China has been stung by a sudden
reversal of fortune in its own back yard
VISITORS to the showroom of the
“Everything is Good” jade company in the Chinese border town of Ruili are
swiftly steered towards one particular lump of black rock among many thousands
on display. It looks innocuous enough, but a small slash on one side, revealing
a translucent green and purple interior, betrays its true worth: this is the
highest-quality jade from Myanmar, and to discerning Chinese customers that
means the best in the world. The price tag is $1.2m.
There are hundreds of such shops in
Ruili, many of them turning the jade into ordinary bracelets and pendants,
valued as lucky charms by Chinese shoppers. For the Chinese, it is just good
business; selling the stones, fossils and wood of Myanmar. To many Burmese,
however, it represents nothing less than the plunder of their country. Since
Myanmar was subjected to Western economic sanctions in the mid-1990s, China has
had virtually a free rein. The booming economy of Ruili is testimony to that.
But the Burmese grumble that whereas the Chinese businessmen of Yunnan have
made fortunes marking up their imports, often in collusion with corrupt Burmese
officials, most Burmese have benefited little from the cross-border trade.
None of this used to matter much
until the stirrings of political reform in Myanmar. Together with trade, the
other traditional Chinese interest along their border has been stability. The
Chinese authorities have long sought to contain spillover from battles between
the armed militias of the Kachin and Karen ethnic groups and the Myanmar
government; they have also tried to stop the flow of drugs from neighbouring
Shan state into China. The recent high-profile trial of a Shan drug lord, Naw
Kham, in Kunming, the capital of Yunnan province, demonstrates how seriously
the Chinese authorities take this threat, and how influential they have become
in the region. But in focusing on these issues, the Chinese missed the bigger
picture of how resentments were building towards their presence in, and
economic exploitation of, Myanmar. The result is that what the Chinese took to
be a solid, mutually beneficial relationship with the Burmese has exploded in
their faces—with long-term consequences for Myanmar, the balance of power in
South-East Asia and the whole way that China does business with poorer
countries.
Zhu Feng, a professor of
international relations at Peking University, says that the “alarm bells
started ringing” for the Chinese over Myanmar with the abrupt suspension of the
Myitsone dam project just over a year ago. Costing $3.6 billion, this was the
largest of several dams that Chinese state-owned enterprises (SOEs) were
building on the Irrawaddy river in Kachin state. The Chinese had assumed that
such development work would be welcomed by the Burmese. To many Burmese,
however, Myitsone came to represent everything that they hate about the unequal
terms of trade between resource-rich Myanmar and its resource-hungry neighbour.
Villages were to be displaced and land flooded to make way for the dam, yet
most of the electricity was earmarked to go to China, leaving the local Kachin
people little better off than before.
Thus when the new Burmese president,
Thein Sein, suspended construction of the dam, at one stroke he asserted his
credentials in Myanmar as a man prepared to listen to his own people and stand
up to the exploitative Chinese. It was an astute domestic political move and a
milestone in the country’s unfolding reform programme. Scholars and officials
in China, however, still talk of their “shock” and “surprise” at a decision for
which they were utterly unprepared and which they are still trying to digest.
In retrospect, explains Mr Zhu, the
Chinese mistake in Myanmar was to focus only on building relationships with
government officials, without paying any attention to “domestic political
nuances”. Thus China missed the vital shifts in policies, words and political
thinking that they might have picked up had they listened to voices other than
the government’s and engaged the country at a local level. This was stupid,
says Mr Zhu: “It’s a big lesson, and we have to learn from it.”
This lack of political antennae on
the ground is, perhaps, inevitable given the standard Chinese policy of
“non-interference” in other countries’ internal affairs. Too often, it seems,
this merely encourages wilful ignorance—which is, indeed, much in evidence in
Ruili. The local Chinese know almost nothing about Myanmar, other than the fact
that it is poor and, they believe, dangerous.
Be nicer
As one Chinese expert on the
country’s aid policy, Zhang Xiaomin of Beijing Foreign Studies University,
points out, China has already run into some of these issues in Africa. But
their experience in Myanmar has really crystallised the problem, he says. As a
result, the Chinese government is now telling businesses—especially
SOEs—operating overseas to be more respectful of local customs and people, and
to invest more in what Westerners would call corporate social responsibility.
Thus, for instance, the China National Petroleum Corporation, which is building
a controversial oil pipeline across Myanmar from the west coast to the border
at Ruili (and then on into China), is now building lots of schools in villages
near the pipeline.
The Chinese are largely right in
this analysis of what went wrong in Myanmar, but it is not the whole story. The
Burmese also complained that for all the roads and bridges constructed, the
Chinese were unable, or unwilling, to provide other, more sophisticated,
services such as banking or advice on issues such as government administration,
the sort of soft-power issues at which Western countries excel.
Indeed, for many Chinese
foreign-policy experts the other worrying aspect of China’s stumble in Myanmar
is that Beijing’s loss has been Washington’s gain. In an era of renewed tension
between America and China in the region, Myanmar’s recent opening up is thus
usually interpreted by these experts as a tilt towards the West, all part of
America’s “pivot” towards Asia. Indeed, the more conspiratorial-minded Chinese
ascribe the changes in Myanmar entirely to the machinations of a resurgent
America determined to contain the rise of China. A further concern, as another
Chinese expert puts it, is that a democratic movement in Myanmar would, in some
way, “influence the situation in China”.
All in all, the democratic
transformation of Myanmar has been a searing experience for the Chinese
government. At least, however, they look set to draw some lessons from it all.
The Economist
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