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Sino-Indian Interests and Rivalry in Burma
Burma exemplifies the difficult balance between competition and cooperation between China and India over oil and gas resources in third countries. India and China's proximity to Burma provides an opportunity for both countries to enhance their energy security by diversifying fuel-supply sources while avoiding the need for expensive LNG (liquid natural gas) transportation. For China, Burma also represents a possible overland supply route for oil and other commodities bypassing the Malacca Strait, a sealane that is vulnerable in the event of an attack or embargo. Access to Burmese ports and overland transportation routes through Burma is seen as a vital security asset for China. [46] This has become increasingly important with the growing Chinese dependence on imported oil, 80% of which is shipped into China via the Malacca Strait. A key Chinese objective is thus to import oil through Burma. According to a recent report, plans for an oil pipeline linking Burma's deep-water port of Sittwe with Kunming in China's Yunnan province were approved by the National Development and Reform Commission (a department of the Chinese State Council) in early April 2006, with construction expected to begin this year. [47]
Assistance from the People's Republic of China to Burma dates back to the 1950s. A significant part of China's trade with developing countries has been financed through credits, grants and other forms of assistance. During the early 1950s, Chinese aid went mainly to North Korea and North Vietnam; however, from the mid-1950s until the late 1970s, large amounts - mainly grants and long-term, interest-free loans - were promised also to non-Communist developing countries. The principal efforts were made in Asia, and Burma was one of the recipients of this support, along with Indonesia, Pakistan and Sri Lanka. [48] In 1986 China withdrew its support for the long-running insurgency of the Communist Party of Burma, [49] and began supplying the Burmese regime with arms. The influx of Chinese weapons was a great help to the Burmese military in its fight against ethnic insurgencies. Chinese arms deliveries started in 1990, and over the next five years China supplied US$1.0-1.2 billion worth of weapons and other military equipment, including J-6 and J-7 fighters, A-5M ground attack aircraft, radar and radio equipment, surface-to-air missiles, tanks, armoured personnel carriers, artillery anti-aircraft guns, multiple rocket-launcher systems, trucks and naval ships, including frigates and fast attack craft (FAC). [50] Moreover, technicians from the Chinese People's Liberation Army (PLA) vastly expanded the Meiktila airbase south of Mandalay, and upgraded a smaller airbase at Lashio, in the northeast, as a forward facility for aircraft refueling and resupply. Chinese assistance was also provided to upgrade the road and railway system from Yunnan to several ports along the Burmese coast of the Bay of Bengal. In 1992, China and Burma agreed that China would modernize Burmese naval facilities, in return for permitting the Chinese navy to use the Small and Great Coco Island (about 300 km south of the Burmese mainland, north of India's Andaman Islands). Since then, Chinese experts have built an electronic intelligence station on Great Coco Island, vastly improved and militarized the Burmese port facilities in the Bay of Bengal at Akyab (Sittwe), Kyaukpyu and Mergui, and constructed a major naval base on Hainggyi Island near the Irrawaddy river delta. The Chinese base on Great Coco Island includes an airstrip, signal-intelligence nodes and an 85-metre jetty. [51] The base monitors Indian naval and missile launch facilities in the Andaman and Nicobar Islands, movements of the Indian navy and other navies throughout the eastern Indian Ocean, as well the overall western approaches to the Strait of Malacca. [52]
China is currently building a deep-sea port in Kyaukpyu, in Rakhine state. The port has a water depth of 20 metres and is capable of accommodating 4,000 TEU (20-foot equivalent units) container vessels. Kyaukpyu is located on the route connecting southwestern China's Kunming city with Burma's Sittwe. According to the Burmese Ministry of Construction, a feasibility study for the seaport and road construction, outlined as Kunming-Mandalay-Kyaukpyu-Sittwe, was made in 2005. Once the 1,943 km Kunming-Kyuakpu road is completed, it is expected to facilitate transit trade and provide job
opportunities for Burmese workers and others in the region. [53]
One of China's strategic interests in Burma is to gain direct access by land to the Southeast Asian nations and, more notably, access to the Andaman Sea. Burma is not only a potential supply route bypassing the Malacca Strait, but can also offer a strategic staging point for monitoring the Malacca Strait's western approaches. Yossef Bodansky claims that 'controlling' the Strait of Malacca is a key strategic objective for China, to the point that it is prepared to risk armed conflict with the regional states and even the USA over this issue. [54] Bodansky maintains that the massive Chinese military buildup in Burma since the early 1990s reflects Burma's growing strategic significance, stressing that 'the extent of the expansion of the transportation infrastructure, all in harsh jungle and mountainous terrain, exceeds by far the needs of even the most optimistic outlook for Sino-Burmese commercial relations'. [55] In the mid-1990s, the Burmese regime granted access for Chinese intelligence services to Zedetkyi Kyun Island, located off the coast of Burma's southernmost tip, Kawthaung or Victoria Point, which is close to the northern entrance to the Strait of Malacca. Bodansky claims that a military base there would enable China to threaten the approaches to the strait. China has currently set up listening posts in Sittwe and Zedetkyi Kyun, enabling it to monitor traffic in the Strait of Malacca and Phillips Channel. [56]
As a result of increased Chinese influence in Burma, as well as arms-trafficking occurring along the Indo-Burmese border, India has sought in recent years to strengthen its ties with Burma. [57] India's interest in and involvement with Southeast Asia has been growing steadily over the past decade. In 2004, an agreement was signed in Yangon by the foreign ministers of India, Burma and Thailand to develop transport linkages between the three countries. This included a 1,400 km highway connecting northeastern India with Mandalay and Yangon, and on to Bangkok, which would contribute to opening up trade between the countries and give India access to Burmese ports. A planned deep-sea port in Dawei, together with a new highway connecting it to Kanchanaburi in Thailand, would no doubt contribute further to commercial links. Dawei, the capital of Tanintharyi division, is on the long, narrow coastal plain of southern Burma.
Building Dawei port also has a direct security angle for the Indian navy, which is now in the process of sorting out the technical and financial details of its ambitious Far Eastern Naval Command (FENC) project at Port Blair, the capital of the Andaman Islands. FENC is intended to extend the Indian navy's nuclear/strategic combat capability. Dawei is located across the Andaman Sea on the Burmese coast, almost facing FENC. [58] Indian analysts worry that the Chinese base on Great Coco Island poses a threat to the Indian tri-services command in Port Blair, which is only about 190 nautical miles (300 km) away. The Coco Island base lies only 22 nautical miles from Landfall Island, the northernmost of the Andamans. The Coco Island facility is also seen as a significant ELINT (electronic intelligence) and SIGINT (signal intelligence) threat to India's missile-testing range, Chandipur-on-Sea and the Sriharikota Island Launching Range, which are designed to assemble, test and launch Indian multi-stage rockets. According to Indian security analysts, the Chinese presence on Coco Island should be seen in connection with the Sino-Pakistani defence project and cooperation on the Gwadar Port facilities, which give China access and basing facilities on the other side of the Indian subcontinent, near the Strait of Hormuz. What is especially worrisome from the Indian perspective is the 'maritime encirclement of India', with the Chinese based at Gwadar to the west of India and on Coco Island to the east. In addition, Burma's experiments with a nuclear research reactor are worrisome from an Indian perspective, especially since China, Pakistan and Russia have all been involved. Indian analysts fear that China's naval presence in Burma may allow it to interdict regional sea lanes of communication. On this account, Burma is emerging as the 'single largest threat to Indian strategic interests in South East Asia'. [59] In an effort to check this state of affairs, India has started its own campaign to woo the Burmese regime by providing military training and selling it arms and military hardware. [60] In addition, Indian President Abdul Khalam recently visited Burma with a new $40 million aid package, along with a proposed natural gas agreement. [61]
Even though India and China seem to regard each other with considerable suspicion, the two countries, which have considerably improved their own bilateral relations, are also faced with some common 'non-traditional' security risks emanating from Burma, including illegal drugs-trafficking (opium and methamphetamines), human trafficking and refugees, the spread of HIV/AIDS and, more recently, avian influenza. Burma has become known as the world's second-largest producer of illicit opium, after Afghanistan. It is also the single largest producer of methamphetamines in Southeast Asia. The government lacks both the will and the ability to take on the major narcotics-trafficking groups, and is not seriously committed to suppressing the money-laundering activities that are so essential to the drugs trade. [62] Burma also has a lot of human trafficking; there is a steady flow of refugees into Thailand, China, Bangladesh and India; and the HIV virus is thought to be spreading. More than 1% of the Burmese population is estimated to have been infected with HIV. [63] Burma thus has one of the most serious AIDS epidemics in the region, and is reportedly also an epicenter of new strains of drug-resistant HIV/AIDS. [64] While the Chinese border town of Ruili has developed into a flourishing trading centre, it has also become a focus of Chinese efforts to prevent the spread of HIV from Burma to China.
The issues of drugs, HIV and crime are serious enough, but the debates they engender also reflect a more overarching concern among Burma's neighbours about the country's political stability. Although the regime has been provided with substantial income from Thai natural gas purchases over the past few years, and is continuously receiving generous provisions of military and infrastructure aid from China, India and other countries, there are indications that the SPDC may be leading Burma into an ever-deepening crisis.
Policy Implications
Offshore natural gas has become the major source of income for the Burmese military regime, and will become increasingly important in the years to come. The effects of economic sanctions imposed by the EU and USA are difficult to assess, but they are certainly not impressive. With the growing importance of natural gas, any assessment of the economic effects of sanctions should take the role of gas into account. If the regime could be deprived of substantial revenues from gas exports, economic sanctions would represent a real challenge to the regime, and this might convince the SPDC to accept political reforms. If not, the effectiveness of sanctions is highly questionable. Innovative ways to engage the regime might prove more feasible, especially if this engagement involves stakeholders in Burmese gas exploitation. Thailand's heavy investment in the Burmese gas sector as well as the escalating Sino-Indian rivalry over Burmese gas have no doubt made it easier for Burma's military leaders to withstand pressure for political reforms. From China's perspective, its relations with India, Japan and the USA have a strong bearing on its geopolitical interests in Burma. As long as the underlying tensions that characterize these relations (in particular the Sino-Japanese relationship) are not fundamentally altered, China will see it as essential to maintain its influence in Burma. Chances are then that future unrest in Burma, whether related to internal strife or opposition to Chinese dominance, will be met with further assertion of Chinese control. This represents a major challenge to any democracy-building effort in Burma. Given that Burma is likely to remain under strong Chinese influence for the foreseeable future, the most promising scenario for Burma's political development would probably come about as a result of positive developments within China itself. A stable, prosperous, democratizing China might be able to engage constructively with the Burmese regime, and this might also provide the best chance of resolving the current crisis in Burma. China may well hold the key to Burma's future. While countries in the neighbouring regions - particularly India and Thailand, but also Australia and Japan - may have important roles to play, China wields far more leverage. For those who wish to influence Burma in a positive direction, it is therefore essential to consider ways that change could be stimulated with the active participation of China, whether through sanctions, constructive engagement and/or any form of dialogue. Ideally, such cooperation should involve the energy sector, including gas production and pipeline construction.
Burma exemplifies the difficult balance between competition and cooperation between China and India over oil and gas resources in third countries. India and China's proximity to Burma provides an opportunity for both countries to enhance their energy security by diversifying fuel-supply sources while avoiding the need for expensive LNG (liquid natural gas) transportation. For China, Burma also represents a possible overland supply route for oil and other commodities bypassing the Malacca Strait, a sealane that is vulnerable in the event of an attack or embargo. Access to Burmese ports and overland transportation routes through Burma is seen as a vital security asset for China. [46] This has become increasingly important with the growing Chinese dependence on imported oil, 80% of which is shipped into China via the Malacca Strait. A key Chinese objective is thus to import oil through Burma. According to a recent report, plans for an oil pipeline linking Burma's deep-water port of Sittwe with Kunming in China's Yunnan province were approved by the National Development and Reform Commission (a department of the Chinese State Council) in early April 2006, with construction expected to begin this year. [47]
Assistance from the People's Republic of China to Burma dates back to the 1950s. A significant part of China's trade with developing countries has been financed through credits, grants and other forms of assistance. During the early 1950s, Chinese aid went mainly to North Korea and North Vietnam; however, from the mid-1950s until the late 1970s, large amounts - mainly grants and long-term, interest-free loans - were promised also to non-Communist developing countries. The principal efforts were made in Asia, and Burma was one of the recipients of this support, along with Indonesia, Pakistan and Sri Lanka. [48] In 1986 China withdrew its support for the long-running insurgency of the Communist Party of Burma, [49] and began supplying the Burmese regime with arms. The influx of Chinese weapons was a great help to the Burmese military in its fight against ethnic insurgencies. Chinese arms deliveries started in 1990, and over the next five years China supplied US$1.0-1.2 billion worth of weapons and other military equipment, including J-6 and J-7 fighters, A-5M ground attack aircraft, radar and radio equipment, surface-to-air missiles, tanks, armoured personnel carriers, artillery anti-aircraft guns, multiple rocket-launcher systems, trucks and naval ships, including frigates and fast attack craft (FAC). [50] Moreover, technicians from the Chinese People's Liberation Army (PLA) vastly expanded the Meiktila airbase south of Mandalay, and upgraded a smaller airbase at Lashio, in the northeast, as a forward facility for aircraft refueling and resupply. Chinese assistance was also provided to upgrade the road and railway system from Yunnan to several ports along the Burmese coast of the Bay of Bengal. In 1992, China and Burma agreed that China would modernize Burmese naval facilities, in return for permitting the Chinese navy to use the Small and Great Coco Island (about 300 km south of the Burmese mainland, north of India's Andaman Islands). Since then, Chinese experts have built an electronic intelligence station on Great Coco Island, vastly improved and militarized the Burmese port facilities in the Bay of Bengal at Akyab (Sittwe), Kyaukpyu and Mergui, and constructed a major naval base on Hainggyi Island near the Irrawaddy river delta. The Chinese base on Great Coco Island includes an airstrip, signal-intelligence nodes and an 85-metre jetty. [51] The base monitors Indian naval and missile launch facilities in the Andaman and Nicobar Islands, movements of the Indian navy and other navies throughout the eastern Indian Ocean, as well the overall western approaches to the Strait of Malacca. [52]
China is currently building a deep-sea port in Kyaukpyu, in Rakhine state. The port has a water depth of 20 metres and is capable of accommodating 4,000 TEU (20-foot equivalent units) container vessels. Kyaukpyu is located on the route connecting southwestern China's Kunming city with Burma's Sittwe. According to the Burmese Ministry of Construction, a feasibility study for the seaport and road construction, outlined as Kunming-Mandalay-Kyaukpyu-Sittwe, was made in 2005. Once the 1,943 km Kunming-Kyuakpu road is completed, it is expected to facilitate transit trade and provide job
opportunities for Burmese workers and others in the region. [53]
One of China's strategic interests in Burma is to gain direct access by land to the Southeast Asian nations and, more notably, access to the Andaman Sea. Burma is not only a potential supply route bypassing the Malacca Strait, but can also offer a strategic staging point for monitoring the Malacca Strait's western approaches. Yossef Bodansky claims that 'controlling' the Strait of Malacca is a key strategic objective for China, to the point that it is prepared to risk armed conflict with the regional states and even the USA over this issue. [54] Bodansky maintains that the massive Chinese military buildup in Burma since the early 1990s reflects Burma's growing strategic significance, stressing that 'the extent of the expansion of the transportation infrastructure, all in harsh jungle and mountainous terrain, exceeds by far the needs of even the most optimistic outlook for Sino-Burmese commercial relations'. [55] In the mid-1990s, the Burmese regime granted access for Chinese intelligence services to Zedetkyi Kyun Island, located off the coast of Burma's southernmost tip, Kawthaung or Victoria Point, which is close to the northern entrance to the Strait of Malacca. Bodansky claims that a military base there would enable China to threaten the approaches to the strait. China has currently set up listening posts in Sittwe and Zedetkyi Kyun, enabling it to monitor traffic in the Strait of Malacca and Phillips Channel. [56]
As a result of increased Chinese influence in Burma, as well as arms-trafficking occurring along the Indo-Burmese border, India has sought in recent years to strengthen its ties with Burma. [57] India's interest in and involvement with Southeast Asia has been growing steadily over the past decade. In 2004, an agreement was signed in Yangon by the foreign ministers of India, Burma and Thailand to develop transport linkages between the three countries. This included a 1,400 km highway connecting northeastern India with Mandalay and Yangon, and on to Bangkok, which would contribute to opening up trade between the countries and give India access to Burmese ports. A planned deep-sea port in Dawei, together with a new highway connecting it to Kanchanaburi in Thailand, would no doubt contribute further to commercial links. Dawei, the capital of Tanintharyi division, is on the long, narrow coastal plain of southern Burma.
Building Dawei port also has a direct security angle for the Indian navy, which is now in the process of sorting out the technical and financial details of its ambitious Far Eastern Naval Command (FENC) project at Port Blair, the capital of the Andaman Islands. FENC is intended to extend the Indian navy's nuclear/strategic combat capability. Dawei is located across the Andaman Sea on the Burmese coast, almost facing FENC. [58] Indian analysts worry that the Chinese base on Great Coco Island poses a threat to the Indian tri-services command in Port Blair, which is only about 190 nautical miles (300 km) away. The Coco Island base lies only 22 nautical miles from Landfall Island, the northernmost of the Andamans. The Coco Island facility is also seen as a significant ELINT (electronic intelligence) and SIGINT (signal intelligence) threat to India's missile-testing range, Chandipur-on-Sea and the Sriharikota Island Launching Range, which are designed to assemble, test and launch Indian multi-stage rockets. According to Indian security analysts, the Chinese presence on Coco Island should be seen in connection with the Sino-Pakistani defence project and cooperation on the Gwadar Port facilities, which give China access and basing facilities on the other side of the Indian subcontinent, near the Strait of Hormuz. What is especially worrisome from the Indian perspective is the 'maritime encirclement of India', with the Chinese based at Gwadar to the west of India and on Coco Island to the east. In addition, Burma's experiments with a nuclear research reactor are worrisome from an Indian perspective, especially since China, Pakistan and Russia have all been involved. Indian analysts fear that China's naval presence in Burma may allow it to interdict regional sea lanes of communication. On this account, Burma is emerging as the 'single largest threat to Indian strategic interests in South East Asia'. [59] In an effort to check this state of affairs, India has started its own campaign to woo the Burmese regime by providing military training and selling it arms and military hardware. [60] In addition, Indian President Abdul Khalam recently visited Burma with a new $40 million aid package, along with a proposed natural gas agreement. [61]
Even though India and China seem to regard each other with considerable suspicion, the two countries, which have considerably improved their own bilateral relations, are also faced with some common 'non-traditional' security risks emanating from Burma, including illegal drugs-trafficking (opium and methamphetamines), human trafficking and refugees, the spread of HIV/AIDS and, more recently, avian influenza. Burma has become known as the world's second-largest producer of illicit opium, after Afghanistan. It is also the single largest producer of methamphetamines in Southeast Asia. The government lacks both the will and the ability to take on the major narcotics-trafficking groups, and is not seriously committed to suppressing the money-laundering activities that are so essential to the drugs trade. [62] Burma also has a lot of human trafficking; there is a steady flow of refugees into Thailand, China, Bangladesh and India; and the HIV virus is thought to be spreading. More than 1% of the Burmese population is estimated to have been infected with HIV. [63] Burma thus has one of the most serious AIDS epidemics in the region, and is reportedly also an epicenter of new strains of drug-resistant HIV/AIDS. [64] While the Chinese border town of Ruili has developed into a flourishing trading centre, it has also become a focus of Chinese efforts to prevent the spread of HIV from Burma to China.
The issues of drugs, HIV and crime are serious enough, but the debates they engender also reflect a more overarching concern among Burma's neighbours about the country's political stability. Although the regime has been provided with substantial income from Thai natural gas purchases over the past few years, and is continuously receiving generous provisions of military and infrastructure aid from China, India and other countries, there are indications that the SPDC may be leading Burma into an ever-deepening crisis.
Policy Implications
Offshore natural gas has become the major source of income for the Burmese military regime, and will become increasingly important in the years to come. The effects of economic sanctions imposed by the EU and USA are difficult to assess, but they are certainly not impressive. With the growing importance of natural gas, any assessment of the economic effects of sanctions should take the role of gas into account. If the regime could be deprived of substantial revenues from gas exports, economic sanctions would represent a real challenge to the regime, and this might convince the SPDC to accept political reforms. If not, the effectiveness of sanctions is highly questionable. Innovative ways to engage the regime might prove more feasible, especially if this engagement involves stakeholders in Burmese gas exploitation. Thailand's heavy investment in the Burmese gas sector as well as the escalating Sino-Indian rivalry over Burmese gas have no doubt made it easier for Burma's military leaders to withstand pressure for political reforms. From China's perspective, its relations with India, Japan and the USA have a strong bearing on its geopolitical interests in Burma. As long as the underlying tensions that characterize these relations (in particular the Sino-Japanese relationship) are not fundamentally altered, China will see it as essential to maintain its influence in Burma. Chances are then that future unrest in Burma, whether related to internal strife or opposition to Chinese dominance, will be met with further assertion of Chinese control. This represents a major challenge to any democracy-building effort in Burma. Given that Burma is likely to remain under strong Chinese influence for the foreseeable future, the most promising scenario for Burma's political development would probably come about as a result of positive developments within China itself. A stable, prosperous, democratizing China might be able to engage constructively with the Burmese regime, and this might also provide the best chance of resolving the current crisis in Burma. China may well hold the key to Burma's future. While countries in the neighbouring regions - particularly India and Thailand, but also Australia and Japan - may have important roles to play, China wields far more leverage. For those who wish to influence Burma in a positive direction, it is therefore essential to consider ways that change could be stimulated with the active participation of China, whether through sanctions, constructive engagement and/or any form of dialogue. Ideally, such cooperation should involve the energy sector, including gas production and pipeline construction.
