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The Burma Road serves as the gateway between Myanmar and the rising empire on its border. It is the central trade route feeding China’s voracious appetite for the resources — including energy, natural resources and food — it desperately needs to sustain its population of 1 billion people. Here China’s pervasive presence, its sophisticated exertion of soft power, is evident at every turn.

Along the Burma Road, China navigates path to energy security

From Mandalay to Kunming, the central artery between Burma and China reflects an evolving economic and political relationship.

Indian Ocean. China is already the world’s largest producer of hydropower, which accounts for 16 percent of its electricity. But its highly competitive, state-owned energy utilities have run out of rivers to dam.

In Burma they’re currently invested in some 63 hydropower projects. China Power Investments Corporation (CPIC) alone has proposed spending $20 billion on a series of dams along the upper reaches of Burma’s sacred heartland river, the Irrawaddy, or Ayeyarwady. And despite promises to the contrary, the vast majority of the electricity produced flows back to China. In the meantime, residents of major cities like Mandalay and Yangon suffer frequent blackouts. Rural Burmese have no access to electricity at all.

A young couple rides a motorcycle from Puin Oo Lin to Mandalay on the Burma Road.
(Gary Knight/VII/GlobalPost)

Now, in the wake of dramatic shifts in Burmese domestic politics, China faces a changed landscape. Burma — which occupies a strategic crossroads between two of the world’s great emerging powers, China and India — has enacted a series reforms that have opened a wellspring of diplomatic favor from Western countries, to say nothing of foreign investment held in check by decades of sanctions. All this poses a serious challenge to China, who is accustomed to free reign in their own backyard.

Bowing to internal opposition, in September 2011 Burmese President Thein Sein suspended construction on the $3.6 billion Myitsone Dam, the largest of China’s projects in Burma. The action took Beijing by surprise and according to one Chinese energy analyst, “humiliated” the primary investor in the project, CPIC. Suddenly, the safety of all of China’s projects in the country seemed in danger.

Sein has deftly managed to make his country a hotly contested flashpoint for influence, in which America, China, and India will all jockey for military and economic dominance, and multinational companies bid to develop and extract Burma’s natural resources. But as we discovered on a recent reporting trip, China has managed to quickly pivot and change how it does business in Burma. If Sein’s moves are meant as a message — don’t take us for granted — China received it.

“The Chinese play by the rules,” says David Steinberg, a professor at Georgetown University and longtime Burma scholar. “When the rules change, so do they.”

We disembarked in Mandalay, the onetime royal seat of the proud Konbaung Dynasty. The palace was reduced to ashes in World War II, and in recent decades the downtown has been bought up by Chinese investors. Shop signs feature Chinese characters, consumer goods bear Chinese brand names, and the gem markets—in which Burma’s famous jade and rubies trade hands — are populated by well-dressed Chinese businessmen in from border towns like Ruilli in Yunnan Province.

Anti-Chinese riots broke out in Mandalay in the late ‘60s and ‘70s, but that did little to stem the tide of immigration by Chinese nationals, which the Brookings Institution estimated at 30 to 40 percent of Mandalay’s total population. According to Irrawaddy, an independent Burmese newsmagazine, Chinese businessmen can easily bribe poorly paid government officials to obtain ID cards, which have allowed them to buy up real estate. This in turn has led to a housing boom in cities like Mandalay and Rangoon that have priced all but the elites out of the market. 

Local students complain that the new private schools attended by the children of these new Chinese elites are vastly superior to the public schools, deepening a sense of anger and exclusion. 

This perceived imperialism has led to a resurgence of anti-Chinese sentiment: In June of last year Burmese protestors stormed a Chinese-owned jewelry store.

But rubies and jade are mere baubles compared to China’s primary interest, which is energy. China’s long economic boom has been fueled by oil, gas, coal and other energy sources, the consumption of which has grown 150 percent over the last 10 years and caused China to overtake the US as the world’s largest energy user.
 
China has moved aggressively to ensure future growth, developing the energy resources of neighboring countries like Burma. Those projects lie outside Mandalay, along the Burma Road.

This report was supported by a grant from the Pulitzer Center on Crisis Reporting.

http://www.globalpost.com/dispatch/news/regions/asia-pacific/myanmar/121026/along-the-burma-road-changing-rules-china