China is Balancing Its Interests in Myanmar


China’s relationship with Myanmar is a complex one, with the Chinese Communist Party supporting the State Administration Council (SAC) military junta due to their shared authoritarian nature. However, China has been playing a hedging game with various political forces within Myanmar for at least a decade, including those opposed to SAC rule. This approach stems from China’s over-dependence on the Myanmar military in the past, which turned against Beijing’s interests in 2010-2011.

The military-aligned government unilaterally warmed up relations with Washington and other Western countries at the cost of long-term Chinese interests in Myanmar, threatening several Chinese investment projects. In Beijing’s view, the Myanmar military was no longer trustworthy, leading to a close relationship with Aung San Suu Kyi and the National League for Democracy. Beijing’s strategy is to maximize its interests in Myanmar, where the tussle for power has intensified and the future is extremely uncertain.

With the SAC, opposing National Unity Government, People’s Defence Forces, and various ethnic armed organizations vying for power, Beijing must hedge its bets and work with whoever serves its interests best. Hedging is often described as the best choice in uncertain geopolitical contexts, as seen in Southeast Asian countries practicing it amid US-China competition.

In the uncertain environment of Myanmar, Beijing, with a significant economic and strategic stake, is engaging with various actors, including the opposition to the SAC junta. The Three Brotherhood Alliance, including the Arakan Army, Myanmar National Democratic Alliance Army (MNDAA), and Ta’ang National Liberation Army (TNLA), has been waging a well-coordinated military offensive against junta strongholds in the northern Shan State since late October 2023.

Since the launch of Operation 1027, the alliance has captured at least 12 towns and overrun over 400 junta bases and outposts in Rakhine, Chin, and northern Shan States. Along the Myanmar-China frontier, the alliance has taken over several crossings through which a substantial amount of cross-border trade takes place. The MNDAA aims to reclaim the Kokang region, previously Special Region One of the Shan State, which was occupied by Myanmar’s military in 2009.

In December 2023, China’s Ministry of Public Security issued an arrest warrant for Bai, a Myanmar military ally, due to Beijing’s dissatisfaction with the SAC’s lack of action. Instead, Beijing opted to rely on the MNDAA for its goal. The Chinese government has attempted to broker a ceasefire agreement between the SAC and the Three Brotherhood Alliance in Kunming. As MNDAA captured Laukkai, Beijing is now satisfied with the success of the EAOs and seeks political stability in the borderland region.

China continues to work with the junta in other parts of the country, such as CITIC signing an addendum to accelerate the development of the Kyaukphyu Special Economic Zone in Rakhine state. The National Union of Myanmar (NUG) is seen as a potential solution to the country’s political turmoil, potentially attracting Beijing’s interest if stakeholders demonstrate their utility.

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