese people," he said. "Now the voice of our people can be heard."

Press freedom in Burma has improved significantly since 2011. In its assessment of global press freedom for 2011-12, Reporters without Borders ranked Burma 151st in its World Press Freedom Index, 18 places higher than the previous year. Burma's rank in the index was higher than fellow ASEAN members Laos and Vietnam and only two spots behind Singapore. Burma was even 23 places ahead of number 174 China.

"Before, nobody, not even the Burmese government, could hear the voice of the Burmese people," he said. "Now the voice of our people can be heard."

These steps forward have not been viewed favorably by all in the Burmese government, as evidenced by a draft law the Ministry of Information submitted to Parliament in early March that would roll back many of the reforms. Fragile the reforms may be, for the moment Burmese media is taking advantage of its newfound freedoms.

Chris Horton is a journalist based in Hong Kong. 

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