Myanmar: Why the US lost to China a long time ago

The Myanmar coup is newly-elected US President Joe Biden's first foreign policy test.

Biden's campaign platform has been particularly reticent on foreign affairs. Perhaps he never thought that he would win or perhaps the American public's interest in global affairs has waned, after eight years of former US President Barack Obama's policies and the raging Covid-19 pandemic. In any case, aside from chastising the Myanmar military for "overturning Burma's democratic transition", the US government has not taken any effective action. (NB: The US has since announced on 11 Feb that it would impose sanctions on the military leaders who directed the coup, among other measures.) Mainstream media in the US also concluded that Biden's options in making a difference in Myanmar were "limited".

But the biggest factor working against the US is Myanmar's geopolitics. Simply put, Myanmar is backed by China, in the same way that Hong Kong and Macau are backed by Guangdong province.

While there was some sort of a transition to democracy in Myanmar after 2011, the civilian government immediately sought to build links with China. China embarked on plans to build a China-Myanmar Economic Corridor (CMEC) stretching from Yunnan's Kunming and running through Myanmar via Mandalay, the latter's second-largest city in the central region, to the deep-sea port in Kyaukpyu on the shores of the Bay of Bengal.

This corridor includes railroads and oil and natural gas pipelines, and is an important component of China's Belt and Road Initiative (BRI).

Citing statistics released by the Burmese Ministry of Commerce, media outlets reported that Myanmar produces over 8 billion cubic metres of natural gas each year. It exports over 5 billion cubic metres of natural gas and also produces over 40 million barrels of crude oil annually. However, as it is lacking in oil and gas processing capabilities, Myanmar imports large volumes of diesel and gasoline each year.

The port of Kyaukpyu also needs a massive amount of cargo terminal infrastructure. As of 30 November 2019, all four distribution points of the China-Myanmar oil and gas pipeline located in southern, northern, and central Myanmar have delivered a total of 24.85 million tons of crude oil and 24.2 billion cubic metres of natural gas to China, bringing about direct economic benefits of US$520 million to Myanmar in total. China claimed that the pipeline "has not only enabled Myanmar to make monetary gain by exporting gas overseas, but has boosted employment at home". It "solves the problem of Myanmar's downstream market" and has "a strategic significance for China's energy diversification and security".

In addition, China is also participating in Myanmar's telecommunications networks and the design of a "New Yangon City". China already has experience investing in Cambodia and developing Sihanoukville. In the case of Myanmar, it can play a role in relocating populations, offering facilities for loans and the transfer of funds, exporting excess capacity, and building infrastructure projects. Once successful, not only would 5G, Douyin, and Alipay dominate the private market in Myanmar and facilitate access to further data, but on the military front, the entire Indian Ocean could be surveilled as well.

Although Obama announced his "rebalance towards Asia-Pacific" strategy in November 2011, it was all talk and no action, lagging far behind China's speedy entry into Myanmar.

China is Myanmar's largest trading partner and its trade with Myanmar accounts for one-third of Myanmar's foreign trade. On the other hand, Myanmar's trade with Japan only accounts for 5.3% of its foreign trade volume.

Undoubtedly, investing in Myanmar is not without its risks. The CMEC runs through numerous ethnic villages that are mired in various cultural and economic conflicts, such as the Rohingya community who live near the ports. Land acquisition and compensation matters could worsen ethnic conflicts. Environmental issues would probably also not be at the top of the agenda. Chinese investment projects after large quantities, fast speed, good quality, and low cost would likely not consider costly environment protection measures.

Myanmar exports rice and vegetables to a large food importer like China, as well as to its other trading partners in the region such as Thailand, Singapore, and India. As for Europe and the US, they are very familiar with the "goddess of democracy" Aung San Suu Kyi and have exported a few Western values of democracy and human rights that awarded a spiritual victory and gave leftist academics and public opinion something to cheer about. The West even had a moment of euphoria after a Hollywood movie (directed by French filmmaker Luc Besson and starring Michelle Yeoh) celebrating Aung San Suu Kyi was made. But apart from that, the Western world has been inept at making constructive contributions to Myanmar's economy and market, let alone preventing China's regional expansion in the South China Sea and South Asia.

The mainstream media in Europe and the US has reinforced the image of Aung San Suu Kyi as an East Asian goddess of democracy. Her moving story has touched the middle class and intellectuals of European and American society and given them the idea that Myanmar's transition to democracy reflects a victory of Western values. Amid all this, China has long been secretly advancing towards Myanmar.

China does not have to compete in terms of soft power or wage a war of words with the West over Myanmar. It just needs to gain material and economic control and influence. Following further capital injections by China and the ever-closer connections between economy and politics, Myanmar's military and other opposition parties can only surmise that China (as Myanmar's largest trading partner) will further assert its influence on Myanmar or even intervene in the latter's political situation.

In the battlefield called Myanmar, China has already won more than one round. Amid the flurry of Biden newly taking office and being hit by this sudden development in Myanmar, if Biden still remembers Obama's "rebalance towards Asia-Pacific" strategy and dusts the cobwebs off what Obama said and what the US government actually did, Biden could be forced to face reality and give up on Myanmar - just like the way US abandoned Cambodia - and let China take over, judging by the state of things.

In fact, apart from winning over the EU and Japan to form a so-called chorus of protests that denounced the military coup in Myanmar as a democratic regression, Biden has not been able to do much else.

On the other hand, China has cleverly maintained a neutral stance in its statement. It refused to admit that it was a "coup", and referred to it as a "major Cabinet reshuffle". The United Nations Security Council had wanted to condemn the coup but China refused to support it and exercised its veto in its capacity as one of the five permanent members of the council. Indeed, aside from just a condemnation of the coup, could the UN Security Council have deployed peacekeepers into Myanmar to rescue Aung San Suu Kyi?

Amid the Myanmar coup, news from the other side of the Indian Ocean came in: on 2 February, the Sri Lankan government scrapped a deal to develop the East Container Terminal at the Colombo port with India and Japan, shocking the New Delhi and Tokyo governments.

Indian media reported that China, which has been actively expanding its influence in South Asia in recent years, is behind Sri Lanka's sudden decision to cut India and Japan from the deal, claiming that the Chinese embassy in Sri Lanka had funded protests against the partnership with these two countries.

To get the better of its two traditional competitors of India and Japan, China allegedly placed enormous pressure on the Rajapaksa brothers, the president and prime minister of Sri Lanka, to cancel the partnership.

In China's eyes, after the South China Sea, the Indian Ocean is the next battlefield with Myanmar as the first stop and Sri Lanka as another strategic foothold.

China has already seen through the limited capabilities of the US. The US's so-called "rebalance towards Asia-Pacific" needs funding and only money can win people over and bribe the political regime. But the US and Europe do not have money. China, on the other hand, has the efficiency and capability to centrally manage its reserves. Thus, the US's so-called "rebalance towards Asia-Pacific" would only be limited to deploying a few aircraft carriers to run a few rounds in the Indian Ocean periodically.

This article was first published in Chinese on CUP media as "美國為何在緬甸早就輸給中國?".

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