The definitive reference work on ChinaMyanmar relations M o d e r n

and Hongwei Fan

David I. Steinberg
Ch i na -
This volume examines the changing relations between China and Burma/
Myanmar since Burmese independence in 1948 and proclamation of the
Peoples Republic of China the following year.
Drawing on hitherto unavailable Chinese sources, it documents the

Myanmar
negotiations and settlement of outstanding issues such as the border demar-
cation, the Chinese Nationalist forces in Burma, the status of the overseas
Chinese residents, and the Burma Communist Party. It also documents the

Modern ChinaMyanmar Relations

Sino-Burmese riots of 1967 and later improvement of relations, culminating
in the close bilateral association that has existed since 198889. R e l at i o n s
As such, the study analyses in detail Myanmars changing role in Chinese
strategy, concentrating on trade and investment relations, oil, gas, hydro-
electric power, natural resources and improved transportation. It outlines D il emm a s of Mutu al D ep en d en c e
military cooperation, narcotics control and migration while emphasizing
Indian and ASEAN concerns and responses.
The volume also outlines a set of policy dilemmas facing the central and
provincial Chinese authorities, the Myanmar government, and Burmese
ethnic minorities, while analysing dilemmas for the United States, India, Dav i d I . S t e i n b e rg a n d H o n g w e i Fa n
ASEAN, and Japan in responding to the changing but interdependent Sino-
Burmese relationship.
David I. Steinberg is Distinguished Professor of Asian Studies at the School of Foreign Service,
Georgetown University. He has had a distinguished professional career and published
extensively on Myanmar-Burma, the Koreas and the wider Asian scene. Hongwei Fan is a
frequent visitor to Burma and an associate professor at the Research School of Southeast
Asian Studies, Xiamen University. He has long studied and written on relations between the
two countries.

www.niaspress.dk

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 MODERN CHINAMYANMAR RELATIONS

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 NIAS Nordic Institute of Asian Studies
Monograph Series
98. Alexandra Kent: Divinity and Diversity
99. Somchai Phatharathananunth: Civil Society and Democratization
100. Nordin Hussin: Trade and Society in the Straits of Melaka
101. Anna-Greta Nilsson Hoadley: Indonesian Literature vs New Order Orthodoxy
102. Wil O. Dijk: 17th-Century Burma and the Dutch East India Company
16341680
103. Judith Richell: Disease and Demography in Colonial Burma
104. Dagfinn Gatu: Village China at War
105. Marie Hjlund Roesgaard: Japanese Education and the Cram School Business
106. Donald M. Seekins: Burma and Japan Since 1940
107. Vineeta Sinha: A New God in the Diaspora?
108. Mona Lilja: Power, Resistance and Women Politicians in Cambodia
109. Anders Poulsen: Childbirth and Tradition in Northeast Thailand
110. R. A. Cramb: Land and Longhouse
111. Deborah Sutton: Other Landscapes
112. Sren Ivarsson: Creating Laos
113. Johan Fischer: Proper Islamic Consumption
114. Sean Turnell: Fiery Dragons
115. Are Knudsen: Violence and Belonging
116. Noburu Ishikawa: Between Frontiers
117. Jan Ovesen and Ing-Britt Trankell: Cambodians and Their Doctors
118. Kirsten Endres: Performing the Divine
119. Gerhard Hoffstaedter: Modern Muslim Identities
120. Malcolm McKinnon: Asian Cities
121. David I. Steinberg and Hongwei Fan: Modern ChinaMyanmar Relations
NIAS Press is the autonomous publishing arm of NIAS Nordic Institute of Asian Studies,
a research institute located at the University of Copenhagen. NIAS is partially funded
by the governments of Denmark, Finland, Iceland, Norway and Sweden via the Nordic
Council of Ministers, and works to encourage and support Asian studies in the Nordic
countries. In so doing, NIAS has been publishing books since 1969, with more than two
hundred titles produced in the past few years.

UNIVERSITY OF COPENHAGEN Nordic Council of Ministers

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 Moder n
C h ina
Myanmar
Re lation s
D il e mm a s of Mutu al D ep en d en c e

Dav i d I . S t e i n b e rg
a n d H o n g w e i Fa n

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 Nordic Institute of Asian Studies
Monograph series, no. 121
First published in 2012 by NIAS Press
NIAS Nordic Institute of Asian Studies
Leifsgade 33, 2300 Copenhagen S, Denmark
Tel: +45 3532 9501 Fax: +45 3532 9549
E-mail: books@nias.ku.dk Online: www.niaspress.dk

David I. Steinberg and Hongwei Fan 2012

All rights reserved.
David I. Steinberg and Hongwei Fan assert their moral right to be
identified as the authors of this work.

British Library Cataloguing in Publication Data

Steinberg, David I., 1928-
Modern ChinaMyanmar relations : dilemmas of mutual
dependence.
1. ChinaForeign relationsBurma. 2. BurmaForeign
relationsChina. 3. BurmaForeign relations1948-
4. ChinaForeign relations1949- 5. ChinaHistory
1949- 6. BurmaHistory1948-
I. Title II. Fan, Hongwei.
327.510591-dc22

ISBN: 978-87-7694-095-9 (hbk)

ISBN: 978-87-7694-096-6 (pbk)

Typesetting by NIAS Press

Printed in the United Kingdom by Marston Digital
Cover photograph: Muse border crossing, Myanmar
(photograph David Steinberg).

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 Contents
Acknowledgementsix
Author Notes x
Introductionxvii
Conceptions and Misconceptions Sino-Burmese Pre-Independence
Relations: An Overview Scope of the Study
Part I: The Vicissitudes of Sino-Burmese Relations During the Cold War
Prelude: Setting the Stage 3
1. Sino-Burmese Relations 19491953: Suspicions and Equivocations 10
The Ideological Context of Sino-Burmese Relations The Establishment
of Diplomatic Relations Tentative Contacts: 19501953 Analysis of
Early Sino-Burmese Relations
2. ChinaBurma Ties in 1954: The Beginning of the Pauk Phaw Era 28
International Factors Chinas Policy Toward Burma Burmas Policy
Toward China Personalized Political Relations in 1954 Economic
Relations in 1954
3. The Honeymoon Period: 19551966 41
The U Nu Period The Ne Win Period (19621967) Economic
Relations 19551966 Cultural Relations 19551966
4. The Anti-Chinese Riots of 1967: The Rupture of the Pauk Phaw Ties 93
The 6.26 Anti-Chinese Riots Wrestling between Beijing and Rangoon
The Impact of the Anti-Chinese Riots Causes of the Anti-Chinese
Riots
5. From Rift to Renormalization of Relations: 19671971 119
The Renormalization of Sino-Burmese Relations Causes of the Renormal
ization of Sino-Burmese Relations The Context of ChinaU.S.Soviet
Triangular Relations
6. Sino-Burmese Ties: The Cicatrized Sino-Burmese Relationship
19721988131
Political Relations Economic Relations Decline of Burmese Status in
Chinese Diplomacy
Part II: The Challenges of ChinaMyanmar Relations in the Post-Cold War Era
Prelude155
v

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 Modern ChinaMyanmar Relations

7. ChinaMyanmar Strategic and Security Relations 162

Energy Issues: Gas, Oil, and Hydroelectric Power Myanmar and
Mineral Resources Security in China
8. ChinaMyanmar Economic and Trade Relations 208
ChinaMyanmar Trade ChinaMyanmar Border Trade Chinese Develop
ment Assistance, and Economic and Technical Cooperation Chinas Invest
ments in Myanmar ChinaMyanmar Economic Relations in the Context
of Regional and Subregional Cooperation YunnanMyanmar Economic
Relations Cross-Border Tourism Chinese Migration into Myanmar
Part III: Sino-Burmese Relations within the International Power Context
9. Regional Impacts: Narcotics, Transport, and the Military in SinoMyanmar
Relations269
Narcotics in the ChinaMyanmar Nexus Chinas Look South: The
SinoMyanmar Transport Corridor The Military Factor
10. International Strategic Issues 306
Chinese Strategy in Myanmar ChinaIndia: Myanmar as Nexus
Sino-Myanmar Cooperation and Japanese Concerns The Burden of
Proximity Thailand The United States Burma Policy: The Luxury of
Distance The Role of International Organizations: The United Nations
and ASEAN SinoMyanmar Relations and International Responses
Part IV: Conclusions
11 Dilemmas of Mutual Dependence in a Globalized World 347
Chinas Dilemmas: Internal and External Myanmars Five Dilemmas
U.S. Dilemmas Regional Actors Chinese-Myanmar Relations under
Discipline-Flourishing Democracy Coda
Appendices
1. Joint Statement Concerning Framework Document on Future
Cooperation in Bilateral Relations between the Peoples Republic of
China and Federation of Myanmar 381
2. Peoples Republic of China Plans and Strategies Mentioned in the
Text385
3. Chronology of Sino-Burmese Relations 390
4. Major Chinese Companies in Myanmar 419
5. Joint Statement Between The Republic of the Union of Myanmar
and The Peoples Republic of China on Establishing a Comprehensive
Strategic Cooperative Partnership 430
6. Summary: Peking and the Burmese Communists: The Perils and
Profits of Insurgency. Secret (later declassified) CIA Report, 1971 433
About the Authors 439
Bibliography 441
Index 472
vi

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 Contents

Tables
1 Chinas trade with Burma, 19661972 106
2 Reports on the BCP in the Peoples Daily, 19711988 137
3 Chinas trade with Burma, 19761988 145
4 Yunnans cross-border petty trade, 19801988 146
5 Chinas imports from and exports to Myanmar, 19882009 209
6 Chinas land ports with Myanmar 214
7 Myanmars border trade with China, 19912008 217
8 Yunnans trade with Myanmar, 20002009 219
9 Projects contracted by China in Myanmars manufacturing sector since
2000226
10 Top ten largest foreign investors in Myanmar up to 31 May 2009 229
11 Chinas direct investment flows in ASEAN, 20032009 230
12 YunnanMyanmar trade, 19952008 243
13 Drugs-related crime in China, 19912009 270
14 Drugs-related crime in Yunnan, 20012008 273
15 Roads of the ChinaMyanmar transport corridor 283

Figures
1 Chinas direct investment stock in Myanmar, 20032009 231
2 The makeup of Chinas investment in Myanmar, up to 31 July 2010 232
3 Number of registered drug addicts in China, 19992005 271
4 Myanmar illicit cultivation of opium poppy and production of opiates,
19952009277
5 PRC worldwide arms sales customers, 20032007 302

Maps
1 Myanmar in its regional setting xv
2 Myanmar administrative units xvi
3 Main ethnic groups in Myanmar 4
4 Kuomintang troops in Burma, 19501961 48
5 Kuomintang and early PRC claims to Burmese territory, with Sino-
Burmese border settlement, 1960 61
6 Oil and natural gas projects in Myanmar with Chinese involvement 166
7 MyanmarChina oil and gas pipelines 171
8 Hydropower projects in Myanmar with Chinese involvement 188
9 Routes to Yunnan in Chinas national highway network planning 284
vii

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 Modern ChinaMyanmar Relations

Plates
1 U Nu, Zhou Enlai and Zhu De, 1956 5
2 ChinaMyanmar Memorial for Friendship, Mangshi 7
3 Mao Tsetung declares the founding of the Peoples Republic of China,
194913
4 Border near Namkham, China 42
5. Mao greeting U Nu and Ne Win, 1960 64
6 U Nu, Zhou Enlai and Ne Win, 1961 65
7 Liu Shaoqi and Ne Win, 1963 74
8 Deng Xiaoping and Ne Win, 1978 135
9 Than Shwe, 2010 156
10 Ruili border crossing, China 287
11 Muse border crossing, Myanmar 287
12 Thein Sein meets with Hillary Clinton, 2011 373

viii

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 Acknowledgements

T he authors wish to thank and acknowledge the strong support given

to them both by Xiamen University and the Georgetown University
Fellowship Program, which allowed them to work together at
Georgetown University during part of 2008. This relationship was fostered by
the Georgetown School of Foreign Service, which provided research and travel
support to enable the authors to meet at international conferences and to work
together at Xiamen University in JuneJuly 2010. The program was devel-
oped in China under the auspices of the China Scholarship Council. Xiamen
Universitys Research School of Southeast Asian Studies also supported the
research efforts of Professor Fan, while the School of Foreign Service provided
research grants to enable Professor Steinberg to visit Myanmar and pursue
his research agenda in and on that country. Professor Fan would like to thank
and acknowledge the support of Professor Zhuang Guotu, the Director of the
Research School of Southeast Asian Studies, Xiamen University, and Professor
Steinberg the assistance of Dean Robert Gallucci of the School of Foreign
Service, Georgetown University.
Both authors are indebted to the readers of various drafts and chapters
of this volume. They include Professor Robert Sutter of George Washington
University; Dr. Andrew Selth of Griffith University, Brisbane; Mr. Bronson
Percival of the CNA; Ms. Yun Sun of The Brookings Institution; Mr. Maxwell
Harrington of Georgetown; and various anonymous readers.
Several of the maps appearing in the volume were based on initial drafts
by Wang Di and Li Feiying of Xiamen University. The Hon. Cheng Ruisheng,
former Chinese ambassador to Myanmar (19871991) and India (19911994),
supplied some of the photographs. Our thanks to Gerald Jackson and his team
at NIAS Press for their support, not least to Don Wagner for his patience with
many changes to the typesetting as the situation rapidly evolved in Myanmar.
The authors would like also to acknowledge the patience of their families
throughout the long, arduous process that sometimes involved shirking home
responsibilities for more esoteric chores.
ix

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 Author Notes
The plural of anecdote is not data.
Professor Donald Emmerson

About the Data

D ata on all aspects of Myanmar should be treated with caution.

The statistical base is often flawed, and sometimes inflated to
assure the leadership that the country is rapidly progressing.
Even such basic statistics as the countrys population is subject to question
ranging from about 48 million to the most recent official figure in June 2010
of 59 million. Although the ethnic Burman population is said to be about two-
thirds of the total population, there are analysts who believe that this number
is overestimated. Muslims consider that their number is perhaps double
the official count, and the Chinese population is subject to widely differing
calculations, and is even more in doubt because of large-scale illegal immigra-
tion. Economic data is also subject to manipulation, and there are extensive
discrepancies between Chinese and Burmese bilateral trade statistics between
the two states. In addition, there is an extensive underground economy that is
beyond calculation, and smuggling and undervalued imports abound. Foreign
investment figures must be treated with a degree of caution because approved
investment is officially higher than actual investment, although official and
informal investment combined is likely to be greater than approved official
investment. Smaller investments, especially from the Chinese community,
often do not go through the Myanmar Foreign Investment Commission. Even
tourist figures vary among Burmese ministries. Macro-economic data such as
the money supply have not been publicly released for some years.
Even the data of Chinas investment in Myanmar are not reliable because
they exclude private investment, and many state-owned enterprises have
invested in Myanmar without the Chinese governments approval. Such
companies have been reluctant to submit applications for foreign investment
permission due to red tape or lack of official qualifications to invest abroad.
x

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 Author Notes

Incalculable BOT (BuildOperateTransfer) projects by Chinese corpora-

tions are not accounted for in investment figures; these projects are both
extensive and expensive. Consequently, the official statistics on Chinas invest-
ment in Myanmar from both sides only reflects major investments and leading
cooperative projects authorized by the two central governments.
Less than three percent of the Yunnan border export trade settled in
RMB is through Chinas customs clearance. The majority of export traders
choose blackmarket banks to settle accounts because they can provide more
convenient and more expeditious services with fewer remittance charges than
international banks, in addition to evading customs duties. A considerable
disparity exists between the statistics on YunnanMyanmar trade between
official Kunming customs figures and reality; the amount and number of
investments, trade, and economic cooperation projects between China and the
cease-fire groups controlled areas are heavily underestimated.
The reader is thus cautioned to consider all data generally as indicative
trends, rather than reflecting actuality. Much of what passes for data in and on
Myanmar are instead anecdotal references.

Exchange Rates
The official KyatU.S. Dollar exchange rate is approximately K5.86.3 to the
dollar and is only used for certain government statistics, which skews what
data are available. However, the unofficial, widely used rate was approximately
K1,000 to the dollar in the summer of 2010, about K850 in the spring of 2011,
and about K780 in the fall of 2011.
The Chinese currency exchange rate is approximately RMB6.8 to the
dollar.

BurmaMyanmar and Other Name Changes

In 1989, the military junta changed the name of the state from Burma to
Myanmar, a centuries-old written form.1 They have rigidly adopted that name
for all uses including the historical period. The United Nations and most
countries have accepted that change, but the Burmese opposition has not done
so, claiming it was imposed by an illegal government. The United States and

1 The natives call their country Myanma in their writings, and in common parlance, Byam-
ma, which is spelled Bram-ma, of which foreigners make Burmah. The Rev. Howard Mal-
com, Travels in Southeastern Asia, Embracing Hindustan, Malaya, Siam, and China with No-
tices of Numerous Missionary Stations and a Full Account of The Burman Empire. London:
Charles Tilt, 1839, p. 3.

xi

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 Modern ChinaMyanmar Relations

several other countries have kept the Burma designation. This division has
become a surrogate indicator of political persuasion.
The military government has also changed the names of various cities and
regional divisions to conform to Burmese orthography. Yangon, rather than
Rangoon, is the most prominent example. Many city street names were also
changed, as have the official names of various ethnic groups.

Older Form Newer Form

Akyab Sittwe (City)
Arakan Rakhine (State)
Chindwin Chindwinn (River)
Irrawaddy Ayeyarwady (Division and River)
Karen Kayin (State, ethnic group)
Magwe Magway (Division)
Maymyo Pyin-U-Lwin (City)
Mergui Myeik (City)
Moulmein Mawlamyine (City)
Pagan Bagan (Old Capital)
Pegu Bago (Division)
Prome Pyay (City)
Rangoon Yangon (City)
Salween Thanlwin (River)
Tenasserim Tanintharyi (Division)

In this volume, Myanmar has been used for the national designation for the
period since 1989, and Burma for previous periods. The term Burmese is used
for all citizens of that country (including all ethnic groups), for the official
language of the state, and as an adjective. Burman is used as the name of the
majority ethnic group in the country. These uses are not intended to have any
political connotations.

Personal Names
There are no surnames in Burmese usage (this sometimes is altered when
Burmese go abroad). Everyone, including children, has their own name,
which is from one to four syllables. The singular exception is Aung San Suu
Kyi, whose mother legally incorporated the name of her husband (Aung
San) onto her childrens names; e.g. Suu Kyi, thus Aung San Suu Kyi. Titles in
Burmese evolve from family relations. The honorific for a senior male is U
xii

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 Author Notes

(lit. uncle), and for a senior female Daw (lit. aunt). Thus, the name of the
former Prime Minister is Nu, although he is universally known as U Nu.
Chinese names are generally printed in the authorized pinyin system of
Romanization with the family name first and no hyphen between multiple
given names (e.g., Zhou Enlai). An exception here is made for Mao Tsetung,
the Romanization thus of which is better known in the West, and for the term
Kuomintang (KMT), the name of the Nationalist ruling party in China until
1949.
There is no standard Romanization system used for Burmese names; those
employed follow the preferences of the individual concerned or general usage.

Ethnic Names
The Myanmar government claims there are 135 ethnic groups in the country.
This is based on obscure colonial estimates that report dialect differences,
but neither ethnicity nor language groupings. Thus, there are said to be 53
groups among the Chin minority alone. The Burmese government often uses
the term race to describe people. The problem is complicated by the use
of the Burmese term lu-myo (lit., person type). The term has been used for
race, ethnicity, nationality (e.g., French lu-myo), etc., and does not conform to
modern social science terminology.

Abbreviations
ADB Asian Development Bank
AFPFL Anti-Fascist Peoples Freedom League (Burmese coalition
government, 19491958)
AMFA Archive of Ministry of Foreign Affairs, Peoples Republic
of China
ARF ASEAN Regional Forum
ASEAN Association of Southeast Asian Nations
BCP Burma Communist Party
BOT BuildOperateTransfer
BSPP Burma Socialist Programme Party (19621988)
CCP Chinese Communist Party
CGGC China Gezhouba Group Corporation
CNOOC China National Offshore Oil Corporation
CNPC China National Petroleum Corporation
xiii

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 Modern ChinaMyanmar Relations

CPB Communist Party of Burma, aka White Flags

CPI China Power Investment Corporation
CPPCC Chinese Peoples Political Consulting Congress
FDI Foreign Direct Investment
GMS Greater Mekong Subregion
KMT Kuomintang
MOGE Myanmar Oil and Gas Enterprises
MoU Memorandum of Understanding (Myanmar)
NCNA New China News Agency
NDRC National Development and Reform Commission
(China)
NPC National Peoples Congress (China)
PBELP Prosper the Borders to Enrich Local Peoples (China)
PLA Peoples Liberation Army
PPP Phnom Penh Plan for Development Management
PRC Peoples Republic of China
SEZ Special Economic Zone (Myanmar and China)
SME Small and Medium Enterprises
SINOMACH China National Machine Industry Corporation
SLORC State Law and Order Restoration Council (Myanmar
19881997)
SPCC State Power Corporation of China
SPDC State Peace and Development Council (Myanmar 1997
2011)
YMEC Yunnan Machinery and Equipment Import and Export
Company

Glossary
Burman Ethnic majority in Myanmar some two-thirds of the
population
Han Ethnic Chinese
Sawbwa Shan hereditary rulers
Tatmadaw Burmese armed forces

xiv

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 Author Notes

Map 1: Myanmar in its regional setting (relief information from Mountain High Maps)

xv

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 Modern ChinaMyanmar Relations

Map 2: Myanmar administrative units (based on a map by the Myanmar Information

Management Unit, MIMU see www.burmalibrary.org/docs6/MIMU001_A3_SD%20&%20
Township%20Overview.pdf )

xvi

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 Introduction

Conceptions and Misconceptions

C ontemporary internal diplomatic pronouncements and media report

ing on Sino-Burmese relations in both countries, in each of which
state control of the media has been ubiquitous, weave a positive web
of unadulterated support and friendship, while the foreign reporting on this
bilateral relationship in official and unofficial circles very often exudes similar
conclusions, but with a negative focus. So the ChinaMyanmar association
and the constant travel of high-level delegations back and forth on productive
missions are given prominence in their respective media, while the same
events prompt concerns that the relationship is detrimental to improved
governance or human rights in Myanmar and undercuts Western sanctions.
The regional strategic implications of this virtual alliance prompt quiet angst
in both informed and popular circles.
The knowledgeable observer is more skeptical. Informed Chinese recognize
the latent possibility in Myanmar for popular and ethnic unrest, potentially
affecting their southern frontier and their extensive national interests in
Myanmar. Burmese unofficially and soto voce raise questions about the intensity
of Chinese commercial expansion and population in their country, while the
government quietly softens dependence on China by buying military aircraft
and other hardware from Russia and elsewhere.
This volume is an effort to rectify misconceptions about the history and
nature of this important bilateral relationship, and to explore its nuances
and the resulting dilemmas for all concerned in the region and beyond, so
that policy options might more effectively be explored. Its thesis is that the
following, simplistic, common perceptions are erroneous that:
Myanmar is a client state of China; that Chinese influence is monolithic;
China is so dominant that the current and any future Burmese admin-
istration will be singularly dependent on its northern neighbor;

xvii

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 Modern ChinaMyanmar Relations

every move by the Chinese is part of a calculated plan to advance their

power and interests in Myanmar;
Burmese democratization is dependent on Chinese attitudes;
Chinese perceptions of U.S. policy changes under the Obama adminis-
tration toward Myanmar are attempts to encircle China; and
the previous U.S. policy of regime change in Myanmar did not succeed
because of Chinese support to the military junta.
Yet strong security relationships between the two states are evident based
both on potential and perceived external threats that each regards as inimical
to its national interests, and there are policy and bureaucratic associations that
influence internal actions on both sides, as well as informal working relations
that affect business and trade.
It was said since independence that Burma was neutral in Chinas shadow.
The influence of China today is obviously important, and, as this volume
hopes to demonstrate, pervasive. Into the future, it will continue to loom large
in the Myanmar context and indeed in the region. But the nationalism that has
been so evident in contemporary Myanmar is likely to mitigate too adhesive an
adherence to the Chinese, who have supplied the glue in terms of assistance in
military equipment, economic aid, training, and infrastructure development.
The Burmese, in response, have sought to diversify their dependence. Following
the 2010 elections and the movement into a civilianized administration,
Naypyitaw (Myanmars new capital) may further try to reduce its reliance on
Beijing. Meanwhile, if the future political situation evokes continuing dialogue
and more changes in the U.S.s Myanmar policy, Myanmars autonomy from
China will likely grow.
This volume argues that as China has invested and continues to invest heavily
in Myanmar, and as Chinas dependence on external energy sources expand,
its need for a compliant Myanmar has increased and will increase. But the fact
of these investments, and the types of investments in non-transferable assets
and infrastructure, particularly the SinoMyanmar oil and gas pipelines and
a multitude of major hydroelectric projects, as well as mining, give Myanmar
a far stronger say in their mutual relationship. And as Chinese penetration of
the Burmese economy becomes more apparent to the Burmese, these links
become more delicate. China and Myanmar are increasingly dependent on
each other, and with that new and growing dependence comes the need for
both parties to explore and resolve the multiple dilemmas that exist and are
likely to grow at all levels in both states if their perceived national interests are

xviii

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 Introduction

to be met. It becomes essential to states and institutions concerned about the

Sino-Burmese relationship, such as the U.S., the E.U., India, Japan, ASEAN,
and the U.N., that these nuances and dilemmas are understood in any policy
formation toward either country.
Neither Chinese nor Burmese interests are, however, monolithic, a factor
often overlooked in the policy discourse. Chinese provincial and lower admin-
istrative level and sectoral interests may stress different priorities. There have
been apparent antagonisms in issues related to Myanmar between Kunming
and Beijing, and even between Kunming and the Yunnan xian (counties).
Burmese state and assorted minority interests have blatantly diverged, espe-
cially in the Sino-Burmese border areas. And as Myanmar enters a new era
of local legislatures under the 2008 constitution that came into force in early
2011, even if under military (and thus centralized) control, new and potentially
ambiguous interests and relationships are bound to develop that may affect
Chinese holdings in those regions.
Both states have external strategic concerns that reinforce the closeness of
ties. China has residual worries about Western encirclement, a leftover attitude
from the Cold War era, so in the past ensuring a neutral Burma was an element
of Chinese foreign policy that has been replaced by its presence in Myanmar.
Myanmar fears a U.S. invasion because of a score of years of a U.S. regime
change policy, and its closeness to China effectively mitigates that concern to
some degree.
It also becomes incumbent on foreign states and organizations to reexamine
their premises about the multiple relationships between China and Myanmar
to determine how best the peoples of Myanmar may be assisted to improve
their sorry state with a poverty level the worst in the region and how
tranquility may be maintained. Each of these states and institutions (the U.S.,
Thailand, the European Union, ASEAN, India) have national or organizational
and strategic concerns that it will attempt to pursue, and the evolution of Sino-
Burmese relations may be pivotal in all those cases.
The contemporary period is presaged by a historical set of relationships,
the understanding of which is essential in interpreting present attitudes and
formulating policies. Mercurial Sino-Burmese relations in the pre-colonial
period, the colonial heritage in Burma/Myanmar, the governance of Burma
from India until 1937, the Sino-Indian War of 1962, and the humiliation of
China in the semi-colonial era all influence present attitudes toward each
other and thus policies, and help determine strategic parameters. Concepts
of power and authority, the personalization of loyalties, and patron-client

xix

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 Modern ChinaMyanmar Relations

hierarchical relationships formulate how those policies may be conceived and

implemented.
Bilateral and regional history does influence contemporary official and
personal prejudices and attitudes. So, some Burmese have not so humorously
noted that when massive China spits, small Burma/Myanmar swims. Some
Chinese disparagingly comment that Burma is a beggar with a golden bowl
a poor country seeking assistance but with vast natural resources. Myanmar
plays for more Chinese assistance by claiming that Myanmar was the weakest
link in the Clinton/Bush administrations containment policy against China,
but when the Obama administration modified its policy toward Myanmar, then
some Chinese circles interpreted this as an effort to limit Chinese influence,
and that the U.S. fomented the 2007 Saffron Revolution in Myanmar
to prevent the construction of Chinese pipelines, as it also was said to have
done in the 2009 Kokang incident. Cold War stereotypes, and international
confrontational politics continue to influence attitudes.
We take the concept of dilemmas in the title as a means to capture the
policy dynamic for better analysis of the many relationships that comprise
the region and the world beyond. There are, in the views of the authors, no
simple solutions to these dilemmas that shift and are transformed over time
and in response to changing circumstances. The International Crisis Group,
in an excellent study, conceived of the dilemma as both singular and from a
Chinese perspective.1 The writing of this volume and that report proceeded
independently, but here the authors have broadened the scope of the inquiry to
consider the multiple dilemmas that not only face Beijing, but also the varying
administration levels in China, among the Burmans and the minorities, and
among the foreign states and institutions that relate to Myanmar and the
Chinese association. History does matter, and thus it is to the earlier period we
first turn.

Sino-Burmese Pre-Independence Relations: An Overview

In a long-term perspective, one that perhaps Zhou Enlai might have liked as
he said it was still too early to evaluate the effects of the French Revolution of
1789, Chinas ethnic Han populations inexorable drive from the Yellow River
valley southward toward the area that has become known as Burma/Myanmar
has been a pattern since the Han Dynasty, some two thousand years ago, when
it was a link in what became known as the southern silk route to India.
1 International Crisis Group, Chinas Myanmar Dilemma. Brussels: Asia Report #177, 14
September 2009.

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 Introduction

The contemporary and profound influence of China in Myanmar, as we

hope to demonstrate in this volume, has its antecedents in earlier history,
although its impact is through a more contemporary form of geo-political
security interests, and a more modern pattern of influence rather than con-
quest. Burma in its pre-colonial incarnation had to pay considerable attention
to China as the overwhelming hegemon in the region, although the various
Burmese dynasties regarded Siam (Thailand) as its most important rival an
attitude that inherently links the past to the present as Thailand is an ally of
the U.S. As history has also illustrated, the rulers of what became Burma did
not take kindly to Chinese incursions into their domain, even if bilateral rela-
tionships were complex. Except for the nineteenth-century pre-colonial and
colonial period, when the march was to the north as British imperial interests
sought to open the supposedly rich markets of Yunnan Province and compete
in securing them against the French in Indochina, China has pushed toward
the south, first to consolidate its rule over the southern parts of what is now
China proper, later to ensure that the Emperors rule was gloriously recognized
by tributary states and chieftains, and most recently to ensure that Chinese
modern strategic, political, and economic interests are supported in that
region. This volume will concentrate on Sino-Burmese contemporary rela-
tions those since Burmese independence in 1948 and the formation of the
Peoples Republic of China (PRC) in 1949; the historical context, however, is
important in understanding the present.
There is an extensive literature covering the expansion of the ethnic Han
to what is now south and southwest China. Yunnan was effectively brought
under Chinese administration only under the Yuan Dynasty (12791368), and
there is a theory that a later ethnic Han migratory advance southward under
the Ming (13681644) and Qing Dynasties (16441911) into what today is
Burma/Myanmar was only precluded by a particularly virulent type of malaria
to which the Chinese from higher altitudes were vulnerable.2
One southern pilgrimage and modest trade route that linked China with
the Buddhist sites in what is now India and Nepal went through northern
Burma. The early, extensive descriptions of the cities and culture of the pre-
Burman Pyu people of central Burma were from Chinese travelers.3 The
Chinese destruction of the Nanchao Kingdom centered at Dali in Yunnan in
832, in some manner yet to be completely researched, probably affected the

2 Gordon Seagrave, known as the Burma Surgeon. Personal interview, Namkham, 1958.
3 See, for example, Janice Stargardt, The Ancient Pyu of Burma, Singapore: PACSEA Cam-
bridge, in association with the Institute of Southeast Asian Studies, 1990.

xxi

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 Modern ChinaMyanmar Relations

movement of both the Thai and Burman people southward. The Mongols of
the Yuan Dynasty captured the Burmese capital of Pagan in 1287, and during
the Ming and Qing Dynasties there were sporadic Chinese attempts to invade
the Burmese kingdoms (176569), and some four attempts were defeated by
the Burmese, as the Chinese were far from their logistic bases. One Burmese
king is noted in Burmese lore as the king who ran away from the Chinese
(Dayokpyemin).
Even before the British completed their tripartite conquest of Burma in three
wars (18221824, 1852, 1885), and the longer pacification of the whole country
after the conclusion of the Third Anglo-Burmese War, Chinese influence in
Burma was in evidence through trade,4 immigration, the investiture of local
chieftains with the symbols of authority as conferred by the court in Beijing,
and through tribute paid by the Burmese court itself to the Chinese, and mutual
official delegations. During King Bodawpayas reign (17811819), five Chinese
delegations visited his capital at Amarapura, and four Burmese delegations
went to Beijing. These residual influences were later reflected in some maps
from both the Chinese Nationalist and early Chinese Peoples Republic, eras
in which northern Burma, along with other parts of mainland Southeast Asia,
were Chinese territory. The Muslim Panthay rebellion in Yunnan (18561873)
and its suppression by Qing authorities prompted the emigration of significant
numbers of Chinese Muslims, some of whom settled in central Burma at the
capital, and in northern Burmese cities such as Lashio and Bhamo.5 Since the
latter town was on the Irrawaddy and navigable to the Bay of Bengal, it was the
focal point of much of the early trade by mule caravan to and from Yunnan.6
The British sent a number of expeditions into China from Burma to ascertain
the feasibility of increasing trade with Yunnan.7 As the British expanded their
economic interests in Burma, especially with the investment in rice production
in the Irrawaddy Delta, which especially flourished after the opening of the
Suez Canal in 1869, Chinese from southeast China (Fujian and Guangdong
Provinces) arrived by sea. There is evidence that some of the local sawbwas

4 In 1827, trade was estimated at 228,000. D. G. E. Hall, Burma. London: Hutchinson

House, 1950, p. 119.
5 There are many discrepancies in the population estimates of the Panthays. In 1931 in Pan-
glong on the China border there were said to be 5,000, but in all Burma in 1911, according
to the census of that year, there were 2,202; in 1921 1,517, and in 1931, 1,106.
6 In 1855, there were said to be some 2,000 Chinese families living near the capital and 500
in Bhamo. John Cady, A History of Modern Burma, Ithaca: Cornell University Press, 1958,
pp. 4556.
7 The most famous of such expeditions was that of the Margary. The Journey of Augustus
Ramond Margary from Shanghai to Bhamo and Back to Manwyne. London, 1876.

xxii

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 Introduction

(hereditary maharajas) in the area of the Shan State were invested as paying
tribute to, and under the protection of, the Chinese Emperor.8 Some were
known as the tusi. More importantly, the Burmese court at Ava and later at
Mandalay sent tribute in the form of local products to the court at Beijing
in ten-year cycles. When the British completed their seizure of the Burmese
state, they signed a treaty with the Chinese in 1887 in which the British agreed
that the tribute (although the term was not used) would continue but would
be delivered by members of the Burmese race, and not personally by the
British themselves.9 The process was never implemented, however.10 Britain
also signed an agreement with China for rights (the annual rent was 1,000
rupees) to the small parcel of borderland called the Namwan Assigned Tract
through which an important road passed linking the Shan and Kachin areas of
the country. It was only returned to China as part of the Sino-Burmese border
settlement of 1960 (see Chapter 3).
The Sino-Japanese War affected Burma as it became the supply route
to the Nationalist forces in Chinas southwest. Burma played a pivotal role
in the supply of war material through the construction of the Burma Road
(completed for motor traffic in 1938). It ran from the railhead in Lashio in the
Burmese Shan State to the China border and then to Kunming, the capital of
Yunnan Province. Lashio was connected by rail to Mandalay and the seaport
of Rangoon.11 Later, in World War II, Japan invaded Burma in its attempt
to surround China, to garner its natural resources, and as a prelude to its
attempted conquest of India. During World War II, Burma was one of the
most fought-over areas in the Pacific theatre. As the Japanese advanced and the
British retreated toward India, a scorched earth policy was implemented that
destroyed much of the states infrastructure. Three years later, when the British
advanced back into Burma, the Japanese applied much the same policy. The
country was devastated.12

8 See, Intelligence Branch, Army Headquarters, India. Frontier and Overseas Expeditions
from India. Volume V. Delhi: Mittal Publications. Reprinted 1983. Chapter on the Shans,
pp. 357399.
9 Ibid., Appendix VIII for the text of the treaty, p. 467. Inasmuch as it has been the practice
of Burma to send Decennial Missions to present articles of local produce, England agreed
that the highest authority in Burma shall send the customary Decennial Missions; the
members of the Missions to be of Burmese race.
10 Personal communication, Michael Carney, SOAS, University of London.
11 There were plans to extend the railroad to the China border in April 1941, but this was
blocked by the Japanese invasion. Plans in 2011 call for its extension to meet a Chinese rail
link from Kunming.
12 The British historian Hall said Burma suffered more from the war than any other Asiatic
country. See Hall, Burma, p. 172.

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 Modern ChinaMyanmar Relations

The economic role of the Chinese in Burma during the colonial period was
certainly not as extensive as that of the Indians (all those from the subconti-
nent), since Burma was governed as a province of India until 1937. Yet it was
important, for in the early period most Burmese were not acquainted with a
monetized economy, and were thus subject to exploitation in terms of trade
and debt. The Chinese, with their own clan and linguistic associations, were
able to play important roles in the economy in trading as they had private ac-
cess to sources of credit through these groups.
The Burmese census of 1983 calculated the number of Chinese as 233,470,
of whom 191,699 were Buddhist and 2,897 Sunni Muslim (68 were Shiite).13
These figures probably exclude an extensive number of Sino-Burmese who
identify themselves as Burmese. Many such individuals attained considerable
prominence in Burmese affairs, and include General Ne Win, General Khin
Nyunt, Brigadier Aung Gyi, General San Yu, Colonel Kyi Maung, General
Maung Aye, and others, although all of the above identified themselves as
Burman and played by Burman rules. Since the legal opening of the Sino-
Burmese border to trade, following the coup of 1988, and the self-destruction
of the Burma Communist Party a year later, large-scale illegal Chinese im
migration has occurred with extensive, new penetration of the economy,
especially in central and northern Myanmar. There are estimates of perhaps
two million illegal Chinese in Myanmar.14
Since the independence of Burma in 1948 and the founding of the Peoples
Republic of China in 1949, bilateral relations have evolved with strategic
implications for both states and for the region. Those relations for the first
forty years were in the shadow of the Cold War and the formulation and
reformulation of Chinese domestic and foreign policies. Thereafter, in the
post-Cold War era, a different set of traditional and non-traditional concerns
emerged involving the interplay of both strategic and economic interests.
Myanmar as a nexus in Sino-Indian relations assumed a new and vital role.15
Myanmars domestic politics from independence ranged from civilian rule to a

13 Burma 1983 Population Census. Rangoon: Immigration and Manpower Department, Min-
istry of Home and Religious Affairs. June 1986. Table 11, pp. 257/58. A more extensive
discussion of the Chinese in Burma/Myanmar follows in Chapter 8.
14 A former Burmese military official cited that figure. Personal interview, Yangon. Foreign
embassies have variously estimated the Yunnanese population of Lashio at 50 percent, and
that of Mandalay, the seat of Burman culture, at 20 percent.
15 In an attempt to influence the incoming Bush administration to consider strategic issues
associated with Myanmar, especially related to IndiaChina relations, this author organ-
ized a conference in February 2000 in Washington on Burma/Myanmar as nexus on the
Bay of Bengal. Unpublished report. It had no discernable effect.

xxiv

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 Introduction

socialist military junta, a military-dominated socialist single-party mobilization

system along an Eastern European model, to an authoritarian military regime
and in 2011 a discipline-flourishing democracy. These varied administrations
influenced its foreign policies and especially Sino-Burmese relations. All had
vital roles in the interplay between China and Myanmar.
The period since Burmese independence is especially germane to contem-
porary policy decisions in the current era. This book is devoted to clarifying,
or at least exploring, the ramifications of the Sino-Burmese present and future
relationships.

Scope of the Study

The importance of Sino-Burmese relations has been evident in policy articles
over the past two decades, even if it has not been publicly discussed in official
U.S. discourse for much of that period. A wide range of articles and studies have
explored aspects of Sino-Burmese bilateral ties, some dating from the early
1950s. These have been mentioned in the bibliography, and cited in the text
when appropriate. The authors acknowledge their contribution to the current
analysis. Most articles have concentrated on Chinese assistance to the Burmese
military regime since 1988, and have castigated China for its perceived role
supportive of an authoritarian Burmese military government that has denied
many rights to its own diverse peoples. Few of these essays have used Chinese
sources and discussed the subject in the context of Chinas domestic political
and economic situation, regional or sub-regional integration, and Chinas
stakeholders at different administrative levels in Myanmar. This book employs
declassified official Chinese records that illustrate Chinese attitudes toward
the various Burmese governments and personalities, and some of the internal
Burmese policies. It is an attempt to fill the gaps in a comprehensive view of the
connections, or at least narrow our lack of understanding of them, which, as we
will demonstrate, are composed of complex and multiple strands at different
administrative levels in both countries, and are constantly changing.
The book is a product of joint authorship. Both Professor Fan Hongwei
and David I. Steinberg have written extensively on Myanmar, and both were
fortunate to come together in 2008 under Georgetown UniversityXiamen
University auspices to spend several months in beginning drafting of it.
Professor Fan has made extensive use of Chinese sources, but his knowledge
of the literature on Myanmar is far more catholic. A large segment of the
footnoted sources are from the Chinese, and Professor Fan has provided the
necessary translations.

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 Modern ChinaMyanmar Relations

This study is divided into four parts. Part I concerns the Cold War period,
which equates to the civilian period in Burma (19481962) and the socialist
military era (19621988). Part II concentrates on the post-Cold War period,
and covers the formation in Myanmar of the military State Law and Order
Restoration Council (SLORC, 19881997), and its successor the State Peace
and Development Council (SPDC, 19972011). Cold War attitudes did,
however, persist in many circles and in many policies. Part III is devoted to the
international implications of the bilateral Sino-Burmese relationship, and Part
IV concentrates on the dilemmas that the various actors face. Part I and Part
II have short preludes placing the bilateral relationship in the context of the
internal Burmese political milieu.
This book is neither a paean to nor a critique of either the Burmese or
the Chinese political scene. These have been extensively written about in
other studies. This is, rather, an attempt to provide a balanced analysis of an
important bilateral relationship with profound implications for the region.
There is no party or actor on which our criticism has not been levied to some
degree. This study has been written in the hope that a bilateral Sino-Burmese
relationship will develop that will improve the lives of the peoples of both states
while providing the stability necessary for such progress and the international
support that may be necessary.
There are no solutions to many of these dilemmas, and actions toward
resolving any are likely to have unintended consequences on others. An
immediate dilemma may in fact not be the most important over a longer
term. The hope, however, is that by articulating the issues, serious study of
the relationship between The Peoples Republic of China and the Union of
Myanmar may contribute to their amelioration, if not resolution.

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 Part I: The Vicissitudes of Sino-Burmese
Relations During the Cold War

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Steinberg book.indd 2 19/04/2012 16:04
 Prelude: Setting the Stage

I ndependent, post-colonial Union of Burma was born in fragile unity, a

unity that had been lacking in both the pre-colonial and colonial eras,
a lack that still persists, perennially haunting the state. Since 4 January
1948, on independence from Britain, Burma has never been able to fashion a
multiethnic state in which power and finances were distributed in a manner
deemed fair to its diverse populations.1 That ethnic issue has bedeviled every
government since that time, and is yet to be resolved.2 Whether as the Union
of Burma or, later, The Socialist Republic of the Union of Burma, and still
later (since 1989) The Union of Myanmar, and since 2011 The Republic
of the Union of Myanmar, that very concept of Union has been subject to
differing, antagonistic interpretations from quasi-centralized civilian rule,
to authoritarian unitary military control, to minority proposed but rejected
federal structures, to blatant secessionist attempts, to an ambiguous relation-
ship following the 2010 elections. The issue presently affects Sino-Burmese
ties along their long, shared frontier. Little wonder that the Burmese militarys
prime goal remains national unity, at almost any cost.
If Burma was a fragile state at its inception, its pregnancy was marred
by the assassination in July 1947 of its chief independence negotiator, Aung
San, who more than any other single individual had the trust of the diverse
populations, trust that rapidly deteriorated with his death. The potential
fragmentation of the state began with two communist rebellions, the mutiny
of many left-wing paramilitary groups, the Chinese Nationalist Kuomintang
incursion into its northern region, the Karen insurrection in the first

1 Aung San famously said that if the Burmans got one kyat (Burmese currency), the minori-
ties would get the same. Some interpreted this as an even split between the Burman major-
ity and seven major minorities; others that the Burmans should get one-eighth. Neither
has ever become a reality.
2 See David I. Steinberg, The Problem of Democracy in Myanmar: Neither Nation-State
Nor State-Nation? [University of Hong Kong conference, June 2011]. This is an applica-
tion to Myanmar of Alfred Stepan, Juan J. Linz, and Yogendra Yadavs article The Rise of
State-Nations, Journal of Democracy, Vol. 21, No. 3, July 2010, pp. 5068.

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 Modern ChinaMyanmar Relations

Map 3: Main ethnic groups in Myanmar

(partly based on a map in Martin Smith,
Burma: Insurgency and the Policy of
Ethnicity, by permission of the author)

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 Prelude: Setting the Stage

Plate 1: U Nu, Zhou Enlai and Zhu De, Beijing, 25 October 1956 (photograph courtesy Cheng
Ruisheng)

years of independence, one could realistically only speak of a Rangoon

government.
This fragmentation was reflected as well in the personalization of power.
Such intense rivalries split the Anti-Fascist Peoples Freedom League, the
ruling civilian coalition since independence. The threat of civil war led to the
constitutional coup in 1958. The civilian legislature, under Prime Minister U
Nu, voted to allow the military to take over government for six months (later
extended to 18 months); if the legislature had not approved, the coup would
have taken place in any case. After eighteen months of effective military rule,3
the military supervised an election that brought back into power a civilian
government led by U Nu, a government to which the military was antithetical.
Its increasingly ineffective rule was ended by the second military coup of 2
3 The Burmese military in this period was one of the models Western social scientists used
to describe the third-world military as perhaps the best hope for rational, forward-think-
ing, developmental administrations. This was, of course, in the Cold War period and such
military-ruled states were anti-communist. At the close of their caretaker administra-
tion, the military published its analysis of its rule: Is Trust Vindicated? A Chronicle of Trust,
Striving, and Triumph. Being an Account of the Accomplishment of the Government of the
Union of Burma, 1 November 19581 February 1960. Hercules was pictured on the dust
cover cleaning the Augean stables.

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 Modern ChinaMyanmar Relations

March 1962, ostensibly to protect the Union and oppose minority secessionist
plots. The Burmese Way to Socialism was immediately introduced deemed
at the time to be the beginnings of perpetual military control, although
eventually in civilianized form.
The bureaucratic failure of the intense, mal-administered socialism of the
Burma Socialist Programme Party, which the Chinese viewed with disdain and
suspicion, resulted in abject economic collapse and the proliferation of ethnic
rebellions. The dire economic and political malaise was compounded by the
military-mandated 1974 constitution and elections that established a single-
party, authoritarian, unitary, socialist state along an Eastern European model.
A portion of every significant ethnic minority group went into rebellion. The
country essentially eschewed normal economic ties with much of the world
beyond, and economically became dependent on Japanese foreign economic
assistance.
Ironically, on independence Burma had been considered by many observers
potentially to become the most developed of all Southeast Asian states. But
by the 1980s with mismanagement rife, an increasing economic deterioration
resulted as export prices fell and prices on necessary imports of raw materials
and spare parts increased. By December 1987, Burma was essentially bankrupt
with foreign exchange reserves of some US$30 million; the United Nations
declared it a least developed nation.4 A major and ill-conceived currency
demonetization (the third under military rule) in September 1987 created
further economic and social chaos, raising rice prices and the demand for
smuggled Chinese consumer and other products, and contributed, along
with pent-up political frustration, to the peoples revolution in the spring and
summer of 1988. It was brutally suppressed by the military resulting in the third
coup of 18 September 1988, designed to shore up a collapsed military control.
This engendered a new military era, which approximately coincided with the
end of the Cold War and the collapse in 1989 of the Burma Communist Party,
all of which are the subjects of Part II of this volume.
Burma/Myanmar has always been conscious of existing in Chinas vast
shadow. As a form of self-protection, Burma early formulated a policy that
was ostensibly neutralist in the great power struggles following the end of
World War II. That was the essential reason why Burmas U Thant, former

4 Burma lobbied for that designation, for it lowered interest rates on loans. (personal inter-
view, Rangoon). However, Burma did not really qualify because its literacy rate was too
high, but this was ignored. The government never formally announced this to the people
(it was buried in an economic document) because it was so embarrassing.

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 Prelude: Setting the Stage

Plate 2: ChinaMyanmar Memorial for Friendship, Mangshi, Yunnan province (photograph

David Steinberg)

Burmese ambassador to the United Nations and U Nus secretary, was chosen
as Secretary General of the United Nations (19611971); he was acceptable
to both power blocs. Although neutralism was decried by both the Peoples
Republic of China and the U.S. Department of State, for obviously antithetical
reasons, it served the Burmese well in those turbulent times. But, as was noted
by Pettman in 1973, the proximity of the PRC dominated Burmas foreign
political concerns, and its leaders evolved a policy of non-alignment that sought
to prevent or at least minimize Chinese intervention in Burmese affairs.5 Pl
During the Cold War, relations between China and its peripheral countries
were critical elements in Chinas evolving foreign relations. Burmas develop-
ment was hostage to the triangular relations among China, the Soviet Union,
and the U.S. (together with the Colombo Plan). Thus, ChinaBurma relations
were one of highlights in Beijings peripheral diplomacy in the 1950s and
1960s. Burma was the first non-communist country to recognize the PRC.
The Cold War was the defining factor in Sino-Burmese relations both during
the Burmese civilian administration (19481962), and that of the military-led
Burma Socialist Programme Party period (19621988). Sino-Burmese ties, af-
ter a frosty beginning, became cordial, and were termed Pauk Phaw before 1967.
The term Pauk Phaw, which may be translated as fraternal but has a closer
Chinese connotation of siblings from the same womb, was used uniquely for

5 Ralph Pettman, China in Burmas Foreign Policy. Canberra: Australian National University,
Contemporary China Papers No. 7, 1973, p. 1.

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 Modern ChinaMyanmar Relations

Burma. A major memorial to this relationship was built in 1956 in the Yunnan
city of Mangshi (see Plate 2) and celebrated by Premier Zhou Enlai and
Burmese Prime Minister U Ba Swe. It is still a center of ceremonial bilateral
occasions. Chinese President Hu Jintao invoked the Pauk Phaw relationship
again when Senior General Than Shwe visited Beijing in September 2010.
Prior to 1967, both leaderships maintained frequent exchanges of visits
and contacts between the two countries. Because of its neutralism and non-
alignment, Burma became an important observation post for both China and
the West, and later in Sino-Soviet friction. With the encirclement of China
by the West, Burma was the only friendly non-Communist territory through
which the Chinese Communists physically could go abroad, and through which
delegations and official missions from Africa, Latin America, and the rest of Asia
to China could travel with ease.6 Former Prime Minister Winston Churchill
remarked that Burma was a gap in the encirclement campaigns against China.7
This warmth only developed during and after satisfactory negotiations on
a number of critical bilateral issues that had to be resolved. These included
the status of the overseas Chinese in Burma; the presence in northern Burma
of Kuomintang (Chinese Nationalist) remnant troops8 that had fled from
the Chinese communists and which were assisted by Taiwan and the U.S.s
CIA; the rebellion of the Burma Communist Party with strong Chinese
influences; and the solution to the problem of the Sino-Burmese border,
which both the Chinese Nationalists and the PRC had not recognized. China
went to considerable lengths not only to assuage Burmese concerns, but
also to demonstrate through the example of its benign intentions toward the
Southeast Asia region and other states along its periphery. Nevertheless, the
Chinese were quietly dubious about the authenticity of Burmese socialism,
and made scathing private remarks about the Burmese leadership.
The closeness of the relationship came to an end, however, when the intern
al Chinese chaos of the Cultural Revolution spread overseas.9 By 19701971,
China and Burma had re-established closer ties, but it took some years before the
wound that incident created was healed. Efforts were made to increase Chinese
6 William C. Johnstone, Burmas Foreign Policy: A Study in Neutralism, Cambridge: Harvard
University Press, 1963, p. 199.
7 Record of Chairman Mao Tsetungs Talk with Visiting Burmese Vice Prime Ministers, U
Ba Swe and U Kywa Nyein, Archive of Ministry of Foreign Affairs, Peoples Republic of
China (hereafter AFTA), No. 105-00339-01(1).
8 When the Qing Dynasty took over in China, some Ming Dynasty troops from the previ-
ous regime in 1644 retreated into what is now Burma, much as the Kuomintang did in
194950.
9 For a general discussion of such problems, see Roderick MacFarquhar and Michael
Schoenhals, Maos Last Revolution, Cambridge: The Belknap Press, 2006. pp. 222229.

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 Prelude: Setting the Stage

economic assistance and to project Chinese cultural soft power. Cultural

exchanges were an important element of this strategy. Irritants remained,
however, such as Chinese support to the Burma Communist Party. At the same
time, Burmas status in Chinese foreign relations as a buffer state to counter U.S.
containment declined. Rangoon was not as important to Beijing as before due
to the important changes in ChinaSovietU.S. triangular relations, particularly
the SinoU.S. rapprochement, and the changes in Chinas domestic politics and
economy in the 1970s and 1980s. China also increasingly de-ideologized for-
eign policy and no longer perceived the outside through some ideological lens
(although its strategic focus was ever-present). China gradually abandoned the
ideal of world revolution and focused on economic modernization. As a result,
China was losing interest in the isolated and economically backward Burma.
Nevertheless, the relationship underwent a transformation following the
Burmese coup of 1988, which approximately coincided with the end of the
Cold War, the demise of the Burma Communist Party, and the growing need
of imported energy to feed Chinese industrial expansion. The closeness of the
relationship between China and Myanmar since the formation of the Burmese
military administration following the coup of 18 September 1988 (the SLORC,
State Law and Order Restoration Council; SPDC, State Peace and Development
Council) belies the turbulence of the earlier period, and is often overlooked.
Indeed, Beijings attitude toward Burma was initially changed by political upheav-
als: the 8 August 1988 (8-8-88) suppressed popular uprising in Rangoon and the
Tiananmen Square massacre in Beijing in 1989. Each resulted in international
sanctions against the state, and drove the two states closer together. The forces
behind the vicissitudes in the bilateral ties were essentially a product of domestic
Chinese programs and relations that reverberated in its foreign policy.
The closeness of the relationship between China and Burma since the
formation of a Burmese administration on independence was also strongly
affected by the personal ties between the leaders of both countries. During this
period, Burma was effectively responding to Chinese actions, but not in an
obsequious or demeaning manner. It was able to exert pressure on the Chinese
on occasion when the Chinese wanted to use Burma as a positive policy
example to other states.
By 1988, the outstanding issues that were divisive in the bilateral relationship
had been resolved, except for the continued existence of the Burma Communist
Party, and Chinese foreign policy had abandoned its ideological fervor. The
relationship underwent a transformation following the Burmese coup of 1988.

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 1
Sino-Burmese Relations 19491953:
Suspicions and Equivocations

S ino-Burmese relations were one of the highlights in Beijings peripheral

diplomacy in the early period (1950s1960s) after the establishment
of diplomatic relations. Although overshadowed by Korea, the Taiwan
issue, and the Sino-Soviet split, Sino-Burmese relationships were formed
within the context of a pervasive Chinese world-view of revolutionary theory,
resulting in suspicions that were only gradually allayed. Strong left-wing pres-
sures within Burma for good relations with the PRC were also apparent, not
only within the two communist parties in revolt but among the above-ground
National Unity Front and other political forces that sought recognition of
China and were suspicious of the imperialist powers Britain and the U.S. At
this stage in the newly forming relationship, China took the lead.

The Ideological Context of Sino-Burmese Relations

In the history of PRC foreign relations, Burma held several first places. Burma
was the first non-communist country to recognize the PRC, the first county to
settle a border dispute with China, and the first to sign a treaty of friendship
and mutual non-aggression with China. But Beijing did not attach much
importance to its southern neighbor in the early period (19491953) after the
establishment of diplomatic relations; bilateral ties then were cold. It was only
in 1954 that Burma engendered some enthusiasm in Beijing.
The Cold War featured periods of relatively calm confrontation and some
real wars, sometimes called proxy wars between two blocs led by the U.S.
and the Soviet Union. The evaluation of the U.S.USSR relationship during
the post-1945 years is configured by two slogans: the Cold War and Yalta. The
Cold War symbolized total antagonism. Yalta, to the contrary, symbolized
mutual accommodation (or for some a sell-out by the U.S. to the USSR).1
1 Immanuel Wallerstein, The Global Picture, 194590, in Terence K. Hopkins and Im-
manuel Wallerstein (eds), The Age of Transition: Trajectory of the World System 1945 2025,
London: Zed Books, 1996, p. 216.

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 Sino-Burmese Relations 19491953: Suspicions and Equivocations

The Cold War was cold in Europe, but it was quite hot in Asia. It was
cold in that neither the U.S. nor the Soviet Union used its military in combat
against the other at any time. The Yalta agreement was an agreement that
there would be no violence, and that neither side would attempt to change the
frontiers, primarily in Europe, that were established in 1945.2 How did the CCP
and Rangoon perceive the Cold War, especially the hot war in Asia? How did
the two countries see their places in the world in the early period of Cold War?
How did the two new regimes think of each other in the early 1950s? Answers
to these questions are important to understand ChinaBurma relations from
1949 to 1953.
U Nu articulated Burmese attitudes toward the two blocs in the Leftist
Unity Program in 1948: Burma should secure political and economic rela-
tions with Soviet Russia and the democratic countries of Eastern Europe in
the same way as we are now having these relations with Britain and the United
States.3 The program was considered astonishing and most disagreeable
by the British.4 Although many Burmese also admitted that the British among
the three powers the British, the Americans, and the Russians were the
closest to us for a variety of reasons, and our relations with the British are thus
absolutely straightforward, they still stressed that our relations with other
countries must be equally straightforward, and we must make friends with
them and our relations with them must be the most cordial.5
At the end of 1949, U Nu elucidated in a speech: Our circumstances
demand that we follow an independent course and not ally ourselves with
any power bloc ... we must not lay down a Communist programme merely
because Chinese Communists are overrunning China and therefore we must
adopt a pattern acceptable to them ... The only political programme which
we should pursue is the one which we believe to be the most suitable for
our Union whatever course the British, the Americans, the Russians and the
Chinese Communists might follow.6 U Nu explained that Burma must be
2 Immanuel Wallerstein, What Cold War in Asia? An Interpretative Essay, in Zheng Yang
wen, Hong Liu and Michael Szonyi (eds), The Cold War in Asia: The Battle for Hearts and
Minds. Leiden and Boston: Brill, 2010, pp. 1920.
3 U Nu: Leftist Unity Program, [25 May 1948], Roger M. Smith (ed.), Southeast Asia:
Documents of Political Development and Change. Ithaca and London: Cornell University
Press, 1974, pp. 101102.
4 British Documents of Foreign Affairs: Reports and Papers from the Foreign Office Confidential
Print, Part IV from 1946 through 1950, Series E Asia 1948, Vol. 7, Bethesda: University
Publications of America, 2001, pp. 19 and 37.
5 Thakin Nu, From Peace to Stability, The Ministry of Information, Government of the Un-
ion of Burma, 1951, pp. 2122.
6 Ibid., pp. 5152.

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 Modern ChinaMyanmar Relations

friendly with all foreign countries. Our tiny nation cannot have the effrontery
to quarrel with any power.7 A small, weak nation like ours, howsoever we
strengthen our defences, can never successfully defend ourselves alone ... The
explanation is that we are a nation of only 17 million people ... Take a glance
at our geographical position Thailand in the East, China in the North, India
in the West, and stretching southward, Malaya, Singapore and so on. We are
hemmed in like a tender gourd among the cactus. We cannot move an inch.8 U
Nu vividly illuminated Burmese perceptions of world politics and its position.
Following this logic, Rangoon would maintain good relations with China
either a Communist or Kuomintang (KMT) regime.
Chinese relations with Burma 19491953 were during the formative period
of PRC foreign policy. Before its full formation, PRC foreign policies and prin-
ciples were established by the leaders of CCP based on Chinese revolutionary
theory, experience, and practice, and the obvious antagonisms between the
two world camps. The CCP designed its relations with Asian countries and the
world from its revolutionary viewpoint, classifying different countries by their
ideological leanings. All countries beyond the socialist camp were imperialist
or controlled by imperialist or anti-revolutionary forces.9 This determina-
tion was based on the CCP theory of two camps and the New Democratic
Revolution, and its revolutionary experience in the civil war.
At the end of 1947, the CCP believed that the Chinese peoples revolutionary
war has now reached a turning point.10 In May 1948, the CCP professed that
there was not a third road in Chinas civil war. There are only two roads in
China now: retain the enemys arms and privileges, namely the semi-feudal
and semi-colonial, dictatorial line followed by the big landlord class and the big
bourgeoisie ... or annihilate the enemys arms and privileges.11 As the KMT
retreated in defeat, the CCP was convinced of an earlier victory in the civil
war than it originally estimated. As we now [1948] see it [the war situation],
only another year or so may be needed to overthrow it [the KMT government]
completely.12 The CCPs victory solidified a firm belief in its revolutionary
theory and experience. In its eyes, The law of historical development is that

7 Ibid., p. 53.
8 Ibid., pp. 98102.
9 Niu Jun, The Formation of Diplomatic Policy in New China and its Main Characteris-
tics. Historical Research, No. 5, 1999.
10 Selected Works of Mao Tsetung, Vol. 4, Beijing: Peoples Press, 1991, p. 1243.
11 Chinese Central Archives (ed.), Selected Documents of the CCP Central Committee, 1948,
Vol. 17, Beijing: Party School of the Central Committee of the CCP Press, 1992, p. 643.
12 Selected Works of Mao Tsetung, Vol. 4, p. 1361.

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 Sino-Burmese Relations 19491953: Suspicions and Equivocations

Plate 3: Mao Tsetung declares the founding of the Peoples Republic of China, Beijing, 1 October
1949. Despite a warming of Sino-Burmese relations in the 1950s, Mao remained personally cool
towards Burma, whose neutralist policies he regarded as implicitly pro-Western.

only by means of revolutionary war can the class be eliminated. The war can be
permanently eliminated only when the class is abolished.13
Mao determined that if there were to be revolution, there must be a revo-
Pl
lutionary party.14 Under such a revolutionary viewpoint, the CCP could not
accept and recognize Burmas independence, the legitimacy of U Nus govern-
ment, or its foreign policy. As a result, the CCP thought the nationalism move-
ment of Burma was unsuccessful, regarded Aung San as a traitor, and U Nu as
a running dog of imperialism.15 U Nus government was a reactionary regime
subject to foreign imperialism and British imperialisms puppet.16 On 25
May 1948, U Nu announced the Leftist Unity Program, which proposed To
form a league for the propagation of Marxist Doctrine, composed of Socialists,
Communists, Pyithu Yebaws and others who lean towards Marxism and to
really discuss and propagate the writing of Marx, Engels, Lenin, Stalin, Mao
Tsetung, Tito, Dimitrov and other apostles of Marxism.17 The CCP deemed
13 Military Works of Mao Tsetung Since the Establishment of the PRC ( January 1959February
1976), Vol. 3, Beijing: Military Science Press, Central Party Literature Press, 2010, p. 69.
14 Selected Works of Mao Tsetung, Vol. 4, p. 1357.
15 The Leader of BCP Declaimed Against Reactionary Government, Peoples Daily, 3 April
1948.
16 U Nus Tricks Go Bankrupt, Peoples Daily, 25 August 1948.
17 U Nu: Leftist Unity Program, p. 102.

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 Modern ChinaMyanmar Relations

that U Nus government was using the trick of false Marxism to deceive the
Burmese people and save its increasingly dying regime.18 Only the Burma
Communist Party (BCP) was identified as a real revolutionary party. Only the
BCP could lead the Burmese people to win the freedom, peace, and independ-
ence of Burma.19 Consequently, Mao still called Burma a semi-independent
and almost independent state even after the shift of ChinaBurma relations in
1954. During the Cold War period, before Beijing de-ideologized its foreign
policy and no longer perceived the outside through some ideological lens,
its perceptions of Rangoon and the BCP did not change even when the two
countries maintained cordial relations. Beijings Burma policy shift in 1954 was
nothing more than opportunistic and pragmatic when facing the increasingly
national security pressures caused by the U.S.
In September 1947, the Communist Party Intelligence Agency conceived
the world as split into two camps: socialist and imperialist. The CCP soon
accepted this theory. In his article, Internationalism and Nationalism, Liu
Shaoqi in December 1948 emphasized that neutralism was impossible during
the period of antagonism between the two opposing camps,20 and in June 1949
he argued that neutralism was deceptive. Mao Tsetung also stated that there
was no third way and decried fence-sitting.21 Countries pursuing neutralist
policies, like Burma, thus were regarded as in the Western camp and were not
on the list with which China first needed to establish close relations.
During Liu Shaoqis visit to the Soviet Union in August 1949, he reported
to Stalin that In East Asian countries like Vietnam, Malaya and Burma, the
proletariat has no right to pursue revolution, and the means of revolutionary
struggle has been or will be armed guerrilla warfare.22 In the meeting of labor
unions in Asia and Australia in November 1949, Liu declared that, We should
give all kinds of moral and physical aid to the proletariat and to labor needing
help in the countries reigned by capitalism and imperialism. China should,
thus, shoulder the international responsibility to aid them in all capitalist
countries, particularly in Asia.23 Continuing in this vein, in 1950 Liu stated in
a CCP document that, It is the CCPs and the Chinese peoples duty-bound

18 U Nus Tricks Go Bankrupt, Peoples Daily, 25 August 1948.

19 Fang Hui, Which Counties Are People Liberation War Going on?, Peoples Daily, 7 April
1949.
20 Liu Shaoqi, Internationalism and Nationalism, Beijing: Peoples Press, 1951, p. 25.
21 Selected Works of Mao Tsetung, Vol. 4, p. 1473.
22 Works of Liu Shaoqi Since the Establishment of the PRC, Vol. 1, Beijing: Central Party Lit-
erature Press, 2005, pp. 5051.
23 Ibid., p. 177.

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 Sino-Burmese Relations 19491953: Suspicions and Equivocations

international responsibility, and one of the most important means of consoli-

dating Chinas revolutionary victory in international circumstances, to use all
possible measures to aid the Communist parties and people in the oppressed
Asian nations, and to struggle for their liberations.24

The Establishment of Diplomatic Relations

Following Burmas independence in January 1948, Rangoon monitored
closely the status of Chinas civil war between the CCP and the KMT.
When the Peoples Liberation Army launched their attacks on the KMTs
contravallation along the Yangtze River, Burma began to pay more attention
to internal Chinese political and military affairs. The presence of a disbanded
Chinese division on the border of Kengtung in 1947 had already caused
Burmese unease. Although there were no signs of Chinese infiltration into
Northeast Burma on more than the scale of the usual seasonal movement
of coolie labour, there was a growing fear that the communist success in
China would provide encouragement to the communists in Burma at a
moment when their strength seemed to be on the wane.25 In July 1949, high
officials of the Burmese ruling coalition, the Anti-Fascist Peoples Freedom
League (AFPFL), considered the potential international influence of Chinas
revolution. During the Burmese Foreign Ministers visits to the U.K. and the
U.S. that same year, he discussed the potential impact on Burma of the CCPs
seizure of power.
On 1 October 1949, Mao Tsetung announced in Tiananmen Square that
This government is the only legitimate government to represent the people of
the Peoples Republic of China. It is ready to establish diplomatic relations with
all foreign governments that are willing to abide by the principles of equality,
mutual benefit, and mutual respect for each others territory and sovereignty.26
This announcement was delivered to U Myint Thein, Burmese Ambassador
in Nanjing, on the same day. Rangoon thus had to address the question of
recognizing the new Beijing government. U Myint Thein was soon recalled to
Rangoon to consult on this problem. With the formation of the PRC, leftists in
Burma began a campaign for the AFPFL government to recognize the Peking
regime. This pressure was buttressed by some forty Chinese associations in

24 Chronicle of Liu Shaoqi: 18981969, Vol. 2, Beijing: Central Party Literature Press, 1996,
p. 245.
25 British Documents of Foreign Affairs, Vol. 9, p. 7.
26 Liao Zhengbao (ed.), Declassified Diplomatic Documents: Archives on Establishment of Dip-
lomatic Relations by the PRC, Beijing: China Pictorial Press, 2006, p. 9.

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 Modern ChinaMyanmar Relations

Burma, led by the Chinese Chamber of Commerce and the Chinese Trade
Association, all favoring recognition.27
With internal pressure for recognition steadily mounting, Foreign Minister
U E Maung, who was visiting London, declared on December 3 that, We
shall have to recognize the new government of China very soon. Nothing has
been decided yet, but it is a question of recognizing facts. Back in Rangoon
on December 6, U E Maung told press reporters that Burma would recognize
Communist China before Christmas and it would mean the automatic break
ing of relations with the Nationalist Chinese government.28 According to the
memoir of the Indian Ambassador to China (1948 to 1952),
Indian government recognition of the new Government of China should
be conveyed to Peking by the end of the year [1949]. For some reason
Burma was anxious that it should be the first State outside the Soviet bloc
to recognize the New China and we were approached with a request to
wait for a few days in order to give Burma the start. In due course, Burma
announced its recognition and we followed in a few days.29

Actually, that some reason was that the Burmese hoped to avert com
munist Chinese hostility.30 A declassified document of the British Foreign
Ministry reveals that the Burmese overestimated the seriousness of the CCPs
threat then. They firmly believed that the Chinese would not hesitate to
attack Burma. They would probably advance 150 miles into Burmese territory
and occupy almost the entire Kachin state, a very valuable part of Burma where
the Burmese Corporation now operates.31
On 16 December, Foreign Minister U E Maung gave a note to Zhou
Enlai that Rangoon decided to recognize the PRC, and hopes to establish
diplomatic relations and exchange diplomatic envoys. Two days later, Zhou
Enlai replied that Beijing agreed to establish diplomatic relations with Rangoon
and exchange diplomatic envoys on the premise of Burma breaking relations
with the KMT government.32
However, Mao Tsetung, who was visiting Moscow, telegraphed to Liu
Shaoqi and Zhou Enlai on 19 December, Regarding the issue of Burmas

27 Johnstone, Burmas Foreign Policy, pp. 5556.

28 Ibid., p. 56.
29 K. M. Panikkar, In Two Chinas: Memoirs of a Diplomat, Westport: Hyperion Press, 1981, p. 68.
30 British Documents of Foreign Affairs, Vol. 9, p. 46.
31 Ibid., p. 38.
32 Documents on PRC Foreign Relations: 19491950, Beijing: World Knowledge Press, Vol. 1,
1957, p. 17.

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 Sino-Burmese Relations 19491953: Suspicions and Equivocations

request to establish diplomatic relations with us, you should ask whether
Rangoon is willing to sever relations with the KMT, and at the same time
ask Rangoon to appoint a delegate to negotiate the establishment of Sino-
Burmese relations. Then you decide whether the two countries relations
should be established. Such procedures of negotiating on establishing
relations are absolutely necessary, and it should be the same with all capitalist
countries.33
Consequently, on 21 December, Zhou Enlai replied again that only after
the Burmese government had broken off relations with the KMT government,
The PRC central peoples government is willing to establish diplomatic
relations between the PRC and the Union of Burma on the basis of equality,
mutual benefit, mutual respect for sovereignty, and territorial integrity, and
hopes the Burma government will dispatch a negotiator to Beijing.34 Beijings
reply was thought cold and rather unexpected in Rangoon.35 As the Indian
Ambassador to China explained, We, as well as other nations including Britain,
had assumed that diplomatic relations would automatically follow recognition
of the new Government, and that previous Embassies would therefore be
automatically revived without discussion or argument. That, however, was not
the Chinese point of view. They held that diplomatic relations had to be settled
separately by negotiations.36
The distinctly ungracious Chinese reply came as a severe disappointment
to the many Burmese who expected that by her hurried recognition Burma
would acquire special merit with Communist China. As a result, at the end of
1949 the Burmese government had not replied to the Chinese note and was
waiting to see how Chinas relations developed with other countries.37
The Chinese mode of negotiations, although different from international
norms, was in accordance with new but established Chinese diplomatic guide-
lines. The Common Programs, which had the nature of a provisional constitu-
tion and was promulgated in September 1949, stipulated (Article 56) that the
Chinese government could negotiate with any foreign government that broke
relations with Kuomintang reactionaries, and is friendly to the PRC. Then
China could establish diplomatic relations with them on the basis of equal-

33 Works of Mao Tsetung Since the Establishment of PRC, Vol. 1, Beijing: Central Party Lit-
erature Press, 1987, p. 193.
34 Notes on the Establishment of ChinaBurma Diplomatic Relations, AMFA, File No. 105-
00001-01(1).
35 Panikkar, In Two Chinas, p. 69.
36 Ibid., p. 69.
37 British Documents of Foreign Affairs, Vol. 11, p. 7.

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 Modern ChinaMyanmar Relations

ity, mutual benefit, mutual respect for sovereignty and territorial integrity.38
The Burmese reply thus had to meet the requirements of the Article 56 of the
Common Programs and the instructions given by Mao on 19 December 1949
from Moscow.
On the eve of the PRCs birth, Zhou Enlai stated that We wont recognize
the diplomatic position of all remaining foreign Embassies in China except
those of socialist countries. From now on, the establishment of foreign relations
should be by means of negotiation. We would recognize the establishment
of diplomatic relations if they make it clear to break all diplomatic relations
with Taiwan. We establish diplomatic ties on some principles. Negotiation-
establishment of diplomatic relations is unprecedented in the international
community, and its a pioneering work which we make according to our coun-
trys specific condition.39 Beijing thus broke normal international conventions
due to the CCP foreign policies of leaning to one side and starting anew.40
The establishment of diplomatic relations between the PRC and other
socialist countries was still determined by international conventions all
ten countries that established diplomatic ties with the PRC were socialist.
The policy of leaning to one side determined Chinas identity and role in
international politics. Before the CCP adopted its Peaceful Coexistence policy
in 1954, Beijing definitively divided the world into two opposing camps.
China identified with the socialist countries camp, and capitalist countries
were regarded as a distinct group by China. Obviously, relations between
China and the West were [based on] rivalry.41 Beijing lacked trust for and a
sense of identity with non-socialist countries.
The policy of starting anew adopted by Beijing aimed to set up a new
model of Chinese diplomacy; the mode of negotiation-establishing relations
was simply the implementation of that policy. On 8 November 1949, at the
foundation ceremony of the new Chinese Foreign Ministry, Zhou Enlai said,

38 Chinese Central Archives (ed.), Selected Documents of the CCP Central Committee, pp.
595596.
39 Lan Sou, Li Ding, Welcoming the birth of New China every day and night, Materials
from CCP History, No. 5, 1989.
40 To make a clean break with the foreign policy of KMT China, the CCP renounced all the
diplomatic relations the Kuomintang Government had established with foreign countries;
treated heads of foreign diplomatic missions accredited to Old China as ordinary foreign
nationals instead of diplomatic envoys; reviewed all the treaties and agreements Old Chi-
na had concluded with foreign countries; gradually cleared up the prerogatives and influ-
ence the capitalist countries had in China; and established new diplomatic relations with
other countries.
41 Liu Zhiyong, Chinese National Identity and the Choices in Chinas Diplomatic Strategy,
China Foreign Affairs University, Ph.D. dissertation, 2005, pp. 4145.

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 Sino-Burmese Relations 19491953: Suspicions and Equivocations

When we pioneer diplomatic space now, it is necessary first to distinguish

friend from enemy.42 After the founding of the PRC, when some socialist
countries quickly established diplomatic relations with China, Zhou Enlai
explained, These countries established diplomatic relations with us on the
basis of genuine equality, mutual benefit, mutual respect for sovereignty, and
territorial integrity. Therefore, we quickly established diplomatic relations with
them. As regards capitalist countries, colonial and semi-colonial countries,
we have to test whether they accept our principle of establishing diplomatic
relations through the procedure of negotiations. We not only listen to their oral
positions but observe their actions.43
Non-socialist countries, moreover, initially took a wait-and-see attitude
toward the new Chinese regime, and some of them still supported the KMT.
The CCP tested the non-socialist countries sincerity of establishing diplo-
matic relations, and assessed their attitude toward the KMT regime and the
legitimacy of the PRC.
On 18 January 1950, Burmese Foreign Minister, Sao Hkun Hkio, wrote a
letter to Zhou Enlai that Burmas government had received Zhous message of
21 December 1949, and stated that the KMT Embassy in Rangoon had received
notice that Burma had cut ties with it, and that Burma recognized the PRC, so the
Taiwan Embassy would be soon closed. Additionally, Rangoon appointed the
former first secretary and consul general in Kunming to the KMT government
as charg daffaires ad interim to the PRC to attend the negotiations. The
process progressed as Beijing had planned. The first step of negotiations is that
we orally ask whether Burma agrees to establish diplomatic relations. If Burma
replies satisfactorily, the first step ends. The second step follows, and both sides
begin to negotiate on exchanging diplomatic envoys.44

In late April 1950, U Phyo, Burmas negotiator, arrived in Beijing. On 29
April, 5 May, and 12 May 1950, Zhang Hanfu, Chinas Vice-Foreign Minister,
held three meetings with him. During these negotiations, both parties discussed
the issues of Burma severing relations with the KMT, and of how Rangoon
would dispose of all KMT organizations and their property in Burma. On 12
May, U Phyo orally replied that The Burmese government never recognized
any other Chinese Kuomintang organizations except the former Chinese
Embassy to Burma. After Burma recognized the PRC, The former Chinese
42 Selected Diplomatic Writings of Zhou Enlai, Beijing: Central Party Literature Press, 1990,
p. 3.
43 Ibid., p. 49.
44 Records from four discussions about the establishment of ChinaBurma relations, AMFA,
File No. 105-00001-02(1).

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 Modern ChinaMyanmar Relations

Embassy will immediately not be recognized, and the personnel of the former
Chinese Embassy will be regarded as common citizens. Any property and funds
of China in Burma will be transferred to the [newly] recognized government.45
On 19 May, Vice-Foreign Minister Zhang Hanfu replied that the Chinese
government had discussed Burmas reply of 12 May, was satisfied with it, and
hoped that both sides immediately would begin to negotiate the exchange of
diplomatic envoys. Meanwhile, Beijing determined that China would appoint
Yao Zhongming as Ambassador to Burma. China and Burma established
diplomatic relations on 8 June 1950, and Burma became the sixteenth country
to do so.

Tentative Contacts: 19501953

Although Burma was the first non-socialist country to recognize the PRC, this
favorable beginning did not quickly develop. On the contrary, ChinaBurma
relations were noncommittal and very cold.46 Both sides were politically
suspicious and mistrustful of each other. China thought Burma an underling
of imperialist countries. Burma worried that China would possibly invade it
and threaten its national security, and it carefully balanced relations between
the West and China.
Chinas new Ambassador to Burma arrived in Rangoon on 28 August 1950.
Burmas press was lukewarm about his arrival and commented sharply on the
attitude of the local Chinese and warned them against divided loyalty as well
as against any attempts by the Chinese communists to interfere in Burmas
internal affairs. The new Ambassador didnt endear himself to the Burmese by
his frank claims on the loyalty of all overseas Chinese in Burma.47
In 1950, the Chinese Embassy held a reception for Chinas National Day (1
October), and invited some Burmese officials and overseas Chinese to attend.
China intended to use the reception to propagandize the new regime and
expand its influence; Burma wanted to understand better Beijings intentions
through the reception. After the reception, the Chinese Embassy in Burma
submitted a report to Beijing:
Concerning our National Day celebrations, the Burmese government was
perfunctory and impeded our efforts in fear that we may take this opportu-
nity to greatly expand our political influence. They were reluctant to offer

45 Ibid.
46 Abstract of Burmese Prime Minister U Nus speech in parliament, AMFA, File No. 105-
00814-01(1).
47 British Documents of Foreign Affairs, Vol. 11, p. 40 and 50.

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 Sino-Burmese Relations 19491953: Suspicions and Equivocations

[us] the list of invitees on the Burmese side and deliberated over it when we
conferred with them. Also, they set up a barrier to the place and decoration
of the celebration ... They intended to spy on our latest development via
this celebration ... Burmas government is basically against our country,
but it is double-faced, and is seemingly and purposely anxious about us.48

At the same time that Burma was courting China, Burmese leaders were
suspicious of China and wanted to balance relations by ensuring ties with the
U.S. an important factor influencing Sino-Burmese relations both in terms
of Chinese concerns and Burmese perceived needs. In October 1950, Burmas
Foreign Minister met with Chinas Ambassador Yao Zhongming, and pointed
out that Yaos speech at the local overseas Chinese assembly on 1 October used
improper anti-U.S. imperialist words. In order to avoid trouble, you should
pay attention [to this] ... I dont agree to a U.S. imperialist invasion, and agree
with your opposition. However, you could express general objections to U.S.
imperialism or be against it according to a specific event, but dont generally
oppose it lest it arouse trouble.49
On 13 September 1950, Burma and the U.S. signed an economic coopera-
tion agreement. After the defeat of the KMT in China and the Korean War, and
fearful of the potential for Chinese subversion through its overseas Chinese
community, Washington sent a team to Southeast Asia to determine what
might be done to hinder what Washington perceived as Chinese expansionism.
This involved the beginnings of U.S. support to Southeast Asian economic de-
velopment programs. In accordance with this agreement, Washington provided
Rangoon with economic and technological assistance. China was dissatisfied.
An editorial in the Peoples Daily on 13 December 1950, noted that Fully known,
the U.S. imperialists have strengthened the invasion of our countrys peripher-
ies, and attempt to change all our neighboring countries into bases for invading
China ... The U.S. has signed military and economic agreements with Thailand
and Burma in order to strengthen economic plunder in these countries, and, on
the other hand, to change them into its military bases for invasion.50
The BurmaU.S. economic agreement caused Burmese leftists much dis-
content. Thakin Lwin, the Chairman of the Burma Conference to Defend World

48 Review of the National Day celebration from the Chinese Embassy to Burma, AMFA, File
No. 117-00038-02(1).
49 Burmese Foreign Minister Opinion on Chinese Ambassador Remarks at Local Overseas
Chinese Gathering and China Response to it, AMFA, File No. 105-00067-02(1).
50 Comments on Joint Communique of Atlee and Truman, Peoples Daily, 13 December
1950.

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Peace (World Peace Congress, Burma), wrote an article and published it in the
Yunnan Daily of 18 October 1951, that U.S. imperialism is upgrading and build-
ing airfields throughout Burma in the good name of economic aid. The U.S. is
using Burma to destroy the pioneer of anti-imperialism, the PRC. One month
later, U Mya Tun, the first secretary of Burmas Embassy in Beijing, explained
to the Chinese that the construction and upgrading of the Rangoon airfield was
supported by the Burmese government, and planned to use the airfield for large
international passenger airliners, so it was not true that U.S. imperialism was up-
grading and building airfields throughout Burma. Meanwhile, Burma declared
that no country was permitted to take destructive action against the PRC or
any other country from Burmese territory. Burmas government is completely
complying with the policies of neutralism and good neighborliness.51 In addi-
tion, U Mya Tun asked the Chinese Foreign Ministry to help him publish an
article in the Yunnan Daily to correct Thakin Lwins article.52
Washingtons influence in Burma was soon weakened by another event.
At the beginning of 1950, some KMT troops retreated into the northeast
Burma. Soon after, these troops united to found the Yunnan Anti-Communist
Salvation Army. In the early 1950s, it launched many attacks and raids on
Yunnan Province.
In the first half of 1952 alone, KMT troops attacked Tengchong, Longling,
and Zhenkang, three counties neighboring Burma, over sixty times, and killed
over one hundred CCP cadres and inhabitants (see Map 4).53 Furthermore,
they attempted to enkindle border conflict, and inflame both countries
military. According to a top secret document of the Burma KMT troops
captured by Burmas Ministry of Information, From now on you and your
men must make all attempts to attack the weak outposts of the Burmese troops
in the disguise that you are Maos Communist bandits and also must propagate
that Maos Communist bandits have invaded Burma ... Therefore to make our
plans successful we must create trouble between these two governments.54
The Burmese government viewed the KMTs offensive actions into Yunnan

51 First Secretary of Burmas Embassy in China denies the establishment of US military

bases in Burma, AMFA, File No. 105-00174-02(1).
52 Burmese Embassy in China requests the Ministry of Foreign Affairs of the PRC to assist
them in publishing a clarification in the Yunnan Daily with regard to the incorrect mes-
sage in Thakin Lwins essay, AMFA, File No. 105-00078-01(1).
53 Development of the Military in Contemporary China, Beijing: Chinas Social Science
Press, 1989, p. 373.
54 Kuomintang Aggression against Burma, Ministry of Information, Government of The Un-
ion of Burma, 1953, p. 159.

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 Sino-Burmese Relations 19491953: Suspicions and Equivocations

as an attempt not to destroy Communist China, but rather to destroy Sino-

Burmese relations.55
The Burmese government wanted to solve the KMT problem by diplomatic
approaches through the United Nations, but its attempt failed because of U.S.
obstruction. Burmas military power was weak; since it was also attempting
to control internal ethnic and other ideological rebels, the KMT problem
could not be solved by force. By 1953, the situation became more serious:
the number of KMT troops rose to 16,000 from 1,700 in early 1950;56 their
arms were more abundant and sophisticated, and they raided several places
in Burma in collaboration with anti-government Karen troops.57 By March
1953, the Burmese government was forced to concentrate over 80 percent of
its defensive forces against these intruders. Most troublesome to the Burmese
was the possibility that the Chinese Communists might use the KMT presence
as a pretext to invade Burma.58
Facing the worsening situation, Prime Minister U Nu worried that if he did
not do something, China might invade Burma, or he might find himself forced
out of office.59 Burma was particularly worried lest the Chinese government
would get the impression that Burma was harboring the KMT troops in her
country.60 Rangoon stopped accepting U.S. aid in 1953 and closed its aid
program. Beijing praised Burmas action. When Zhou Enlai met with the
Burmese Government Labor Delegation in May 1953, he said Burmas action
made many Asian countries excited.61
Complicating the situation was the Sino-Burmese undemarcated border
issue that had been pending since the end of the nineteenth century. Chinese
maps printed by the KMT government after the Second World War included
some territory in the north of Burma as Chinese (see Map 5), and this was
55 Kenneth Ray Young, Nationalist Chinese Troops in Burma Obstacle in Burma Foreign
Relations: 19491961, New York University, Ph.D. dissertation, 1970, p. 57.
56 Chen Hurngyu, Complaint by the Union of Burma Regarding an Aggression against it
by the Government of the Republic of China in 1953, Journal of Overseas Chinese and
Southeast Asian Studies, Vol. 4, No. 3, July 2004.
57 Robert H. Taylor, Foreign and Domestic Consequences of the KMT Intervention in Burma,
Data Paper: No. 93, Southeast Asia Program Department of Asian Studies, New York:
Cornell University, July 1973, p. 16.
58 Chi-shad Liang, Burmas Foreign Relations: Neutralism in Theory and Practice, New York:
Praeger Publishers, 1990, p. 70.
59 Victor S. Kaufman, Trouble in the Golden Triangle: The United States, Taiwan and the
93rd Nationalist Division, The China Quarterly, No. 166, 2001, p. 447.
60 Kalyani Bandyopadhyaya, Burma and Indonesia: Comparative Political Economy and For-
eign Policy, New Delhi: South Asian Publishers, 1983, p. 154.
61 Account of Premier Zhou Enlais meeting with a Burmese governmental labour delega-
tion, AMFA, File No. 105-00110-01(1).

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 Modern ChinaMyanmar Relations

obviously unsatisfactory to Rangoon. But the new 1950 PRC map also
included the area north of Bhamo.
An authoritative Chinese Communist atlas published in 1953 showed
most of the frontier with Burma as undemarcated and laid claim to everything
north of Myitkyina. With reference to the border dispute between China and
Burma, the map of Yunnan noted, These problems await the establishment
of a peoples Burma and the final victory of the Asian Peoples revolution;
then they can receive a complete and reasonable solution.62 The area where
the KMT was sheltering in Burma was along the disputed borderland
between two countries, further increasing Rangoons fear for its territorial
unity.
ChinaBurma economic and cultural relations were insignificant from
1950 to 1953. Compared with bilateral trade before World War II, trade
decreased. From 1950 to 1953, Chinas yearly average imports and exports
were US$3.2825 million and US$0.8725 million from Burma, and were 0.32
percent and 0.12 percent of Chinas gross imports and exports respectively.63
The trade structure between two countries was still unchanged, with raw and
primary products being the main commodities. Cultural intercourse between
Beijing and Rangoon was limited; it was only after the two countries premiers
visited each other in 1954 that the situation improved.64

Analysis of Early Sino-Burmese Relations

Under the New Democratic Revolution theory, only the Communist Party
could lead newly independent peoples to win national and democratic revolu-
tions. Beijing believed, Whether in economic, military, or political dimen-
sions, Burmas nature has not been changed; it still is a typical colonial country
even after its independence. The President of Burma, Sao Shwe Thaike, was
a big feudal lord, and Prime Minister, U Nu was an extremely vicious, and a
notorious Burmese traitor. Burmas government was the representative of big
landlords and big bourgeoisie, and the loyal lackey of imperialism Burmas
reactionary circles of big landlords and big compradors.65 On 3 September
1952, when Zhou Enlai visited Moscow and talked with Stalin, he stated that

62 Harold C. Hinton, Chinas Relations with Burma and Vietnam: A Brief Survey, New York:
International Secretariat, Institute of Pacific Relations, 1958, p. 40.
63 Yearbook of Chinas International Trade and Economy, Beijing: Foreign Economic and
Trade Publishing House of China, 1984, pp. iv15.
64 Review by Chinese Embassy to Burma of Sino-Burmese cultural ties in the past decade,
AMFA, File No. 105-00603-02(1).
65 Burmese Peoples Struggle, Peoples Daily, 10 May 1948.

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 Sino-Burmese Relations 19491953: Suspicions and Equivocations

the Burmese government concealed its real position on China, but it actually
pursued the policy of anti-China following the U.K. and U.S. lead.66
In this early period of establishing diplomatic ties, distrust and limited
contact became the keynote of Chinas policy toward Burma. The principle
of putting the house in order before inviting guests,67 adopted by the CCP
at that time, also restricted its relations and communications with Rangoon.
Moreover, Chinas foreign relations focused on aligning with the Soviet Union,
and aiding Vietnam against France and North Korea against the U.S. A new
small country such as Burma was not on the preferential list and not a priority
for developing close relations.
Rangoon gradually established a neutral foreign policy towards China
during 19481953. Although both sides appointed Ambassadors during this
period, Burma was suspicious of Chinas intentions.68 Suspicion, vigilance,
and fear were the main characteristics of Burmas policy toward China. The
aim of Burma in recognizing China lay in taking precautions against a potential
Chinese invasion. In 1988, former President Maung Maung explained that,
The fear of aggression was at the back of the Union Governments mind when
it decided to be the first [non-Communist government] to recognize the new
Communist regime in China.69 Burmas Prime Minister U Nu, even compared
China and Burma to elephant and lamb, and stated that We once were very
afraid, and suspicious that the PRC could possibly intervene in our countrys
internal affairs.70 U Nu also referred to Burma as a tender gourd between two
cactuses (China and the West). In this early period, Beijing controlled the
initiative in the development of Sino-Burmese relations.
Burmese apprehension of China was evident. In 1954, Sao Shwe Thaike,
the head of the upper house of the Burmese parliament, said to Zhou Enlai,
the visiting Chinese Premier, Burma is a small country and has to maintain
friendly relations with its neighbors.71 In December 1957, during the visit of
Burmese Vice Prime Minister U Kyaw Nyein and U Ba Swe, they said to Mao
Tsetung, Prior to Prime Minister U Nus visit to China and his meeting with
Chairman Mao, Burma was, indeed, afraid of China, because Burma is a small
66 Minutes of Conversation between I. V. Stalin and Zhou Enlai, APRF, f. 45, op. 1, d. 329, ll.
7587.
67 See footnote 40 in this chapter.
68 Yunnan Institute of History Studies (ed.), Documents on the History of ChinaBurma
Friendship, 1954, Vol. 2, No. 2, p. 58.
69 Maung Maung, Burma in the Family of Nations, Amsterdam: Djambatan Ltd, 1956, p. 145.
70 Yunnan Institute (ed.), Documents on the History of ChinaBurma Friendship, p. 13.
71 Responses by Burmese officials and media to Premier Zhou Enlais visit to Burma, AMFA,
File No. 105-00259-03(1).

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 Modern ChinaMyanmar Relations

country while China is a big one.72 There was a border of over two thousand
kilometers between Burma and China. In 1954, Burmas population and size
were 3.2 percent and 7 percent respectively of Chinas. So Burma was very
cautious, wanting neither to offend the Western bloc by having close contact
with China, nor displeasing China by having too intimate a relationship with
the West. Zhou Enlai, when visiting Burma in 1956, publicly expressed his
understanding of Rangoons apprehension, and stated, It is easy for a newly
founded big country to cause suspicion in other countries.73
Burmese historical memory intensified Rangoons distrust and worry
about China. China had invaded Burma in times of the Chinese Yuan and
Qing dynasties. During Prime Minister U Nus first trip to China in 1954, he
intentionally mentioned this history at the state banquet hosting him. Although
he ascribed the Chinese invasions not to the Han (ethnic Chinese) nationality
but to the expansion of Mongols and Manchus, the foreign warlords,74 U Nu
used history to express Burmas present anxiety about China. Yet Burmas first
Ambassador to the PRC, U Myint Thein, said that Han, Manchu, Nationalist,
Communist, it makes no difference to the Burmese. A Chinese is a Chinese
and to be feared. U Nu fully accepted this view.75 In 1957, while Burmas
Vice Prime Minister U Ba Swe visited China, he told the Chinese, Our fear
is very natural because in history big countries always were buckoes. Burma
lay among powers.76 The CCP attitude toward national revolution in other
Asian countries was also a concern. In 1957, U Nu spoke in Burmas parliament
that New Chinas relations with the insurrectional BCP are not clear, but it
expressed some fraternal care.77 The Burmese viewed the Sino-Burmese
border issue, KMT troops, the problem of the overseas Chinese, and the CCP
relations with the BCP as potential sources of Chinese invasion and subversion.
With the end of the Korean War, the increasing pressure of the U.S. con-
tainment policy against China, and Chinas urgent need for a peaceful environ-
ment necessary to recover and develop its economy, Beijing began to pursue
a new foreign policy. This policy Peace and United Front focused on
Chinas national interests. From 1954, it ended the policy of putting the house

72 Record of Chairman Mao Tsetungs talk with visiting Burmese Vice Prime Ministers, U Ba
Swe and U Kyaw Nyein, AMFA, File No. 105-00339-01(1).
73 All the manuscripts from Premier Zhou Enlais talks in Burma (Chinese, English, and Bur-
mese), AMFA, File No. 203-00085-01(1).
74 Prime Minister U Nus banquet speech, Xinhua Monthly, No. 1, 1955.
75 Richard Butwell, U Nu of Burma, Stanford: Stanford University Press, 1963, p. 177.
76 Record of Chairman Mao Tsetungs talk, AMFA, File No. 105-00339-01(1).
77 Abstract of Burmese Prime Minister U Nus speech, AMFA, File No. 105-00814-01(1).

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 Sino-Burmese Relations 19491953: Suspicions and Equivocations

in order before inviting guests. That year also saw the shift in Sino-Burmese
relations. However, Burmas fear and distrust of China, reflected in the early
period after the establishment of diplomatic relations, did not disappear; it
continued throughout the Cold War, although its quality differed at various
stages in the two countrys relations.

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 2
ChinaBurma Ties in 1954: The Beginning
of the Pauk Phaw Era

F rom 1954, Beijing and Rangoon began to have closer relations

and more frequent contacts. Sino-Burmese relations entered the
friendly Pauk Phaw (fraternal) era until Chinas Cultural Revolution
spilled over into Burmese territory in 1967. The shift in relations in 1954 was
due to a complex of bilateral, systemic, and dynamic factors coupled with strong
personal influences. China changed its overall foreign policy, but particularly its
policy toward Burma. Rangoon actively responded to Beijings change.
This process was speeded up through the personal rapport that was estab-
lished by the leaders on both sides, but especially by U Nu and Zhou Enlai.
The amelioration of suspicions between the two states may have eventually oc-
curred, but it seems evident that it would have taken considerably longer to do
so without this personal empathy; the generic shift in Chinese policy did not
resolve the outstanding and consequential issues facing the two states, which
were finally settled much later. This chapter focuses on the manifestations,
the causes, and the impact of the changed relations. The turn in 1954 basically
consisted of two dimensions: diplomatic-political and economic relations.

International Factors
The United Statess perennial policy in Asia is characterized by preventing the
rise of any hegemonic power in the region. A fear of the Sino-Soviet bloc and
its expansion was caused by the Chinese role in Korea, Tibet, and Vietnam,
and in the potential of the overseas Chinese communities in Southeast Asia.
Communist insurrections had begun in Burma, Malaya, and the Philippines. In
the early 1950s, the U.S. responded by establishing military bases in the region,
increasing U.S. troop numbers in the countries around China, signing a series
of military treaties with Chinas neighboring countries, and forming what was
perceived in China as a military encirclement against that country. These instru-
ments included the ThailandU.S. Military Assistance Agreement (17 October

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 ChinaBurma Ties in 1954: The Beginning of the Pauk Phaw Era

1950), the PhilippinesU.S. Mutual Defense Treaty (30 August 1951), the
KoreaU.S. Mutual Defense Treaty (1 October 1953), the U.S.Taiwan Mutual
Defense Treaty (2 December 1954), the U.S.Japan Mutual Defense Assistance
Agreement (8 March 1954), and the Manila Pact (8 September 1954).
Zhou Enlai delivered the Report on the Work of the Government at the
First Session of the First National Peoples Congress on 23 September 1954,
in which he stated: In order to build a prosperous socialist industrialized
country, we need a peaceful environment and a peaceful world. Therefore,
we should strengthen and develop unity and collaboration with the Soviet
Union as well as other socialist countries, and attach importance to the
peaceful collaboration and the promotion of economic and cultural ties with
all countries, particularly Southeast Asian and other neighboring countries.1
Beijing therefore made efforts to break out of U.S. encirclement, and sought
support from Asian and African countries, particularly those on its periphery.
These efforts became the main mission of Chinas diplomacy after the Korean
War ceasefire. To this end, Zhou encouraged the formation and enlargement of
the area of peace, composed of such countries as Burma, Cambodia, Ceylon,
India, Indonesia, and Nepal. In contrast to the initial negative communist
attitude towards the neutral forces, Zhou stressed the importance of the
uncommitted countries and devoted much attention to their growing role in
fortifying the international forces of peace.2

Chinas Policy Toward Burma

When the CCP seized power in 1949, Beijing pursued a foreign policy of lean-
ing to one side and insisted that the world was divided into two antagonistic
camps, and it was impossible for neutralism to exist between them.3 All non-
socialist nations were classified as stooges or running dogs of imperialism.
However, both domestic needs and the international environment in the early
1950s impelled Beijing to alter its black and white, with us or against us, con-
ception of world politics, and to begin to stress national interests in its foreign
policy. In the development of foreign relations Chinese policy shifted gradu-
ally away from attempting to drive Western influence out of Asia by direct con-
frontation or unequivocal support for revolutionary wars, and toward efforts

1 Song Enfan and Li Jiasong (eds), Chronology of the PRCs Foreign Affairs, Vol. I, Beijing:
World Affairs Press, 1997, p. 159.
2 Kuo-kang Shao, Chou Enlais Diplomatic Approach to Non-Aligned States in Asia:
195360, The China Quarterly, No. 78, June 1979, p. 326.
3 Liu Shaoqi, Internationalism and Nationalism, p. 25.

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 Modern ChinaMyanmar Relations

to win Asian neighbors away from alliances with the West through offers of
peaceful coexistence.4
In 1952, Zhou Enlai spelled out that policy with respect to neutral countries,
We cant be hostile to them and push them into the enemys camp. We can
make friends with them. Policies toward the nationalist countries in Southeast
Asia that had established diplomatic relations with Beijing changed. We will
try for their neutral stance at war, and at peace make them keep imperialism at
arms length.5
In 1954, Chinas new foreign policy was formed, focusing on breaking
through the U.S.s containment and encirclement, uniting all countries that
wished to maintain peace with China, and creating a peaceful, stable re-
gional environment for its domestic economic development and recovery.
The new policy was characterized by building collective peace and secu-
rity and expanding a peaceful area in order to form a safe buffer zone
between China and the West. This new course in Pekings foreign policy
was apparently directed by three major considerations: first, the enhance-
ment of Chinas national security; second, the need for diplomatic flexibil-
ity; and third, Beijings quest for major power status.6 To achieve these
ends Beijing would respect the concept of non-alignment as a legitimate
approach to Cold War issues.7
On 8 July 1954, Mao Tsetung gave 11 instructions on Chinas diplomacy
which included: Begin to establish a Southeast Asian peace zone, effect and
develop cooperation in the zone, and sign non-aggression pacts or collective
peace treaties; unite all peaceful forces (including government), isolate and
split up U.S. [interests]; International Peace and United Front.8
In August 1954, Zhou Enlai spoke at the 33rd session of the central govern-
ment that it was necessary to insist on and carry out the Peaceful Coexistence
Five Principles. We believe ... to establish more and broader peace zones in
Asia so that these areas wont become the hothouse where the U.S. invader

4 Peter Van Ness, Revolution and Chinese Foreign Policy, Los Angeles and London: University
of California Press, 1970, p. 12.
5 Selected Diplomatic Writings of Zhou Enlai, pp. 5254.
6 Kuo-kong Show, Communist Chinas Foreign Policy toward the Non-aligned States
with Special Reference to India and Burma, 19491962, University of Pennsylvania,
Ph.D. dissertation, 1972, p. 37.
7 Kuo-kang Shao, Zhou Enlais Diplomatic Approach, p. 324.
8 CCCPC Party Literature Research Office, Biography of Mao Tsetung: 19491976, Vol. 1,
Beijing: Central Party Literature Press, 2003, pp. 562563.

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 ChinaBurma Ties in 1954: The Beginning of the Pauk Phaw Era

group wages war and organizes military groups. This central government will
strive for Asian collective peace in the light of this guideline.9
The shift in ChinaBurma relations in 1954 was one of the results of this
changed foreign policy a logical approach of seeking a peripheral environment
featuring peace and security for Beijing. On 2 December 1954, Zhou Enlai
claimed that, together with Burma, China will struggle to implement the
Peaceful Coexistence Five Principles, establish and expand a peaceful zone, and
maintain Asia and World peace.10 In addition, the communique released during
U Nus visit to Beijing in 1954 stipulated that The two countries premiers
expressed deep concern over strengthening and expanding the peaceful area.11
The Chinese appeal for an Asia Peace Zone, however, obviously could not be
implemented without Rangoons interaction and support.

Burmas Policy Toward China

By 1954, Burma had gradually formulated a neutralist and non-alignment
foreign policy. A clear policy on non-alignment was not evident in the early
years after independence; Burma was simply groping in the dark.12 Rangoons
determination and formation of its policy were affected by multiple factors. At
the end of 1950, the Peoples Liberation Army (PLA) entered both Tibet and the
Korean War. The Burmese viewed these violent Chinese actions as potentially
dangerous. The experience of Korea convinced them that they would have to
avoid at almost any cost the possibility of becoming a battlefield for the Western
Nations Communist conflict.13 On 8 March 1951, Prime Minister U Nu
reaffirmed his governments determination to adhere to its policy of neutrality.
By the beginning of 1951, both Burma and India had definitely perceived the
necessity of friendship with China, which had cast its shadow over Asia.14
Consequently, U Nu explained the reasons for Burmese neutralism: Burma

9 Zhou Enlais Report on Diplomacy at the 33rd Session of Central Peoples Government
Committee (11 August 1954), File No. 206-Y0037, in Bureau of Archives, Ministry of
Foreign Affairs, PRC (ed.), Selected Diplomatic Documents of the PRC: Geneva Conference
1954, Vol. 1, Beijing: World Knowledge Press, 2006, p. 495.
10 Premier Zhou Enlais speech at the banquet for Prime Minister U Nu, Xinhua Monthly, No.
1, 1955.
11 Communiqu of the premiers of China and Burma, Xinhua Monthly, No. 1, 1955.
12 B. Pakem, India Burma Relations. New Delhi: Omsons Publications, 1992, p. 29.
13 M. D. Stephens, The Sino-Burmese Border Agreement, Asian Review, Vol. LIX, No.
217, January 1963, p. 49.
14 Uma Shankar Singh, Burma and India, 19491962: A Study in the Foreign Policies of Burma
and India and Burmas Policy towards India, New Delhi, Bombay, Calcutta: Oxford and
IBH Publishing Co., 1979, p. 164.

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 Modern ChinaMyanmar Relations

was located in the sphere of influence of two rival camps; Burmas military and
economic powers were weak; it needed to defend itself.15 China was a primary
factor in Burmese policy formulation. Burmas non-alignment is primarily to
assure China of non-aggression from Burmese soil and to avoid the destruction
of Burma in another war.16 Fear of antagonizing China has also been at least
partially responsible for Burmas policy of neutralism.17
After KMT troops, which had been defeated and driven from the mainland,
fled to Burma, Rangoon unsuccessfully attempted to resolve the problem
through U.N. channels. Because of U.S. actions, the KMT issue was not only
not effectively resolved, but became more serious. By 1953, KMT troops in
Burma had became more powerful with the support of Taiwan and the U.S.,
and its threat to Burmas national security was more dangerous. The Burmese
feared Beijing might use the presence of the KMT forces as an excuse to invade
Burma. In 1952, the PLA crossed the disputed border, the so-called 1941
Line, into Burma to annihilate the KMT forces. Hence, the Burmese had good
reasons to worry.
The result of this experience in the United Nations was to make most
Burmese leaders feel that their original hopes that membership in the United
Nations offered a small nation like theirs protection against outside interference
were changed ... It was also quite apparent after Burmas disillusionment with
the United Nations, as a protector of the security of small states as shown
in the case of the handling of the KMT issue by this body, that the Burmese
government began to move towards closer friendly relations with Communist
China.18 At the same time, Beijing also soothed Rangoons anxieties. China
offered assurances that so long as adequate steps were being taken against
the KMT troops, the issue would not be a cause of trouble between the two
states.19 Chinas forbearance on the KMT issue in Burma created a favorable
impression in Rangoon; the Burmese saw the possibility of friendly relations
with its northern neighbor. Chinas attitude on the matter was one designed to
indicate that it only harbored peaceful intentions and friendly feelings toward

15 U Nu, Burmas Neutral Policy, Burma, January 1955, Vol. V, No. 2, p. 1.

16 David Wen-wei Chang, A Comparative Study of Neutralism of India, Burma and Indo
nesia, University of Illinois, Ph.D. dissertation, 1960, p. 122.
17 John Seabury Thomson, Burma: A Neutral in Chinas Shadow, Review of Politics, Vol.
19, No. 3, 1957, p. 336. For other similar arguments, see Jerry Rose, Burma and the
Balance of Neutralism. The Reporter, XXVIII, No. 1, 3 January 1963, p. 24; Johnstone,
Burmas Foreign Policy, p. 164; Frank Trager, Burma and China, Journal of Southeast Asian
History, Vol. 5, No. 1, March 1964, p. 61.
18 Singh, Burma and India, pp. 171172.
19 Panikkar, In Two Chinas, p. 169.

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 ChinaBurma Ties in 1954: The Beginning of the Pauk Phaw Era

Burma and this undoubtedly had the effect of making the Burmese government
more receptive to the peace offensive that was launched in 1954.20
Furthermore, India and Burma had established cordial relations, and the
two countries leadership often consulted on world affairs. New Delhi had
developed a non-alignment foreign policy and took a friendly attitude toward
Beijing. These had important impacts on Burmese diplomacy. Also, internally
the communists and the left-wing socialist elements within Burma forced the
U Nu government to appear non-aligned.
Rangoon gradually transmitted more gestures of goodwill to Beijing
between 1951 and 1953, such as the vote on China in the U.N. during the Korean
War, approving private shipments of rubber to China, and supporting the PRCs
seat in the U.N.21 On the part of Burma, [efforts] to please Communist China
had become quite unmistakable by the middle of 1953.22
Rangoons and Delhis attitudes toward Beijings actions in the Korean War
also pushed China to reorient its policy to win the support of those nationalist
governments and employ their neutrality in world politics. Rangoon and
Delhi refused to join in branding China as an aggressor in Korea in January
1951. In the same year, Burma, India, and some other AsianAfrican countries
abstained on the U.N. resolution on a strategic war materials embargo against
China. Additionally, a Burmese private company exported some rubber to
China during the Korean War although its volume was modest.23 As Burma
and India adopted policies different from the West, Beijing re-evaluated the
position of neutral countries and now considered them as part of the united
front.
As China gradually adjusted its policy toward neutral countries, the Soviet
Unions position on those countries further drove changes in Beijings policy
toward Burma. After Stalins death in March 1953, Moscow began to seek
detente with the West and rethink its relationships with Asian neutral countries.
Russian leaders emphasized peaceful coexistence and peaceful competition
between communist and non-communist countries.
Burma responded positively as the CCP devised these new tactics. Thus,
a new prospect in Sino-Burmese ties opened in 1954. Although bilateral

20 Robert Alexander Holmes, Chinese Foreign Policy Toward Burma and Cambodia: A
Comparative Analysis, Columbia University Ph.D. dissertation, 1969, pp. 1516.
21 During this period, for detail of how Rangoon pleased Beijing see Shen-Yu Dai, Peking
and Rangoon, The China Quarterly, No. 5, JanuaryMarch 1961, p. 135.
22 Ibid., pp. 134135.
23 Xu Simin, An Overseas Chinese Experience: The Memoir of Xu Simin, Hong Kong: The
Mirror Post Cultural Enterprises Co. Ltd, 1981, pp. 100102.

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 Modern ChinaMyanmar Relations

relations fluctuated in the succeeding twelve years, both resolved the problems
of the border dispute, the KMT troops, and the dual nationality of overseas
Chinese. Burma became one of the closest partners of China in Asia.

Personalized Political Relations in 1954

The transformation of bilateral relations, or at least its timing, was in large part
due to the personal efforts and relationship between Zhou Enlai and U Nu.
Mutual suspicion had haunted early relations. The change began symbolically
with the exchange of visits between the two premiers, after which China
Burma relations improved. U Nu indicated, ChinaBurma amity had not been
established until my good friend Premier Zhou Enlais first trip to Rangoon
[in 1954] ... Before Premier Zhou Enlai visited Rangoon, I should admit that
there were some misgivings between the two countries peoples. On Burmas
side, many had a feeling of fear about whether China would subvert Burmas
government.24 When China was founded in 1949, our two countries relations
were not friendly. Because Chinas Premier visited Burma and I visited China,
understanding between us increased. Based on this new understanding, we
issued a statement supporting the famous Five Principles. We signed economic
and trade agreements, and cultural delegations visited each other. 25
In 1954, both sides consulted and exchanged views on the issues disturbing
Sino-Burmese relations, and jointly advocated the Peaceful Coexistence Five
Principles, and took them as the rudder of ChinaBurma relations.26 Zhous
trip to Rangoon ended with a joint statement. U Nu said that Your visit and
our joint statement greatly promoted more understanding between [our] two
countries.27 In the beginning, notwithstanding, we were still suspicious of
Chinas intentions. However, Premier Zhous visit and the announcement of
the Five Principles assuaged the tension.28 Zhou agreed with U Nu, and said,
When two neighboring and newly founded countries with different political
systems begin contact, it is natural that both fear and misunderstand each other
... These apprehensions, nevertheless, were gradually allayed because of the
two premiers exchange visits and the establishment of the Five Principles.29
24 Premier Zhou Enlai hosts Prime Minister U Nu in Kunming, Xinhua Semi-Monthly, No. 9,
1957, p. 56.
25 Abstract of Burmese statesman U Nus Speech (10 a.m., 13 October 1955), AMFA, File
No. 105-00446-04.
26 Joint statement of the premiers of China and Burma, Xinhua Monthly, No. 7, 1954.
27 Burmese Prime Minister U Nus letter to Premier Zhou Enlai on the distorted coverage by
Burmas press of the ChinaBurma joint statement, AMFA, File No. 105-00037-01(1).
28 Prime Minister U Nus banquet speech, Xinhua Monthly, No. 1, 1955.
29 Premier Zhou Enlais speech at farewell banquet, Xinhua Monthly, No. 1, 1955.

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 ChinaBurma Ties in 1954: The Beginning of the Pauk Phaw Era

More importantly, both parties worked on how to implement these Five

Principles, and reached a three-point consensus on issues of common interest.
First, contact between the two countries leaders increased understanding
and confidence in developing bilateral relations. When the CCP and the
AFPFL came into power for the first time, both lacked diplomatic experience,
and both were prejudiced against each other. Before 1954, the CCP thought
the Burmese leaders were the proletariats enemy.30 Burma feared the CCPs
leaders were like Hitler,31 and was afraid that Zhou Enlai was a cocky, irascible,
and tricky statesman.32 U Nu articulated his psychological status before and
after his trip to Beijing in 1954. When I reached Beijing just now, I had some
apprehensions ... [However] Our apprehensions disappeared after the visit
of eleven days.33 U Nus discourse may have sounded simply like diplomatic
parlance, but it was direct and candid on a range of issues.
In December 1954, Mao Tsetung met U Nu when he visited Beijing, and
praised his visit to China. Mao said that China wanted to establish diplomatic
ties with Thailand. Nevertheless, Thailand said it was afraid that China could
invade it, but Burma also feared such an invasion. However, Burma uses the
means of developing friendly relations with us, and comes here to find out
whether we will invade it. And yet, Thailand is even reluctant to come to China
to have a look. If you have suspicion and dissatisfaction, you can speak out.34
During the same meeting, U Nu also admitted that, In the past, we dared
not say what we wanted to say, fearing that you would mistake us as the U.K.s
and U.S.s lackey, and that our opposition parties in Burma would report such
conditions to you. However, after we met each other now, and discussed issues
and understood each other, we wont be afraid to speak straightforwardly any
longer. This is the most significant achievement of my trip to China.35
Moreover, Zhou Enlais distinct personal charm impressed the Burmese who
feared China, and increased the Burmese leaderships favorable impressions. For
example, after Zhous trip to Rangoon, some Burmese felt that Premier Zhou
is young and graceful, respected Burmese traditional customs, and is adept at

30 Burmese Peoples Struggle, Peoples Daily, 10 May 1948.

31 Works of Mao Tsetung, Vol. 6, p. 382.
32 Yunnan Institute (ed.), Documents on the History of ChinaBurma Friendship, p. 5.
33 Prime Minister U Nus speech at farewell banquet, Xinhua Monthly, No. 1, 1955.
34 Works of Mao Tsetung, Vol. 6, pp. 377379.
35 Ibid., p. 379. There was, however, significant differences between U Nu and the Burmese
military, which had determined that China was Burmas only potential enemy. See David
Steinberg, Burma and Lessons from the Hungarian Revolution, Irrawaddy, October
2006.

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 Modern ChinaMyanmar Relations

diplomacy and is a statesman.36 His behavior shows that he is a Premier not of

a power but of a fraternal country. Premier Zhous attitude removed our wrong
guesses in half an hour. Since then, we completely believe: if a Premier treats
a small country so modestly and hospitably, the country and people which he
governs will be even more generous and hospitable.37 In regard to the effect of
Zhous visit to Burma, U Nu wrote to Zhou that For you as an individual, for
the whole of China, you have made a wide circle of friends here.38
Second, Burma made promises on the issues about which China was worried,
allaying Beijings suspicions. Beijing had entered the Korean and Indochina
wars, and the U.S. and its allies in Asia had countered by trying to contain
China. Chinas security situation on its periphery had increasingly worsened.
Consequently, if Burma joined the West, China believed its southwest security
would be endangered. The economic agreement signed by Burma and U.S. in
1950 had caused Beijing to worry. During U Nus first visit to Beijing in 1954, he
especially mentioned the issue. Although Burma has no ability to interfere in
Chinas internal affairs by itself, it is able to damage China if it allows itself to be
an underling of Chinas enemies ... We could provide some vital locations which
could be used as navy and air force strategic bases to launch attacks on the PRC.
We could also facilitate Chinas enemies espionage and subversion in China.39
U Nu gave Beijing his promises regarding those possibilities that Through fair
and foul, we by no means will become the underling of any country ... We in
no case will do anything to jeopardize peace.[Burma] at no time will accept
unilateral aid which [might] lead to suspicion between the two countries, and
in fact never had thoughts of accepting such aid. We wont adopt any demarche
causing Chinas apprehension at the instigation of other some country.40
Third, China partly assuaged Rangoons fear and suspicion. Before Zhou
Enlai visited Burma, Rangoon was worried that Beijing was exporting revolution
and subverting the Burmese regime largely because of the CCPs attitude
toward the BCP and Burmas civil war. In 1954, however, Zhou Enlai claimed
in Rangoon that Revolution cannot be exported. If tried, there is no chance of
success. Communist parties of various countries win out only by themselves.41
36 Responses by Burmese officials and media to Premier Zhou Enlais visit to Burma, AMFA,
File No. 105-00259-03(1).
37 Prime Minister U Nus banquet speech, Xinhua Monthly, No. 1, 1955.
38 Burmese Prime Minister U Nus letter to Premier Zhou on the distorted coverage, AMFA,
File No. 105-00037-01(1).
39 Prime Minister U Nus speech at farewell banquet, Xinhua Monthly, No. 1, 1955.
40 Ibid.
41 Chronicle of Zhou Enlai: 19491976, Vol. 1, Beijing: Central Party Literature Press, 1997,
p. 393.

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 ChinaBurma Ties in 1954: The Beginning of the Pauk Phaw Era

Zhous Rangoon speech on the Communist Partys Export of Revolution had

special significance for the Burmese. Furthermore, the ad hoc joint statement
issued by the two countries premiers during Zhous visit to Burma stressed that
The two premiers restated: every countrys people have the right of choosing its
state system and lifestyle, and other countries should not interfere in the choice.
Revolution cannot be exported. Also, the common volition of the people in one
country should not suffer foreign interference.42
Burmas turbulent situation after independence, various insurrections, and
the possibility of external interference concerned China, but Mao Tsetung told
U Nu in Beijing in December,
We wish for peace in Burma. Concerning how you acquire that peace, you
need to deal with it yourself ... Each country solves its problem by itself ...
Each country has several kinds of parties. With respect to these parties, we
cant allege to oppose or support any party. The counterpart with which we
negotiate must be each countrys government. We wont invade Burma as
the U.S. interfered in the Guatemalan revolution. We wont move fighting
forces into Burma, and our Ambassador, Yao Zhongming, meanwhile, will
not act undercover in Burma. Yao will in no case do this. If he does, we will
by all means immediately dismiss him from his post.43

During the Cold War, the populous overseas Chinese in Southeast Asia
were regarded as a potential fifth column. Although the population of the
overseas Chinese in Burma was not large compared with those in some other
Southeast Asian states, Rangoon still worried about the issue of the Chinese
and their indoctrination through the Chinese school system. Burmese fear
focused on their potential political role and dual nationality. Therefore, Mao
pledged that We wont establish Communist parties in the overseas Chinese
communities, and its branches have been closed. We have done so in Indonesia
and Singapore. We have enjoined the overseas Chinese not to undertake political
activities in Burma. They can only participate in activities permitted by Burmas
government, such as celebrations ... There are some radicals in the Burmese
overseas Chinese community, and we have persuaded them not to interfere
in Burmas internal affairs. We have instructed them to abide by Burmas law,
and we dont have contacts with Burmese opposition parties fighting againsrt
Burmas government.44

42 Joint statement of the premiers of China and Burma, Xinhua Monthly, No. 7, 1954.
43 Works of Mao Tsetung, Vol. 6, pp. 374376.
44 Ibid., pp. 376377.

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 Modern ChinaMyanmar Relations

Maos promise on overseas Chinese issues was affirmed by the China

Burma communique in December 1954. It stated that overseas Chinese should
respect the laws and social customs in Burma, and should not participate
in local political activities ... Concerning the issue of [the former] colonys
nationality, the two countries governments will negotiate it through normal
diplomatic channels as soon as possible.45
When U Nu visited China, the two premiers, after consultations, thought
it was necessary to establish consulate-generals in each others major cities. In
fact, this suggestion was also a step in assuaging Burmese apprehension about
China. Mao explained that, In the past, Burma thought Yunnan dark, and
didnt know how many troops Beijing had stationed there, or what Chinese
trick was being aimed at Burma. Burma fears us very much. So we have
suggested that Burma establish a consulate general in Yunnan to watch us.46

Economic Relations in 1954

Like Sino-Burmese political relations, economic ties also shifted in 1954. On
22 Apri 1954, China and Burma signed the first economic trade agreement
(valid for three years). According to the agreement, China would export coal,
silk, silk fabrics, cotton fabrics, paper, agricultural implements, light industry
products, handicrafts, porcelain enamel, porcelain, canned food, tea, and
cigarettes to Burma. Burma would export rice, rice products, pulse seedcake,
minerals, timber, rubber, and cotton to China.47 On 3 November 1954, both
signed a goods exchange protocol on Burmese rice and Chinese commodities,
and a contract in which China bought 150,000 long tons of Burmese rice.
In addition, U Nus first trip to Beijing promoted bilateral economic rela-
tions. After negotiations, Both premiers think that it is necessary to open
ChinaBurma airline [traffic], resume road traffic, and conclude postal agree-
ments. In order to develop the trade between the two countries, the two pre-
miers agree that China will annually import 150,000200,000 long tons of rice
from Burma from 1955 to 1957; during the same period, Burma will import
industrial equipment and daily necessities from China.48
Although the amount, value, and categories involved in the 1954 trade
agreement and contract were not significant in the two countries total foreign
trade, it symbolized a change of attitude. The 1954 shift in the ChinaBurma
45 Joint Communique of China and Burmas Premiers, Peoples Daily, 13 December 1954.
46 Record of Chairman Mao Tsetungs talk, AMFA, File No. 105-00339-01(1).
47 China and Burma Sign Trade Agreement Valid for Three Years, Peoples Daily, 23 April
1954.
48 Joint Communique of China and Burmas Premiers, Peoples Daily, 13 December 1954.

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 ChinaBurma Ties in 1954: The Beginning of the Pauk Phaw Era

economic nexus was further strengthened in subsequent years. The trade value
between the two countries in 1955 increased by 30 times over 1954, and 44
percent in 1956.
The 1954 change in ChinaBurma economic ties was attributable not only
to the promotion of political relations, but also to trade as a political lever. At
that time, the quality of both countries economy and industrialization was
backward, but China still had some comparative advantages over Burma.
Consequently, in respect of ChinaBurma bilateral trade, The needs of Burmas
production and life can easily be met by our countrys exports while Burmas
export commodities are inconsistent with Chinas import requirements.49
In October 1954, when Zhou Enlai met Burmas foreign trade delegation
in Beijing, he remarked that Henceforth, we are prepared to meet Burmas
import needs, and hope that Burma can list the needed goods ... In the
following two years, if ChinaBurma trade cannot balance, we are willing to
trade using cash with special funds. This method is special in our foreign trade
because we ordinarily swap [barter].50 Zhous promise clearly showed that
China was taking advantage of trade to promote political relations. The case in
point was the rice trade between the two countries.
Rice was vital to Burmas economy. However, Rice is also one of Chinas
staple export goods; it is impossible to buy a great deal of Burmas rice with
foreign exchange. Only when Burma urgently asks us to buy its rice, can
we consider buying some rice in order to do a favor and help Burma out of
difficulty.51 Chinas Vice Minister of Foreign Affairs, Zhang Wentian, stressed the
significance of promoting economic relations with Asian countries at the session
of Chinas Ambassadors to Asian countries in 1956. Because we are a power, at
times we dont need some goods such as Burmas rice, but we still buy a bit.52
In December 1954, the memorandum that U Nu gave to Chinas counter-
part mentioned that The contract of ordering 200,000 tons of 1953 Burma
rice was signed by two countries government on 3 November 1954. About
the rice produced in 1953, we are also not sure whether it is edible. So China
needs to dispatch investigators to Rangoon to very carefully inspect it.53
49 Review by Chinese Embassy to Burma of Sino-Burmese economic ties in the past decade,
AMFA, File No. 105-00603-01.
50 Account of Premier Zhou Enlais meeting with a Burmese delegation, AMFA, File No.
105-00130-01(1).
51 Review of Sino-Burmese economic ties, AMFA, File No. 105-00603-01.
52 Chronicle of Zhang Wentian: 19421976, Vol. 2, Beijing: CCP History Press, 2000, p.
1021.
53 Burmese Prime Minister U Nus letter to Premier Zhou Enlai about the ChinaBurma rice
trade, AMFA, File No. 105-00036-01(1).

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 Modern ChinaMyanmar Relations

Beijings intention of promoting bilateral ties through the rice trade was self-
evident.
Rangoon applauded Beijings goodwill on the rice trade, and U Nu publicly
praised it many times. On 2 December 1954, U Nu stated in Beijing that There
is a great deal of surplus rice. Without buyers, we will be caught in a dilemma.
Meanwhile, due to war destruction, my countrys economy is backward. If
the rice cant be sold, it will undermine Burmas economic base. Concerning
Chinas purchase of Burmese rice, We think the generous action is a friendly
illustration.54
In the same year, U Nu remarked at the ceremony of Burmas National Day
that China was buying Burmas rice in order to help Burma. Actually, the New
China has surplus rice to export, but considering Burmas rice market, China
has taken these exciting steps. And the profit that Burma has got from China
has exceeded Rangoons original hopes.55 This was significant for Burma,
because Burmese economic planning had been premised on the high export
price for rice because of the Korean War, but Burmas implementation of its
economic planning staggered when the price declined.

54 Yunnan Institute (ed.), Documents on the History of ChinaBurma Friendship, p. 7.

55 Premier U Nus Report at the National Day Meeting, (Rangoon) Chinas Daily, 22
November 1954.

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 3
The Honeymoon Period: 19551966
For Friends in Burma
I live by the rivers head. You live by its tail.
Limitlessly, we love each other. We drink the same rivers water.
I drink from the upper flows. You drink from below.
Endlessly the river flows. We share everlasting happiness.
We are neighbors. Our friendship lasts.
Like the ageless evergreen. The waters flow forever.
Our lands are connected. At the mountains foot, beside the
same river
Anti-imperialism begets freedom. We are peacefully united.
We are paukphaw. Our languages are connected.
We are united and help each other. Peace is powerful
Living by the rivers, we praise their Climbing the mountains, we sing of
breadth their majesty.
The mountains face north. The river flows south.
Chen Yi , 1956

A decade-long honeymoon followed the shift from suspicion to

friendship in the ChinaBurma nexus in 1954. Chinese media and
scholars usually described the close relations by quoting Chen Yis
poem For Friends in Burma. Beijings honeymoon with Rangoon until 1966,
however, also verified a Chinese proverb: things always reverse themselves
after reaching a climax. After Sino-Burmese relations reached their peak in
196061, subsequent important changes in the domestic political situation
and foreign policy in the two countries signaled that this honeymoon period
would end. Strains in Chinas relations with Burma increased after 1962 under
the new military regime in Rangoon.
World events after 1954 played their part in the improvement in Sino-
Burmese relations. The emergence of the non-aligned movement and the
Bandung Conference, in which both China and Burma played important

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 Modern ChinaMyanmar Relations

Plate 4: Border near Namkham, China. Statuary illustrating poem For Friends in Burma
(photograph David Steinberg)

roles; the Hungarian Revolution of 1956; the Chinese invasion of Tibet; the
Indo-Pakistan War; the Sino-Indian War of 1962; and the development of the
Sino-Soviet split, including these two powers vying for influence in Burma
all contributed to both sides realization that the sore points of contact needed
to be resolved.

The U Nu Period
One of Beijings fundamental foreign policy objectives toward its periphery,
prior to Chinas foreign policy shift to radicalism in the mid-1960s Cultural
Revolution, was to construct collective peace and security, expand peaceful
regions in Asia, and recruit Burma into its united front as a buffer in its
confrontation with the West and even as a means of limiting the American
containment and isolation of China.
After the establishment of diplomatic relations in 1950, however, Sino-
Burmese relations faced four major problems: (1) the overseas Chinese issue,
(2) the BurmaChina boundary dispute, (3) the KMT troops in Burma, and
(4) the BCP issue. The settlement of these four issues had a direct bearing on
whether Beijing could realize its fundamental objectives in Burma.

The Overseas Chinese Issue

The first Chinese Nationality Law was promulgated in 1909. It operated on the
basis of jus sanguinis all Chinese anywhere were regarded as citizens of China
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 The Honeymoon Period: 19551966

alone.1 Tsai noted that toward the end of the Qing Dynasty Chinese opposition
to jus soli alone affords ample material for conflicts between states.2 China
did not recognize dual citizenship until Beijing and Jakarta signed the Sino
Indonesian Dual Nationality Treaty in 1955.
During the Cold War, the overseas Chinese in Southeast Asian countries
were regarded by the West with suspicion potentially to be used by China
for subversion and expansion. The issue of Chinese nationality and treatment
created tensions between China and some Southeast Asian states, and their
resolution had been an issue after World War II.3 Although the population of
the overseas Chinese in Burma was relatively small, the Burmese government
still regarded the Chinese with vigilance in varying degrees at different times
and on different issues. The Burmese were especially concerned about their
political activities. The Chinese, in addition, had important commercial roles
in Burma throughout the country, so they could not be ignored.
In the early 1950s, there were said to be some 350,000 overseas Chinese
in Burma, according to the Chinese Embassy in Rangoon.4 In light of the
Nationality Law and the provisions of the two countries, they included: (1)
about 140,000 Sino-Burmese of mixed blood, or 39 percent,5 who, according
to Burmese provisions, should have had Burmese citizenship; (2) about
120,000 Chinese, or 33 percent, born in Burma. Two-thirds of the locally-
born Chinese were second or earlier generation and could have had Burmese
citizenship as it was supposedly automatic. Those of the first generation might
apply for citizenship;6 260,000 of them might have dual nationality, accounting
for 74 percent of the total.
1 Law on the Acquisition and Loss of Chinese Nationality, The American Journal of
International Law, Vol 4, No. 2, Supplement: Official Documents, 1910, pp. 160166.
2 Tsai Chutung, The Chinese Nationality Law, 1909, The American Journal of International
Law, Vol. 4, No. 2, 1910, pp. 408409.
3 George Pukung Jan, Nationality and Treatment of Overseas Chinese in Southeast Asia,
New York University, Ph.D. Dissertation, 1960, p. 215.
4 Reference Material of Overseas Chinese Population, Research Association of Overseas
Chinese, 1956, p. 75.
5 During British rule, marriage between Chinese and Burmese, particularly between Chinese men
and Burmese women, was the most common form of intermarriage. (See, Ikeya Chie, The
Modern Burmese Woman and the Politics of Fashion in Colonial Burma, The Journal of Asian
Studies, 67:4, 2008, p. 1299.) When a Chinese marries a Burmese wife, the daughters usually
receive Burmese names and wear Burmese dresses and are regarded as Burmese, while the sons
are regarded as Chinese. (see M. B. Hooker, The Chinese Confucian and Chinese Buddhist
in British Burma, 18811947, Journal of Southeast Asian Studies, 17 September 1990, Vol. XXI,
No. 2, p. 395. So the actual number of Sino-Burmese is vastly underestimated but unknown.
6 Introduction on [the] Overseas Chinese Condition, Office of Overseas Chinese Affairs
Commission, 1963, p. 25. The law was changed in Burma in 1982, giving Chinese and
other foreigners associate citizenship, with less rights.

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 Modern ChinaMyanmar Relations

During U Nus first visit to China in December 1954, he expressed

Burmese concerns over the Chinese nationality question, and wished that
it could be solved as soon as possible.7 On 13 October 1955, U Hla Maung,
Burmese Ambassador to China, inquired whether China would approve of the
renunciation of Chinese nationality by the overseas Chinese who had attained
Burmese citizenship. Burma, however, was ready to negotiate with China on dual
nationality.8 In response to Burmas request, China drafted a joint communique
and was ready to accept dual nationality.9 China, however, later changed its mind,
holding that the Burmese government was really intending to reach only a partial
agreement on the overseas Chinese question, either by continuing negotiations
or dragging them on.10 Therefore, China did not respond to Burmas request
and no negotiations took place. In spite of this, China was positively disposed
toward the overseas Chinese attaining Burmese nationality: Given that the
acquiring of Burmese nationality was beneficial to our country both politically
and economically, a policy should be adopted to encourage a large number of
overseas Chinese to acquire Burmese nationality.11
When meeting with the Burmese Ambassador to China on 22 June 1956,
Zhou Enlai said, China endorses [the concept] that the overseas Chinese who
were born in their host countries and are willing to stay there could acquire
the nationality of their residence countries.12 Zhous posture meant that
China accepted the Burmese governments plan to give citizenship to eligible
overseas Chinese. At the welcoming meeting hosted by local overseas Chinese
on 18 December 1956, Zhou Enlai explicitly stated to the overseas Chinese
and Burmese that it was good that some overseas Chinese who had long stayed
in Burma should become Burmese citizens as long as they made the choice
voluntarily, and they no longer held Chinese citizenship.13
That the overseas Chinese did not become an obstacle to Sino-Burmese friend-
ship was due to their relatively small population, a high level of assimilation, and
good ethnic relations, unlike their counterparts in Indonesia, Malaysia, and some
7 Joint Communiqu of Chinas and Burmas Premier, Peoples Daily, 13 December 1954.
8 Speech notes for Foreign Minister Zhang Hanfu and Burmese Ambassador to China U
Hla Maung (10:30 a.m. on 13 October 1955), AMFA, File No. 105-00175-03(1).
9 Instructions and additional comments on the nationality problems facing Overseas Chinese
in Burma, AMFA, File No. 105-00510-03(1).
10 Files on dual nationality of Overseas Chinese in Burma compiled by the Asian Affairs
Department of the Ministry of Foreign Affairs, AMFA, File No. 105-00510-10(1).
11 Ibid.
12 Summary of discussion between Premier Zhou Enlai and Burmese Ambassador to China
U Hla Maung (22 June 1956), AMFA, File No. 105-00307-02(1).
13 Speech of Premier Zhou Enlai at the welcoming ceremony by Overseas Chinese in Ran
goon, Burma, AMFA, File No. 105-00510-08(1).

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 The Honeymoon Period: 19551966

other Southeast Asian countries, where religious differences were a factor in their
lack of assimilation. In the early 1950s, there were some 140,000 Sino-Burmese, and
a second generation of about 80,000 of their descendents. According to Burmas
Citizenship Act, the government could naturally grant Burmese nationality to these
220,000 Chinese, and China also approved of this approach.
Since the first high-level mutual visits in 1954, China had made clear its
position on the overseas Chinese political role: China would not use the over-
seas Chinese to interfere in Burmese internal affairs and subvert Burmese state
power.14 In the early 1950s, China disbanded the Democratic League of China
and Chinas Communist Party in Burma. At the welcoming meeting held by
the Rangoon Chinese community on 18 December 1956, Zhou Enlai further
articulated that: The overseas Chinese should be law-abiding and exemplary
residents in Burma. Those who have obtained Burmese nationality should
politically distinguish themselves from those who havent. The former are
not to be admitted into the overseas Chinese organizations and the latter are
not to engage in Burmese political activities. The Chinese are not allowed to
join Burmese parties, or take part in elections and all other political activities.
They should stay away from these ... In addition, we would not establish any
organization of the communist party and other Chinese democratic parties
in the Chinese community.15 During the visit, Zhou Enlai explicitly told the
Burmese Prime Minister, Politically, we hold that those who have attained
suffrage in Burma should be regarded as Burmese citizens and will no longer
possess Chinese nationality; therefore they will not be allowed to join the
overseas Chinese organizations and their activities. Similarly, if some Chinese
still maintain their Chinese citizenship, they should be excluded from Burmese
political activities.16 In addition to Zhous vow in Rangoon in 1956, he made
similar statements during his other eight visits to Burma that The overseas
Chinese should not get involved in local political activities.17Although the
Chinese government and leadership made promises about proscribing any
Chinese political role in Burma, disturbing political events still occurred be-
cause some pro-Beijing Chinese were found to be involved in Burmese politi-
cal activities.
In August 1956, U Hla Maung told Zhou Enlai that some Chinese and
Chinas Embassy in Rangoon supported some parties in Burmese domestic

14 Works of Mao Tsetung, Vol. 6, pp. 376377.

15 Speech of Premier Zhou Enlai, AMFA, File No. 105-00510-08(1).
16 Chronicle of Zhou Enlai, Vol. 2, p. 647.
17 Interview Ye Keqing, 8 December 2005, Yangon, Myanmar.

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 Modern ChinaMyanmar Relations

election campaigns.18 When meeting with Zhou Enlai in 1960, former Burmese
Prime Minister, U Ba Swe, told Zhou Enlai again, Before the general election
of this year, the overseas Chinese endowed the Clean faction of AFPFL
[i.e., U Ba Swes opponents] and they spent money like water. We hope Your
Excellency could do something to prevent this. The leaders of the Clean
faction of AFPFL raised money from Chinese businessmen in their own names
and the businessmen did not hesitate to give to them.19 U Ba Swe also admitted
that China had instructed the overseas Chinese to alienate themselves from
Burmese politics. However, the overseas Chinese actually funded the Clean
faction regardless of their oral promises.20 The Bank of China in Rangoon was
accused of sponsoring U Nu, of the Clean faction, to run for Prime Minister.21
The leader of the overseas Chinese Communist Party in Burma recalled that it
was only realistic for the overseas Chinese to support local politics: Although
the Chinese government prohibited them from participating in Burmese
politics, they were generally reluctant to offend the Burmese, especially those
who were influential and to whom they owed their survival and development.
As a result, they had to make donations to the local parties in power. The BCP
at times [also] collected donations from them. The two sides in fact had a tacit
understanding in this respect.22
In general, the issues concerning the overseas Chinese political role in Burma
had not been major obstacles in bilateral relations, mainly due to Beijings
restraint, the weak power of the resident Chinese, the internal strife between
the CCP and KMT in the Chinese community, and more threatening and
overshadowing border and KMT army issues.

The Burmese Kuomintang Army Issue

On 29 November 1949, Zhou Enlai warned southern bordering countries not
to shelter the KMT army that had retreated into that area.23 One month later,

18 Summary of discussion between Premier Zhou Enlai and Burmese Ambassador to China
U Hla Maung (25 August 1956), AMFA, File No. 105-00307-03(1).
19 Account of discussion between Premier Zhou Enlai and former Burmese Prime Minister
U Ba Swe, AMFA, File No. 203-00036-04(1).
20 Ibid.
21 Brief account of talks and meetings during Premier Zhou Enlais visit to Burma, AMFA,
File No. 203-00036-07(1).
22 Memoirs of LWZ, Part III: Assignment on Overseas Chinese after the Dissolution of
the Burmese Overseas Chinese Communist Party. Unpublished manuscript, 1993. Initials
are used to protect the identity of sources.
23 Works of Zhou Enlai since the Establishment of PRC, Vol. 1, Beijing: Central Party Literature
Press, 2008, p. 593.

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 The Honeymoon Period: 19551966

Mao Tsetung cabled Liu Shaoqi: The PLA should not pursue and attack the
armies of Li Mi and Yu Chengwan [both KMT generals] in haste lest they
withdraw to Vietnam and Burma ahead of our besiegement.24 Although the
CCP had anticipated that the KMT troops would withdraw to Vietnam and
Burma, it did not predict their later threat to the security of southwest China,
and their significance in Sino-Burmese relations.
In early 1950, more than 1,700 KMT troops crossed the border into
Kengtung, preyed upon the countryside, and caused great hardship to local
inhabitants by their demands for food and forced labor. Units of the Burmese
army made contact with these troops and demanded that they should either
leave Burmese territory forthwith or submit to disarmament and internment in
accordance with international law. On the refusal of the KMT troops to comply
with either of these alternatives, units of the Burmese army took offensive action
to enforce compliance. After several engagements in the latter half of 1950,
the KMT troops were dislodged from Kengtung; they withdrew westward
and established a new headquarters at Mong Hsat near the BurmaThailand
frontier, where they constructed a regular airfield to facilitate the receipt of
supplies from sources outside Burma. New recruits had been obtained from
the BurmaYunnan border area. The number of the troops was then estimated
at about 12,000. General Li Mi had been moving between Mong Hsat and
Taiwan and there was other evidence of a direct link with the Kuomintang
Government. At the end of 1952, the troops which had so far been operating in
areas east of the Salween River had extended their activities to areas west of the
river in conjunction with elements in active rebellion against the Government
of Burma.25
Although the CCP seized provincial power in Yunnan peacefully in 1950, it
did not wholly and effectively control Yunnan. Some local warlords, rebellious
KMT army units that previously had surrendered to the PLA, and minority
armed forces jointly launched armed insurrections and riots around the prov-
ince.26 Beijing believed that the threats of the KMT army in Burma probably
resulted from the U.S. making use of the Burmese KMT army to open a second
front during the Korean War, and also that the KMT was colluding with anti-
communist forces in China to assault and subvert the Yunnan government.

24 Works of Mao Tsetung since the Establishment of the PRC, Vol. 1, p. 198.
25 Yearbook of the United Nations 1953, New York: Department of Public Information,
United Nations, 1954, p. 162.
26 Campaign to Eliminate Banditry in the Southwest Region, Beijing: PLAs Publishing House,
2001, p. 625.

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 Modern ChinaMyanmar Relations

Map 4: Kuomintang troops in Burma, 19501961 (based on a map by Wang Di and Li Feiying, in
part sourced from material in the PRC Foreign Ministry archives)

In the first half of 1952 alone, some small groups of KMT troops launched
more than 60 attacks against border areas in three counties of Yunnan:
Tengchong, Longling, and Zhenkang. Over 100 officials and local residents
were killed.27 Between May and June 1951, Li Mi dispatched 6,000 soldiers and
launched cross-border attacks one after another along four routes in Yunnan;
parts of Gengma county, Menglian county, Menghai county and Zhenkang
county were occupied. In July, KMT troops were divided into two columns
to re-enter into Yunnan, and occupied Cangyuan, Menglian, and Lancang
counties. But their attacks and seizures were short-lived, and under the PLAs
counterattacks they finally retreated back into Burma.
The increasing strength of the KMT army in Burma with the military assis-
tance of Taiwan and the U.S. increased Beijings anxiety. The KMT constructed
an airfield, updated and renewed armaments, and recruited new soldiers. Most
of the new recruits consisted of anti-communists from border areas of Yunnan
and Chinese deserters in Burma. For example, when KMT troops attacked

27 Development of the Military in Contemporary China, Vol. 1, p. 373.

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 The Honeymoon Period: 19551966

Yunnan and retreated back to Burma under the PLAs offensive in the summer
of 1951, during which they had occupied Mengding and eight other counties in
Yunnan for several months, some anti-communists followed them and together
they withdrew to Burma. Thus, their armed force rose to 12,000.28 Since the
CCP had came to power in mainland China, various internal and disruptive
political campaigns were mounted at intervals, such as those against landlords.
During each political movement, some Chinese fled from Yunnan and other
provinces to Burma to dodge political persecution; the KMT in Burma also
encouraged them to escape. Some of them became the supporters of and par-
ticipants in the KMT armies.
In addition, the KMT army in Burma attempted to create border conflicts
between China and Burma in order to sour Sino-Burmese relations. According
to a KMT document of 1952 that was captured by Burmese intelligence units,
they were ordered to come between the two countries armies when the
Burmese army attacked them. You and your affiliated troops should disguise
yourselves as PLA to attack Burmese army barracks and subsequently make
announcements that China should invade Burma.29 On 16 September 1959,
the Kunming Military Region reported to Beijing that Some KMT soldiers
disguised as PLA have slipped into the northern section of the unsettled border
three times since the early July ... They intended to attack the Burmese army
or PLA in disguise in order to provoke and destroy Sino-Burmese relations.30
To Rangoon, the KMT army above all meant that Burmese sovereignty and
territorial integrity were jeopardized. As a result, the AFPFL was under internal
nationalistic political pressure in addition to other, previously mentioned, in-
ternational issues. In addition, the alliance of the KMT army and ethnic insur-
gents further aggravated the issue. On 22 January 1953, the Burmese Ministry
of Defense stated that some evidence revealed military cooperation between
the KMT army and Karen insurgents, who received arms aid from the former.
The KMT armies also obtained support from the Padaung ethnic group when
they were expelled from Shadaw by the Burmese army on 25 February 1953.31
Chinas declassified archives also indicate that KMT troops colluded with

28 Command paper of the 12th session of the Legislature, Archives of Academia His-
torica (Taiwan), Cat. No. 069, Roll No. 150, File No. 11-4-3, 22 December 1953, pp.
4448.
29 Kuomintang Aggression against Burma, p. 159.
30 Operations by remnants of Chiang Kai-sheks troops in BurmaChina border areas
and the negotiations with Burma, AMFA, File No. 105-00604-02(1).
31 Keesings Contemporary Archives, London: Keesings Publications Limited, March 28-4
April 1953, p. 12838.

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 Modern ChinaMyanmar Relations

the Sawbwa of Kengtung, and supported their separatist movement. They

[KMT] actively encouraged the anti-government armed forces in the Shan
State to attack the Burmese army east of the Salween River, and discouraged a
Sawbwa of the Shan State from handing over power to Rangoon.32
Beijing, however, adopted a restrained attitude toward the problem of the
KMT, which the Burmese appreciated. In 1957, U Nu spoke out in parliament: I
have to appreciate the PRCs attitude and sincerity. When KMT troops allegedly
attacked Yunnan, China could have made trouble for us if it had wanted to do
so. On the contrary, China took a sincere and patient attitude towards us, so I
give my thanks to the PRC.33 In 1960, Zhou Enlai told Ne Win that Regarding
the KMT troops in Burma, we know that it is hard for you to annihilate them
because they have arms, and notably strong support from a foreign power
[i.e., the U.S.]. We adopt an attitude of understanding, and await the Burmas
government exterminating them stage by stage.34 Beijing even attempted to
resort to force to solve directly the KMT problem in Burma. In the early 1950s,
China proposed to deploy the PLA to help Burma annihilate them, but Burma
refused. In fact, for a long period China was very dissatisfied with the Burmese
failure effectively to cope with the KMT issue. Declassified documents from
Taiwan indicate that Beijing made use of leftists in the Burmese government to
promote it attacking the KMT. Meanwhile, Beijing ordered the PLA to disguise
themselves as KMT troops to project KMTs image as the aggressor to the
Burmese.35
Facing the aggravating KMT crisis, Burma stopped American aid and
submitted the KMT issue to the United Nations.36 Between November 1953
and May 1954, Taiwan withdrew 6,986 troops from Burma in 3 batches,
handed over 1,323 pieces of weapons, and 822 personnel were evacuated to
Taiwan. There were still 6,000 KMT affiliated people staying in Burma and
most weapons were still in their hands and those of some minority rebels.37
After the first troop withdrawal to Taiwan in 1954, Rangoons attitude
to this issue relaxed because the threat caused by the KMT and their power

32 Situation of Chiang Kai-sheks troops fleeing to Burma and Burmese attitude, AMFA, File
No. 105-00605-02.
33 Abstract of Burmese Prime Minister U Nus speech, AMFA, File No. 105-00814-01(1).
34 Account of the discussion between Premier Zhou Enlai and Ne Win, Chief of the General
Staff of Burma, AMFA, File No. 203-00036-01(1).
35 Return of the Yunnan Anticommunist National Salvation Army to Taiwan, Archive of
Political and History Department, Defense Ministry (Taiwan), File No: 542.5/1073,
June 1953February 1954.
36 Bandyopadhyaya, Burma and Indonesia, p. 154.
37 Yearbook of the United Nations 1953, pp. 5354.

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 The Honeymoon Period: 19551966

declined. The Burmese government then concentrated on the BCP and

ethnic rebels. The KMT troops were no longer able to pose a dire threat to
Rangoons sovereignty. The KMT affair, however, had an important impact on
the Burmese military, which took over the administration of part of the Shan
State as a result, and perhaps this experience contributed to their confidence in
administering the whole country later.38
On 17 December 1954, when meeting the Burmese Ambassador to China,
Zhou Enlai pointed out that China hoped the Burmese government would take
powerful action to wipe out or disarm the KMT army and remove an obstacle
in Sino-Burmese relations.39 In August 1956, Zhou Enlai told U Hla Maung that
Concerning the KMT troops in Burma, we have for seven years kept silent on it
in the newspapers and never deliberately made it difficult for Burma. However, the
KMT army would be a considerable threat to China with the support of America.40
In December 1957, Military Intelligence of the PLA General Staff Depart
ment analyzed the attitude of the Burmese government toward the Burmese
KMT army:
The Burmese government has centered on civil war in recent years and the
KMT troop issue plays second fiddle to it. Although Burmas government
is disgusted that the U.S. and Taiwan support them, Rangoon attempts
to take advantage of this situation to blockade the ChinaBurma border.
Consequently, they have maintained the confrontation with the KMT
troops, and dont launch aggressive attacks on them. However, when they
[the KMT] expand their sphere of influence, the Burmese army undertakes
military operations to counterattack. Early this year, the 9th Infantry
Brigade of Burma asked the Headquarters of the Burmese Army General
Staff for permission to attack, but failed to get the permission. Afterwards,
the Burmese army didnt carry out any large-scale military operation from
January to October. Burmas government deployed one brigade and four
and a half battalions (about 4,000 men) to cope with the KMT troops, and
revoked the command post at Po-Ren Meng. During July, the Burmese
army made a concession without fighting back when KMT troops occupied
Mill Mountains, which Burmese local armed forces occupied.41
38 See Mary P. Callahan, Making Enemies: War and State Building in Burma, Ithaca: Cornell
University Press, 2003.
39 Chronicle of Zhou Enlais Diplomatic Events: 19491975, Beijing: World Knowledge
Publishing House, 1993, p. 96.
40 Main points of two conversations between Premier Zhou Enlai and Burmese Ambassador to
China U Hla Maung, AMFA, File No. 105-00752-02(1).
41 Situation of Chiang Kai-sheks troops fleeing to Burma, AMFA, File No. 105-00605-02.

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 Modern ChinaMyanmar Relations

In early March 1959, the Burmese army launched its Spring Campaign to
attack the KMT. The PLA Intelligence Department predicted, according to
its analysis of Burmese military offensive performance and the deployment
of forces, that the purpose of the Burmese military operation was to limit the
KMT sphere of influence, and to crack down on KMT arrogance in order to
reap political capital for the Burmese military caretaker government. Therefore,
the Burmese military operation was on a limited scale, and intermittent war
continued.42
China was dissatisfied with the Burmese attitude and repeatedly urged
Rangoon to solve the problem, but Rangoon seemed deliberately to play down
its seriousness. In March 1956, U Hla Maung told Zhou Enlai that the Burmese
KMT army was not large. They could not take possession of any base area and
hid in the jungle so they had to move around and harass travelers. Many in
the KMT army had sent letters to express their willingness to surrender. The
Burmese KMT army, including dependants, amount to around 3,000; they are
distributed along the ThaiBurma, LaosBurma, and ChinaBurma border
areas.43 When U Hla Maung met Zhou Enlai three months later, he stressed
again that the KMT troops were only 2,0003,000 (families included). They
operated in the area of Kengtung and marauded passengers and villages. They
did not exist as a whole unit, but moved around in a dispersed manner.44
When Burmese Vice Prime Ministers U Ba Swe and U Kyaw Nyein visited
China on 14 December 1957, Mao Tsetung asked again about the number of
Burmese KMT troops. U Ba Swe responded that it was estimated to be 1,000
1,500 but that they were not political but rather bandits looting everywhere they
went. At most, they once were 12,00016,000 strong.45 On 17 April 1958, Zhou
Enlai once more inquired from U Hla Maung about the size of the KMT army
in Burma. U Hla Maungs answer was less than 2,000 including their families.
They have been reduced to banditti and are found in the border areas of Burma
ThailandLaos. The Burmese government is trying to resolve this problem.46
Beijing had continuously questioned the Burmese since 1954 about the
number and military strength of the KMT troops, and the Burmese answer was

42 Ibid.
43 Summary of discussion between Premier Zhou Enlai and Burmese Ambassador to China
U Hla Maung (7 March 1956), AMFA, File No. 105-00307-01(1).
44 Summary of discussion between Premier Zhou Enlai and U Hla Maung (22 June 1956),
AMFA, File No. 105-00307-02(1).
45 Record of Chairman Mao Tsetungs talk, AMFA, File No. 105-00339-01(1).
46 Abstract of talks between Premier Zhou Enlai and Burmese Ambassador to China U Hla
Maung on Burmese domestic situation, AMFA, File No. 105-00858-01.

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 The Honeymoon Period: 19551966

quite different from that of Chinese intelligence sources: from December 1957
to October 1958, the KMT army commanded by Liu Yuanlin had carried out
the Anzai Plan in northern Burma; it was to train troops to assault the southwest
region of China.47 Information from Military Intelligence of the PLA General
Staff Department in December 1957 also revealed that KMT troops in Burma
had 4 armies, 10 divisions, 7 independent regiments, 1 artillery group, and 1
guard group, amounting to 4,500, and were dispersed along the Sino-Burmese
border area in northeast Burma and the triangle area of Burma, Laos, and
Thailand.48 Up to 12 December 1958, according to preliminary estimates at
that time, 114,510 Yunnanese escaped to neighboring countries because of the
Great Leap Forward and 80 percent of them fled to Burma.49 On 24 October
1958, a report submitted by the Chinese Embassy in Burma to the Foreign
Ministry depicted the situation: after the outflow of Chinese residents from
the Yunnan border areas, KMT troops in Burma seized the opportunity to
despise the socialist system, slander our partys policy, smear the Great Leap
Forward for its slave labor, and the outflow due to governmental persecution,
and to counteract the influence of socialism. A large number of escapees were
enlisted with the KMT troops in Burma, which had expanded (it was reported
that their troops had increased by more than 2,000 in one year).50
PLA intelligence also pointed out that Since the second half of 1958, KMT
troops have energetically beguiled Chinese escapees to enlist, and they expand
their sphere of influence northward in Burma. It is learnt that they have increased
to approximately 8,000 from 5,300, and have established the Ximeng Military
Region in the Kawa Mountains, the southern section of the sparsely settled
ChinaBurma border.51 In 1959, Yunnan anti-communists took advantage
of the occasion of Tibets rebellion to incite armed insurgence by more than
2,400 in the Ximeng frontier area, and instigated the escape of a large number
of border residents. The KMT seized this chance to expand their forces once
again. Up to November, they totaled more than 9,400, comprising 5 armies, 15
divisions, 6 columns, 6 independent regiments, 3 independent detachments,
and 1 military region. Taiwan supported their expansion. Beginning in March
1959, Taiwan airdropped arms to them. In July 1960, Taiwan shipped a special

47 Memoirs of Liu Yuanlin at the Age of 88, Taipei: History and Political Bureau of Compilation
and Translation of National Defense, 1996, p. 106.
48 Situation of Chiang Kai-sheks troops fleeing to Burma, AMFA, File No. 105-00605-02.
49 Reports on the flight of inhabitants in Sino-Burmese border areas, AMFA, File No. 105-
00604-01.
50 Ibid.
51 Situation of Chiang Kai-sheks troops fleeing to Burma, AMFA, File No. 105-00605-02.

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 Modern ChinaMyanmar Relations

operation force of 400 members to northern Burma as well as airdropped a

large number of weapons and equipment. In September, Maung Pai Airstrip
was built, and Taiwan was planning to deploy troops in northeast Burma, using
it as an outpost to reconquer Mainland China.
The number of KMT troops reported to China by Burmas government,
1,0003,000 including their families, could not convince the former. This
seemed not to be an intelligence error, but a Burmese maneuver to deliberately
undervalue this issue. China did not believe the Burmese version that the
KMT army had become dispersed bandits. Beijing began increasingly to worry
about the expansion of the KMT army in Burma.
In October 1960, both sides signed an agreement to settle the border
dispute, and they agreed to continue to carry out necessary surveys of the
boundary line between the two countries, to set up new boundary markers,
and to examine, repair, and remould old boundary markers.52 China declared
that it was necessary to attack the KMT in order to ensure the security of the
border survey and avoid any disturbance of the demarcation. On 4 December,
China and Burma signed an agreement in Kunming on guard duty for erecting
boundary markers. The two countries agreed on 22 December 1960 to launch
a joint military operation to eliminate the KMT troops. Between 22 December
1960 and 9 February 1961, the PLA entered Burma twice and engaged in
battle.53 It took the PLA and the Burmese army three months to defeat them and
destroy their general headquarters in Burma. Most of the KMT army moved to
the frontier area of BurmaLaosThailand, and 4,349 of Liu Yuanlins troops
were withdrawn to Taiwan.54
The remaining KMT had lost their main strength and could not conduct
threatening attacks on Yunnan, although Taiwan went on supporting them
after 1962 and ordered them to continue trying to attack the mainland. From
March 1963 to September 1966 there were 8 invasions by the KMT forces in
the frontier areas of Yunnan; these were defeated by the PLA. Thereafter, KMT
troops retreated to the BurmaThailand border area and gradually stopped
aggressive attacks on the Yunnan border region.

52 Boundary Treaty Between the Union of Burma and the Peoples Republic of China,
United Nations Treaty Series, Vol. 1010, No. 114847, p. 142.
53 According to Chen Yixiang, acting as the translator of the ChinaBurma joint border
survey team, the PLA entered Burma to assault KMT troops in the border area of China
BurmaLaos in the second half of 1961. See Chen Yixiang, Memories of the Sino-
Burmese joint boundary survey, At Home and Overseas, 2003, No. 12.
54 Memoirs of Liu Yuanlin, p. 275.

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 The Honeymoon Period: 19551966

Rangoons consent for the PLA to enter Burma to destroy the KMT troops
played a significant role in finally solving the KMT army problem. But the
Burmese continuously had great suspicions concerning the PLAs presence in
Burma. For instance, in the second half of 1961, when China proposed to send
troops to exterminate the remaining KMT army in Burma for reasons of the
security of the boundary settlement, Burma hesitated to reply and worried
that the PLA would not be evacuated from Burma but would help the BCP
expand its military forces. China promised again and again that the combat
would be conducted in the name of Sino-Burmese joint operations; the
Burmese could watch the combat at some commanding height when the battle
started. After the battle, all the trophies like firearms and ammunition would
belong to Burma; the communique would be released in the name of Sino-
Burmese joint operations; and the PLA guaranteed to entirely retreat from
Burma.55 At last, Burma agreed and the PLA entered Burma. This reflected the
increasing trust between China and Burma, which was based on the peaceful
settlement of Sino-Burmese boundary dispute. The solution of the border
dispute itself promoted bilateral ties. The settlement of the KMT problem was
one of the byproducts of overcoming the border dispute.

The BurmaChina Boundary Settlement

When the CCP seized power in China in 1949, the Sino-Burmese border
dispute became a difficult challenge for Beijing in the context of the regime
change in China, the decolonization of Asian countries, and the rise of the
Cold War. The undemarcated boundary was one of the most significant and
controversial issues of Sino-Burmese relations in the 1950s.

~ The Divergence of Interests in the Border Dispute

China claimed that there were three sections of the undemarcated borderline
to be resolved: the southern section of the Akha mountain area; the middle
sections MengMao Triangle area at the confluence of the Nmai Hka and Ruili
rivers; and in the northern section, the northern part of the High Conical Peak.
Initially, Beijing maintained that the 1941 Line was void, and that the Meng
Mao Triangle area and the northern lost areas including Hpimaw, Gawlum, and
Kangfang should be returned to China. The Burmese bargained for the status
quo, as they had inherited from the British the 1941 Line and the traditional
borders. They continued to dominate the MengMao Triangle area but thought

55 Chen Yixiang, Memories of the Sino-Burmese joint boundary survey.

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 Modern ChinaMyanmar Relations

that a 50-square-mile territory including Hpimaw, Gawlum, and Kangfang

could be returned to the Chinese. As a result, Burma claimed that only the
northern part was the unsettled boundary. China attributed the Sino-Burmese
border issue to a product of imperialist policies of aggression and attempted
to change the result while Burma stressed its inheritance from history? The
process of resolving the ChinaBurma border issue was not smooth sailing.

~ BurmaChina Strains in 1956

China originally was not anxious to resolve the boundary dispute with Burma.
The PLA had crossed the 1941 Line and entered the debated ground
in Burma to pursue KMT troops in 1952, and had stationed troops there.
But Sino-Burmese conversations on the border problem began in 1954. In
December 1954, when U Nu visited China, the joint communique referred to
the incomplete delimitation of the boundary line, and acknowledged the ne-
cessity to settle this question in a friendly spirit at an appropriate time through
normal diplomatic channels.56 The two parties agreed to keep the boundary
status quo for the time being. Soon after, however, an armed conflict between
the two countries erupted at Yellow Orchard in the Wa State in 1955. The
border problem having thus assumed urgency and importance, negotiations for
an early and final settlement were started in earnest at the highest levels of the
two governments.57
On 20 December 1955, a skirmish between the Burmese army and PLA
occurred at Yellow Orchard to the west of 1941 Line, causing several casu-
alties in the two armies.58 Burmese domestic media and the Western press
continually reported the story and accused China of invading Burma. The
U.S. then supported the Manila Pact countries in carrying out a military
exercise to show their disapproval of the Chinese incursion. Beijing felt the
pressure caused by the conflict, which caused the border dispute to be placed
on Chinas agenda of the day. When Zhou Enlai presented a report on the
ChinaBurma border problem to the National Peoples Congress in 1957, he
purposely mentioned the conflict. Although the event was resolved through
a joint effort by the two sides, in the meantime it also gave the two govern-
ments an opportunity to understand the urgency and necessity of resolving

56 Joint Communique of Chinas and Burmas Premiers, Peoples Daily, 13 December 1954.
57 Maung Maung, The BurmaChina Boundary Settlement, Asian Survey, Vol. 1, No. 1,
March 1961, p. 40.
58 Burmese note to China relating to talks on the shooting incident in Sino-Burmese border
areas, AMFA, File No. 105-00745-01(1).

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 The Honeymoon Period: 19551966

the boundary problem.59 Negotiations were conducted over several years

beginning in early 1956.
Soon after the Yellow Orchard event, Burma presented a note to China
stating that the two parties should respect the 1941 Line to avoid a recurrence
of similar incidents. Burma made suggestions that two parties should withdraw
their respective troops from the controversial area and that a Joint Boundary
Commission should hold meetings as soon as possible.60 The Chinese Embassy
in Burma, analyzing the Burmese suggestions, concluded that Burma was
attempting to shirk responsibility for the event, and noted that [Burma] asked
China to recognize the 1941 Line, which would validate their [the Burmese]
position and unilaterally incorporate the location of the conflict into Burma,
as well as urging us [China] to withdraw our army to the east of the 1941
Line. Burmese claims violated the consensus of maintaining the temporary
boundary status quo reached by U Nu and Zhou Enlai in Beijing. As a result,
the Chinese Embassy in Burma proposed not to withdraw to the 1941 Line.61
On 31 July 1956, The Nation, a leading Rangoon English daily, reported
that hundreds of Chinese troops had invaded Burma and occupied 500 square
miles of Burmese territory, and were moving south. This report brought the
situation to the attention of the two leaders and international public opinion.
Prime Minister U Ba Swe convened the Cabinet and other leadership to
discuss the serious situation. On the day that the report was released, the
Burmese government partly denied it, but admitted that the Chinese army
had invaded Burma, disclosed that the PLA had set up an outpost in Wa State
near the BurmaChina border, but stated that the situation was not as severe
as reported in The Nation.62 Although Rangoons public statement inclined
to play down the degree and extent of Chinese infiltration, U Kyaw Nyein
recognized that the coverage was indeed true and conflicts and casualties
had occurred (in November last year).63 In response to the Burmese official
statement, Zhou Enlai wrote a letter to U Nu on 4 August saying that although
the Burmese Foreign Ministry denied the truth of the coverage, it nevertheless
proclaimed that the PLA had entered the Wa State and posted sentinels.
Zhou criticized Burma, stating that it should not censure the Chinese border

59 Reports of Sino-Burmese Boundary Problem, Peoples Daily, 10 July 1957.

60 Burmese note to China, AMFA, File No. 105-00745-01(1).
61 Ibid.
62 Declaration Announced by Government of Union of Burma, PLA Daily, 4 August 1956;
Burmese Government Issued Statement, Peoples Daily, 4 August 1956.
63 Shen Zhihua and Yang Kuisong (ed.), The Declassified Record of U.S. Intelligence on China:
19481976, Vol. V and VI, Beijing: Oriental Press, 2009, p. 312.

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 Modern ChinaMyanmar Relations

crossing before negotiations and consensus building. The Burmese modus

operandi, he believed, only offered agitators a chance to alienate ChinaBurma
ties, and work against the boundary settlement.64 The Bureau of Intelligence
and Research of the U.S. Department of State, in analyzing the event, deemed
that the Burmese government had made use of the coverage in The Nation
to reveal the information that it was reluctant to release itself. It seemed that
the Burmese government had enticed the newspapers into publicizing the
news because it wanted to attract world attention to the Chinese invasion
of Burma and charge Beijing with aggression through unofficial channels.65
Also, Beijing believed that Burmese public opinions condemnation of China
was officially instigated and supported by Rangoon. Hence China explicitly
told the Burmese that The reports had definitely something to do with your
government.66 The Chinese government hoped that the Burmese government
would not increase political tension in order to oppress China.67
In general, Rangoon won an overwhelming victory in the boundary dispute
in 1956. Burma denied Chinas invasion publicly but recognized a Chinese
presence and infiltration to the west of the 1941 Line. Thus, Burmese tactics
not only affirmed the legitimacy of the traditional borderline but also caused
international public opinion pressure on China. In the same year, incidents
in Poland and Hungary heavily impaired the international image of socialist
countries and powers, and also produced a chilling effect on ChinaBurma
relations. Burma was discontented with, as well as afraid of, the Soviet interven-
tions in Poland and Hungary. Therefore, Rangoon was suspicious of the truth
of Chinese sincerity about the Five Principles of Peaceful Coexistence, and
was afraid that China would perform a Southeast Asian version of the events in
Poland and Hungary. The Burmese felt that the Chinese presence in the unde-
marcated areas was similar to the Hungarian situation, so Burma should learn a
lesson from the incidents in Hungary.68 Consequently, BurmaChina relations
were strained, and Burma after July 1956 was inclined to follow the Western

64 Premier Zhou Enlais Reply to Former Burmese Premier U Nu on Visiting Burma and
Sino-Burmese Boundary Issue, in Zhuo Renzheng (ed.), Cordial Pauk Phaw: A Grand
Gathering of Chinese and Burmese Residents in Border Areas between China and Burma in
1956, Beijing: Central Party Literature Press, 2003, p. 7.
65 Shen Zhihua and Yang Kuisong (eds), The Declassified Record, p. 312.
66 Main points of two conversations between Premier Zhou Enlai and U Hla Maung, AMFA,
File No. 105-00752-02(1).
67 Summary of discussion between Premier Zhou Enlai and U Hla Maung, AMFA, File No.
105-00307-03(1).
68 Burma Nationalist Alliance Salutes Hungarian Struggle: Burma Should Take Lesson,
The Nation, 17 November 1956.

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 The Honeymoon Period: 19551966

countries in international affairs. China came under considerable pressure from

the Burmese medias and international public opinions condemnation of the
Chinese incursion into Burma, the Wests sowing dissension about the border
dispute, and the blow-back from the Poland and Hungary incidents.

~ Beijings Response
Beijing took some measures to reverse the tide. First, contrary to the silence of
the Chinese media prior to the 1955 Yellow Orchard event, they published some
editorials and reports on the boundary issue in order to refute accusations and
reports prejudicial to China.69 Second, China tried to relieve tensions by em-
ploying Burmese leftists and pro-China forces. On 8 August, the BurmaChina
Friendship Association issued an appeal for a peaceful boundary settlement
on the basis of the Five Principles of Peaceful Coexistence and criticizing the
intrigue against Sino-Burmese friendship.70 Burmese leftist newspapers car-
ried editorials and reports to deny the domestic accusations of China invading
Burma. Third, a major rally of residents living in the border areas in Burma
and China was speeded up. During 1517 December 1956, the rally was staged
in Mangshi, Yunnan, with about 350 official representatives and 15,000 border
residents of the two countries. The function nominally was a festival of border
residents, but actually it was essentially a mass rally and diplomatic event which
both officials and ethnic glitteratis attended.71
Finally, both sides began to negotiate the BurmaChina boundary dispute.
From 22 October to 8 November 1956, U Nu, the President of AFPFL,
was invited to Beijing to negotiate the boundary settlement, but before his
departure for Beijing, Rangoon had already received Beijings promise of a
settlement. On October 2, Vice Prime Minister U Ba Swe told the newsmen at
his monthly press conference that The Chinese Government has accepted the
1941 Line as a basis for the negotiations.72 In Beijing, The Burmese Prime
Minister suggested that the two states accept the boundaries in effect at the
time of Burmese independence [1948]. The Communist regime, after a brief
period, countered with the suggestion that: (a) the traditional line including
the portion of the McMahon line in the north be accepted; (b) the Namwan

69 Alert to Conspiracies of Damaging Sino-Burmese Relations, Peoples Daily, 4 August

1956.
70 BurmaChina Friendship Association Appeals to Prevent Conspiracies of Damaging
Sino-Burmese Relations, Peoples Daily, 10 August 1956.
71 Yunnan Provinces final report on Chinese and Burmese inhabitants gathering in the
border areas, AMFA, File No. 105-00512-04(1).
72 China Has Accepted 1941 Line as Basis For Negotiations, The Nation, 3 October 1956.

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 Modern ChinaMyanmar Relations

lease be abrogated; (c) the 1941 line be validated; and (d) Hpimaw, Gawlam,
and Kangfang villages be returned to China.73 China registered its policy
principles on the border settlement and suggested a package solution to the
problem. Although China did not publicly accept that Beijing would recognize
the validity of 1941 Line, the press communique intimated it would. In the 1956
communique, both sides agreed that China would withdraw to the east of 1941
Line and that Burma would evacuate Hpimaw, Gawlum, and Kangfang before
the end of 1956.74 This demonstrated that China actually accepted the 1941
Line, though Beijing demanded that the Burmese army should not enter the
area before the border settlement (an area from which the PLA were to retire).
More importantly, China at the same time agreed that Burmese government
employees could step into the area.75 On 5 November 1956, Beijings plan was
passed by the 50th meeting of the Standing Committee of the National Peoples
Congress of China. When a joint communique was issued on 10 November,
U Nu gave a detailed broadcast talk on the border problem in Rangoon. He
stated that China was prepared to accept the frontier that Burma had inherited
on achieving independence except for the three Kachin villages that were to be
returned to China, and that the Namwan Assigned Tract was to be abrogated.76
Over 1020 December 1956, Zhou Enlai visited Burma. The timing,
selection, and effect of this visit were crucial, given that BurmaChina relations
were strained. U Nus trip to China partly restored Burmese confidence in peaceful
coexistence with us, but the imperialists took advantage of the border dispute
in Hpimaw and the Hungary event to sow discord in Burma ... Premier Zhou
opposed other countries, as well as Chinas, chauvinism. The Premiers position
further allayed Burmese suspicion of China and promoted its trust in us ... The
other side understood our true attitude towards the border dispute through the
negotiations. Zhous visit alleviated the adverse impact of the Hungarian Uprising
and enlisted the amity of both U Nus and U Ba Swes cliques.77

~ Chinas Concessions
In essence, Chinese concessions on the border issue turned Sino-Burmese ties
in 1956 from pessimism to optimism. After U Nu returned to Rangoon from

73 BurmaChina Boundary, International Boundary Study, No. 42, 30 November 1964,

Bureau of Intelligence and Research, U.S. Department of State, p. 7.
74 Joint Press Communique of Burma and China, Peoples Daily, 10 November 1956.
75 Reports of Sino-Burmese Boundary Problem, Peoples Daily, 10 July 1957.
76 Richard J. Kozicki, The Sino-Burmese Frontier Problem, Far Eastern Survey, Vol. 26, No.
3, March 1957, p. 35.
77 Popular reactions to Premier Zhou Enlais visit to Burma, AMFA, File No. 105-00512-08(1).

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 The Honeymoon Period: 19551966

Map 5: Kuomintang and early PRC claims to Burmese territory, with Sino-Burmese border
settlement, 1960 (based on a map by Wang Di and Li Feiying)

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 Modern ChinaMyanmar Relations
Beijing, he announced at a news conference that Zhou Enlai had accepted the
200 mile McMahon Line from Diphuk LHka Pass to Izu Razi and the 1941
Line in the Wa State. Thus, the Chinese government stated that it recognized
and respected the status quo of the ChinaBurma boundary, and gave up
its previous territorial claims but asked the return of Hpimaw, Gawlum, and
Kangfang and the Namwan Assigned Tract near Namhkam (see Map 5).78
Beijings relinquishing the previous claim of unsettled territory prompted
opposition from the Chinese Embassy in Burma, from Yunnan province,
and from the military. For example, the ethnic elite of the Wa State claimed
to be independent of Burma and China when they learned that most areas
controlled by them were to be allocated to Burma. Our cadres and soldiers
have stayed there [west of the 1941 Line] for several years, and established
cordial relations with local residents. In the past, we propagandized that the
Akha Hills Belongs to China, No Division of Akha Hills, and No Land for
Peace. We feel puzzled and will fail to persuade local residents to accept the
area west of the 1941 Line is being ceded to Burma.79 In October 1956, the
Burmese media reported that Chinese soldiers had crossed the border to
Hpimaw, and were levying taxes on local villagers and asserting that Hpimaw
actually belonged to China and would be returned to China sooner or later.80
The Yunnan provincial government enjoined local officials and populace
to move to the east of the 1941 Line. The central government instructed,
Do not emphasize that it is traitorous that the KMT government signed
the 1941 Pact. And do not refer to the 1941 Pact as a quisling agreement, or
you will not only fail to clarify the reasons [for the agreement] but also lead to
more puzzleheadedness among the populace. You should try to persuade and
induce the headmen and the common people around the 1941 Line on both
sides.81
Beijing gave these instructions to Yunnan because Chinas concessions
on the border dispute with Burma in 1956 were not rooted in public opinion
but rather in the CCPs central control and arbitrary decisions. When Zhou
Enlai visited Rangoon in 1956, he told Prime Minister U Ba Swe that Beijings
difficulties were caused by Chinas concessions to Burma. These included:
(1) Explaining the reasons to the Chinese people. (2) Persuading Tibets

78 U Nu In Favour of Package Deal Giving up Hpimaw and Two Villages in Return For the
Namwan Tract, The Nation, 11 November 1956.
79 Zhuo Renzheng, A promising beginning to resolving the BurmaChina boundary prob-
lem: PLA withdrawal to the west of 1941 Line, Hundred Year Tide, no. 9, 2003, p. 25.
80 Red Chinese Soldiers Claim Hmaw Area for Their Own, The Nation, 6 October 1956.
81 Zhuo Renzheng, A promising beginning, pp. 2526.

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 The Honeymoon Period: 19551966

Dalai Lama et al. to accept the McMahon Line. (3) Explaining the KMTs
condemnation of our quislingism. However, we have to concede to you [Burma]
in order to solve, once and for all, all Chinas border disputes with neighboring
countries. We will make every effort to overcome the difficulties to fulfill the
scheme.82 On 13 March 1957, Zhou Enlai told the Burmese Ambassador
to China that Some committee members of the Peoples Congress and the
National Committee of Chinese Peoples Political Consultative Conference
(CPPCC) had some complaints about the Chinese concessions and the joint
communique. As a result, it will take us some time to persuade them and
explain the reasons.83
Accordingly, the CCP made efforts to reach domestic consensus in 1957
and explain the necessity of compromise with Burma. In March 1957, Zhou
Enlai made speeches on the BurmaChina boundary problem successively in
the Third Plenary Session of the Second National Committee of the CPPCC,
and in a conference attended by all circles and ethnic minorities convened by
the Yunnan Committee of the CPPCC. A heated debate occurred in the two
meetings, and the government ... reached a consensus of all concerned on
the BurmaChina boundary settlement.84 Particularly at the latter confer-
ence in Yunnan, Zhou Enlai patiently tried to persuade the delegates and al-
leviate Yunnanese discontent with Beijings concessions. Zhou made a series
of speeches and reports in Kunming, which made us gradually agree to the
demarcation policy of the central government.85 On 9 July 1957, Zhou Enlai
presented a subject report, Report on the BurmaChina Boundary Problem, at
the fourth Plenary Session of the first National Peoples Congress. Zhou once
again expatiated on Chinas proposals for and guidelines on the BurmaChina
boundary settlement.86 The Congress approved Zhous report and agreed that
the government could thereby negotiate the border problem with Burma.87
The border settlement, however, could not be successfully concluded in
1958 largely because the AFPFL split into two factions. The political infight-
ing culminated in a military caretaker government under General Ne Win
(19581960). Ne Win was not only bound up in the border settlement, but had
82 Main points of talks between Premier Zhou Enlai and leading figures in Burma,
AMFA, File No. 203-00019-02(1).
83 Song Fengying, Zhou Enlai and BurmaChina boundary negotiations, Overview of CCP
History, no. 11, 2005, p. 7.
84 Reports of Sino-Burmese Boundary Problem, Peoples Daily, 10 July 1957.
85 Song Fengying, Zhou Enlai and BurmaChina boundary negotiations, p. 8.
86 Reports of Sino-Burmese Boundary Problem, Peoples Daily, 10 July 1957.
87 Resolution on the Report of Sino-Burmese Boundary Problem Presented by Premier and
Foreign Minister Zhou Enlai, Peoples Daily, 16 July 1957.

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 Modern ChinaMyanmar Relations

Plate 5: Mao greeting U Nu (left) and Ne Win (right), Beijing, 29 September 1960 (photograph
courtesy Cheng Ruisheng)

won the cooperation of the Kachin and Shan leaders in working for a final settle-
ment.88 Both signed the Friendly Agreement on the Question of the BurmaChina
Boundary and The Boundary Treaty between the Peoples Republic of China and
the Union of Burma in 1960, representing the settlement of the BurmaChina
boundary disputes (see Map 5).
In 1960 and 1961, the boundary settlement pushed ChinaBurma ties to
their acme. After the conclusion of the Friendly Agreement and the Boundary
Treaty, Rangoon organized a series of massive celebrations in the border
areas neighboring China, including Bang Kam, Putao, Lwejel, Bhamo, and
Myitkyina, which from 3,000 to 30,000 people attended. Burmese frontier
guards also invited the Chinese army to participate in their celebrations. In
response to Burmese celebrations and gatherings, the Chinese government
held celebrations in Mangshi, Ruili, Zhangfeng, and Nansan, whose scales
ranged from 1,000 to 20,000.89 In October 1960, Prime Minister U Nu led a
delegation of 350 members to attend Chinas National Days celebration and
signed the boundary treaty in Beijing. China organized three million people to
welcome the Burmese delegates when they arrived. On 2 October, Beijing city
held a mass rally of 100,000 to celebrate the signature of the boundary treaty.
Burma presented one million Chinese residing on Chinas side of the border
with 2,000 tons of rice and 1,000 tons of salt.90 1961 was styled BurmaChina
Friendship Year. In January, Zhou Enlai visited Burma with nine groups of 400

88 Maung Maung, The BurmaChina Boundary Settlement, p. 41.

89 China holds celebrations for signing of the friendship treaty and settlement of the boundary
agreement for border areas, AMFA, File No. 105-00681-01(1).
90 Burmese gifts of rice and salt to Chinese border inhabitants and reciprocal gifts, AMFA,
File No. 105-00680-01(1).

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 The Honeymoon Period: 19551966

Plate 6: U Nu, Zhou Enlai and Ne Win, Rangoon, 2 January 1961 (photograph courtesy Cheng
Ruisheng)

delegates to take part in the celebration of Burma Independence Day and ex-
changed the ratification papers of the Boundary Treaty. China gave 1.2 million
residents living along Burmas side of the border 2.4 million meters of printed
cloth and 600,000 pieces of porcelain plates as reciprocal gifts in order to avoid
and eliminate the detrimental political effect on Chinas border area caused by
Burmese gifts as well as to meet Burmese border residents needs, improve
friendship, and increase our political influence.91
The explanation for the BurmaChina boundary settlement involves several
interrelated issues. China gave up the strong policies and territorial demands
it held prior to 1956, and this change of attitude in 1956 related to the CCPs
changing perception of the world and the international situation.
China introduced its foreign policy based on the Five Principles of Peaceful
Coexistence in 1954, which was aimed at creating a peaceful international
environment for its domestic economic development and at counter-attacking

91 Ibid.

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 Modern ChinaMyanmar Relations

the Wests containment policy. The new policy was attributed to Beijings clear
self-appraisal of its national power and its objective judgment of the world
situation. In the 1950s, China optimistically believed in the future of world
development, that the worlds tense situation could be relieved, and that world
peace possibly could be achieved. China had to gain national and international
support and permanent world peace to bring about socialist industrialization.92
In the 1950s, the boundary dispute was a potential source of conflict between
China and its bordering countries, and in order to isolate and demonize China
the West was using the problem to accuse Beijings foreign policy of hypocrisy,
namely: real aggression but ostensible peace. In 1956, Chinas compromise on
the border dispute with Burma was based on the premise of a package deal.
Beijings concessions and the agreement of a package deal displayed Chinas
sense of crisis and urgency concerning the border dispute, which directly
stemmed from the strained bilateral relations in 1956 and international pres-
sures. Meanwhile, her neighboring countries distrusted Chinas vow of peace.
Therefore, Chinese policy objectives of boundary settlement with Burma were
to try to relieve the tension of the world situation, and peacefully coexist with
the countries of the world, notably our adjacent countries. This policy advances
our socialist construction, and also accords with the peoples interest of the
world.93 In conclusion, Chinas approach to the border dispute with Burma was
land for peace.
China also planned to hold the Sino-Burmese boundary settlement up as
a brilliant model for all to see.94 As Daphne E. Whittam pointed out, behind
the Chinese approach to the ChinaBurma boundary dispute, Beijings con-
siderations were: First, the security of Chinas frontiers; second, the preserva-
tion of Chinas historical image as a great Asian power in relation to her neigh-
bours; third, the preservation of Chinas ideological image as the champion
of Peaceful Co-existence among Asian nations. The Sino-Burmese Boundary
Treaty, hailed by the two governments as a model of how Asian nations should
settle historical disputes and maintain peace among themselves, enabled the
Chinese authorities to satisfy all these three considerations.95 Now that Burma

92 Resolution on Political Reports of the 8th National Congress of CCP, Peoples Daily, 28
September 1956.
93 Reports of Sino-Burmese Boundary Problem, Peoples Daily, 10 July 1957.
94 Minutes of Talks between of Zhou Enlai and U Nu, 3 December 1956, quoted in
CCCPC Party Literature Research Office, Biography of Zhou Enlai, Vol. 2, Beijing: Central
Party Literature Press, 2008, p. 1177.
95 Daphne E. Whittam, The Sino-Burmese Boundary Treaty, Pacific Affairs, Vol. 34, No. 2,
Summer, 1961, p. 183.

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 The Honeymoon Period: 19551966

was selected to be a brilliant model of a boundary settlement, Beijing could

not implement a tough policy toward Burma, and fail to solve the dispute.
Accordingly, China had reluctantly to accept the Burmese bargain in order
to completely solve the border dispute.96 Indeed, China also used the Burma
case to prove the authenticity of its peaceful foreign policy. In the 1950s, the
non-socialist countries mistrusted China and worried about its communist
military and political expansion. Therefore, China tried to win their trust. As
Zhou Enlai said in 1957, We, the socialist country, will certainly not invade,
but other countries disbelieve us. As a result, we will gradually make them
believe us in a practical way and strive for peaceful coexistence. We will do
our best to settle boundary disputes with all bordering countries starting with
Burma. Then, they will trust us after the solution of Burmas case.97 When
Beijing and Rangoon solved the border dispute, China stated that It proves
that China unhesitatingly implements a peaceful foreign policy and is willing
to coexist and cooperate with the countries with different social systems on the
basis of the Five Principles of Peaceful Coexistence ... Its no use distorting
and defaming Chinas foreign policy.98
Why did China select Burma to be a brilliant model of a boundary
settlement? Chinas first Ambassador to Burma explained the reason: Zhou
Enlai told me, We have no experience in solving border disputes so we need
to select a country to conduct an experiment. Burma maintains good ties with
China, and was an initiator of the Five Principles of Peaceful Coexistence,
which are the political foundation of our negotiations. The Burmese stance
on the border dispute with China is typical of that of some small countries.
If we amicably solve the border problem with Burma, it will be beneficial in
dispelling Burmese fears of China and pacifying the peripheral countries.
More important, Burmas case will help the border solutions between China
and other countries.99
Strategically and politically, Burma was no threat to China and the Chinese
Communists had no strategic interest in the disputed area. This important
factor led to the boundary settlement for mutual benefit of Burma and China.100

96 Main points of talks between Premier Zhou Enlai and leading figures in Burma, AMFA,
File No. 203-00019-02(1).
97 CCCPC Party Literature Research Office, Biography of Zhou Enlai, Vol. 2, p. 1179.
98 Zhou Enlais Speech at the Farewell Banquet Held by Premier U Nu, Peoples Daily, 14
October 1961.
99 Interview Yao Zhongming, quoted in Biography of Zhou Enlai, Vol. 2, p. 1178.
100 Luke T. Chang, Chinas Boundary Treaties and Frontier Disputes, London, Rome, and New
York: Oceana Publications, Inc, 1982, p. 50.

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 Modern ChinaMyanmar Relations

In addition, also playing a part was the Ne Win factor. In 1958, the border
negotiations were brought to a halt by the political crisis in Burma that followed
the AFPFL split. But the crisis brought to office General Ne Win, who tackled
the boundary problem with determination. He emphatically told the Chinese
that he had been able to make these proposals only by virtue of his position
as a non-partisan Prime Minister and that the Chinese should therefore regard
his proposals as the maximum offer that any Burmese government could make.
He suggested that, instead of further negotiations, the Chinese should take the
small remaining step needed to reach an agreement and offered to go to Peking
immediately to sign it.101 Towards the end of 1959, as his departure from politi-
cal office drew near, General Ne Win made forthright and soldierly proposals
to Mr. Zhou, not failing to point out that, as leader of the interim government,
he commanded the support of all the major parties in Burma as an elected party
government might not be able to do.102 Personally, Ne Win wanted to solve in
a friendly manner the dispute with China to increase his political capital in the
Burmese political arena. After the two sides had signed the Boundary Treaty
and the Friendly Agreement in 1960, the Ne Win government held massive cel-
ebrations in border areas to improve Ne Wins personal reputation as well as the
legitimacy of the interim government,103 to show the two factions of the AFPFL
that Ne Win had won the support of the Shan state, the Kachin state, and the
people on the border problem.104 When either Ne Win visited China or Chinas
leaders visited Burma in 1960 and 1961, he unequivocally told China about the
political cleavages and his dissatisfactions with U Nu, the U.S. and India.105 Also,
Chinas Bulletin of Foreign Affairs in 1960 indicated that Ne Win was the most
friendly to China among the various Burmese factions.106

The Burma Communist Party Issue

The relations between the CCP and the BCP were a bilateral sensitive issue
during the Cold War. Some claim that Sino-Burmese relations in the period

101 Whittam, The Sino-Burmese Boundary Treaty, pp. 179180.

102 Maung Maung, The BurmaChina Boundary Settlement, p. 41.
103 Burmese government holds celebrations for signing of the friendship treaty and settle
ment of the boundary agreement for border areas, AMFA, File No. 105-00681-02(1).
104 China holds celebrations for signing of the friendship treaty and boundary agreement,
AMFA, File No. 105-00681-01(1).
105 Debriefing after visit to Burma by Zhou Enlai, AMFA, File No. 203-00047-05; Bulletin regarding
the conditions of Premier Zhou Enlais discussions in Burma, AMFA, File No. 203-00036-
08(1); Reception to state guests (some of U Nus responses), AMFA, File No. 204-00119-17(1).
106 Bulletin regarding the conditions of Premier Zhou Enlais discussions in Burma, AMFA,
File No. 203-00036-08(1).

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 The Honeymoon Period: 19551966

19481988 were largely defined by the BCP issue. Characterized by a form

of delicate friendship, they remained the norm until the remarkable transfor-
mation of the post-September 1988 period.107 In general, there is some truth
in such a conclusion, but more specifically, the BCP played different roles at
different stages. The BCP was not a hurdle in Sino-Burmese relations between
1949 and 1966 because the CCP gave limited support to the BCP and the
party-to-party ties were subject to state-to-state relations.
Before the birth of the PRC in 1949, the CCP had publicly and morally sup-
ported the BCPs armed combat. After the CCP seized power in China, it main-
tained secret ties with the latter. Some high-ranking officials of BCP had lived in
Beijing since early 1950 and received CCP training. According to the leader of
the overseas Chinese Communist Party in Burma, The secretary of Working
Committee of the Overseas Chinese Communist Party, KPX, led two members
of the BCP Central Committee to Beijing from Burma soon after the foundation
of the PRC. At the end of October 1950, I returned to Beijing to report on our
work on behalf of the Working Committee of the overseas Chinese Communist
Party in Burma. It was arranged that I lived with three leaders of the BCP, two of
whom were led by KPX to Beijing. Several times, LLY introduced the experience
of Chinas land reform and united front work to its fraternal party members.108
Some pointed out that the BCP had secretly received moral, material,
financial, organizational, and ideological support from the CCP as well as the
government before the 1967 6.26 [ June 26] incident (see Chapter 4).109
Nevertheless, other evidence proves the contrary: the BCP rebels were lacking
ammunition and supplies although they were accomplished in bushfighting,
and they obviously had not received massive aid from the CCP, according
to the CIAs report.110 Chinas material support to the BCP rebellions was
not significant before the rift in BurmaChina relations in 1967.111 FG, Vice
Chairman of the BCP, also verified that massive material support from the
CCP started after the break of relations in 1967.112

107 Chi-shad Liang, Burmas Relations with the Peoples Republic of China: from Delicate
Friendship to Genuine Co-operation, Peter Carey (ed.), Burma: The Challenge of Change
in a Divided Society, London: Macmillan Media Ltd, 1997, p. 71.
108 Memoirs of LWZ, Part II: The Dissolution of the Burmese Overseas Chinese Commu-
nist Party. Unpublished manuscript, 1991.
109 Tin Muang Maung Than, Myanmar and China: A Special Relationship?, Southeast Asian
Affairs, Singapore, Institute of Southeast Asian Studies, 2003, p. 192; Wayne Bert, Chi-
nese Relations with Burma and Indonesia, Asian Survey, Vol. XI, No. 6, June 1975, p. 475.
110 Shen Zhihua and Yang Kuisong (ed.), The Declassified Record, p. 299.
111 Ibid., p. 529.
112 Interview, Vice Chairman of BCP, FG, 17 February 2005, Xiamen.

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 Modern ChinaMyanmar Relations

Beijing also pursued a prudent news policy to avoid irritating Rangoon.

There were only 20 pieces of coverage and articles on the BCP in the Peoples
Daily from 1947 to July 1949. Only 11 reports appeared in the newspaper from
October 1949 to 25 June 1967 and none of them mentioned the overthrow of
the Burmese government. However, two reports drew attention. First, the BCP
sent a letter of congratulations to the CCP for its 1956 Eighth Session and the
letter was published in the Peoples Daily. Although the letter did not touch upon
anti-Burmese government sentiment, it was the first time that China publicly
released a BCP Central Committee letter in the Peoples Daily.113 Second, the
BCP sent a congratulatory telegram to Beijing on the tenth anniversary of its
national celebration in 1959. The letter was carried in the Peoples Daily and half
of the congratulations focused on accusations concerning Burmas domestic
politics and foreign policy. The BCP criticized the Burmese government for
accepting U.S. military aid, constructing the RangoonMandalay strategic
highway with U.S. aid, and suppressing domestic unions and the opposition
parties.114 The publication of this letter to some extent indicated that the CCP
had begun to loosen its news policy on the BCP. However, China still kept a
delicate balance between party-to-party relations and state-to-state relations
during U Nu period. In addition, Beijing suggested several times that Rangoon
hold peaceful negotiations with the BCP, but this was rejected by Rangoon.
For instance, Zhou Enlai visited Burma in 1956 and proposed that U Ba Swe
hold peaceful negotiations with the BCP but they [the Burmese] dont listen
yet.115

The Ne Win Period (19621967)

On 2 March 1962, Ne Win launched a military coup to seize power. The coup
detat raised the curtain on the age of military rule in Burma. Although Ne Win
promulgated a new constitution in 1974, it only institutionalized the power
of the Burma Socialist Programme Party (BSPP) under military domination.
Political upheavals occurred in both China and Burma during 19621967.
Given the anti-Chinese riot in Rangoon in 1967, this period of 19621966 was,
in hindsight, on the eve of a great change in bilateral ties.

113 BCP Central Committees Letter of Congratulations for the 8th National Congress of
CCP, Peoples Daily, 21 September 1956.
114 Telegram of Congratulations from the Central Committee of BCP, Peoples Daily, 30
September 1959.
115 Main points of talks between Premier Zhou Enlai and leading figures in Burma, AMFA,
File No. 203-00019-02(1).

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Beijings Posture Toward Ne Wins Military Coup

In the evening of 1 March 1962, Ne Win and his family saw a performance
presented in Rangoon by the China Ballet, and this concealed his imminent
covert action. At 1:00 a.m. of 2 March, Ne Win took action to wrest power. On
the same day, the Chinese Embassy in Rangoon reported the breaking news
to Beijing and stressed that the Burmese coup was allied to Nassers Egyptian
coup. As of now, the Burmese side has not informed foreign embassies that the
new government is established ... The military government has presently been
in complete control of the situation, and the regime wont be changing hands,
and will be consolidated. Given this fact, we suggest that our government
should recognize it as soon as possible once we receive the served [official]
notice about the establishment of the new government.116
On 3 March, the Chinese Embassy asked for instructions from their
Ministry of Foreign Affairs about whether Ye Jizhuang, the Minister of Foreign
Trade visiting Burma, should ask to see Ne Win, and whether they should ask to
see the new Foreign Minister, and present congratulations to the new Burmese
leadership. Beijing replied, Now, we should not publicly pronounce on the new
regime in a hurry ... You pay close attention to other countries responses and
behaviors towards the new government ... Give every man the ear, but few the
voice ... You can congratulate the Ministers for their new appointments on your
own behalf.117
Beijing took a wait-and-see attitude in the following days. However, at
14:00 p.m. of 6 March, the Embassy sent a telegram to Beijing saying, Today,
the Indian government has instructed its Ambassador to Burma to visit the new
Burmese Foreign Minister and deliver a note recognizing the new government.
The Foreign Minister of Burma received him this afternoon ... The Burmese
side dropped our Embassy a hint that the Chinese Ambassador would not be
received by the Foreign Minister unless we present the note of recognition.
The Embassies of U.K., Thailand, and Indonesia in Rangoon have not received
instructions so our recognition should not be postponed. Please send the note
of recognition endorsed by Zhou Enlai in the name of Chinese government as
soon as possible. At 22:00 p.m., the Chinese Embassy reported back to Beijing
that the Burmese government had released a news bulletin that India and the
U.K. had submitted notes to recognize the new Burmese government that

116 Recognition of the Burmese military regime (Chinese and English version), AMFA, File
No. 105-01780-01.
117 Telegrams between Beijing and the Chinese embassy to Burma regarding Chinese recog-
nition of the Burmese military government, AMFA, File No. 117-01344-04.

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 Modern ChinaMyanmar Relations

evening.118 At 24:00 p.m. Beijing telegraphed the Ambassador, Li Yimang, to

submit the note of recognition endorsed by Chen Yi, the Foreign Minister and
the congratulatory telegram to General Ne Win signed by Zhou Enlai ... We
will publish the news at home in the evening of 7 March.119 On the afternoon
of 7 March Ambassador Li Yimang submitted the note of recognition and
the congratulatory telegram to the Burmese Foreign Minister and Ne Win,
respectively. China became the fourth country to recognize the Ne Win
military junta.
In fact, Ne Win had disclosed that he wanted to seize power during his trip
to China in 1961.120 Thereafter, the Chinese Embassy to Burma had analyzed
the Burmese political situation and predicted a military regime or a military
coalition government through a coup possibly occurring in Burma in 1962. The
new Burmese government would continue to carry out a peaceful neutralist
policy and come to terms with imperialists and feudalists.121 Chinas Foreign
Ministry responded to the prediction by stating that China should maintain
good relations with the military junta considering the overall international
situation. But China still should pay attention to the military regimes attitude
towards China.122 As a result, China had mental preparation for Ne Wins coup.
It was not a problem for Beijing whether Rangoons new military regime would
be recognized; Beijing only need determine when and in what manner. Put
another way, Chinas hesitation showed that Beijing was uncertain about how
to start their new bilateral ties. While detailed information of the coup and the
new military regime was unavailable, other countries reactions were crucial for
Beijing to make a decision because they were an important reference index.
Consequently, Beijing stressed the importance of watching other countries
reactions123 in the matter of when China would recognize the Ne Win govern
ment and whether Zhou Enlai would send a congratulatory telegram to Ne
Win.
China wanted to maintain friendly relations with Burma so it wanted to
take the lead in recognizing the Ne Win government and win the new Burmese
leaderships favor. Yet the instability of a military junta was influential in
118 Responses of other countries to recognition of the Burmese military coup as well as their
official acceptance of the new military government, AMFA, File No. 105-01077-04.
119 Recognition of the Burmese military regime, AMFA, File No. 105-01780-01.
120 Course of the Burmese military coup in March 1962, AMFA, File No. 105-01077-01.
121 1961 work review and 1962 work program of the Chinese Embassy to Burma and the
official reply of the responsible department, AMFA, File No. 105-01079-01.
122 Ibid.
123 Chinese Embassy reply to note from the Burmese Foreign Ministry about the Burmese
foreign policy statement, AMFA, File No. 105-01780-02.

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 The Honeymoon Period: 19551966

Beijings decision. Although Rangoon declared on the day of the coup that
it would still adopt a neutralist foreign policy, Beijing was suspicious of the
Burmese position. When China observed the international responses toward
the Burmas coup, the reaction of the neighboring countries exerted a crucial
influence on Beijings decision. The first recognition by the United Arab
Emirates on 4 March did not change the Chinese policy of wait-and-see. But as
soon as India, the important geopolitical rival to China, recognized Rangoon,
China immediately followed. In Chinese calculations, China was eager to
counter Indias influence in Burma. Later, China adopted a different policy
than that of India toward Burmese economic nationalization.

The Burma Communist Party Issue Pl

In April 1963, Liu Shaoqis visit to Burma played a crucial part in the peaceful
negotiations between the BCP and the government.124 There are two versions
of Liu Shaoqis mediation. The first: according to Wang Guangmeis memoir,
Lius wife accompanied him on the trip to Burma, and Ne Win arranged a talk
on the BCP issue with Liu Shaoqi at Ngapali seaside resort in order to avoid
wiretapping. Ne Win told Liu that He would like to discuss national problems
with the BCP and he expected China to serve as a bridge.125 The second
version: according to Cheng Ruishengs memory, the accompanying translator
of Liu Shaoqi, Liu Shaoqi suggested to Ne Win on the way to Mingaladon
airport when he concluded his visit on 26 April that he could negotiate with
Thakin Ba Thein Tin in Beijing. Ne Win replied that he needed to talk further
with his colleagues about the problem. This conversation directly helped to
bring about negotiations between the Ne Win government and the BCP that
year.126 A declassified document of Chinas Foreign Ministry has proven the
second version to be correct, because the conversation records of Liu and Ne
Win coincide with Cheng Ruishengs memory.127
On 11 June 1963, the Burmese government issued the negotiation state
ment. Thakin Than Tun, the Chairman of the BCP Central Committee, wrote
to Ne Win welcoming the statement and negotiations. Meanwhile, Thakin

124 Foreign Ministrys reply to the Chinese Embassy to Burma on the 1963 Burmese politics
summary and the 1964 work program, AMFA, File No. 105-01864-01.
125 Huang Zheng, Interview with Wang Guangmei, Beijing: Central Party Literature Press,
2006, p. 317.
126 Cheng Ruisheng, Records of Sino-Burmese Friendship, in Li Tongcheng and Yu Ming
sheng (eds), Chinese Diplomats in Asia, Shanghai Peoples Publishing House, 2005, p. 173.
127 Record of talks between Liu Shaoqi and Burmese leaders, checked and approved by Liu
Shaoqi, AMFA, File No. 203-00576-01.

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Plate 7: Liu Shaoqi and Ne Win, Rangoon, 20 April 1963 (photograph courtesy Cheng Ruisheng)

Ba Thein Tin, the Vice Chairman of the BCP living in Beijing, asked China
to help contact Kyaw Win, the Burmese Ambassador to China, and arrange
their meeting and negotiations instead of Than Tun. On 28 June, the two
parties met in the CPPCC Auditorium and held talks for one and a half
hours. Ba Thein Tin forwarded three points to Ne Win: that two BCP Central
Committee members abroad should be sent back to consult with the BCP
Central Committee on peace negotiations; that the military operations of the
government should be stopped; and that the BCP did not agree to the Bill of
Oblivion (a general amnesty), which was useless to national peace. On 29 June
Ne Win consented to the return of the two committee members. Ba Thein Tin
immediately sent two telegrams to the Central Committee of the Communist
Party of the Soviet Union and the Central Committee of the Communist Party
of Vietnam, and asked them to notify Than Myiang, on vacation in the Soviet
Union, the member of the Political Bureau of the Central Committee of the
BCP, and Sai Yal in Laos, the alternate member of the BCP Central Committee,
to return to Beijing.128
128 Contact between the Foreign Ministry and Burmese Embassy to China for return of BCP
leaders to Burma, AMFA, File No. 105-01818-01.

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 The Honeymoon Period: 19551966

From 11 July to 29 September, the leaders of the BCP returned to Burma in

three batches including one Vice Chairman, three members of Central Committee
and 25 high-ranking cadres. Between 2 September and 31 October, both sides
held eight formal negotiations and some informal talks. On 14 November, the
peace talks broke down. On 15 November, the Burmese government released
a statement from the Revolutionary Council, the National Democratic United
Front (NDUF), and the BCP on the failure of negotiations. According to the
statement, the Ne Win government took the negotiators to their bases in Burma
and Ba Thein Tin was permitted to return to China.129
Although the peace talks in 1963 were mediated by Liu Shaoqi and some
leaders of the BCP lived in China, the result of talks indicated that the CCPs
controlling influence over the BCP did not seem to be predominant. The two
parties had different judgments of Ne Wins regime. The CCP only played the
role of intermediary and did not participate in the talks. For example, Aung
Gyi, the member of the BCP Central Committee, asked China to give some
suggestions about peace talks: How will we negotiate with the government?
What should we talk about? What requirements should we raise? How should
we cope with Ne Wins policy? We have not deliberated on these problems and
wish the CCP to give us some proposals.130
Moreover, Aung Gyi articulated the BCPs perceptions on the Ne Win
governments differences with the CCP. He personally thought that the
divergences among the CCP, the BCP, and the Soviet Communist Party (SCP)
toward Ne Win would affect their respective postures on the talks. The SCP
regards Ne Win as a petty bourgeoisie who possibly takes Castros route so
it [wants to] persuade the BCP into laying down arms to cooperate with Ne
Win. In the CCPs eyes, Ne Win belongs to national bourgeoisie and will follow
Sukarnos political line. The BCP takes Ne Win as a big bourgeoisie and an
object to be overthrown.131 Ba Thein Tin agreed with Aung Gyi and stated that
Its a political offensive against the BCP. Ne Win accedes to peace talks with
us because he comes across difficulties now and seeks to get through difficult
situations. The nature of the Ne Win government is big bourgeois and it has
resolutely opposed the Communist Party all along, so we should not cherish
illusions about the Ne Win government.132 Also, he criticized the SCPs opinion
that Ne Win belonged to the petty bourgeoisie and would become a Castro, and
129 Peace talks between the BCP and Burmese government, AMFA, File No. 203-00515-02.
130 Contact between the Foreign Ministry and Burmese Embassy for return of BCP leaders,
AMFA, File No. 105-01818-01.
131 Ibid.
132 Ibid.

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 Modern ChinaMyanmar Relations

its suggestion that the BCP should cooperate with Ne Win. We are against any
similar Soviet proposal of cooperation between the BCP and Ne Win, whoever
will present it.133
The reasons for this failure of negotiations involve many factors. To the BCP,
especially its leadership living in China, the result of the talks was inevitably
unsuccessful because they believed that it was necessary to topple Ne Win rather
than cooperate with him. The BCP acceded to peace talks with the government
due to the CCPs influence as well as its own political considerations. Since
the CCP praised the BCP for their peace talks with Ne Win, They [the BCP]
gained the political initiative, sounded out Ne Wins intention of peace, and
took advantage of the opportunity to contact widely all sides and expand
their political influence whether the talks were successful or not.134 In July
1964, Ne Win told Zhou Enlai that At that time, the Revolutionary Council
really hoped to achieve an agreement with the BCP, and anticipated that the
BCP had changed their analyses of the Revolutionary Council. In the past, the
BCP argued that we [the Burmese government] had advocated the socialism
system not in deeds but in words, and that we were the agents of capitalists
and military capitalists, and took the capitalist road to protect the interests
of the bourgeoisie. The slogan of socialism advocated by us was a trick and
didnt stand for the peoples welfare. During the peace talks, the BCP expanded
their base areas, drummed up support of the masses, and imposed taxes on
the people. They considered that it would be very good if the peace talks were
successful; if not, they would still benefit from the negotiations because they
had made use of the talks to expand their base areas.135
The CCP promoted the negotiations out of several considerations. First,
the BCPs military strength was too weak alone to overturn Ne Win in the short
run. Second, in order to maintain friendly relations with Burma, China wanted
to remove or alleviate Rangoons apprehensions and suspicions that Beijing
was making use of the BCP to subvert the government. Third, China took the
chance of the talks to promote cooperation between Ne Win and Burmese
leftists to weaken pro-U.S. factions. Finally, the Soviet Union supported Ne
Wins Burmese Way to Socialism and suggested that the BCP cooperate with
the government instead of engaging in armed combat. More importantly, the
Soviets used the BCP problem to harm Sino-Burmese relations.136 As a result,
133 Ibid.
134 Ibid.
135 Summary of discussion between Premier Zhou Enlai and Chairman Ne Win, AMFA, File
No. 203-00583-05.
136 Trends in the Burmese political situation, AMFA, File No. 105-01227-01.

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 The Honeymoon Period: 19551966

Beijings aim was to counterattack the Soviet Unions intention of alienating

Burma from China.
In June 1963, Chairman Mao instructed that a Vice Foreign Minister should
replace the Chinese Ambassador to Burma, in order to enhance friendly
relations and support the current peace talks in Burma.137 Thus, Geng Biao, Vice
Foreign Minister, was appointed the new Ambassador; he had rich experience of
military affairs and peace talks.138 As Vice Foreign Minister, Geng was in charge
of foreign affairs with Burma. In 1946, he had worked as the CCPs negotiator
in the Beijing Executive Headquarters supervising the cease-fire negotiations
between the CCP and the KMT. The replacement of Chinas Ambassador to
Burma reflected Beijings painstaking care in regard to the peace talks.
Before Chinas new Ambassadors to foreign countries went to their posts,
at that time they generally were collectively or individually received by one or
two central leaders. However, Gengs treatment before he left for Burma was
very unusual, which indicated that his mission and responsibility was of high
importance.139 According to Geng Biao, Mao Tsetung, Liu Shaoqi, Zhou Enlai
and Chen Yi met him respectively, and gave instructions to him. All of their
instructions emphasized boosting bilateral friendship and cooperation.140
On 23 November 1963, Ne Win asked Vice Premier Marshal He Long,
who was visiting Indonesia by way of Rangoon, to send words to Chinese
leaders that The failure of peace talks is a Burmese internal affair and by no
means impacts on BurmaChina friendly relations.141 This event did cause
our two countries a dilemma but we understand each other.142 Although Ne
Win repeatedly asserted that the broken peace talks wouldnt impair bilateral
relations, He is very dissatisfied and apprehensive that we support not his
Burmese Way to Socialism, but the BCP.143 Thanks to the shattered peace
talks, Burma knows that we fail to provide the desired supports to them and
so they will contain our influence in Burma and take more precautions against

137 Geng Biao, Memoir of Geng Biao: 19491992, Nanjing: Jiangsu Peoples Press, 1998, p. 168.
138 Cheng Ruisheng, Forty Years of Good-neighborly Diplomacy, Chengdu: Sichuan Peoples
Press, 2006, p. 66.
139 Cheng Ruisheng, Account of Geng Biaos service as an envoy to Burma, Hunan Tide, No.
8, 2009.
140 Geng, Memoir of Geng Biao, pp. 171172.
141 Burmese domestic situation and foreign relations, and Sino-Burmese relations, AMFA,
File No. 203-00515-03.
142 Vice Premier He Long Met Chairman Ne Win via Burma to Indonesia, AMFA, File No.
105-01819-01.
143 Materials for investigation and research on Burmese domestic politics and foreign affairs
conducted by the First Asian Department of the Foreign Ministry, AMFA, File No. 105-
01314-02.

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 Modern ChinaMyanmar Relations

China.144 In July 1964, Zhou Enlai visited Burma and suggested once again
that Rangoon and the BCP resume peace talks. Ne Win rejected the suggestion,
stating that the trust between the two sides had been destroyed.145
At the time of the fifteenth anniversary of Chinas National Day, the BCP
sent a letter of congratulations to Beijing. Beijing broadcast the letter in English
and Burmese, and published it in the Peoples Daily of 3 October. In the letter,
the BCP attributed the failure of the peace talks in 1963 to the sabotage of the
imperialists, domestic reactionaries, and revisionists.146 Although China had
published the BCPs congratulatory letter in 1958, the 1963 publication seemed
more sensitive and meaningful due to its publication soon after the failed
peace talks. Also, China foresaw that Burma would remain unsatisfied. Hence,
on October 10, 1964, the Ministry of Foreign Affairs and the International
Department of the Central Committee of the CCP gave instructions to the
Chinese Embassy in Rangoon on the potential Burmese response to the BCPs
congratulatory letter problem: If Burma refers to the problem, you reply that
the letter of congratulations was sent by the Central Committee of the BCP
to the Central Committee of the CCP. The CCP will publish and broadcast
all letters and telegrams of congratulations in full sent by fraternal parties no
matter whether they are legal or not in their own countries. It was not the first
time to publish the BCPs letter of congratulations, which related to party-
to-party relations rather than state-to-state relations. BurmaChina relations
are friendly.147 On 7 October, the official Burmese newspaper The Guardian
carried an editorial criticizing the letter of congratulations from the BCP
and expressed discontent with China. The BCP is not loyal to the Burmese
revolutionary road but to foreign countries ... China adopts a janus-faced
policy towards Burma.148
China made efforts to keep a balance between party relations and state rela-
tions, but in reality its dual track approach was impossible. Over 19621966, the
BCP problem between Beijing and Rangoon was more evident and serious than
during the U Nu period. Although the CCP had not publicly supported the
BCP, the aborted peace talks and the congratulatory letter problem damaged
bilateral relations, which became two important causal factors why Ne Win was
annoyed with Beijing. After the failure of negotiations, the Burmese grudge

144 Burmese domestic situation and foreign relations, AMFA, File No. 203-00515-03.
145 Summary of discussion between Zhou Enlai and Ne Win, AMFA, File No. 203-00583-05.
146 Letter of Congratulations of the BCP Central Committee, Peoples Daily, 3 October 1964.
147 The problem caused by the publication of BCP congratulatory letter, AMFA, File No. 105-
01600-04.
148 Ibid.

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 The Honeymoon Period: 19551966

against China was repeatedly mentioned in the documents of Chinas Foreign

Ministry and the reports of the Chinese Embassy to Burma.149

Beijings Attitude toward The Burmese Way to Socialism

Soon after Ne Win came to power, he advocated the Burmese Way to Socialism.
The CCPs perception of the Burmese Way to Socialism and how Beijing
viewed the nature of Ne Wins regime are important in exploring the essence
of BurmaChina relations during this period.
China did not comment following the announcement of the Burmese
Way to Socialism. Soon after Ne Wins military coup in 1962, the Chinese
Embassy to Rangoon requested instructions from the Foreign Ministry how
tactically to respond to the military government because they are endeavoring
to collect our perspectives on the Burmese Way to Socialism through various
channels.150 The Ne Win government paid special attention to the reactions
from all countries to its new ideology. Chinas press did not report it at all, while
the Soviet Union, Romania, Czechoslovakia, Poland, and Hungary expressed
support. Accordingly, The Burmese military government was disgruntled
at our silence toward its political platform.151 In reply, Beijing instructed that
although the Burmese junta advocated the Burmese Way to Socialism, they
actually practiced the policies of an anti-communist and anti-people party,
an economic monopoly, and a military dictatorship. We certainly can not
support such socialism. However, because Burma has implemented a peaceful
and neutral foreign policy and a friendly policy toward China, it is our object to
unite and compete for [influence]. Tactically, we still will properly clarify our
position on different occasions.152
China did not directly comment on the Burmese political platform and the
Burmese Way to Socialism whether in public or in personal contacts. China only
expressed general support for Rangoons neutral and peaceful foreign policy,
Burmese national independence, and its friendly attitude towards China.153

149 Assessment by the Chinese Embassy to Burma of the Burmese political situation, AMFA,
File No. 105-01225-01; More efforts to pull Burma into Chinas orbit, AMFA, File No.
105-01865-01; Negotiations of Premier Zhou Enlais visit to Burma, AMFA, File No.
203-00582-04.
150 The problem of clarifying our position on the Burmese Way to Socialism, AMFA, File No.
105-01816-01.
151 Burmese materials: Introduction and general situation of Burma, the problems of Sino-
Burmese ties, and Sino-Burmese chronicles of events, AMFA, File No. 203-00473-02.
152 The problem of clarifying our position on the Burmese Way to Socialism, AMFA, File No.
105-01816-01.
153 Ibid.

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The quieter China kept its attitude toward the Burmese Way to Socialism,
the more eager Rangoon was to know Beijings attitude.154 In April 1964, Liu
Shaoqi visited Burma and voiced Chinese opinions on the Burmese Way to
Socialism in political and diplomatic parlance. The Socialist Road is at an
experimental stage. The socialism of China as well as the Soviets is on a road
that will continue long before it ends ... Burma has chosen to try the Socialist
Road. If Burmese socialism is successful and has positive results, China also
may learn from Burma ... The socialism pursued by each country is permitted
to vary and be a trial effort by which we can learn from each other. Burma
may carry out an experiment on Burmese socialism as long as Burma does not
label Burmese socialism as the correct international socialism route.155 Lius
comments were tactful, which revealed two points: on the one hand, China did
not object diplomatically to the Burmese Way to Socialism; on the other hand,
Beijing ideologically disfavored Burmese Socialism.
Ne Win told Liu that although Burmese socialism was different from those
of other countries, the objective of both Chinas and Burmas socialism was the
same. In the end, we will still carry out MarxismLeninism. We are gradually
realizing the goal. If we advocate MarxismLeninism now, the people will fear
that we are the same as a communist party. We must educate the people and
enlist their support ... Burmese socialism is different from the socialism of the
right-wing Socialist Parties of Europe so we hope that you do not identify us
with right-wing Socialist Parties ... We dont follow Western countries and take
the capitalist road, but we politically and economically construct socialism.156
Ne Wins statement demonstrated that he wanted to convince Beijing of the
same objective and nature of the two countries socialism, and sought to win
Chinas support and recognition. According to the translator of the Ne Win
Liu Shaoqi talks in 1964, Cheng Ruisheng, Ne Win was very pleased and
grateful when he heard Liu Shaoqis opinions.157 Later, the Embassys report
to Beijing also proved that Ne Win had appreciated Liu Shaoqis comments
on the Burmese Way to Socialism, which had greatly removed his suspicion
of China because Beijing had reserved its judgment on it prior to 1964.158 But

154 Recommendations from the Chinese Embassy to Burma to the Ministry of Foreign
Affairs, AMFA, File No. 105-01816-02.
155 Record of talks between Liu Shaoqi and Burmese leaders, AMFA, File No. 203-00576-01.
156 Record of talks between Liu Shaoqi and Burmese leaders, AMFA, File No. 203-00576-01.
A dissident colonel in Yangon, when asked whether Ne Win was a socialist, replied, Ne
Win will be a socialist when Mao Tsetung learns to play golf! Personal interview.
157 Cheng Ruisheng, Forty Years of Good-neighborly Diplomacy, p. 64.
158 Burmese foreign relations, AMFA, File No. 105-01157-03.

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 The Honeymoon Period: 19551966

Lius statement was only a Chinese tactic; Beijing had not changed its opinion
of Burmese socialism.
In 1964, a report from the Chinese Embassy to Burma to the Foreign Ministry
analyzed Burmese socialism, and drew the conclusion that it was not true and
scientific socialism but bureaucratic capitalism with the outward appearances
of socialism. The report listed nine reasons to prove that conclusion.159 In 1965,
the First Asian Department of the Foreign Ministry also concluded that Ne Win
fancies to pursue socialism not under the leadership of the Communist Party
in Burma, ... [this] is state capitalism in effect, and [the Burmese] have taken
the capitalist road of military dictatorship.160
After Lius trip to Burma, China still remained silent on Burmese socialism,
so Ne Wins pleasure brought about by Lius statements proved to be temporary;
Rangoon remained discontent that China did not recognize Burmese social-
ism.161 In contrast, the Soviet and eastern European states favored it in high
profile and propagandized it. In early 1965, the Chinese Embassy in Rangoon
reminded Beijing that It is worth noting that the propaganda of the Soviet
Union caters for Ne Win juntas needs and that Soviet influence is expanding
[in Burma] ... In less than half a year, the Soviet Union has published at great
length nearly 20 articles to boost the Burmese Way to Socialism, prettify the
Ne Win junta, and give enormous publicity to Ne Wins achievements. The
three documents, Program of Burmese Way to Socialism, Philosophy of Burmese
Program Part, and Special Characteristics of Burmese Socialist Programme Party
would lead Burma on the socialist road.162 Recently, there are signs that Ne Win
cherishes more illusions about the new leadership of the Soviet revisionist
government, and Burma is building closer relations with the Soviet Union.163
Chinas non-recognition of Burmese Way to Socialism also meant that
Beijings judgment about the nature of Ne Wins military government was inevi-
tably negative. When Rangoon released the Special Characteristics of the Burma
Socialist Programme Party on 4 September 1964, Chinas Embassy commented
on the document: It [the government] acts like the bourgeoisie, and is the

159 Assessment by the Chinese Embassy to Burma of the Burmese political situation, AMFA,
File No. 105-01225-01.
160 Materials for investigation and research on Burmese domestic politics and foreign affairs,
AMFA, File No. 105-01314-02.
161 Purchasing of 100,000 tons of Burmese rice in 1965, AMFA, File No. 105-01604-01.
162 Materials for investigation and research on Burmese domestic politics and foreign affairs,
AMFA, File No. 105-01314-02.
163 Materials for investigation and research on Burmese domestic politics and foreign affairs
conducted by the Chinese Embassy to Burma, AMFA, File No. 105-00314-01.

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dictatorship of military junta and a military party.164 This analysis was adopted
by Beijing because, as another later report of the First Asian Department of the
Foreign Ministry expatiated on the nature of the Ne Win government, The Ne
Win military clique is a special group deriving from the Burmese bourgeoisie. It
belongs to a centrist [group] of bourgeoisie according to its political positions
... The Ne Win military government takes on domestic policies of an anti-com-
munist party and anti-people rather than depending on the masses. Although
the government opposes U.S. imperialists subversion and safeguards national
independence, it doesnt dare to offend U.S. imperialism, cherishes illusions
about the Soviet revisionism, and is wary of China.165

Chinas Backing of Ne Win

Although China ideologically was skeptical about the Burmese Way to Socialism
and regarded the Ne Win military government as a bourgeois regime, Beijing
carried out a realistic foreign policy to maintain good relations with Rangoon.
China still subordinated party-to-party relations to state-to-state relations. Of
course, Ne Wins China policy weighed heavily in Beijings decision-making.
Because Ne Win continued to implement a neutralist foreign policy, China
sought to win over Ne Wins regime.166
After Ne Win came into power, the government carried out a program of
economic nationalization in order to achieve the Burmese Way to Socialism.
This catastrophic and absurd program caused political and economic tur-
bulence, social turmoil, and popular discontent in Burma. China seized the
opportunity to expand Chinese influence in Burma.
On 19 March 1964, Ne Win nationalized the economy and pursued a
policy of autarky. More than 10,000 private stores were nationalized, of which
6,700 were owned by the Chinese and their funds were estimated to hold more
than Kyat 0.2 billion.167 On 17 May, the government issued a decree that 50 and
100 kyat notes would cease to be legal tender, so that the Chinese communitys
economy suffered heavy losses. Although limited compensation was offered,
countless Chinese savings were wiped out overnight. All the schools and
newspapers operated by the overseas Chinese were nationalized or banned.

164 Assessment of the Burmese political situation, File No. 105-01225-01.

165 Materials for investigation and research on Burmese domestic politics and foreign affairs,
AMFA, File No. 105-01314-02.
166 The problem of clarifying our position on the Burmese Way to Socialism, AMFA, File No.
105-01816-01.
167 Current situation and problems of Burmese Overseas Chinese, AMFA, File No. 105-
01662-05.

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Two Beijing banks, the Bank of Communications and the Bank of China, were
nationalized. Ne Wins nationalization cut off the channels and eradicated the
main source of Chinas influence over the Chinese community in Burma. This
situation presented the Chinese Communists with a dilemma: either they
could make known their dissatisfaction with this action and it would result in a
reduction of Pekings influence in Burma, or they could remain silent because
Western influence was also being reduced.168 Beijing not only kept quiet
but supported Ne Win. Facing these situations, Chinas government takes
a supportive attitude towards Burmese fundamental domestic and foreign
policies, and actively promotes its improvement of the conditions according to
the established foreign policy.169
China withdrew the assets from the two nationalized banks, Kyat 5 million,
and presented them as a gift to the military government. India issued a written
protest against Burma and claimed compensation. Chinas action formed a sharp
contrast to Indian attitude, which was of great political benefit.170 On 1 April
1965, 129 private middle schools including 16 Chinese schools were announced
to be nationalized. In the afternoon of 1 Apri1, the Chinese Embassy made an
appointment to meet U Tun Tin, the chief of the 3rd Politics Department of the
Burmese Foreign Ministry, where he stated that Chinas government always
instructs the overseas Chinese to abide by the laws and decrees of their country
of residence. Chinas Embassy completely supports that Burmese government
takeover of the Chinese schools, and we are ready to give our cooperation to
you if you need our help during the take-over.171
During this demonstration of Burmese nationalisation, aliens transferred
their property and funds. According to a report of the Chinese Embassy,
by 1964, several hundreds of millions Kyat funds fled Burma and over
20,000 Indians were forced from the country (200,000 followed later).
Widespread panic occurred in the Chinese community. Some leaders of
Overseas Chinese associations shipped their property to the Embassy for
safekeeping, and some Chinese escaped to Yunnan with gold requesting
that the Chinese government transfer the capital to China. In a word, the

168 Robert A. Holmes, Burmese Domestic Policy: The Politics of Burmanization, Asian
Survey, Vol. 7, No. 3, March 1967, p. 193.
169 Situation report by Chinese Embassy to Burma on Ne Wins economic nationalization,
AMFA, File No. 118-01251-03.
170 Nationalization of Burmese banks and China abandons the assets of China Bank and Bank
of Communications (Chinese and English Version), AMFA, File No. 105-01822-01.
171 Reduction of Burmese rice production, and fiscal and economic measures, AMFA, File
No. 105-01303-04.

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 Modern ChinaMyanmar Relations

overseas Chinese universally demanded official help in transferring their

property and funds.172
India reacted against Burmese nationalization. On 21 April, nearly 1,000
Indians demonstrated in front of the Indian Embassy, a demonstration said
to be hatched by the Embassy itself. On May 6, the Indian Foreign Ministry
stated that the Indian government had passed on Burmese Indian concerns to
the Burmese government and asked Rangoon to reconsider their plight. An
Indian diplomat was dispatched to Rangoon to negotiate the problem. On 20
May, the Indian Embassy issued a special press communique and notified the
Indians in Burma to hand their gold and jewelry to the Embassy. The Burmese
government commented, This is a disgraceful act.173
Although the Ambassador Geng Biao on 22 May expressed Chinas concerns
about the overseas Chinese unfavorable situation and asked Burma to protect
their legitimate rights and interests, Beijing was reluctant to displease Ne Win
for the sake of overseas Chinese interests. Compared with India, Chinas banks
in the Yunnan border area were ordered to stop transacting Kyat deposits174and
large overseas remittances in Kyat175 in order to keep friendly relations with
Rangoon.
Beijings apathy triggered overseas Chinese anger and discontent. They
complained that Chinas government disregarded their interests, and that the
motherland sacrificed overseas Chinese interests.176 Although the Embassy did
endeavor to propitiate the Chinese community again and again, it served no
purpose because China failed to help them solve their practical difficulties.177
Conversely, Beijing stressed: At this moment of upheaval, it is necessary to
enhance the ideological work aimed at the overseas Chinese. This ideological
work on the overseas Chinese bourgeoisie is based on patriotism and mainly in-
cludes improving their consciousness of anti-imperialism and anti-colonialism,
pushing them to further BurmaChina friendship, demanding that [the govern-
ment] carry out our policies for the overseas Chinese, [urging them] to comply
with Burmese laws and decrees, and to drop out of Burmese political activities

172 Information of the Department of Consular Affairs: Overseas Chinese in the situation of
Ne Wins nationalization, AMFA, File No. 118-01328-01.
173 Trends in the Burmese political situation, AMFA, File No. 105-01227-01.
174 Situation report on Ne Wins economic nationalization, AMFA, File No. 118-01251-03.
175 Notice, queries and replies to the General Bank as well as to branch banks with regard to
overseas remittances, Documentation in the Archives of Fujian Province, Roll No. 230,
Cat No. 3, File No. 806, 1963.
176 Situation report on Ne Wins economic nationalization, AMFA, File No. 118-01251-03.
177 Current situation and problems of Burmese Overseas Chinese, AMFA, File No. 105-
01662-05.

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 The Honeymoon Period: 19551966

... The overseas Chinese proletariat should be educated in both patriotism and
internationalism. They should be instructed to love the motherland as well as
the Burmese people, to correctly understand the Burmese situation, and Chinas
Burma policy.178 Regarding the education of ChinaBurma friendship among
the overseas Chinese, first inculcate the idea in the leaders and cadremen of the
Chinese community, and then make popular the overseas Chinese understand-
ing of the significance of our friendly policy toward Ne Win.179
Obviously, China was not content with Burmese nationalization but it was
still in favor of Ne Wins scheme. Beijing instructed that overseas Chinese inter-
ests should be subordinate to Beijings interests and the friendship of the two
countries. When Zhou visited Rangoon in July 1964, he asserted in Rangoon
that China favors the Ne Win government gradually taking back the enterprises
operated by foreigners, including overseas Chinese.180 The overseas Chinese
should abide by Burmese laws and orders and you need not give lenient treat-
ment to the overseas Chinese breaking the law.181 On the way to the airport
when Zhou was concluding his visit, he specially told Ne Win again that he had
ordered the Chinese Embassy to convene the leaders of the Chinese community
and had urged them to abide by Burmese laws and decrees. There are sure to be
some profiteers among overseas Chinese capitalists, and some have connections
with Hong Kong and Taiwan.182 Moreover, the relationship between economic
independence to political independence were underlined by the ChinaBurma
joint communiqus issued during Zhou Enlais and Liu Shaoqis trips in February
1964 and April 1966, respectively, and Ne Wins visit to China in July 1965.
While Ne Win was taking firm steps to implement the Burmese Way to
Socialism program, some opposition was brewing to overthrow his regime.
On 5 June 1964, the Chinese Embassy reported to Beijing that according to
its intelligence, Sein Win, the commander of the Burmese Middle Military
Region, was planning to launch a military coup in the following two weeks
after 30 May.183
After the policy debate, Beijing concluded on 9 June that Although the
current bilateral relations are not warm, overall ties are normal. Presently Ne
178 Situation report on Ne Wins economic nationalization, AMFA, File No. 118-01251-03.
179 Reports of the Chinese Embassy to Burma on Burmese assistance for the return to China
of Overseas Chinese, as well as replies from the Central Committee of the Overseas Chi-
nese and the Foreign Ministry, AMFA, File No. 118-01322-01.
180 Diplomatic bulletin of Premier Zhou Enlais visit to Burma, AMFA, File No. 203-00583-
04.
181 Summary of discussion between Zhou Enlai and Ne Win, AMFA, File No. 203-00583-05.
182 Ibid.
183 More efforts to pull Burma into Chinas orbit, AMFA, File No. 105-01865-01.

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 Modern ChinaMyanmar Relations

Win has politically isolated himself in the extreme, faces a sea of economic
troubles, and is facing the danger of being subverted and even murdered
by imperialists and the domestic right-wing factions. Although Ne Win is
reactionary and passive, he has sharp friction with American imperialism and
his ties with Soviet revisionists are not solid. By and large, Ne Wins attitude
toward China is friendly. Under the current situation in Burma, whoever comes
into power will be more reactionary than Ne Win, and the U.S., the U.K. and
Japan will definitely penetrate Burma. This scenario is detrimental to China
and the Burmese people.184 Therefore, Zhou Enlai instructed the Foreign
Ministry to telegraph to Ambassador Geng Biao, and Ask him to inform Ne
Win of three points face to face: 1. the intelligence of a military coup against
him; 2. ask him what aids Burma urgently needs now; 3 say that Zhou Enlai or
Chen Yi is willing to go to Rangoon to exchange views with Ne Win if he feels
it necessary.185 Over 1011 July 1964, Zhou Enlai secretly visited Burma. Zhou
Enlai and Ne Win held three talks for total 11 hours in the two days. Zhou
Enlai suggested that Ne Win should not take drastic measures in the economic
sphere and that his policy should focus on annihilating speculators and the
colonialist economic power in Burma and uniting medium- and small-sized
traders.186
Beijings energetic support of Ne Win arose from its judgement that If Ne
Win falls from power, a more reactionary government will ensue, and the U.S.
and U.K.s influence will spread in Burma. The upshot would be disadvantageous
to the Burmese people, the whole struggle of anti-U.S. imperialism in Southeast
Asia, as well as to us. As a result, we should firmly support Ne Win.187 In
addition, Beijing believed that the BCP and other revolutionary forces were
too weak to seize power. If Ne Win were overturned, the reactionary factions
would be stronger. If Ne Wins reign continued, the Burmese revolution would
have more time to build up its strength.188
The political relations of BurmaChina between 1955 and 1966 can be inter-
preted from three Chinese perspectives: global, regional and bilateral relations.
Globally, BurmaChina political relations were guided by Beijings peaceful
foreign policy and its strategic objective of establishing an international anti-
American united front. China made an attempt to present BurmaChina rela-

184 Ibid.
185 Ibid.
186 Vice Premier Chen Yi informed Burmese Ambassador to China of Premier Zhou Enlais
trip to Burma, AMFA, File No. 106-01144-02.
187 Diplomatic bulletin of Zhou Enlais visit to Burma, AMFA, File No. 203-00583-04.
188 Schedule for Premier Zhou Enlais visit to Burma, AMFA, File No. 203-00582-01.

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 The Honeymoon Period: 19551966

tions as a brilliant model of peaceful coexistence with non-socialist countries.

At a regional level, political relations served in countering the U.S. containment
policy, defending Chinese national security, and creating peaceful zones around
China. Bilaterally, Beijing adopted flexible and realistic policies towards Burma
so that the barriers between the two countries, such as the border dispute, KMT
troops, the overseas Chinese problem, and the export of revolution, did not dam-
age their relations.

Economic Relations 19551966

Since the shift in BurmaChina relations in 1954, their scale of trade had ex-
panded. While Chinas exports to Burma increased by 32 times, from US$0.37
million in 1954 to US$10.68 million in 1955, its imports from Burma expanded
by 28 times, from US$0.52million in 1954 to US$17.29 million in 1955. During
19551966, the annual average import and export volumes reached US$14.5
million and US$18.26 million, respectively.189
In March 1955, the purchasing group of the Burmese government visited
China and signed three contracts worth 1.9 million, to purchase 36 kinds of
merchandise like steel, cotton yarn, and plastic. On 21 February 1958, a new
trade agreement was signed by the two parties valid for one year. In October
1960, a Burmese government trade delegation visited China and a consensus
was reached on expanding bilateral trade and reopening the BurmaYunnan
road. On 15 October 1960, Chinas trade delegation arrived in Rangoon to
further develop and expand bilateral trade. An agreement that China would
purchase Burmese rice was signed on 24 October. At the end of January 1961,
Burma and China signed a trade agreement in Beijing valid for five years.
In 1966, Exchange of Notes on Extension BurmaChina Trade and Payment
Protocol was signed and both sides agreed to continue adopting the bilateral
trade and payment protocol signed in 1961 before the signature of a new trade
protocol. In the same year, Beijing promised to buy 10 long tons of Burmese
rice produced in 1966 and 8 long tons of rice produced in 1967.
In Beijings calculation of foreign policy, economic and technological co-
operation between China and the developing countries Played important po-
litical and economic roles in uniting them and winning their support.190 Sino-
Burmese economic and technological cooperation dated from the mid-1950s.
On 17 July 1956, China provided all machinery and equipment, engineering
design, and technical experts to expand a Burmese spinning mill. Moreover,

189 Yearbook of Chinas International Trade and Economy, pp. iv15.

190 Chronicle of Zhang Wentian, Vol. 2, p. 1021.

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 Modern ChinaMyanmar Relations

another spinning mill, a rubber plant, and a soap factory were built with the
support of Chinese equipment and technology. According to the economic
and technological cooperation protocol signed in January 1961, China gave a
loan of 30 million to Burma. Up to mid-1960, 300 experts and technicians
in the paper industry, hydroelectricity, bridges, botany, geology, chemical engi-
neering and light industry sectors were dispatched to Burma, assisting in the
construction of 12 projects with Chinese loans.
China held that It is necessary to economically conduct proper as well as
active propaganda towards Burma, and introduce our economic experience
to them ... In order to unite Burma and impair imperialist influence in the
country, and to boost the friendly relations and bilateral economic and trade
ties. It was also useful to hold exhibitions on Chinas economic achievements
in Burma and initiate reciprocal visits in the economic sphere.191 There were
dozens of official economic and commercial missions between China and
Burma between 1954 and 1966.
The profile of BurmaChina economic relations of this period was shaped
by the correlation between economic factors and political considerations;
political warmth drove the trade and economic ties, and the economic nexus
served political relations. On the whole, the development of Sino-Burmese
economic ties was not motivated by economic considerations but by Chinas
political and security interests in Burma. Beijing even stated that Chinas
economic and trade deals with Burma should meet the demands of Sino-
Burmese political relations, and cater to Chinas diplomacy towards Burma.192
For instance, although the two countries were economically backward, the level
of Chinas industrialization was higher compared with Burma. Accordingly,
Our exports to Burma can meet Burmese needs but their available export
commodities are not demanded by China,193 especially rice.
Burma was once the worlds largest exporter of rice. After its independence,
rice was the most important agricultural commodity of Burma, whose export
accounted for 7080 percent of gross export values. However, just as Zhou
said, Rice is also the major item of export in China. As a result, it is impossible
for China to expend foreign exchange on importing rice in large quantities
from Burma. Only when Burma woos us to purchase its rice, do we take into
consideration the circumstances to buy some rice in order to help them out

191 Review by Chinese Embassy to Burma of Sino-Burmese economic ties in the past decade,
AMFA, File No. 105-00603-01.
192 Ibid.
193 Ibid.

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 The Honeymoon Period: 19551966

of difficulties.194 China played the rice card to please Burma on occasion.

In 1957, Zhou Enlai told U Kyaw Nyein, Vice Prime Minister of Burma that
Chinas grain yield is increasing but Burma does not need to worry about
it and we wont impact the market share of Burmese rice.195 Beijings rice
offensive did win Burmese appreciation and a favorable impression of China
in the 1950s. U Nu even publicly expressed thanks to China for the rice deals
on several occasions.196
Although trade developed, economics were not crucial to the two partys
foreign relationships. This mainly resulted from the low level of bilateral
economic development, the low degree of industrialization, and weak com-
plementarities in the two economies. Politics promoted the development of
the bilateral trade represented by the rice trade, and economic grants and co-
operation. The economic relations between Burma and China in 19551966
were, however, a crucial component of bilateral political relations. Politics and
diplomatic policies played significant roles in promoting bilateral economics
and trade.

Cultural Relations 19551966

From 1950 to 1966, dozens of cultural delegations exchanged visits between
Rangoon and Beijing, which chiefly included sports, religion, arts, medicine,
media and movies. There were 39 cultural interchanges during 19491959,
with Chinese delegations to Burma amounting to 17 visits with 453 members,
and Burmese delegations to China reaching 22 and 244 visitors.197
Cultural relations at this stage were the indication as well of political rela-
tions. As Chinas Embassy in Rangoon generalized, As a rule, cultural inter-
course is premised with politics because politics needs concerted actions in
the cultural domain. If bilateral relations are amicable, the cultural missions are
easy to be undertaken. If cold, they are impossible to be carried out. Therefore,
ChinaBurma cultural intercourse is intensive sometimes and infrequent
once in a while.198 For example, when they solved the border dispute over
19601961, a climax of cultural exchanges occurred. In 1960, Chinas Cultural
Delegation, the National Ensemble of Ethnic Minorities Songs and Dances,

194 Ibid.
195 Record of talks between Premier Zhou Enlai and Vice Prime Minister U Kyaw Nyein,
AMFA, File No. 105-00339-02(1).
196 Review of Sino-Burmese economic ties, AMFA, File No. 105-00603-01.
197 Review by Chinese Embassy to Burma of Sino-Burmese cultural ties in the past decade,
AMFA, File No. 105-00603-02(1).
198 Ibid.

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 Modern ChinaMyanmar Relations

and the Basketball Team of Chengdu visited Burma, while the Burmese
Cultural and Amity Troupe, a strong government mission of 370 members led
by U Nu, visited China, and included cultural, sports, news, trade, and military
delegations. In 1961, Premier Zhou Enlai headed a strong mission of 430 del-
egates to visit Burma, and it consisted of delegations of government, military,
culture and art personnel, as well as those from Yunnan province, Buddhists,
movies, sports, news and boundary supervisors. Among them, the cultural
and arts delegation alone comprised 300 delegates and performed 24 times for
270,000 throughout Burma.
Beijing regarded cultural communications as an instrument to push political
ties. Play the role of cultural intercourse in promoting bilateral relations as far
as possible, in order to draw Burma over to our side, impair imperialist influ-
ence, further expand our countrys influence in Burma, and encourage Burma
into defending its national independence and countering colonialism.199
Buddhism in Burma is predominantly of the Theravada tradition, and is
practiced by an overwhelming majority of the countrys population. It plays
an important part in Burmese politics, society, and economy. In the mid 1950s,
various rumors about Chinas Buddhism were prevalent in Burma. Rumor had
it that Buddhism has been banned in China. Chinese monks were expelled
and killed.200 To counter such charges, religious exchanges were placed on
Beijings preferred cultural agenda. Especially important was the Buddha
Tooth Relic, which was delivered in October 1955 from China to Burma to
be worshipped; it played great role of boosting bilateral amity.201 When the
Buddha Tooth Relic arrived in Rangoon, the President, Prime Minister, two
House Speakers, the leading figures in the government and military, honor
guards of the army and foreign envoys welcomed it at the airport, and a grand
welcome ceremony was held at the same time. Rangoon city turned out to
welcome it and the citizens worshipped it along the road from the airport to
downtown. The pilgrimage of the Buddha Tooth Relic had extensive as well as
a profound influence on Burmese.202 According to the escort of Buddha Tooth
Relic, Burmas government and the Buddhist community adopted warmer
and more cordial attitudes to us when our Buddhism delegation visited Burma
six months ago. During the pilgrimage of the Buddha Tooth Relic, some

199 Ibid.
200 Zhao Puchu, Independence, Peace and Friendship, Peoples Daily, 28 May 1955.
201 Review of Sino-Burmese cultural ties, AMFA, File No. 105-00603-02(1).
202 Report of the Chinese Buddhist Association on transport of the Buddhas tooth relic,
AMFA, File No. 105-00182-10(1).

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 The Honeymoon Period: 19551966

leading figures in the Buddhist community established closer relations with us.
Some attitudes were changed by this activity.203
In early 1955 and 1956, skirmishes broke out in ChinaBurma border areas,
which resulted in the tension and estrangement between the two countries. For this
reason, leaders conducted mutual visits in the second half of 1956 to negotiate the
border dispute. Under this circumstance, Beijing dispatched artistic delegations to
visit Burma several times in order to mitigate the tension between two countries
caused by boundary problems, create a friendly atmosphere and political impact
when Zhou Enlai, Marshal Ye Jianying and the Governor of Yunnan province were to
visit Burma.204
From the end of the 1950s and in the early 1960s, Beijing gradually changed
its realist foreign policy largely based on national security and interests to
a radical revolutionary policy highlighting the dominant role of ideology in
policymaking. By the mid 1960s, China had established a radical revolutionary
foreign policy characterized by countering imperialism, revisionism, and all
reactionaries of various countries, and supporting and aiding the revolutionary
movements in Asia, Africa, and Latin America. The shock of Beijings radical
revolutionary position to Burma was not immediately obvious. Nevertheless,
after the eruption of the Cultural Revolution, Burma could not escape the
export of revolution. On 4 January 1967, Vice-Premier Chen Yi declared at
the reception of the nineteenth anniversary of Burmese Independence held
by Burmese Embassy in Beijing that An eternal socialist China will more
effectively struggle against imperialism, modern revisionism, and reactionaries
of foreign countries, more forcefully patronize peoples struggle for world peace,
national independence, peoples democracy and socialism in Asia, Africa, and
Latin America, and the world, and more successfully fulfill our international
responsibility.205 From January to 26 June 1967, namely before the anti-Chinese
riots in that year, articles and reports about the propaganda of Mao Tsetung
thought, anti-Soviet articles, support to the Chinese Cultural Revolution, and
the personality cult around Mao in Burma were continually published in the
Peoples Daily.206 In these reports, Beijing used the title of Burmese Friends

203 Ibid.
204 Review of Sino-Burmese cultural ties, AMFA, File No. 105-00603-02(1).
205 Eternal Socialist China Will Fulfill International Responsibility, Peoples Daily, 5 January
1967.
206 For Example, Burmese Friends Eager to Learn Quotations from Chairman Mao, Peoples
Daily, 19 January 1967; Cheer of Burmese Friends for Revolutionary Action in Shanxi
Revolutionary Rebels in Shanghai, Peoples Daily, 31 January 1967; Burmese Workers
Active Learning Quotations from Chairman Mao, Peoples Daily, 4 March 1967; Burmese

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 Modern ChinaMyanmar Relations

to refer to the Burmese supporters of the Cultural Revolution. Although the

supporters of Beijings Cultural Revolution in Burma were not mentioned,
the reports in the CCPs organ newspaper indicated that Chinas turmoil had
spread to Burma. The Ne Win government had no patience with Chinese
revolutionary penetration because the military regime since 1962 had adopted
a policy of eliminating all foreign influence in Burma. It meant that a conflict
between Beijings revolutionary diplomacy and Ne Wins political platform and
foreign policy could not be avoided.

Friends Compliment for Mao Tsetung Thought Becoming the Strongest Weapon of
World Revolutionary People, Peoples Daily, 14 April 1967.

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 4
The Anti-Chinese Riots of 1967: The
Rupture of the Pauk Phaw Ties

C 1
hinese academic studies on Sino-Burmese relations have long been un
balanced. Research is generally done under the intellectual framework
and rubric of friendship and harmony more diplomatic than ana-
lytical. To some degree, academic research is also subject to political propa-
ganda. The conflict and frustration between the two countries have often been
omitted or neglected in Chinese books and papers devoted to this topic.
A case in point is the study of Burmas anti-Chinese riots in 1967. This was
the most important anti-Chinese event in modern Burmese history. Rich in
significance, it has been too little understood. Few Chinese scholars have dealt
in depth with these riots, which had an important impact on Sino-Burmese re-
lations during the Cold War. A few western scholars have analyzed this subject,
but most of the research was conducted in the 1970s and 1980s, and lacked
Chinese sources, especially local materials from the overseas Chinese com-
munity in Burma. This chapter focuses on the causes, reasons, and impacts of
these anti-Chinese riots against the spread of the Chinese cultural revolution
to Burma.

The 6.26 (26 June) Anti-Chinese Riots

The BSPPs efforts to nationalize the entire economy following the coup of
1962 included private educational institutions. After the military government
promulgated the Nationalization of Private Schools Law in April 1965, all
Chinese schools in Burma were nationalized, and all teachers were dismissed,
except those with Burmese citizenship. According to the education law, however,
private schools with less than twenty students were still allowed to function.

1 These include such Chinese books as The History of Sino-Burmese Relations, Study of
Friendship between China and Burma, Two Thousands Years Friendship of China and Bur-
ma, Pauk Phaw Friendship: Residents Get-together Between China and Burma in 1956, and
Documents on China-Burma Friendship History.

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 Modern ChinaMyanmar Relations

Thus, overseas Chinese intellectuals throughout Burma founded a number of

smaller Chinese schools, using local Chinese houses and business sites.
When the Cultural Revolution broke out in China in 1966, it gradually
affected the Chinese community in Burma. Some Chinese students and teachers
wore Chairman Mao badges and recited quotations from Mao Tsetung. The
local authorities in the northern city of Bhamo early in June 1967 prohibited
Chinese students from entering school wearing Mao badges. When they got
the news, the Chinese Chamber of Commerce, the Chinese Association of
Beneficence, and the Chinese Teachers League in Rangoon dispatched several
representatives to negotiate with the Bhamo authorities. The local authorities
felt pressure from the overseas Chinese, so they asked for instructions from the
capital. At the same time, Rangoon was being plagued by overseas Chinese
students who followed the Red Guard in China and wore Mao badges. In
order to control the situation, the Burmese Ministry of Education enacted a
law that all students were forbidden to wear any badge in school other than the
Burmese national emblem and the Aung San badge. However, the Chinese did
not abide by this rule. Overseas Chinese students not only continued to go to
school with Mao badges, but their number increased.2
When the students of Rangoon No. 3 National Elementary School (formerly
the Chinese Womens Middle School) went to school with Mao badges on 22
June 1967, some teachers tore off the badges and threw them into the sewer. The
students who had broken the rule were locked in one room. After they learned
what had happened, some students parents came to the No. 3 School and
argued with some teachers. Finally, the teachers confessed that they had acted
improperly, and thus the dispute died down. The neighboring Zhong Zheng
Middle School, however, closed its gate while its students were inside, thus
preventing some 80 students from going home for lunch. They then protested
against the school administrators. At about four p.m., the police arrived and
ended the dispute. The closed gate was reopened and the students inside left
school.
The military government took steps to control the situation on 24 June.
Rangoon No. 3 National Elementary School and the Zhong Zheng Middle
School were closed, while military officers were appointed as heads of the
Overseas Chinese Middle School and the Nan Yang Middle School. They
issued regulations against Mao badges that all Chinese students were ordered

2 Lin Zhu, Recalling a painful experience: the origin of the 1967 anti-Chinese riots in Bur-
ma, in Collection of Overseas Chinese history, Vol. IV, Fuzhou: Fujian Society for Overseas
Chinese History, 1987, p. 246.

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 The Anti-Chinese Riots of 1967: The Rupture of the Pauk Phaw Ties

to sign and obey, on pain of being denied entrance to the school. On 25 June,
crowds began to assault the Overseas Chinese Middle School, but the attack
was not massive.
Anti-Chinese riots, however, began to escalate from 26 June. With sword and
cudgel, Burmese attackers first gathered at the square behind the Shwedagon
Pagoda, at the train station, and near the Rangoon No. 4 department store.
The crowds proceeded along three routes. The first group mainly attacked
the Overseas Chinese Middle School. The second confronted the Chinese
community, besieging the Chinese Teachers League, the Irrawaddy River Glee
Club, and the Chinese Clerks Association. The third headed for the Chinese
Embassy.
In the Overseas Chinese Middle School, many Chinese students still
wore Mao badges on 26 June. They were asked to sign a pledge to obey the
ban against badges in school, but they declined. Both sides refused to budge.
The school closed its gate when some students parents heard the news and
went to inquire. The students gathered together and shouted slogans, reciting
quotations of Chairman Mao. Shortly thereafter, the Chinese Embassy sent
someone to encourage the students. Before long, the attackers along the
first route reached the Overseas Chinese Middle School and stood facing
students inside the campus. They assaulted the students parents and those
Chinese wearing Mao badges near the gate. One died, and over twenty were
injured. Police, meanwhile, were attacking Nan Yang Middle School. Five
students were arrested and more were injured.3 During the afternoon, mobs
continued to attack Chinese near the Overseas Chinese Middle School. Some
Chinese wearing trousers were killed or beaten and others wearing trousers
were attacked indiscriminately because Burmese always wear longyis and it
was assumed that anyone not wearing a longyi was not Burmese. Mobs even
blocked buses to check the passengers, and then killed ones wearing trousers.4
The military regime on 27 June finally gave orders that nine schools, in which
most students were Chinese, were to be closed indefinitely.
At 1:00 p.m. on 26 June, a crowd of over one thousand surrounded the
Chinese Embassy in Rangoon and threw stones and tiles at it. Two groups
assaulted the Embassy successively at about 8:00 p.m. and made off with the
Chinese national emblem, while the Burmese police responsible for guarding

3 Burmese authority violently counters China and excludes overseas Chinese for the pur-
poses of its internal policy and external diplomacy, Peoples Daily, 29 June 1967.
4 Zeng Guanying and Chen Zunfa, Witnessing two anti-Chinese riots in Burma. Unpub-
lished manuscript.

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the Embassy either stood by or left. Mobs made six attacks, one after the other,
on the offices of The New China News Agency (NCNA), Chinas Civil Aviation
Administration, and the office of the Economic and Commercial Counselor of
the Chinese Embassy, and burned their properties on 27 June.5 A crowd of two
thousand started the third attack, and finally invaded the Chinese Embassy on 27
June and killed Liu Yi, an aid technician, and injured several Chinese diplomats.
On the afternoon of 28 June, the military government announced martial law
from 29 June in the Chinese Embassy area and Rangoons Chinatown. The
personnel of the Chinese Embassy were not allowed to go out.
The attacks on the Chinese community had two foci. The first on 26 June
was besieging and destroying the Chinese Teachers League, the Irrawaddy
River Glee Club, and the Chinese Clerks Association. This attack resulted in
thirty-one Chinese dead, twenty-seven victims in Chinese Teachers League,
three in the Irrawaddy River Glee Club, and one in the Chinese Clerks
Association. In addition, dozens of other Chinese associations were burned or
destroyed, and some members of these associations were arrested or injured.
Second, Chinese shops, houses, and properties in Chinatown and other
blocks were sacked, burned, and destroyed. Mobs struck anyone whom they
met wearing trousers or Chairman Mao badges. Almost all Chinese shops and
dwelling houses were completely destroyed. Rangoon looked like a city dam-
aged by bombs. Burnt-out Chinese-owned cars and scorched properties lay
topsy-turvy in the street and were piled on the roadsides. Footpaths were cov-
ered by broken glass and smashed pots and pans. Several hundred Burmese in
batches took part in the affray and street attacks in Rangoon, and destroyed and
looted Chinese shops, restaurants, cinemas, beauty parlors, and photoshops.6
The riots began on 26 June and ended on 28 June. The military government
imposed a curfew in Rangoon and effectively kept the riots within limits.
Although Rangoon was the only site of Chinese deaths, the riots influence
spread over Burma. Chinese in other parts of the country suffered in differing
degrees. Anti-Chinese protests in Magway on 29 June consisted of over two
thousand Burmese, and over twenty Chinese shops and houses were destroyed.
On the same day, an anti-Chinese protest occurred at Yenangyaung and over
one hundred Burmese destroyed one Chinese shop selling tea. One day later,
approximately one thousand Burmese paraded to protest against Chinese in
5 For Chinas first coverage on the anti-Chinese riot in Rangoon see Burmese reactionary
government undisguisedly plotted anti-Chinese riot, Peoples Daily, 29 June 1967. These
assaults took place at 0:40 p.m., 0:55 p.m., 1:10 p.m., 2:00 p.m., 13:40 p.m., and 14:10 p.m.
6 Burmese reactionary government went its own way to continue anti-Chinese riot,
Peoples Daily, 2 July 1967.

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 The Anti-Chinese Riots of 1967: The Rupture of the Pauk Phaw Ties

Mandalay. Parades and demonstrations against Chinese, moreover, occurred

in two hundred and eighty-one cities and towns, such as Pyinmana, Taunggyi,
Pye, Mawlamyine, Dawei, Myingyan, Pathein, and others.

Wrestling between Beijing and Rangoon

Beijings Response
After the anti-Chinese rioting started in Rangoon, Beijings first official re-
sponse was on 28 June, when Han Nianlong, the Vice Foreign Minister, called
in Burmas Ambassador to China and presented a note of protest. In it, China
charged that the military regime connived at instigating riots, and lodged the
strongest and most urgent protest against Burma. In addition, China demanded
that the Burmese government take immediate emergency measures to prohibit
anti-Chinese rioting from worsening, assure the safety of Chinas Embassy and
other Chinese organs as well as Chinese citizens, return the pillaged Chinese
national emblem, and chastise the murderers.7 This note appeared on the front
page of the Peoples Daily on 29 June. On the same day, the charg daffaires
of the Chinese Embassy in Rangoon, Hsiao Ming, put forward a five-point
demand to the Burmese government: (1) severely chastise the murderers;
(2) comfort and compensate the bereaved families; (3) apologize publicly;
(4) assure the safety of Chinas Embassy, other Chinese organs, and Chinese
citizens; (5) stop at once the fascist violence against the overseas Chinese.8
On 30 June, Beijing issued a statement that the military regime was
instigating and engineering the Rangoon riots catering to U.S. imperialism
and Soviet revisionism, and was using them to deflect the strong dissatisfac-
tion of the Burmese people with Ne Wins government. Beijing delivered the
strongest and most urgent protest against Burma again and decided that the
Chinese Ambassador, who had gone back to Beijing before the Rangoon riot-
ing, would not be sent back to his post. The Chinese government repeated the
five demands of 29 June, and declared it would take other steps according to
the state of affairs in Rangoon.9 Subsequently, more official notes and protests
were delivered to Burma, after all Beijings demands were rejected by Rangoon.
In the three months from August to November of 1967, The Peking leaders
have sent to the Burmese government more than 20 notes and statements of a
7 Burmese government consecutively goaded mobs to attack Chinas Embassy, kill Chinese
the aid technician and persecute Overseas Chinese, Peoples Daily, 29 June 1967.
8 Central Committee of BCP issued statement on anti-Chinese riot contrived by reaction-
ary Burmese government, Peoples Daily, 2 July 1967.
9 PRC government issues a statement in the strongest and most urgent protest against anti-
Chinese fascist violence of Burmese government, Peoples Daily, 30 June 1967.

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threatening nature. They assert, taking a position of great-power chauvinism,

that the Burmese government of Ne Win will definitely be severely punished
by the Chinese people and their National Liberation Army.10
The Chinese media also attacked Burma and Ne Win after the Rangoon
incident. From 29 June through December in 1967, there were 153 reports
and articles attacking Burma in the Peoples Daily alone. These attacks against
Burma reached a climax in July and August, with 75 reports and 33 articles in
the Peoples Daily. This media offensive diminished gradually thereafter.
On 29 June, demonstrating outside Burmas Embassy in Beijing, 200,000
people protested against the Burmese anti-Chinese riots and supported
Beijings 28 June note of protest. From 30 June to 3 July a total of over one
million Chinese sequentially joined rallies and demonstrations in front of
the Burmese Embassy in Beijing. The demonstrators declared: Overthrow
Burmese reactionists and Ne Win. It was their sacred right that overseas
Chinese and Burmese people studied, propagandized, and defended Maos
thought. The Burmese government must confess in public and apologize to
Beijing, the Chinese people, and the overseas Chinese in Burma. Among the
demonstrations noted above, the march and rally of 3 July went out of control.
Red Guards broke into the Burmese Embassy and tore up the Burmese national
flag and smashed the Burmese national emblem, which became one of four
notorious incidents in China during the Cultural Revolution, along with invad-
ing the Indian and Indonesian Embassies, and burning the British office of the
charg daffaires. During the same period, massive demonstrations and rallies
continuously occurred in Shanghai and Kunming.
China submitted a memorandum on 1 July to Burma wherein Beijing
refused Rangoons demand that the Chinese government stop massive dem-
onstrations. In addition, it demanded that the Burmese government stop
the siege of the Chinese Embassy and Chinatown in Rangoon, and fulfill the
Chinese demands.
Apparently, Beijing used the BCP as a lever or countermeasure against the
anti-China activities in Burma in addition to their verbal and media attacks,
and massive demonstrations in Beijing, Shanghai and Kunming. The BCP
Central Committee issued a statement on 28 June on the anti-Chinese riots in
Rangoon, stating: We absolutely support the overseas Chinese revolutionary
brave and just action. They called on all Burmese people to try their best to
support their Chinese brethren in Burma and oppose the anti-Chinese riots.
10 A. Shchetinkin, Pekings Crude Interference, The Current Digest of the Post-Soviet
Press, No. 41, Vol. 19, 1 November 1967, p. 25.

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All Burmese people strive for the complete overthrow of the Ne Win military
government and the establishment of a peoples democratic and united front
government.11
A memorial rally for Liu Yi was staged on 5 July, attended by Political
Bureau of the CCP Central Committee member, Vice Premier Li Xiannian. At
the memorial rally, Thakin Ba Thein Tin, first Vice Chairman of the Central
Committee of the BCP, gave a speech titled The Military Government of Ne
Win, the Chiang Kaishek of Burma, is bound to fail; the people are bound to
win. In the address, he enumerated the malfeasances of the Ne Win regime
and called upon the Burmese people to overthrow it. On behalf of the BCP,
he affirmed that The overseas Chinese struggle in Burma was absolutely
just and right-on. We, the BCP, heartily support the overseas Chinese correct
struggle and strongly protest against the fascist killing of the overseas Chinese
by the military government.12 This address was fully published, not only in the
Peoples Daily, but in the CCP organ, Red Flag.
The BCP not only expressed its stance in its statement and speech about
the Rangoon incident, but also took action against the anti-Chinese rioting
in Burma. The BCP staged rallies to protest against anti-Chinese activities
within its base area at Bago, Pathein, Tharrawaddy, as well as other places,
and distributed leaflets and pasted notifications in Rangoon, Myaung Mya,
and Taikkyi, warning the military government, Dont persecute the overseas
Chinese. In July 1967, the BCP executed a Burmese who had taken the lead in
demonstrating and protesting against China.13

Rangoons Reaction
In the face of Beijings vehement response to the anti-Chinese rioting in
Rangoon, the Burmese reacted quickly and strongly. When 200,000 Chinese
gathered and demonstrated in front of the Burmese Embassy in Beijing on 29
June, Rangoon presented a memorandum to Beijing, which waved aside the
Chinese five demands and asked Beijing to stop the massive demonstrations.14
In addition, Rangoon repudiated Hsiao Mings denouncement and stated that
11 BCP issues a statement about the anti-Chinese riot instigated by the reactionary Burma
government, Peoples Daily, 2 July 1967.
12 The Military Government of Ne Win, the Chiang Kaishek of Burma, is bound to fail; the
people are bound to win, Peoples Daily, 6 July 1967.
13 Revolutionary people staged massive rally within BCP base area, Peoples Daily, 11 Au-
gust 1967; Firmly reject and oppose Ne Win reactionaries anti-Chinese activities, Peo-
ples Daily, 4 November 1967.
14 China submitted a memorandum to Burma refusing the absurd demands of the Burmese
reactionary government, Peoples Daily, 2 July 1967.

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the anti-Chinese riot was not plotted by the Burmese government and that the
Chinese Embassy had no right to interfere in Burmese internal affairs.
Rangoons uncompromising attitude prompted Beijings even stronger
response. It should be noted that the Peoples Daily first editorial about the
Rangoon riot appeared on 30 June, and the BCP statement of 28 June about the
riot was not published in the Peoples Daily until 2 July. This suggests that Beijing
at first took a wait-and-see attitude toward Rangoons reaction. Consequently,
Chinese policy became more radical as Rangoon refused to provide a satisfac-
tory reply. In particular, Burma ignored the Chinese five demands, which irri-
tated Beijing. China broadcast and published the BCP statement to overthrow
the Ne Win military regime, and establish a peoples democratic and united
front government.15 Compared with previous Chinese policy toward Burma,
this change was unprecedented. The Maoist leadership finally supported the
BCP not because of any new finding of strength in the Burmese Communist
movement, but because the situation in Burma had developed to the point
where Beijing had to choose between backing down (by retracing or shelving its
demands) or supporting its officials and overseas Chinese, some of whom had
lost their lives.16
The Burmese media countered Beijings verbal attacks, publishing articles
and reports that were anti-Chinese and anti-communist. Rangoon broadcast
that Chinese students were metaphorically sowing dragons teeth, had been
trained for over one year in Beijing, and their actions had been plotted by
China. In order to refute Beijings blame that the military regime was creating
a white terror in Burma, the Burmese press reported that some Chinese
had joined the anti-Beijing protest and parade in Burma, and called on local
Chinese to oppose all evil forces and defend their interests.17
The crude interference by Beijing in the internal affairs of Burma elicited a
protest on the part of the Burmese public. A wave of rallies and demonstrations
spread throughout the country, and their participants sternly denounced the
provocative actions of the local hung weiping (red enemies) and their Peking
sponsors. Waving over the heads of the demonstrators were banners bearing
the slogans: We Burmese are the masters here! We do not want Maos ideas!18

15 BCP issued a statement about anti-Chinese riot instigated by reactionary Burmas gov-
ernment, Peoples Daily, 2 July 1967.
16 Melvin Gurtov, China and Southeast Asia: The Politics of Survival, Baltimore and London:
The Johns Hopkins University Press, 1975, p. 118.
17 Ralph Pettman, China in Burmas Foreign Policy, pp. 3637.
18 A. Shchetinkin, Pekings Crude Interference, p. 25.

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After the anti-Chinese riots, the military authorities placed pro-Beijing

leaders and activists in the Chinese community under surveillance and arrest-
ed some Chinese, which led to a new series of Beijing protests and warnings.
Nevertheless, Rangoon insisted on trying those who were accused of stirring
up Chinese students to demonstrate or starting something. In addition, the
government took the opportunity to crack down on pro-Beijing leftist leaders
and silence propaganda outlets. At least 100 officials of well-known Communist
front organizations, like the BurmaChina Friendship Association and the
AfroAsian Solidarity Committee in Rangoon, were arrested.19
The Burmese government also took some measures to weaken Beijings
influence on both the Chinese community and the political situation in
Burma; it restricted contacts between the Chinese Embassy and the Chinese
community in Rangoon. The areas of Chinatown and the Chinese Embassy
were under military administration from 28 June, which again prompted
Beijings protest. In July, Beijing informed Rangoon that China would deliver
some vegetables, fruit, and drugs to the Chinese Embassy, but Burma refused
this demand and subsequently detained all relief supplies when China persisted
in sending them to Rangoon. At the same time, Ne Win prevented the Chinese
government from sending a plane to ship seriously injured Chinese back for
treatment. In August, China re-attempted to airlift some relief supplies to its
Embassy in Rangoon, but failed.
At the beginning of September, Chinas Central Committee of Overseas
Chinese Affairs wanted to dispatch a delegation to convey their sympathy
to the Chinese in Burma, but the Burmese government disapproved. In the
same month, Rangoon recalled its Ambassador to Beijing. Burma terminated
the Chinese economic assistance program, and presented a note to China, in
which China was asked to withdraw all its Chinese aid personnel in October.
A total of 412 Chinese aid experts and technicians returned to China prior to 4
November 1967.
Four NCNA correspondents in Rangoon, Yu Minsheng, Teng Wenqi, Li
Chengyi and Liu Dejin, were expelled from the country in July 1967 and January
1968. On 19 March 1968, the Burmese police detained some leaders of Chinese
associations and pro-Maoist Chinese activists throughout Burma on the pretext
of inspecting their ID cards. Over the following two days, more Chinese were
detained in Mandalay, Moulmein, Bassein, Myitkyina, Bamo, Lashio, and
Taunggyi. In addition, some pro-Beijing Chinese were deported.

19 Gurtov, China and Southeast Asia, p. 117.

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In the course of this wrestling between the two sides, some pro-Taiwan
Chinese joined the anti-Beijing protests and parades and delivered speeches
against the CCP and mainland China. This was criticized by Beijing, which
charged that Rangoon had used pro-Taiwan Chinese to counter the CCP.20 The
anti-communist Chinese set up an Overseas Chinese Freedom Association
in Burma in Rangoon in September 1968. The Chinese Embassy submitted a
memorandum to the Burmese government on 24 October 1968 and requested
the latter to take immediate steps to prohibit pro-Taiwan Chinese from anti-
Beijing activities.

The Impact of the Anti-Chinese Riots

Disappointed and Dazed Overseas Chinese
The overseas Chinese in Burma were the direct victims of the anti-Chinese
riots; their lives and properties were under attack and their living environment
deteriorated. Hence, a large number of Chinese in Burma emigrated. Tens
of thousands of overseas Chinese returned to China, thirty to forty thousand
to Hong Kong and Macao, and some to Europe, America. and Australia.21 In
addition to the direct impact of the anti-Chinese riots, they had more profound
and long-term effects.
One female overseas Chinese described her mood after the rioting: Then,
we were scared as well as angry.22 This was not a particularly pro-Beijing mood; it
was ubiquitous in the Burma Chinese community. Many pro-Taiwan and neutral
Chinese felt the same. One pro-Taiwan Chinese, touching on the situation in
Burma after the riot, said that the terror atmosphere caused by the anti-China
incidents continued to about 1980. After the riots, half of the Cantonese23 left
Burma for the U.S., Taiwan, Hong Kong, Malaysia, and Singapore.24 During
the riots, even the Japanese in Rangoon also panicked because of their similar
appearance to the Chinese. Some Japanese cars were stoned.25
In order to escape being attacked again, many Chinese gradually assimi-
lated. Some Chinese began to conceal their personal identity and Chineseness.

20 Reactionary Ne Win authority colludes with Chiang Kaishek junta to the teeth. Extends
anti-China riot to towns and countries throughout Burma, Peoples Daily, 13 July 1967.
21 Wen Xing, Ne Wins autarchy and 1967 anti-Chinese accident, Overseas Chinese Monthly,
No. 11, 1988, p. 15.
22 Interview Cun Shoubin, Mandalay, 7 December 2005.
23 Historically, the percentage of Cantonese supporting the Kuomintang was higher than
Fujianese.
24 Interview LFH , Yangon, 18 November 2005.
25 Sakuma Hirayoshi, Living in Burma: the People and Their Lives in the Isolated Country,
Tokyo: Keiso Shobo, 1994, p. 56.

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Offspring born in the 1970s and the 1980s were not given Chinese names.
They claimed not to be Chinese, but from Shan and other Burmese minori-
ties.26 This phenomenon of the Chinese concealing their identity was more
noticeable in Rangoon. There, after the anti-Chinese riots most overseas
Chinese usually did not speak Chinese even at home.27 Thus, today Chinese
who are under forty-five years old and who lived in the former capital during
that time generally cannot speak Chinese.
Many overseas Chinese were unwilling to appear in public and participate
in social activities lest their Chinese identity should be exposed and bring trou-
ble to them if new anti-Chinese riots emerged. Overseas Chinese associations
decreased their programs. Their associations kept low profiles even when they
held some activities.28 This condition did not change until the 1980s. Before
the 6.26 event, skirts and trousers were popular costumes in the Chinese
community, but the Chinese changed to dress in the Burmese fashion longyis
and slippers after 1967.29
Beijing openly supported the BCP while the BCP supported the overseas
Chinese, and some overseas Chinese joined the BCP; the serial interlinkages
made those overseas Chinese speak and act more cautiously, even these who
had no relation with the BCP.
It was the experience and lessons from the 6.26 anti-Chinese riots that
prompted many overseas Chinese in Burma to become indifferent to politics,
and to orient themselves as just simple businessmen. The riots made them more
careful and they learned to how to protect themselves more effectively. The
6.26 event played the role of accelerating the process of Chinese assimilation.

The Drop in Beijings Influence in Burma

During and after the anti-Chinese riots, the most affected were the Maoists;
those killed and arrested were the elite and hard-core Maoists in the Chinese
community. Other Chinese Maoists were monitored by the authorities. As
a result, the CCP greatly lost influence in the Chinese community. Many
overseas Chinese were jailed; some had to flee abroad; some joined the BCP;
some were killed. It could be said that Maoists in the Chinese community in
Burma lost seventy to eighty percent of their group.30

26 Interview Cun Shoubin, Mandalay, 7 December 2005.

27 Interview Luo Xilong, Yangon, 11 November 2005.
28 Interview Wang Qinliang, Yangon, 20 November 2005.
29 Interview Li Jiamei, Mandalay, 7 December 2005.
30 Interview HHZ, Kunming, 7 December 2003.

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In fact, the Chinese Maoists angry mood after the rioting meant that
Beijing had no effective measures to help them escape from the dilemma
brought on by the CCPs export of revolution. So the overseas Chinese, es-
pecially Maoists, were in trouble. Some became unbalanced mentally, some
complained that Beijing was inept and could not handle the trouble and
crises.31 Some Chinese complained that Our shops and factories were nation-
alized, and we lost all our properties. Also, Chinese schools were nationalized
and our offspring couldnt be educated in Chinese. How sad we are. You [the
Beijing authorities] did not say any word about the situation then, but on the
contrary you persuaded us to put up with the facts. Nevertheless, just for a
badge we now have to face the tragic results. We tread on eggs in the current
situation.32 Even some Chinese asserted that Maos thought harms us and we
are scapegoats.33
Beijings leftist foreign policy, and the harm and loss that the Chinese
suffered during the riots made some overseas Chinese change to support the
Kuomintang or alienate themselves from the CCP. This was especially true
in Upper Burma, where the Kuomintang had had more influence. Beijings
influence had increased to some degree through its efforts in the 1950s, but
it decreased again after the 1967 riots. Meanwhile, some Chinese had fled
to Burma to escape the CCPs political persecution, and Taiwan made more
effort to secure overseas Chinese support and favor.

The Shock to ChinaBurma Ties

On 29 June 1967, Beijing declared that the Chinese Ambassador to Burma
would not return to his post. Burma recalled its Ambassador to Beijing two
months later; ChinaBurma diplomatic relations were kept at the charg
daffaires level until 1970.
Indeed, the anti-Chinese riots caused Chinas policy toward Burma to
change. Before the riots, China had emphasized the preservation of state-to-
state relations between the two countries. National interest played a critical
role in Chinese policy toward Burma. Consequently, although Beijing sup-
ported the BCP before the riots, it was cautious and covert. However, after
the riots, China changed its policy toward Burma and strongly and openly
supported the BCP.

31 Interview Cun Shoubin, Mandalay, 7 December 2005.

32 Lin Zhu, Recalling a Painful Experience, p. 249.
33 Interview Zhao Hua, Kunming, 7 December 2003.

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The CCPs Central Committee sent a telegram to the BCPs Central Com
mittee in August 1967, congratulating them on the 28th anniversary of the
founding of the BCP. It declared that The CCP and the Chinese people firmly
support the peoples revolutionary armed struggle led by the BCP. We regard
such support as our bounden proletarian international duty ... It is our firm
conviction that the BCP headed by comrade Thakin Than Tun, which persists
in the revolutionary line of winning the war and seizing political power, will
assuredly unite all Party comrades and Burmese people of all ethnic groups to
overthrow the reactionary Ne Win government and win complete victory in
the revolutionary war in Burma.34
Moreover, the Chinese media published articles written by the BCPs leaders
and cadres, and broadcast their speeches, which urged the Burmese people to
support its armed struggle and overthrow the Ne Win regime.35 According to
the index of the Peoples Daily, before the riots Beijings official newspaper only
occasionally published the BCPs activities and news. The number of related
reports on the BCP in the Peoples Daily did not exceed fifteen, and their contents
did not deal with the BCPs anti-government stance. Beijing was careful when
dealing with relations between the Burmese government and the BCP.
After the 6.26 event, however, China began to support the BCP openly and
provided it with weapons, training, advisors, logistics, etc.36 On 1 January 1968,
troops of the BCP in China led a military offensive across the Burmese frontier
along three routes. Each route included one PLA detachment (company),
which consisted of Chinas southwest minority soldiers from various Chinese
military areas.37 These PLA minority soldiers were trans-frontier minorities,
such as the Shan and Kachin, and thus had the same origin as some Burmese
minorities. Some Chinese Maoists in Burma were directed to join the BCP
after the anti-Chinese riots, and it had some voluntary members from the
local Chinese communities. In addition, a large number of educated Chinese
youths came to Burma and joined the BCP. Chinese BCP cadres significantly
increased.

34 Central Committee of CCP ardently congratulates the 28th anniversary of BCP, Peoples
Daily, 15 August 1967.
35 For instance, some of their articles were: Overthrow Chiang Kaishek of Burma Ne Win;
Statement of BCPs Central Committee on Chairman of BCPs being murdered; The most pow-
erful weapon, the most important aid; Burmese peoples armed struggle is bound to win; The
sharpest weapon of Burmese armed revolution; Dare to make sacrifice, dare to struggle, dare to
win victory.
36 Interview FG, former Vice Chairman of BCP Central Committee, Xiamen, 17 February
2005.
37 Interview ZZT, Taunggyi, 16 December 2005.

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Table 1: Chinas trade with Burma, 19661972 (US$ million)

Year 1966 1967 1968 1969 1970 1971 1972

Imports 15.92 8.12 77 872 1392
Exports 7.99 12.97 1.41 (negligible) 371 908 1152
Balance 7.93 4.85 1.41 (negligible) 294 36 240

Source: Ministry of Foreign Economics and Trade, PRC, The Comprehensive Foreign
Trade Statistical Data: 19501989, 1990, p. 51.

The rift between the two countries resulted in a sharp decline in bilateral
trade after 1967. The bilateral trading value in 1969 was only four thousand
dollars, a decrease of ninety-three percent compared with 1967, which set the
low record in the history of the two nations trading. This trade stagnation did
not change until diplomatic normalization in 1971 (see Table 1).

Causes of the Anti-Chinese Riots

The Beijing Dimension
Chinas policy toward Burma after 1962 was focused on minimizing Soviet and
U.S. influence in Burma. On the other hand, China enlisted Burmese support
on the Sino-Indian border dispute, Vietnam, Laos, and other international is-
sues. Zhou Enlai visited Burma in February 1964, and he repeated his trip again
in July that year, just after Vice Prime Minister of the Soviet Union, Mikoyan,
had visited Rangoon just one week earlier. Zhous second visit to Burma began
to balance and minimize Soviet influence in Burma and the military ties be-
tween Burma and the West.
In addition to Zhous visit in February 1964, Ne Win went to Beijing in
July 1965, and Liu Shaoqi visited Rangoon in April 1966. All three issued
communiques during their visits stressing that economic independence was
significant for political independence. Their purpose was focused on the
economic deterioration and disturbances in Burma due to Ne Wins drastic
Burmese socialist policy. Beijing was worried that the U.S. and the U.S.S.R.
would fish in troubled waters and entice Rangoon to abandon its neutralist
foreign policy in pursuit of aid with attached political and economic strings.
Hence, the Chinese intent was to remind Rangoon to watch out for any other
major powers subversion.
During Ne Wins trip to Beijing in 1965 and Liu Shaoqis visit to Rangoon in
1966, the Chinese leaders both emphasized the Vietnam issue at state banquets
in the two countries capital. Obviously, China wished Burma to support her

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struggle against the U.S., but Ne Win was reluctant to do so and did not come
out against the U.S. He also avoided the question of Vietnam in Beijing and
Rangoon. Both ChinaBurma joint communiques in 1965 and 1966 just took
a general stance against imperialism and colonialism and did not mention the
U.S.
China not only failed to make Burma change her neutralist policy, but faced
more troubles. The BCP sent a message of greetings to Beijing on the fifteenth
anniversary of the PRC in 1964. Beijing broadcast the congratulations in
English and Burmese and published it in the Peoples Daily.38 Burma responded
strongly to it and closed the Chinese consulates in Mandalay and Lashio.
Since the late 1950s and early 1960s, China had begun gradually to give
up its previous realist foreign policy in pursuit of national security interests,
and had introduced instead a hardline and irrational foreign policy which gave
prominence to ideology, especially proletariat internationalism, as its guiding
principle. It neglected or denied the decisive role of national interest in the
process of decision making. By the middle of the 1960s, China had formed
a radical revolutionary foreign policy characterized by its declared struggle
against imperialism, revisionism, and all reactionaries of various countries,
while helping and aiding revolutionary movements in Asia, Africa and Latin
America.
Leftist factions gradually took control of foreign affairs after the Cultural
Revolution broke out in China. The Minister as well as other Vice Ministers
of the Foreign Ministry, including Chen Yi, were savaged. The political bureau
of the Foreign Ministry was stoned and the offices of the Vice-Ministers of the
Foreign Ministry were closed by rebels. Consequently, the Central Committee
of the CCP lost control of foreign affairs for a time. During 19661967, dip-
lomatic disputes broke out between China and nearly thirty countries, while
China had diplomatic and semi-diplomatic relations with only forty countries.39
Furthermore, after September 1966, Beijing recalled all its ambassadors to for-
eign countries except Egypt. They were ordered to return to join the Cultural
Revolution. The Embassies abroad could not function effectively. The Chinese
Ambassador to Burma, Geng Biao, and his 21 colleagues were recalled to Beijing
in March 1967. When Geng Biao arrived at the Beijing airport, he lost his free-
dom and was taken to the Foreign Ministry and was questioned about whether
Liu Shaoqi and Chen Yi had some problems during their trips to Burma.40 Some

38 See Central Committee of BCPs Congratulatory letter, Peoples Daily, 3 October 1964.
39 Contemporary Chinese Diplomacy, Beijing: Chinas Social Science Press, 1987, p. 209.
40 Geng, Memoir of Geng Biao, p. 221.

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 Modern ChinaMyanmar Relations

leftists came to Rangoon later and soon controlled the Embassy. They actively
promoted the Cultural Revolution in the Chinese community and ignited the
fuse of the anti-Chinese riots in Rangoon.
That in 1967 all students were forbidden to wear any badge in school except
the Burmese national emblem and Aung San badges made some officials of the
Chinese Embassy very dissatisfied; they deemed that wearing Maos badge
was the principle of supporting Beijing and could not be banned.41 Some
Chinese students continually defied the government with the support of the
Chinese Embassy. Although the conflict between Chinese students and the
Rangoon Chinese WomensMiddle School administration had been resolved
on 22 June 1967, some Chinese associations convoked their students parents
and encouraged their children to go on wearing Mao badges in school. Some
Chinese students on the evening of 22 June were organized to see the film
Red Lantern, and encouraged to fight.42 One ethnic Chinese, a teacher at the
Rangoon Overseas Chinese Night School recalled, We convened the students
[encouraging them] to wear Mao badges, and the students parents were
worried about this. On 25 June, the Burmese radio broadcast that no students
could wear badges to school the next day. Some parents asked us if their children
would still wear badges. I then asked the Chinese Teachers Association for
instructions and they told us to go on fighting.43 Thus, the conflict between
the Chinese community and the military regime was unavoidable.
Most observers believed that the major cause of the riots was the Cultural
Revolution and Chinas attempt to export it.44 Chinas Red Guard diplomacy
was the inherent continuation of internal chaos in China.45 The 6.26 event
was essentially a by-product of the Cultural Revolution46 and the direct result
of Beijings revolutionary foreign policy.
On the other hand, some argued that Chinas frustration over its failure
to get Burma to identify with and support Chinese foreign policy may be one
of the factors that precipitated the Sino-Burmese rift in 1967.47 Burma acted
41 Zeng Guanying and Chen Zunfa, Witnessing two anti-Chinese riots.
42 Ibid.
43 Interview WXX, Yangon, 23 December 2005.
44 Robert A. Holmes, Burmas Foreign Policy Toward China Since 1962, Pacific Affairs,
Vol. 45, No. 2, Summer, 1972, p. 245.
45 Ibid.; John H. Badgley, Burmas China Crisis: The Choices Ahead, Asian Survey, Vol.
VII, No. 11, November 1967, p. 758; Martin Smith, Burma: Insurgency and the Politics of
Ethnicity, Dhaka: The University Press, 1999, p. 225.
46 Peking and the Burmese Communists: the Perils and Profits of Insurgency, CIA Intel-
ligence Report, RSS No. 0052/71, July 1971, p. 46. For the Executive Summary, see Ap-
pendix 6.
47 Holmes, Burmas Foreign Policy, p. 245.

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 The Anti-Chinese Riots of 1967: The Rupture of the Pauk Phaw Ties

quite independently on some major international problems against the wishes

of China. Burmas independent actions on major world issues ultimately led
to the Sino-Burmese rift in 1967.48 Ne Win visited Washington in 1966 and
supported the U.S. presence in Vietnam and elsewhere in Southeast Asia. The
CCP thought Burma had abandoned its neutralist foreign policy and support
of Chinas stand. This was also said by some to be the cause of the Rangoon
event.49 Moreover, some thought that Ne Wins socialistic policy cut the
channel of Beijings influence over the Chinese community and Burmese
internal politics. Ne Win nationalized two Beijing-owned banks, all Chinese
schools, and closed down all Chinese newspapers in Burma. This irritated
Beijing and encouraged it to export the Cultural Revolution to Burma.50
These arguments place effects before cause. The exported Cultural Revo
lution fundamentally arose not from any external situation, but because of
Chinese domestic political developments. Consequently, Burmas shift to
a more isolated stance after 1963 cannot be construed as contributing to the
Chinese antagonism of the Cultural Revolution period. The hostile policy
toward Burma was similar to that toward other Asian countries.51 More impor-
tantly, when Ne Win visited Beijing and held talks with Zhou Enlai in 1971,
Zhou explained, The cause of the Rangoon riot has little relation to the border
issue. As regards your visit to the U.S., it caused some attention and remarks, but
it didnt worry me.52 Also, Zhou admitted that We disapprove of the actions
of some Burmese overseas Chinese schools in 1967, too ... Overseas Chinese
should obey the law of local countries and should not disobey it. They should
work and live there according to local custom.53

The Rangoon Dimension

The Ne Win regime defended its national security in the 6.26 incident, which
strengthened his political legitimation. After Ne Win came in office by coup
detat in 1962, he promulgated the Burmese Way to Socialism in domestic
policy, and adhered to a neutralist policy in foreign affairs. Rangoon minimized
as much as possible all foreign influences in Burma. Comparatively speaking,
48 Bandyopadhyaya, Burma and Indonesia, p. 170.
49 Frank N. Trager, Sino-Burmese Relations: The End of the Pauk Phaw Era, Orbis, Vol. XI,
Winter, 1968, No. 4, p. 1053. Holmes, Burmas Foreign Policy, p. 245; Bandyopadhyaya,
Burma and Indonesia, pp. 170171.
50 Bandyopadhyaya, Burma and Indonesia, pp. 170171.
51 Wayne Bert, Chinese Policy Toward Burma and Indonesia, Asian Survey, Vol. XXV, No.
9, September 1985, p. 965.
52 Selected Diplomatic Writings of Zhou Enlai, p. 481.
53 Chronicle of Zhou Enlai, Vol. 2, p. 473.

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Ne Win sought more vigorously than U Nu to balance the influence of major

states within Burma, often by eliminating such influence altogether, or as much
as possible.54 Independence, however delimited, has been a real touchstone in
Burmese foreign policy, and Ne Win took this to its logical extreme by closing
down the avenues through which outside states, and particularly China, pur-
sued their political objectives in Burma at Burmas expense.55 Among foreign
observers, Burmese foreign policy was considered inward-looking, xenopho-
bic, and immature in its weltanschauung.56
The Burmese media covered the anarchy in China after the Cultural
Revolution burst out in 1966. Rangoon was afraid that the Cultural Revolution
possibly could affect it. In November 1966, Ne Win made a speech at the
Burmese Socialist Programme Party (BSPP) assembly and reprimanded the
overseas Chinese for their illegal revolutionary action. Whereafter, Rangoon
heightened security measures to control the ChinaBurma border and clamped
down on illegal Chinese migration.57 When worry became reality, Ne Win
was far from compliant, and this episode gave a most marked autonomous
tinge to an otherwise acquiescent relationship. For the Ne Win military
junta, characterized by self-isolation, it was vigilant against its giant northern
neighbor and had strong nationalist sentiments. It was unacceptable that the
Chinese continuously violated Burmese law. It is conceivable that after the
long series of chauvinist exercises in the Chinese community the authorities
wished to teach the Chinese a lesson and that cadres of the Burmese Socialist
Programme Party (BSPP) were encouraged to stir up popular feeling.58 The
6.26 incident was Burmese counteraction in pursuit of defending its national
security and interests. The counteraction developed into a bloody and violent
conflict and was closely connected with Burmas domestic political situation
and the political legitimacy crisis of the Ne Win military government.
Two factors contributed to the extraordinary violence of the reaction
in Burma: the 1967 rice crisis and the increasingly xenophobic atmosphere
that enveloped the country after Ne Wins seizure of power.59 After Ne Wins
coup detat, the military government was facing a crisis of political legitimacy.
54 Pettman, China in Burmas Foreign Policy, p. 27.
55 Ibid., p. 45.
56 Maung Maung Gyi, Foreign Policy of Burma Since 1962: Negative Neutralism for Group
Survival, in F. K. Lehman (ed.), Military Rule in Burma Since 1962, Singapore: Maruzen
Asia, 1981, p. 10.
57 Sakuma Hirayoshi, Modern Political History of Burma, Tokyo: Keiso Shobo, 1993, p. 218.
58 Jay Taylor, China and Southeast Asia: Pekings Relations with Revolution Movements, New
York: Praeger Publishers, 1976, p. 211.
59 Martin Smith, Burma, p. 225.

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 The Anti-Chinese Riots of 1967: The Rupture of the Pauk Phaw Ties

Resentment against the repressive militarysocialist regime grew and festered,

periodically bursting out in the open in the form of urban uprisings (1962,
1963, 1964, 1965, 1966, 1967, 1970, 1974, 1975, 1976, and so on).60 Rice riots
broke out in Rangoon during the summer [1967] and the rising black market
price, which according to official statistics was 700 per cent of the controlled
price in Rangoon, drew more of the production into illegal trade channels.61
In 1967, Burma probably came closer to civil war than at any time during this
period. There was a total breakdown in the distribution of cooking oil, rice and
other basic necessities.62 As a result, the rice crisis was a crucial contributing fac-
tor. Two overseas Chinese witnessing the anti-Chinese riots remembered that
The serious rice crisis even compelled civil servants to be absent and go to the
villages to buy rice. Then there was a rumor that dock workers in Rangoon had
been prepared to breach the barn and snatch rice.63 Another witness also men-
tioned this detail in his memoir: The leader of the Burmese Labour and Peasant
Party disclosed that the Ne Win regime was in a political quandary because of
rice deficiency and students and citizens petitions as well as demonstrations.
The generals were plotting to connect the rice shortage crisis with the event of
badgewearing and instigated the anti-Chinese riot so that they could distract
domestic dissatisfaction and retrieve a tumbledown reign.64 In 1967, Ne Win
said that Burma, once the largest exporter of rice, could not feed itself.
Some scholars shared similar opinions. Silverstein considered that In fact
Ne Win was able to transform an internal problem into an international one
which drew the nation to his side and made the Chinese become the target
of Burmese wrath, and gave the military a breathing spell that led to gradual
reversals of many of the socialist and other policies the military had adopted.65
As Beijing accused, Ne Win actually used secret police and recruits to engage
in anti-Chinese activities for the sake of stirring up Burmese nationalism. The
Burmese riotous response to the export of the Chinese Cultural Revolution
was possibly organized and abetted by the Ne Win government itself. The
Burmese elite deliberately manipulated the anti-Chinese riot as an external

60 Yawnghwe, Chao-taang, Burma: The Depoliticization of the Political in Muthiah A

Lagappa (ed.), Political Legitimacy in Southeast Asia The Quest for Moral Authority,
Stanford: Standford University Press, 1995, p. 188.
61 Laurence D. Stifel, Burmese Socialism: Economic Problems of the First Decade, Pacific
Affairs, Vol. 45, No. 1, 1972, p. 67.
62 Josef Silverstein, A New Vehicle on Burmas Road to Socialism, Asia, Spring, No. 29,
1973, pp. 6465.
63 Zeng Guanying and Chen Zunfa, Witnessing two anti-Chinese riots.
64 Lin Zhu, Recalling a Painful Experience, pp. 246247.
65 Silverstein, A New Vehicle, p. 66.

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 Modern ChinaMyanmar Relations

stimulus for internal ends so that it could reduce the considerable discontent at
home caused by drastic nationalization policies and a bad harvest season.66 The
incident of Chinese badgewearing was used by Ne Win to defuse economic
and political crisis, and divert domestic discontent.67 The overseas Chinese
became the scapegoat of Rangoon and the object of Burmese exclusionism.68
A CIA declassified document shows that US Embassy observers on the scene
were impressed that the police and army, although visible on the streets, made
no attempt to prevent the destruction of Chinese property or the killing of
Chinese citizens. In effect, the Chinese government began a chain of events
which the Burmese government allowed to accelerate.69
The anti-Chinese riots were one of the military regimes steps to strengthen
its power. This argument can be further substantiated by some oral history ma-
terial, including Japanese observers. Sakuma Hirayoshi, a Japanese diplomat
in Rangoon, verified that Burmese soldiers and police had let the mob attacks
go unchecked at the beginning of the riot until the situation deteriorated. He
argued that the Burmese government took advantage of the riot, due to the
public discontent with rice shortage, to preserve its tottering regime.70 Ono
Toru, a foreign language teacher in Rangoon, recalled that the 1967 crisis
faced by the Ne Win regime was at first provoked by the food shortage and the
Chinese Cultural Revolution. The Rangoon incident helped deflect popular
dissatisfaction from Burmas government to China.71
One returned overseas Chinese recalled that on 26 June, her relative saw
many military trucks carrying Burmese soldiers into a prison beside her house.
They changed out of their military uniforms into longyis and rushed out to
attack the Chinese. Although the soldiers wore longyis, their uniform short-
sleeved shirts were not taken off, so they still could be easily recognized.72
Mr. Chen Zunfa, a former reporter of the Peoples Daily, a Chinese newspaper
in Rangoon, escaped from the Burmese killing because of his fluent, accentless
Burmese and his local costume. He got the message from his relative who was
a member of the BSPP ten days before the anti-Chinese riot that the BSPP had

66 Ralph Pettman, China in Burmas Foreign Policy, pp. 4142.

67 Imakawa Eichi , Burma under the Ne Win Military Regime, Kyoto: Review Press, 1971,
p.187.
68 Tsuchifu Nagao, New Colonialism and Nationalism Revolution, Kyoto: Newsletter Press,
1973, p. 205.
69 Peking and the Burmese Communists, p. 52.
70 Sakuma Hirayoshi, Living in Burma, pp. 5657.
71 Ono Toru, The Current Situation of Burma, Southeast Asian Studies, Vol. 5, No. 2, 1967,
p. 190.
72 Interview Guo Huilan, Xiamen, October 21, 2003.

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 The Anti-Chinese Riots of 1967: The Rupture of the Pauk Phaw Ties

held a meeting and had decided to organize a mob of five thousand to loot
and make trouble in Chinese areas.73 Another reporter on a Chinese newspaper
in Rangoon also got similar news and reported it to the Chinese Embassy, but
it was ignored.74
The popular Burmese reaction to what they perceived was Chinese-insti
gated violence, involving Embassy support, was to invade and sack the Chinese
business quarter of Rangoon.75 Undeniably, some Burmese nationalists partici-
pated in the riot, but it is generally believed that most of killers were soldiers and
rent-a-crowd people. However, there is another side to the coin. Many Chinese
were rescued, protected, and helped by Burmese. When the mobs searched
for Chinese along streets during the riot, some Burmese told the attackers on
their own initiative that there were no Chinese dwellings on the street. For
example, the boss of a Burmese restaurant under my house told mobs that the
upstairs residents were Burmese, and saved my family, said a returned overseas
Chinese.76 Another pro-Maoist leader of the Overseas Chinese Association was
protected by his Burmese landlord. The monk of the temple behind his house
also was willing to provide shelter for him.77 We still often hear such stories
in the Chinese community in Burma now. Relations between the overseas
Chinese and Burmese became one of the more harmonious models of Chinese-
indigenous relations in Southeast Asia, but the situation is undergoing change
as Chinese influence has grown since 2000. The phenomenon has been widely
recognized in academic circles.78

The Chinese Community Dimension

The anti-Chinese riot was also attributable to some political Chinese and their
misjudgment of the political situation of the day.

73 Interview Chen Zunfa, Xiamen, 31 August 2003.

74 Interview Lai Baoluo, Yangon, 23 November 2005.
75 John F. Cady, The United States and Burma, Cambridge and London: Harvard University
Press, 1976, p. 258.
76 Interview Zeng Wenmian, Xiamen, 19 August 2003.
77 Interview Zeng Wenmian, Xiamen, 5 September 2003.
78 For related discussions see Victor Purcell, The Chinese in Southeast Asia, London: Ox-
ford University Press, 1965, p. 69; John Leroy Christian, Burma and the Japanese invader,
Bombay: Thacker and Company , Limited, 1945, p. 279; Victor Purcell, The influence
of racial minorities, in Philip W. Thayer (ed.), Nationalism and Progress in Free Asia,
Baltimore: The Johns Hopkins Press, 1956, p. 244; G. E. Harvey, British Rule in Burma
18241942, London: Faber and Faber, 1946, p. 70. Records of Burma Overseas Chinese,
Taipei: Committee to Compile records of Overseas Chinese, 1967, p. 121; Wang Zhong-
min, Yearbook of Overseas Chinese in Burma, Shanghai: Shanghai Commercial Press, 1936,
p. 15.

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 Modern ChinaMyanmar Relations

With increasingly close Sino-Burmese relations since the mid-1950s,

numerous Chinese leaders and various delegations frequently visited Burma.
Beijing constantly influenced and tried to unite the Chinese community in
Burma through political, cultural, educational, and economic means. Beijings
force and influence in the Chinese community continuously increased. Before
Chinese schools were nationalized by the government, there were over 250,
with nearly 40,000 students. Among these schools, the pro-Beijing percent was
higher than those pro-Taiwan; some Maoists or pro-Maoist activists were being
produced. They told the author that although they were born in Burma they
grew up singing quotations from Mao.79After the Cultural Revolution broke
out, many overseas Chinese supported the movement, virtually worshiped Mao
as well as loved Maos quotations and badges, which were the continuity of their
political identity. In this context, pro-Maoists allegiance was difficult to control.
A Burmese overseas Chinese wrote an article, published in the Peoples Daily
in June 1967, which reflects the pro-Beijing Chinese judgement and attitude to
the Cultural Revolution:
The Cultural Revolution brings immense inspiration and profound instruc-
tion. Overseas Chinese patriotic fervor grows as never before. Everybody is
deeply concerned about the great revolutionary movement in history and
writes to Chairman Mao and the central committee of the CCP and show
their firmest support, which involves the future of the motherland, of the
world, and of their offsprings happiness.

Today, reading Chairman Maos works is the first demand in the lives of
patriotic Chinese. We try our best to get the Little Red Book. Some have
asked for it from their relatives in China; some borrowed it from their
friends; some shared one book; some extracted Maos quotations from
newspapers and compiled them; some listened to Beijing Radio and
wrote down Maos quotations. Now many can recite some apothegms or
complete sections of the Three Old Works of Chairman Mao.

Today, the portrait of Chairman Mao can be seen in both overseas Chinese
associations and their houses throughout various towns and cities in
Burma. More and more overseas Chinese associations hang the red brand
of Chairman Maos quotations. During festivals, the overseas Chinese pre-
sent Maos badges to each other as the most precious gift. Studying Maos

79 Interview Huang Renmei, Hong Kong, 14 September 2007; Interview Zeng Xiuying,
Hong Kong, 14 September 2007.

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 The Anti-Chinese Riots of 1967: The Rupture of the Pauk Phaw Ties

quotations before any gathering has been in fashion. The East is Red, Sailing
the Seas depends on the Helmsman, and other Songs of the Quotations
from Chairman Mao are favorite songs in the Chinese community. Over
seas Chinese wearing Maos badge can be found everywhere in Burma.
Everybody regards it as the symbol of glory and happiness.

Chairman Mao is our Greatest Leader, and anyone who opposes Chairman
Mao is our absolutely irreconcilable enemy.

If the song doesnt pay a tribute to Mao thought, we dont sing it; if the
drama doesnt propagandize Mao thought, we dont perform it; if the action
doesnt accord with Chairman Maos instruction, we dont take it. Patriotic
overseas Chinese in Burma are loyal to Chairman Mao and socialist China,
which is unchanging for ever.80

In terms of Burmas Chinese community as a whole, the writers description is

exaggerated, but pro-Beijing Chinese in Burma indeed were prevalent, especially
among Chinese students, teachers, and cadres of Chinese associations.
Some pro-CCP Chinese with loyalty to Beijing actively supported and
responded to the Cultural Revolution. Therefore, they forgot their status as
foreign subjects and the motherlands former instruction of abiding by local law
and dropping out of local political activities, but were guided and instructed
by Beijings leftist policy and thoughts of the red world, and had a blindfold
superiority complex that a powerful homeland was backing them.81 Its the
legitimate right of overseas Chinese to wear Mao badges. No one can deprive us
of that right. We fight against anyone who dares to oppose our badge-wearing.82
Many pro-Beijing Chinese then had such opinions.
The overseas Chinese underestimated and mistakenly judged the govern
ments reaction when they antagonized the Rangoon authorities. A pro-Mao
Chinese teacher in Rangoon said that Our couples prepared clothes for the
worst imprisonment. We thought that since China had a population of 700
million, the Burmese government dare not take action against us because Burma
was so weak and small. Our estimate was far from exact. [But] if we could keep
calm, the incident would not happen.83 Not only Chinese teachers but also
their students had the same opinion then. I prepared my clothes and shoes

80 Burma patriotic Overseas Chinese stay loyal to Chairman Mao for ever, Peoples Daily,
30 June 1967.
81 Lin Zhu, Recalling a painful experience, p. 250.
82 Interview Wu Xizhi, Yangon, 23 November 2005.
83 Ibid.

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for being imprisoned at any moment, said a pro-Beijing Chinese student in

Mandalay.84 A survivor of anti-Chinese riots, Ms. Guo Huilan, perhaps is more
persuasive. We didnt anticipate violent action taken by the government and at
first thought that we were similar to the Indonesian overseas Chinese, who were
injured and repatriated to China. We all were willing to return to China. Our
worst estimate was that we would not be killed but just be bruised.85Of course,
Beijing was primarily responsible for the overseas Chinese underestimating the
result of defying the Ne Win regime. The PRC was primarily responsible for
starting the chain of events that led to the riots.86

The International Community Dimension

It is noteworthy that the provocations in Rangoon were not an isolated phe-
nomenon. Similar disturbances also occurred in India, Singapore, Malaysia,
and several other countries of Asia. It seems that the Mao Tsetungs group
was at pains to create the impression that the Cultural Revolution was find-
ing support in other countries.87 The anti-Chinese wave around the world in
the late 1960s was a model for the anti-Chinese riots in Burma. Following the
deterioration of Sino-Indian relations in the early 1960s and the border war,
anti-Chinese activities emerged in India. After an anti-Chinese movement in
Indonesia in 1957, massive counter-Chinese violence happened again in 1966,
when Chinese consulates were time after time besieged and destroyed.88 These
anti-Chinese riots and the split between China and some other countries re-
sulted from Beijings radical World Revolution foreign policy. When Beijing
tried to export the Cultural Revolution to Burma, Rangoon realized that China
had followed the same old disastrous road.
The anti-Chinese movements in India, Indonesia, Hong Kong and so
forth, and Beijings reaction to these activities abroad before the 6.26 incident,
strengthened Ne Wins confidence and determination to confront China. During
anti-Chinese movements in other countries, whether a Chinese Embassy, a

84 Interview He Lihua, Mandalay, 7 December 2005.

85 Interview Guo Huilan, Xiamen, 21 October 2003.
86 Peking and the Burmese Communists, p. 50.
87 G. Zafesov, Chinese Provocations in Burma, The Current Digest of the Post-Soviet Press,
No. 26, Vol. 19, 19 July1967, p. 27.
88 Even the Chinese consul-general in Indonesia was held under duress and overseas Chi-
nese were killed, attacked and looted. In February 1966, Ghana severed diplomatic rela-
tions with China; Cuba issued an anti-Chinese statement on the same month; the senate
of Kenya approved an anti-China proposal in March; anti-China turbulence bursted out
in Hong Kong in May 1967. At the same time, Chinese diplomats and reporters of the
NCNA were injured, detained, and overseas Chinese were persecuted in Mongolia.

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 The Anti-Chinese Riots of 1967: The Rupture of the Pauk Phaw Ties

consulate or diplomats were attacked or local overseas Chinese were persecuted,

Beijings policy basically was: protest, protest again and again ... finally evacuating
some overseas Chinese refugees from some countries such as in India, Indonesia,
and Vietnam. On the whole, Beijing had no effective instrument to protect the
overseas Chinese in trouble and settle disputes caused by its irrational foreign
policy. Instead, it organized massive domestic protests and parades, and lodged
protests. A case in point was Indonesia. The enforced passivity of Chinese foreign
policy during this phase was graphically illustrated by Beijings inability to deal
effectively with the challenge to Chinese state interests made by Indonesia. Anti-
Chinese Indonesian violence peaked in early and mid-1966 with attacks, raids,
forced searches, the sacking of the Chinese Embassy and several consulates,
and expulsion of Chinese diplomatic personnel. But China could still do little
except protest, withdraw official persons and students, and cut off economic
assistance.89
The policymakers of Burma noticed the weakness of Beijing and balanced
the cost and risk of antagonizing China. Thus they dared to counter the PRC,
from which Burma was always afraid of invasion and subversion. Facing anti-
Chinese riots in Rangoon, Beijing first lodged protests. Second, it organized
massive protests in China.90 Third, Chinese aid experts were withdrawn
and Chinese loans to Burma terminated. Last, some overseas Chinese were
evacuated.
The 6.26 incident in Rangoon in 1967 was one of the most obviously
adverse consequences of the CCPs Revolutionary Diplomacy. It symbolized
the end of Pauk Phaw relations between the two countries, which had been
in place since the mid 1950s. The anti-Chinese riots in Rangoon involved
some complicated factors. Although it was the immediate result of Chinas
revolutionary foreign policy, the matter also included Burmese domestic
issues, the international situation, and Sino-Burmese political identity and
judgment.
Sino-Burmese antagonism was relatively short-lived. After early 1968, Chi
nese verbal hostility to and attacks on Burma declined. The Chinese paid

89 Thomas Robinson, China confronts the Soviet Union: warfare and diplomacy on Chinas
Inner Asian frontiers, in Roderick MacFarquhar and John K. Fairbank, The Cambridge
History of China, Vol. 15, The Peoples Republic, Part 2: Revolutions within the Chinese
Revolution, 19661982, Cambridge: Cambridge University Press, 1991, pp. 235236.
90 About the massive Chinese protest and demonstration against Burma, see 200,000 people
protest outside Burmese Embassy in Beijing, Peoples Daily, 30 June 1967; Savage Anti-
China Burmese government will inevitably be hoisted by its own petard, Peoples Daily, 2
July 1967.

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 Modern ChinaMyanmar Relations

increasingly less attention to the Burmese government over time and, beginning
in JanuaryJune 1968, China began to stress almost exclusively the activities of
the BCP and Burmese guerrillas waging war against the government, virtually
ceasing direct verbal criticisms of the latter.91 Burma also tried to relax the two
countries relations. ChinaBurma ties were renormalized over 19701971.
However, Beijings policy of openly supporting the BCP did not change because
of the diplomatic normalization. The CCP did not give up its policy of open
support to the BCP until 1978. The BCP continued to be a sensitive and core
issue in bilateral relations.
The BCP issue had additional significance. The change of Beijings policy
toward the BCP reflected Beijings balance between national interests and
ideology, Sino-Soviet rivalry in Southeast Asia, party relations and state
relations, and the ChinaBurma interest game in the Cold War. The BCP
issue made Burma much more aware of the role of the geographic factor in its
foreign policy, although it had anticipated the threat from the north.

91 Daniel Tretiak, Changes in Chinese Attention to Southeast Asia, 19671969: Their

Relevance of The Future of The Area, Current Scene, No. 21, November 1969, p. 5.

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 5
From Rift to Renormalization of Relations:
19671971

A lthough Burma was touted as a model of Chinas foreign relations,

the Rangoon events in 1967 led to a break in Sino-Burmese rela-
tions, which was in neither countrys national interests. This rift,
however, did not widen further in 1968. The renormalization of Sino-Burmese
relations after the high tide of the Cultural Revolution of 19661967 and the re-
establishment of relations between the two countries is not only a case study for
such issues, it provides an avenue to review changes in Chinese foreign policy,
and Chinese interests in global, regional, and bilateral relationships.

The Renormalization of Sino-Burmese Relations

During the 1968, the two countries reduced their hostility, and relations gradu-
ally thawed. Although the Chinese media continued to condemn and attack
Rangoon, the number and frequency of verbal attacks decreased sharply, and
the phraseology was less acrimonious compared with Beijings response in
1967. There were 154 articles about Burma in the Peoples Daily from June to
December in 1967, but only 29 articles in 1968, and words like reactionary
and fascist were hardly used again. China donated US$4,000 to Burma for
hurricane relief.
Burma reciprocated. From the summer of 1968, Burma refrained from
openly accusing China of training and providing sanctuary for insurgents,
and started to depict the rebellion of the BCP as more of a local event.1 The
focus of Burmese criticism was shifted from the Chinese government to the
BCP and its insurgent allies. Demonstrations began to take the form of work
protests, and free labor donated by workers in a carefully orchestrated but
more constructive use of anti-Chinese feelings; Burmese accusations once
again became indirect.2

1 Bert, Chinese Relations with Burma and Indonesia, p. 476; Robert A. Holmes, China
Burma Relations since the Rift, Asian Survey, Vol. 12, No. 8, August 1972, p. 694.
2 Pettman, China in Burmas Foreign Policy, p. 37.

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In January 1969, when Ne Win visited Pakistan, he discussed there with

Chinese officials the possibility of resuming relations.3 In 1969, Rangoon
decided to stop border patrols along the Sino-Burmese border in order to
avoid further conflict with the Chinese army. At a conference of the BSPP in
November, Ne Win asserted With regard to China, we would like to restore
the cordial and friendly relations that previously existed. This will require
efforts by both sides. For our part, regarding the clashes at the borders and the
present situation, we shall do whatever we can to restore the old friendship
and keep the situation from getting worse. We regard the 1967 incident as
an unfortunate one. We would like to heal its wounds and forget the ugly
incident.4
Both sides began to be invited to attend some diplomatic functions held
by the other party. On 19 July 1968, the Chinese charg daffaires in Burma
attended the commemoration on Burmas Martyrs Day, and placed a wreath
on the tomb of Burmas National Father, Aung San. In October 1968 and
August 1969, some Burmese officials, public figures, and military officers
were invited to attend the National Day and Armys Day receptions sponsored
by Chinese Embassy in Rangoon. During the same period, Chinese officials
were present at receptions given by the Burmese charg daffaires in Beijing.
Both Chinese and Burmese attenders at various national celebrations and
commemorations, however, were low-ranking government officials and
military officers. Thus, the reconciliation progress was slow. The first sign of
a real thaw was on 3 January 1970, when the Chinese Vice Minister of Foreign
Affairs, Xu Yixin, appeared at the celebration of Burmese Independence held
by the Burmese Embassy in Beijing, and the Xinhua News Agency briefly
reported it. By mid 1970, however, reconciliation gestures had become very
bold.
Chairman Mao Tsetung directly expressed the wish to improve relations
with Burma. On the evening of 1 May 1970, Mao met diplomatic envoys of
35 countries attending the May Day celebrations on the Tiananmen Square
rostrum; he expressed his wish to improve and thaw the relationship
between China and their countries, and shook hands with each of the
envoys. When Mao greeted the charg daffaires of Burma, he asked him
to give his regards to Ne Win. Maos posture on May Day was critical to a
BeijingRangoon rapprochement. In August 1971, Zhou Enlai mentioned
this detail to Ne Win, who was visiting Beijing, saying that On May 1st
3 Far Eastern Economic Review, 20 February 1969, p. 311.
4 Holmes, ChinaBurma Relations since the Rift, p. 695.

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 From Rift to Renormalization of Relations: 19671971

last year, Chairman Mao asked your charg daffairs to convey his regards
to you, Sir. You also made active responses at this time. In this way, the
situation took a favorable turn.5

The rank and number of those attending national celebrations sponsored
by each side also rose.6 The two countries returned their Ambassadors to
their posts. In October 1970, Rangoon appointed U Thein Maung as the new
Ambassador to China, and he arrived in Beijing on 16 November. In March
1971, the new Chinese Ambassador, Chen Zhaoyuan, reached Rangoon. Thus,
seemingly, the broken bilateral relationship due to the 1967 anti-Chinese
incident in Rangoon was healed.
Finally, Ne Wins trip to China in 1971 symbolized the real renormalization
of ChinaBurma ties. Between 612 August 1971, Ne Win visited Beijing on
invitation. At the welcoming banquet on 6 August, Zhou Enlai praised Ne
Win for his great contribution in boosting good bilateral relations and solving
the Sino-Burmese border issue. Zhou also hoped that Ne Wins visit could
further improve relations. Ne Win reaffirmed the Pauk Phaw friendship of
the two countries, and stated that bilateral cooperation on national peaceful
development and world peace would constantly promote the interests of both
sides.7 Mao Tsetung also met Ne Win.
The subjects of ChinaBurma relations and the overseas Chinese in Burma
were discussed at five talks between Zhou Enlai and Ne Win. Ne Win expressed
deep regret over the 6.26 event in 1967, agreed to make up to the Chinese
victims of the Rangoon event, and asked for Zhou Enlais advice on appropriate
compensation. Zhou said We also disapproved of some actions of the Chinese
schools in 1967 ... At that time, ultra-leftism permeated our Ministry of Foreign
Affairs. But our government still controlled the situation, especially the relations
with Burma ... We declared that the overseas Chinese should not violate local

5 Selected Diplomatic Writings of Zhou Enlai, p. 483.

6 On 1 October 1970, the Burmese acting Foreign Minister, Vice Foreign Minister, the
commander-in-chief of Rangoon Military Region and other high-ranking officials at-
tended the reception for National Day held by the Chinese embassy. On the same day, Ne
Win sent a congratulatory telegram to Zhou Enlai for Chinese National Day. On 4 Janu-
ary 1971, the Vice Chairman of the Standing Committee of the Peoples Congress, Guo
Morou, and the Vice Foreign Minister, Han Nianlong, attended the reception for Burmese
Independence Day. On 1 August the Director of the Military Intelligence Department of
the Burma Defense Ministry, the Secretary of the Defense Ministry, and the commander-
in-chief of the Rangoon Military Region attended the reception in the Chinese Embassy
celebrating the founding of the PLA.
7 Chairman Ne Win and First Lady Reach Beijing, Premier Chou Hosts Burmese Visitors,
Peoples Daily, 7 August 1971.

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law but abide by the law of the host countries, living and working according to
the local lifestyle ... We oppose dual nationality.8
During Ne Wins visit to China, China restated its policy to adhere to a
friendly and peaceful policy toward Burma while Rangoon promised to insist
on a peaceful and neutral policy toward China. Soon after Ne Win visited
China, at the request of Burma China restarted its aid program, which had
been suspended by the 1967 riots. On 22 November 1970, Burma voted for the
proposal brought forward by eighteen countries concerning the PRCs seat in
the U.N. and depriving Taiwan of its membership. On 9 October 1971, Burma
and 20 other countries proposed to the U.N. that the PRCs seat in the U.N. and
Permanent Membership on the U.N. Security Council be approved; Burma
had changed from simply being a voter to a proposer. Zhou Enlais secretary,
Tong Xiaopeng, recalled that U Thant, the Burmese Secretary-General of the
United Nations (19611971), had supported the PRCs admission to the U.N.
His attitude could be attributed to friendly ChinaBurma relations.9

Causes of the Renormalization of Sino-Burmese Relations

Only four years separated the rift from the renormalization of bilateral ties.
Although largely an immediate result of both sides active interaction, there
were broader causes: changes in the international situation and in Beijing
WashingtonMoscow triangular relations.

Burmas Reconciliation Dynamics

From the viewpoint of the Burmese, the need for and the process of the renor-
malization of Sino-Burmese relations were dependent not only on understand-
ing the causes of the anti-Chinese riots, Burmese judgments about Chinas
internal upheaval, and the effects of Chinas reaction to the Rangoon events,
but also on the essence and purpose of Burmese foreign policy.
The direct cause of the Rangoon riots was Beijings leftist foreign policy,
but the Burma junta also used the event to transfer domestic dissatisfaction
onto foreigners, and seek internal political legitimacy. Although Rangoon
orchestrated its nationalistic response to counterattack the Chinese provo-
cation, it intentionally controlled the riot situation because Ne Win did not
want to make a complete break with Beijing. After the riots, Burma recalled its
Ambassador from Beijing, but did not sever diplomatic relations. Compared

8 Selected Diplomatic Writings of Zhou Enlai, p. 484.

9 Tong Xiaopeng, Memoir of Tong Xiaopeng, Fuzhou: Fujian Peoples Press, 2000, pp. 469
470.

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with some anti-Chinese riots in other Southeast Asian countries, the scale
and degree of the Rangoon riots were relatively moderate. The anti-Chinese
riots in Rangoon caused heavy losses to Chinese life and property, but other
incidents occurring outside Rangoon were generally limited to protests and
demonstrations.
Burmas restrained attitude concerning the anti-Chinese riots and the
domestic situation was related to Rangoons judgment and perception of the
turmoil of the Cultural Revolution. When Ne Win visited China in 1971, he
discussed the Burmese process of decision-making about the riot. I remember
that your Ministry of Foreign Affairs had suffered two strikes, so I felt that
your government could not completely control the situation at that time ...
Whatever they said to us, we thought that this was not the Chinese leaderships
opinions. For a period of time, even I was under pressure to break off foreign
relations with China, but I rejected this ... We understood when Premier
Zhou expressed his attitude on Sino-Burmese relations to the foreign media:
What China does depends on what Burma does. Where China goes relies
on where Burma goes ... We figured that Premier Zhou wished to maintain
diplomatic relations with us. This was also what we wished. We didnt want to
cut diplomatic ties with China, because it is easy to break off relations, but it
is hard to resume them.10 During the anti-Chinese riots and the succeeding
antagonisms between Beijing and Rangoon, Burma had refrained from more
violent or controversial responses. It did not attempt to draw support from the
U.S. and the Soviet Union. These were all important preconditions on which
to renormalize Sino-Burmese relations.
The Rangoon riots didnt signify that Burmas fundamental foreign policy
had changed Burma did not choose to fall back on U.S. or Soviet support,
and it still pursued its neutral and non-aligned policy. In March 1968, Ne
Win remarked, We should not depend on other countries but on ourselves.
Although the Rangoon event was deplorable, we shall not give up our neutral
policy.11 Burmas stance was an important precondition for rapprochement.
Although there seems an apparent contradiction between the anti-Chinese
riots in Rangoon and Burmas neutral policy, the distinction should be made
between a tactical need and a broader purpose.

10 Chen Yangyong, Zhou Enlai in 1967, Chongqing: Chongqing Press, 2005, p. 287.
11 Rangoon Domestic Service, 1 March 1968, quoted from Zhang Guozhong, Burma and
Communist China, 19501990, Taiwan National Chengchi University, M.A. thesis,
1995, p. 55.

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Burma formulated its neutral foreign policy soon after its independence,
and claimed not to ally with any country, and declared that it would not be
involved in any dispute, and would maintain friendly international relations.
China was a major factor behind Burmas neutralism and non-alignment. Some
said that the making of Burmas foreign policy was based on the fact that China,
with a 700 million population, was to its north.12 Burmese non-alignment
policy is primarily to assure China of non-aggression from Burmese soil and
to avoid the destruction of Burma in another war.13 The British historian D.
G. E. Hall argued that Independence is a word that has a very special meaning
to them; it represents the supreme end of their policy, domestic as well as
foreign.14 In the midst of the Cold War, Burma was more cautious and prudent
in maintaining its independence and national security compared with many
other countries.
Chinas reaction after the Rangoon events further strengthened the Burmese
conviction of the need for amicability with China. In addition to organizing
massive domestic protests and parades, after the 1967 Rangoon incident Beijing
openly supported the BCPs efforts to overthrow the military regime. This last
measure of Beijings counterattack against Rangoon did endanger the Ne Win
government.
At the Opening Session of the Fourth Party Seminar on 6 November
1969, Ne Win stated that The list of insurgencies that I have given is far from
complete. The most serious situation prevails in the regions which share the
border with China ... Let it suffice to say that from January 1 to the end of
August this year, there were eight major engagements in that area, and ten
which might be classed as minor or medium. It is not our way of doing things
to raise a hue and cry every time something serious happens.15 We in Burma
are therefore pledged to peace; and more, we shall undertake never to allow
any piece of our territory to be used by any force, indigenous, or coming
from abroad, as a base or foothold from which aggression may be committed
or any trouble may be made against any of our neighbors. Even though our
relations with a neighbor are at [this] juncture embarrassed, we should not
restore the short-sighted policy of looking elsewhere for aid in the solving

12 Rose, Burma and the Balance of Neutralism, p. 24.

13 David Wen-wei Chang, A comparative study of neutralism, p. 122.
14 D. G. E. Hall, Review of Burmas Foreign Policy: A Study in Neutralism, Pacific Affairs, Vol.
XXXVII, No. 2, Summer 1964, p. 231.
15 Address delivered by General Ne Win, Chairman of the Burma Socialist Programme
Party, at the Openning Session of the Fourth Party Seminar on 6th November 1969,
Burma Socialist Programme Party, 1969, p. 33.

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 From Rift to Renormalization of Relations: 19671971

of our problem.16 Facing this serious challenge, Ne Win asserted, We have

no strength to retaliate ... Therefore, I appeal to the people of the country to
remain calm, and not be provoked into anger and harsh words or drastic action
by the clashes on the borders.17
Meanwhile, former Prime Minister U Nu declared that he would change
Burmese neutral policy and seek arms aid from all quarters, including the U.S.,
China, and the Soviet Union; his goal was to recapture power and thereby
reestablish democratic socialism. Over 19691970, there were reports that he
had made an alliance with the Karen and Mon insurgents to overthrow the Ne
Win regime.18 These factors also pushed Ne Win to reconcile with China. In
1970, Burma stopped the U.S. military aid program that had started from 1958,
and the American personnel carrying out the program left the country at the
end of June 1971. At the same time, Burma declined to join the Asian collective
security system initiated by the Soviet Union and to sign a security accord with
Moscow. This demonstrated that Burma did not want to further irritate China.

Explanations from China

From the viewpoint of China, the reconciliation between Beijing and Rangoon
had different dimensions: the internal Chinese factors that caused the anti-
Chinese riots in Burma, the changing internal domestic situation, the impact
of the ChinaBurma rift on China, and the reorientation of Chinas foreign
policy.
As earlier discussed, the extension of Chinas Cultural Revolution directly
caused the anti-Chinese riots in Rangoon. Two factors connected the Rangoon
incident with the Cultural Revolution. First, Beijing had propagandized Mao
Tsetung thought internationally and intrusively. The Propaganda Outline
of the Cultural Revolution put forward in June 1966 emphasized that the
Cultural Revolution is of vital significance, bearing on the destiny and future
of our Party and state as well as World Revolution.19 In October 1966, The
Publicity Department of CCP Central Committee approved distributing the
Little Red Book all over the world.20 The CCP Central Committee decreed
that the main mission of Chinas Embassies abroad was to propagandize Mao

16 Ibid., pp. 3337.

17 Ibid., p. 35.
18 Bandyopadhyaya, Burma and Indonesia, p. 172.
19 Instruction outline for disseminating information related to the Cultural Revolution,
Xinhua Monthly, No. 6, 1966, p. 29. Or see Peoples Daily and PLA Daily of 6 June 1966.
20 Ma Jisen, The Cultural Revolution in the Foreign Ministry of China, Hong Kong: Chinese
University of Hong Kong Press, 2003, p. 134.

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Tsetung thought and the Cultural Revolution overseas.21 Consequently, the

Chinese Embassy in Rangoon disregarded the objections of the Burmese
government and took its own course and launched the Burmese version of the
Cultural Revolution.
Second, radicals had seized diplomatic power. These events-in Hong Kong,
Phnom Penh, Rangoon, and to a lesser extent elsewhere-had multiple causes.
But they would probably not have occurred had the Chinese Foreign Ministry
not suffered radicalization during this mid-1967 period, had Foreign Minister
Chen Yi not been subject to personal attack, and had the physical destruction
of some ministry records not taken place.22 Mao Tsetung confirmed to Edgar
Snow that the Ministry of Foreign Affairs was in a mess, and that It was out
of control for one and a half months and its power was seized by counter-
revolutionaries.23 Since early 1967, Chen Yi had not functioned as minister
and had lost power in August when Wang Li took over the Foreign Ministry. On
24 October 1967, Zhou Enlai asked the visiting President of Mauritania to pass
on messages to Kim Il-sung, Norodom Sihanouk, and Gamal Abdel Nasser:
We always instruct overseas Chinese that they should abide by the local laws;
but we cant control their actions; we dont conceal that our embassies abroad
made some mistakes but we can correct them at any moment.24
It was because Mao himself had opened the Pandoras Box of international-
izing the Cultural Revolution in the summer of 1967 that the revolutionary
rebels were able to take power in the Foreign Ministry. On 9 September 1966,
Mao Tsetung wrote in a report that All Chinas diplomatic establishments
abroad should be revolutionized.25 And he also decided to call back all Chinas
Ambassadors (except the Ambassador to Egypt) and most of the top embassy
staff members to join the Cultural Revolution.26 This action obviously severely
impaired Pekings ability to perceive and analyze events abroad. But an equally
important consequence was that it radicalized both the embassies, once the
staff returned to them, and the Foreign Ministry departments at home.27 The
recall of ambassadors was to have important consequences several months

21 Zhu Liang, Selfless and fearless truth-seeker, Wang Jiaxiang, Yan-Huang Historical Review,
No. 8, 2006, p. 6.
22 Robinson, China confronts the Soviet Union, p. 244.
23 Works of Mao Tsetung Since the Establishment of the PRC, Vol. 13, Beijing: Central Party
Literature Press, 1998, p. 163.
24 Chronicle of Zhou Enlai, Vol. 2, p. 196.
25 Works of Mao Tsetung Since the Establishment of the PRC, Vol. 12, Beijing: Central Party
Literature Press, 1998, pp. 128129.
26 Du Yi, Chen Yi in the Cultural Revolution, Beijing: World Knowledge Press, 1997, p. 95.
27 Robinson, China Confronts the Soviet Union, p. 246.

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later, for it probably facilitated the manipulation of several embassies by fanati-

cal followers of Mao.28 In the same way, the Chinese embassy in Burma was
completely entangled in the domestic political turmoil. In March 1967, Chinas
Ambassador to Burma, Geng Biao, and 21 colleagues were recalled. Some radi-
cals subsequently came to Rangoon and seized power in the embassy. They
actively pushed the Cultural Revolution in Burma, and ignited the fuse of the
anti-Chinese riots.
The seizure of power in the Foreign Ministry by radicals was influential in
the anti-Chinese riots as well as in the subsequent rift in bilateral ties. In 1971,
Zhou told the visiting Ne Win that Chinas government tried its best to confine
the Rangoon event to the negotiations between the two governments.29 But the
state of affairs could not be controlled by Zhou, and the actions by the radicals
in the Foreign Ministry and in the Chinese embassy in Burma continuously
aggravated tensions. Zhou explained, At that time, our embassies directly sent
notes to foreign countries on some vital political issues. It was unprecedented
that our embassy in Rangoon presented notes of protest to your Foreign
Ministry without the permission of Chinas Foreign Ministry. Up to now, we
have not ascertained how many notes were delivered to your Foreign Ministry
without the approval of our Foreign Ministry.30
In August 1967, supported by Mao Tsetung, Zhou seized diplomatic power
again and began to restore the order in foreign relations that had been affected
by the chaos of the Cultural Revolution. Zhous regaining power in the Foreign
Ministry was the turning point in mending the break with Rangoon. In 1971,
when Zhou retrospectively considered the rapprochement between the two
countries with Ne Win, he stressed, With regard to ChinaBurma relations,
we always took measures to control the state of affairs, and later you, Sir, did
so too, so bilateral ties didnt worsen further. It was good and favorable for our
two countries to improve and resume diplomatic relations.31
Nevertheless, the renormalization of Sino-Burmese ties was not simply the
result of the changing political situation in China. The fundamental explanation
was that Beijing gradually reoriented its foreign policy and strategy. China was
isolated from the rest of the world during the height of the Cultural Revolution
in 19661967. When the upheavals subsided, Beijing began to take a more
practical foreign policy line in 1968 and attempted to regain the initiative.
28 Melvin Gurtov, The Foreign Ministry and Foreign Affairs during the Cultural Revolu-
tion, The China Quarterly, No. 40, October-December 1969, p. 72.
29 Selected Diplomatic Writings of Zhou Enlai, p. 481.
30 Ibid., p. 482.
31 Ibid., p. 484.

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In May 1968, Mao Tsetung objected that the appellation The center of the
world revolution-Beijing was wrong and self-centered, and instructed that
Chinas external propaganda should not be intrusive. Dont propagandize that
revolutionary movements in foreign countries are affected by China.32 In early
1970, the Central Committee of the CCP dispatched military representatives
to the Foreign Ministry, and a revolution committee was established in June.
As a result, China gradually stabilized its external relations.
China also made conciliatory gestures to the outside world. On the evening
of1 May 1969, Mao and Zhou received eight new Ambassadors to China on
the Tiananmen Square Rostrum, and said that China wished to improve and
develop relations with countries all over the world. A group photo was taken
with each of the eight Ambassadors in sequence, and all the eight pictures were
published in the Peoples Daily the next day. Soon, Chinas missions returned
their posts and Beijing began taking some measures to restore the external ties
impaired during the height of the Cultural Revolution.
Additionally, the significance and consequences of the split in ChinaBurma
relations for China could not be ignored. Prior to 1967, China had set Burma up
as a model of its adherence to the Five Principles of Peaceful Coexistence, and
had peacefully solved the border dispute. Chinas revolutionary foreign policy
heavily tarnished its international image. An aggressive self-righteous China
caused widespread apprehension and fear in peripheral countries, particularly
in small ones. Therefore, the renormalization of ChinaBurma relations, which
had been the previous good model of Chinas external relations, enhanced
other countries trust in Chinas foreign policy and the sincerity of Beijings
reconciliation, as well as expedited and promoted the return of normalcy in
Chinas foreign relations.
Moreover, the change in the international environment during this period,
especially in Chinas circumjacent regions, was another important factor
pushing a return to the pre-Cultural Revolution policy and renormalizing
Chinas foreign relations.

The Context of ChinaU.S.Soviet Triangular Relations

In the late 1960s and early 1970s, a variety of political forces had formed new
international relations out of those that had been structured and integrated
for more than 20 years after World War II. In the contention for hegemony
between the U.S. and the Soviet Union, the former was less dominant at that

32 Works of Mao Tsetung Since the Establishment of the PRC, Vol. 12, pp. 274276.

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stage. The Sino-Soviet split and the fearsome military threat from Moscow
pushed the two weaker countries (the U.S. and China) into an alliance to
balance the strongest within the great power triangle.
In August 1968, the Soviet Union occupied Czechoslovakia. Following the
Soviets signing a 1964 military pact with Mongolia, by 1969 about one million
Soviet troops were stationed on the Sino-Mongolian and the Sino-Soviet
borders. In March 1969, the Sino-Soviet border conflict over Zhenbao Island
(Damansky Island) broke out, and further border clashes along the western
section of the Sino-Soviet border in Xinjiang occurred in August 1969. The
Chinese suffered casualties in this engagement. Heightened tensions raised
the prospect of a nuclear war between China and the Soviet Union. Also,
Moscow proposed an Asian collective security system to seek to organize an
anti-China united front in Asia to encircle or contain the PRC just as it was
beginning to emerge from the turmoil and isolation of the Great Proletarian
Cultural Revolution.33 India, Pakistan, Afghanistan, Burma, Cambodia, and
Singapore were among the Asian states specially sought after in this security
system framework.34
Thus Moscow became Beijings biggest threat instead of Washington. Some
regard the nature of the Cultural Revolution and the events after the autumn of
1967, as indicating no real revolution in foreign policy. The Cultural Revolution
has been an internal phenomenon, and its seepage abroad to become a factor
in Chinas relations with other countries seems to have been an uncalculated
though perhaps an inevitable by-product. As such, those instances in which the
Revolution had deleterious consequences for Chinas foreign relations might
be characterized as aberrant episodes rather than as reflections of a persistent
or prominent new strand in Chinas foreign policy line.35 Yet this seems
questionable given the official Chinese admonition to spread the Cultural
Revolution abroad, at least for a period.
The Soviet menace and Chinas self-isolation caused Beijing gradually
to return to a practical foreign policy after the summer of 1967. Meanwhile,
Sino-American rapprochement after 1969 required Beijing to change its self-
centered perceptions and arrogance in the policy debate: a shift in Chinas
foreign policy from fanaticism to realism.

33 Arnold L. Horelick, The Soviet Unions Asian Collective Security Proposal: A Club in
Search of Members, Pacific Affairs, Vol. 47, No. 3, Autumn 1974, p. 269.
34 Ibid., pp. 271272.
35 Gurtov, The Foreign Ministry and Foreign Affairs, p. 102.

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Rangoon sought detente with Beijing primarily in its own national inter-
ests, and the chain reaction of Sino-U.S. rapprochement through the world also
further allayed Burmese hesitation on reconciliation with China and dimmed
Burmese suspicions of Chinese intentions. (From 1970 to 1972, 33 countries
established diplomatic relations with China and six countries resumed rela-
tions with China.) For Beijing, the change in ChinaU.S.Soviet triangular
relations in the late 1960s and early 1970s meant new security challenges and
opportunities of balance created by the great powers game. This was partly re-
sponsible for the Sino-Burmese rapprochement. After the Rangoon incident,
the Soviet Union, the U.S., and other countries in the two camps supported
Burma against China, and provided economic and technical aid to Burma.
Rangoon and Washington signed a military training pact. These countries used
the Sino-Burmese rift to minimize and counter Chinas influence in Burma, so
China, in its security dilemma, subsequently had to try regaining its power in
Burma.
In summary, between 1954 and 1966 China gradually shifted its foreign
policy from the pragmatic to the irrational; ideological considerations, espe-
cially proletariat internationalism, overwhelmed national security and real-
istic interests in the process of decision-making. Chinas foreign relations thus
moved from a united front to self-isolation. The split between ChinaBurma
in 1967 was a conspicuous example of this course.
The deleterious consequences for Chinas foreign relations caused by
the Cultural Revolution were amplified by the BeijingMoscow split and
confrontation. However, the Sino-U.S. dtente was undoubtedly the force to
push Beijing to return to pragmatism in foreign relations. The Ne Win military
regime had faced a legitimacy crisis since it seized power in the 1962 coup detat.
Although the anti-Chinese riot provided Ne Win with an opportunity to divert
domestic discontent by orchestrating nationalism against a foreign target, he
had to defuse the strain caused by the rift with China. Chinas support for the
BCP had severely threatened the Rangoon regime. Consequently, Rangoon
needed to restore relations with Beijing more urgently than China did with
Rangoon.

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 6
Sino-Burmese Ties: The Cicatrized Sino-
Burmese Relationship 19721988

T he turn from confrontation to negotiation between China and the

U.S. became apparent during the 1970s and 1980s. Chinas domestic
political situation and foreign relations underwent drastic changes.
The period 19721988 was a thaw in bilateral relations between China and
Burma. It was an attempt to erase the scars of the earlier Cultural Revolution.
In the light of the changes in the geopolitics in Southeast Asia and of the
triangular relations of China, the Soviet Union and the U.S., however, Beijing
now attached less importance to Rangoon compared to its policy orientation
before 1966.

Political Relations
The BeijingRangoon Thaw
Although the broken relations between China and Burma due to the anti-
Chinese riots in 1967 were renormalized in 1971, both states could not get over
their shadows in such a short period. By the end of the 1970s, China had not
yet put an end to the domestic chaos of the Cultural Revolution and readopted
the peaceful foreign policy of the 1950s. This factor, coupled with Burmese
distrust of Beijings shifting policy, led to continued suspicion between the two
countries. In the early and mid 1970s, Sino-Burmese ties faced the conundrum
of how to heal the rupture. China attempted to assuage Burmese apprehension
of Chinas export of revolution, while Burma wanted to reassure China about
its neutral role in the game of power politics.
In August 1975, U Hla Phone, the Foreign Minister of Burma, visited
China. This visit was regarded as the preparation for, and a prelude to, Ne
Wins visit three months later. During talks with U Hla Phone, Vice Premier
Deng Xiaoping complimented him that Burma did not participate in the
agreements initiated by United States in Asia and evinced no interest in the
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Soviet Unions Asian Collective Security Proposal.1 Over 1115 November,

Ne Win as President of Burma visited China by invitation. This was the most
crucial diplomatic contact since the breakup of bilateral relations in 1967.
Chinese newspapers extolled Ne Wins visit with elevated wording. Two articles
were published in The Peoples Daily, on 11 and 12 December 1975, Warm
Welcome to the Burmese Distinguished Guests and Burmese Government
Sticking to Independent and Nonalignment Policy and ChinaBurmese Pauk
Phaw Friendship Ongoing, stressing the traditional Pauk Phaw ties and amity,
and Chinese contentment with Rangoons sustained policy of neutralism. On
13 November, Mao Tsetung, although seriously ill, persisted in meeting Ne
Win, which served to show that Beijing made much of his visit.2
Ne Wins trip to China in 1971 focused on the Rangoon incident of 1967,
and this time Zhou Enlai and Ne Win reaffirmed their commitment to the Five
Peaceful Principles of 1954. On 11 November at the welcoming banquet, Ne Win
claimed that Burma never allows any country to maintain military bases on
Burmese soil to antagonize other countries, especially our neighbors. We wont
do so in the future.3 When Prime Minister U Nu paid his first visit to Beijing in
1954, Burma made China similar promises in order to cast aside Beijings doubts
that Burma was siding with the U.S. Ne Wins reemphasis on the base problem
on November 11 largely resulted from the Asian Collective Security proposal
initiated by the Soviet Union at that time. Such a promise was a guiding principle
of Burmas China policy and the prerequisite to winning Beijings favor. Ne Win
stated that The problems [discord in bilateral ties] are not unlikely to be solved
in the long run as long as we both, tolerantly and patiently, cope with them for
the sake of friendship.4 By all appearances, the problems mentioned by Ne Win
were Chinas support of the BCP. At the end of the visit, a Joint Communique
was issued, which stressed the significance of the Five Principles of Peaceful
Coexistence for bilateral ties, and the unanimous agreement on the proposition
of building up a peaceful, neutral, and liberal zone in Southeast Asia.5

1 Chronicle of Deng Xiaoping, 19751997 Vol. I, Beijing: Central Party Literature Press,
2004, p. 80.
2 In 1974, Mao was suffering from a terminal illness so he told Wang Hongwen that he
would not meet any foreign guest even if they requested to see him. Maos health further
deteriorated. See Biography of Mao Tsetung, Vol. 2, pp. 17151740.
3 Speech of President Ne Win, press release, Xinhua News Agency, 12 November 1975.
The Burmese constitution of 2008 stipulates that there will be no foreign bases in Myan-
mar.
4 Ibid.
5 Joint Communique of PRC and the Socialist Republic of the Union of the Burma, Peo-
ples Daily, 16 November 1975.

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 Sino-Burmese Ties: The Cicatrized Sino-Burmese Relationship 19721988

By 1975 the cool BurmaChina relations had become somewhat better, but
both sides had not made substantive progress in improving relations because
Beijing had failed to fulfill its promise on the Five Peaceful Principles. Deng
Xiaoping tried to appease Ne Wins fear with high-sounding rhetoric that We
strictly and consistently observe the Five Principles of Peaceful Coexistence
... China will never be a superpower to invade and bully other countries.6 We
believe the revolution of any country should depend on its national strength
... China would never intervene in the affairs of other countries.7 In reality,
China was still implementing a dual track foreign policy and maintaining
support for the BCP. In the meantime, Burma was reluctant to stand by the
Chinese and publicly counter the Soviets and the U.S. Accordingly, although
the joint communique stressed anti-hegemonism, phrases denouncing U.S.
and Soviet imperialism were not used.
Over 511 February 1977, Deng Yingchao, the Vice Chairman of the
Peoples National Congress, visited Burma.8 She was the first Chinese state
leader to visit Burma since the rift of BurmaChina relations in 1967 and the
end of the Cultural Revolution. A number of factors can account for Dengs
visit: to demonstrate the end of Chinas political upheaval and the elimination
of the Gang of Four political force; to prevent Rangoon from deviating from
its neutral policy and to counter-attack Moscows encirclement of China;9 to
exploit her special status as Zhou Enlais widow to boost bilateral ties because
he played such important roles in BurmaChina relations10 as well as having a
good personal friendship with Ne Win;11 and to signal and stress that its Burma
policy had returned to the Zhou era.12
Burma thought highly of Deng Yingchaos visit. The enthusiastic reception
Ne Win gave to Deng- usually only reserved for heads of state- was a clear sign
of the juntas attempt to re-establish the cordial relations of Zhous era and to
enlist Beijings support in the BCP problem. (BCP leaders had visited Beijing
two months before Dengs trip to Burma, and were received and hosted by Hua
Guofeng, the successor to Mao Tsetung).

6 Speech of Vice Premier Deng Xiaoping, press release, Xinhua News Agency, 12 Novem-
ber 1975.
7 Chronicle of Deng Xiaoping, Vol. I, p. 129
8 In November 1975, Mao Tsetung made suggestions to Ne Win that he invite Chinese lead-
ers to visit Burma when he met Ne Win in Beijing. Ne Win accepted Maos suggestion.
9 The Editorial of Hong Kong South China Morning Post, Zhou Enlais Wife Visited Bur-
ma, Reference News, 13 February 1977.
10 Interview Chinese Former Ambassador to Burma, Cheng Ruisheng, 12 July 2009, Beijing.
11 Interview Chinese Former Ambassador to Burma, Chen Baoliu, 14 July 2009, Beijing.
12 Bert, Chinese Policy Toward Burma and Indonesia, p. 966.

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On 27 April 1977, after nearly one and a half years interval, Ne Win led a
high-level delegation to visit Beijing at the invitation of China. The interval
between this visit and Dengs trip to Burma amounted to less than three months,
which drew outside attention. The main intention of Ne Wins visit was to
bargain with Beijing about the BCP problem. At the welcoming banquet, Ne
Win stated that If there are some unfavorable problems in bilateral relations
caused by some unavoidable circumstances, the two parties should be honest
and patient in dealing with them. If the problems arent solved by this means for
a while, we should not escalate them lest our existing friendship be impaired.13
Although neither of the two sides released the outcome of the negotiations, Ne
Win told the press that During the talks, both of us adopted frank and mutual
understanding attitudes.14
The mutual visits of Deng Yingchao and Ne Win in the first half of 1977 did
not end the visits between both leaderships. In early September, the Foreign
Minister of Burma, U Hla Phone, made a detour to Beijing to inform China of
his visit to Cambodia the moment he wrapped it up. On 18 September, Ne Win
dropped in during his visit to Korea by way of Beijing. Hua Guofeng met Ne Win
and Vice Premier Deng Xiaoping discussed with him Chinas domestic situation
and foreign relations with the U.S., Japan and Yugoslavia. Ne Win, very familiar
with Chinese politics,15 was convinced of Deng Xiaopings crucial future role in
Chinas political arena. As a result, Ne Win invited Deng Xiaoping to visit Burma.
Over 2631 January 1978, Vice Premier Deng Xiaoping visited Burma
and received high-level, red-carpet treatment. He was given a 19 gun salute
and a guard of honor accompanied by Ne Win. President Ne Win and the
leading high officials received Deng Xiaoping at the airport; 100,000 civilians
were arranged to welcome him along the route between the airport and the
State Guest House. Deng Xiaopings photo was published in the Burmese
newspapers on arrival day. Both governments set their propaganda machines
in motion and gave Dengs visit a tremendous build-up.
In terms of timing, Dengs trip was the first visit after the Cultural Revo
lution of the most important Chinese state leader since the end of 1960, not
only to Burma but to foreign countries. From the beginning of the Cultural
Revolution to Deng Xiaopings foreign tour in 1978, Chinese leaders hardly
visited foreign countries, while foreign leaders unilaterally visited China. Deng
13 President Ne Wins Speech at the Welcoming Banquet Held by State Council, Peoples
Daily, 28 April 1977.
14 President Ne Wins Toasts at the Welcome Banquet for Chinese Leaders, Peoples Daily,
2 May 1977.
15 Interview, Cheng Ruisheng, 12 July 2009, Beijing.

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 Sino-Burmese Ties: The Cicatrized Sino-Burmese Relationship 19721988

Plate 8: Deng Xiaoping and Ne Win, Rangoon, 26 January 1978 (photograph courtesy Cheng
Ruisheng)

Xiaopings visit to Burma indicated that China had restored internal order and
stability. The occasion of the visit marked Beijings concern with countering
Vietnams influence in Burma. In January 1978, border disputes between
Vietnam and Cambodia had intensified. Deng Yingchao subsequently visited
Cambodia. At the same time, Foreign Minister of Vietnam, Nguyen Duy Lo,
visited some countries of Southeast Asia. On Deng Yingchaos heels, Deng
Xiaopings visit to Rangoon was an important step in countering Vietnamese
influence in Southeast Asia.
Deng Xiaoping was not only the Vice Premier, but also the Vice Chairman of
the Central Committee of the CCP, the Vice Chairman of the Military Commission
of the CCP Central Committee, and the Chief of the PLA. Deng Xiaopings 1978
foreign tour in eight countries, including Burma, symbolized that he had come
to power for the third time and that his era was underway, which meant that the
pragmatists and moderates began to control the countrys political situation.
Dengs first and second legs of his overseas trip in 1978 were Burma and
Nepal, which was no accident. Among the third world countries, both Burma
and Nepal carried out non-aligned and friendly policies towards China,
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 Modern ChinaMyanmar Relations

so Beijing selected them as the first two legs of Dengs tour to demonstrate
that the new Chinese leadership would carry on Zhou Enlais good-neighbor
diplomacy. The purpose of the visit was also to establish a united front against
the Soviets in order to contend against Soviet and Vietnamese expansion in
Southeast Asia.16 The Soviet Union had sent some parliamentary, cultural, and
sports delegations to Burma before Dengs visit, but Ne Win was averse to the
increasing any Soviet influence. Beijing was likely to seize the opportunity to
enhance bilateral political relations.17

Beijings Dual-Track Diplomacy

After the anti-Chinese riots in Rangoon in 1967, the CCP politically, economi-
cally, and militarily started publicly to support the BCP. On 1 January 1968,
BCP troops, heavily armed and well equipped by China, crossed the border
into Burma and seized place after place with Chinese support. Some overseas
Chinese in Burma were ordered or volunteered to join the BCP after the riots,
and many Chinese-educated youths crossed the border to enlist in the BCP
during the Cultural Revolution. Thus, a considerable proportion of middle-
and upper-cadres and officers of the BCP were Chinese. In spite of the renor-
malization of BurmaChina relations in 1971, the CCP still publicly remained
supportive of the BCP.
The Peoples Daily, the mouthpiece of the CCP and the most authoritative
newspaper in China, was a weathervane illustrating Beijings dual-track diplo-
macy, whose editorials and coverage reflected CCP and BCP relations.
During 19711978, some Chinese leaders passed away, and the BCP sent
telegrams of condolence to the CCP.18 The Peoples Daily published from 1971

16 Cheng Ruisheng, Records of Sino-Burmese Friendship, p. 174.

17 Deng Xiaopings Visit to Rangoon Will Influence Asia, Reference News, 23 December 1977.
18 Telegrams of condolences on the deaths of Chen Yi, Xie Fuzhi, Li Fuchun (Vice Premier
and member of the CCCP), Dong Biwu (senior statesman of the CCCP), Kang Sheng
(the Vice Chairman of CCCP), Premier Zhou Enlai, Zhu De (Chairman of the Standing
Committee of the National Peoples Congress and member of the standing committee of
the Political Bureau of the CCP), Mao Tsetung, Guo Morou (Vice Chairman of the Stand-
ing Committee of the National Peoples Congress and Member of Central Committee of
the CCP) and Luo Ruiqing, were published in full in the Peoples Daily. Meanwhile, the
BCPS congratulatory letters also appeared in the Peoples Daily, including those for the
10th National Congress of the CCP, the 25th anniversary of National Day, the 4th ses-
sion of Chinas National Congress, the 55th anniversary of the founding of the CCP, Hua
Guofengs election as both the Chairman of the Central Committee of the CCP and the
Chairman of the Military Commission of the CCP Central Committee, the third Plenary
Session of the eleventh Central Committee, and the opening of the 11th Chinas National
Congress, and Deng Xiaopings election as the President of the Chinese Peoples Political
Consultative Conference.

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Table 2: Reports on the BCP in the Peoples Daily, 19711988

Year Nature Format Number

1975 BCP Statement Fully Published 1

1975 CCP to BCP: Fully Published 1
Telegram of Condolence
1976 News Photo 2
19711978 BCP to CCP: Telegram of Fully Published 10
Condolence
19711978 BCP to CCP: Telegram of Fully Published 8
Condolences
19711978 News Brief mention 13
19791988 BCP to CCP: Letter of Partly Published 1
Congratulation
19791988 BCP to CCP: Letter of Brief mention 3
Congratulation

Source: The Peoples Daily, 19721988

to 1978 eight telegrams and letters of congratulation, 10 telegrams of condo-

lence and consolation sent by the BCP, and 13 coverages on the BCP leaders
presence in Chinese celebrations and mournings.
The Peoples Daily on 21 May 1975 released the full text of the CCPs telegram
of condolence on the deaths of the Chairman of the BCP Central Committee,
Thakin Zin, and the Secretary of BCP Central Committee, Thakin Chit.
This telegram recognized the leading role and contribution of the BCP in the
Burmese struggle against class enemies at home and abroad, and deemed that
the BCP will undoubtedly win outright victory in the revolutionary war.19
On the same day, the Central Committee of the BCP issued a statement on
the deaths of the two leaders, stating that the party would proceed with armed
combat and carry the struggle to the end under the guidance of Marxism and
Mao Tsetung thought.20
On 25 January 1976, the member of the Standing Committee of the
Political Bureau of the CCP Central Committee, Zhang Chunqiao, met and
banqueted Thakin Ba Thein Tin, the Chairman of the BCP. On 18 November
1976, Hua Guofeng, the Chairman of the CCP Central Committee, received
and gave a welcome dinner for Thakin Ba Thein Tin and the Vice Chairman of
19 CCP Telegrammed BCP on the death of Chairman Thain Zin and Secretary Thain Chit,
Peoples Daily, 21 May 1975.
20 Carrying out the Revolution till Victory: BCP Central Committees Announcement on
the Death of Chairman Thain Zin and Secretary Thain Chi, Peoples Daily, 21 May 1975.

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 Modern ChinaMyanmar Relations

the BCP, Thakin Pe Tint. The two meetings between the two parties in 1976
were covered by the Peoples Daily, accompanied by photographs. The second
meeting appeared on the front page of the daily, which indicated that Hua
Guofeng succeeded Mao as the leader of world revolution and was continuing
to carry out Maos policy to support the communist movements in Southeast
Asia as well as reassuring pro-Beijing communist parties in Asia of the change
of Chinese leaders.
In March 1971, the Voice of the People of Burma (VOPB) started its trans
mission from the Chinese side of the border and the radio signal covered all
Burma. The VOPB broadcast in five languages: Burmese, Kachin, Karen,
Shan, and Chinese, every morning at 7:008:00 a.m. and in the evening at
18:3019:30 p.m. According to CIAs declassified document, The [assistance]
the Chinese are providing the insurgents as of April 1971 includes, in addi-
tion to the weapons mentioned above, ammunition, explosives, tools, clothing
and uniforms, medicines, food grains, printed propaganda (including Mao
badges) and extra funds (in Burmese currency). During the past two years,
Chinese support of Naw Seng has grown significantly. Not only has the supply
of weapons increased but the type has improved: as of May 1971, the Chinese
were supplying B-40 rocket launchers, mortars, light machine guns, and a few
heavy machine guns, in addition to the semi-automatic weapons and subma-
chine guns which they had been providing since late 1967.21 Beijing permitted
the BCP to recruit Chinese ethnic minority peoples living on the Chinese side
of the border to serve with the insurgents in Burma. In some cases, however,
local Chinese officials have been actively involved in the recruiting. The pres-
sure that government authorities exerted on Chinese non-Han citizens living
near the border to join the Burmese insurgents is reported to have consider-
ably increased in 1969 and 1970.22On 9 April 1975, the VOPB broadcasted
that during 19681975, the BCP fought 1,300 battles with Ne Wins troops,
and killed and captured 16,000 soldiers of the government army. By 1975,
their bases had expanded to 34,000 square kilometers, in which there were
3,000 villages and 575,000 people.23
Beijings dual-track diplomacy naturally caused Burmese discontent and
hindered the comeback of the friendly relations of the Zhou Enlai era. At
the same time, Burma had to put up with its giant and aggressive neighbor.

21 Peking and the Burmese Communists, p. 78.

22 Ibid., p. 79.
23 Chronology of Burma (2 March 19629 April 1975), Historical Research Institute of Yun-
nan, 1975, p. 164.

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 Sino-Burmese Ties: The Cicatrized Sino-Burmese Relationship 19721988

Rangoon actively kept close contact with Beijing to seek to find a solution to
the BCP problem, while carrying out an equidistant diplomacy in the great
powers game, and particularly maintaining their moderate relations with
the Soviet Union and Vietnam. Rangoon attempted not only not to provoke
Beijing, but also to use Chinas opponents to counterbalance the Chinese.
On 27 April 1977, Ne Win was invited to visit China and negotiate the BCP
problem with Beijing. It seemed that China had to make some concessions to
appease Burmese anger during this visit. It was sensible to gain Burmese support
especially when the Soviet Union had increasingly expanded its influence in
Vietnam and in the region of the Indian Ocean. Meanwhile, the pragmatist
faction of Deng Xiaopings entourage had regained power and had initiated a
shift in the dual-track diplomacy. After 1978, the Peoples Daily never published
in full the BCPs telegrams of condolence, letters of congratulation, or the BCP
leaders presence at Chinas official functions. During 19791988, the BCPs
congratulatory letters and telegrams appeared only four times in that daily, one
only in part and the other three only mentioned by name (see Table 2).
Over 2023 October 1980, Ne Win paid his 11th visit to China and met
the top leaders in Beijing such as Hua Guofeng, Ye Jianying, Zhao Ziyang,
Deng Xiaoping, and Li Xiannian. Before his trip to China, Ne Win declared a
general pardon for any disarmed anti-government forces, but the BCP refused
to receive the pardon. Therefore, Ne Win still needed to win the support
of Beijing to stamp out its domestic rebellions. By the mid 1980s, the BCP
problem had ceased to matter in bilateral relations. When Ne Win (who had
retired as President but still remained Chairman of the BSPP) visited China
on 4 May 1985, Deng Xiaoping stated that There is no great problem to be
solved between China and Burma. Ne Win agreed with Deng.24 In May 1987,
Burmese President U San Yu met Chinas Vice Premier Qiao Shi in Rangoon
and stated that Chinese and Burmese relations were continually amicable and
there is no problem between the two countries.25

Regional Security
To a large extent, the Cold War found expression in regional security and
conflict in Asia. Regional security issues dominated relations between China

24 Chai Shikuan and Zhu Minzhi, Compliments on Sino-Burmese Friendship and an Exam-
ple of Implementing the Five Principles when Deng Xiaoping Met Ne Win, Peoples Daily,
5 May 1985.
25 Lu Jimin, Burmese President U San Yu Met Vice Premier Qiao Shi, Peoples Daily, 26
May 1987.

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and its peripheral countries. After the BeijingMoscow split in the 1960s and
the SinoU.S. dtente in the 1970s, the confrontation between China and
the Soviets entangled Chinas relations with adjacent countries and regions.
Deng Xiaoping pointed out three major impediments to the renormalization
of Sino-Soviet relations: First, one million Soviet garrison troops along
the Sino-Soviet border, including the Soviet garrison in Mongolia; second,
Vietnams invasion of Cambodia; third, the Soviet invasion of Afghanistan.
Both Vietnam and Afghanistan shared a land border with China (as did
Mongolia), so the problems of Vietnam and Afghanistan were perceived as
threats to China.26
Since the renormalization of Sino-Burmese relations, regional security was
an unavoidable topic in their bilateral relations. Beijing tried to draw Burma
into the international united anti-Soviet front, to weaken Soviet influence in
Burma, and to push the Burmese into standing by the Chinese on the problems
of Vietnam and Afghanistan. China stressed the common status of both as
third world or developing countries and thus asserted during the high-level
exchanges of visits in the 1970s that the two countries should undertake the
common tasks of anti-imperialism and anti-hegemonism. These visits were
Ne Wins trips to China in December 1975 and April 1977, Deng Yingchaos
trip to Burma in 1977, and Burmese Prime Minister U Maung Maung Khas
visit to Beijing in 1979.
In spite of Chinese appeals and initiatives against the Soviets, the two coun-
tries did not issue unanimous statements opposing imperialism and hegemony,
except for the joint communique in 1975 that both countries are against any
country or country bloc that conspires to establish hegemony over other
nations and spheres of influence in any region of the world.27 The Burmese
remained silent about Chinese verbal attacks and comments on the imperial-
ism and hegemony of the Soviets and Vietnam. Although Burma objected to
Vietnams invasion of Cambodia and the Soviet invasion of Afghanistan, the
Burmese media did not publish any editorials or comments on them, but only
quoted the relevant reports of foreign newspapers and foreign wire services
in accordance with its neutralist and non-alignment foreign policy. In 1977,
U San Yu, the General Secretary of the BSPP reiterated at the third Congress
of the BSPP that According to [our] independent foreign policy, Burma will

26 Chronicle of Deng Xiaoping, Vol. I, p. 851.

27 Joint Communique of the P.R.C. and the Socialist Republic of the Union of the Burma,
Peoples Daily, 16 November 1975.

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 Sino-Burmese Ties: The Cicatrized Sino-Burmese Relationship 19721988

keep its word to maintain good relations, mutual understanding, and mutual
help with all countries.28
The general objective of Burmas China policy was to foster good-neighbor
relations to ensure national security. Although Burmas policy objective was not
unique, it had exceptional meaning. Burma possessed sensitive and important
geopolitical significance, lying wedged between China and India with a long,
exposed border both with them as well as with Thailand. The Burmese see
their security in recognizing the geographical realities of their situation and
providing their larger neighbors with no pretext for invasion. Even in the face of
Chinas aiding the Burma Communist Party in its war against the government,
the Burmese limit themselves to protests to China and warfare against their
local communists.29 In addition, Rangoon deemed that An overview of the
international situation shows that there are two blocs, capitalism and socialism.
Two blocs are scrambling for a balance of power by hook or by crook. Moreover,
they are extending and expanding their sphere of influence in order to enhance
their political systems.30 In this context, Burma prudently conducted balanced
diplomacy between the Soviet Union, Vietnam, the United States, and China.
For instance, when Deng Xiaoping ended his visit to Burma in January
1978, Ne Win promptly invited Vietnam Prime Minister Pham Van Dong
to visit Rangoon. In 1979, Burma announced its withdrawal from the Non-
Aligned Movement, which was to meet in Cuba, mainly because of its Soviet
domination. Burma was worried that the anti-Soviet countries, notable China,
would be suspicious of its neutral and non-alignment policy if it continued to
hold its membership.
Burma still followed a conservative and cautious policy to protect its inter-
ests without offending any parties even in the face of regional security problems
in Indochina. After the eruption of the Sino-Vietnamese War in February 1979,
President Ne Win visited Thailand in March to conduct emergency consulta-
tions on the Indochina situation. Both parties voiced concern about the armed
conflict and its danger of escalation, supported international organizations,
and urged the parties concerned to seek a peaceful settlement of the conflict.31
28 General U San Yu, the Secretary of the Burma Socialist Program Party, Addressed the
Political Report of the BSPP Central Committee at the 3rd Party Congress, Information
of Southeast Asia, No. 46, 1980.
29 Josef Silverstein, The Military and Foreign Policy in Burma and Indonesia, Asian Survey,
Vol. 22, No. 3, March 1982, p. 287.
30 General U San Yu Addressed the Political Report of the BSPP, Information of Southeast
Asia, No. 46, 1980.
31 Joint Press Communique of Burma and Thailand on Peaceful Settlement of Conflicts in
Indochina, Peoples Daily, 7 March 1979.

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However, Burma did not make known its position on the ChinaVietnam con-
flict. When Ne Win received Japanese Foreign Minister Ito Masayoshi in August
1980, he denounced foreign troops invasions of Cambodia and Afghanistan,
and said Burma would follow ASEANs lead at the forthcoming United Nations
session on the seating of a Kampuchean delegation. However, The Burmese
representative was absent during the vote on the seating of a Kampuchean
representative. Thus Burma avoided giving public support for the ASEAN and
China position and at the same time did not back the stance of Vietnam and the
Soviet Union.32
In the 1980s, although China tried to get Burmese support on regional security
issues to contain Russian expansion in Asia, the intensity of Chinas diplomatic
ideology was gradually fading. The speeches of the Chinese leadership revealed
that Beijing highlighted not their common status as third world countries, but
rather their common historical experience and the common tasks of both
the maintenance of independence and peace and economic development.
Discussion of anti-imperialism and anti-hegemonism was avoided as each
tried to express its stance in a more tactful and more moderate manner. Our
two countries opinions about the international situation are similar.33 Both
have similar or analogous judgments on the major international problems.34
[Our] two countries share unanimous views on the current great international
problems.35 These speeches during the visits of Chinas Premier Zhao Ziyang
and President Li Xiannian visits to Rangoon in 1981 and in 1985 respectively,
Burmas President U San Yus trip to China in October 1984, and that of Burmas
Prime Minister U Maung Maung Kha in 1986.

The Overseas Chinese Issue

The overseas Chinese issue wasnt a problem in BurmaChina relations during
this period. China continued the policy (obeying local laws and customs) on
overseas Chinese affairs that had obtained before the Cultural Revolution
and sought to retain the loyalty, support, and favor of the overseas Chinese in
Burma after the reconciliation.
Deng Yingchao received more than 150 representatives of the Chinese com-
munity throughout Burma in Rangoon in February 1977. She reiterated that

32 Josef Silverstein, Burma in 1980: An Uncertain Balance Sheet, Asian Survey, Vol. 21, No.
2, A Survey of Asia in 1980: Part 2, February 1981, p. 222.
33 Political Talks of Zhao Ziyang and U San Yu, Peoples Daily, 31 October 1984.
34 U Maung Maung Kha Held Return Banquet, Peoples Daily, 14 April 1986.
35 Wu Xueqian Met Burmese Foreign Minister, Peoples Daily, 6 May 1988.

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China was implementing the overseas Chinese policy from before the Cultural
Revolution, as constructed by Zhou Enlai, and explained the causal relation
between the Gang of Four in power and irrational Chinas diplomacy as well
as ChinaBurmese rift. In January 1978, Deng Xiaoping further expounded
the reasons for the overseas Chinese policy change to Chinese representatives
in Rangoon, and stated that China was resuming the overseas Chinese policy
formulated by Mao Tsetung and Zhou Enlai before 1966. China encourages
the overseas Chinese in voluntarily acquiring the citizenship of their countries
of residence and protects their legitimate rights.36
Chinas President Li Xiannian reaffirmed the main principles of the 1956
Zhou Enlai speech in Rangoon in the same city in March 1985. The overseas
Chinese who hold Burmese nationality are Burmese citizens, should be loyal to
Burma and take the responsibility of Burmese citizens. The Chinese without
local citizenship should abide by laws enacted by the Burmese government,
respect Burmese habits and customs, and live in harmony and get along with
them.37 For the first time, Li Xiannian, during his visit to Burma, recog-
nized Chinas fault in the 1967 Rangoon riot. ChinaBurma relations were
disturbed by Chinas domestic problems on one occasion but our Burmese
friends adopted a forward-looking policy. As a result of which we are greatly
touched.38 The above-mentioned speeches of Chinese leaders reveal that
Beijing intended to dispel Burmese suspicion of the overseas Chinese and the
shadow of the Rangoon incident, to promote bilateral political relations.
On the whole, Sino-Burmese relations were immune from the overseas
Chinese problem between 1972 and 1988. First, most overseas Chinese had
obtained Burmese citizenship. By the downfall of Ne Win in 1988, the Chinese
in Burma amounted to about 0.8 million according to official Burmese statis-
tics, among whom only 73,272 were Chinese citizens.39 Under Ne Wins rule,
the military regime distrusted and discriminated against foreign immigrants
and non-indigenous peoples. Under the 1974 Burmese Constitution and the
Burma Citizenship Law promulgated in 1982, Chinese were only recognized
as second and third class citizens in Burmanamely Associate Citizens and

36 Chronicle of Deng Xiaoping, Vol. I, pp. 260261.

37 Zhao Xinkao and Wang Mianlan, President Li Xiannian Received the Representatives of
Burmese Chinese Community, Peoples Daily, 7 March 1985.
38 President Li Xiannians Speech at the Welcoming Banquet of President U San Yu, Peoples
Daily, 6 March 1985.
39 Burmese Central Bureau of Statistics, Statistical Yearbook of Ministry of Finance of Union of
Burma, 19791989, Kunming: Institute of International Studies, Yunnan, 1991, p. 15.

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Naturalized Citizens-and had no right to be elected.40 Beijing kept silent re-

garding this discrimination against the Chinese. China was reluctant to impair
bilateral ties because of the issue, which it largely regarded as Burmas internal
affairs.
Second, by Beijings calculations, the overseas Chinese should be subject
to Chinas overall foreign policy. When China decided to abandon the dual
nationality principle and encourage overseas Chinese to become citizens of
local countries in the mid-1950s, it was a maneuver to build up a brand-new
reputation for China among its neighbors, and to demonstrate the Chinese im-
plementation of the Five Principles of Peaceful Coexistence.41As Deng Xiaoping
said in Rangoon in 1978, considering the large number of overseas Chinese in
Asia, notably in Southeast Asia, its advantageous to China and local countries
to encourage them to become naturalized in their resident countries.42
Third, Chinas influence sharply declined in the overseas Chinese commu-
nity because of its revolutionary foreign policy. Most overseas Chinese rela-
tives in China suffered political persecution, and their legitimate interests were
infringed upon, during the Cultural Revolution. Consequently, the overseas
Chinese were widely disgusted with the CCP regime. The revolutionary diplo-
macy badly marred Chinas international image and caused discontent among
the overseas Chinese. After the 6.26 event, Chinese losses in the riots and
Beijings paralysis in improving their miserable plight alienated the overseas
Chinese from Beijing and politics. The reduction of Beijings influence in the
Burmese overseas Chinese community objectively weakened the seriousness
of the overseas Chinese issue in Burma.

Economic Relations
Between 1972 and 1988, BurmaChina economic relations did not occupy an
important position in the two countries foreign relations. Macroscopically,
Chinas economic relations with Burma still served Beijings political inten-
tion of balancing the Soviet Unions and the United Statess influence in
Burma, and stabilizing Rangoon on its side. Microscopically, economic fac-
tors gradually became the major momentum in economic bilateral ties after
the mid-1980s.

40 Paisal Sricharatchanya, Some are More Equal, Far Eastern Economic Review, 8 October
1982, Vol. 118, No. 41, p. 27.
41 Cheng Xi, The relationship between Overseas Chinese and foreign relations: Review and re-
flection on Chinas abandonment of dual nationality, Beijing: The Overseas Chinese Pub-
lishing House of China, 2005, p. 130.
42 Chronicle of Deng Xiaoping, Vol. I, pp. 260261.

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Table 3: Chinas trade with Burma, 19761988 (US$ million)

Total Exports Imports Imbalance

1967 21.09 12.97 8.12 4.85

1968 1.41 1.41 1.41
1969 (negligible) (negligible) (negligible)
1970 4.48 3.71 0.77 2.94
1971 17.80 9.08 8.72 0.36
1972 25.44 11.52 13.92 2.40
1973 22.66 16.82 5.84 10.98
1974 55.54 17.38 38.16 20.78
1975 31.23 14.65 16.58 1.93
1976 26.95 6.78 20.17 13.39
1977 29.34 9.35 19.99 10.64
1978 42.29 13.40 28.89 15.49
1979 31.13 12.80 18.33 5.53
1980 51.43 17.09 34.34 17.25
1981 48.48 18.07 30.41 12.34
1982 49.01 19.92 29.09 9.17
1983 36.08 18.47 17.61 0.86
1984 32.64 19.00 13.64 5.36
1985 70.24 30.67 39.57 8.90
1986 76.71 30.66 46.05 15.39
1987 150.65 64.42 86.23 21.81
1988 255.62 140.83 114.79 26.04

Source: Statistics of Foreign Trade, 19501989, 1990, p. 51.

With the thaw in ChinaBurma ties in 1971, economic cooperation and

trade between the two countries were renewed. Compared with 1966, bilateral
trade volume in 1971 increased by 3 times. From 1973 to 1984, trade volume
between Burma and China fluctuated between US$30 million and US$50
Ta
million and the annual average volume of trade amounted to around US$35
million (see Table 3).
Although trade skyrocketed in 1971 due to the improvement in Burma
China relations, it only had modest growth before the mid-1980s. There
was a steep rise after 1984 and trade in 1985 amounted to US$70.24 million
dollars, up over 100 percent. 1987 and 1988 also witnessed sharp rises. Over
19851987, the increases in trade resulted from the growth of border trade.
Border petty trade in Yunnan reached RMB124.07 million, up 182 percent,
largely boosted by overall ChinaBurmese trade (see Table 4).
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Table 4: Yunnans cross-border petty trade, 19801988 (RMB million)

Total Up Exports Imports

1980 28.13 16.88 11.25
1981 49.94 77.53% 32.09 17.85
1982 33.60 32.80% 16.80 16.80
1983 32.24 4.05% 15.73 16.51
1984 44.04 36.60% 21.15 22.89
1985 124.07 181.72% 57.30 66.77
1986 198.09 59.66% 93.10 104.99
1987 462.32 166.39% 226.04 236.28
1988 860.81 86.19% 485.98 374.83

Source: Jiang Yongren, Research and Guide of Burma Investment and Trade,
Mangshi: Dehong Ethnic Press, 2000, p. 369.

Border trade in Yunnan was at a standstill during the Cultural Revolution.43

In 1985, Yunnan Province authorized border trade zones in 27 counties and
cities, reduced policy restrictions on border trade, and stimulated it by tariff
reductions and exemptions. In May 1985, the Secretary General of the CCP
Central Committee made a suggestion to Ne Win in Beijing that both legalize
border trade. Three months later, Chinas Ambassador to Burma once again
asked Burmas President to legalize it. At the end of the same year, Burma
agreed to conduct border trade with Chinas Foreign Trade Ministry.
Two months after Ne Win visited China in 1971, China renewed its program
to supply economic and technological assistance to Burma. In accordance with
Burmese needs, Beijing agreed to prolong the repayment terms of Chinas 1961
loan, and to postpone the expiry date of the agreement on ChinaBurmese eco-
nomic and technological cooperation. Chinas assistance projects, suspended
by Rangoon after the anti-Chinese riots in 1967, restarted and Chinese aid
technicians and experts returned to Burma. In November 1971, Burmas
Foreign Trade Minister, Maung Lwin, led a government trade delegation to
China and signed a trade pact and a loan agreement. The two parties agreed to
give the most-favored nation treatment in trade to each others customs, tariffs,
tallage expenses, and custom clearance.44
On 12 July 1979, a new Agreement on Economic and Technological
Cooperation was signed by the two countries. Under the agreement, China

43 Zi Gui, Trade Between Yunnan and Burma, Explore Asia, No. 15, 1984, p. 5.
44 Ministry of Foreign Affairs, PRC (ed.), Collection of Treaties of the Peoples Republic of
China, 1971, Vol. 18, Beijing: Peoples Press, 1973, pp. 9293.

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 Sino-Burmese Ties: The Cicatrized Sino-Burmese Relationship 19721988

would provide Burma with a RMB0.1 billion interest-free loan for 7 years
from 1980 to 1986.45 On 3 July 1980, both signed a Protocol on Economic and
Technological Cooperation that China should help Burma construct 8 projects
according to the first clause of the 1979 agreement: 1) Thanlyin Bridge; 2) a
spinning factory with 40,000 spindles; 35) 3 rice mills with daily capacity of
150 tons; 6) a water supply project in Moulmein city; 7) 1 lock factory; and 8)
supply equipment items worth RMB3 million. On June 21, 1984, an Agreement
on Economic and Technological Cooperation was signed and another in 1987.
In 1987, Beijing promised to supply an interest-free loan to Rangoon.
When the two summit leaders held talks during this period, particularly
in the 1980s, they began to pay more and more attention to economic issues.
Chinas economic reform, open door, and rapid development drew Burmese
attention and interest. Three of Burmas key leaders visited Shenzhen, the first
special economic zone in China, as well as other cities in east-coast China.
Additionally, there were frequent exchanges of economic and trade delegations
between the two countries.46

The Decline of Burmese Status in Chinese Diplomacy

In 1975, an American scholar predicted that The Chinese have not, and
perhaps will not succeed in re-establishing the warm relationship they had with
Burma in the pre-Cultural Revolution period.47 Facts proved the accuracy of
his speculation, but only until 1988. Compared with the relations before 1967,
Sino-Burmese ties in this period were characterized by the decline of Burmas
status in Chinese foreign relations; Beijing paid less attention to Rangoon. The
differences in the reporting on Burma in the Peoples Daily before and after
1972 reveal this.

45 Ministry of Foreign Affairs, PRC (ed.), Collection of Treaties of the Peoples Republic of
China, Vol. 26, p. 62.
46 The economic trade delegations of China visiting Burma during 19711987 included:
Chinese Trade Delegation (December 1972), Chinese Trade Delegation (August 1982),
Chinese Delegation of the Textile Industry (November 1982), Chinese Delegation of
the Textile Industry (November 1985), and Chinese Government Economic Delegation
(November 1987). Meantime, the economic trade delegations of Burma visiting China:
a Burmese Government Trade Delegation (November 1971), Burmese Government
Economic Delegation (May 1972), Burmese Agriculture Delegation ( June 1973), Bur-
mese Trade Delegation (October 1974), Burmese Industry Delegation (October 1975),
Burmese Trade Delegation (September 1977), Burmese Government Trade Delegation
(April 1980), Burmese Industry Delegation ( June 1980), Burmese Industry Delegation
(May 1984), Burmese Government Delegation ( July 1986), and Burmese Government
Trade Delegation (April 1987).
47 Bert, Chinese Relations with Burma and Indonesia, p. 479.

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 Modern ChinaMyanmar Relations

When ChinaBurma relations were cold over 19491953, there were only
188 reports about Burma in the Peoples Daily, with an annual average of 37.6. Both
established warm relations in 1954 and maintained the amicability until the split
of 1967. The reports increased to 62 in 1954, and 1,278 over 19551966, which
averaged 106.5 annually. There were 592 reports in 19721988, and the average
annual number reached 34.82. Thus, 266 reports were published between 1980
1988. This partly resulted from the decrease of bilateral intercourse compared
with that before 1967, and partly stemmed from the Burmese lowered status and
importance in Beijings calculation of foreign relations.
Although from 1972 to 1988, Burmese and Chinese leaders paid many
visits to each others countries,48 the disparity in the quantity of bilateral visits
before and after 1972 indicated that Beijings interest in Burma was cooling off.

Disappearance of Rangoon Corridor

During the 1950s and 1960s, China considered itself strategically encircled
by the West. Although China and the Soviet Union launched an air service
between Beijing and Irkutsk in 1955, the BeijingMoscow course flight
plan failed because of the lack of airline capacity in China. The launch of the
BeijingKunmingRangoon route in 1956 partly improved the situation. In the
1950s, China communicated with the outside largely through the two routes
of BeijingIrkutsk and KunmingRangoon.49 China found a new outlet to the
world and a potential position of strength for activity elsewhere in Asia. Burma
is the only friendly non-Communist territory through which the Chinese
Communists can come and go, and through which delegations and official mis-
sions from Africa, Latin America and the rest of Asia can come and go with
ease.50 Behind the frequent Chinese frequent visits to Rangoon between 1954
and 1966, lay both the fact of warm bilateral ties, and the fact that the function

48 These visits to China included 5 visits of the top leader Ne Win, 5 visits of the President, 4
visits of the Foreign Minister, 4 visits of the Prime Minister and Vice Prime Minister, and
one visit of the Chairman of the ruling party. Chinese leaders conducted 7 visits to Burma
including one visit of the Foreign Minister, 4 visits of the Premier and Vice Premier, one
visit of the President, and one visit of the Vice Chairman of the Standing Committee of
the National Peoples Congress. During 1950 and 1966, Zhou Enlai visited Burma 9 times,
the President 2 times, the Vice Premier 16 times (Vice Premier and Foreign Minister
Chen Yi 13 times), Vice Chairman of the Standing Committee of the National Peoples
Congress twice. The Burmese Prime Minister and Vice Prime Minister visited China 9
times (including the Chairman of the Revolutionary Council), the Chief of General Staff
of the Tatmadaw 4 times. U Nu visited China 6 times (5 times as Prime Minister and one
time as the Chairman of AFPFL) and Ne Win 6 times.
49 Yao Jun, Aviation History of China, Zhengzhou: Elephant Press, 1998, p. 324.
50 Johnstone, Burmas Foreign Policy, p. 199.

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 Sino-Burmese Ties: The Cicatrized Sino-Burmese Relationship 19721988

of the Rangoon Corridor was to facilitate Chinese leaders additional arrivals

in Burma. For example, Burma invited Chinese leaders to drop in on Rangoon
when they visited other countries. The 1972 U.S.China rapprochement
caused great changes in Asian geopolitics. The U.S. stopped the encirclement of
China and in succession American Asian allies established relations with China.
Thus, the radical changes in the international situation and in Asian geopolitics
deprived the Rangoon route of any special significance for China.

The Loss of Buffer State Status

Before Beijing adopted its revolutionary foreign policy in the mid-1960s,
countering U.S. containment and establishing a buffer zone against the U.S.
was the core of Chinas policy goals for its periphery. China succeeded in
solving both the Burma border dispute, and the issue of the KMT troops in
Burma, and mitigated the overseas Chinese problem with Burma, and so both
maintained good ties before 1967. Burma, implementing its neutral and non-
alignment policy, became an important buffer state between China and the
West and the later the Soviet Union.
Although the Cold War still burned hotly across the world, Nixon reached
China and drank toasts with the Chinese leaders in February 1972. Soon
after, the United States dropped its opposition to Chinese entry into the
United Nations and the groundwork was laid for the eventual establishment
of diplomatic relations. This dramatic change not only enhanced Chinas
international and strategic status,51 but also had a ripple effect on Chinas
periphery. Over 19721975, one after another, Japan, Malaysia, the Philippines,
and Thailand established diplomatic relations with China.
Compared with the 1950s and 1960s, the security environment of Chinas
southern and eastern borders was greatly improved and Burmas strategic value
as a buffer state for China was thereby lessened. Although it was impossible
for China to ignore Burma in this period because of Soviet and Vietnamese
expansion in Indochina, the threat caused by this expansion was less serious
than that of the Western camp. Therefore, the strategic significance of Burma to
China was accordingly reduced with the changes in the international situation.

The Reorientation of Chinese Foreign Policy

During the Cold War, Burma could not occupy a central position in Chinese
diplomacy without two preconditions: (1) the confrontation between China
51 Chen Jian, Maos China and The Cold War, Chapel Hill and London: University of North
Carolina Press, 2001, p. 239.

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and the West, led by the United States, and the U.S.s policy of containment,
threatening Chinas security; (2) Burmas neutralist and non-alignment policy,
which had geopolitical significance for China. The first precondition disap-
peared after the normalization of SinoU.S. relations and the value of Burma
therefore declined.
Chinas adjusted foreign policy and the structure of its foreign relations
heavily influenced the decline in Burmese importance. Starting from the late
1960s and early 1970s, Beijing gradually changed its radical foreign policy and
returned to a realist policy, although China had not completely jettisoned its
belief in world revolution. The reorientation of Chinas foreign policy and
SinoU.S. rapprochement greatly decreased Beijings isolation. Between 1970
and 1972 alone, China renormalized or improved diplomatic relations with
Korea, Yugoslavia, Kenya, Tunisia, Burundi, Ceylon, and Ghana, and estab-
lished diplomatic relations with 23 countries. In 1975, China formally recog-
nized ASEAN as a regional organization and favored the ASEAN-proposed
establishment of the Zone of Peace, Freedom and Neutrality (ZOPFAN) in
Southeast Asia. China progressively disassociated itself from the communist-
led insurgencies in Southeast Asia because of a perceived need to secure
ASEAN support on the Indochina question, thus alleviating the suspicion
and apprehension of Southeast Asian countries caused by Chinese ties with
insurgent communist parties. Beijing hoped to reassure these countries that
China had no covert expansionist ambitions towards them and that its inten-
tions with respect to Kampuchea are similarly benign.52
After the third Plenary Session of the Eleventh Central Committee of the
CCP in 1978, China changed its perception that an imminent world war was
unavoidable, and began to take an optimistic view of the international situation.
Beijing defined peace and development as the two major themes of the
contemporary world, which were the foundation-stone for Chinas domestic
and foreign policies.53 China also abandoned the ideal of world revolution and
focused on economic modernization. Of major importance now are Chinas
economic needs and the political changes that will ensure order and security
in the world, overcome the backwardness of the country, and fulfill its plans for
modernization. The necessity to create favorable external conditions in order
to realize its program of economic growth made the Chinese leadership change

52 William R. Heaton, China and Southeast Asian Communist Movements: The Decline of
Dual Track Diplomacy, Asian Survey, Vol. 22, No. 8, August 1982, p. 781.
53 Lev Deliusin, The Influence of Chinas Domestic Policy on Its Foreign Policy, Proceed-
ings of the Academy of Political Science, Vol. 38, No. 2, 1991, pp. 5859.

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 Sino-Burmese Ties: The Cicatrized Sino-Burmese Relationship 19721988

its view of SovietAmerican relations.54 China abandoned its policy of an

international united front against the Soviets, framed in the 1970s, and pursued
non-alignment with all the great powers. The 12th CCP National Congress
attempted to outline a new policy agenda for the 1980s. In September 1982,
Deng Xiaoping proposed at the opening ceremony of the Congress that China
faced three major tasks in the 1980s: national reunification, anti-hegemonism,
and maintenance of world peace. Economic construction is at the core of
the three tasks as it is the basis for a solution of Chinas external and domestic
problems.55 This core task determined that Chinas foreign affairs centered
on raising foreign resources to suit the needs of modernization, and Chinas
diplomacy towards developed countries accepted that China hungered for
greater capital and advanced technologies. Isolated and economically backward
Burma, which had adopted a closed door policy, was not important to China.
In the 1980s, China increasingly de-ideologized its foreign policy. The
global situation was no longer depicted in black-and-white terms but was seen
as multicolored. By contrast, Burma was still pursuing a policy of autarky
economic isolation from the world. The catastrophic Burmese Way to Socialism
had turned Burma into one of the worlds most impoverished countries. The
1988 nation-wide uprising against the Ne Win regime, the military coup, and
the Chinese Tiananmen Square massacre in 1989 caused upheavals to domestic
politics and foreign relations in the two countries. Both also suffered attendant
international sanctions. These important events lifted the curtain on new
ChinaMyanmar relations in the post-Cold War.

54 Ibid., pp. 5859.

55 Selected Works of Deng Xiaoping, Vol. III, Beijing: Peoples Press, 1993, p. 3.

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 Part II: The Challenges of ChinaMyanmar
Relations in the Post-Cold War Era

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 Prelude

T he confluence of a series of closely timed, if not related, events

prompt consideration of the changes in Sino-Burmese relations
beginning approximately in 1988. These events were both interna-
tional and internal to Myanmar.
Internal to Burma, a variety of factors strongly influenced, both directly
and indirectly, Sino-Burmese relations from that period. These included: the
incredibly obtuse Burmese complete demonetization of 7 September 1987
of two-thirds of the currency (kyat) in circulation, ending whatever residual
confidence existed in the kyat and in the governance of the Burma Socialist
Programme Party, with the resultant deluge of Chinese imports; the end of
socialism and the official but ineffectual encouragement of the private sector
and Chinese investment; the failed peoples revolution against the BSPP
government; the military coup of 18 September 1988; the opening to foreign
investment; extensive gas exploration and exploitation; the unrecognized
elections of 1990; cease-fires with some 17 minority insurgencies, some along
the Chinese frontier; and all finally followed by the internal collapse of the
Burma Communist Party (BCP) in 1989.
Internationally, new factors affected bilateral ties as well. These were the end
of the Cold War; Tiananmen; Indias policy shift in light of extensive Chinese
penetration of Myanmar; and later Myanmars joining of ASEAN in July 1997.
Chinese influence increased because of expanding Chinese strategic concerns
(both in Beijing and in Yunnan Province), and because of non-traditional
security issues (narcotics, health, etc.), especially Chinas vastly expanding
reliance on imported energy and minerals for its continued economic growth
and employment the latter a critical political issue.
The formation of SLORC/SPDC military rule since 18 September 1988,
continued the domination of the state by the Burma armed forces (the
Tatmadaw), a pattern of direct rule by edict that has ended following the elec-
tions for a new government on 7 November 2010 based on a constitution that
was approved by a clearly manipulated referendum in May 2008. Under the

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Plate 9: Than Shwe, chairman of the State Peace and Development Council (SPDC), 19922011
(photograph from 2010, courtesy Government of Thailand). Than Shwe built a military career
during the rule of Ne Win but only really came to prominence after the events of 1988.

new government that emerged from the elections in the spring of 2011, the
military will, however, continue its hold on to essential power and governance
under that constitution. The role of Senior General Than Shwe, former head of
state, remains ambiguous; how much he will continue to influence Myanmar
events and if so, of what nature and to what degree, remains unclear. He holds
no constitutional office.
If Sino-Burmese relations in the period from independence to 1988 were
characterized as essentially determined by internal Chinese policy shifts that
were expressed in international affairs and to which the Burmese responded,
the era in Sino-Burmese relations since 1988 has been driven by Chinese
requirements at national and local levels for strategic and economic access
to Myanmar and its resources to help fuel Chinas growth; and by internal
Burmese needs for both economic support and a strategic partner against what
the Burmese junta perceived as external threats, especially from the United
States and through its ally, Thailand.
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 Prelude

The relationship has been expressed largely through economic and military
associations, and thus Part II of this volume focuses on the economic relations
that have, and will continue to have, strategic impacts. The Burmese govern-
ment was on the cusp of change in 2011, and it is the thesis of this volume
that this new era, essentially because of the growing need for close cooperation
between Myanmar and China, will result in a mutuality of a series of depend-
encies at various levels that may change bilateral relations for the foreseeable
future. This evolution will have a profound effect on other state and regional
actors, including India, ASEAN and its component states, the United States,
the European Union, and Japan. This evolving, dynamic bilateral relationship
is little understood outside the region and needs explication.
The growing concerns about and even antipathy toward Myanmar first by
the Western states, and later by some of the ASEAN countries, was a result of a
series of military actions and policies that have defied established international
norms. They have resulted in a country with growing economic capacity if
not competence, and in spite of considerable present and future resources a
seeming unwillingness, at least until the spring of 2011, to improve the lot of its
diverse populations.1
To the West, these deficiencies have prompted both disapproval and a
refusal to provide a mantle of international legitimacy to the junta, and to the
government that has followed. The SLORC/SPDC junta, however, has in its
view vastly increased infrastructure throughout the country and negotiated a
series of fragile cease-fires that, if they did not resolve the continuing problems
of the multi-cultural state, at least stopped most of the killings in the seeming
myriad of insurrections since independence that have cost about a million
lives, according to General Saw Maung, former head of state (19881992).
The junta has increased the foreign exchange reserves from some US$30
million to about US$5 billion (with much more to come when the Chinese
pipelines are operational), and built a new capital at Naypyitaw. The lot of
the people, however, has languished, with the lowest per capita income in the
region (some US$350450 in 2010).
The Western regard of Myanmar as a pariah state is based on a persistent
pattern of human rights violations that indicate that the junta has had as little
regard for international opinion as it has for the well-being of its peoples. This
pattern has been continuous until the formation of the new administration in

1 In his inaugural speech, President Thein Sein on 31 March 2011 indicated that the gov-
ernment planned to take measures to improve health, education, and other diverse social
needs.

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 Modern ChinaMyanmar Relations

2011, and expressed through a series of actions that have prompted international
concern. First, the violent suppression of the peoples revolution in 1988,
followed by the brutal repression of opposition to the coup within the country
(estimates are that some 6,000 people were killed in both events); the failure
of the Burmese government to recognize the results of the May 1990 elections,
which it had sponsored and then ignored; and the house arrest and ill treatment
of the Nobel Laureate Aung San Suu Kyi, who has become a personalized avatar
of democracy to much of the Western world. The outrage of the May 2003
Depayin incident in central Myanmar, in which a large number of opposition
supporters were killed and Aung San Suu Kyi roughed up exacerbated this
antipathy. This concern was increased by the brutality of the repression of the
monks demonstrations in what has been called the Saffron Revolution in
the fall of 2007, and the slowness of the juntas response to disastrous cyclone
Nargis in May 2008 (especially as contrasted with the rapid response of the
Chinese leadership to the Sichuan earthquake of the same month). The
decision to go on with the constitutional referendum in spite of the resulting
chaos contributed to the perception of malaise in Burmese governance. Quiet
Chinese suggestions for reform in Myanmar indicate Chinese concerns over
future stability in that state stability that is tied to Chinese interests.
The international impressions of Myanmar are exemplified by the listing
of Myanmar (Burma in the documents) on the failed state index.2 Of the 177
countries listed, Myanmar rates 16th from the bottom. Somalia is the most
failed state, followed by Chad and the Sudan. Myanmar is listed as slightly
better than Yemen and worse than Ethiopia. The rating is based on 12 social,
economic, political, and military indicators, but the primary criteria are
loss of physical control or a monopoly on the legitimate use of force, and
the erosion of legitimate authority. Although the social indicators measuring
the well-being of the Burmese population by all international institutions
and standards are exceedingly low, the degree of control by the Tatmadaw in
that society is very high. International legitimacy in the West is low, but this
attitude is not necessarily reflected in many other, non-Western states. The
used of the term failed state, or others pariah, rogue, and other pejorative
terms simply reinforces policy predilections and exacerbates the differences
between the West (especially the U.S.) and China, India, and other states, and
negatively affects efforts to initiate policies that might improve the lives of the
diverse populations of that country.
2 The Fund for Peace, and Foreign Policy. The calculations are from 2008. Others listed as
worse than Myanmar were Pakistan, Iraq, and Afghanistan.

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 Prelude

The strained relations with the United States have been exacerbated by
U.S. calls for regime change in Myanmar/Burma, and sanctions that have been
serially imposed, and to which the E.U. has responded with their own, although
less onerous, system of sanctions as well.3 The purpose of such sanctions was
regime change and recognition of the legitimacy of the political opposition
after the 1990 elections. This was an unattainable expectation. The unrealistic
but nevertheless existential fears of the Tatmadaw of a U.S. invasion, as well as
the militarys own conceptual role as the savior of Myanmars national unity
and as a unique social force, has resulted in a massive build up of the military
from some 198,000 in 1988 to approximately 406,000 in 2010 (although the
latter figures are imprecise the target was said to be 500,000).4 To this end,
Chinese support for the military since 1988 is estimated at some US$3.0 billion
(but supporting data are lacking). To this must be added extensive Chinese
economic assistance and most prominently, investment in infrastructure that
will change the nature of the Sino-Burmese relationship. The increases in
Chinese trade, investment, and illegal immigration all continue to dominate
the Burmese scene, prompting criticisms from the West that these activities
undercut the effectiveness of the sanctions policies.
Myanmar is one of several countries in which Chinese and U.S. interests
are in opposition. Burmese concerns, as reflected in Tatmadaw policies, may
have prompted the close ties with China as a means of political and strategic
security against what many in the Naypyitaw leadership regard as potential
U.S. threats. Although often portrayed in the West as a means for lucrative rent-
seeking and corruption, it may be more a matter of security needs (however
unrealistic) as interpreted by the leadership. Chinese strategic and security
interests, especially the provision of much-needed energy and access to the
Bay of Bengal, have prompted Chinese support for the military government.
Such support is both positive from a Chinese viewpoint and thus far has
denied other states having as considerable an influence as China. Potential
Chinese rivalries with India also result in calculations by both governments of
supportive policies for Myanmar, which has become a nexus of Sino-Indian
relationships. These policies affect the ASEAN states, ASEAN as an institution,
the United Nations, and Japan as well.

3 The E.U. modestly modified its sanction regimen in April 2011, allowing more travel by
Burmese officials.
4 National Bureau for Asian Research, Asias Rising Power. Strategic Asia 20102011, Execu-
tive Brief, p. 48. Vietnam has 455,000 troops, and Thailand 306,000.

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Beyond statistics and agreements, however, are the attitudes of the military
leadership that affect Myanmars relations with the external world. Although
much of what emanates from Yangon or Naypyitaw may be considered either
diplomatic niceties or propagandistic cant, it would be a grievous policy error
to ignore the core set of beliefs that influence Myanmars external relations,
even with a close ally like China, and even if those beliefs may not be grounded
in reality as seen from afar.
Myanmars leadership has exhibited very strong nationalistic sentiments
that should not be discounted. They view their role as maintaining the
sovereignty and national unity of the state, and believe that civilian politicians
and minority groups are bent to subvert those goals. This is not simply whimsy.
It affects their calculations of how power should be distributed in their society,
and the unique role that the Tatmadaw believe they have had, and will continue
to have, in safeguarding the Union. The motto above the portals of the Defense
Services Academy is The Triumphant Elite of the Future. This may well
portray the role the Tatmadaw has envisioned for itself. Although international
relations have now changed, the previous, demonstrated experience since
independence has been that all Burma/Myanmars neighbors, together with
the U.K. and the U.S., have supported insurrections or dissidents, and that
both Muslims and Christians have had international associations that are seen
to subvert state-sponsored goals. This history is not forgotten. It increases the
sense of nationalistic fervor and vulnerability, prompting over-reactions to purported
threats, insults, or demands. These attitudes are unlikely to materially shift
over the near term, and thus will influence the relationship with China and the
role of the Chinese within Myanmar.
In some sense, issues of the internal and external legitimacy of the new
government that came into power at the start of the Burmese fiscal year (April
1) in 2011 have been exacerbated. Western states denounce the constitution as
undemocratic, the May 2008 referendum on it as both importune and rigged,
the November 2010 national elections as deeply flawed, and the resultant
government as essentially a continuation of military rule through other means.
Conversely, the government claims that its road-map to discipline-flourishing
democracy has been achieved with a multi-party political system operating
even at local levels for the first time in Burmese history. China has praised this
progress as ardently as other states have opposed it.
Reforms have been promised. In the most remarkable public speech by an
official in a half-century, President Thein Sein has called for widespread social
changes, an end to corruption, economic reforms, better minority relations,

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 an attack on widespread poverty, and even in a later edict the return of those
self-exiled motivated by political or economic causes. In a stunning statement,
with important but as yet unclear implications, he has also bowed to popular
opinion, as he himself has stated, and called for the suspension during his
tenure of office (until 2015) of Chinese construction of the both physically
massive and unpopular Myitsone Dam on the Irrawaddy River. This could
have important effects on SinoMyanmar relations. These calls for widespread
reforms are still fragile, with significant, high-level elements of the Tatmadaw
opposed to them. One issue for foreign actors is whether to call for increased
pressure on the government through additional sanctions and/or a U.N. Com
mission of Inquiry into human rights abuses, perhaps strengthening those
opposed to positive change, or support to the planned changes. Too strong
a position on support or rejection of either wing could negatively affect the
well-being of the Burmese peoples.
As this volume will demonstrate, the latest era in Sino-Burmese relations,
reflecting not only the closeness of the ties but also the changing nature of the
relationship, creates a set of dilemmas for both states and for other interested
state and institutional actors. These issues have received less consideration
than they have deserved for effective policy formulation. Part II of this volume
and the sections that follow are essentially dedicated to examining the changes
in economic, strategic and security ties.

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 7
ChinaMyanmar Strategic and Security
Relations

B urma/Myanmar remains the site where the dominant cultures of

South, Southeast, and East Asia meet and compete for influence.
At critical times, Burma has been a cockpit for rivalry between
the colonial powers in the 19th century. In the 20th century, the superpowers
contested there for influence. In the fluid strategic environment of the early 21st
century with the rise of China and India, together with the re-engagement of
the U.S. in the region, its important position is once again attracting attention
from analysts and officials.1
What have been and are the strategic and security implications of Burma/
Myanmar for China? The answers vary by era and environment. The histories
of World War II and the Cold War in East and Southeast Asia have shown
that Burma played a significant role in Chinas pursuit of national security.
If the strategic importance of Myanmar to China diminished as Chinese
international relations normalized, as the Cold War ended, and as Burma was
no longer the physical avenue to the region beyond, it began to have a new
and enhanced relevance to Beijing, and especially to Yunnan Province. This
new emphasis was based on non-traditional strategic interests as well as longer-
range traditional concerns over Chinas regional potential.
These new concerns related to two types of potential strategic blockages:
blockages that could interfere with Chinese economic development planning
and its expansion of trade and exports, both of which were dependent on
greater access to energy. Important as well was the potential of physical block-
ages (transport, access, etc.) to the import of such energy resources. Chinas
enhanced world economic role and internal stability (and thus employment at
home for a more mobile and vast un- and under-employed labor force) height-

1 Andrew Selth, Burma: A Strategic Perspective, Asia Foundation Working Paper #13,
May 2001, p. 5.

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ened demands for alternative energy sources that had to be imported and in
which Myanmar could play a significant role.
These strategic issues (some of which are also discussed in Chapter 10) relate
as well to the provision of military support to the vastly expanded Tatmadaw,
which during this period doubled in size; Chinese assistance greatly increased
the sophistication and amount of its weaponry, as well as its logistical capacity.

Energy Issues: Gas, Oil, and Hydroelectric Power

Chinas Energy Security and Myanmar
Energy security, according to the International Energy Agency, can be de-
scribed as uninterrupted physical availability at a price which is affordable,
while respecting environment concerns. It consists of two aspects: Long-
term energy security is mainly linked to timely investments to supply energy
in line with economic developments and environmental needs. Short-term
energy security, on the other hand, is the ability of the energy system to react
promptly to sudden changes in supply and demand.2 Chinas energy security
problem includes these two aspects.
China now continuously relies heavily on imported energy to satisfy the
increasing demand of its rapid, sustained economic growth. From a largely
self-sufficient energy economy as China began its rush to industrialize, it
has become the worlds second-largest and fastest growing energy consumer.
Chinas energy imports have risen sharply, raising internal concerns about
its energy security, particularly its oil supply. In 1993, China became a net
importer of oil. According to International Energy Agency estimates, Chinas
oil consumption will increase from 6.7 mb/d (million barrels a day) in 2005,
to 11.1 mb/d in 2015, and 16.5 mb/d in 2030-an average growth of 3.7 percent
per year. The countrys oil-import dependence will increase sharply, with
imports growing from 3.1 mb/d in 2005 to 13.1 mb/d in 2030. It will import as
much as all 27 E.U. member states combined in 2030.3 Oil security has become
the core issue of energy security in China, and one of the critical aspects of
national security.
It was these threats that pushed Chinese leaders and the government to
change their concepts of security. On 5 March 2001, at the 4th Session of
the 9th National Peoples Congress (NPC), Premier Zhu Rongji elucidated,

2 Energy Security, www.iea.org/subjectqueries/keyresult.asp?KEYWORD_ID=4103.

3 World Energy Outlook 2007: China and India Insights, International Energy Agency, p.
288.

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 Modern ChinaMyanmar Relations

The energy issue, particularly the oil issue, is an important issue of resources
strategy. Domestic oil exploration and production cant meet the needs of
economic and social development. The contradiction between supply and
demand of energy increasingly sharpens. We must leave no stone unturned to
economize and alternate [other fuels with] oil, quicken the exploration and
production of oil and gas, make full use of overseas resources, and build oil and
other strategic resources stocks as soon as possible.4
In November 2003, at Chinas Central Economic Work Conference, President
Hu Jintao put forward the concept of finance and oil security for the first time, and
the necessity of establishing a new oil development strategy. In December 2005,
Vice-Premier Zeng Peiyan reported on the current Chinese energy situation and
energy security issues at the 19th Session of the 10th NPC Standing Committee,
and while outlining Chinese security needs, noted: Now and henceforth, Chinas
energy security is facing and will face a very complicated environment.5
Chinas oil security must now address these challenges: the sources of oil
imports are concentrated; the pattern of oil imports is unilateral; and a market
oil trading system has not been established.6 Chinese analysts consider oil price
volatility and physical supply disruptions, particularly a deliberate interruption
by the United States, to be the main threats to energy security.7In order to
ensure energy security, Beijing has adopted policies to meet current and future
challenges. Chinas Medium and Long Term Energy Development Plan Outline
20042020, which was approved at an executive meeting of the State Council
in 2005, exhorts: Take full advantage of domestic and overseas resources and
markets ... Take an active part in the exploration and development of world
energy and resources ... Diversify the sources of energy imports.8

4 Zhu Rongji, Report on the Outline of The Tenth Five-Year Plan for National Economic
and Social Development: Delivered at The Fourth Session of The Ninth National Peoples
Congress on 5 March 2001, Peoples Daily, 17 March 2001.
5 The Current Situations of Energy and Energy Security Issues in China Report by Vice
Premier Zeng Peiyan at the 19th Session of the 10th NPC Standing Committee, China
Petroleum and Chemical Standard and Quality, No. 4, 2006.
6 Wang Guiying, Chinas Oil Environment and Oil Security Strategy, China University of
International Business and Economics, Ph.D. thesis, 2003, pp. 4954.
7 Erica S. Downs, The Chinese Energy Security Debate, The China Quarterly, No. 177,
March 2004, p. 31.
8 The executive meeting of the State Council approves China Medium and Long Term
Energy Development Plan Draft, news.xinhuanet.com/zhengfu/200407/01/content_
1559228.htm.

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 ChinaMyanmar Strategic and Security Relations

China indicated that it was necessary to expand cooperation on oil and

gas exploration abroad to solve Chinas energy problem.9 On 27 January 2010,
Chinas State Council announced the establishment of a National Energy
Commission. Premier Wen Jiabao and Vice Premier Li Keqiang lead it as
Chairman and Deputy Chairman, respectively. The Commission is tasked to
devise Chinas energy development strategy, review issues of energy security
and development, and coordinate domestic energy exploration and interna-
tional energy cooperation.10 The establishment of such a super-ministry reflects
the Chinese leaderships strong concern for energy efficiency, energy security,
and environmental protection.11
In response to growing concerns about energy security with particular
emphasis on oil security, Beijing has initiated some key measures including the
construction of a strategic petroleum reserve system, investment in overseas
oil fields, the construction of transnational pipelines, and oil diplomacy.12
Beijing is engaged in active world energy diplomacy. All Beijings diplomatic
activities are aimed at mitigating the adverse effects of the increase in oil-
import dependence, diversifying the sources and routes of imported oil, and
preparing for supply disruptions.

Chinese Enterprises in the Myanmar Oil and Gas Sector

In recent years, Myanmar has been included in the worldwide energy map that
China has drawn. In 2004, 2005, and 2007, the Chinese Ministry of Commerce
and Ministry of Foreign Affairs promulgated the Countries and Industries
for Overseas Investment Guidance Catalogue I, II, III, respectively. The
Catalogue is a major reference for departments in charge of foreign economic
cooperation at all levels; it offers guidance for and verification of overseas
investment by Chinese enterprises.13 Myanmar was on the first reference list

9 The Eleventh Five-Year Plan for National Economic and Social Development of The Peoples
Republic of China, Beijing: People Press, 2006, p. 146.
10 Out of 27 Ministers, 12 are included in the newly established National Energy Commis-
sion. Most notably, the Ministers of Foreign Affairs, State Security, Finance, Environmen-
tal Protection, Commerce, Land and Resources, and Water Resources are among its 21
members.
11 Bo Zhiyue, Chinas New National Energy Commission: Policy Implications, EAI Back-
ground Brief No. 504, 5 February 2010.
12 Downs, The Chinese Energy Security Debate, p. 32.
13 Any enterprises complying with the Catalogue and verified to hold the overseas invest-
ment approval certificate shall have the priority right to enjoy state preferential policies
in such areas as funds, foreign exchange, tax collection, customs, and exit and entry (Item
Three).

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 Modern ChinaMyanmar Relations

Map 6: Oil and natural gas projects in Myanmar with Chinese involvement completed, current
and planned (based on a map in Earthrights International, China in Burma: The Increasing
Investment of Chinese Multinational Corporations in Burmas Hydropower, Oil and Natural Gas, and
Mining Sectors, 2008, by permission)

released in 2004. Chinese enterprise was encouraged to invest in areas of oil,

gas, forestry, agricultural machinery manufacturing, and construction.
Myanmar is rich in oil and has Southeast Asias largest, and the worlds
tenth largest, natural gas reserves. According to official estimates, Myanmar
has oil reserves of 3.2 billion barrels, total estimated gas reserves of 2.54 trillion
cubic meters, and proven reserves of 0.51 trillion cubic meters.14 The gas and
oil sectors have attracted the most FDI since Myanmar passed its foreign
investment legislation in 1988. Myanmar authorities intensified the opening
of off-shore and on-shore blocks to foreign companies since the end of 2004.15
14 An Indian company is exploring an onshore gas block in Myanmar, mandalay.mofcom.
gov.cn/aarticle/jmxw/200802/20080205405219.html.
15 The first onshore oil exploration contracts since independence were issued shortly after
the 1988 coup to ten foreign firms.

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 ChinaMyanmar Strategic and Security Relations

Up to the end of 2007, there were US$3.24 billion FDI in the Myanmar oil
and gas sector. Naypyitaw has deals with a total of thirteen countries oil firms,
including Russia, China, India, South Korea, France, and the U.S.
In 2001, Chinese enterprises began to be involved in Myanmar oil and
gas explorations. Since 2005, cooperation in the oil and gas sectors between
the two countries has increasingly expanded. In September 2004, the China
Petroleum & Chemical Corporation (SINOPEC), the DianQianGui Petrol
eum Exploration Bureau of China, and the Myanmar Oil & Gas Enterprise
(MOGE) reached a production-sharing contract on cooperation in petroleum
exploration. Under this contract, petroleum exploration was carried out at Block
D, an onshore block in Myanmars western Rakhine state. Both sides invested
US$30 million for exploration. If the Block D had rich gas and oil reserves,
the contract would extend the performance time. Then, Block D would be
developed as an oil field with oil output of 1 million tons per year.
One month later, a consortium led by China National Offshore Oil Corpor M
ations (CNOOC) Myanmar unit, China Huanqiu Contracting and Engineering
Corp., and Golden Aaron Pte. Ltd. of Singapore signed a production-sharing
contract with Myanmar at onshore Block M (Rakhine State) covering a total area
of 3007 square miles. On 14 December 2004, the consortium agreed on two
production-sharing contracts at offshore Block A-4 (offshore Rakhine State)
and Block M-10 (offshore Mottama), with areas of 2,889 square miles and 5,320
square miles respectively. On 25 January 2005, the same consortium signed three
deals at onshore Block C-1 (IndawYenan area), Block C-2 (ShweboMonywa
area), and offshore Block M-2 (offshore Mottama, see Map 6).
Within three months, from October 2004 to January 2005, the consortium
led by CNOOCs Myanmar unit entered into production-sharing contracts
three times. The six onshore and offshore Blocks cover a total area of over
80,000 square kilometers and their overall exploitation area has surpassed that
of the Bohai Sea oil field. The Chinese had built its presence in Myanmars oil
and gas sector.
On 15 January 2007, the China National Petroleum Corporation (CNPC)
and the MOGE made three production-sharing contracts. Under the contracts,
oil and gas exploration will be carried out at blocks AD-1, AD-6, and AD-8,
which cover a total area of 10,000 square-kilometers off the Rakhine coast (see
Map 6).16 Two months later, Myanmar decided to sell the gas from A-1 and
A-3 blocks to China through a pipeline. The A-1 and A-3 fields off the Rakhine
16 CNPC got three contracts of offshore gas exploration in Myanmar, Shanghai Securities,
18 January 2007.

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 Modern ChinaMyanmar Relations

coast have proven reserves of 5.7 trillion to 10 trillion cubic feet with up to 8.6
tcf of that volume being recoverable.
On 20 June 2008, CNPC, South Koreas Daewoo International, and the
Myanmar government signed a memorandum on the sale and transport of
natural gas from the A1 and A3 fields. This signified that ChinaMyanmar
cooperation in oil and gas sector had deepened and expanded.
All three major Chinese oil corporations CNPC, SINOPEC, and CNOOC
have gained footholds in Myanmar. In addition, massive Chinese investment
in Myanmar oil and gas fields has led other Chinese enterprises to Myanmar.
They are involved in geological prospecting, petroleum machinery and
spare parts, and oil and gas drilling. Generally, when those major Chinese oil
firms have contracts with Myanmar, they subcontract some projects to other
Chinese companies for technical services, test drilling, equipment supply, and
so on. Thus, Chinese expansion in energy is not only in direct production, but
also in peripheral industries.

Sino-Myanmar Oil and Gas Pipelines

In addition to undiversified energy supply sources, Chinese energy security
is also facing a transportation challenge. China imports most of its oil by
marine shipping, except a minor portion by railway from Russia. Chinese
energy transportation security has two facets: transportation capabilities and
transportation routes. China does not have enough sea-going oil tankers, so it
is heavily dependent on foreign oil tankers.17 Four-fifths of Chinese imported
oil must traverse the Straits of Malacca, as does 45 percent of the worlds oil
supplies. The PLA does not possess the military capability to secure this sea-
lane of communication, through which the majority of its oil imports transits,
and must rely on the United States to guarantee safe passage. Consequently,
Beijing worries that the Straits of Malacca might be closed either by a terrorist
attack or a blockade caused by a crisis over Taiwan between China and the U.S.
This has become known as Chinas Malacca dilemma.
As a heavy user of the Malacca Straits, China has a vested interest in the
elimination of transnational threats in the sea lane. Yet Beijing remains uneasy
at the prospect of a greater role for external powers in securing the straits.
Chinese security analysts have accused the U.S. and Japan of using the threat of

17 About the tanker factor in Chinas energy security, see Andrew Erickson and Gabe Collins,
Beijings Energy Security Strategy: The Significance of a Chinese State-Owned Tanker
Fleet, Orbis, Fall 2007, pp. 665684.

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 ChinaMyanmar Strategic and Security Relations

terrorism as a pretext to expand their naval presence in and around the straits.18
On 29 November 2003, at Chinas Central Economic Work Conference,
President Hu Jintao pointed out that some powers always had a finger in the
pie and controlled the Straits of Malacca marine lane; therefore, China had
to formulate a new strategy for oil energy, and take active measures to secure
national energy security. Besides increasing production opportunities, a second
aspect of Chinas energy strategy involves ensuring reliable delivery networks,
reducing its over-dependence on energy transportation through the Straits of
Malacca, and escaping the Western-controlled energy marine lanes by building
ports and pipelines.
In recent years, China has designed some alternative routes for Chinas
crude imports: the ChinaRussia oil pipeline, the ChinaKazakhstan oil
pipeline, the ChinaRussia gas pipeline, the ChinaTurkmenistan gas pipeline,
the ChinaMyanmar oil and gas pipeline, and the ChinaPakistan gas pipeline.
All these designed pipelines, except the ChinaKazakhstan oil pipeline, are
not yet operational. China expects that such initiatives will reduce Chinas
vulnerability to American dominance of the sea lanes, to its strong Middle
East connections, and to the security risks associated with long supply lines
by tanker from the Persian Gulf via the Straits of Malacca. Compared to risks
along this sea lane, pipelines from neighboring countries seem favorable for
Chinas energy security. Myanmar is located in a unique position since it can
provide natural gas directly to southern China by pipeline.19
Over ten years ago, the Chinese Academy of Social Sciences proposed an
initiative to build a SinoMyanmar oil pipeline, but it was not adopted at the
time. In 2001, President Jiang Zemin visited Myanmar during which, according
to Jiangs suggestions, both sides agreed to make agriculture, human resources,
natural resources tapping, and infrastructure construction the key fields
of bilateral cooperation.20 Thus, when Beijing and Yangon signed the Joint
Statement of the Peoples Republic of China and the Union of Myanmar on
the Framework of Future Bilateral Relations and Cooperation in Beijing on 6
June 2000 (See Appendix I), the joint statement did not mention cooperation
between the two countries in the energy sector. After Jiangs trip to Myanmar,
however, both sides began to discuss the oil and gas pipeline project.

18 Ian Storey, Chinas Malacca Dilemma, China Brief, Vol. 6, Issue 8, 12 April 2006.
19 Nobuyuki Higashi, Natural Gas in China Market Evolution and Strategy, International
Energy Agency Working Paper, June 2009, p. 34.
20 Ma Xiaoning, President Jiang Held Talk with Senior General Than Shwe, Peoples Daily,
13 December 2001.

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 Modern ChinaMyanmar Relations

In August 2004, several scholars of Yunnan University made a proposal to

the government, Suggestions on Building Oil Pipeline from Sittwe to Kunming.
The oil for the pipeline would be mainly imported from the Middle East
and Africa. In the same year, the Yunnan Government submitted a report to
the State Council suggesting building SinoMyanmar oil and gas pipelines.
Beijing, however, did not appraise the proposed project and did not reply.
In 2006, however, the Sino-Burmese oil pipeline initiative was finally consid-
ered by Beijing policymakers. In the Overview of Chinas Petroleum Industry
in 2005 publicized by the National Development and Reform Commission
(NDRC) in February 2006, it stated for the first time that China should expand
transportation capabilities ... four major imported oil transportation passages,
namely the SinoKazakhstan and SinoRussia crude oil import land corridors,
and the Strait of Malacca and SinoMyanmar oil import marine lanes.21
In March 2006, Yunnan Delegations Suggestion on Building a Sino-
Myanmar Oil Pipeline and Constructing an Oil Refining Industry Base in
Yunnan, report was issued.22 It suggested that all crude oil imported through
the SinoMyanmar oil pipeline phase 1 project be refined in Yunnan, that
Yunnan be developed as a new national oil refining base, and that Yunnans pro-
posal be put into the National Eleventh Five-Year Plan as well as in the National
Medium and Long Term Energy Development Plan. Also, Yunnan elucidated,
At the present time, it is the most favorable opportunity to decide to build the
SinoMyanmar oil pipeline, so we request that the NDRC approve and initiate
the pipeline project, decide the constructions owner as soon as possible, and
push this strategic and important project by building early in order to safe-
guard national oil transportation security.23 Beijing and Naypyitaw reached
an agreement over the cooperation in the SinoMyanmar oil & gas pipeline
project on 29 October 2006.
A Daewoo-led consortium signed a memorandum of understanding with
CNPC about the sale and transportation of natural gas from A-1 and A-3
Blocks off Myanmar on 20 June 2008. In the meantime, six Myanmar, Chinese,
South Korean, and Indian companies signed an agreement on the pipeline

21 NDRC publicized Overview of Chinas Petroleum Industry in 2005, www.oilnews.com.

cn/gb/misc/200602/14/content_654325.htm.
22 Signed jointly by 91 Yunnan delegates who attended the National Peoples Congress
(NPC) and the National Committee of the Chinese Peoples Political Consultative Con-
ference (CPPCC); was submitted to the Beijing leadership.
23 Yunnan tries to engage in Sino-Myanmar Oil Pipeline, Wenhui Daily (Hong Kong), 19
March 2006 or The point of fall of Sino-Myanmar Oil Pipeline Challenges Yunnan, Yun-
nan Economic Daily, 12 July 2007.

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 ChinaMyanmar Strategic and Security Relations

Map 7: MyanmarChina oil and gas pipelines (based on a map by Wang Di and augmented with
details from an unpublished map courtesy Earthrights International)

feasibility study. China plans to build a gas reserve base and a wharf for oil
tankers on an island near Kyaukpyu in Rakhine State. CNPC will provide
50.9 percent investment for pipeline construction and enterprise operations
in Myanmar. The oil pipeline and gas pipeline will cost US$1.5 billion and
US$1.04935 billion, respectively, and will reach Kunming via Mandalay and
Muse.24 A major road will be built along the pipelines by the Chinese on the M
basis of a BOT (BuildOperateTransfer) arrangement.
China and Myanmar signed an agreement for the joint construction of
crude oil and gas pipelines on 26 March 2009. The agreement came during the
visit of Li Changchun, a member of the Standing Committee of the Political
Bureau of the CCP Central Committee. During Maung Ayes visit to China on
16 June 2009, a MoU relating to the development, operation, and management
of the MyanmarChina crude oil pipeline project was signed by The CNPC
and Myanmars Ministry of Energy in Beijing. According to the agreement,
the pipeline is designed for an annual capacity of 22 million tons, or 442,000
24 Mikawa Masahisa, China got approval for its bid to operate Myanmar oil pipeline, Japan
Economy News, 18 November 2008.

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 Modern ChinaMyanmar Relations

barrels. CNPC will be responsible for the line design, construction, operation,
and management. The project includes a large-scale crude oil unloading port
and a terminal at Maday Island not far from Sittwe in western Myanmar, as well
as nearby oil storage and transportation facilities in addition to the pipeline.25
On 31 October 2009, CNPC began constructing a port at Maday island as part
of the MyanmarChina crude pipeline project. On 20 December 2009, CNPC
signed an agreement with Myanmars Energy Ministry to receive exclusive
rights to build and operate the pipeline. The deal has granted the operating
concession of the pipeline to the CNPC-controlled South-East Asia Crude
Oil Pipeline Ltd. The pipeline company will also enjoy tax concessions and
customs clearance rights. The agreement stipulates that Myanmar government
will guarantee the companys ownership and exclusive operating rights, as well
as the safety of the pipeline.26
Premier Wen Jiabo visited Myanmar over 23 June 2010, to participate in
celebrations to mark the 60th anniversary of the establishment of diplomatic
relations between the two countries. During the two-day visit, the two Premiers
formally launched the construction of the MyanmarChina oil and gas pipeline
project. Chinas official Peoples Daily on 5 June reported that There are 793
kilometers of gas pipeline in Myanmar, and also a 771-kilometer-long crude
oil pipeline. An oil port in Kyaukpyu as a facility is to be built for the planned
ChinaMyanmar oil pipeline project (see Map 7).
Throughout the stages of proposing, programming, canvassing and first-
phase preparations for the oil pipeline, Yunnan province (from scholars to
government) played a crucial role. Yunnan is the most important and staunchest
supporter of, and lobbyist for, the oil pipeline. Before the oil pipeline was
decided, the Yunnan government had made many preliminary preparations on
related infrastructure. The SinoMyanmar oil and gas pipeline and refinery
was taken from one of the twenty 2007 and 2008 Yunnan key construction
projects to be promoted and developed. In response to the key project, the
Yunnan government established a functional office dealing with the project.27
At the end of 2009, an oil depot began to be built in Kunming with stor-
age capacity of 85,000 cubic meters in the first phase and 150,000 cubic
meters in the second phase; this is a supporting project of the SinoMyanmar

25 MoU of ChinaMyanmar Oil Pipeline Signed, China Petroleum Daily, 19 June 2009.
26 An Agreement of Concession and Duty of ChinaMyanmar Oil Pipeline Signed, China
Petroleum Daily, 21 December 2009.
27 Wang Yonggang and Xu Xiaomei, The Executive Meeting of Yunnan Province Govern-
ment decided to establish Key Construction Project Responsibility System in Yunnan,
Yunnan Daily, 2 June 2007.

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 ChinaMyanmar Strategic and Security Relations

oil pipeline and the Kunming oil refinery. The ChinaMyanmar oil and gas
pipeline will bring Yunnan about RMB80 billion in investment. In addition,
Chongqing city and Guizhou and Guangxi provinces finally get a slice of the
action. The oil pipeline will extend to Chongqing via Guiyang and the termi-
nal of the gas pipeline will not be at Kunming, as originally designated, but at
Nanning in Guangxi province (see Map 7). The trunk oil and gas pipelines in
Chinas territory stretches 1,631 kilometers and 1,727 kilometers, respectively.
The construction of pipelines in Chinas section began in September 2010 and
it is estimated that they will be put into use in 2013.28

The Implications and Significance of ChinaMyanmar Energy Cooperation: The

Political Dimension
Myanmar is one of the various baskets into which Beijing places its energy
security eggs. Importing oil and gas from Myanmar and building the oil and
gas pipelines between the two countries is only one part of Beijings energy
security strategy designed to minimize its oil supply vulnerability. Given Sino
Myanmar close ties, Western powers will have little possibility of control,
especially in an international or regional conflict involving China. Myanmar,
however, will not replace the important position of the Middle East in Chinese
energy security. On the other hand, the imported gas and the gas pipeline will
ease the negotiations about importing gas between China and Russia.
Although the SinoMyanmar oil and gas pipelines may ease Chinas wor-
ries about its over-dependence on energy transportation through the Straits of
Malacca, it still cannot take the place of that route. Some in China exaggerated
the role of the SinoMyanmar oil pipeline and Myanmar in Chinas energy
security, and argued that the pipeline could completely solve the Malacca
dilemma.29 According to the design of the oil pipeline, its annual transporta-
tion capacity is 20 million tons, still only 10 percent of the Malacca sea-lanes
transmission capacity.
The imported oil and gas from Myanmar and the SinoMyanmar pipeline
still constitute an essential component of Chinas energy diplomacy and strategy.
Further, from the perspective of Beijings comprehensive strategy in Myanmar,
ChinaMyanmar energy cooperation is only one part of Beijings Two Ocean
Strategy. China is making great efforts to gain access via Myanmar to the

28 The Construction of ChinaMyanmar Oil and Gas Pipelines Has Begun, China Petro-
leum Daily, 13 September 2010.
29 John Walsh, Myanmar Solves Malacca Dilemma: Burma Is Now Chinas Main Ally in Southeast
Asia, 8 August 2007, john-walsh.suite101.com/myanmar-solves-malacca-dilemma-a28005.

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Indian Ocean as a passage for Chinese commodities, traffic, and energy. China
Myanmar energy cooperation is characterized first by its immediacy, and second
as instrumental in solving the oil security dilemma and promoting Chinese
economic development. It has also become a diplomatic and tactical tool for
Chinas Rising.30This phenomenon is reflected in ChinaMyanmarIndia
triangular relations.
From the start of the Cold War, Beijing has regarded Burma/Myanmar as
a geo-strategic buffer zone, whether in its confrontations with the West, its
rivalries with the Soviet Union and Vietnam, or its Peaceful Rise strategy in
the post-Cold War era. In the light of China maintaining and strengthening
its influence in Myanmar after 1988, New Delhi has become Beijings biggest
competitor in Myanmar. After changing its Burmese policy from idealism to
realism in 1993, India is steadily developing its relations with Myanmar. The
two countries cooperation in recent years in the energy sector is especially
important. China is a critical factor behind this change of New Delhis policy.
Fearing a Chinese threat to its east, India has reviewed its Burmese policy and is
attempting to balance Chinas growing economic and military influence there.31
Indias Burmese policy is aimed at ChinaMyanmar strategic relations.32 India
sees China as its principal competitor in the global quest for energy. Indian
officials are loath to admit publicly the existence of such competition, to avoid
possible political friction with their behemoth northern neighbor.33 Accordingly,
when China first developed relations with Myanmar, Beijing could keep a low
profile to assuage Indian perceptions. But now India has been aggressive and
publicly clamoring to curb China. China has to throw away its scruples, and do
what it should do.34
China is increasingly wary of Indias naval capabilities in the Indian Ocean
and of its ability to interdict tanker traffic headed for China. This has been
heightened recently by Indias improving naval cooperation with the Southeast
Asian states, including Myanmar, and the United States. India in its turn is
30 Yu Yohuei, Hu Jintaos Oil Diplomacy and Challenges, Mainland China Studies, Vol. 48,
No. 3, 2005, p. 37.
31 Helen James, Myanmars International Relations Strategy: The Search for Security, Con-
temporary Southeast Asia, Vol. 26, No. 3, 2004, p. 536.
32 Andrew Selth, Burma and the Strategic Competition Between China and India, The
Journal of Strategic Studies, Vol. 19, No. 2, June 1996, p. 213. But see Chapter 10 on the
importance of development of Indias Northeast as another motivating factor.
33 Energy Trends In China and India: Implications for the United States. Hearing Before
the Committee On Foreign Relations: United States Senate, 109th Congress, First Session,
26 July 2005, p. 50.
34 SinoMyanmar Oil and Gas Pipeline Project total investment amounts to several billions
U.S. Dollars, China Petrochem, 1 March 2007.

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 ChinaMyanmar Strategic and Security Relations

increasingly concerned about Chinas growing efforts to acquire port access

along the Indian Ocean coast, with new port-access arrangements in Pakistan,
Bangladesh, Sri Lanka, and Myanmar. The zero-sum approaches to energy
security increase the risk of spillover into competition over maritime energy
transport routes in the Indian Ocean and the Straits of Malacca.35
Therefore, the construction of the SinoMyanmar oil and gas pipelines
could counter India and limit its influence in Myanmar, and such efforts could
also set up a valuable geo-strategic buffer zone.36 If China maintains its close
ties with Myanmar, this will have a profound impact on the strategic balance in
South Asia and change the rules of the game in the Indian Ocean.37
In SinoMyanmar relations, energy cooperation is a bond. More interests
between the two sides will be interwoven. Petrodollars are the Myanmar re-
gimes prime source of foreign exchange. China, as one of its important gas
buyers, will further increase its influence in Myanmar, which remains under
various sanctions of much of the international community. The building of the
gas and oil pipelines will boost massive infrastructure construction in Myanmar.
The highway, railway, and port which China will build for the pipelines will
make Myanmar increasingly reliant on China. But Myanmar always plays its
rich gas resources as a trump card in its diplomacy. The oil and gas pipelines
and Myanmars role in Chinas energy security improves Myanmars position
in neighboring countries and its geo-strategic value. An article published in
Myanmar Times (23 February 2007) stated that the SinoMyanmar oil and gas
pipelines will cause Myanmar to hold an important position in Beijngs energy
strategy.38 Interestingly, China took notice of this article. Three days later, the
Consulate General of China in Mandalay translated the article into Chinese,
and pasted it on its website.
Oil and gas are the stabilizers of close ChinaMyanmar relations, the
catalyst of deepening relations between the two countries. To ensure its energy
interests, Beijing will have to increase its reliance on Myanmar. Politically, an
energy-importing state may slip into a weak bargaining position with respect
to the exporting states and overland transit states. Ships can be diverted but
pipelines are immovable. The exporting and transit states on a pipeline have
some political leverage over the importing state and this can be used to disrupt

35 Energy Trends In China and India: Implications for The United States, p. 37.
36 Li Chenyang, Qu Jianwen and Wu Lei, The strategic initiative of Chinas solving the
Malacca Dilemma, The Reference News, 5 August 2004.
37 The SinoMyanmar Oil and Gas Pipeline Project, China Petrochem, 1 March 2007.
38 The SinoMyanmar Oil and Gas Pipeline through Myanmar will make ChinaMyanmar
ties closer, mandalay.mofcom.gov.cn/aarticle/jmxw/200702/20070204401154.html.

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flows in the short term in order to increase the exporting or transit countrys
bargaining power in some political or economic negotiation with one or more
of the other states involved.39
For transit oil and gas pipelines, it is important to consider that the
transit country can disrupt the pipeline during its operation simply because
it can.40 This possibility is based on two assumptions. First, it assumes that
the Naypyitaw could disrupt or restrict the oil transmission and gas supply
to bargain over a higher payoff. The past performance of transit pipelines in
some other countries has indicated that, When oil and gas prices were high,
producers and transit countries tended to want to increase volumes to earn
greater returns, placing greater stress to renegotiate contracts to take advantage
of high prices and inducing more spills and accidents. When prices were low,
the operators tended to cut back on maintenance expense, causing corrosion
and damage so that they could use the degraded pipeline infrastructure to
create negotiating leverage for higher transit prices.41 China could face the
risk of obsolescent bargaining42 in a cross-border pipeline project. Generally,
cross-border pipeline projects depend on the committed participation of
multiple parties over a long period. In a cross-border pipeline project, some
risks may be amplified because the interests of several sovereign states are at
stake.
Second, it assumes that the pipelines would be vulnerable to attack by anti-
government groups and forces in Myanmar. Transit oil and gas pipelines face
the problem of potential disruption from a number of sources, notably post-
construction behavior of the transit country once the pipeline is built and in

39 Philip Andrews-Speed, Xuanli Liao and Roland Dannreuther, The Strategic Implications
of Chinas Energy Needs, Adelphi Paper, No. 346, The International Institute for Strategic
Studies, 2002, p. 15.
40 Ekpen J. Omonbude, The transit oil and gas pipeline and the role of bargaining: A non-
technical discussion, Energy Policy, Vol.35, No.12, December 2007, p. 6193.
41 The lesson is simple: Russia, for example, limited natural gas supply to Turkmenistan in
1997 to coerce higher prices after a dispute over contracts. Russia, again, used control of
their natural gas pipelines in 2005 to manipulate the market to their advantage and gain
concessions on gas prices from Ukraine, even at the risk of blackouts in Eastern Europe
and international outrage. Russia has used the same tactic at least five times since in natu-
ral gas disputes with Belarus, Georgia, Moldova, and Ukraine suppliers and transporters
frequently manipulate dependency to their advantage. Benjamin K Sovacool, Reassess-
ing Energy Security and the Trans-ASEAN Natural Gas Pipeline Network, Pacific Affairs,
Vol. 82, No. 3, Fall 2009, p. 476.
42 Obsolescent bargaining refers to a situation where the original agreement between the par-
ties becomes obsolescent as one or more parties often sovereign states or state compa-
nies seek to improve their position once the pipeline is built. See Developing Chinas
Natural Gas Market: The Energy Policy Challenges, OECD/IEA, 2002, p. 232.

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operation. The cost and security of supply implications of disruptions to transit

pipelines are huge.43 The grenade attacks on the Thaukyegat hydropower
project and the Myitsone dam project launched by anti-government forces
in April 2010 demonstrate that assumption. By contrast, pipelines that are
over 700 kilometers in length and require many pump stations are easier to
be attacked. Pump stations, critical to moving oil through the pipeline, are
highly vulnerable to air assault or sabotage that could result in the pipeline
being shut down. The destruction of one or more pump stations will reduce,
if not stop, the flow of oil through the line, making pipelines as susceptible to
closure as sea-lanes. The replacement of large pumps and drivers can take up
to a year. Pipeline operators rarely stock spare pumps of this size because they
are expensive, usually costing millions of dollars.44
The recent developments in Myanmars domestic politics since the Kokang
event in 2009 have cast a shadow of doubt over the project. The proposed
route of the pipelines passes close to areas controlled by ethnic militias. The
prospect of renewed conflict between Naypyitaw and these groups, following
government demands that they disarm or be integrated into Myanmars armed
forces, has made Beijing nervous.45 The security risk to the pipeline is serious.
The pipeline route passes through areas partly controlled by ethnic cease-
fire groups, including the Shan State Army North (SSAN), the Kachin
Defence Army (KDA) and the Myanmar National Democratic Alliance Army
(MNDAA).46 Due to a dispute over the transformation of Border Guard
Forces, armed conflict broke out in Kokang between both sides in 2009. It
led to 37,000 civilians fleeing to China. China faces the challenge and the
conundrum of how to keep its balance and avert internal ethnic conflict along
the SinoMyanmar border while still claiming non-interference in the internal
affairs of other countries. The dual-pipeline projects provide an incentive to
China to further strengthen ties with Myanmar. The Chinese government
surely hopes that the pipeline will help to foster political stability along the two
countries border.
In addition, the uncertain political scene in the medium and long-term in
Myanmar could also be a potential source of conflict over the pipelines, although
its believed that the Tatmadaw will continue to control the government.

43 Ekpen J. Omonbude, The transit oil and gas pipeline, p. 6192.

44 Downs, The Chinese Energy Security Debate, p. 36.
45 Ian J. Storey, China a major player in S-E Asia pipeline politics, The Straits Times, 23
September 2009.
46 Corridor of Power: Chinas Trans-Burma Oil and Gas Pipelines, Shwe Gas Movement,
2009, p. 20.

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There is a widespread view that conflicts over pipelines, including those due
to incompatible legal and regulatory regimes, arise because of politics. Some
conflicts undeniably have been political, including those that have grown out
of a legacy of political divisions.47
Although the future of the SinoMyanmar gas and oil pipelines is difficult
to predict, particularly whether Naypyitaw might use it as a bargaining counter
in its relations with Beijing and whether a Russia-like incident might occur in
Myanmar, it is safe to say that China must in future continue to woo Myanmar
with economic projects or military sales. According to the 2009 report of
Shwe Gas Movement, the oil and gas pipelines will pass through 22 townships
along a 980 kilometers course (according to Chinas official release, the length
of the pipelines is 771793 kilometers) across Myanmar. Currently forty-
four infantry and light infantry battalions are positioned along the pipeline
corridor. Each battalion is thought to have 250300 soldiers, which means
that at this time there are up to 13,200 soldiers positioned along the route.
A naval base that includes nine sub-battalions in place on the eastern side of
Ramree Island will monitor the deep sea port and oil terminal.48 Obviously,
the safety of the dual pipelines needs to be protected by the Tatmadaw. The
case of the Yadana gas pipeline from Myanmars Andaman Sea to Thailand has
shown that the Myanmar government had militarized the pipeline region and
The military has been steadily building up its presence to protect the natural
gas development activities in the region.49 As a result, there is every reason
to believe that the ChinaMyanmar military relation will remain close and
Myanmar will have incentives to request Chinas military aid and cooperation.

The Security and Economic Dimension

The main motivation of the ChinaMyanmar oil and gas pipelines project is
to resolve the Malacca dilemma. China tends to view its oil security through
the prism of AmericanJapanese containment of China.50 Beijing believes the
U.S. is the primary threat to Chinas energy security. Chinas energy security

47 Cross-Border Oil and Gas Pipelines: Problems and Prospects, Joint UNDP/World Bank
Energy Sector Management Assistance Programme, June 2003, p. 9.
48 Corridor of Power, pp. 7 and 20.
49 Earthrights International and Southeast Asian Information Network: Total Denial: A Report
on the Yadana Pipeline Project in Burma, 10 July 1996, p. 13.
50 Pak K. Lee, Chinas quest for oil security: oil (wars) in the pipeline? The Pacific Review,
Vol. 18 No. 2 June 2005, p. 289.

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activities reflect this concern; they are largely defensive and are designed to
minimize the vulnerability of Chinas oil supply to American power.51
There are two main schools of thought about the necessity of land routes
for Chinas imported oil transportation. The first school contends that Like
all its Asian neighbors, China worries about the security of transport corridors,
chiefly the Malacca Strait, through which all Middle Eastern oil reaches its
Asian customers. This concern is legitimate.52 Apparently, China does not
have the capacity to prevent the U.S. from disrupting its sea-lanes. Developing
land routes for oil transport appears to be Chinas best option.53 The Chinese
government and many Chinese scholars also think so.54
The second school argues that China exaggerates the threats to navigation
in the Straits of Malacca, notably the U.S. factor. Erica S. Downs holds that
China need not worry that the U.S. and its allies could disrupt the flow of oil
to China during a SinoAmerican conflict by blocking the Straits of Malacca
because The United States certainly has the military capabilities to destroy any
transnational pipelines the Chinese are interested in constructing. Pumping
stations could easily be damaged with cruise missiles launched from long-
range bombers.55 Some scholars claim that the abovementioned U.S. blockade
against Chinas energy supply is unlikely: As Chinas economy becomes more
deeply integrated into the regional production chain, the associated costs of
launching such a blockade are increasing as well. Economic interdependence
again serves as perhaps the single most powerful deterrent against an embargo
or blockade by Chinas neighbors in terms of traditional military-related risks;
the possibility of a risk turning into a threat to Chinas energy security is getting

51 Erica Strecker Downs, Chinas Quest for Energy Security, RAND, 2000, p. 53.
52 Chinas Worldwide Quest for Energy Security, The International Energy Agency, 2000,
p. 64. For other arguments of this school, see Mokhzani Zubir, Mohd Nizam Basiron,
The Straits of Malacca: the Rise of China, Americas Intentions and the Dilemma of the
Littoral States, Maritime Institute of Malaysia, April 2005; You Ji, Dealing with the Ma-
lacca Dilemma: Chinas Effort to Protect its Energy Supply, Strategic Analysis, Vol. 31, No.
3, May 2007; Robert E. Ebel, Energy and Geopolitics in China Mixing Oil and Politics: A
Report of the CSIS Energy and National Security Program, CSIS, November 2009, p. 52;
53 Hongyi Harry Lai, Chinas oil diplomacy: is it a global security threat? Third World
Quarterly, Vol. 28, No. 3, 2007, p. 534.
54 See Zhang Jie, The Malacca Factor of Chinas Energy Security, Studies of International
Politics, No. 3, 2005; Li Jinming, Malacca Straits and the security of Sea-lanes in the South
China Sea, Southeast Asian Affairs, No. 3, 2006; Ma Xiaoyu, Zhang Ziyang and Hu Lim-
ing, Safety analysis on Chinas oil transportation at Malacca strait, China Water Trans-
port, Vol. 7, No. 1, 2007.
55 Downs, The Chinese Energy Security Debate, pp. 3637.

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lower, thanks to the forces of economic globalization.56 In contrast to Beijings

fear that the U.S. may someday try to interdict Chinas foreign energy supplies,
The actual situation is less dramatic.57
We argue that the annual transmission capacity of the ChinaMyanmar
oil pipeline demonstrates that it will not solve the Malacca dilemma and
will only help mitigate its reliance on the Straits of Malacca marine lanes.
The impact of ChinaMyanmar pipeline projects on Chinas overall energy
picture is small, particularly given Chinas projected oil import demand. The
Myanmar line will be able to transport 10% of Chinas 2009 volume of imports,
but only 3% of projected demand in 2030, and this oil will still have to come
from overseas.58
We admit the security advantage that the ChinaMyanmar oil overland
pipeline may have over tanker imports, but one advantage, which Chinese
sources do not mention, is political. In order for the United States to disable a
pipeline supplying China, it would have to attack Chinese territory or a third
country. A blockade, however, could in theory be enforced without having to
attack a sovereign state.59 The pipeline is effectively meaningless in Chinas
energy security because United States has the military capability to destroy and
paralyze the pipeline in both Myanmar and Chinese territory. The significance
of ChinaMyanmar oil and gas pipelines is largely embodied in its economic
impact on Chinas Southwest regions and in its strategic effect on ongoing
ChinaMyanmar relations.
Although the future of the SinoMyanmar gas and oil pipelines is difficult
to predict, and whether Myanmar could use the pipelines as bargaining chips,
it is safe to say that China must continue to woo Myanmar with economic
projects or military sales.
Chinese investment in oil and gas exploration is intended to provide a
stable oil supply in price and quantity for Chinas economic development. The
SinoMyanmar oil pipeline would reduce by over 1,820 sea miles the present
journey to Guangzhou from the Middle East. The economic significance
of the oil pipeline, however, to an even greater extent will support Chinas
southwestern development.

56 Zha Daojiong, Chinas Energy Security and Its International Relations, The China and
Eurasia Forum Quarterly, Volume 3, No. 3 November 2005, p. 44.
57 Daniel Yergin, Ensuring Energy Security, Foreign Affairs, March/April 2006, Vol. 85,
Issue 2, p. 77.
58 John Seaman, Energy Security, Transnational Pipelines and Chinas Role in Asia, IFRI
Asie Visions 27, April 2010, p. 38.
59 Downs, The Chinese Energy Security Debate, p. 37.

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At present, the oil of the southwest province is supplied by the refineries in

South and Northwest China; the transportation distance is far and the cost is
high. In particular, Yunnan is located at the end of Chinas product oil supply
network. Insufficient oil has become an obstacle to economic development in
the southwest. Consequently, the pipeline firstly can solve the problem of oil
shortages in southwest China. Secondly, the tobacco sector is a pillar industry
of the Yunnan economy, and residual oil products such as fertilizer could help
boost tobacco production. Yunnan wishes to use the opportunity offered
by the oil pipeline to construct an oil refining industry base in Kunming. In
2006 it submitted such a proposal to Beijing. According to the plan, after the
completion of the SinoMyanmar oil and gas project, the southwest province
will increase its oil refining capacity to 20 million tons per year. It will produce
12.77 million tons of oil, including 3.1 million tons of gasoline, 8.4 million
tons of diesel oil, and 1.27 million tons of kerosene. The related products from
the pipeline are planned to yield 1 million tons of ethane, 1.53 million tons of
synthetic resin, and 1.77 million tons of basic organic material per year.
On 2 December 2007, the Yunnan government and the CNPC concluded
a strategic cooperation framework agreement in Beijing. Both sides agreed
to push the construction of the Yunnan oil refining industry. Under the
agreement, the Yunnan government will give the CNPC approval to set up
a product oil pipeline network, and a sales network and distribution center
for ethanol gasoline. Furthermore, Yunnan will first build the KunmingDali
product oil pipeline, and in time, the KunmingMengzi, KunmingPuer, and
KunmingQujing product oil pipelines. The Yunnan oil refining industry base
will greatly reduce the distance and cost of crude oil transportation, and its
refined oil can radiate throughout Sichuan, Chonqing, Guizhou, Guangxi, and
Southeast Asian countries.
In addition, Chongqing has requested extending the SinoMyanmar oil
and gas pipelines to it. Chongqing hopes to become the other oil refining
center. It wants to use this favorable occasion to solve its oil and gas shortage,
and apply to build a national emergency petroleum reserve, which could get
policy support and funding from the central government. As the traffic hinge
on the upper Yangtze River, Chongqing could carry products or crude oil to
various ports along the Yangtze River, and become a distributing center of oil
products.
In early 2007, Huang Qifan, Vice Mayor of Chongqing, said the CNPC
had chosen Chongqing as the destination for the pipelines, noting that the
city would build a 10-million-ton capacity refinery to process imported crude,

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which was due to come on stream in three years. Chongqing plans to invest
RMB200 billion in an oil and chemical industry cluster with an annual pro-
duction value of RMB100 billion.60 The Chongqing government treated the
preparation for the construction of a 10-million-ton refinery as one of its ten
key projects in 2008.61
At present, natural gas remains a marginal fuel in the Chinese energy system.
Pipeline construction and downstream facilities lag behind upstream progress.
Nevertheless, Faced with mounting environmental problems and starkly rising
oil imports China could well decide to accelerate building up both its domestic
gas delivery system and its gas imports, in a grand national switch toward clean-
burning fuels.62 Since 2002, China has initiated the WestEast Natural Gas
Transmission Project and the SichuanEast Natural Gas Transmission Project,
and is constructing a nationwide gas pipeline network. The ChinaMyanmar
gas pipeline is not only conjoined with the national strategy, but also will
partly promote the readjustment of both the industrial structure and energy
consumption. Also, the projects will be a strong response to Chinas Western
Development strategy. As the eastern, coastal provinces have experienced
dramatic increases in wealth, much of the interior has been left far behind.
Southwestern China is vastly underserved by internal gas and oil distribution
networks in particular, but the Myanmar pipeline project could help remedy the
situation.63
The pipelines will generate a significant windfall for the Myanmar regime
over the next 30 years. The annual transit fee of the gas pipeline alone will hit
US$150 million.64 However, the prospects that the government will make full use
of gas and oil revenues for the development of the countrys economy and social
well-being are hardly optimistic. Additionally, natural gas and oil pipelines are
capital-and technology-intensive projects, and they will not produce many local
employment opportunities. But the pipelines project will generate the boom of
infrastructure, particularly roads. The two countries, for example, signed on 18
May 2010 a MoU on the development of cooperation on the ChinaMyanmar
Corridor Project to link Ruili and Kyaukpyu.
The SinoMyanmar oil and gas pipelines are significant for Yunnans, Chong
qings and Southwest Chinas economic development, and an important thrust

60 Chongqing makes SinoMyanmar Oil Pipeline Certain? Phoenix Weekly, 2007, No. 11.
61 Wang Huongju, Report on the Work of Chonqing Government 2008, Gazette of Chong-
qing Municipal Peoples Government, No. 3, 2008, p. 10.
62 Chinas Worldwide Quest, IEA, p. 73.
63 Seaman, Energy Security, IFRI Asie Visions 27, p. 30.
64 Corridor of Power, Shwe Gas Movement, 2009, p. 5.

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for the future local economy. This will also lead to the strategic distribution of
domestic energy.

The Implications and Characteristics of Chinas Energy Diplomacy in Myanmar

Chinese investment in Myanmars oil and gas fields and the SinoMyanmar
pipelines demonstrate several aspects of the new face of Chinas oil diplomacy:
[1] the trend of voluntarily taking risks in securing overseas energy supply
sources; [2] the opportunism and pragmatism of Beijings oil diplomacy; and
[3] securing its energy interests even at the cost of challenging the interna-
tional political order. Chinas energy security activities reflect its resolution
to ensure that national oil security and energy become crucial ingredients in
Chinese diplomatic strategies. Chinese investment in the oil fields of Sudan,
Iran, Myanmar, and other pariah states shows a similar characteristic of its
oil diplomacy. These oil dealings are criticized as counter to international
norms. Failure to address these matters could encourage other parties seeking
scarce energy supplies to similarly compromise on human rights as they court
questionable oil regimes at the expense of local populations, a development
that would be detrimental to international peace and security.65 Yet Chinas
energy security strategy, for all its success and sophistication, contains an in-
herent contradiction, and that is Beijings pursuit of pariah states. In increasing
its closeness with regimes that the rest of the world, but particularly the U.S.,
would prefer to see marginalized, Beijing is undermining its own objective of
appearing to be a more responsible global citizen.66
Since the end of the Cold War and the failed 1988 peoples revolution,
Myanmars international image has been constantly negative. Called one of
the outpost of tyranny countries by the Bush administrations Secretary of
State Designate, Myanmar has been sanctioned and isolated by much of the
international community. China uses its position and influence in international
fora to lobby for Naypyitaws interests, or at least to provide public damage
control (e.g., in the Security Council). Beijings role in the United Nations
Security Council and also its position in U.N. bodies dealing with sanctions were
of exceptional importance to progress in its energy relations with Myanmar.
Chinas oil diplomacy with Myanmar makes Beijing and Naypyitaw both clients
and allies. This is a new phenomenon in post-Cold War Chinas foreign policy;

65 Matthew E. Chen, Chinese National Oil Companies and Human Rights, Orbis, Vol. 51,
No. 1, Winter 2007, p. 41.
66 Cherie Canning, Pursuit of the Pariah: Iran, Sudan and Myanmar in Chinas Energy Se-
curity Strategy, Security Challenges, Vol. 3 No. 1, February 2007, p. 50.

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it deserves attention. Beijing has proven that it has benefited from refusing to
support the U.S. sanction policies toward rogue or pariah states.
In March 2007, for example, Myanmar withdrew Indias status as preferential
buyer on block A1 and A3 gas fields, and instead sold them to China for a
30-year term, and agreed to a new 800 km pipeline, even through India had
conducted furious lobbying and had been an important shareholder of the A1
and A3 gas fields.67 Many believe that China became the first customer for the
A1 and A3 gas fields because in January 2007 China had vetoed a U.S. move
to debate Myanmar at the U.N. Security Council as a threat to regional peace
and security. The U.S. had argued for regime change in the country two
days before the contract was signed. The Myanmar official TV news reported
this at unprecedented speed and thanked China for supporting Myanmar
and blocking the U.S. move in the U.N. Security Council. In 2005, China
and Russia also challenged U.S. Burma policies, using the threat of a veto on
recommendations on Burma.
Seeking a controlled oil source, Chinas diplomatic offensive is comprehen-
sive as well as strategic and speculative. It has an impact on the interaction be-
tween China and the great powers.68 It is not just in this single case of Myanmar
that China has used its position in the U.N. to provide oil-producing countries
with political support and thus to receive economic and energy interests. In its
quest for energy, China has also curried favor with Iran and Sudan, oil-rich na-
tions that have difficult relations with the West. It has threatened to use its veto
in the United Nations to prevent international sanctions to punish Iran for its
nuclear program or Sudan for its alleged genocide. I see them as becoming less
and less conciliatory on issues they consider to be vital interests,69 U.S. Deputy
Secretary of State Robert B. Zoellick cautioned on 6 September 2005, adding
that, If China continues to seek energy agreement with such countries as Iran,
more conflicts will arise between China and the U.S. If Chinese companies
continue to seek energy supply from troublemakers such as Iran, Myanmar,
Zimbabwe, and to want to lock up energy sources for themselves, China will
have difficulty in safeguarding its energy supply, and must make a choice.70 It
67 Daewoo has a 51 percent stake in the A1 and A3 natural gas fields, where it is partnered by
Indias Oil and Natural Gas Corporation with 17 percent, the Gas Authority of India Ltd
with 8.5 percent, Korea Gas of South Korea with 8.5 percent, and Myanmar Oil and Gas
Enterprise with 15 percent.
68 Chung-lian Jiang, Chinas Oil Strategy and Its Implications for Africa, Issues and Studies,
Vol. 42, No. 4, 2003, p. 123.
69 Joseph Kahn, The Two Faces of Rising China, The New York Times, 13 March 2005.
70 Tian Hui, China Has No Intention to Control Oil Sources, Oriental Morning Post, 9 Sep-
tember 2005.

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seems that China has little choice but to become increasingly reliant on global
energy markets. Beijings access to foreign resources is necessary both for
continued economic growth and, because growth is the cornerstone of Chinas
social stability, for the survival of the Chinese Communist Party (CCP).71
China generally has a hands off policy on the internal affairs of its trading
partners, eschewing political conditionality. China argues that development
requires the correct sequencing of priorities, with economic reforms first
and political liberalization a distant second (if it is mentioned at all). Beijing
uses this assessment to justify an approach that also happens to coincide with
Chinas own trade priorities and political preferences.72
In the U.N. Security Council, China often opposes sanctions based on human
rights concerns not only because it fears that such sanctions might be wielded
someday against itself, but also because, as a latecomer to the international
energy scene, China believes it does not have the luxury of scrutinizing the
human rights practices of underdeveloped energy-rich countries.73
Chinese oil and gas companies lack the capacity to deal with the legal and
financial aspects of international trade, so they rarely win in bids competing with
major international oil and gas exploration in resource-rich fields. Tactically, as
a latecomer to the international energy market, which has been controlled and
segmented by western oil giants, China continuously establishes and promotes
energy cooperation with the states that the U.S. and other western countries
dislike and sanction. Thus, for Chinese companies, the possibilities for success
here are high because of the meager competition from western companies.
An IEA report argued that for other major energy importing countries, two
messages had been clear. First, Chinas manner of entry into the global energy
markets carries no surprises. Its strategies bear strong similarities to others
and they are equally aggressive. Therefore, and second, it has become clear that
China requires a strong place in the system. Other players must make room for
it. China is not a marginal player but a powerful new force in the international
energy markets.74
Beijing is not impervious to the impact of its realistic oil diplomacy on
international politics and the regional geo-political order. Beijing has been

71 David Zweig and Bi Jianhai, Chinas Global Hunt for Energy, Foreign Affairs, Sep/Oct
2005, Vol. 84, Issue 5, pp. 2526.
72 Elizabeth Economy and Karen Monaghan, The Perils of Beijings Africa Strategy, Inter-
national Herald Tribune, 2 November 2006.
73 U.S.China Relations: An Affirmative Agenda, A Responsible Course, Report of an
Independent Task Force, The Council on Foreign Relations, 2007, p. 32.
74 Chinas Worldwide Quest, IEA, 2000, p. 74.

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keeping a low profile in its oil diplomacy toward Myanmar. China is obviously
aware of the negative influence when it has close and strategic cooperation
with a notorious military regime. China still does not have enough power to
disregard the attitude and response of India, Thailand, Singapore, and other
neighboring countries to ChinaMyanmar strategic cooperation.
The 2007 Saffron Revolution, Naypyitaws slow reaction to Cyclone
Nargis in 2008, and some pressures for an Olympic boycott over Chinas
Myanmar policy made China face unprecedented pressures from the inter-
national community. Nevertheless, the crises occurring in Myanmar in these
two years demonstrate that the military junta has been able to control society
and the political situation. Beijing will bet that the military regime will hold
power over a long period. If Beijing wants to recover its costs and investments
in the Myanmar energy sector and ensure its strategic interest in a future
SinoMyanmar energy pipeline, it will inevitably try to prevent any saffron
or other color revolution from happening in Myanmar. Even if democratiza-
tion develops in Myanmar, whoever obtains power, the bottom line of Chinas
Burmese policy is that its core interests should be protected because of geo-
politics realities. The CCPBCP relations during the Cold War demonstrated
this argument. Beijing used the BCP as lever to contain Rangoon when Burma
publicly antagonized China in 1967.
At a micro-level, Chinas oil diplomacy in Myanmar shows the impact on
Beijings policy-making by Chinese local government and sectoral interest
groups. From the initial proposal of the SinoMyanmar pipeline, Yunnan,
Chongqing, Sinopec, and CNPC played very important roles, and were crucial
promoters, canvassers, and supporters of the policy. For central and local
government, the significance of the SinoMyanmar oil and gas pipelines, and
Myanmars position in Chinas energy strategy, are different. Local governments
and sectoral interest groups are the direct promoters and beneficiaries of this
project. Traditionally, with the Yangtze River as the division line, CNPC is
active mainly in north and west China, and Sinopec in south China. The two
national heavyweights compete for the domestic energy market. So Yunnan
in company with CNPC, and Chonqing with Sinopec, pushed the Sino
Myanmar energy pipeline together with Yunnans and Chongqings oil refining
industry bases.
If an effective international energy security cooperation mechanism that
includes China is not established, China will not hesitate to continue its prag-
matic energy diplomacy. From Chinas perspective, its national interest would
be much better served by working with the U.S. to shape the future interna-

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 ChinaMyanmar Strategic and Security Relations

tional system.75 The bottom line for China is that its government has to generate
upwards of 500 million new jobs in the coming two decades, as people flow out
of the countryside into the expanding urban areas and capital-intensive invest-
ment in manufacturing reduces the number of new jobs created in that sector.76
Beijings investments and its clearly established aim of rising and pursuing
development will not allow it to turn around, although Chinese mercantilism,
particularly when it comes to energy, constitutes a source of tension with the
United States.77
Chinas no strings attached investment and aid posture undercuts in-
ternational efforts to condition aid to improved governance. It also impedes
international efforts to punish governments like Sudans for gross misconduct.
China probably will continue to exploit the economic and political opportuni-
ties that arise in spite of internationally imposed sanctions, even at the risk of
antagonizing Washington, unless the leaders in Beijing determine that their
conduct fundamentally jeopardizes PRC interests, including Chinas relation-
ship with the United States and its international image.78

China and Myanmars Energy Security

Concerns over energy issues between China and Myanmar are not limited to
oil and gas. Beijing is also having an impressive impact on Myanmars power
sector.
Myanmar has ample amounts of fresh water due to the huge rivers run-
ning through its territory. Now, the Myanmar government has targeted these
extensive river systems to produce large-scale electricity by implementing its
30-year Hydroelectric Power Strategic Plan. Many dams are being constructed
on main rivers and their tributaries throughout the country with both large and
small hydropower plants considered as priority national development tasks.
China is the leading country to invest in and construct Myanmars hydropower
projects (see Map 8).

75 Robert B. Zoellick, Whither China: From Membership to Responsibility? Speech deliv-

ered to the National Committee on USChina Relations, New York, 21 September 2005,
www.state.gov/s/d/former/zoellick/rem/53682.htm.
76 Peter Cornelius and Jonathan Story, China and Global Energy Markets, Orbis, Vol. 51,
No.1, Winter 2007, p. 19.
77 Major Lawrence Spinetta, The Malacca dilemma Countering Chinas string of pearls
with land-based airpower, a thesis presented to the Faculty of the School of Advanced Air
and Space Studies for completion of graduation requirements, School of Advanced Air
and Space Studies, Air University, Maxwell Air Force Base, Alabama, June 2006, p. 28.
78 U.S.China Relations, The Council on Foreign Relations, 2007, p. 32.

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 Modern ChinaMyanmar Relations

Map 8: Hydropower projects in Myanmar with Chinese involvement completed, current and
planned (based on a map in Earthrights International, China in Burma: The Increasing Investment
of Chinese Multinational Corporations in Burmas Hydropower, Oil and Natural Gas, and Mining
Sectors, 2008, by permission)

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In recent years, Myanmar has been facing serious and chronic power short-
ages, with many parts of the country suffering frequent outages as electricity
supply has been unable to keep pace with rising demand, causing the populace
to lose confidence in the reliability of electricity supply systems. Although
Myanmar has and is constructing some power plants, it remains relatively dark.
A common Chinese pun on Myanmars name plays with its Chinese transcrip-
tion, Miandian, replacing it with a homophone that means no power. The
electricity shortages have become serious economic and political issues. In
the cold season,79 when hydropower plants cannot generate much electricity
because of a lack of rain, even the former capital Yangon and Mandalay and
other big cities have had no power or have to cut off power in different blocks
and at different periods every day. In the rural areas, electricity is hardly avail-
able. Myanmar cities are often immersed in the noise produced by numerous
power generators because many enterprises, shops, and rich families have
personally bought them. Power shortages are hindering the economy and
are choke points for its development. Furthermore, Myanmars dissatisfied
populace has satirized its dark condition without power as the dark reign
of the military junta. Naypyitaw wants to solve this problem and increase
its political legitimacy. Under this circumstance, Chinas enterprises have been
extensively involved in the Myanmar power sector since the early 1990s.

Chinas Involvement in Myanmar Hydropower Plants and Dams

Chinas dam-building has attracted attention as a result of the current Chinese
involvement in at least 93 major dam projects abroad. These projects are
particularly concentrated in Southeast Asia and Africa, where China has
fostered strategic regional and bilateral ties. Chinas dam exports are also active
in Latin America, South Asia, and Eastern Europe.80 On the map of Chinas
global dam expansion, Myanmar is an important host country, although
the Burmese hydropower sector was not included in the July 2004 list of
Countries and Industries for Overseas Investment Guidance Catalogue (I)
issued by the Ministry of Commerce and the Ministry of Foreign Affairs, and
Countries and Industries for Overseas Contract Project Guidance Catalogue
(I & II) issued by the Department of Outward Investment and Economics

79 There are three seasons in Myanmar: rainy season, cold season, and hot season.
80 Kristen McDonald, Peter Bosshard, Nicole Brewer, Exporting dams: Chinas hydropower
industry goes global, Journal of Environmental Management , Vol. 90, Supplement 3, July
2009, p. S294.

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of the Commerce Ministry, in 2008 and 2009.81 The political economics of

dams are an important aspect of ChinaMyanmar relations. China sees the
new bilateral role played by Chinas dam industry as a win-win situation for
China and Myanmar.
The expansion of Chinas dam industry in Myanmar adds further weight to
the influence of China in Myanmar because Chinese dam construction is not
limited simply to the construction of a large number, but also because China
has offered or is implementing package engineering; that is, peripheral
equipment and material the delivery of dam and hydro components that
have become major factors in the increase of imports from China.
Chinese companies have been involved in the construction of 25 massive
dams on the Irrawaddy, Salween, and Sittang Rivers and their tributaries. The
dams will produce an estimated capacity of 30,000 megawatts and cost a total
of more than US$30 billion to construct.82 During the course of Chinese
companies involvement in the construction of Myanmar power plants, some
state-owned enterprises are the first in line.
The Yunnan Machinery & Equipment Import & Export Co., Ltd. (YMEC)
is a very active participator in the building of power plants in Myanmar.
Since 1990, YMEC has established strong partnerships with Myanmar. As
of 2001, YMEC had exported 16 complete sets of facilities as well as electric
transmission and transformation equipment, and is one of the largest Chinese
exporters to Myanmar of hydro-electricity equipment.83 From 1990 to 2002,
YMEC was involved in 20 hydropower stations in Myanmar.
On 1 December 2005, YMEC signed a memorandum of understanding with
the Ministry of Electric Power No. 1 on the joint development of the Ruili
River and the Nmai Hka River, and it will gradually build three cascade hydro-
power stations on the model of BuildOperateTransfer (BOT) on the Ruili
River (said to be RMB3 billion). Meanwhile, YMEC got the priority rights for
constructing a hydropower plant on the Nmai Hka River. On 29 December
2007, YMEC signed three contracts with Myanmar the reconstruction of
the ZawgyiI hydropower plant, and the construction of the Datawchaing and
Wetwun hydropower plants.

81 For the list, see hzs.mofcom.gov.cn/static/column/zcfb/a.html/1; www.china.com.cn/

chinese/PI-c/626171.htm.
82 Violet Cho, Ban the Dam, Say Activists, 14 March 2008, www.irrawaddy.org/article.
php?art_id=10888.
83 The Largest Hydropower Plant jointly built by China and Myanmar is shaping up, www.
hwcc.com.cn/newsdisplay/newsdisplay.asp?Id=25480.

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Chinas Gezhouba Group Corporation (CGGC) is another important con-

tractor for Myanmar hydropower stations. It has wholly or partially contracted
and constructed over 100 large hydroelectric projects in China and has taken
on over 30 contracts in hydroelectric projects, highways, as well as water sup-
ply in the Middle-East, South Asia, Southeast Asia, and Africa. Up to now in
Myanmar CGGC has partially built the Yeya Hydropower project and Tasang
Dam. Also, it supplies complete equipment for hydro-electricity generation
to Papun, Shwe Gin, and Tasang Hydropower projects, with a contract value
US$14.8546 million, 20 million, and US$6 billion respectively.
China has been involved in 7 hydropower plants with the total capacity
of 16,500MW in Kachin State; they will be completed by, and include two
hydropower plants constructed by the China Power Investment Corporation
(CPI), which are expected to generate 6,900 megawatts of electricity. On
28 December 2006, CPI signed a memorandum of understanding with the
Myanmar Ministry of Electric Power No. 1 on the development of the Nmai Hka
River and Malikha River basins and the Myitsone hydropower station on the
Ayeyawady River, construction of which was recently suspended (see Chapter
11). In 2007, CPI got the development rights for seven cascade hydropower
stations with a total capacity of 13,360 MW at the confluence of the Nmai Hka
River, the Malikha River, and the Ayeyawady River. On 27 February 2008,
CPI signed a contract with the Ministry of Electric Power No. 1, for building a
hydropower plant in a tributary of the Nmai Hka River. This dam is being built
as the electrical source and power supply for the future construction of seven
hydropower plants in the Nmai Hka, Malikha, and Ayeyarwady Rivers.
From 2004 to 2005, the China National Heavy Machinery Corporation
signed three contracts with Myanmar, for providing complete sets of equipment
for generating electricity as well as the design, manufacture, installation,
debugging, and technical services for the Kun and Kabaung Hydropower
Plants, and are building 300 kilometres of double-circuit and 45 kilometres
of single-circuit transmission line, as well as a 230KV substation for the Yeya
Hydropower Project.
On 5 April 2007, a memorandum of understanding was signed between the
Myanmar Ministry of Electric Power No. 1 and the China Hanergy Holdings
Group Company Ltd. According to the MoU, both sides will jointly build
a 2,400MW hydropower station in the upper Salween River. They agreed
to invest RMB20 billion and finish it within 10 years. In the same month,
the Farsighted Group and the China Gold Water Resources Co. signed an
agreement with the Myanmar Junta Company for this project.

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In the past 20 years, more and more Chinese companies have become
involved in the construction of and investment in many dams and power plants
in Myanmar. However, these Chinese involvements in Burmese hydropower
plants have been only partly funded. Although the above-mentioned leading
Chinese enterprises that have played crucial roles in the construction of
massive Myanmar hydropower plants are in the limelight as the main investors
or contractors, in fact behind each power plant contracted or invested by
Chinese companies there are many and various subsidiary Chinese enterprises
involved in these projects.
For example, during the construction of the Dapein Hydropower Plant,
SINOHYDRO Corporation is the constructor, and the China Datang Corpor
ation and the Central China Power Group Intl Economic & Trade Co. Ltd are
the investors. The Jiangxi Provincial Water Conservancy Planning and Designing
Institute are in charge of the design and reconnaissance survey of this project.
The metal structures and complete equipment for the hydro-electricity
generation of the Kabaung Hydropower Plant were supplied by the China
National Electric Equipment Corporation and the China National Heavy
Machinery Corporation, respectively. The Hebei Province No. 2 Electric
Power Construction Company provides installation, debugging and technical
services for this project.
Another case in point is the Yeywa Hydropower Plant. The ExportImport
Bank of China gave US$0.2 billion of preferential buyers credits for this project.
It is built by the China Gezhouba Group Corporation, but the China Hydraulic
and Hydroelectric Construction Group Corporation & China Citic Tech
nology Co., Ltd. is supplying and installing complete equipment for hydro-elec-
tricity generation and metal structures. The China National Heavy Machinery
Corporation constructs transmission lines and substations for this project.
Besides these large enterprises and transnational corporations, many domestic
small-medium enterprises(SMEs) have also been in involved in the Yeywa
Hydropower Plant. The leading contractors sub-contract with Chinese SMEs,
which are needed to provide various specific designs, consultation, reconnais-
sance surveys, technical services, spare parts, and equipment. Other auxiliaries
are also involved, such as Zhejiang Orient Holdings Co., Ltd, Shandong Electric
Power Engineering Consulting Institute., Ltd, Anhui Province Energy Group
Company, Ltd, Chengdu Shuangliu Tianhe Machinery Co. Ltd., Hubei China
Gezhouba Project Management Co., Ltd.
In addition to the remarkable number of Chinese enterprises involved in
the construction of dams and hydropower plants in Myanmar, major Chinese

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corporations have begun to ally and collaborate. In order to increase their

competitive power in Myanmar, on 8 August 2006, YMEC, Yunnan Huaneng
Lancang River Hydropower Co., and Yunnan Power Grid Co. formed a coalition
as The Yunnan Joint Power Development Company. To avoid damaging
competition among Chinese enterprises in Myanmar, in April 2008 China
Southern Power Grid Co., Ltd, China Three Gorges Project Corporation, and
SINOHYDRO signed a strategic cooperation framework agreement for the
Salween River in Myanmar.
Besides the fundamental factor of close bilateral political relations, the
reason why China can play an important role in the Myanmar power sector
also lies in the economic needs of both sides.
Except for the new capital at Naypyitaw, Myanmar cities have had to face
blackouts. So Myanmar generals sought Beijings support and help and visited
Chinese projects in China.84
When the Myanmar delegation, led by the Minister of Agriculture and
Irrigation with 18 members, attended the Northeast Asia Investment and Trade
Expo in Changchun, the capital of Jilin Province in September 2007, they asked
Chinas side to arrange a visit to the Datang Changchun No. 2 Co-generation
Power Co., Ltd. On 24 May 2007, Maj-Gen. Khin Maung Myint, the Minister
of Myanmar Electric Power No. 2 made an appointment with the Chinese
Ambassador to Myanmar, Guan Mu. Myanmar wishes China to help it in the
construction of transmission and substations, Khin Maung Myint said.85
In the fiscal year 20062007, all foreign investment totaling US$0.28 billion
in the Myanmar power sector was from China.86 Massive Chinese involvement
in Myanmar hydropower projects is also implementing the Go Global strat-

84 Myanmar Prime Minister Khin Nyunt in July 2004 went to Hubei Province to visit the
Three Gorges Hydropower Station under construction, which is the biggest dam in the
world. On 30 November 2005, a delegation headed by the Myanmar Electric Power Min-
ister visited Yunnans Power Grid Corporation. In October 2006, Soe Win went to Hubei
Province again and visited the Central China Power Grid Company., Ltd. He called for
more hydropower projects and transmission lines and substations, and stated that the
funding and technical support were especially urgent needs. In May 2007, a Myanmar
power delegation led by the Minister of Myanmars Ministry of Electric Power No. 1
visited Yunnan. One month later, General Thein Sein, Secretary (1) of the SPDC (now
President) led the Attorney-General and 7 Ministers of Ministry of Electric Power No. 1
and No. 2, Energy, Commerce, Mines, and Transport on a visit to Yunnan. They visited
the Yunnan Power Grid Corporation and called on Chinese enterprises to invest in and
develop hydropower stations in Myanmar.
85 Myanmar plans to expand cooperation with China on electric transmission and substa-
tion, mm.mofcom.gov.cn/aarticle/todayheader/200705/20070504709457.html.
86 All foreign investment in Myanmar power sector is from China, www.chinapower.com.cn/
newsarticle/1057/new1057505.asp.

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egy formulated by Beijing. This expands Chinese companies and enterprises,

and increases export and foreign exchange revenue. As noted above, China
has not only built many dams but also supplied much of the equipment for
Burmese hydropower plants. This equipment included complete hydroelectric
generators and all kinds of auxiliaries. The maintenance of this equipment,
imported from China, and the supply of spare parts and technical services will
continue to be dependent on China. China therefore has, and will have, great
influence upon the Myanmar power sector.
Since 1995, Yunnan has exported power to the neighboring border cities in
Myanmar. From 1995 to 2004, the export of power to Myanmar was increasing
at an annual rate of 40 percent.87 In 2004, Yunnan stopped the power supply
to the Shan State Special Region 4 in order to force it to close the casinos in
Myanmar. Without the power supply, the casinos suffered heavy losses and
layoffs. (Because a great many Chinese swarmed into the Myanmar casinos,
many billions of yuan flowed to Myanmar.)

The Dynamics of Chinas Dam Expansion in Myanmar

Chinese dam builders have accumulated a vast knowledge base, having con-
structed almost half of the worlds 45,000 large dams within Chinas borders.
Further, Chinese companies can often build dams less expensively than com-
panies from other parts of the world. In recent years, as Chinese dam building
capacity has increased, reforms in the power sector have simultaneously created
a more pluralized, flexible industry which can act more opportunistically both
inside and outside of China.88 The corporatization of Chinas power sector
has been followed by a surge in domestic and overseas dam building, as power
companies move quickly to secure existing assets and to begin to develop new
ones. These factors facilitate Chinas increased involvement in overseas dam
building.89
Meanwhile, the expansion of Chinas dam industry also has been prompted
by favorable policies a package of initiatives known as the Go Global
strategy. A clear illustration of the success of the strategy in Myanmar is that,
among the eleven power corporations that were carved from the former State
Power Corporation of China, four power generator companies, (two power

87 The Export of Power to Vietnam and Myanmar has become an important merchandise to
earn foreign exchange, www.chinapower.com.cn/newsarticle/1023/new1023750.asp.
88 McDonald et al., Exporting dams, p. 297.
89 Ibid., pp. 294297.

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 ChinaMyanmar Strategic and Security Relations

grid corporations as well as Sinohydro Corporation and Gezhouba Group

Corporation), have been involved in Myanmars power sector.
China is involved at present in the construction and development of hy-
dropower projects with the model of BOT on the Ruili and Nmai Hka Rivers,
and the Malikha River basin, as well as the Ayeyarwady River. In Kachin State,
seven dams along the Ayeyarwady, NMai Hka, and Mali Hka Rivers, with a
combined installed capacity of 13,360 MW, are planned. The CPI signed in
2007 an agreement with the Burmese authorities to finance all seven dams.
After the preparatory projects of seven dams began in April 2007, CPIC set
about solving the problem of power transmission from Myanmar to China. On
21 May 2007, CPI and China Southern Power Grid Co. Ltd signed a strate-
gic cooperation framework agreement for jointly developing the Nmai Hka,
Malikha, and Ayeyarwady river electricity. According to the agreement, China
Southern Power Grid Co. Ltd. will construct the power transmission networks
by which Myanmar power is transmitted to China.
China is in the process of radically reforming its economy. The country
is attempting to change its pattern of economic growth at the cost of the
over-consumption of resources, heavy-pollution, and wide environmental
degradation that have occurred in the course of development. Approximately
78 percent of Chinas electricity demand is met by burning coal, which has
taken a serious toll on the environment.90 According to Chinas plan, the
proportion of electricity produced from coal should have been reduced to 68
percent by 2010, and further to 60 percent by 2020.91 Large-scale hydropower
is almost universally considered renewable and sustainable in China. The
current leaderships emphasis on sustainable and scientific development, along
with its renewable energy targets for the coming decades, stand to more than
double the existing installed hydropower generating capacity by 2020.92 China
is exporting its concepts of sustainable development to neighboring areas such
as mainland Southeast Asia. In response, Myanmar, with its rich hydroelectric
power resources but plagued by power shortages, seems to have no other

90 Philip H. Brown, Darrin Magee, and Yilin Xu, Socioeconomic vulnerability in Chinas
hydropower development, China Economic Review, Vol. 19, Issue 4, December 2008, p.
614.
91 China Expected to Suffer Another Power Shortage in Two Years, SinoCast China Business
Daily News, London (UK), 28 February 2006.
92 Amy McNally, Darrin Magee, and Aaron T. Wolf, Hydropower and Sustainability: Re-
silience and Vulnerability in Chinas Powersheds, Journal of Environmental Management,
Vol. 90, Supplement 3, July 2009, p. 292.

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choice than to open the door for significant foreign involvement in projects on
the main streams of its leading rivers.

The Problems Facing Chinas Dams in Myanmar

Chinese outward investment that is intended to secure natural resources often
occurs in geographically sensitive and/or politically controversial locations
because many of the easily accessible and non-controversial locations in which
these resources occur are already controlled by predominantly Western multina-
tional companies.93 As a result, Countries and Industries for Overseas Contract
Project Guidance Catalogue (I & II) reminds Chinese companies that Chinas
overseas contract projects are increasingly facing security problems due to the
factors of politics, ethnic conflict, and terrorism in the host countries.94
An official investment guide for Myanmar stresses that When Chinas
companies contract projects in pursuit of economic interests, they should
actively work with the local society, participate in social welfare, and build
some small projects benefiting the Myanmar people, in order to get support
from the places where the construction project is located and to ensure Chinas
investments and projects steady and sustained development.95
The complexity of the political situation in Myanmar affects Chinas dam
building projects. Opposition groups and human rights activists charge that
the military government cannot represent the Myanmar people, and has
criticized the ruling junta for selling out national interests by selling off its
natural resources through agreements with energy-hungry China and India. In
addition, the dams inevitably affect the environment and society in Myanmar.
The Worldwide Fund for Nature (WWF) released its list of the worlds top ten
rivers at risk in 2007, Salween-Nu river was one of those listed due to the threat
of dams.96

In December 2007, the Burma Rivers Network as well as 122 Myanmar
and international organizations wrote an open letter to Hu Jintao on the influx

93 WWF, Rethink Chinas Outward Investment Flows, April 2007, p. 6.

94 Countries and Industries for Overseas Contract Project Guidance Catalogue (I and II),
Department of Outward Investment and Economic, Chinas Commerce Ministry, Decem-
ber 2008. hzs.mofcom.gov.cn/static/column/zcfb/a.html/1.
95 Chinese Academy of International Trade and Economic Cooperation of Ministry of Com-
merce, PRC, Investment Promotion Agency of Ministry of Commerce, PRC, Economic
and Commercial Counsellors Office of the Embassy of the Peoples Republic of China,
Guidelines for Overseas Investment and Cooperation in Other Countries and Regions (Myan-
mar), 2009, pp. 5960.
96 Worldwide Fund for Nature (WWF), Worlds Top 10 Rivers at Risk, WWF Internation-
al, Gland, Switzerland, March 2007, p. 4.

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of Chinese dam building companies to Myanmar. In this letter, they stated,

Burning and looting of villages, forced relocation, systematic sexual violence,
and extra-judicial killing by the regimes troops are commonplace. Any dam
construction will therefore compound the suffering of ethnic people living in
both ceasefire and non-ceasefire areas, many of whom have already become
internally displaced people or refugees.97
The human rights abuses and forced labor that have occurred in the con-
struction of dams are not confined to Chinese projects. Its no secret that
development and securing future energy reserves take precedence over pro-
tecting the environment in most of the world, but what of human rights? And
what of the proposed, or lack thereof, benefits for Burma and its people?98
But Chinese dam builders have yet to adopt internationally accepted social
and environmental standards for large infrastructure development that can as-
sure these costs are adequately taken into account. The Chinese government,
however, is becoming increasingly aware of the challenge and the necessity
of promoting environmentally and socially sound investments overseas.99 In
Myanmar:
The entire decision-making process for the planning and implementation of
the hydropower development projects has been conducted in secrecy, with
the barest minimum of information revealed. There has been a total absence
of public participation among the dam-affected communities in Burma. So
far there has been no evidence that any social impact assessments (SIA) or
adequate and timely environmental impact assessments (EIA) have been
carried out for the dams, despite agreements having been concluded and
in some cases construction having already begun. The vast majority of the
communities who will bear the negative impacts of dam construction will
get no benefit or compensation.100

Consequently, some Myanmar people and organizations requested that the

Chinese government monitor and regulate Chinese corporations operating
and financing hydropower development and other natural resource extraction
projects abroad. Businesses should be made to comply with relevant Chinese

97 Open Letter to the Peoples Republic of China on the Influx of Chinese Dam Building
Companies to Burma/Myanmar, Burma Rivers Network, 3 December 2007.
98 Don Talenywun, The politics of dam construction along the Salween, Mizzima, 15 Au-
gust 2009.
99 McDonald et al., Exporting dams, p. 294.
100 Open Letter to on the Influx of Chinese Dam Building Companies.

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 Modern ChinaMyanmar Relations

domestic and international standards ensuring peoples informed participation

in decision-making and accountability.101
According to the survey of the corporate social responsibility and sustain-
ability of Chinese companies conducted by WWF in 2009, Regarding sus-
tainable development and corporate social responsibility, the main activities of
the companies are philanthropic donations, staff engagement and legal compli-
ance. This shows that the corporate social responsibility of Chinese companies
is still at the initial stage ... Few of the companies expressed concern with the
environmental impacts of proposed investments. The importance of environ-
mental impact assessment to corporate social responsibility and avoiding pos-
sible negative consequences in the future is not yet apparent to the majority of
Chinese companies.102 Obviously, China has to face the challenge of how to
deal with international norms. The details of the construction of dams on vari-
ous rivers are not readily accessible, and the status of these dams is made more
uncertain due to the lack of public information about the extent to which they
are under reconsideration even in China. This fact reflects a Chinese view that
it has no obligation to make public statements about developments within its
own territory or other territories until a time of its own choosing. It is evident
that Naypyitaw holds a similar stance and attitude.
According to some Chinese contractors, they have paid compensation for
the Burmese affected by relocation because of their projects, but that such
compensation was paid to the Burmese government, which did not pay those
dislocated. They have also claimed that they have not forcibly evicted people
from dam sites, but that Burmese companies have done so.
For most Myanmar people, their dissatisfaction and anger lie in the current
power shortage in the country while many dams have been built in the past
ten years. This means the Myanmar people still have not benefited from the
dams. Some ascribe this to Chinese exploitation because they think that most
power generated by the hydropower stations is transmitted back to China.103
In terms of the local communities around the location of the projects, whether
they benefit from them, and to what extent their interests can be considered,
have an immediate impact on the security of Chinas investments and major
projects in Myanmar.

101 Ibid.
102 WWF, Chinese Companies in the 21st Century (II): A Survey on the Social Responsibil-
ity and Sustainability of Chinese Companies, April 2010, pp. 1114.
103 Interview MLM, MyanmarChinese, Beijing, 10 July 2010.

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 ChinaMyanmar Strategic and Security Relations

Although the country has known violence in the past, the bomb blasts at
the Myitsone dam project, built by CPI in April 2010, were aimed at China.
Alarm bells have been ringing about the security of the dams contracted by
China. Many people resent deals that are cut between Chinese firms and
Myanmars central government without any perceived local benefit. When
youre in a situation where you cant retaliate against your own government,
you can perhaps retaliate against investment by outsiders.104 The grenade
attacks on the Thaukyegat hydropower project in Bago division on 27 April
2010, launched by the Karen National Liberation Army (KNLA), also indicate
that all large-scale projects backed by the central government are vulnerable to
such attacks.

Myanmar and Mineral Resources Security in China

Chinas investment and involvement in Myanmars mining sector are not so
arresting as its expansion into the sectors of oil, gas, and hydropower plants.
Chinas involvement in Burmas mining sector is difficult to assess, as many
mining projects are small scale therefore less visible, attracting less publicity
and they are often located in remote areas where access is restricted by
the military or obstructed by difficult terrain.105 Moreover, the opacity is
attributable to some other factors. The news media in the two countries pay
little attention to small and medium mining projects, and Chinas enterprises
and investors barely release relevant news. In contrast, Chinas involvements
in Myanmars oil, gas, and hydropower sectors are easier to assess because of
relevant information, news, and updates available in the public domain. Some
Chinese investment and contracting go beyond the ken of the two countries
central governments. Their mining interests are not known outside the cease
fire areas controlled by ethnic minorities, where warlords illegally issue local
exploration or mining licenses.
It was after 2000 that Chinas large enterprises began to set foot in the
mining sector of Myanmar. Chinas presence in the sector has a connection
with the following background.

104 China risks backlash with Myanmar investments NGO, Reuters, 9 July 2010.
105 EarthRights International, China in Burma: The Increasing Investment of Chinese Multina-
tional Corporations in Burmas Hydropower, Oil and Natural Gas, and Mining Sectors, 2008,
p. 8.

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 Modern ChinaMyanmar Relations

Chinas Mineral Resources Security Outlook

As of early 2007, there were 171 minerals with identified resources and reserves
in China, including 10 energy minerals, 54 metallic minerals, and 92 nonme-
tallic minerals.106 For many centuries, China has valued its vast territory and
abundant resources but such a traditional conception is now being reversed.
Chinas import volume of main mineral commodities increased considerably
with its rapid industrialization from the 1990s. China became the worlds big-
gest consumer of nonferrous metal in 1995 and of copper and aluminum in
2003. By 2010, the external dependency of China on iron ore, copper, and
aluminum will reach 57 percent, 70 percent and 80 percent, respectively. The
gap between the supply of and the demand for mineral resources is growing,
and it will have a far-reaching impact on Chinas development and on the global
market of nonmetallic minerals. The strategic significance of Chinas growing
dependence on raw material imports for its minerals has aroused universal at-
tention from all concerned stakeholders.107 This condition has caused anxiety
in Beijing about mineral resources security, which has been reflected in various
reports and documents issued by Chinas State Council.
In 2001, the National Program on Mineral Resources was promulgated
by Chinas Ministry of Land and Resources in the 11th Five-year Plan for Land
and Resources (20062010). On 31 December 2008, the Chinese Ministry
of Land and Resources released the 20082015 National Plan for Mineral
Resources, which is mainly about policies on reserves of minerals. This plan
emphasized that Chinas response capacity to cope with the impacts of market
perturbation in mineral resources in general was weak. It stated that China will
have a strong demand for minerals in the process of rapid industrialization and
urbanization during the implementation of plan-schemes, and that Chinas
absolute demand for minerals cannot be reduced in the short run. The demand
supply imbalance of mineral resources is growing. Therefore, if the model of
geological resource and economic development is not changed, Chinas security
in mineral resources supply will face greater challenges.108

106 Communique on Land and Resources of China 2007, www.gov.cn/gzdt/200804/17/

content_947023.htm.
107 Zhang Jian, The prospects for cooperation between China and countries with rich de-
posits of nonferrous metals, World Nonferrous Metals, No. 8, 2005.
108 20082015 National Plan for Mineral Resources, www.mlr.gov.cn/xwdt/zytz/200901/
t20090107_113776.htm.

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 ChinaMyanmar Strategic and Security Relations

Chinas Countermeasures against the Mineral Resources Dilemma

To narrow the demand-supply gap in mineral resources and enhance the
response capacity to deal with the international mineral markets risks and
emergencies, China plans to set up a system of mineral reserves and mecha-
nisms for tackling the mineral shortage. The 11th Five-year Plan for Land and
Resources (20062010) proposes to carry out geological investigations and
mineral resources surveys in peripheral countries; to establish important min-
eral reserves bases focusing on scarce minerals inside and outside China, with
a priority on the periphery; to strengthen the collecting of information about
geological resources and the investment environment in other countries min-
ing sectors; and work out guidelines for investing in overseas mines to support
Chinas enterprises.109
In recent years, Chinas global investment in mining has been in the lime-
light. And Chinas surging demand for mineral resources also fuels international
concerns. For example, Chinas expansion into the energy and mining sector in
Africa is called a new colonialism in the continent.110 The Chinese thirst and
hunt for mineral resources in the world is believed to make China a risk to the
planet, the China Threat to resources.
Although Chinese involvement in Myanmar mining has not aroused wide
international concern like other similar projects in Australia, Africa, and South
America, there are the same intentions, driving forces, and policy behind them.
The Policy Guidance for Overseas Investment, jointly issued by Chinas eight
ministries and bureau on 5 July 2006, categorizes overseas investment into
priority, permission, and prohibition. Investment which can acquire scarce
and imperative raw materials and resources for the state is listed as the first
prioritized item for domestic enterprise.111 Meanwhile, the Catalogue for the
Guidance of Overseas Investment Industries lists the specific items to be
obtained through overseas investment in energy and mining: the exploration
for and exploitation of oil and gas; the prospecting for, exploitation of and mine-
selecting of e.g. copper, bauxite, nickel, vanadium, tin, lead, and diamonds.
The investment in energy and mining industries overseas has become the
109 Sketch of The 11th Five-year Plan for Land and Resources (20062010), www.cgs.gov.
cn/YWguanli/ZLyanjiu/ZHyanjiu/334_637.htm.
110 China faces charges of colonialism in Africa, The New York Times, 18 January 2007; Alec
Russell, The new colonialists, Financial Times, Nov 17, 2007; Yaroslav Trofimov, New
Management: In Africa, Chinas Expansion Begins to Stir Resentment; Investment Boom
Fuels Colonialism Charges: A Tragedy in Zambia, Wall Street Journal (Eastern edition),
p. A.1, 2 February 2007.
111 The Policy Guidance for Overseas Investment, policy.tech110.net/html/article_382215_
1.html.

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 Modern ChinaMyanmar Relations

most important investment made by domestic Chinese enterprises. The 11th

Five-year Plan for Overseas Investment states that the main point of Chinas
overseas investment is to strengthen the exploitation of resources abroad and
assure domestic economic security.112
In order to promote and implement the strategy of Go Global, the National
Development and Reform Commission (NDRC) and the ExportImport Bank
of China on 27 October 2004 set up an operational mechanism to give credit
support to the key overseas investment projects encouraged by the state. The
first item of key overseas investment entitled to preferential credit support is
the project which can ease the supply shortage of mineral resources in China.113
Also, Chinas Ministry of Commerce has formulated policies to stimulate
Chinas enterprises to secure overseas mineral resources; financial subsidies
from the central government are available.

Chinas Investment in Myanmars Mining Sector

Chinas growing presence in Myanmars mining sector started in 2001, and
intensified when Chinas Vice Premier Wu Yi visited Myanmar in 2004. This
is because the Myanmar mining sector had not opened to foreign investment
until the middle-1990s.
In July 2001, Chinas Ministry of Land and Resources and Myanmars min-
ing authorities signed a memorandum of understanding regarding cooperation
in the promotion of investment in the exploration, mining, and utilization of
mineral resources. The memorandum stipulated that the two countries coop-
eration included but was not limited to assessment, layout, exploration, and
exploitation of mineral resources; establishing a mixed committee about min-
eral resources cooperation; and encouraging the two countries enterprises
and research institutes to cooperate.114
In March 2004, Chinas Vice Premier Wu Yi led a strong governmental
entrepreneur delegation to visit Myanmar. Zhang Jian, the general manager of
the China Nonferrous Metal Mining Group Co., Ltd (CNMC), was recom-
mended to join the delegation by Chinas Ministry of Commerce. During Wu
Yis trip to Myanmar, CNMC won the Tagaung Taung nickel project.

112 The 11th Five-year Plan for Overseas Investment, www.investzj.com.cn/sanji.asp?id_fo-

rum=010488.
113 Notice on Providing Credit Supports to the Key Overseas Investment Projects Encour-
aged by the State, zfxxgk.ndrc.gov.cn/PublicItemView.aspx?ItemID={e7006c8545ec-
40618110-b267c59b673c}.
114 Duan Tingchang, China and Myanmar signed a memorandum of understanding regard-
ing the cooperation of Geology and Mineral Resources, China Gold News, 20 July 2001.

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 ChinaMyanmar Strategic and Security Relations

During Myanmar Prime Minister Khin Nyunts visit to China in July 2004,
CNMC and Myanmars Mining Enterprise No. 3 (ME3) signed an agreement
for preliminary surveys, mineral exploration, and a feasibility study for the
Tagaung Taung nickel project on July 12. On the following day, Myanmars
Mines Minister granted a mining license to CNMC. The Myanmar Ministry of
Mining approved a completed feasibility study of the project in June 2007. The
production-sharing contract between No. 3 Mining Enterprise and CNMC for
the Tagaung Taung nickel project was signed in Naypyitaw on 28 July 2008,
which consisted of mining and smelting facilities, and was designed to produce
85,000 tons of ferronickel and 22,000 tons of nickel per annum. The project
was scheduled to start operation in 2011, and was granted a 20-year service
period by the Myanmar government.115 On 17 April 2009, President Luo Tao,
and the Secretary of the Party Committee of CNMC, Zhang Keli, went to
Chinas Hainan province to visit Myanmars Prime Minister Thein Sein, who
was attending the Boao Forum for Asia (BFA). They negotiated the Tagaung
Taung nickel project and Thein Sein expressed interest in promoting the
project further. On 17 May 2009, the ceremonial ground-breaking took place
to formally begin the construction of the project.
The project is located in the northern Thabeikkyin Township, Mandalay
Division, 120 km from the southeastern border town of Liangjiang in Chinas
Yunnan Province and a few kilometers from the Ayeyarwady River. The
Tagaung Taung site hosts one of the two identified nickel deposits in Myanmar.
With an investment volume of more than US$800 million, the Tagaung Taung
Nickel Project is the first and largest project in ChinaMyanmar cooperation
in mining industries, which is also listed as a key project of overseas Chinese
investment during the 11th Five-Year Plan.116 After completion, it will have an
annual production capacity of 85,000 tons of nickel iron. CNMC will invest
US$500 million in nickel mining operations in a 40-km section of the nickel
project. Part of the investment will be for the construction of an onsite 30,000-
ton/year nickel production plant. Preliminary studies revealed potential
reserves of 800,000 tons with an average nickel content of 2 percent.117 This

115 China Nonferrous Metal Mining Group Co., Ltd signed the contract of Tagaung Taung nick-
el project in Myanmar, www.chinamining.com.cn/news/listnews.asp?classid=159&siteid=
153059.
116 Retrospection of the 25th Anniversary of the Founding of China Nonferrous Metal Min-
ing Group Co., Ltd, China Nonferrous Metal News, 27 November 2008.
117 Liu Jianjun, China Nonferrous Metal Mining Group Co., Ltd Arrived at an Agreement
with No. 3 Mining Company of Myanmar Mining Ministry, China Nonferrous Metal
News, 20 July 2004.

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 Modern ChinaMyanmar Relations

project will become Myanmars first nickel production facility. Another

project, Letpadaung copper, is being developed by CNMC, with an annual
production capacity of 125,000 tons of Grade A copper.
An agreement was signed between the China Hainan Jiayi Machine Import &
Export Co Ltd (CHJMIE) and the Exploration Bureau of the Myanmar Ministry
of Mines on 26 July 2004. According to the agreement, CHJMIE received
permission to explore copper and other minerals in Monywa with the area of
1,400 sq km, Sagaing Division, and in SinboNankesan, 700 sq km, Kachin State.
This project needs about US$1 billion from exploration to production,118 and
is also the second largest project of SinoMyanmar cooperation in the mining
sector after Vice Premier Wu Yis trip to Myanmar in 2004.
In March 2005, the Shandong Geology and Minerals Bureau won the gold
exploration rights in 8 blocks (50 acre/per block) in Myanmar. Eight lodes
were found in 3 blocks. The maximum mining content of a core sample was
120g/t, and its average content was 2030g/t. In the upper 90-meter layer,
there were total reserves of about 5 tons, and the lode still extended in the
lower 90-meter layer. On 12 August 2005, China Kingbao Mining Ltd signed
a contract for a feasibility survey on the Mwetaung nickel mine with No. 3
Mining Company of the Myanmar Mining Ministry.119 It is for the exploration
of 55 sq km in Tetain and Kalay in Chin State that contains proven nickel
reserves in excess of 10 million tons.120
Between 19 and 23 November 2006, the Assistant Foreign Minister, Chen
Jian, headed a Chinese official economic and trade delegation visit to Myanmar.
The two parties held the 2nd high level consultation meeting on forestry and
mining cooperation between Myanmar and China, and signed a compendium
of the second round of consultations on SinoMyanmar forestry and mining co
operation. Chinas Chongqing International Economic & Technical Cooperation
Corporation won the mining rights for an iron ore project in 2007, and planned

118 Zhang Yunfei, China and Myanmar Signed the Agreement of Exploring the Copper De-
posit, China Mining News, 29 July 2004.
119 Kingbao ( Jinbao) Mining Co. is a joint subsidiary of Gold Mountain (Hong Kong) Inter-
national Mining Co. and Wanbao Mining Co., both of which control 50% of the company.
Gold Mountain (Hong Kong) International Mining Co. is itself a wholly-owned sub-
sidiary of Zijing Mining Co., while Wanbao Mining Co. is a wholly-owned subsidiary of
China North Industries (NORINCO). See EarthRights International, China in Burma,
2008, p. 8.
120 China Kingbao Mining Ltd Signed a Cooperation Agreement with Myanmar side for the
Mwetaung nickel mine, mm.mofcom.gov.cn/aarticle/jmxw/200508/20050800263296.
html.

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 ChinaMyanmar Strategic and Security Relations

to invest RMB5 million in iron mining operations in five years. The area of this
iron deposit was 8 sq km, and its iron content amounted to 63 percent.121
Research by ERI reveals that ten Chinese multinational corporations are
involved in six mining deals with the regime. Their number, however, is more than
ten. Some other Chinese multinational corporations such as China Minmetals
Corporation, the Aluminum Corporation of China (CHINALCO), China
Hainan Jiayi Machine Import & Export Co., Ltd, China Mining Association,
Beijing Intercontinental Mineral Development Co., Ltd, and Jiangsu Pengfei
Group, Co., Ltd are also concerned with Myanmar mining. According to the
Myanmar Investment Commission, up to 30 April 2006, foreign countries
invested in 58 projects in Myanmars mining sector with a contracted value of
US$534.89 million, including 9 Chinese projects totaling US$670 million.122 Till
the end of 2008, Chinas contracted investments in Myanmar mining reached
US$866 million.123 The Myanmar official statistics do not present the full
picture of Chinas involvement in mining.
A number of Chinese enterprises and investors have become involved in
the field of mining beyond Beijing and Naypitaws supervision. Particularly
in the areas controlled by cease-fired ethnic groups, most Chinese investment
and production there are unknown to the outside. For example, in the area
ruled by The National Democratic Alliance Army, Chinese businessmen have
exploited manganese. An estimated 1,000 mine workers, all from China, are
now living near the mine field. An estimated 34,000 tons of rock per year were
transported from the mine field to the Standing Company Limited of China
in both 2004 and 2005.124 The Kachin Development Networking Group
and the Lahu National Development Organization have recently published
on-the-ground research indicating that the Chinese companies, Northern Star,
Sea Sun Star, and the Standing Company Limited, are involved in numerous
smaller-scale mining projects in Kachin and Shan States. In May 2001, the
Baoshan Bureau of Geology and Minerals Exploration signed an agreement
with Kachin State Special Region No. 1. The Yunnan side would carry out the
geologic and mineral exploration in the region under the agreement so that

121 A Chongqing State Enterprise Wins the Exploration Rights of a Iron Ore in Myanmar for
Five Years at the Cost of RMB5 Million, Chongqing Economic Times, 26 April 2007.
122 Chinas Investment Ranking 11th on Myanmar FDI List, mm.mofcom.gov.cn/aarticle/
jmxw/200607/20060702606645.html.
123 Data of ChinaMyanmar Economic and Trade Cooperation in 2008, mm.mofcom.gov.
cn/aarticle/zxhz/tjsj/200902/20090206038342.html.
124 Unhindered Prospects, Undercurrents, July 2006, Issue 2, pp. 23.

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 Modern ChinaMyanmar Relations

the Kachin local government could exploit and open those untapped mineral
resources.125
Yunnan is an important stakeholder and very active in the process of
Chinas involvement in Myanmars mining sector. The Yunnan Tin Company
Group Limited (YTC) signed an agreement of mine resources exploration and
business strategic cooperation with the Myanmar Royal Hi-tech Group Co.,
Ltd on 1 March 2007. On 5 June of the same year, over 100 Yunnan enterprises
held a symposium of cooperation with more than 70 Myanmar entrepreneurs,
and five mining cooperation agreements were signed.126

The Yunnan Nonferrous Metal Geological Bureau, cooperating with a
Myanmar company, won six gold-mining rights in 2008.127 The Yunnan Geology
& Mineral Resources Exploration Engineering Group invested RMB13.0512
million to explore a lead-zinc-copper polymetallic deposit in Lashio. This
project was approved by the Yunnan Development and Reform Commission in
December 2007.128
The Chinese presence in Myanmars mining sector in recent years is only a
component of Beijings global strategy for seeking mineral resources. Besides
Myanmar, China is employing itself in mining activities in e.g. Iran, Zambia,
Congo, Laos, Vietnam, Mongolia and North Korea. Inevitably, when China
chooses Myanmar as a country from which to obtain mineral resources, it
pays the cost of a negative international image, being criticized for pursuing
a pragmatic policy in seeking and acquiring overseas mineral resources at the
expense of human rights.129

Currently, China obtains overseas mineral resources through four channels:
trade, preliminary exploration, mine investment, and international merger
and acquisition. Until now, only Myanmar manganese ore has occupied an
important place in Chinas import of mineral resources. Among Chinas staple
import of scarce mineral resources in 2008, it imported 757 million tons of
manganese from 37 countries, and the import from Myanmar held 4.7 percent,

125 Yearbook of Baoshan, Luxi: Dehong Ethnic Press, 2002, p. 125.

126 Zhang Min, Yunnan Enterprises Signed Five Contracts, Spring City Evening, 12 June
2007.
127 Wang Zhengduan, Yunnan Go Global: Making Great Progress in Exploring Overseas
Mines, China Land and Resources News, 17 July 2008.
128 Yunnan Geology and Mineral Resources Exploration Engineering Group was ap-
proved to explore the lead-zinc-copper polymetallic deposit in Lashio, wzs.ndrc.gov.
cn/jwtz/jwtzgk/t20080131_188863.htm.
129 The real China threat, The Boston Globe, 7 March 2007.

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 ChinaMyanmar Strategic and Security Relations

ranking fifth.130 Chinas exploration and investment in Myanmar mining is now

also focusing on nickel and cooper. Other Myanmar mines have not assumed
much importance for Chinas mineral resources and economic security.

130 Bulletin of China Land and Resources (2008), 202.123.110.5/gzdt/200904/01/content_

1274266.htm.

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 8
ChinaMyanmar Economic and Trade
Relations

D uring the Cold War, economic and trade dimensions counted for
little in the ChinaBurma nexus; these dimensions were prin-
cipally motivated by political calculations and served as a tool
for political relations. Since 1988, however, economic interests have become
a prime consideration of Beijings policy towards Myanmar and have become
interlinked with Beijings longer-term security interests. The two countries
economic ties have also been politicized in the context of Western states sanc-
tions on Myanmar.

ChinaMyanmar Trade
The trade between China and Myanmar consists of conventional trade, border
trade,1 and smuggling. On the whole, the volume and value of the trade has
greatly increased since 1988 (see Table 5).
Sino-Myanmar bilateral trade grew steadily between 1988 and 1995 at an
average annual rate of 25 percent. By 1995, trade had reached a total value of
US$767.4 million a record high in the 1990s. Thereafter, the trade volume
declined for four years in a row because of Chinas and Myanmars policy
changes on border trade. First, in 1996 Beijing abolished the preferential
policy on import duties on border trade and tightened regulations.2 Second,
Myanmar was badly affected by the Asian financial crisis, which prompted a
sharp drop in the exchange rate of the Myanmar currency (Kyat) against the
U.S. dollar. In the crisis, Myanmars lack of foreign exchange and unfavorable

1 Chinas border trade comprises barter trade between border residents, petty trade in the
border areas, and foreign economic and technical cooperation in the border areas.
2 See Circular of the State Council on Issues Covering Border Trade, tfs.mofcom.gov.cn/
aarticle/date/i/k/z/200301/20030100061518.html.

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 ChinaMyanmar Economic and Trade Relations

Table 5: Chinas imports from and exports to Myanmar, 19882009 (US$ million)

Myanmar

Total Exports Imports Balance

1988 255.62 140.83 114.79 26.04

1989 287.40 184.27 103.13 81.14
1990 327.62 223.54 104.09 119.45
1991 392.09 286.17 109.52 180.25
1992 390.44 259.17 131.27 127.90
1993 489.49 324.66 164.83 159.83
1994 512.40 369.11 143.28 225.83
1995 767.40 617.85 149.55 468.30
1996 658.53 521.12 137.41 383.71
1997 643.50 570.09 73.41 496.68
1998 580.90 518.86 62.04 456.82
1999 508.03 406.55 101.48 203.59
2000 621.26 496.44 124.82 371.62
2001 631.54 497.35 134.19 363.16
2002 861.71 724.82 136.89 587.93
2003 1077.24 907.71 169.53 738.18
2004 1145.49 938.59 206.90 731.69
2005 1209.25 938.45 274.40 664.05
2006 1460.07 1,207.42 252.65 954.77
2007 2062.04 1,690.98 371.06 1,319.92
2008 2626.01 1,978.46 647.54 1,330.92
2009 2907.36 2,261.24 6461.2 1,615.12

Source: Yearbook of Chinas Foreign Economic Relations and Trade, 19912003;

China Commerce Yearbook, 20042010.

balance of trade were severe,3 and thus the government resorted to strict
import controls, particularly on luxury and non-essential goods. At the end of
1997, Myanmar suspended border trade with China, Thailand, and India.

3 Toshihiro Kudo attributed the inflow stagnation of Chinese exports to Myanmar in the
second half of 1990s to the fact that the Myanmar government became annoyed with the
countrys expanding trade deficits by the mid-1990s and resorted to stricter import con-
trols, particularly on luxury and non-essential goods. Accordingly, the influx of Chinese
consumer goods and durables declined. See, Toshihiro Kudo, Myanmars Economic Re-
lations with China: Who Benefits and Who Pays?, in Monique Skidmore and Trevor Wil-
son (eds), Dictatorship, Disorder and Decline in Myanmar, Canberra: ANU Press, 2008, pp.
9394. Only part of the explanation for the decline was the trade deficit, and he neglected
Beijings policy change in 1996 and the factor of the Asian financial crisis.

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 Modern ChinaMyanmar Relations

The dwindling Sino-Myanmar trade scraped bottom in 1999 and has

consistently risen since 2000. Compared to the period between 1988 and
1995, from 2000 to 2008 the higher average growth rate per annum was 35.85
percent. Table 5 indicates that Myanmar consistently has suffered from trade
deficits with China since 1988.4 In 2007 and 2008, Chinas favorable balance
of trade vis--vis Myanmar surpassed US$1.3 billion. However, when the
ChinaMyanmar oil & gas pipeline project is completed, Myanmar will have
another big source of foreign earnings from gas exports to China in the near
future. China will be critically important for Myanmar not only as a supplier of
goods and commodities, but also as an export market.5 Then the trade deficit
will narrow.
Myanmar is relatively insignificant in Chinas external trade. Although
SinoMyanmar trade volume occupied only 1.2 percent of the ChinaASEAN
trade volume from 2000 to 2008, Myanmar has been and is critically important
for Yunnan province. YunnanMyanmar trade makes up over 50 percent of
ChinaMyanmar trade. To Myanmar, China has become its second largest
trading partner. In the 1990s, China became a major supplier of Myanmars
general merchandise. The dominant position of Chinese consumer products in
Myanmar is attributed to the following factors: Myanmars manufacturing sector
lagged behind demand, and its import substitution strategy remained ineffective;
sanctions pushed Yangon to rely heavily on Chinas merchandise; India, ASEAN,
and Japans marginal engagement policies toward Myanmar retarded the entry
of their commodities into its market; and China had emerged as the worlds
factory by virtue of its rapid industrialization, and could meet any of the needs
of Myanmars market. In particular, in a poor country with limited purchasing
power such as Myanmar, the low price and reasonable quality of Chinas products
were attractive. Accordingly, when Yangon opened its door and legalized border
trade with China in 19881989, and because of the demonetization of much
of Myanmars currency in September 1987, Chinas commodities poured into
the emerging consumer goods markets in Myanmar through legal and illegal
channels. During the same period, China began to export machinery, product
lines, spare parts, vessels, trains, and automobiles to Myanmar.

4 For the reason for the Myanmar trade deficit with China, see Poon Kim Shee, The Politi-
cal Economy of ChinaMyanmar Relations: Strategic and Economic Dimensions, Ritsu
meikan Annual Review of International Studies, 2002, pp. 4547.
5 Toshihiro Kudo, China and Japans Economic Relations with Myanmar: Strengthened vs.
Estranged, in Kagami Mitsuhiro (ed.), A ChinaJapan Comparison of Economic Relation-
ships with the Mekong River Basin Countries, BRC Research Report No. 1, 2009, p. 280.

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 ChinaMyanmar Economic and Trade Relations

After the end of the 1990s and the beginning of the 21st century, the mar-
ket share of Chinas consumer goods in Myanmar began to decline. According
to the Yunnan Provincial Office of State Administration of Taxation statistics,
Yunnan products market share in Myanmar gradually dropped in the early
1990s and has fallen to No. 3 after Thailand and South Korea. In Mandalay, for
instance, the 50 percent market share held by China has currently decreased
over 30 percent.6 In this period, more commodities and goods from Japan,
Hong Kong, India, ASEAN (notably Thailand), and South Korea entered
Myanmar. Thailands commodities have some competitive advantages because
of the short transportation distance, low costs, and good quality, as well as
meeting Burmese consumption habits.
China lost the market share in the country because of its fake or inferior
commodities and the excessive competition among Chinas enterprises and
merchants. For example, before the 2008 Chinese Milk Scandal,7 China
dominated the milk powder market in Myanmar, and just two companies
Hope Springs of Yunnan and Deng Chuan Butterfly Dairy Co., Ltd. achieved
70 percent of the total milk market share in 2007.8 After the Milk Scandal, not
only did Naypyitaw stop the import of Chinas milk powder, but also the sales
volume and price of all Chinas food products dropped in Myanmar.9 Another
similar event was the fake eggs from China in 2009, which also injured its
reputation. In response, Myanmar took measures to curb illegally imported
food items from China. Originally, the products of Fujian Mindong Electric
Manufacturing Co., Ltd. found a ready market in Myanmar, but Myanmars
consumers lost confidence to them because of fake products. In 2003, 21
motor exporters in Chongqing made an alliance and promised to abide by
minimum price-fixing for fear of their companies predatory price-cutting in
Myanmar.10

Entering the new millennium, China is massively exporting assemblies,
product lines, and bulk equipment to Myanmar. This is largely responsible
for the great increase of SinoMyanmar trade volume and balance after 2000.
According to Chinas former ambassador to Myanmar in 2004, Myanmar has
6 Probe into the Circulation of RMB30 Billion in Border Trade, China Business Journal, 22
February 2004.
7 About the sandal, see en.wikipedia.org/wiki/2008_Chinese_milk_scandal.
8 Yunnan Hope Group Occupies 70 Percent of Myanmar Milk Powder Market Share,
China Business News, 15 August 2007.
9 The Market Share of Chinas Foodstuff Declining in Myanmar, The Economic and Com-
mercial Section of the Consulate General of PRC in Mandalay, mandalay.mofcom.gov.cn/
aarticle/ztdy/200812/20081205949989.html.
10 21 Motorcycle Exporters in Chongqing Allied, Consumption Daily, 14 August 2003.

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 Modern ChinaMyanmar Relations

become a major host country of Chinese overseas project contracting. The

projects contracted by China in Myanmar mostly include bridges, wharves,
plants, manufacturing plants (such as a sugar plant, a shipyard and a caustic soda
factory). For Chinese enterprises, the biggest benefit is the export of complete
machinery and electronic products, which are boosted by Chinas contracted
projects in Myanmar. The figures from the Chinese customs department show
that Chinese machinery and electronic products have accounted for 4550
percent of total Chinese exports to Myanmar in the recent five or six years.11

ChinaMyanmar Border Trade

The rapid expansion of ChinaMyanmar trade was caused both by the domes-
tic demands of the two respective countries and by western sanctions against
Myanmar. Border trade is an important momentum of this expanding bilateral
trade. There is little documentation or comprehensive data relating to the bor-
der trade, however, because its activities include informal trade and smuggling,
as well as underpricing, all of which are not recorded in official statistics. Thus,
real trade volume can only be estimated. Accordingly, Chinese official statistics
and data on ChinaMyanmar border trade just reflect a part of the actual situ-
ation. In addition, the different definitions of ChinaMyanmar border trade
also mean that the subject has been and will be understood differently.
Mya Than argues that ChinaMyanmar cross-border trade includes five
types: Formal or official border trade; informal border trade; illegal border
trade (smuggling); transit trade; and barter trade.12 For Winston Set Aung,

11 Li Jinjun, Myanmar Economic Overview and Prospects for ChinaMyanmar Coopera-

tion, Overseas Investment and Export Credit, No. 2, 2004. The most apparent ripple effect
between Chinas contracted projects and export lies in the hydropower stations and dams
in Myanmar. The Yeywa Hydropower project had contracts with some Chinas enter-
prises. On 2 September 2005, China Hydraulic and Hydroelectric Construction Group
Corporation and China Citic Technology Co., Ltd. supplied and installed the whole set
of equipment for hydro-electricity generating and metal structures for the Yeywa pro-
ject with a contract value of US$126 million. On 16 June 2005, China National Electric
Equipment Corporation and Zhejiang Orient Holdings Co., Ltd won the bid for the Keng
Tawng hydropower plant with contract value of US$15 million, and the China side was
responsible for the design of the plant, as well as the supply, installment and adjustment of
electronic, mechanical equipment and metal structures. The metal structures and whole
set equipment (US$8.92 million) for hydro-electricity generating of the Kabaung Hydro-
power Plant were supplied by the China National Electric Equipment Corporation and
the China National Heavy Machinery Corporation. Chinas Gezhouba Group Corpora-
tion received the supply contract for the Shwe Gin Hydropower Project on 7 September
2007, whose value amounted to EUD 20 million.
12 Mya Than, Myanmars Cross-Border Economic Relations and Cooperation with the
Peoples Republic of China and Thailand in the Greater Mekong Subregion, Journal of
GMS Development Studies, Vol. 2 No. 1, October 2005, pp. 3940.

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 ChinaMyanmar Economic and Trade Relations

Border trade is trade with neighboring countries through border points

by road (or by coastal sea in the case of exports from Myeik to Thailand).
Border trade between Myanmar and its neighboring countries includes formal
and informal (documented and undocumented) trade.13 On 13 August 1994,
China and Myanmar signed the Memorandum of Understanding on Border
Trade, which provided the definition of border trade as It includes bilateral
landborne trade and exchanging goods by border residents between Yunnan
and Myanmar.14

In 1996, the State Council of China classified border trade: 1. exchanging
goods by border residents, with the goods value not more than the set amount
or quantity at the open-up points or markets designated by the government
within the border areas 20 kilometers from the boundary line; 2. border trade
in small amounts, referring to trade activity between the Chinese enterprises
which are granted operation rights of border trade of small amounts in the
border areas, and the enterprises or other trade organizations in the border
areas of the neighboring countries.15

Besides the above-mentioned two types, SinoMyanmar border trade
includes informal trade and smuggling. On both China and Myanmar soil,
there are numerous brokers, who constitute a type of social networking for the
underground economy.
On 3 October 1988, Yangon legitimized and formalized the border trade
with China, and set up border trade offices in Lashio, Muse, Namhkam, and
Kunlong.16 Myanmar started the implementation of the border trade system
in 1991 with China and India. Up to 2009, Myanmar had opened four border
trading points with China, namely Muse (opened on 21 January 1998), Lwejel
(23 August 1998), Chinshwehaw (19 October 2003), and Kambaiti (reopened
1 August 2009).17 In 1998, Muse was opened as a border trade point with China
and a one-stop service was introduced. On 4 November 2006, the Muse 105
Mile Trade Zone (i.e., at the 105th mile road marker) was established, which
covers an area of 370.83 acres linking Chinas Ruili in Yunnan Province. Also,

13 Winston Set Aung, The Role of Informal Cross-border Trade in Myanmar, Institute for
Security and Development Policy Asia Paper, September 2009, p. 9, 3031.
14 Memorandum of Understanding on Border Trade of China and Myanmar, xxgk.yn.gov.
cn/newsview.aspx?id=123341.
15 Circular of the State Council Regarding Relevant Issues on Border Trade, tfs.mofcom.gov.
cn/aarticle/date/i/k/z/200301/20030100061518.html.
16 For the process of legalization of ChinaMyanmar border trade, see Maung Aung Myoe,
SinoMyanmar Economic Relations Since 1988, Asia Research Institute, National Uni-
versity of Singapore, Working Paper, No. 86, 2007, p. 9.
17 The Kambaiti and Laiza trading points were temporarily closed in June 2006.

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 Modern ChinaMyanmar Relations

Table 6: Chinas land ports with Myanmar

Name Level* Date opened** Opposite

Myanmar points
and region

Ruili National 1978 Muse, Muse

township
Wanding National 1952 Kyukok, Kyukok
township
Houqiao National August 1991 Kambaiti, Kachin
State Special
Region No. 1
Qingshuihe National August 1991 Chinshwehaw
(Mengding) Shan State Special
Region No. 1
Daluo National August 1991 Mong La, Shan
State Special
Region No. 4
Menglian Provincial August 1991 Bangkang, Shan
State Special
Region No. 2
Nansan Provincial August 1991 Kokang Laukkai,
Shan State Special
Region No. 1
Cangyuan Provincial September 1996 Nandeng, Shan
State Special
Region No. 2
Yingjiang Provincial August 1991 Laza, Kachin State
Special Region
No. 1
Zhangfeng Provincial August 1991 Lwejel, Lwejel
township
Pianma Provincial August 1991 Datianba, Kachin
State Special
Region 1.

Source: Ports Office, Department of Commerce, Yunnan Province.

Chinas ports are classified as national ports (approved by the central govern-
*

ment) or provincial ports (approved by provincial governments). The national land

ports are open to both Chinese and foreign vehicles transporting passengers and
goods into or out of China by land, whereas the provincial land ports are only for
petty trade in the border areas and restricted to the exit or entry of the local resi-
dents in these areas.
**
Except Ruili and Wanding, the date refers to when the ports were approved to
become provincial ones.

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 ChinaMyanmar Economic and Trade Relations

Myanmar has been working to transform border trade with China into normal
trade to enhance the bilateral trade between the two countries. Myanmar will
soon add one more border trade zone in the Kokang region built in Yan Lone
Chai Township to facilitate trading between that region and Yunnan. From
Myanmars perspective, its border trade with China has experienced ups and
downs, reflecting not only market situations but also political, security, and
macroeconomic conditions.18
Chinas policies on border trading have also experienced adjustment and
reorientation. In 1988, the Yunnan government formulated the policy of making
full use of its geographical and resources advantages to develop Southeast
Asian markets. The State Council promulgated rules and preferential policies
on taxes, duties, exchange rates, and export drawbacks to boost border trade
in 1991 and 1992. In 1992, Yunnan established the Administration of Border
Economy and Trade, and Beijing approved Wanding and Ruili as open cities
along the Chinese border. In the same year, two state-level border economic
cooperation zones, Ruili Border Economic Cooperation Zone (Ruili BECZ)
and Wanding Border Economic Cooperation Zone (Wanding BECZ), were
founded with the approval of the State Council to promote the border trade
between China and Myanmar. Now, Yunnan is lobbying Beijing to establish
a ChinaMyanmar Cross-border Economic and Cooperation Zone in the
province.
In accordance with Chinas border trade regulations of 1996, goods imported
as exchanging goods by the border residents in amounts less than RMB1,000
per person per day shall be exempt from tariffs and import duties. In case the
amount exceeds RMB1,000, the excessive amount shall be levied on tariffs and
import duties in compliance with stipulated tax rates. With the quick progress
of border trade, the free-duty and tariff quota was raised to RMB3,000 in 1998
and RMB8,000 in 2008.
The Measures for the Administration of Foreign Exchange in Border Trade,
promulgated by the State Administration of Foreign Exchange in September
2003, granted that Chinese traders and enterprises could conduct settlements
using RMB in the border trade. With a view to promoting the development of
border trade between China and its surrounding countries, Beijing approved a
program as of 1 January 2004, that taxes on the export of goods under small-

18 Toshihiro Kudo, Myanmars Economic Relations with China: Can China Support the
Myanmar Economy? Institute of Developing Economies, JETRO Discussion Paper No.
66, 2006, p. 11. For Myanmars policy changes on border trade with China, see the same
paper, pp. 1012.

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 Modern ChinaMyanmar Relations

scale border trade in Yunnan settled in Renminbi by means of banking transfers

and cash could be refunded 70 percent and 40 percent, respectively. The export
tax rebate (exemption) policies shall apply to export transactions settled only
in foreign exchange before this new provision. Because the refundable rate of
70 percent was not attractive for the traders and the policy was not effective,
Upon the approval of the State Council, as of October 1, 2004, the rate of the
refundable amount of taxes has been adjusted from the present 70 percent to
100 percent if the export of goods under small-scale border trade in Yunnan is
settled in Renminbi by means of banking transfers.19

At the end of 2008, China signed settlement agreements with eight neigh-
boring countries including Myanmar, with a voluntary choice of settlement
currency. In a bid to facilitate transactions in border trade in September 2009,
the China Construction Bank and the Agricultural Bank of China signed
agreements opening RMB settlement accounts with the Myanmar Economic
Bank to establish direct banking relations between the two countries in a bid to
facilitate transactions in border trade. Commercial banks from Myanmar will
link with their counterparts from Ruili and Jiegao in China starting in 2010.
Up to 2009, China had opened 11 land ports with Myanmar (see Table 6),
though there are four official trade posts on the Myanmar side of the border
with Yunnan. Apart from Muse, Lwejel, and Kyukok, the other trade points are
located in ceasefire group-controlled areas.
Among 20 Yunnan ports, the ports to Myanmar are the most important
and busiest in terms of trade volume, freight volume, the number of entry-exit
vehicle, and personnel. For Myanmar and China, Muse and Ruili have played
the most important roles in bilateral border trade. Muse (mile 105) is the most
lucrative and the busiest trading point in the country; its trade volume with
China accounts for 50 percent of Myanmar landborne trade and 75 percent
of border trade.20 According to Kunming Customs, when Yunnan small-scale
border trade volume in 2007 amounted to US$1.01 billion and SinoMyanmar
border trade hit US$0.7m, the Ruili export figure was US$0.3 billion and held
52.6 percent of the border trade export volume in the province.21 From 2000 to
2008, according to statistics, Ruili border trade volume made up 64 percent of
YunnanMyanmar trade and 26 percent of ChinaMyanmar trade. Ruili port

19 Trial Implementation of Tax Refund (Exemption) for Export of Goods under Small-scale
Border Trade Settled in Renminbi, Finance and Accounting for International Commerce, No.
1, 2005, p. 13.
20 Study on RuiliMuse Cross-border Economic and Cooperation Zone, www.dehong.gov.
cn/dehong/yearbook/2009/0523/overview-8208.html.
21 Yunnan Border Trade Hit US$ 1 Billion, Spring City Evening, 23 January 2008.

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Table 7: Myanmars border trade with China (19912008) (US$ million)

Fiscal Year Exports Imports Total Trade Total border % of

value balance trade border
trade

199192 52.52 54.47 106.99 1.95 139.27 76.82

199293 58.50 131.24 189.74 72.74 257.93 73.56
199394 27.04 90.23 117.27 63.19 248.04 47.28
199495 29.96 65.08 95.04 35.12 231.87 40.99
199596 22.03 229.31 251.34 207.28 335.95 74.81
199697 29.82 158.68 188.50 128.86 357.13 52.78
199798 86.44 59.37 145.81 27.07 257.06 56.72
199899 94.88 99.41 194.29 4.53 300.27 64.71
199900 96.39 94.90 191.29 +1.49 344.39 55.54
200001 124.38 100.11 224.48 +24.28 411.74 54.52
200102 133.12 115.85 248.96 +17.27 505.83 49.22
200203 158.17 132.57 290.74 +25.60 460.57 63.13
200304 177.26 163.84 341.10 +83.42 531.80 64.14
200405 246.46 176.37 422.83 +70.09 687.88 61.47
200506 285.88 195.48 481.36 +90.4 716.73 67.16
200607 453.12 296.64 749.76 +156.48 1092.61 68.62
200708 555.48 421.95 977.43 +133.53 1329.53 73.52

Source: Maung Aung Myoe, SinoMyanmar Economic Relations Since 1988, Asia
Research Institute, National University of Singapore, Working Paper No. 86, April
2007, p. 10; Department of Border Trade, Myanmar Ministry of Commerce.

has become the largest border trade port not only in Yunnan province but also
among inland provinces and regions in China; 50 to 60 percent of the goods
and commodities for border trade in the province passed through Ruili port,
Ta
where the average vehicle flow per day amounted to over 1,500.22
China is the biggest border trading partner of Myanmar. The Myanmar
government also promoted all border trade not only with China but also with
Thailand, India, and Bangladesh to compensate for the economic sanctions
imposed by the West, and the Chinese border recorded a most meaningful suc-
cess. Thus, Myanmars border trade with China has become a main artery of its
economy.23 Table 7 indicates that the lions share of Myanmars border trade is
with China. The value of ChinaMyanmar border trade accounted for an aver-
age of 61.47 percent of Myanmars total border trade from 1991/92 to 2007/08.

22 ChinaMyanmar Border Trade Routeway: Ruili, the Golden Port, Spring City Evening,
10 April 2009.
23 Toshihiro Kudo, Myanmars Economic Relations with China, 2008, p. 97.

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 Modern ChinaMyanmar Relations

Myanmars documented cross-border exports through Muse, Myawaddy, and

Kawthaung account for 41 percent, 19 percent, and 12 percent, respectively, of
the total value of documented cross-border exports from Myanmar.24 The data
in Table 7 also shows that Myanmar has had a positive border trade balance
with China since 1999/2000. In the MyanmarChina border trade, the most
frequently exported items are agricultural products, aquatic products, and rub-
ber and its products, while the main items that Myanmar imports from China
are electric goods and machinery, textiles, chemicals, steel, daily-used products,
and pharmaceuticals. However, as Maung Aung Myoe notes:
Chinese data can by no means be considered fully accurate in terms of
SinoMyanmar trade, but the figures are generally more reliable than those
of Myanmar. Myanmar data show a different picture on SinoMyanmar
trade. It is generally agreed among Myanmar scholars that the Myanmar
trade statistics are notoriously unreliable and that the figures are often
completely distorted. Generally, Myanmar trade data are undervalued.
This is due not only due to different methods of calculation, but also more
importantly to widespread corruption in trade and customs offices as well
as among border security authorities. Myanmar data show smaller deficits
and even surpluses for Myanmar.25

According to Chinese official statistics, the value of SinoMyanmar trade

accounted for only 1.2 percent of ChinaASEAN total trade value from 2000
to 2008. Myanmar is also not important for Chinas overall border trade, and
it has not been on the list of Chinas major border trading partners. In 2008,
Chinas three largest border trade partners were Russia, Kazakhstan, and
Kyrgyzstan. However, the border trade between the two countries is critical
for Yunnan as indicated in Table 8. Over 50 percent of ChinaMyanmar trade
value is YunnanMyanmar trade, while the border trade constituted 76 percent
of YunnanMyanmar trade volume from 2000 to 2009.
Although Chinese official statistics show that the border trade was a
large percentage of YunnanMyanmar total trade, the actual value of border
trade should be much higher due to the underground trade. In accordance
with Myanmars regulations, the private sector is prohibited from exporting
through border areas some agricultural products, minerals, metals, animals,
animal products, arms and ammunition, antiques and teak, and importing beer,

24 Winston Set Aung, The Role of Informal Cross-border Trade in Myanmar, p. 24.
25 Maung Aung Myoe, SinoMyanmar Economic Relations Since 1988, p. 7.

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 ChinaMyanmar Economic and Trade Relations

Table 8: Yunnans trade with Myanmar, 20002009 (US$ million)

Total Exports Imports

Value Share Border Value Share of Value Share of

of trade China China
Year China share of Myanmar Myanmar
Myan Yunnan trade trade
mar Myanmar
trade trade

2000 362.99 58.5% 79.1% 293.06 59.1% 69.93 55.9%

2001 348.73 55.2% 73.4% 251.51 50.6% 97.22 72.6%
2002 406.78 47.2% 68.8% 296.08 40.8% 110.70 80.8%
2003 492.79 45.8% 64.9% 356.85 39.3% 135.94 80%
2004 551.32 48.2% 72.8% 386.61 41.2% 164.71 79.6%
2005 631.62 52.2% 84.2% 410.63 43.9% 220.99 80.7%
2006 692.08 47.4% 81.2% 521.13 43.2% 170.95 67.6%
2007 873.57 42.4% 80.3% 640.68 37.9% 232.89 62.9%
2008 1192.79 45.4% 78.6% 727.69 36.8% 465.10 71.8%
2009 1227.33 42.2% 79.7% 775.06 34.3% 452.27 70.0%

Source: Department of Commerce of Yunnan Province; Yunnan Yearbook; Statistics

of Kunming Customs.

cigarettes, liquors, plastic household goods affecting the domestic industries.26

Additionally, There are still various constraints such as an export-first policy,
the licensing system, and high taxes related to exports in conducting formal
trade. This has led to a situation where informal practices have expanded drasti-
cally, especially in border areas.27 In 1989, Bertil Lintner wrote that the value of
ChinaMyanmar border trade (including illegal trade) was about US$1.5 billion
after Myanmar legalized the border trade.28 On both China and Myanmar soil,
numerous brokers constituted a net working for the underground economy.
Now, there are still over 40 underground banks in Ruili, although the govern-
ment has been fighting illegal banking since 2004.29
As a rule, the RMB is chosen as the settlement currency in the Yunnan
border trade. Less than 3 percent of the total passes through Chinas customs
clearance using RMB for settlement payments. The majority of export traders

26 For the rule, see www.commerce.gov.mm/eng/dobt/procedures.html.

27 Winston Set Aung, The Role of Informal Cross-border Trade, p. 6.
28 Bertil Lintner, The Busy Border: Burmas contraband trade with China is booming, Far
Eastern Economic Review, 8 June 1989, p. 104.
29 Liu Lang, Yunnan: Over 95 Percent of the Settlement of Border Trade Using RMB,
China Business News, 6 January 2009.

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 Modern ChinaMyanmar Relations

choose the blackmarket banks to settle accounts. In addition to evasion of

duty, they can provide more convenient and more expeditious settlement
with less remittance charges than international banks.30 Thus, a considerable
disparity occurs in the statistics on YunnanMyanmar trade between those of
the Kunming Customs and reality.

Chinese Development Assistance, and Economic and Technical

Cooperation
In the context of sanctions and the nonengagement policy of most Western
countries, the development assistance provided by Beijing and the economic
and technical cooperation between the two countries have been regarded as one
proof that China is that isolated countrys leading backer. It is difficult to probe
the subject because reliable data on assistance and cooperation are by no means
easy to find and both sides seldom release the details of cooperation. The spe-
cific number of assistance and cooperation agreements and protocols signed by
both sides are not available. According to the Yunnan Commerce Department,
from the mid-1980s to 2005, China and Myanmar signed fifteen agreements
of economic and technical cooperation.31 Myanmar released a statement that
The progress of economic cooperation between Myanmar and China can be
witnessed as over 30 economic agreements were signed between 2004 and
2006.32 It is estimated that up to 2010, at least over one hundred assistance and
economic and technical cooperation agreements were signed by China and
Myanmar. These agreements are involved not only with the traditional coop-
eration sectors such as agriculture, industry, and trade, but also in new sectors
including tourism, mining, communication, technology, and fisheries.
ChinaMyanmar economic cooperation boosts bilateral political ties. The
effect firstly is reflected in a series of agreements signed by the two leaderships
when they exchanged visits. In July 1993, China and Myanmar signed six
agreements on economic and technical cooperation, and Beijing offered a
RMB50 million interest-free loan to Yangon. In 1996, Myanmar acquired a
RMB150 million discount-interest loan from China, and both sides established
a MyanmarChina Economic Cooperation Promotion Committee to further

30 Yin Hongwei, Settlement Using RMB VS Blackmarket Banks, South Wind Window, No.
10, 2009.
31 The Economic and Technical Cooperation Agreements and Pacts Signed by China and
ASEAN Countries, www.bofcom.gov.cn/bofcom/432914020329062400/20051110/
4646.html.
32 Minister for Commerce attends 50th Anniversary of SinoMyanmar Gathering in Yun-
nan Province, The New Light of Myanmar, 23 December 2006.

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 ChinaMyanmar Economic and Trade Relations

bilateral economic ties. Myanmar used the RMB150 million loans to construct
production lines of automobile disc wheels and automotive radiators.
In May 1997, the two countries signed the Agreement on MyanmarChina
Economic Cooperation Promotion, and the Agreement of Formation of the
SinoMyanmar Joint Committee on Economic, Trade and Technological
Cooperation. According to the latter agreement, the main functions of the joint
working committee are to examine the implementation of relevant agreements
signed between them on economic, trade, and technical cooperation and to
jointly explore the possibilities of carrying out various forms of economic
cooperation.33 Two months later, when Chinese Vice Premier Wu Bangguo
visited Myanmar, the two sides signed a loan agreement, under which the
Chinese government provided a preferential loan to Myanmar totaling RMB100
million. The Myanmar government used the loan to build a production line of
automobile throttles; it was put into operation in 2003. In 1998, China offered
Myanmar a preferential loan amounting to US$150 million to cope with the
impact of the Asian financial crisis.
In 2000, Myanmar General Maung Aye, Vice Chairman of the SPDC, paid
an official visit to China to mark the fiftieth anniversary on 8 June 1950 of the
establishment of diplomatic relations. Standing behind the political ties was a
package of agreements and contracts signed by the two countries. Among them,
the most important agreement was the Joint Statement on the Framework of
Future Bilateral Relations and Cooperation (See Appendix 1). The fourth article
of the statement stressed that Both sides agree to further strengthen cooperation
in trade, investment, agriculture, fishery, forestry and tourism on the basis of
equality and mutual benefit, priority to actual results, and taking advantage of
the others strength.34 Meanwhile, the Agreement on Economic and Technical
Cooperation, Agreement on Tourism Cooperation, Agreement on Science and
Technology Cooperation, and a Memorandum of Understanding (MoU) on the
implementation plan for outbound travel by Chinese citizens to Myanmar were
reached.35 On 26 August 2001, China and Myanmar signed an Economic and
Technical Cooperation Agreement in Yangon on the traffic sector. Jiang Zemins
2001 trip was the first Chinese presidential visit since 1988. During this visit,

33 Ministry of Foreign Affairs, PRC (ed.), Collection of Treaties of the Peoples Republic of
China (1997), Vol. 44, Beijing: World Affairs Press, 1999, p. 141.
34 For the Joint Statement, see: www.fmprc.gov.cn/chn/w jb/zzjg/yzs/g jlb/1271/1272/
t23684.htm.
35 Agreements between Myanmar and Peoples Republic of China signed, The New Light of
Myanmar, 17 July 2000.

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 Modern ChinaMyanmar Relations

seven bilateral agreements were signed.36 Also, Jiang suggested listing agriculture,
human resources, natural resources, and infrastructure construction as key fields
of furthering bilateral cooperation.
During Assistant Minister of Commerce of China Chen Jians visit to
Myanmar in December 2002, the two sides signed a framework agreement on
Chinas provision of a concessional loan and another agreement on economic
and technical cooperation. These loans extended by China were used for
infrastructural construction.
When Than Shwe, the Chairman of SPDC, visited China again at the
invitation of President Jiang Zemin in January 2003, Jiang promised that
Assistance will be provided to Myanmars development tasks as much as
possible. Under the economic and technological cooperation program, China
will provide RMB50 million to Myanmar and give a special loan of US$200
million for the development tasks.37
In December 2003, China and Myanmar signed a framework agreement on
the provision of concessional loans and another agreement on economic and
technical cooperation. Under the prior agreement, the Chinese government
would provide a concessional loan for use in the second phase of a key com-
munication network project of Myanmar, while under the latter agreement,
China would extend an interest-free loan to Myanmar for use in mutually
agreed projects.38 In March 2004, Chinas Vice Premier Wu Yi led an economic
delegation of some 40 Chinese leading entrepreneurs to Myanmar. During

36 The Protocol on Cooperation in Border Areas; the contract for Improving Petroleum Re-
covery on 10R-4 Pyay Field; the Agreement on Economic and Technical Co-operation;
the Agreement on the Promotion and Protection of Investments; the Agreement on Phy-
tosanitary Cooperation; the Agreement on Cooperation in Animal Health and Quaran-
tine; and the Agreement on Cooperation in Fisheries. See Ministry of Foreign Affairs,
PRC (ed.), Collection of Treaties of the Peoples Republic of China (2001), Vol. 48, Beijing:
World Affairs Press, 2003, pp. 161169.
37 Senior General Than Shwe, President Jiang Zemin Discuss Bilateral Cooperation, The
New Light of Myanmar, 12 January 2003. At the same time, three agreements were signed,
including the Agreement on Health Cooperation, the Agreement on Economic and Tech-
nical Cooperation, and the Agreement on Cooperation in the Field of Sports. In the same
month, Vice Premier Li Lanqing was invited to visit Myanmar, and the two sides reached
an agreement on partial debt relief for Myanmar, a Memorandum of Understanding on
Extending a Grant of RMB5 million for the Supply of Culture, Education and Sporting
Goods by China to Myanmar and another MoU on the Program of Aerospace and Mari-
time Courses Provided by China to Myanmar.
38 China, Myanmar sign agreements on loan, economic cooperation, chenjian2.mofcom.gov.
cn/aarticle/activity/200412/20041200008329.html.

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 ChinaMyanmar Economic and Trade Relations

the visit, 21 agreements on trade and economic cooperation were signed.39

Just four months later, Myanmar Prime Minister Khin Nyunt visited China.
His trip was rewarding, and eleven documents on economic and technologi-
cal cooperation were signed. The agreements included cooperation in trade
promotion, energy and minerals exploration, telecommunications, and other
industrial fields. The Chinese government also offered a US$150 million loan
for telecommunications as well as a US$94 million rescheduling of debts.
Eight MoUs, agreements, and contract notes on economic and coopera-
tion were signed between the two countries when Myanmar Prime Minister
Soe Win visited China over 1418 February 2006.40 China and Myanmar
signed another general loan agreement on the utilization of the preferential
buyers credit loan of US$200 million on 8 June 2006. The loan was used in
implementing projects of five Myanmar Ministries in different sectors. At the
end of 2006, Chinas Assistant Minister of Commerce Chen Jian granted a
low-interest loan and debt cancellation to Myanmar in Yangon, reportedly of
RMB300 million (US$38 million) and RMB240 million (US$30 million), re-
spectively.41 The two sides agreed to jointly work out three cooperation master
plans on timber, mining, and agriculture and to initiate more cooperation mas-
ter plans in the sectors of energy, industry, and infrastructure after working out
the timber, mining, and agriculture master plans.42 Additionally, an agreement
of economic and technical cooperation and an exchange of letters on Myanmar
scholars going to China were signed.

39 The main documents between the two governments included an agreement on economic
and technical cooperation, a framework agreement on provision of concessional loans and a
memorandum of understanding (MoU) on promotion of trade, investment and economic
cooperation. Other documents covered agreements, MoUs, and contracts on cooperation in
projects of communications, power plants, agricultural technology, agricultural machinery
manufacturing, mineral exploration, fertilizers and railways. Under these agreements and
contracts, Chinese companies initiated a large number of projects in Myanmar manufac-
turing, energy, and infrastructure sectors.
40 They were: Agreement on Economic and Technical Cooperation; Air Services Agree-
ment; Agreement on the Chinese Ministry of Railways Donating Passenger Coaches to
Myanmar; Memorandum of Understanding on the Construction of Greater Mekong In-
formation Superhighway; a sub-loan agreement of US$31.50 million; a loan agreement
for a urea fertilizer factory; a supply contract (phase-1) for Myanmars National Telecom-
munication Network Construction Project; and a contract for the supply of mechanical
and electrical equipment and services for Paunglaung Hydropower Project Phase II. In-
formation Sheet of Myanmar Information Committee, www.myanmar-information.net/
infosheet/2006/060219.htm.
41 China Grants Myanmar Partial Debt Relief, International Business Times, 24 November
2006.
42 China, Myanmar sign economic, trade cooperation agreements, english.peopledaily.com.
cn/200611/23/eng20061123_324523.html.

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 Modern ChinaMyanmar Relations

Two agreements of economic and technical cooperation were signed on 30

December 2006 and 16 November 2007, respectively. When Li Changchun, the
member of the Standing Committee of the Political Bureau of the Communist
Party of China Central Committee, visited Myanmar in March 2009, the
two countries signed the Cooperation Agreement on the Myanmar Oil and
Gas Pipelines; the Framework Agreement on Development of Hydropower
Resources; the Agreement on Economic and Technical Cooperation; the
Memorandum of Understanding Regarding Buyers Credit for Construction
Projects (Naypyitaw International Airport, hydropower plants and projects of
Myanmar Ministry of Industry II).
It is difficult to distinguish the Chinese governments genuine development
assistance from commercially based projects contracted by Chinas enterprises.
During Premier Li Pengs visit to Myanmar in December 1994, he told the
Burmese that China was developing a market economy, and Chinas enterprises
would be the leading implementers of bilateral economic and technical coop-
eration. The economic assistance and free-interest loans previously provided
by Chinas government would be gradually replaced by conventional and low-
interest loans from banks. As a rule, when an assisted project is determined by
China and Myanmar, the Department of Aid to Foreign Countries of Chinas
Ministry of Commerce calls for bids on it in China. As development assistance
and economic and technical cooperation between the two countries increase,
more and more Chinese machinery, commodities, technology, and projects
contracted by Chinese enterprises appear in Myanmar.
By the end of 2008, the contract value and turnover of contracted projects,
labor services, design, and consulting by Chinese companies in Myanmar
stood at US$5.38 billion and US$3.79 billion respectively.43
China contracted 18 projects in Myanmar from 1979 to 1993 and their
contract value and turnover were US$70.49 million and US$70.56 million.44
Chinas Foreign Ministry revealed that Chinas enterprises had contracted 800
projects in Myanmar by October 2002, whose contract value reached over
US$2.1 billion.45 Many assistance projects and business cooperative ventures
initiated and conducted by Chinas local government and enterprises in the

43 Data of ChinaMyanmar Economic and Business Cooperation in 2008, mm.mofcom.gov.

cn/aarticle/zxhz/tjsj/200902/20090206038342.html.
44 China Foreign Economic Statistical Yearbook (1994), Beijing: China Statistics Press, 1995,
pp. 330340.
45 ChinaMyanmar Bilateral Relations, www.x sbnjw.gov.cn/News_03/ReadNews. A sp?
BigClassID=2&NewsID=365.

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 ChinaMyanmar Economic and Trade Relations

border area, and/or the economic and technical cooperation between Yunnan
and ceasefire-controlled areas in Myanmar, are beyond official statistics.
Coupled with a great deal of development assistance from China, as well as
economic and technical cooperation between the two countries, Chinas enter- Table
prises, notably state-owned economic enterprises, now flourish in Myanmar.
According to Tang Hai, the former Commercial Counselor of the Chinese
Embassy in Myanmar, Myanmar has become the fourth largest market of
Chinas foreign engineering projects.46
Currently, it is impossible to find out the total of Chinas enterprises in-
volvement in the manufacturing sector in Myanmar because both countries
disclose only some information on these projects, and most of the enterprises
keep their expansion in overseas markets close. In consequence, the projects
indicated in Table 9 are a tip of the proverbial iceberg for Chinese enterprises
involvement in the Myanmar manufacturing sector. During the second session
of the YunnanMyanmar Economic and Trade Cooperation Forum in January
2010, Myanmar officials revealed that the textile, medicine, home appliance,
and porcelain industries in Myanmar depend on Chinas capital and technol-
ogy to operate.47
Chinese enterprises engagement in the Myanmar manufacturing sec-
tor has two characteristics. First, almost all the Chinese contractors in the
Myanmar manufacturing sector are strong state enterprises, behind which
even stronger Chinese multinational corporations often stand. For example,
Tianjin Machinery Import and Export Corporation is the subordinate of the
Northern International Group. China National Machinery Industry Complete
Engineering Corporation and China National Construction & Agricultural
Machinery Imp./Exp. Corp are affiliated with China National Machinery
Industry Corporation (SINOMACH). SINOMACH is the controlling share-
holder of China CAMC Engineering Co., Ltd. China Huanqiu Contracting
& Engineering Corp belongs to China National Petroleum Corporation
(CNPC).
Second, China has adopted the strategy and policy of combining foreign
assistance, economic and technical cooperation, and its Go Global
admonition. The Department of Foreign Countries, Ministry of Commerce,

46 Tang Hai, the Commercial Counselor of China Embassy in Myanmar, Talked About
ChinaMyanmar Economic and Business Cooperation, International Business Daily, 24
January 2005 or ChinaASEAN Business Weekly, October 17, 2005.
47 Myanmar Major Industries Depend on Chinas Capital and Technology, sousuo.mofcom.gov.
cn/query/queryDetail.jsp?articleid=20100106756595&query=%E7%BC%85%E7%94%B8
%E4%B8%BB%E8%A6%81%E5%B7%A5%E4%B8%9A%E8%A1%8C%E4%B8%9A.

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Table 9: Projects contracted by China in Myanmars manufacturing sector since

2000 (contract value above US$ 10 million)

Project name Contract Contractor Contract Fund source

date value, US$
million

Kyaukse June 2000 China National 17 Supplier

Cemet Plant Construction & Agricultural credit
Machinery Imp./Exp. Corp.
(CAMC)
Mobile October China National Machinery 13
Liquefied 2000 Import & Export
Petroleum Corporation
Gas Plant
Kyaukse May 2001 Zhejiang Sifang Group 17.5 Chinese
Agricultural Corporation interest-free
Machinery loan
Factory
Salingyi June 2001 China National 21.92
Textile Plant Construction & Agricultural
Machinery Imp./Exp. Corp.
(CAMC)
Yeni Paper 12 China Chengda Engineering 81.5 Loan provid-
Mill December Co., Ltd ed by The Ex-
2001 portImport
Bank of China
and China
Construction
Banks Cheng-
du Branch
Kyaukse 2 June China CAMC Engineering 16.5
Hsinmin-1 2000 Co., Ltd. (CAMCE)
Cement Plant
Kyaukse 18 Yunnan Machinery & 18.1
Hsinmin-2 January Equipment Import & Export
Cement Plant 2001 Company Limited (in short
form YMEC)
Chauk 21 April China National Machinery 12
Peracetic Acid 2002 Industry Complete
Factory Engineering Corporation
Pakokku Ttile 2000 Tianjin Machinery Import 27 Supplier
Mill and Export Corporation credit

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 ChinaMyanmar Economic and Trade Relations

Pwintbyu 2000 Tianjin Machinery Import 33

Textile Mill and Export Corporation
Tabaung 31 August China Metallurgical 90 Supplier
Bleached Pulp 2000 Construction credit from
Factory Export
Import Bank
of China
Pyaw Bwe February Tianjin Shitong Machinery 20
and Myittha 2007 Imp. & Exp. Co., Ltd.
Spinning
Factory
Tabaung February China Metallurgical 20
Paper Mill 2004 Construction
Taikkyi 24 March China Huanqiu Contracting 195 Chinese
Fertilizer 2004 & Engineering Corp. preferential
Factory (HQCEC) China CAMC loan and
Engineering Co., Ltd. supplier credit
Dragon March Jiangsu Pengfei group Co., 11.52
Cement Plant 2002 Ltd
(Extention)
Thiliwa January 1. China CAMC Engineering 91.29
Shipyard II 2003 Co., Ltd. (CAMCE)
Bilin Tire Plant October China CAMC Engineering 33
2007 Co., Ltd. (CAMCE)
Myanmar 5 China CAMC Engineering 30
Float December Co., Ltd. (CAMCE)
Glasswork 2007
Myanmar 2006 Yunnan Xinhua Printing 10 Sino
Xinhua Company Myanmar
Education joint
Printing Co., investment
Ltd
Heavy Diesel 25 August Shandong Puli Construction 67
Engine Manu- 2010 Engineering Co., Ltd
facturing Pro-
ject (I phase)

Source: Chinas Commercial Ministry; Jiangsu Pengfei Group, Co., Ltd; China CAMC
Engineering Co., Ltd; China National Machinery & Equipment Import & Export
Corporation; China Metallurgical Group Corporation; Economic Information Daily;
Yunnan Daily; China Chemical Industry News; China Building Materials News.

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 Modern ChinaMyanmar Relations

says that Chinas foreign aid supports Go Global. Most assistance and coop-
eration projects between the two countries are tied to Chinese state-owned
economic enterprises. Meanwhile, the Chinese government provides export
credits to the enterprises which win the bids or purchase orders for projects in
Myanmar. This policy not only removes Chinas enterprises worry about the
turbulent situation there, but also avoids the dilemma of foreign exchange and
fund shortages in Myanmar. As a result, Chinas enterprises massive involve-
ment in Myanmar is the byproduct as well as the propellant of good political
relations between both states

Chinas Investments in Myanmar

There have been no accurate statistics from the two countries governments
on Chinas investments in Myanmar since 1988 because many of them entered
Myanmar without going through official channels and procedures. In 2009,
the Investment Guide to Myanmar released by Chinas Ministry of Commerce
stressed that some Chinese firms invested in Myanmar in the name of local
citizens in order to escape Myanmars policy restrictions on foreigners, but
such investments would not be protected under Myanmar law. The relations
between the central government and cease-fire groups controlled areas are
very subtle, and Chinese investors should not invest in these areas without
Naypyitaws permission.48 That caution actually reveals that current Chinese
investment in Myanmar includes both. They made use of policy defects and
loopholes in military government regulations to acquire ID cards and invested
there in the name of Myanmar subjects. For example, most Chinese migrants
from Yunnan migrate to Myanmar as their country of destination with the
purpose of conducting business or trade. Around 50 percent of population
of Lashio, the most important city in northern Myanmar and 20 percent
of population in Mandalay, the cultural capital of Myanmar, are Chinese.
The majority of their investments are not properly documented as they
do business informally under the names of their local partners in order to
avoid the complicated processes and high costs related to registered foreign
investment.49
Some Yunnan state-owned enterprises have invested in Myanmar without
the Chinese governments approval because they were reluctant to submit
48 Guidelines for Overseas Investment and Cooperation in Other Countries and Regions (Myan
mar), 2009, p. 57.
49 Winston Set Aung, Illegal Heroes and Victimless Crimes: Informal Cross-border Mi-
gration from Myanmar, ASIA PAPER, Sweden Institute for Security and Development
Policy, December 2009, p. 10.

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 ChinaMyanmar Economic and Trade Relations

Table 10: Top ten largest foreign investors in Myanmar, up to 31 May 2009 (US$
million)

Ranking Country Number of Investment Percentage of

investment value total foreign
projects investment

1 Thailand 59 7406.843 46.98%

2 UK 50 1860.549 11.80%
3 Singapore 72 1553.213 9.85%
4 China 28 1331.439 8.44%
5 Malaysia 33 660.747 4.19%
6 Hong Kong 31 504.218 3.20%
7 France 2 469.000 2.97%
8 U.S. 15 243.565 1.54%
9 Indonesia 12 241.497 1.53%
10 South Korea 37 239.318 1.52%

Source: The Latest Rank of Foreign Investment in Myanmar, Economic and

Commercial Counselors Office of the Embassy of China in Myanmar.

applications for foreign investment permission due to red tape or they were
not qualified to invest abroad. In fact, Chinese private investment in Myanmar
does not need the approval of Chinas government.50 The Myanmar Investment
Commission also fails to count and control unofficial Chinese investments.
Consequently, the official statistics on Chinas investment in Myanmar from
both sides just reflects major investments and cooperation usually pushed by
the two governments.
By 31 December 2004, China was the 13th largest foreign investor in
Myanmar, having an investment of US$103.9 million in 22 projects.51 According
to the Myanmar Investment Commission, up to 31 December 2007, Chinas
contracted investment in Myanmar reached US$475 million in 27 projects. And
China was in the sixth place in Myanmars foreign investors, whose investment Table
volume held 3.23 percent of total foreign investment.52 Up to the end of May
2009, China stood 4th in Myanmars foreign investment line-up US$1.331
billion.

50 Current Account Management Department of State Administration of Foreign Exchange

(ed.), Currency Crossborder Circulation and Management on Foreign Exchange in Border
Trade, Beijing: China Financial and Economic Publishing House, 2005, pp. 234235.
51 Statistics of FDI in Myanmar, mm.mofcom.gov.cn/aarticle/ztdy/200509/20050900388228.
html.
52 China Ranking 6th of 2007 FDI in Myanmar, mm.mofcom.gov.cn/aarticle/jmxw/
200801/20080105340987.html.

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 Modern ChinaMyanmar Relations

Table 11: Chinas direct investment flows in ASEAN, 20032009 (US$ million)

Country 2003 2004 2005 2006 2007 2008 2009

Vietnam 12.75 16.85 20.77 43.52 110.88 119.84 112.39

Laos 0.80 3.56 20.58 48.04 154.35 87.00 203.24
Cambodia 21.95 29.52 5.15 9.81 64.45 204.64 215.83
Myanmar 4.09 11.54 12.64 92.31 232.53 376.70
Thailand 57.31 23.43 4.77 15.84 76.41 45.47 49.77
Malaysia 1.97 8.12 56.72 7.51 32.82 34.43 53.78
Singapore 3.21 47.98 20.33 132.15 397.73 1550.95 1414.25
Indonesia 26.80 61.96 11.84 56.94 99.09 173.98 226.09
Philippines 0.95 0.05 4.51 9.30 4.50 33.69 40.24
Brunei 1.50 1.18 1.82 58.10
Total 119.32 195.56 157.71 335.75 968.08 2484.35 2698.10

Source: China Commerce Yearbook 20042010

Table 10 shows that the investment value of the top ten largest investors
reached 92.02 percent of Myanmars total foreign investment. ASEAN countries
are the most important foreign investors in Myanmar. Thailand stands top in
Myanmars foreign investment ranking. Singapores investment in the country
covered the most fields: 12 sectors. Given Chinas indirect and unofficial
investments, China would likely have been the top investor or on a par with
Thailand in Myanmars foreign investment ranking. In 2011, however, China
officially surpassed Thailand to become Myanmars largest investor.
Between 200405 and 200809 Myanmar fiscal years (beginning April
1), the Myanmar government approved 14 Chinese investment projects
amounting to US$1,264.436 million according to the Foreign Investment Law.
These projects were contracted and carried out by Chinas state enterprises after
the two countries central governments bargained over them. According to the
Myanmar Central Statistical Organization (CSO), up to 31 July 2010, Chinas
investment including Hong Kong swelled to US$12.3 billion and stood first on
the FDI list. The dramatic growth largely arises from Chinas major investment
in the last two years, such as the ChinaMyanmar oil & gas pipelines and the
hydropower plants in the Kachin State. In addition, Hong Kongs investment
in Myanmar has been included in the data on Chinas investment since 2010.53

53 China including Hong Kong stands top in Myanmars FDI Ranking, mm.mofcom.gov.cn/
aarticle/zxhz/tjsj/201010/20101007188073.html.

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 ChinaMyanmar Economic and Trade Relations

Figure 1: Chinas direct investment stock in Myanmar, 20039.

Source: China Commerce Yearbook 2010, p. 185.

In the context of Chinas direct investment in ASEAN, Chinas official

statistics reveal that Myanmar was not an attractive investment destination Table
for China in Southeast Asia before 2008. But a significant change has taken
place in the situation and Myanmar has become the second largest investment
destination for China in ASEAN countries since 2008 (see Table 11).
Both Chinas and Myanmars official statistics indicate that Chinas invest-
Figur
ment in Myanmar is rising sharply (see Figure 1). Doubtless, the real amount of
Chinese investment in Myanmar greatly outnumbers the official statistics. This
condition can be attributed to a great deal of Chinese investment without the
permission of Naypyitaw (including investments in the name of local citizens
and in cease-fire group areas). Figur
By 31 July 2010, China had invested US$12.3 billion in eight sectors of
Myanmar, of which mining, electric power, and oil and gas respectively took
US$1.88 billion, US$5.31 billion and US$4.95 billion.
China has made heavy investments in strategic sectors of Myanmar, such as
oil, gas, and other resources (see Figure 2). This reflects both Chinas growing
concern for energy security in the long term, and Beijings official investment
policy towards Myanmar. According to the Countries and Industries for Overseas
Investment Guidance Catalogue (I), Chinas official investments in Myanmar
focus on energy and other resources sectors were motivated by Beijing.
In July 2004, Chinas Ministry of Commerce and Ministry of Foreign Affairs
jointly promulgated the Guidance Catalogue on Overseas Investment Industries
in Other Countries (I). The Catalogue is a major reference for departments in
charge of foreign economic cooperation at all levels, offering guidance and

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 Modern ChinaMyanmar Relations

Figure 2: The makeup of Chinas investment in Myanmar, up to 31 July 2010.

Source: The Commercial Counselor of Chinas Embassy in Yangon, mm.mofcom.gov.cn/aarticle/
zxhz/tjsj/201010/20101007188073.html.

verification of overseas investment by Chinese enterprises. Any enterprise

complying with the Catalogue and verified to hold an overseas investment ap-
proval certificate shall have the priority right to enjoy state preferential policies
in such areas as funding, foreign exchange, tax collection, customs, and exit
and entry. According to this Catalogue, Chinas enterprises are encouraged
to invest in the fields of oil, gas, forestry, agricultural machinery manufactur-
ing, and construction in Myanmar. As a result, Chinas official investments in
Myanmar focus on energy and other resources sectors motivated by Beijing.
On 15 June 2009, Chinas Ministry of Commerce promulgated the Guide
lines for Overseas Investment and Cooperation in Other Countries and Regions
(Myanmar) to assist enterprises in obtaining information concerning the in-
vestment environment in host countries and regions. The Guideline reminds
Chinese investors to notice that The Myanmar government promulgated The
Union of Myanmar Foreign Investment Law in 1988 and welcomes foreign in-
vestments, but the government still adheres to prudence and backward-looking
[policies], and even introduces policy restrictions or sets up artificial barriers
against foreign investors. Chinese investors will face three major difficulties in
Myanmar: unsound legislation and unstable policy; poor infrastructure; and
dual exchange rates with a large gap.54 Regarding these risks and difficulties,
the Guideline suggests that Chinas enterprises take out overseas investment
insurance or guarantees provided by China Export and Credit Insurance
Corporation (SINOSURE) and The ExportImport Bank of China (China
Eximbank), which obligates the insurer to underwrite an investors economic
losses in overseas investment and profits caused by political and business risks
of a host country.55

54 Guidelines for Overseas Investment and Cooperation in Other Countries and Regions (Myan
mar), p. 57.
55 Ibid., p. 61.

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 ChinaMyanmar Economic and Trade Relations

The 2007 Handbook of Country Risk released by SINOSURE has nine

rankings, in which the first rank indicates the safest countries and the ninth
signifies the most risky countries. The Handbook rated Myanmar eighth of
nine in country-risk ranks, and asserted that the country risk level of Myanmar
is high.56
In a country listed as risky by China, Chinese investments can be classified
as two types: first, official investments that are based on bilateral political rela-
tions in spite of serious risks in Myanmar, and which concentrate on energy,
power, and resources sectors and are important for the two countries energy
security and development strategy; second, many small and medium invest-
ments without the two countries approval that are beyond official statistics.
The latter cope with the investment risks through two channels. They are in-
vested in the cease-fire controlled areas neighboring Yunnan and are welcomed
by local cease-fire leaders, where local government legislates to protect and
attract foreign investment.57 Or the investors have purchased Myanmar ID
cards or have cooperated with local ethnic Chinese so that they can make in-
vestments in the name of Myanmar citizens. Using the ethnic Chinese business
network in Myanmar, Chinas investors can avoid and reduce investment risks.

ChinaMyanmar Economic Relations in the Context of Regional

and Sub-Regional Cooperation
With the end of the Cold War, economic globalization developed with un-
precedented speed. Although some western countries unilateral sanctions
against Myanmar failed to achieve their political goal (regime change), they
succeeded in impeding the countrys integration into the global economy.
However, this does not mean that Myanmar has been ignored by globalization.
As part of economic globalization, regional and sub-regional cooperation are
very active in East and Southeast Asia. Although under authoritarian govern-
ance, Myanmar has joined regional and subregional cooperative organizations
such as the ChinaASEAN FTA, Greater Mekong Sub-regional Cooperation
(GMS), the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic
Cooperation (BIMSTEC), and the MekongGanga Cooperation.
In recent years, China has been very enthusiastic in regional cooperation in
peripheral areas. Beijing regards cooperation as the springboard of its Peaceful

56 China Export and Credit Insurance Corporation, Handbook of Country Risk (2007) Vol. I,
Beijing: China Finance Press, 2007, p. 149.
57 See Investment Regulation in Shan State Special Region No. 1, www.kokang.net/html/
falvfagui/2008/1215/17.html.

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 Modern ChinaMyanmar Relations

Rise as well as a way of coping with the China Threat. In the context of an
era of change and a rising new regionalism, regional cooperation adds new
elements and dimensions to ChinaMyanmar bilateral ties. Meanwhile, some
bilateral relations are being drawn into the framework of regional cooperation,
and are pushed by a regional platform.
In November 2000, China initiated the ChinaASEAN FTA, and got
active responses from ASEAN countries. Two years later, the Framework
Agreement on Comprehensive Economic Co-operation between China
and ASEAN was signed during the seventh ASEANChina Summit in
Phnom Penh. According to the agreement, both parties will establish the
ChinaASEAN FTAs covering trade in goods by 2010 for Brunei, China,
Indonesia, Malaysia, the Philippines, Singapore, and Thailand, and by 2015
for the newer ASEAN member states, such as Cambodia, the Lao PDR,
Myanmar, and Vietnam. By 2015, as a result, tariffs and non-tariff barriers in
substantially all trade in goods will be eliminated and trade in services with
substantial sectoral coverage will be liberalized between China and ASEAN.
On the same day when the agreement was signed, China implemented a debt
relief plan in Asia, and remitted part or all of Vietnams, Laos, Cambodias
and Myanmars overdue debt.
At the ASEAN Plus One summit with China on 4 November 2002 at
Phnom Penh, China agreed to grant Myanmar unilateral preferential tariffs for
110 products. China exchanged a letter with Myanmar, entitling it to special
preferential duty treatment. An Early Harvest Program (EHP) of tariff cuts on
agricultural products was launched in 2004. Under the program, from 1 January
2004 China gave 133 products from Myanmar preferential access to its market.
The EHP takes into account that special and differential treatment shall be
given to Cambodia, the Lao PDR, Myanmar, and Vietnam, which would allow
China to eliminate Myanmar and Laos tariffs on 600 agricultural products
no later than 2010. In order to boost intra-regional trade cooperation, Chinas
Premier Wen Jiabao stated at the GMS Summit in 2005 that China would
unilaterally expand the range of products eligible for preferential tariff from
Laos, Cambodia, and Myanmar as of 1 January 2006. China signed exchanges
of letters on special and preferential tariff treatment with the three countries on
11 December 2005. According to the documents, starting from 1 January 2006,
some categories of goods exported to China from the three countries, mainly
vegetables and fruits, would enjoy zero-tariff treatment. The preferential policy
would apply to 83 categories of goods from Cambodia, 91 categories of goods
from Laos, and 87 categories of goods from Myanmar.

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 ChinaMyanmar Economic and Trade Relations

China and ASEAN signed the Agreement on Trade in Goods of the Frame
work Agreement on Comprehensive Economic Cooperation in 29 November
2004. In accordance with the relevant schedules in the agreement, the six original
ASEAN countries (Brunei Darussalam, Indonesia, Malaysia, Philippines,
Singapore, Thailand) and China shall eliminate all its tariffs for tariff lines
placed in the Normal Track not later than 1 January 2010. As the newer ASEAN
member state, Myanmar was allowed to reduce tariffs to 05 percent of its tariff
lines under the Normal Track not later than 1 January 2010 and shall eliminate its
tariffs not later than 1 January 2013 on 40 percent of its tariff lines placed in the
Normal Track. Myanmar shall reduce its applied Most Favored Nations (MFN)
tariff rates of tariff lines placed in its Sensitive Lists to 20 percent not later than 1
January 2015. These said tariff rates shall be subsequently reduced to 05 percent
not later than 1 January 2020.
The second component of the FTA with ASEAN is the trade in services,
which entered into force on 1 July 2007. Under this Agreement, services and
services suppliers/providers in the region enjoy improved market access and
national treatment in sectors/subsectors where commitments have been made.
It is expected that the agreement will lead to the expansion and growth of the four
modes of trade in services, namely: cross-border supply, consumption abroad,
commercial presence, and movement of natural persons. The market-access
commitments of both China and ASEAN are contained in the first package
of the agreement. Both ASEAN and China agreed to progressively liberalize
trade in services with substantial sectoral coverage. China is committed to
open up new markets for the ASEAN countries in 26 branches of 5 service
areas on the basis of the original WTO commitments, namely: construction,
environmental protection, transportation, sports, and commerce. Myanmar is
committed to open its market to China and other ASEAN countries in finance,
telecommunication, construction, and commercial services.
On 12 April 2009, China agreed to set up a US$10 billion ChinaASEAN
Investment Cooperation Fund to finance major 10+1 investment cooperation
projects in infrastructure, energy and resources, information and communica-
tion technology, and other fields. In the next three to five years, China will
provide ASEAN countries with US$15 billion credit, including US$1.7 billion
in concessional loans. China is also considering providing a total of RMB270
million this year [2009] in special aid to the less developed ASEAN countries,
including Cambodia, Laos, and Myanmar, to help them meet pressing needs
and get through this difficult time. China has already contributed US$900,000
to the 10+3 Cooperation Fund and US$100,000 to the ASEAN Foundation,

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 Modern ChinaMyanmar Relations

and will provide an additional US$5million to the ChinaASEAN Cooperation

Fund.58 Moreover, China will host a series of training programs to strengthen
information and experience-sharing with ASEAN, and jointly increase capac-
ity in natural disaster management. In the next five years, China will provide
another 2,000 government scholarships and 200 MPA scholarships to devel-
oping countries in East Asia.
The ChinaASEAN Expo and ChinaASEAN Business and Investment
Summit since 2004 have annually been convened in Nanning, the capital of
south Chinas Guangxi province. The Expo has become a significant platform
for ChinaASEAN regional cooperation. The Myanmar Prime Minister or
Secretary-1 of SPDC has led a delegation to attend the Expo and Summit
every year except 2007 and 2010. Myanmar has begun to pay more attention
to a new potential trading partner Guangxi. On October 29, 2009, the
Myanmar Consulate-General in Nanning was opened. Meanwhile, the Union
of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI),
the biggest business organization in the country, opened a representative office
in Nanning to strengthen bilateral trade activities with China as well as with
other ASEAN member countries.
The Greater Mekong Subregion (GMS) cooperation is another impor-
tant institution having an impact on ChinaMyanmar economic relations.
In 1992, the Asian Development Bank (ADB) initiated the GMS Economic
Cooperation and Development Program for China, Cambodia, Laos, Myan
mar, Thailand, and Vietnam in the Mekong River region, designed to enhance
economic relations among the countries. At present, China deepens and
prioritizes cooperation with other GMS member states in nine sectors, includ-
ing transportation, communications, environmental protection, agriculture,
energy sources, tourism, environment, human resources development, as well
as trade facilitation and investment.
Under the GMS framework, China and Myanmar mainly develop coop-
eration in the sectors of communication, human resources and transporta-
tion. On July 2005, six GMS members signed am MoU on the Planning and
Construction of a GMS Information Superhighway Network (ISN) during
their meeting in Vientiane, Laos. Under the MoU, the six countries agreed to
invest in the construction of an optic fiber cable system and cooperate on the
project to build a commercialized information and communication platform
in order to launch the basic fields of chatting, data sharing, connection of the
58 Wen Guojing, Pan-Beibu Gulf Economic Cooperation Forum, the Important Coopera-
tion Mechanism of ChinaASEAN, Guangxi Daily, 19 May 2009.

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 ChinaMyanmar Economic and Trade Relations

internet, as well as distance education, medical treatment, e-government,

and e-commerce, all of which will sharply raise the capacity of the internet to
promote the socio-economic development of the subregion. As the main part
of the GMS Information Highway, the ChinaMyanmar optical cable, Ruili
Muse SDH 2.5 GB/s Optical Transmission System, was prepared and designed
in 2004. It was constructed from January to April 2005 and was put into use
on 5 April 2005. China also offered a training course of GMS E-commerce to
Myanmar and other GMS members.
In 2006, China promised to provide a loan of RMB300 million to the GMS
Information Superhighway Myanmar section. The next year, both sides signed
a loan agreement in Yangon. According to the plan, there are 12 ISN fiber
links being built across the GMS to boost information links. In the Myanmar
section, there are over 2000 kilometers of optical cable from Muse to Tachilek,
via Mandalay and Yangon. Of Myanmars two ISN links respectively with
China and Thailand, the link with China was built since April 2007. Shanghai
AlcatelLucent got the supply contract of ISN Myanmar section in 2007. In
March 2008, the MyanmarChina fiber link was built across China from Kun
ming to Muse (on the China border) with its link further extended to reach
Yangon.
The GMS program, with its emphasis on large-scale infrastructure develop-
ment, regards transportation as the prioritized cooperation sector. The GMS
Cross-Border Transport Agreement (GMS Agreement) is a multilateral instru-
ment for the facilitation of cross-border transport of goods and people. China
and Myanmar acceded into the agreement in 2002 and 2003, respectively, but
both parties havent held negotiations on the transport facilitation enforce-
ment between Ruili and Muse as of this writing. The LancangMekong River
water route was formally open to navigation between China, Laos, Myanmar,
and Thailand on 26 June 2001. However, the opening of navigation did not
create the anticipated prosperity of trade, tourism, and transport in the areas
along the river, largely because of poor navigational conditions.
After Premier Mahathir Mohammad of Malaysia initiated the Trans-Asia
Railway, building the KunmingSingapore Rail Link in 1995, the project was
also promoted under the GMS mechanism. (For the details of the Lancang
Mekong River water route and the ChinaMyanmar railway, see Chapter 9)
One key element of the GMS program is to encourage establishing a com-
petitive regional power market and system. Through the cross-border power
trade and interconnection between their respective networks, the idea is to:
[1] reduce national investments, operating costs, greenhouse gas emissions

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 Modern ChinaMyanmar Relations

and other pollutants; [2] enhance the reliability of the electricity supply, in-
cluding power supply from an interconnected network in case of power failure;
and [3] share in other benefits resulting from the interconnected operations
of the systems. The inter-government agreement on regional power trade was
endorsed by six GMS member countries at the first GMS summit meeting on
3 November 2002. Now the interconnected electric power network is being
built. Although the transmission line between China and Myanmar grids has
not yet been connected, China plans to import 1020 million kw of hydro-
power from Myanmar between 2010 and 2020.59
China is actively engaged in personnel exchange and cooperation among
GMS member countries, utilizing the ChinaASEAN Cooperation Fund and
the Asia Regional Cooperation Special Fund financed by China. Since 2005,
through holding various workshops and technology training classes, relating
to agriculture, energy, telecom, trade, investment, epidemic prevention, and
logistics sectors at the firm, sector, national, and regional levels. After the Phnom
Penh Plan for Development Management (PPP), a regional capacity-building
initiative, was launched in November 2002, Chinas government supported the
PPP through the China Regional Cooperation and Poverty Reduction Fund.
A network of capacity-building partners has been created in the region. The
Asia Pacific Finance and Development Center (AFDC) based in the Shanghai
National Accounting Institute in Shanghai and The Kunming University of
Science and Technology (KUST) are the PPPs network of capacity-building
partners. Now, China each year trains a large number of officials and technical
talents for other GMS countries.
The GMS countries adopted the economic corridor approach for develop-
ment during the 8th GMS Ministerial Meeting held in Manila in 1998. This ho-
listic strategy seeks to improve and enhance investments in transport, energy,
and telecommunications in the subregion. Till now, the economic corridor has
been developed with three initiatives, namely the NorthSouth, EastWest
and Southern Economic Corridors. Originally, the YangonMandalayKun
ming route was envisioned as part of the NorthSouth Economic corridor
but it was not approved. Now, two different routes along the north-south
axis are involved in the NorthSouth Economic Corridor initiative: (1) the
KunmingChiang RaiBangkok via the Laos and Myanmar route, and (2)
the KunmingHanoiHaiphong route. Consequently, Myanmar is basically
excluded from the NorthSouth Economic Corridor.

59 Li Li, Yunnan Boosts the GMS Electricity Cooperation, Yunnan Daily, 18 May 2007.

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 ChinaMyanmar Economic and Trade Relations

Tourism is regarded as one of the key sectors for further cooperation among
the GMS countries. According to the GMS Tourism Sector Strategy, 13 priority
tourism corridors, zones, circuits, and lines have been identified. Among the
13 special projects, there are four tourism corridors or zones including both
China and Myanmar. They are the Mekong River Tourism Corridor, including
all GMS countries; the Golden Quadrangle Tourism Zone, including Laos,
Myanmar, Thailand, and Yunnan Province; the Heritage Necklace Circuit,
including all GMS countries; the Shangri-la Tengchong Myitkina Tourism
Development Zone, including Myanmar and Yunnan Province. In addition,
China initiated compiling The Plan of Transnational Tourist Lines in the Upper
Mekong (Golden Square) Tourism Region and The Plan of Transnational Tourist
Lines in the Western YunnanNorthern Myanmar Region.
At the end of the 1990s, Yunnan proposed regional economic cooperation
among Bangladesh, China, India, and Myanmar (BCIM), and the idea was
acclaimed by the other three countries. The first Conference on Regional
Cooperation and Development among BCIM held in Kunming approved the
Kunming Initiative on 17 August 1999. The Kunming Initiative was intended to
emerge as a new economic forum in the region. The main thrust of the Initiative
is to seek sub-regional economic cooperation, particularly in North-East India
(NIE), Bangladesh, Myanmar, and the Southwest of China, and attempt to
generate substantive economic benefits in the areas of trade, investment, energy,
transport, and tourism. Up to 2009, the BCIM Forum on Regional Economic
Cooperation had been held nine times. BCIM member countries signed some
cooperation agreements and agreed to list infrastructure, transportation, and
tourism as the priority cooperation sectors. The program, the BCIM Border
Free Trade Area, is being advanced and promoted, and covers West of Yunnan
province, the Shan State and Kachin States in Myanmar, Assam State and
Arunachal Pradesh State in India, and Bangladesh border areas.
The BCIM forum, essentially a track-II endeavor, is primarily promoted by
the non-governmental sectors of the member countries to influence policy-
makers, business people, and government representatives in boosting regional
cooperation by transform it into a growth quadrangle. Although Bangladesh,
China, and Myanmar are eager to improve cooperation and transform it into
an official mechanism, the position of the Indian government is lukewarm.
Due to the various insurrections in Northeast India and Northwest Myanmar,
the absence of political mutual trust between India and China, and unsatis-
factory MyanmarBangladesh relations, it is impossible for ChinaMyanmar

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economic cooperation to develop in the near future within the context of the
BCIM mechanism.
All kinds of regional cooperation mechanisms intersect in the triangulated
area of ChinaSoutheast AsiaSouth Asia, in which Japan, China, India, Russia,
the U.S. and E.U. are all involved to one degree or another. These stakeholders
involvements are designed to diversify the interests of regional cooperation,
and their intentions are the same, namely maximizing their national interests
and ensuring their political and economic influence in the region. In the case
of China, the most important political interest of its involvement in regional
cooperation lies in easing the concerns in the region about the China Threat.
Although Beijing has asserted that Chinas rise will be peaceful, whether the
historical memories of Revolutionary Export or the witness of Chinas re-
alpolitik diplomacy in Africa will allow the circumjacent countries to believe
the northern powers vow is questionable. If ASEAN countries could share
more of the fruits of Chinas rapid economic development through regional
cooperation, and if both sides could develop common interests, the regional
platforms will become one of the best approaches to eliminate the perception of
a China Threat. Meanwhile, regional cooperation adds new facets and dimen-
sions to ChinaMyanmar bilateral relations. Although China and Southeast
Asia established the scope of regional cooperation, China has devised some
programs such as the KunmingRangoon Highway, the ChinaMyanmar
HighwayWaterway Combined Transport Passage, and the ChinaMyanmar
Cross Border Economic Zone, and has tried its best to bring them into the
regional cooperation network.
Regional cooperation will deepen economic and business cooperation
between China and Southeast Asia, notably in mainland Southeast countries
which, except for Thailand, are poor and devoid of accumulated capital.
Chinas loans, investments, development assistance, and technology appeal
to them, and increase their favorable attitudes toward China. Also, Beijing is
combining the Western Development strategy with regional cooperation
in order to acquire a new impetus for development in Yunnan and Guangxi.
On the part of Myanmar, regional cooperation has the function of providing a
buffer against Western economic sanctions, and increases the military regimes
international legitimacy at the same time.

YunnanMyanmar Economic Relations

Among Chinas peripheral countries and regions, developing countries like
Myanmar, Laos, Vietnam, and Nepal did not play key roles in Chinas exter-

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 ChinaMyanmar Economic and Trade Relations

nal trade. But for landlocked Yunnan Province, distant from the east coast,
neighboring Myanmar has different economic implications and values. It is
necessary to distinguish the economic ties between BeijingMyanmar and
YunnanMyanmar when the two countries economic relations are discussed,
and we can develop insights into the different pursuits of interests and the cor-
relation between Chinas central and local government.
For Beijing, Myanmar has not occupied an important position in Chinas Table
overall foreign trade. Between 2000 and 2008, the volume of ChinaMyanmar
trade was only 1.2 percent of ChinaASEAN trade.60 However, Myanmar is
the most important trade partner of Yunnan.
Also, Myanmars importance for Yunnan is reflected by the fact that Yun
nanMyanmar trade accounts for the lions share of two regions trade. Table
12 indicates that YunnanMyanmar trade volume has been half of the two
regions total trade volume since 2000, while 80 percent of YunnanMyanmar
trade is border trade. Given the small section of border in Myanmar controlled
by the central government and the enormous and widespread smuggling and
underground economy, Yunnans trade with Myanmar is greatly underestimated.
RMB is used for settling accounts in 95 percent of Yunnan border trade.
According to the report of the Kunming Branch of the Peoples Bank of China,
the RMB flow reached 66.986 billion between Yunnan and Vietnam, Laos,
and Myanmar in 2007. The underground banks are very popular in the areas of
the Yunnan border, as was mentioned earlier.
Although China introduced economic reform and the open-door policy
in 1978, Beijing gave priority to the eastern provinces and coast regions before
2000. The marginalized provinces and regions in west China only took a
favorable turn due to the launching of the Western Development and the
Go Global policies in the new century. Consequently, YunnanMyanmar
trade volume has risen sharply since 2001. In response, Yunnan also created
opportunities and mechanism for economic cooperation with Myanmar.
Since 2001, exhibitions have been held annually and alternately in the
respective ChinaMyanmar border towns aimed at promoting bilateral trade
between the two countries. The Yunnan government has arranged for the entre-
preneurs in the province to visit Myanmar to seek opportunities of expanding
trade and economic cooperation. Over 1216 March 2003, a strong economic
and trade delegation from Yunnan, led by the Secretary of the Yunnan Provincial
Committee of the CCP Bai Peien, visited Yangon and held trade and investment

60 Source: ChinaASEAN Yearbook, 20042009; China Commerce Yearbook, 2004.

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 Modern ChinaMyanmar Relations

promotion meetings with its Myanmar counterparts. Both sides signed over 20
business contracts worth US$65.26 million.61 In 2006 and 2007, the Yunnan
government and the Myanmar Commerce Ministry jointly staged the China
(Yunnan)Myanmar Trade & Investment Promotion meeting in Yangon. In
February 2007, the Yunnan Provincial Chamber of Commerce and the Union
of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI)
signed a Framework Agreement on an Economic and Trade Cooperation
Forum in order to expand trade and economic cooperation. Four months later,
the first session of the Forum was convened in Kunming, and Myanmar held the
second session on 11 January 2010. Apart from the cooperation platform aimed
at Myanmar alone and instigated by Yunnan, a Kunming Import & Export
Commodities Fair has been successfully held annually for sixteen consecutive
years, in which Myanmar has participated from the first fair.

Cross-Border Tourism
Currently, Chinese tourists to Myanmar need only hold passports or border
passes; there are, therefore, two kinds of tourism: cross-border tourism in
frontier areas and the tourism in Myanmar proper. In June 2000, the Vice
Chairman of the SPDC, General Maung Aye, visited China. He and Chinese
Vice President Hu Jintao issued a Joint Statement Concerning a Framework
Document on Future Cooperation in Bilateral Relations between the Peoples
Republic of China and the Union of Myanmar. In the statement, China has
agreed to make Myanmar a country of destination for Chinese citizens to go
on overseas tours. Both sides will decide through consultation detailed ways of
implementation. When Hu Jintao paid a reciprocal visit to Myanmar one month
later, both signed a SinoMyanmar pact of tour cooperation. In December 2000,
the two countries signed a memorandum on Myanmars approved destination
status for Chinese outbound travel. From 10 June 2001, Chinese residents were
allowed to travel to Myanmar using only a tourist exit visa. Now, the volume
of Chinese tourists with visas to Myanmar is small, and can not be compared
with the number to Thailand, Malaysia, Singapore, and the Philippines. The
reasons for this are two-fold. Tourism service and infrastructure in Myanmar lag
behind, and the Chinese are strangers to Myanmar.
In contrast, the day trip to the MyanmarChina border area has attracted
more Chinese; it has become a distinct extension of the Yunnan trip for domestic
tourists from other provinces in China. Since 1991, the Yunnan tourism bureau
61 Li Hongfeng: China (Yunnan)Myanmar Trade and Investment Promotion Closed on
16 November 2003, Yunnan Daily, 22 November 2003.

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Table 12: YunnanMyanmar trade, 19952008 (in U.S.$ million)

Year Total Yunnan exports Yunnan imports

value
Value Share No. of 10 Value Share No. of 10
of total largest of total largest
exports export imports import
partners partners

1995 490.09 392.10 29.46% 2 97.99 12.40% 3

1996 362.44 278.33 24.40% 2 84.41 9.20% 3
1997 304.77 276.37 22.80% 2 28.40 3.60% 6
1998 308.72 276.13 21.90% 2 32.59 4.20% 5
1999 299.52 245.99 23.80% 1 53.53 8.57% 4
2000 362.99 293.06 24.58% 1 69.93 10.97% 3
2001 348.73 251.51 20.22% 1 97.22 13.05% 2
2002 406.78 296.08 20.70% 1 110.70 13.90% 2
2003 492.79 356.83 21.28% 1 135.96 13.71% 1
2004 551.32 386.61 23.00% 1 164.71 17.37% 1
2005 631.62 410.63 15.54% 1 220.99 10.54% 2
2006 692.08 521.13 15.37% 1 170.95 6.02% 2
2007 873.57 640.68 13.53 % 2 232.89 5.76% 5
2008 1192.79 727.69 14.60% 1 465.10 10.10% 1

Source: Yearbook of Chinas Foreign Economic Relations And Trade, 19961997, 1997
1998, 19981999, 19992000, 2000, 2001,2002, 2003, 2004, 2005; Yunnan Yearbook,
2006, 2007, 2008, 2009.

for visits between Yunnan and Myanmar has initiated the routes of Wanding
Lashio, RuiliMandalay, and MenghaiMenglaKawthaung. Yunnan provincial
and sub-provincial governments regard YunnanMyanmar tourism as a source
of income.
According to the Deputy Director of the Yunnan Provincial Tourism Bur
eau, Yu Fan, from January to October 2006, Chinese day trippers to Myanmar
amounted to 961.5 thousand person-times. Between 1998 and June 2003, there
were 4 million tourists to ChinaMyanmar border area in two countries.62
However, one day trips to Myanmar fluctuated with the changing situation
in the SinoMyanmar border areas. At the end of the 1990s, dozens of casinos
were opened in Myanmar near China. A great many Chinese swarmed into these
casinos so that dozens of billions of RMB flowed to Myanmar. Consequently,
from 2003, the Yunnan authorities took some steps to crack down on the casinos

62 ChinaMyanmar Cross-border Tourism Booming, yunnan.mofcom.gov.cn/aarticle/

sjdixiansw/200612/20061204159560.htm.

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 Modern ChinaMyanmar Relations

in Myanmar, such as cutting off the supply of electricity and communications

from China, and stopping day trips to Myanmar. The Chinese government in
2004 suspended issuing one day tour passes to Myanmar except for Yunnan
residents. This caused most casinos to close in the north of Myanmar. However,
it also inflicted a heavy loss on Yunnan tourism, at least several hundred million
RMB annually because, as mentioned-above, most of Mainland Chinese
tourists to Myanmar are one-day sightseers. For example, under such adverse
influences, domestic day trippers to Myanmar through Menghai County
were 23.2 thousand person-times, down 97 percent, and the profit earned by
tourism was RMB219 million, down 48 percent in 20052006. Of a total of
15 travel agencies in Ruili, five closed down and three went out of business.
The occupancy rate of hotels decreased from 70 percent to 30 percent, and the
turnover from scenic spots and relevant restaurants and shops declined by 40
percent. Nearly half of the employees (some 4,000) in Ruili tourism lost their
jobs.63 In January 2008, Beijing lifted the ban on border tourism in Yunnan
Province. Nevertheless, China closed one-day tours to Myanmar again in
September 2009 because of the Kokang conflict.
Yunnan is the major driving force behind the development of China
Myanmar cross-border tourism. Ruili and Muse have jointly held the China
Myanmar Pauk Phaw Carnival in Ruili since 2000 under the auspices of the
Yunnan Provincial Government and the Myanmar Ministry of Hotels and
Tourism. The annual event was staged on 25 May prior to 2008 and the
date was changed to 25 October since 2008 because Chinas government
cancelled the week-long May Day holiday in that year. Using the golden week
holiday and its unique performances, the Carnival attracted more and more
visitors. The International Jewelry Culture Festival was amalgamated with
the Carnival since 2008 in order to compound the economic effects of the
event. Moreover, Baoshan holds similar beer carnivals and business events.
Yunnan is also pushing the cooperation of tourism with bordering countries in
the context of regional and subregional cooperation.
In Mainland Chinas 31 provinces, the personnel flow (entry-exit) of
Yunnan ports has been among the top eight since 2000, although the province
is landlocked. There are 20 ports in Yunnan province, among which 11 land
ports lead to Myanmar. The ports to Myanmar are the busiest in terms of
trade volume, freight volume, the number of entry-exit vehicles and personnel.
Actually, the real cross-border flow of personnel and logistics between the two
63 Report on Prohibition against Gambling not Tourism in Guangxi and Yunnan, www.
cnta.gov.cn/html/20086/2008-6-2-21-16-40-180.html.

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countries vastly outnumbers the government statistics because there are over
90 border crossings, 111 barter trade points between border residents, and more
underground border crossings aside from official ports in Yunnan. Obviously,
neither two countries governments effectively control the land border. For
example, Yunnan Ruili and Myanmar Muse share a 169.8 km border, which is
the only section controlled by the central government in Myanmar out of the
total of the over 2,000 km ChinaMyanmar border. Even so, there are still 36
unofficial crossings in the Ruili section of the border and they have not been
effectively supervised by the governments.64 The trade and other economic
activities beyond government control occurring in the border areas controlled
by Myanmar ceasefire groups are countless.
Now, a RMB economic sphere has formed in the border areas of Laos,
Myanmar, and Vietnam adjacent to China, where the RMB circulation area
generally covers between 70 and 180 km inward, and its farthest circulation
range extends 300 km. Ninety percent of the trade and other business dealings
choose RMB for settlement.65 In the Shan State Special Regions No. 4 and No.
2, the RMB has replaced the Kyat to become the major circulating currency.
The channel of RMB outflows to Myanmar consists of border trade and
tourism, investment, and illegal activities such as smuggling, gambling, drug
trade, and money laundering. In general, a RMB black market has come into
being in Myanmar, and it has become a medium of exchange and savings, and
a means of payment in the north of the country.66

Chinas commodities dominate the market of north Myanmar, especially
in some necessities. Yunnan began to provide electricity to some regions in
northern Myanmar in 1995, and the power supply has increased sharply in
recent years.67 China exported 76.369728 million kilowatt-hours of electric
power to Myanmar, worth US$6.098212 million, in the first quarter of 2009.68
Also, cell phone and landline phone, and financial services are provided by
Yunnan in the northern border areas in Myanmar. Consequently, when the
Chinese police took action against gambling along the ChinaMyanmar
border from 2003, Yunnan authorities took some measures to put pressure on
64 Ibid.
65 Lu Hao, Investigation and Opinion on RMB Circulation in ChinaMyanmar and China
Laos Border Areas, Times Finance, No. 9, 2007.
66 Du Ping, Investigation and Suggestion on RMB Circulation in ChinaMyanmar Border
Areas in Dehong, Times Finance, No. 10, 2007.
67 Gengma Power Supply Company: Reform and Development, www.cjch.cn/qxyq/gmx/
20061221074946.htm.
68 Analysis on Electricity Export in the First Quarter of 2009, www.ocn.com.cn/market/
200904/dianlichukou291514.htm.

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the local governments in northern Myanmar, including cutting off the supply
of electricity, water, and communication and financial services from Yunnan,
which demonstrated these Burmese areas dependence on China.
When Beijing proclaimed the Go Global strategy, Yunnan formulated its
corresponding approaches. In Yunnans Go Global initiative, Vietnam, Laos,
Myanmar, and Cambodia were the prioritized destinations. The four countries
were Yunnans first choice to implement the strategy, and the leading economic
and trade partners. A significant influx of investors, enterprises, and labor force
from Yunnan further corroborates the close relations between Myanmar and
the province. In addition to the northern Myanmar region, Yunnans enterprises
and investors assume importance in the sector of energy and mining, project
contract and economic cooperation.
In China, Yunnan has long been regarded as an inaccessible, backward,
and remote frontier province. Chinas economic integration with different
parts of the AsiaPacific region is no longer limited to the coastal areas where
the Western Development was initiated in 1999. To change the landlocked
and inaccessible condition and push regional economic integration, Yunnan
is making efforts to forge links with the neighboring countries of Myanmar,
Laos, Vietnam, and Thailand. In addition, a large number of Yunnanese have
entered Myanmar, notably in the north.
When China abandoned the principle of self-reliance and adopted the
open-door policy, the coastal areas were encouraged to make full use of the
comparative advantage of their geo-political locations for economic involvement
with developed countries and regions. Indeed, the development and opening
up of China has witnessed various provinces and regions in China establishing
particular economic links with specific countries and regions around China.
Most typically, the economies of Guangdong, Fujian, and Shandong Provinces
are dominated by their relationships with Hong Kong, Taiwan, and South
Korea, respectively. In the early 1990s, Beijing opened the border areas and
gave them preferential policies as the open coastal areas. Following the earlier
open patterns of the east coast regions, Northeast China, Xinjiang, Guangxi,
and Yunnan are becoming economically integrated with the Russian Far East,
Central Asia, and mainland Southeast Asia.
Since 1978, economic expansion has been predominant among the provin-
cial policy makers. For Yunnan with hardly any potential for economic devel-
opment, the province makes much of its geographical advantage as the poles
of economic growth and dynamism. Consequently, economic integration
between Yunnan and Myanmar as well as other Southeast Asian countries is

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critical for Yunnans provincial economic development and its change of status
in Chinas hierarchical system and administrative divisions. Myanmars role in
Yunnans foreign economic relations is thus gaining importance. Behind the
ChinaMyanmar oil and gas pipelines, the transportation corridor between
them, cross-border tourism, and other initiatives relating, Yunnan is both the
promoter as well as the direct beneficiary.
Many projects and programs between the two countries are only Yunnan
(both government and private enterprise) local schemes and actions, not
motivated by Beijing. Myanmar is negligible in the big picture of Chinas
external economic relations, but it is significant in Beijings calculation on
energy security. In general, it is with Beijings support that Chinas strong state
enterprises get and carry out contracts of major projects in Myanmar, such as
dams, and the oil and gas pipelines. More economic transactions are carried
out on the local YunnanMyanmar level. If an abacus is a metaphor for China
Myanmar economic relations, the central-level and local-level relations are like
the shafts and beads respectively.

Chinese Migration into Myanmar

Chinese migration into Myanmar is not well understood; it has long been ne-
glected by scholars devoting themselves to Southeast Asia or overseas Chinese
studies in states where the Chinese are more numerous or economically relevant.
The Chinese in Myanmar have drawn little attention except during the 1967
anti-Chinese riots in Rangoon and the 2009 conflict in Kokang. Compared
with their counterparts in other Southeast Asian countries, the Chinese in
Myanmar have been a low-profile and marginal community. Major changes in
the Chinese community there have been evident since 1988, however, particu-
larly in relation to the economy. This section explores the changes in Burma/
Myanmars Chinese community during the post-Cold War period and the cor-
relation between it, the Myanmar political situation, and SinoMyanmar ties.

Chinese Demographics in Myanmar

The size of current Chinese population in Myanmar lacks reliable data. Various
estimates and calculated guesses vary from 1.4 to 4.5 percent of a total population
of some 55 million. The main estimates are as follows:
The Taiwan Overseas Compatriot Affairs Commission (TOCAC): In
2009, the Statistics Office of TOCAC estimated that the 2008 population of
Myanmar Chinese reached 11.28 million, or 2.022.18 percent of the total

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population.69 According to the Overseas Compatriot Affairs statistics annual

reports in 2008, its population stood at 1,073,000 at the end of 2008.70
Chinese administrations: the Foreign Office of Guangdong Province in
2008,71 Chinas Overseas Chinese website in 2006,72 and Chinas Embassy
in Yangon in 2005, released reports that there were 2.5 million Chinese in
Myanmar.73
Mya Than has argued that the Chinese population reached between 0.9
1.35 million in the mid-1990s, or 23 percent of the Myanmar population.74
Leo Suryadinata held the number was 0.63 million in 1999.75 David Steinberg
has argued that considering the influx of Chinese illegal immigrants, There
may now be some 3 million Chinese in Myanmar around 4 percent of the
total population (not counting a very large number of Sino-Burmese, many of
whom have achieved great prominence in Burmese society).76 Zhuang Guotu
believes that the estimation should consider the new Chinese migration, so
he has inferred that the population should exceed 2.5 million in 2009.77 The
answer is that we do not know.

Myanmar Chinese may be divided into different groups according to
differing standards. Chinese immigrants consist of three main dialect groups:
the Hokkien, the Yunnanese, and the Cantonese. Most Chinese are engaged in
business and enterprise. The Hokkien and Cantonese continue to dominate the
Chinese population in lower Myanmar while the Yunnanese are dominant in
the upper Myanmar Chinese community. Nevertheless, in the past ten years two
changes have occurred in the Chinese settlement pattern. First, more and more

69 A collection of materials pertaining to the Overseas Chinese population, No. 3, Taipei: Tai-
wan Overseas Compatriot Affairs Commission, 2009, pp. 3335.
70 Statistical Yearbook of the Overseas Chinese Affairs Commission (2008), Taipei: the Over-
seas Chinese Affairs Commission, 2009, p. 11.
71 Worse Humanitarianism Catastrophe than the Cyclone Itself in Myanmar, Nanfang
Daily, 7 May 2008.
72 A Survey of Chinese in Myanmar, www.chinaqw.com//news/2006/0630/68/34584.
shtml.
73 Myanmar Chinese Community Held the Tenth Anniversary of Release of Jiang Zemins
Eight-point Formula, mm.china-embassy.org/chn/xwdt/t182486.htm
74 Mya Than, The Ethnic Chinese in Myanmar and their Identity, in Leo Suryadinata (ed.),
Ethnic Chinese as Southeast Asians, Singapore: Institute of Southeast Asian Studies, 1997,
p. 119.
75 M. Jocelyn Armstrong, R. Warwick Armstrong, Chinese Population of Southeast Asia,
in M. Jocelyn Armstrong, R. Warwick Armstrong, and Kent Mulliner (eds), Chinese Popu-
lations in Contemporary Southeast Asian Societies, Richmond: Curzon Press, 2001, p. 2.
76 David I. Steinberg, The United States and Burma/Myanmar: a boutique issue? Interna-
tional Affairs, Vol. 86, No. 1, 2010, p. 14.
77 Zhuang Guotu, A New Estimation of the Ethnic Chinese Population in Southeast Asia,
Journal of Xiamen University, No. 3, 2009, pp. 6667.

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 ChinaMyanmar Economic and Trade Relations

wealthy Yunnanese now move to Yangon and expand their economic forces at
the states economic centre. Second, more and more Shanba Chinese78 migrate
to cities such as Mandalay, Yangon, Pyin Oo Lwin (Maymyo) and other cities
from the ethnic states. The newly urbanized Chinese are rich and relatively
ostentatious, notably some of them acquiring considerable wealth through
jade, lumber, and narcotics smuggling. They have no bitter experience of the
1967 anti-Chinese riots, compared with the traditional Chinese. Mya Maung
mentions the phenomenon that Aggressive and wealthy Chinese investors,
ethnic Chinese Kokang and Wa drug warlords, and military robber barons have
made the wholesale acquisition of real estate and homes. By offering exorbitant
prices to the Burmese landowners, they have sharply accelerated the relocation
process.79
Myanmar Chinese are differently classified by the two countries. According
to the Chinese classification, Myanmar Chinese comprise the Han ethnic
majority including the Kokang, most Hokkin, Cantonese, and some Yunnanese,
and other ethnic minorities including the Panthays and Yunnan transborder
ethnic groups such as Dai, Jingpo (Kachin), and Wa. But Myanmar regards
the Kokang and Yunnan transborder ethnic groups as among the 135 ethnic
groups recognized by the government of Myanmar, while other Chinese have
not been officially recognized as an ethnic group in Myanmar.
When China adopted the open-door policy in 1978, it also started a new
Chinese emigration wave to the outside world. Therefore, 1978 is generally
regarded as the divide between traditional and new Chinese migration. The
traditional Chinese in Myanmar consist of between the second to more
than the tenth generation of Chinese residents; as in other Southeast Asian
countries, they have had up and down experiences. New Chinese began to
swarm into Myanmar from about 1990. Its estimated that there are between
12 million new Chinese migrants in Myanmar over the past decade.80 A
significant influx of Chinese, primarily from Yunnan, in the 1990s threatened
to upset the demographic balance in the north. When a person in Mandalay
dies, his death is not reported to the authorities. Instead, that persons relatives
send his identity card to a broker in Ruili or some other border town in Yunnan.
There, the identification papers are sold to anyone willing to pay the price.

78 The traditional Chinese living in big cities such as Yangon and Mandalay call the new
urbanized Chinese Shanba.
79 Mya Maung, On the road to Mandalay: a case study of the Sinonization of Upper Burma,
Asian Survey, Vol. 34, No. 5 May 1994, p. 455.
80 David I. Steinberg Personal interview, Yangon, November 2007; Sudha Ramachandran,
Yangon still under Beijings thumb, Asia Times, 11 February 2005.

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 Modern ChinaMyanmar Relations

The Chinese buyers photo is substituted on the card, and he can then move to
Mandalay as a Burmese citizen.81
The phenomenon of recent Chinese migration into Myanmar is not the
first such influx. Historically, there have been four Chinese migration waves
to Southeast Asia: the first was from early in the 17th century to the mid 19th
century; the second wave the mid 19th century to the early 20th century;
the third wave the early 20th century to the early 1950s; and the fourth wave,
the 1980s to the present.82 Most of the influx of Chinese after 1978, the fourth
wave, are illegal migrants. For obvious reasons, there are no accurate figures on
the volume and composition of illegal flows from China to Southeast Asia.83
The new Chinese migration into Myanmar is, consequently, an important part
of the fourth migration wave into Southeast Asia.
Other factors contributed to this influx. Beijings open-door policy since
1978 has meant that China returned to the international system and international
community. The rapprochement in SinoU.S. relations highlighted Chinas
return. Four decades of nearly continuous warfare in Indochina came to an
end with the removal of the Cold War overlay, and economic development
and modernization moved more clearly to the top of Southeast Asias agenda.84
These changes were the preconditions of the emergence for the fourth wave,
which started the regional flow of capital, technology, and the labor force
between China and Southeast Asia. The Chinese flow to the region is one of
the reflections of regional integration in the post-Cold War period.
The SLORC abolished the Burmese Way to Socialism in favor of a more
open, market economy, and in particular legalized ChinaMyanmar border
trade. A massive influx of Chinas commodities ensued and the sanctions on
Myanmar by some Western countries increased its dependence on China.85
Business and investment opportunities in Myanmar offered by the above-
mentioned factors attracted many Chinese businessmen into the country.
In addition, 17 armed ethnic groups and some 40 small ethnic groups have
signed ceasefire agreements with the military junta since it took power in 1988,

81 Lynn Pan (ed.), The Encyclopedia of the Chinese Overseas, Richmond: Curzon Press, 1999,
p. 143.
82 Zhuang Guotu, On the Four Waves: A History of Chinese Migration into Southeast Asia,
Southeast Asian Affairs, No. 1, 2008, pp. 6979.
83 Zhuang Guotu, A New Estimation, p. 62.
84 Marvin C. Ott, From Isolation to Relevance: Policy Considerations, in Robert I. Rot-
berg (ed.), Burma: Prospects for a Democratic Future, Washington D.C.: Brookings Institute
Press, 1998, p. 71.
85 The influx of commodities, not investment, started after the Burmese currency demoneti-
zation of September 1987.

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among which 12 armed ethnic groups were allowed a limited amount of au-
tonomy in their areas along the countrys borders. Despite the fragility of these
(mostly verbal) pacts, they brought rare tranquility to northern Myanmar,
in particular the border areas. The geographical proximity to China and the
isolation from Naypyitaw pushed the cease-fire groups along ChinaMyanmar
border to rely on China to develop their local economies and expand their
powers.
As a result, the warlords in their areas and special regions approved Chinese
contract mining, infrastructure projects, and lumbering; Chinese investment,
technology, consumer goods, and almost all other economic elements are
favored. In recent years, with rapid urbanization in the Shan State and Wa
area, many new buildings have appeared, most of which are contracted by the
Chinese.86 Before the Kokang conflict in August 2009, Chinese investment
exceeded RMB1 billion in Kokang, where the Chinese sustained its economy.87
Both Chinese investments and contracted projects in Myanmar drove more
Chinese to enter the country because these firms were inclined to employ,
whether legally or illegally, Chinese and not the local residents. In the recent 10
years, a large number of Chinese laborers have bypassed the border checkpoints
and have illegally entered Myanmar as woodcutters, miners, and construction
workers. They gradually reached central Myanmar, even as far as the India
Myanmar border. The news that Myanmar police have caught and repatriated
Chinese laborers with illegal entry is nothing new. There are still an indefinite
number of undocumented Chinese laborers imprisoned in Lashio, Bhamo,
Myitkyina, and Mandalay. In 2006, 800 undocumented Chinese laborers were
repatriated to China while at least a further 364 were repatriated in 2007. Under
pressure from Chinas government, Maijiayang casino was closed at the end of
January 2009. Up to 10 February 5,000 Chinese working in the casino were
repatriated to China over ten days.88 Before the Minela casino closed, there were
at least 15,000 Chinese in Minela city.89
Lastly, a large number of Yunnan border residents have moved to the
neighboring countries in the last decade, resettling in the north of Myanmar,
Thailand, Vietnam, and Laos. In these three countries there are hundreds of
thousands of Chinese. According to the Yunnan Ethnic Affairs Commission,
altogether 210,000 Chinese migrated to the Kokang area and two-thirds of
86 Lincang Branch Investigation Team of the Peoples Bank of China, Investigation of RMB
circulation in the border trade in Lincang region, Southwest Finance, No. 9, 2001, p. 46.
87 Chen Jiang, He Xu, Kokang Survival, Southern Weekly, 8 October 2009.
88 Maijayang Casino Closed, The Beijing News, 11 February 2009.
89 Yin Hongwei, The Casinos in Periphery Survive under Chinas Pressure, Macao Monthly.

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 Modern ChinaMyanmar Relations

Pang Hsang citys total population, 20,000, were Chinese.90 Poverty and the
economic appeal of neighboring countries account for the Yunnan border resi-
dents outflow. Yunnan has 35 border counties and cities, among which are 25
Chinese designated poverty-stricken counties. Also, the people on both sides
of the border often belong to the same ethnic groups they share the same cul-
ture and language. Transnational marriages across the border are very popular.
These factors greatly facilitate migration. Meanwhile, outside pull factors added
to this migration. In 1999, the Wa area (with central government backing)
decided to resettle some people in the southern Shan State to eliminate opium
and implement the Wa Areas Development Programme (WADP); they were
provided with buckwheat seeds, fertilizer, and medical treatment. Some Yunnan
border residents were lured to join the Wa area migration (the Wa population
of Yunnan is extensive). After the Wa migration to the southeast along the
border with Thailand and Laos, the opportunity to develop the vacant lands in
the northern Wa area once again attracted Chinese to swarm into Myanmar. It
was conservatively estimated that about 5,000 Chinese migrated to Myanmar
because of the migration influence in the Wa area.91

The Economic Role of the Myanmar Chinese

Most Myanmar Chinese are engaged in business, and play the role of agent and
broker between the Myanmar market and the Greater China economic sphere,
including China, Hong Kong, Macau, Taiwan, and the ASEAN market. There
is a shortage of investment financing available to the Burman community.
Those with access to capital are of two groups, in addition to foreigners
who invest locally. These groups are those of the higher-level military with
connections to tap into the banking system on a personal basis or who may
launder funds in this manner, and the Chinese community with access to
capital available through the overseas Chinese networks of clan, language, and
regional associations.92 By 31 May 2009, foreign investment from 31 countries
and regions reached US$15.767043 billion in Myanmar. Besides China and
Hong Kong, Thailand, Singapore, Malaysia, and Indonesia were on the list

90 Chen Yanhui, The Blurred Border: One Hundred Thousand Yunnan Border Residents
Moved Abroad, Phoenix Weekly, No. 19, 2007.
91 Yang Wenyu, The Foreign Student Group in ChinaMyanmar Border Area, Oriental
Outlook, 4 March 2004.
92 David I. Steinberg, Myanmar: The Anomalies of Politics and Economics, The Asia Founda-
tion Working Paper # 5, November 1997, p. 24.

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of top ten investment countries.93 A fair proportion of ASEAN investment in

Myanmar belongs to the ethnic Chinese in other Southeast Asian countries.
Since December 1988, when more liberal foreign investment laws were
enacted, most foreign investment in Myanmar has been of ethnic Chinese
origin. The two most important factors contributing to this are: most Western
governments have not actively promoted business links with Myanmar, and
the large number of Sino-Burmese who fled Burma during the 1960s now can
use their connections to invest there.94 In the north, ethnic Chinese, including
groups prominent in the Shan State and eastern border regions since 1949,
are becoming a dominant economic force in Mandalay and other significant
commercial centers in upper Burma.95
Several factors greatly affect the role of the Myanmar Chinese as a bridge
to link the Myanmar economy to the outside, particularly East and Southeast
Asia. The Chinese have benefited from the Myanmar market-oriented economic
reforms and the military juntas attitudes towards them. Under the Burma
Citizenship Law promulgated in 1982, the Chinese are only recognized as second
and third class Myanmar citizens, namely Associate Citizens and Naturalized
Citizens; they have no right to be elected. But from 1988 onwards, a series of
economic policies issued by Yangon did not make a distinction between Chinese
and the other citizens, especially the Myanmar Citizens Investment Law (1994).
This Law legitimized and encouraged the private investment of all Myanmar
citizens including an associate citizen or a naturalized citizen.96 The Chinese,
consequently, grabbed the opportunity and in no time activated their ethnic
group economic networks, which had been restricted during the Ne Win era.
The increased ChinaMyanmar trade and economic ties, the ad hoc border
trade, and ASEANs engagement policy toward Myanmar offered Chinese
businessmen favorable opportunities to rise. When business-men from the
Greater China economic sphere sought to enter the Myanmar market, they
often collaborated with resident Chinese, which helped them deal with the
anomalies of doing business in Myanmar. One of the serious drawbacks for
foreign investors, particularly those who operate on-shore, is the necessity to
work with the bureaucratic government structures and multitudes of controls

93 The Latest Rank of Foreign Investment in Myanmar, mm.mofcom.gov.cn/aarticle/jmxw/

200907/20090706383099.html.
94 East Asia Analytical Unit, Overseas Chinese Business Networks in Asia, Department of
Foreign Affairs and Trade, Australia, 1995, p. 185.
95 Ibid., p. 64.
96 The Myanmar Citizens Investment Law, www.blc-burma.org/html/myanmar%20law/lr_
e_ml94_04.html.

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and counter-controls. Rules are often changed without prior notice, particularly
in the case of currency controls, import restrictions, and other restrictions on
movement of goods and services or trade practices.97 But even lacking explicit
contracts, Chinese ethnic social networks and social capital reduced the trans-
action costs and increased the business success rate. In Myanmar, like China,
legal and other soft infrastructures are still being developed, and good con-
nections are essential for doing business. The ethnic Chinese have social and
business structures which operate well in the absence of sound legal and other
structures; they have a propensity for developing international connections.
They are therefore at their most competitive in countries such as Myanmar.98
In 2009, Chinas Ministry of Commerce released an Investment Guide to
Myanmar that reminded Chinese investors that although the Burmese govern-
ment encouraged foreign investment, its policies created formidable obstacles.
Chinese investors from the Greater China economic sphere commonly chose
to cooperate with the Myanmar Chinese community who shared overseas
Chinese networks of clan, language, and regional associations in order to reduce
risk and uncertainty when they entered Myanmar market.
Myanmar is increasingly a focus for business delegations from abroad,
many of which seek to link up with the local ethnic Chinese business com-
munity. A large number of delegations come from China each year.99 Whether
Chinas official business delegations (from provincial or county levels) or pri-
vate enterprises, they tended to seek business opportunities through Chinese
associations in Myanmar. Between December 2005 and 2007, the Myanmar
Chinese Chamber of Commerce received 15 business delegations from all
over China. This Chamber is the leading business association in the Myanmar
Chinese community and is comprised of over 500 entrepreneurs and business-
men members.100 Chinas enterprises and companies also choose local Chinese
as agents and direct distributors of their products. For example, 80 percent of
the agricultural machinery market in Myanmar has been occupied by Chinese
products. The predominant share can be attributed to three major local
Chinese distributors in the country: 007 Company, Goodbrother Company,
and Yeeshin Company.

97 Khin Maung Kyi, Economic Development of Burma: A Vision and Strategy, Stockholm: Olof
Palme International Center, 2000, p. 111.
98 East Asia Analytical Unit, Overseas Chinese Business Networks in Asia, p. 60.
99 Ibid., p. 186.
100 Special Publication of the 100th Anniversary of the Myanmar Chinese Chamber of Commerce,
Yangon: Myanmar Chinese Chamber of Commerce, 2009, p. 107.

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 ChinaMyanmar Economic and Trade Relations

On the other hand, Myanmar Chinese also travel to China, Hong Kong, and
other Southeast Asian countries in search of business partners and opportunities.
The Myanmar Chinese Chamber of Commerce frequently arranges for its
members to visit widely in China searching for investment and cooperation
opportunities. They attend the World Chinese Entrepreneurs Convention,
the ASEAN Chinese Business Investment Southwest Promotion Meeting, the
AsiaPacific Chinese Business Forum, the ChinaASEAN Expo, the China
International Fair for Investment and Trade, the China Yiwu International
Commodities Fair, and all kinds of other economic and trade fairs.101
The roaring ChinaMyanmar border trade has created a golden opportu-
nity for the Myanmar Chinese community. Most of the underground banks
in Yunnan were opened by Myanmar Chinese families; such institutions have
considerable economic power. Ruili city in Yunnan is the hub of their opera-
tions, and their family members are distributed in border cities and other large
and medium-sized cities throughout Myanmar. Their nets even extend to Hong
Kong.102 Some rich Chinese have been investing outside Myanmar. China
and Southeast Asian countries are their prioritized investment destinations,
and Yunnan and Singapore are most preferred. A large number of Myanmar
Chinese invest and do business in the Yunnan border area; they are the most
vibrant and powerful among foreign investors there. Many of them have dual
identity.103 A leader of the returned Myanmar Chinese association in Yunnan
demonstrated this phenomenon. He pointed out that Myanmar Chinese
began to get Chinese ID cards through their social networks in China since
about 1992, and they consequently have opened bank accounts, bought real
estate, and invested in Yunnan Province and beyond in the name of Chinese
citizens.104
The connection between the Myanmar Chinese community and the overseas
Chinese networks paves the way for their intermediary role between Myanmar

101 In recent years, Chinese businessmen and entrepreneurs in Myanmar have given more
and more attention to business negotiation activities with a Chinese background, and seek
more business opportunities through the overseas Chinese network. For example, the 4th
session of the World Myanmar Chinese Diaspora Association was held in Hong Kong on
1517 September 2007, and over 1,000 Myanmar Chinese diaspora members from all
over the world attended. However, the 9th World Chinese Entrepreneurs Convention was
convened in Japan on the same date, so some powerful Chinese entrepreneurs in Myan-
mar chose to attend the Japans activity.
102 Current Account Management Department, State Administration of Foreign Exchange
(ed.), Cross-border currency circulation and management of foreign exchange in border trade,
Beijing: China Financial and Economic Publishing House, 2005, p. 104.
103 Ibid., pp. 233234.
104 Interview with HG, Kunming, 14 January 2010.

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and the greater China economic sphere. Being largely Hokkien or Cantonese,
Yangons ethnic Chinese tend to have links to other Hokkien and Cantonese
communities around the world ... Yangons Hokkien tend to have strong links
to Singapore and to Penang (both of which have large Hokkien communities)
and the Cantonese have strong links to Hong Kong (which is dominated by the
Cantonese). Also, despite Myanmars relative isolation, some members of the
Yangon ethnic Chinese community attend the annual meetings of the various
international dialect associations. This may have the effect of renewing their
international links and replenishing their Chineseness.105 Much of the foreign
direct investment entering the country is channeled through ethnic Chinese
networks.106 This is especially true of Taiwan investment because Myanmar
has not legalized diplomatic, economic, and trade relations with Taipei. Thus,
Taiwanese businessmen make their investments in the country and carry on
trade with it via a third country and by way of what are called transfer bills.
Myanmar Chinese have not only linked themselves to overseas networks but
have also established their own transnational networks. During the Cold War
era, numerous Chinese left Myanmar for China, the U.S., Macao, Hong Kong,
and Europe. Resettled in over 20 countries and regions, they total 300,000,
including over 100,000 in the U.S., 4050,000 in Thailand, over 20,000
in Macao, and 120,000 in Taiwan.107 Some of them have set up associations
and have kept in touch with each other in such places as Macao, Hong Kong,
Taiwan, New York, San Francisco, and Los Angeles. In China, the returned
Myanmar Chinese have also established associations in Xiamen, Beijing,
Yunnan, Shanxi, Guangxi, Tianjin, Guangdong, Nanchang, and Shanghai.
In January 2001, they established the World Myanmar Chinese Diaspora
Association, whose membership includes all Chinese and their descendants
claiming common origins in Myanmar. Its objectives lie in the promotion of
common development, win-win cooperation, solidarity and mutual support
among its members, and contributing to the economic boom of the country
of residence and origin.108 The Association convenes every two years. It has
held five large assemblies in Mainland China, Macao, and Hong Kong up to

105 East Asia Analytical Unit, Overseas Chinese Business Networks, pp. 184185.
106 Ibid., p. 64.
107 Commemorative Issue of the 2nd Session of the World Myanmar Chinese Diaspora Associa-
tion, Kunming: Association of Overseas Exchange of Yunnan Province, 2002, p. 24.
108 Commemorative Issue of the 1st Session of the World Myanmar Chinese Diaspora Association
and Celebration of Macaos Return, Macao: Macao Myanmar Overseas Chinese Associa-
tion, 2002, pp. 8586.

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 ChinaMyanmar Economic and Trade Relations

2009, which over 1,000 Myanmar Chinese diasporas from all over the world,
including the Myanmar Chinese community, attended every time.
On 1 January 2009, over 800 delegates from the Chinese Chamber of
Commerce in the U.S., Japan, Singapore, Thailand, Hong Kong, and Macao,
and local Chinese, attended the Celebration of the 100th Anniversary of the
Myanmar Chinese Chamber of Commerce in Yangon. Since the 1990s, when
the military junta adopted market-oriented and open-door policies, many
Chinese have returned to the country, bringing capital, technology, and new
experiences.109 When a Myanmar Chinese entrepreneur explained the reason
for their economic rise after 1988, he believed that Myanmar Chinese busi-
nessmen maintained many natural contacts with foreign traders due to all
kinds of historical reasons. The current cooperation between them through
various social contacts is larger and closer than in the 1950s ... When China
established the Shenzhen Special Economic Zone (SEZ) and Zhuhai SEZ
in 1980, it obtained overseas Chinese investment and support, and thus met
with success. Today, the Myanmar Chinese businessman also faces a similar
opportunity and position. The 1990s witnessed successful cooperation be-
tween Myanmar Chinese and foreign investors from mainland China, Taiwan,
Singapore, and Thailand.110

The Economic Power of the Myanmar Chinese

The Asian Development Bank claimed that an objective assessment of eco-
nomic developments in Myanmar is made difficult by poor quality data.111
This conclusion is also applicable to the Chinese economy in Myanmar. Not
only are there no reliable statistics on this economy, but also the biographies of
successful Chinese entrepreneurs have not appeared.
During Ne Wins rule, some 100,000 Chinese left the country because the
government nationalized trade and industry that destroyed Chinese liveli-
hoods. The remaining Chinese only made a living in a restricted space and were
involved in the black market. The situation underwent a dramatic and favorable
turn at the end of 1980s, as noted previously. When the author (Fan Hongwei)
109 Zhai Zhenxiao, Migration, Cultures and Identities: The Social Construction and Trans-
national Networks of BurmeseChinese Immigrant Communities in Yangon, Jhong-he,
and Toronto, Taiwan National Tsing Hua University, Ph.D. thesis, 2006, pp. 166167.See
also Lynn Pan (ed.), The Encyclopedia of the Chinese Overseas. Richmond: Curzon Press,
1999, p. 143; East Asia Analytical Unit, Overseas Chinese Business Networks in Asia,
Department of Foreign Affairs and Trade, 1995, pp. 186187.
110 Special Publication of the 100th Anniversary, p. 185.
111 Asian Development Bank, Asian Development Outlook 2003, Oxford University Press,
2003, p. 82.

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 Modern ChinaMyanmar Relations

conducted field work in Myanmar at the end of 2005, those Chinese traders
and entrepreneurs interviewed unanimously recognized the significance of the
1988 tipping point for their lives and economy. They remarked that All the cur-
rent successful big Chinese entrepreneurs in Myanmar started their businesses
in 1989.112 The new environment caused by the 1988 upheaval in Burma and
Chinas open economy and booming international trade provided us with
numerous business opportunities and made considerable numbers of Chinese
into the New Rich.113 In the Chinese community, countless businessmen
made a fortune through the ChinaMyanmar border trade.114

Between November 1988 and April 1993, there were 5,875 export trad-
ing companies and agents in Myanmar, and about 800 ones belonged to the
Chinese. The number of Chinese exporters was not small, and their economic
power and scale were predominant. Fifty percent of the leading 20 private
import and export companies were owned by Chinese. In the field of rubber,
agricultural and forest products, and aquatic product exports, Chinese played
the dominant role.115 By the mid-1990s, 70 percent of vendors stands in major
markets all over Myanmar were manned by Chinese, who mainly dealt in agri-
cultural products, local products, jewelry, plastic products, and machine, trans-
port, hotel, restaurant, textile, construction, tourism and aquatic products.116
Today the countrys ethnic Chinese are again at the forefront in Myanmars
economy. The majority of retail, wholesale and import trade, including cross-
border trade and big restaurants, are run by them or by mixed ChineseBarmar
[Burman]; and the largest supermarket in Yangon is operated by an ethnic
Chinese group.117

By 2000, Myanmar Chinese import and export companies totaled 4,500.
Within the country, there were about 25,000 Chinese enterprises selling
groceries and other sundry goods. Mainly family-operated, these had an aver-
age capital value of 2 million Kyat. Their conditions in other fields were also
remarkable: over 2,000 snack-bars in Yangon, 12 million Kyat average capital
per shop; 700 teahouses in Yangon, 140 million Kyat; 200 musical instrument

112 Special Publication of the 100th Anniversary, p. 125.

113 Ibid., p. 186.
114 Ibid., p. 121.
115 Fang Xiongpu, Glimpse of the Chinese Community in Myanmar, Hong Kong: South Island
Press, 2000, p. 160.
116 Bao Lu, Chinese in Myanmar, Information of South-east and South Asia, No. 18, 1996, p.
23.
117 Mya Than. The ethnic Chinese in Myanmar and their identity, in Leo Suryadinata (ed.),
Ethnic Chinese as Southeast Asian, Singapore: Institute of Southeast Asian Studies, 1997, p.
128.

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 ChinaMyanmar Economic and Trade Relations

and toy shops, 130 million Kyat; 2,000 hotels and inns, 5 million Kyat; 700
maritime agents, 580 million Kyat; 7,000 cloth and clothes shops, 650 mil-
lion Kyat.118
Chinese overall occupational structure in Myanmar remains in 2011 more
or less as it was. However, more and more Chinese are engaged in manufacture,
whose enterprises and factories, by and large, are small and medium scale, and
belong to the processing and light industry.
From 1992 onwards, the Myanmar government established dozens of
industrial zones throughout the country. A fair proportion of enterprises in the
Dagon Industrial Zone, Shwe Paukkan Industrial Zone, Shwe Pyithar Industrial
Zone, and Hlaing Thayar Industrial Zone belong to the Chinese.119

For Myanmar Chinese, neither their overall nor individual economic power
is yet able to compare with their counterparts in other Southeast Asian countries.
No Myanmar Chinese entrepreneur or his enterprise has entered the any rank of
the Top 500 Chinese Entrepreneurs, Southeast Asias 40 Richest, and Forbes
Asias 200 Best Under A Billion (list of the best small- and midsize companies
throughout the Asia Pacific region) released by some institutions. Nevertheless,
the Chinese are still the most energetic and pragmatic ethnic group in Myanmar
and are playing an important or a dominant role in some fields of the country.
The Chinese now dominate the fields of the grocery, retail, and restaurant
trades in Myanmar.120 The export of farm produce is jointly controlled by
Chinese and Indians, and 8090 percent of private rubber dealers are Chinese.
When the Myanmar government opened banking in 1992, half of the private
banks belonged to the Chinese.121 Among the private banks, Asia Economy
Bank, owned by a Chinese, was the biggest, which had nearly 40 local branches,
recruited over 3,000 employees, and whose savings held 40 percent of the total
of all Myanmar banks. Yet this bank was closed in 2003.122

In addition to Chinatown, Chinese shop signboards are ubiquitous in
Yangon and Mandalay, from gold shops, to supermarkets, to groceries. On
25 February 2008, the biggest shopping market containing over 300 shops
in Mandalay, Yadanabon Market, was destroyed by a major fire, and most of
them were operated by local Chinese. It is said that all the buildings above two

118 Yearbook of the Huaren Economy 2000/2001, Beijing: Morning Glory Publishers, 2001, pp.
9293.
119 Special Publication of the 100th Anniversary, p. 185.
120 Overview of Myanmar Chinese, www.chinaqw.com//news/2006/0630/68/34584.shtml.
121 Special Publication of the 100th Anniversary, pp. 7879.
122 Ibid., pp. 125126.

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floors are owned by Chinese in Mandalay.123 For the purpose of convincing the
author of local Chinese dominant economic power in Mandalay, one Chinese
entrepreneur said that During the Spring Festival, Chinese always close their
shops to celebrate the holiday. Under their influence, the whole Mandalay
commercial market is also closed until we reopen our shops at the end of the
Festival. If you visit the city during the Spring Festival, you will feel the obvi-
ous landscape.124 Another scholar also confirms the landscape: Real estate in
key sites in Mandalay has been acquired by wealthy Chinese investors, ethnic
Chinese Kokang, and Wa businessmen (notorious for their drug connections)
at exorbitant prices. This has had the effect of pricing out the ordinary Burmese
residents who cannot afford the housing and land costs in central Mandalay.
As a result, the central area of Mandalay has been transformed into a thriving
centre of alien (especially Chinese) culture with modern homes, hotels, shops
and high rise buildings filled with rich Chinese businessmen.125
The Chinese migrants presence in the Myanmar economy is a double-
edged sword. They are the lubricant of ChinaMyanmar economic ties, but
they are also the component of Chinas soft power projected in Myanmar.
Meanwhile, they are possibly the potential friction of bilateral relations. One
author has warned that If the Chinese are perceived to be in control of the
economy, then a rise in anti-foreign sentiment might be expected which could
have serious effects on both the political and economic future of the state.126
The Chinese takeover of Mandalay and northern Burma replicates the
economic consequences of the British colonization of Burma.127 The influx of
new Chinese migration generates fears of economic dependence and political
domination.
Some observers and scholars argue that China dominates Myanmars
economy, and attribute the continued survival of the military regime facing
Western sanctions to Chinas support and close bilateral economic ties.128 This
claim exaggerates Chinas economic influence on Myanmar and disregards
Naypyitaws nationalism, which demands more careful research. In fact, the

123 Interview with YGM, Mandalay, 15 December 2005.

124 Interview with LZM, Mandalay, 15 December 2005.
125 Chee Kiong Tong, Identity and Ethnic Relations in Southeast Asia: Racializing Chineseness,
Springer, 2010, p. 155.
126 Steinberg, Myanmar, The Asia Foundation Working Paper # 5, p. 24.
127 Mya Maung, On the Road to Mandalay, p. 455.
128 Ott, From Isolation to Relevance, p. 72; Toshihiro Kudo, Myanmars Economic Rela-
tions, JETRO Disscussion Paper No. 66, 2006, p. 17; Aung Din, Burmas last chance,
Far Eastern Economic Review, 26 May 2009; Toshihiro Kudo, Myanmars Economic Rela-
tions with China, 2008, p. 104.

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answer to whether Naypyitaw can survive Western sanctions without Chinas

economic supports has been illustrated by the history of Burmas self-isolation
during the BSPP period. More importantly, the hypothesis has not been based
on reliable and accurate statistics on ChinaMyanmar economic and trade
relations. As mentioned earlier in the chapter, no scholars, observers, or in-
stitutions of the Burmese scene have disclosed Chinas real influence because
there are no believable and exact statistics from both sides, and their ties are so
complicated and multi-dimensional. Although dependence on China seems
self-evident, there is a tendency to underrate the vehemence and potential of
Burmese nationalism. Myanmar has attempted to balance Chinese support,
and will limit all foreign influences on key national concerns. Chinese assis-
tance has been important to the Burmese junta, not for its survival but for its
strengthened control.129
If China withdrew its support to Myanmar and limited its economic rela-
tions with it, other neighboring countries would fill the Chinese vacancy in
the country. Based on Myanmars trade patterns, we can also surmise that
sanctions have pushed the country toward Asia and away from better ties with
Western democracies. Human rights activism has not affected the public image
of Asian investors in the same way it pressured Western multinationals.130 New
Delhis policy towards Myanmar shifted from Isolation to Constructive
Engagement since 1993. Behind the change, its an important contributing
factor to counterbalance Chinas penetration in Myanmar. Accordingly, there
is no reason to doubt that India would expand its influence in the country if
China estranges itself from Myanmar.
The lack of statistics on the subject, however, cannot become an excuse
for denying the fact of Chinas presence in Myanmar. One must be alive to the
possibility that inadequate data indeed cover up the real economic power of
China in Myanmar, which both official statistics underestimate.
Official data do not depict the full extent of Chinas economic engagement
in Myanmar. Chinese build-operate transfer (BOT) projects are often classi-
fied as government loans/aid and therefore excluded from official investment
figures. The level of Chinese investment is also under-reported because
many private companies and individual investors invest in the name of its
local partners names. And while Chinese investment in the areas controlled
by the ethnic groups is also rising, it is often excluded as foreign investment

129 David I. Steinberg, The United States and Burma/Myanmar, pp. 187188.
130 Jalal Alamgir, Myanmars Foreign Trade and Its Political Consequences, Asian Survey,
Vol. XLVIII, No. 6, November/December 2008, p. 994.

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in official reporting because Naypyitaws reign in these areas is weak or non-

existent. Reporting omissions are also common for small-scale investments,
such as Chinese government loans for alternative development projects and
commercial investments in rubber plantations and the mining sector.131At the
same time, there is a large underground and informal economy between the
two countries; we stress that the real amount of SinoMyanmar trade and in-
vestment greatly outnumbers the official statistics. Chinas economic influence
is underestimated in Myanmar if we rely on their bilateral economic ties ac-
cording to official sources. This should not suggest, however, Myanmars total
dependence on China. We discern a partial, uncomfortable dependency on
China. As Chinas former Ambassador Li Jinjun noted, Myanmars economy
consists of two major economic plates controlled by the central government
and ethnic groups, respectively and three relatively independent economic re-
gions. The three regions are: 1. the region south of Mandalay centering Yangon
controlled by the central government; 2. the northern Myanmar economic re-
gion composed of several special regions dominated by ceasefire ethnic groups
closely integrated with Chinas Yunnan province; 3. the economic region,
comprising northeast Myanmar centering on Tachileik, closely integrated with
Thailand.132
With three relatively independent economic regions in this country as well
as the reality of China/YunnanMyanmar economic ties, we argue that north
Myanmar has become economically dependent on China. Economically, how-
ever, the foci of Beijing and Yunnan on Myanmar are different. While central
level bilateral economic relations are subject to political ties and Beijngs stra-
tegic interests in the country, local level relations have fewer political consid-
erations and are more immediate and practical. In the provincial development
blueprint devised by Yunnan, mainland Southeast Asia, particularly Myanmar,
has occupied a critical position. Yunnan is practicing a modern version of mer-
cantilism. The degree of economic integration between Yunnan and Northern
Myanmar is unprecedented, but it will inevitably face the challenge of the
uncertainties of Naypyitaw-cease fire groups relations. In conclusion, when
discussing current ChinaMyanmar trade and economic relations or Chinas
economic influence, we should be carefully circumspect in either overstating
or underestimating Chinas economic influence in Myanmar. Analyses should

131 Chinas Myanmar Strategy: Elections, Ethnic Politics and Economics, Crisis Group Asia
Briefing No. 112, 21 September 2010, p. 12.
132 Li Jinjun, Analyzing the Cause and Impact of Current Economic Hardship in Myanmar,
Asia Probe, No. 4, 2002.

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pay attention to the different dynamics of different levels of economic ties,

and those of the central and local governments, as well as Chinas official large
investment and incalculable undocumented private investment in this country.
Additionally, the catalyst function of economic sanctions against Myanmar
imposed by the U.S. and its major allies in ChinaMyanmar trade and eco-
nomic nexus should not be ignored. Myanmar is subject to formal and infor-
mal economic sanctions from some western countries. U.S. sanctions are the
most stringent and include total bans on new investment since 1997 and on
trade since 2003.133 The E.U. introduced economic sanctions according to the
Common Position in 1996, and hardened its stance by updating, renewing,
and extending the restrictive measures in subsequent years.134 Other countries,
including Japan, Australia, New Zealand, and Canada imposed various restric-
tions on their activities in and/or with Myanmar. In addition to the formal sanc-
tions, western informal sanctions were applied to Myanmar. In the early 1990s,
some prominent North American and Western European corporations with-
drew from Myanmar. Their pullouts were prompted not by formal sanctions
on investment, but by informal pressures including lobbying campaigns, legal
challenges, shareholder revolts, street protests, and letter-writing initiatives.135
When western corporations, consequently, considered doing business with
Myanmar or investing in that country, they have had to face possible criticism
and pressure from human-rights, environmental, and other pressure groups.
By comparison, neither Chinas state nor private corporations are under insti-
tutional or non-institutional constraints. Rather, Chinese enterprises overseas
expansion is encouraged and supported by Beijings pragmatic strategy, Go
Global. For instance, The Chinese leadership supports CNPCs ambition to
become a world-class oil company. The internationalization of CNPC is not
only part of the Chinese governments plan to create internationally competi-
tive firms but also part of its strategy to achieve energy security.136Myanmar
is believed to have a large amount of informal trade across its land borders,
especially with Thailand and China. The informal economy may be as large

133 For the background, history, and statutory actions of U.S. economic sanction on Myan-
mar, see Michael F. Martin, U.S. Sanctions on Burma, CRS Report for Congress, 16 July
2010; Larry A. Niksch, BurmaU.S. Relations, CRS Report for Congress, 2 March 2008.
134 For E.U.s policy toward Myanmar, see Renaud Egreteau, Intra-European Bargaining and
the Tower of Babel E.U. Approach to the Burmese Conundrum, East Asia, Vol. 27, Issue
1, March 2010, pp. 1533.
135 Ian Holliday, Doing Business with Rights Violating Regimes Corporate Social Respon-
sibility and Myanmars Military Junta, Journal of Business Ethics, 2005, Volume 61, No. 4,
pp. 332333.
136 Downs, Chinas Quest for Energy Security, RAND, 2000, p. 51.

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 Modern ChinaMyanmar Relations

as or larger than the formal economy.137 The sanctions and isolation further
aggravate the formal economy in this country.
Most foreign direct investment (FDI) to Myanmar was from developed
countries over 19952001. Among the developed countries, the United
Kingdom and the United States were significant, and their FDI were domi-
nated by oil and gas activities. The highest FDI inflows into Myanmar were be-
tween 19902002, and in 1997. They declined, however, from 1998. UNCAD
attributed the decline primarily to the impact of the 19971998 Asian financial
crisis,138 but tightened western economic sanctions were another factor. The
Clinton administration on 22 April 1997 announced a ban on all new U.S.
investment in Myanmar. In that year, The United States is the fourth-largest
external investor in Burma after France, Singapore and Thailand. However,
much of that investment lies in the oil sector, where Unocal [now Chevron]
and, to a lesser degree, Atlantic Richfield are involved. As many U.S. companies
have withdrawn from Burma in recent years and as the ban applies only to new
contracts, the short-term consequences for the countrys economy will be
modest.139 The 1997 ban caused two obvious outcomes: first, the peak in FDI
in Myanmar before 2002. Because U.S. companies signed more investment
deals with Burma in February than in the whole of the previous eight years
as they dashed to conclude talks before the Presidents bill banned new U.S.
investment in the Southeast Asian nation. And Most of the new investment
was in the oil and gas sector, with offshore exploration rights held by and be-
ing converted into production-sharing contracts.140 Second, the U.S. stopped
expanding into the Myanmar market, particularly into the energy sector.
According to the E.U. Common Position adopted in 1996, E.U. members were
prohibited from investing in state-owned enterprises in Myanmar. According
to the Myanmar Central Statistical Organization, the majority of FDI into
Myanmar lies in the power, oil, and gas sectors between 1989 and 2007.141 While

137 Myanmar: Sanctions, Engagement or Another Way Forward? International Crisis

Group Asia Report No. 78, 26 April 2004, p. 17.
138 FDI in brief: Myanmar, www.unctad.org/sections/dite_fdistat/docs/w id_ib_mm_en.
pdf.
139 United States: Burma Sanctions, Oxford Analytica Daily Brief Service.
140 Ted Bardacke, US companies rush to beat Burma sanctions, Financial Times, 25 April
1997. It cited this sentence that: most of the new investment was in the oil and gas sec-
tor, with offshore exploration rights held by and being converted into production-sharing
contracts.
141 Thandar Khine, Foreign Direct Investment Relations between Myanmar and ASEAN,
IDE Discussion Paper, No. 149. April 2008. It cited this sentence that: According to the
Myanmar Central Statistical Organization, the majority of FDI into Myanmar lies in the
power, oil, and gas sectors between 1989 and 2007.

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 ChinaMyanmar Economic and Trade Relations

western companies withdrew and were reluctant to invest, China was opposed
to the sanctions against Myanmar and adopted a policy of non-interference.
Chinas companies, motivated by the strategies of Western Development and
the Go Global programs launched by Beijing in the new century, appealed
to the resource-rich Southeast Asian nation. For example, Chinese enterprises
began to be involved in Myanmar oil and gas explorations in 2001. Up to 2008,
all three major Chinese oil corporations CNPC, SINOPEC, and CNOOC
have gained footholds in Myanmar. Chinas economic presence in Myanmar to
some considerable extent profited from Western economic sanctions against
Naypyitaw, notably those by the U.S.

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 Part III: Sino-Burmese Relations within the
International Power Context

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 9
Regional Impacts: Narcotics, Transport, and
the Military in Sino-Myanmar Relations

S ino-Burmese relations within the context of regional power and

security concerns have three specialized aspects that transcend the
usual Sino-Southeast Asian relations: the problem of narcotics, the
extensive expansion of the Chinese transport network, and the rising role
of the Burmese tatmadaw, the latter with more than considerable Chinese
assistance. Although the Burmese military under any conceivable development
within our purview will be no threat to China, and indeed the strengthening of
Burmese forces by China could be rationalized as internally protecting Chinese
assets in Myanmar against insurrections as well as finding political favor with
the regime, narcotics has been viewed by the Chinese, both historically and at
present, as an existential threat to the state.
Myanmar has been a narcotics problem since opium production, which was
legal in Burma until 1958 and was taxed by the Shan sawbwas, was transformed
into its distilled form, heroin, and found international markets, most specifically
in the United States. Afghanistan has replaced Myanmar as the worlds leading
heroin exporter, but another lucrative market has been found in Thailand
for Burmese-produced methamphetamines, which unlike heroin and the
opium poppy have no agricultural base. Although China has no fear of the
Burmese military, mutual suspicions between Thailand and Burma/Myanmar
are both historical and contemporary. The Burmese still unrealistically fear a
U.S. invasion via its surrogate and ally, Thailand. These three factors narcotics,
Chinese transport expansion, and the military are components of the regional
dynamics.

Narcotics in the ChinaMyanmar Nexus

Over a century ago, China had a massive opium problem. Despite the absence
of reliable and meaningful statistics, it is beyond doubt that opium culture ex-
panded enormously throughout the nineteenth century. The number of opium

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Table 13: Drugs-related crime in China, 19912009

Year Cracked Arrested Heroin Opium Mari- Methamphetamine Precur-

drug- criminal seizure seizure juana seizure sor
related suspects (tons) seizure (tons) chemi-
cases drug- (tons) cals
(1000) related seizure
captured (tons)
(1000)

1991 8.4 18.5 1.919 1.980 0.454 0.351 49.8

1992 14.7 28.3 4.489 2.680 0.910 0.655 58.8
1993 26.1 40.8 4.459 3.354 0.251 0.005 90
1994 38.0 51.0 3.881 1.737 1.534 0.460 38
1995 57.5 73.7 2.376 1.110 0.466 1.304 85.9
1996 88.6 112.6 4.347 1.745 4.876 1.599 218.6
1997 180.1 244.0 5.477 1.880 2.408 1.334 383.5
1998 182.4 231.9 7.358 1.215 5.079 1.608 344.5
1999 64.9 58.1 5.364 1.193 16.059 272
2000 96.2 37.1 6.281 2.428 4.493 20.900 215
2001 110.3 73.3 13.2 2.82 0.75 4.82; 2.07 million 208.2
pills MDMA/ecstasy
2002 110.0 90.0 9.2908 1.2193 1.3 3.1909; 3.01 million >300
pills MDMA
2003 93.8 63.7 9.53 5.83; 0.409 million 72.8
pills MDMA
2004 98.0 67.0 10.8365 2.746; over 3 million
pills MDMA
2005 4.5 5.8 6.9 2.3 0.941 5.5; 2.34 million
pills MDMA; 2.6
tons of ketamine
2006 4.6 5.6 5.79 1.69 5.95; 0.4541 million
pills MDMA; 1.79
tons of ketamine
2007 5.6 6.7 4.6 1.2 5.8; 7.62 million
methamphetamine
tablet, 2.21 million
pills MDMA; 6
tons of ketamine
2008 6.2 7.3 4.33 1.38 6.15; 5.27 tons
of ketamine
2009 7.7 9.1 5.8 1.3 8.7 6.6; 5.3 tons of
ketamine; 1.062
million pills MDMA

Source: Annual Report on Drug Control in China, 20002010, Ministry of Public

Security, PRC.

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 Regional Impacts: Narcotics, Transport, and the Military in Sino-Myanmar Relations

Figure 3: Number of registered drug addicts in China, 19992005 (10,000 persons) Source:
Annual Report on Drug Control in China, 19992006.

users ranged from 0.66 percent of the adult Chinese population to 60 percent
or more.1 At the beginning of the twentieth century, China was consuming
95 percent of the worlds opium supply. Opium came to function as both a
source of and a substitute for cash.2 During the rule of the KMT, the opium
problem was still rampant in China.3 Soon after the CCP seized power, Beijing
launched a nationwide campaign from 1950 to 1952 against drugs, along with
other political campaigns such as Suppressing Counter-revolutionaries, The
Three Antis, and The Five Antis. In these three years, 82,056 drug criminals
were arrested; 33,786 of them suffered the death penalty or life imprisonment.4
This campaign basically wiped out the drug problem in urban areas. By the
late 1950s, the opium problem was solved in most parts of China, except in
several minority areas where the campaign was postponed. From the late
1950s, China claimed it was a drug-free country, and it enjoyed this reputation
for more than two decades by virtue of the combination of the extremely tight
control over individual life, and its virtual isolation from the rest of the world.5

1 Frank Dikotter, Lars Laamann and Zhou Xun, Narcotic Culture: A History of Drugs in
China, Hong Kong: Hong Kong University Press, 2004, pp. 5152.
2 Carl A. Trocki, Opium, Empire, and the Global Political Economy: A Study of the Asian
Opium Trade, 17501950, London, New York: Routledge, 1999, pp. 125126.
3 See Edward R. Slack, Jr, Opium, State, and Society: Chinas Narco-economy and the Guomin-
dang, 19241937. Honolulu: University of Hawaii Press, 2001.
4 Concluding Report on Nationwide Anti-drug Campaign, by Luo Ruiqing, in Zhu Yu
(ed.), Removing Cancer: Records of the PRCs first anti-drug and anti-prostitution meas-
ures, Beijing: Central Party Literature Press, 1999, p. 49.
5 Zhou Yongming, Anti-Drug Crusades in Twentieth-Century China: Nationalism, History,
and State Building, Lanham: Rowman and Littlefield Publishers, Inc., 1999, p. 113.

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 Modern ChinaMyanmar Relations

When China re-opened its doors in the late 1970s, drugs re-emerged in the
country and are becoming increasingly problematic (see Table 13).
According to Chinas official statistics, the number of drug addicts reg-
istered with the public security organs in 1991 was 148,000, a figure which
rose to 520,000 in 1995, and to 681,000 in 1999.6 In contrast with most Asian
countries reporting stable or declining abuse trends in 2002, opiate abuse con-
tinued rising in China. The number of registered drug addicts rose in 2002
and in 2003 to exceed 1 million people, a 15-fold increase over the 19902003
period.7 By 2005, registered drug addicts jumped to 1,140,400 (see Figure 3).
Up to June, 2010, the number rose to 1,437,000.8
Today, when the Chinese think about drugs, Myanmar and Yunnan often
come to mind. The current plague of narcotics in China is intimately associated
with Burma/Myanmar. Before China opened up to the outside world in
1979, there were three drug-transit routes from the Golden Triangle to the
main consumer markets in North America and Western Europe: 1. Golden
TriangleBangkokHong KongJapanU.S.; 2. Golden TriangleRangoon
Kuala LumpurSingaporeNorth America; 3. Golden TriangleIndia or Sri
LankaEurope. After China adopted its open-door policy and relaxed the
control of the border trade, the drug traffickers wasted no time in establishing
the fourth traffic route: from the Golden Triangle to Yunnan, then to Hong
Kong and the rest of the world ... As drug-transit activities increased, so did
the number of addicts [in China].9
Now, the Golden Triangle, notably northern Myanmar, does the most harm
to China among foreign sources of drugs. China is not only the trafficking
route and transit site, but also the leading consumption market of narcotics
produced in the Golden Triangle. When bulk narcotics reach Yunnan, most
of them are shipped to Guangdong via Guangxi, Guizhou, and Hunan. Then
some are smuggled abroad and the rest enter the local market or are transferred
to Hunan, Jiangxi, Fujian, as well as the northern provinces in the country.10
Table 14 indicates that Yunnan is infested with narcotics; it is also a barrier
arresting the influx of narcotics into the rest of China. Chinese authorities
estimate that some 80 percent of the opiates produced in the Golden Triangle

6 White Paper: Narcotics Control in China, China Facts and Figures, March 2002.
7 United Nations Office on Drugs, World Drug Report, 2004, Vol. 1: Analysis, p. 88.
8 The Drug Addicts in Our Country Increased by 100,000 in One Year, The Public Secu-
rity Organs will Strengthen Supervision and Control, www.cnr.cn/china/gdgg/201007/
t20100723_506784131.html
9 Zhou Yongming, Anti-Drug Crusades in Twentieth-Century China, p. 115.
10 Annual Report on Drug Control in China, 2002.

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 Regional Impacts: Narcotics, Transport, and the Military in Sino-Myanmar Relations

Table 14: Drugs-related crime in Yunnan, 20012008

Year Cracked Arrested Narcotics Proportion Propor- Proportion

drug- criminal seizure of tion of of opium
related suspects (tons) nationwide nationwide seizure %
cases drug- heroin metham-
(1000) related seizure % phetamine
(1000) seizure %

2008 13.16 15.02 6.54 67.20 33.50 92.22

2007 9.74 12.00 7.09 73.70 39.36 90.51
2006 9.96 11.98 9.60 80.10 75.80 91.10
2005 23.00 25.70 10.75 73.40 69.30 94.00
2004 16.67 20.39 9.82 78.14
2003 14.20 18.10 9.47 82.70 12.70
2002 15.00 1.90 0.87 73.50
2001 11.22 13.78 1.02 61.00 16.70 46.10

Source: Yunnan Yearbook, 20002009; Annual Report on Drug Control in China, 2001,
2003, 2004.

are exported to China.11 The bulk of heroin consumed in China is from the
Golden Triangle.12 Chinas 2.2 million heroin users, the largest population in
absolute terms, were estimated to consume some 45 m/t of heroin in 2008.
Most of the supply for China is sourced in Myanmar, although Afghan heroin
appears to be gaining market share.13 As a result, Myanmar must be an essential
partner of China in solving the narcotics problem.
In order to control narcotics from Myanmar, Beijing has adopted a series
of measures. China has set up three lines of defense to block narcotics from
Myanmar: the first line, Yunnan province; the second line, Guangxi, Guizhou,
and Sichuan adjacent to Yunnan; the third line, Guangdong, Fujian, Chongqing,
Gansu, Ningxia, Hunan, Hubei, Henan and Anhui.14 Yunnan province is thus
Chinas focus against Myanmar narcotics. In April 2005, the China National
Narcotics Control Commission launched the nationwide Peoples War on
Drugs for a period of three years. Over the three years, Yunnan Province seized

11 United Nations Office on Drugs, World Drug Report, 2004, Vol. 1, pp. 8889.
12 Annual Report on Drug Control in China, 2006.
13 United Nations Office on Drugs, World Drug Report, 2010, p. 42.
14 Annual Report on Drug Control in China, 2000.

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 Modern ChinaMyanmar Relations

12.9 tons of heroin, 9.3 tons of ice, and 4.5 tons of opium from the Golden
Triangle.15

China also actively participates in and promotes bilateral and regional
cooperation in drug control with Myanmar. In May 1991, China hosted
the first meeting of senior officials of China, Thailand, Myanmar, and the
United Nations Drug Control Program (UNDCP) in Beijing, to discuss the
proposal on multilateral cooperation against drug abuse in the sub-region. In
June 1992, China, Myanmar, and the UNDCP signed the China/Myanmar/
UNDCP Joint Cooperation Project on Drug Control in Yangon, Myanmar.
A memorandum of understanding on Drug Control was signed in 1993 by
the Governments of China, the Lao Peoples Democratic Republic, Myanmar,
Thailand, and the United Nations Office on Drugs and Crime (UNODC).
Cambodia and Vietnam became parties to the MoU at a Ministerial Meeting
held in Beijing on 27 May 1995, and a Subregional Action Plan for Drug
Control (SAP), including eleven projects at a total cost of more than US$15
million, was approved by the six Governments. Under the cooperative
mechanism between the signatory countries of the MoU, a MoU ministe-
rial meeting is held every two years; the annual Senior Officials Committee
meetings, bilateral cross-border meetings, innovative pilot interventions in
individual countries, technical training, and the strengthening of the mana-
gerial capacities of the governments on drug control projects and programs
have been initiated and implemented. According to that program, offices for
the MyanmarChina cross-border drug control cooperation were opened in
Qingshuihe in Myanmar and Qingshuihe in China in 2001, and in Lwegel in
Myanmar and Larin in China.
In 2000, China and the ten ASEAN countries endorsed the ASEAN
and China Cooperative Operations in Response to Dangerous Drugs
(ACCORD) aiming at eliminating or drastically reducing the problems
of illicit drug production, trafficking, and abuse in the region by the year
2015. The ACCORD established a dynamic Plan of Action, and the ASEAN
Governments and China agreed to strengthen coordination of their efforts
in four major areas of activity.16 Now, trafficking in illegal drugs has become

15 Deputy Secretary General of Chinas National Narcotics Control Commission (NNCC)

and Director-General of Narcotics Control Bureau of the Ministry of Public Security Yang
Fengruis Speech at the press conference of Chinas State Council Information Office,
www.scio.gov.cn/xwfbh/xwbfbh/wqfbh/2008/0625/200905/t308942.htm.
16 For the four major cooperation areas, see ASEAN and China Cooperative Operations in
Response to Dangerous Drugs (ACCORD), www.aseansec.org/645.htm.

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 Regional Impacts: Narcotics, Transport, and the Military in Sino-Myanmar Relations

a priority between ASEAN and China on cooperation in the field of non-

traditional security issues.17
Because of the serious epidemic of narcotic drugs in the Golden Triangle,
Lao PDR, Myanmar, Thailand, and China have been affected by the problem.
Accordingly, cooperation on drug control among these four countries was ini-
tiated, and their first Ministerial Meeting in 2001 was convened to establish
drug control partnership on the basis of the existing cooperation among the
four countries.18 From 2000, China signed MoUs on narcotic drugs control
with Myanmar, Lao PDR, Thailand, and Vietnam, respectively.
In connection with the drug problems along the border, a junior-officials
meeting on MyanmarChina drug control cooperation is held every month,
and information has been exchanged. In addition, as of 1996, a senior-officials
meeting of Myanmar, China and UNDCP on drug control is held every six
months. Information has been exchanged and cooperation promoted.19 Also,
the ministerial level meetings, MoU meetings on the topic of narcotic control,
and regular meetings between Yunnan and Myanmar central and local authorities
on counter-narcotics cooperation are held. Both sides in recent years have taken
joint action to eradicate drug trafficking groups, drug trafficking networks, drug
kingpins, and drug-manufacturing bases and laboratories in Myanmar. China
has trained hundreds of Myanmar counter-narcotic personnel at the Yunnan
Police Academy in Kunming.20
In order to block and interdict drug source in Myanmar, Beijing has been
giving high priority to the strategy of eliminating the supply of illicit drugs by
boosting alternative development programs in northern Myanmar. Beginning
in 1990, China has actively helped the northern parts of Myanmar and Laos,
where poppies were traditionally planted, to promote alternative development
by means of providing technological and agricultural support and developing
tourism resources.21 Between 2006 and 2008, Chinas central government
appropriated over RMB100 million for alternative development activities in
the two countries, helping to cultivate over 1 million mu (66,666 hectares)
of substitute crops, and donated 10,000-ton rice and a certain amount of
17 See Joint Declaration of ASEAN and China On Cooperation in the Field of Non-tradi-
tional Security Issues, www.fmprc.gov.cn/eng/topics/zgcydyhz/dlczgdm/t26290.htm.
18 Thailand, Myanmar, Lao PDR, and China Cooperation on Drug Control, en.oncb.go.th/
document/e1-coop-4L-idx.asp.
19 Kyaw Gaung, Promotion of MyanmarChina Drug Control Cooperation, The New Light
of Myanmar, 1 April 2002.
20 For details, see Xiaolin Guo, Towards Resolution: China in the Myanmar Issue, Silk
Road Paper, March 2007, pp. 6263.
21 White Paper: Narcotics Control in China, China Facts and Figures, March 2002.

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 Modern ChinaMyanmar Relations

medicines to farmers who gave up poppy cultivation to help them get alternative
livelihoods. It also conducted satellite remote sensing and field surveys to
efficiently monitor opium poppy cultivation in northern Myanmar.22
In April 2006, Chinas State Council issued a document encouraging Chinese
investment in alternative development in Myanmar and Laos, and appropriated
special funds worth RMB0.25 billion to develop alternative crop cultivation
in the two countries. And the Ministry of Commerce, NDRC, Ministry of
Agriculture, and Ministry of Public Security jointly organized a work team titled
122 to speed up alternative crop cultivation.23 In an attempt to eradicate opium
supply, the two countries signed an action program of cooperation for alternative
development for curbing poppy cultivation on 20 November 2007. Under this
program, both states have been developing alternative cultivation in northern
Myanmar including the Kachin State Special Regions 1 and 2, Shan State Special
Regions 1, 2 and 4 as well as other areas determined by both sides.24
By the end of December 2008, Chinas Ministry of Finance had appropri-
ated a special fund of RMB150 million to Yunnan province for alternative
development, and exempted and reduced import duties and value-added taxes
amounting to RMB300 million on these agricultural products buyback pro-
duced in the areas devoted to alternative cultivation in Myanmar and Laos.25
Up to the end of 2007, there had been 135 Yunnan enterprises investing in
alternative development projects in Myanmar and Laos.26 Preliminary sta-
tistics showed that Chinas enterprises invested RMB1.6 billion in over 200
alternative development projects in the two countries from 2006 to 2009.27
Poppy cultivation in Myanmar has declined significantly in the past decade
(see Figure 4). Perhaps the most important reason for the decline in opium
cultivation in Burma is a number of opium bans declared by cease-fire groups
in northern Shan State. The opium ban was carried out largely due to Chinese
pressure.28 Chinas efforts on alternative development in Myanmar also partly
contributed to the decline. Nevertheless, these projects have had many un-
22 Deputy Secretary General of Chinas National Narcotics Control Commission (NNCC)
and Director-General of Narcotics Control Bureau of the Ministry of Public Security, Yang
Fengruis Speech at the press conference of Chinas State Council Information Office,
www.scio.gov.cn/xwfbh/xwbfbh/wqfbh/2008/0625/200905/t308942.htm.
23 Annual Report on Drug Control in China, 2007.
24 For details of the Action Program, see xxgk.yn.gov.cn/newsview.aspx?id=1111435.
25 Annual Report on Drug Control in China, 2009.
26 Annual Report on Drug Control in China, 2008.
27 Chen Baojiang, Yang Fan, Mutual Benefit and Development, Yunnan Daily, 1 September
2010.
28 Tom Kramer, Martin Jelsma and Tom Blickman, Withdrawal Symptoms in the Golden
Triangle: A Drugs Market in Disarray, Transnational Institute, 2009, p. 22.

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 Regional Impacts: Narcotics, Transport, and the Military in Sino-Myanmar Relations

Figure 4: Myanmar illicit cultivation of opium poppy and production of opiates, 19952009
(hectares). Source: UNODC.

desired effects and do not significantly profit the population. Most ex-poppy
planters have not been able to find alternative sources of income. They barely
cultivate more food, grow alternative cash crops, or find casual labor to solve
their food gap. Consequently, Current levels of [Chinas] support are insuf-
ficient, and need to be upgraded in order to provide sustainable alternatives
for the population.29 The population in the Wa State that is free from opium
production is among the poorest in the country, as alternative crops/employ-
ment are lacking. Some Chinese companies also exploit an advantage of crop
substitution policies for their own economic interests: they apply for preferen-
tial loans and subsidies from the Chinese government and use them to invest
in non-opium cultivation projects in Myanmar. Chinas government needs to
increase supervision of their operations in Myanmar lest Beijings substitution
programs and policy should continue to be distorted and undermined. As the
Transnational Institute and International Crisis Group reports have pointed
out, the Chinese government should re-evaluate its policies30and take into ac-
count the lessons learned from alternative development projects in other parts
of the world.31
As Milsom noted, China has played a key role in the Wa strategy to move
away from illicit drug dependence, as it is by far the most important country to
the WSR [Wa Special Region] economy. New industries pursued by the WCA
[Wa Central Administration] and new services have largely been developed

29 Tom Kramer, From Golden Triangle to Rubber Belt: The Future of Opium Bans in the
Kokang and Wa Regions, Transnational Institute, July 2009, pp. 12.
30 Chinas Myanmar Dilemma, International Crisis Group Asia Report, No. 177, 2009,
p. 41.
31 Kramer, et al., Withdrawal Symptoms in the Golden Triangle, p. 35.

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through the procurement of Chinese support. But while China provides the
opportunity, its trade policies have also been a major constraint on the success
of the transition in the WSR. The Wa commercial ventures largely rely on
gaining access to Chinese markets to be successful, and market access has
remained problematic throughout the period of study.32
Chinas motive of alternative development policy in Myanmar and Laos
is important in spite of its problems and unanticipated effects. It should be
noted that China is the leading victim of Golden Triangle narcotics. According
to UNDOC, More than three quarters of Myanmars production (some 40
m/t of heroin) supply the local and regional markets, primarily those that
are Chinese. The estimated rate of heroin flow interceptions in China was 8
percent in 2008.33 The official Chinese statistics have focused on the heavy
heroin users, and this new population of abusers does not appear on the
Chinese radar-screen.34 According to international practice that there are four
hidden drug users behind each dominant drug addict, the real number of drug
addicts in China now at least amounts to over 7 million.
Although poppy cultivation and opium production in Myanmar have fallen,
the amount of narcotics entering China from the Golden Triangle has not de-
creased because the output of amphetamine-type stimulants (ATS) in this region
has grown sharply and increasingly flow into Chinas market.35 According to the
UNDOC report, while the drug problem in China has long been dominated by
opium and later heroin, by the end of the 1990s methamphetamine and ecstasy
began to appear increasingly in the Chinese illicit drug market.36The areas of
northern Myanmar cause the most serious damage to our country and the condi-
tion will hardly change in the short term. The methamphetamine tablets inflow
from these areas has risen significantly.37 In addition, some precursor chemicals
used to produce heroin have been smuggled to the Golden Triangle from China.

32 Jeremy D. Milsom. Conflicting Agendas: Illicit Drugs, Development and Security in the
Wa Special Region of Myanmar, Ph.D. Dissertation, University of Melbourne, School of
Land and Environment, Department of Resource Management and Geography, October
2010, p. 171.
33 United Nations Office on Drugs, World Drug Report, 2010, p. 46.
34 Niklas Swanstrm and Yin He, Chinas War on Narcotics: Two Perspectives, Silk Road Paper,
December 2006, p. 19.
35 Annual Report on Drug Control in China, 2004, 2010.
36 United Nations Office on Drugs and Crime, Patterns and Trends of Amphetamine-Type
Stimulants and Other Drugs in East and South-East Asia(and neighboring regions), 2009,
p. 54.
37 Chinas Narcotics Control Activities, www.scio.gov.cn/xwfbh/xwbfbh/wqfbh/2008/
0625/200905/t308941.htm.

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In China, Drugs are bringing increasingly severe damage to society, trigger-

ing a large number of criminal cases, public security problems and the spread of
HIV/AIDS, and affecting social stability and public security.38 Despite some
efforts in drug control, the landscape and outlook of rampant illegal narcotics in
China is grim. Besides Chinas domestic factors, external factors pose a difficult
dilemma for Beijing. Narcotics trafficking in China is a problem, yet the issue is
not receiving enough attention from the Chinese government, the media, policy
institutions, the United Nations or foreign governments. Heroin, opium, and
AST consumption and distribution within China are not solely a Chinese issue,
but an international one.39 The narcotics issue in ChinaMyanmar relations is
especially the case. Although both parties increasingly have intensified coop-
eration on drug control under bilateral and regional mechanisms, the areas of
north Myanmar remain the biggest threat to China. Over the past two decades,
China has provided assistance worth over RMB500 million for crop substitu-
tion projects in Myanmar and Laos. The amount, however, cannot compare
with Chinas other economic assistance or project investment in Myanmar (see
Chapter 8). China has no reason to deny money to interdict and eradicate its
leading drug source. Indeed, it is in Chinas interest to do so.
The crux of this matter does not lie in the drugs of northern Myanmar
alone. It is compounded and complicated by Naypyitaw-ceasefire group rela-
tions, Burmeseethnic group relations, the Myanmar political situation, pov-
erty eradication, and economic development in the north of Myanmar, as well
as Burmese attitudes towards Chinas dominant presence in upper Myanmar.
Although Myanmar has been recognized for its efforts to collaborate with its
neighbors in jointly controlling the transportation of precursor chemicals,
in an effort to reduce narcotics production and trafficking in the highlands
of Southeast Asia, The political situation in Myanmar has also discouraged
many donor countries that could have been helpful to its law enforcement
efforts. This is a pertinent issue because continued opium poppy eradication
drives farmers into deeper destitution. Without viable alternative sources of
income, it is only a matter of time before the farmers either revert back to grow-
ing opium poppies or participate in producing synthetic drugs.40

38 Officials of the Narcotics Control Bureau of the Ministry of Public Security of China Talk
about Chinas Drug Control, http://ipc.fmprc.gov.cn/eng/zjhd/t143444.htm.
39 Ryan Clarke, Narcotics Trafficking in China: Size, Scale, Dynamic and Future Conse-
quences, Pacific Affairs, Spring 2008, 81, 1, p. 92.
40 Ko-lin Chin and Sheldon X. Zhang, The Chinese Connection: Cross-border Drug Traf-
ficking between Myanmar and China, Final Report to The United States Department of
Justice Office of Justice Programs, National Institute of Justice, April 2007, p. 70.

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 Modern ChinaMyanmar Relations

China, however, has not been alone in its concern over opium/heroin pro-
duction in Burma/Myanmar. While China was rigorously eliminating internal
drug use, the market for Burmese heroin was in the United States. This created
internal U.S. political pressure for the elimination of heroin in Burma. To this
end, some tens of millions of dollars were allocated for opium suppression, and
these were used, among other things, to supply helicopters and other equip-
ment to monitor and destroy the poppy fields. This project came to an end in
1988, although the U.S. continued to support U.N. efforts.
Because of the drop in opium production, the U.S. had worked with
Burmese military intelligence in 2002 to try to certify that Myanmar was in
compliance with U.S. anti-narcotics legislation. A senior Burmese official was
invited to Washington to negotiate the details, but after hopes had been raised
and reputations committed to the effort, various influential Congressmen
prevented this from being achieved, ostensibly because of methamphetamine
production, which essentially was directed toward Thailand.41 No Burmese
heroin has been seized in the United States in the last several years.42
Japan, in an effort to assist in crop substitution, instituted a buckwheat
production project for the production of soba noodles. This project failed to
be economically viable because the cost of the product was high in relation to
transport costs, and buckwheat for the Japanese market was far more cheaply
available from Chinese sources, where transport costs were much lower.

Chinas Look South: The ChinaMyanmar Transport Corridor

Myanmars importance in world affairs has long derived from its critical geo-
strategic position. Not until the Second World War, when it became Chinas
gateway or back door,43 did China really realize that Burma occupied a
geostrategic position of some importance. Since then, the Burma Road has
become a concrete and the most well-known example illustrating Chinese
understanding of Myanmars importance for China.
When the map of traffic construction in Southwest (particularly Yunnan
Province) China is spread out, Beijings fan-shaped Look South strategy
with Yunnan as the pivot is clearly evident. The strategy, extending southward,

41 Thai Prime Minister Thaksin, under political pressure, ordered a war on drugs, which
resulted in over 2,800 extra-judicial killings by authorities.
42 National Drug Assessment of 2009. Washington, D.C., p. 31.
43 See, for example, H. I. Deigan, Burma Gateway to China, Smithsonian Institution War
Background Studies No. 17, 1943; World Battlefronts: Back Door to China, Time, 21
December 1942.

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corroborates that China and Southeast Asia have never been so closely
interconnected.
Yunnan shares a 4,060 km land border with Laos, Myanmar, and Vietnam.
There are 11 first-category ports, 9 second-category ports, and over 90 passages
to the outside world in Yunnan. For China, the province is the most convenient
location connecting the Indian Ocean with the Pacific Ocean, bridging the
three markets of China, Southeast Asia, and South Asia.
Yunnan authorities planned the initiative of a Yunnan International Passage
in 1992. However, it had no occasion to undertake the blueprint for it until
the Chinese Western Development strategy was started in 1999. Under the
Western Development plan, improved transport was a priority. Under these
circumstances, Yunnan soon formulated the basic program, general objectives,
and main tasks of Western Development in the province. At the end of 1999,
Kunming formally established the goal of making Yunnan an international
passage connecting China to Southeast Asia and South Asia. The Yunnan
government stated that, The construction of [such an] international passage is
Yunnans inevitable choice of exerting its location advantage and expanding its
opening-up to make full use of Yunnans beneficial factors of linking China with
Southeast Asia and South Asia by land, water, and air.44
As a result, China has made efforts since the advent of the 21st century
to undertake and push the SinoMyanmar transport corridor. The project is
driven by Chinas geo-economic and geo-strategic interests, and is also Beijings
step to implement its Two-Ocean strategy, which will affect geopolitics in
South Asia and Southeast Asia. The corridor has an important impact on
current and future SinoMyanmar relations; it is like an adhesive binding
bilateral geopolitical and economic ties.

ChinaMyanmar Roads
The strategy of the Yunnan International Passage consists of three dimensions:
transportation construction between Yunnan and foreign countries, between
Yunnan and other domestic provinces, and within Yunnan province itself.45
For road transport, Yunnan has laid out a framework for the International
Passage, and plans to build three vertical lines, three horizontal lines, and
nine passages.

44 Li Jiating, Yunnan Governor, Constructing Distinct Economic System during Western

Development, in Go West: Chinese leaders viewpoints on developing the western regions,
Beijing: Central Party Literature Press, 2001, p. 134.
45 Niu Shaoyao, Yunnan: Constructing International Passage, Peoples Daily, 28 August 2000.

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 Modern ChinaMyanmar Relations

Three vertical lines:

(1) YibinZhaotongKunmingHekou(1,016 km);
(2) DukouYongrenWudingKunmingMohan(958 km);
(3) YanjingDeqinZhongdianDaliLincangDaluo (1,397 km).46
Three horizontal lines:
(1) PanzhihuaHuapingLijiangJianchuanLanpingLiuku (642 km);
(2) Guizhou-ShengjingguanQujingKunmingDaliBaoshanR uili
(965 km);
(3) GuangxiFuningKaiyuanJianshuiYuanjiangPuerJingguLin
cangQingshuihe (1,493 km).
Nine passages: Five passages connecting Yunnan to other provinces:
(1) KunmingNanningBeihai (553 km in Yunnan);
(2) KunmingGuiyang (204 km in Yunnan);
(3) KunmingShuifuChengdu (250 km in Yunnan);
(4) KunmingPanzhihuaChengdu (250 km in Yunnan);
(5) KunmingDaliZhongdianTibet (950 km in Yunnan).
Four passages connecting Yunnan to Southeast Asian countries:
(1) KunmingMohanLaosBankok;
(2) KunmingRuiliYangon;
(3) KunmingHekouVietnam;
(4) KunmingTengchongMyanmarIndia.47
Yunnans road layout for its International Passage postulates three road
lines reaching the ChinaMyanmar border in the six lines of three vertical
and three horizontal. In Nine passages, there are two passages leading to
Myanmar. The roads of KunmingRuiliYangon and KunmingTengchong
MyanmarIndia are actually the updated editions of the Burma Road and the
Stilwell Road.
In recent years, Beijing and Yunnan have built and upgraded some roads
in Yunnan extending to Myanmar and some leading to Yunnan in Myanmar
territory.
46 Hekou, Mohan and Daluo are ChinaVietnam, ChinaLaos and ChinaMyanmar border
cities, respectively.
47 Chen Ping, Survey on three vertical lines, three horizontal lines and nine passages
Highway Net in Yunnan, 29 January 2008, yunnan.mofcom.gov.cn/aarticle/sjdixiansw/
200801/20080105359455.html.

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Table 15: Roads of the ChinaMyanmar transport corridor (RMB billion)

Road name Road class Length, km Investment Building time

KunmingAnning Highway 22 2.81 2004- 2007

AnningChuxiong Highway 130 4.90 2002- 2005
ChuxiongDali Highway 179 5.29 19951999
DaliBaoshan Highway 165 7.04 19982002
BaoshanLongling Highway 76 5.54 20042008
LonglingRuili Highway & 158 10.94 20092012
Class II
BaoshanTengchong Highway 154 4.61 20072010
Tengchong Class II 176 12.30 20042007
Myitkyina
Jinghong Class II 60 0.45 20042008
Damenglong
ZhangfengBhamo Class IV 79 0.03 20042007
YingjiangNabang Class II & 92 0.23 20032005
Class IV
TengchongBanwa Class II 72 0.46 20032006

Source: Department of Communications of Yunnan Province; China Communica-

tions News; China Railway Construction News; The Economic and Commercial Sec-
tion of the Consulate General of PRC in Mandalay; Yunnan Highway Development
and Investment Co., Ltd.
Note: The LonglingRuili highway includes 154.6 km highway and 3.112 km class
II road, and links up the RuiliBhamo road; the Baoshan-Tengchong highway
requires building 63.94 km length and uses the available 90 km BaoshanLong
ling highway, connecting to the TengchongMyitkyina road; the terminals of
JinghongDamenglong and TengchongBanwa are the ChinaMyanmar border
demarcation stone No. 240 and No. 4, respectively.

Yunnan plans to construct main highway passages leading to Vietnam, Laos,

Myanmar, and Thailand by 2010. Its trunk highway net will link up all 20 ports
in Yunnan. Of 18 passages, 13 will reach Myanmar, 4 reach Vietnam, and one
reach Laos.48 Table 15 shows that 95 percent of the KunmingRuili highway,
via Anning, Chuxiong, Dali, Baoshan, and Longling, has been open to traffic,
while the remaining section, the LonglingRuili highway, has also been under
construction. The BaoshanTengchong highway and TengchongMyitkyina
road Class II were built and upgraded in 2007, facilitating the passage to South
Asia via Myanmar.
48 Department of Communications of Yunnan Province, Layout of Yunnan Road Net
(20052020), xxgk.yn.gov.cn/bgt_Model1/newsview.aspx?id=236838.

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 Modern ChinaMyanmar Relations

Map 9: Routes to Yunnan in Chinas national highway network planning

Besides the trunk highway stretching to Myanmar, China has built and
upgraded many roads to various SinoMyanmar border ports, such as the
JinghongDamenglong, ZhangfengBhamo, TengchongBanwa, and Ying
jingBanwa, especially since 2005 when Yunnan began to implement the
project of Prosper the Borders to Enrich Local People(PBELP).
In response to the Western Development strategy, the State Ethnic Affairs
Commission (SEAC), China, initialized the PBELP project in 135 border
cities and counties in 2000; its aim is to lift the economic development levels
of Chinas border area within 10 years by increasing infrastructure investment
and promoting a group of profitable programs.
Yunnan allocated RMB4.8 billion from 2005 to 2007 to carry out the PBELP
project in its 8 prefectures and cities, and 25 border counties. It completed the
connection of trunk highways in border areas and surface hardening of roads
leading to townships in the province.49 The Eleventh Five-Year Plan for PBELP,
endorsed by the State Council on 9 June 2007, set the first aim of improving
backward situations in communications, electricity, and irrigation works
infrastructure in border areas. One of its main tasks through joint efforts is to
49 General Office of the Peoples Government of Yunnan Province, The Completion con-
dition of 20 Key Projects in Yunnan, xxgk.yn.gov.cn/bgt_Model1/newsview.aspx?id=
236889.

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reinforce the construction of highways in the border regions, including trunk

highways and roads to counties and villages, ports, sites for barter trade, tourist
sites, and defense highways suited for both military and civilian services.50
In May 2008, the new three-year PBELP project in Yunnan began to be
implemented. In combination with the construction of the defense highway
and the Yunnan International Passage, the key task of the new project was to
expedite the construction of the highway net, upgrade the roads and strive for
the completion of 750 km of trunk highway and 2,100 km of county roads in
border regions, gradually solving the transport bottleneck hampering frontier
development. In response, Yunnan has appropriated RMB10.71847 billion for
the new project.51
Currently, although Beijing has not definitely upgraded the Yunnan
International Passage to state strategic plan level, the central government
is building Yunnan as a land traffic pivot between the eastern provinces and
Southeast Asia in terms of the National Highway Network Planning ap-
proved in 2004. China is investing heavily in building the highway net con-
necting Yunnan with the east coast developed regions and provinces in order
to improve the insufficient road infrastructure that is impeding economic
intercourse between them.
M
The Planning includes 7 routes starting from Beijing, 9 SouthNorth
longitudinal routes, and 18 EastWest latitudinal routes, referred to as the
7918 Network, with a total length of about 85,000 km. In accordance with
the Planning, China is building a highway from Hangzhou to the China
Myanmar border city of Ruili (Coding G56), which is 3,405 km long via Pl
Zhejiang, Anhui, Jiangxi, Hubei, Hunan, Guizhou, and Yunnan. Moreover, as
can be seen in Map 9, the program noticeably shows that five highways from
other developed cities to Kunming are being or planned to be built, namely,
ShanghaiKunming(G60, 2,370 km), ShantouKunming(G78, 1,710 km),
GuangzhouKunming (G80, 1,610 km), BeijingKunming (G5, 2,865 km),
and ChongqingKunming (G85, 838 km).
The MyanmarChina oil and gas pipelines project will spur infrastructure
development, particularly roads along the pipelines in Myanmar. The two
countries, for example, signed a MoU on the development of cooperation on
the ChinaMyanmar Corridor Project to link Ruili and Kyaukpyu on 18 May
50 State Ethnic Affairs Commission of China, The Eleventh Five-Year Plan for Prosper the Bor-
ders to Enrich Local People, www.seac.gov.cn/gjmw/zt/2007-06-15/1181878972642969.
htm.
51 New Three-Year Plan for Prosper the Borders to Enrich Local People in Yunnan, Yunnan
Political Affairs, No. 11, 2008, p. 23.

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 Modern ChinaMyanmar Relations

2010. According to the Corridor Project, China will help Myanmar construct a
railway and motorway from Kyaukphyu Township in Rakhine State to Ruili in
China in near future.52

The ChinaMyanmar Railway

In December 1995, Premier Mahathir Mohammad of Malaysia announced the
Trans-Asia Railway initiative to build a KunmingSingapore Rail Link; it was
unanimously endorsed by the ASEAN countries and China.
In response to ASEANs initiative on the Trans-Asia Railway, China formu-
lated three route options:
(1) East route: SingaporeKuala LumpurBangkokPhnom PenhHo Chi
Minh CityHanoiKunming;
(2) West route: SingaporeKuala LumpurBangkokYangonLashioRuili
DaliKunming;
(3) Middle route: SingaporeKuala LumpurBangkokVientianeShangyong
Xiangyun (or Yuxi) Kunming).
Now, the three routes in Chinese territory have been included in the National
Middle/Long Term Transport Plans of China issued in 2004.
The West route is 2,600 km-long, and needs building 840 km new railways,
of which ChinaMyanmar railway is one section. In Chinas section, the Kun
mingRuili railway is 690 km long. In 1998, the railway between Kunming
and Dali via Guangtong was completed and put into service. So it remains
constructing the railway between Dali and Ruili. Besides, a 132 km new railway
from Ruili to Lashio needs building if Chinas railway net is to be linked to
Myanmars railway net. Now, China is making an effort to realize the railway
link between Kunming and Yangon.
In light of the Middle/Long Term Transport Plan, China plans to build
the section of KunmingJinghongMohan in the SinoLaos passage, the
section of DaliRuili in the SinoMyanmar passage, and upgrade the section
of KunmingHekou in the SinoVietnam passage. In addition, The Eleventh
Five-year Plan of Chinas Railway framed by Chinas Ministry of Railway states
that it will build the DaliRuili railway and rebuild the double-track railway
of KunmingGuangtong section of the KunmingDali rail link before 2010.
In 2007, the 350 km long DaliRuili railway project started, with estimated

52 MoU on ChinaMyanmar Corridor Project inked, The New Light of Myanmar, 19 May
2010.

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 Regional Impacts: Narcotics, Transport, and the Military in Sino-Myanmar Relations

Plate 10: Ruili border crossing, China (photograph David Steinberg)

Plate 11: Muse border crossing, Myanmar (viewed from Ruili, photograph David Steinberg).
RuiliMuse is the most important transit point in ChinaMyanmar trade.

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 Modern ChinaMyanmar Relations

total investment of RMB14.7 billion, which was put on the list of Ten Major
Projects of Western Development in that year.
Also, the ChinaMyanmar railway will become one part of The Third
AsiaEurope Continental Bridge conceived by China, connecting the east
coast of the Atlantic Ocean with Chinas east coast via Yunnan. It connects
seaports in Guangdong province to Kunming, Myanmar, Bangladesh, India,
Pakistan, Iran, and Turkey, enters Europe, and reaches Rotterdam in the
Netherlands. China expects to link the Asian South to its Southeast by means
of the western route of the Trans-Asia Railway and construct a Continental
Bridge, which will become another of Chinas safe and convenient land
international thoroughfares.

The ChinaMyanmar River Navigation Route

While China is constructing a road and railway transportation net link to
Southeast Asian countries, Yunnan is also developing a water transport plan
of constructing two waterways reaching other provinces, i.e., the Jinsha
River and the You River leading to the Yangtze River Delta and the Pearl
River Delta, and three waterways reaching foreign countries, which are the
Lancang-Mekong River, ChinaMyanmar Land and Water course, and the
ChinaVietnam Hong River.
The Lancang-Mekong River, 4,880 km long, runs through China, Laos,
Myanmar, Thailand, Cambodia, and Vietnam. On 7 January 1997, China
and Myanmar signed the Agreement on Passenger and Cargo Shipment on
the Lancang-Mekong River. China opened the ports of Jinghong, Simao,
Menghan, and Guanlei, and Myanmar opened the Wan Seng and Wan Pong
ports. On 20 April 2000, China, Laos, Myanmar and Thailand signed the
Agreement on Commercial Navigation on the Lancang-Mekong River. The
official inauguration of commercial navigation among the four countries
followed on 26 June 2001.
At the end of 2006, China started oil shipping via the Mekong River. Two
ships each carrying 150 tons of refined oil arrived at Guanlei port of Yunnan
province from Thailand via the Mekong River, marking the trial launch of
Chinas oil shipping program with its Southeast Asian partners; the waterway
will serve as a modest alternative to the Strait of Malacca as a route for oil
shipping and supply to Yunnan and Southwest China.
In order to improve the commercial navigability of the water course, China
has initiated a program of dredging and removing of rapids, reefs, and shoals
in the Lower Mekong River. China provided a sum of RMB42 million in 2000
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for upgrading 331 km Mekong River course shared by Laos and Myanmar. But
a new challenge, the navigation security and safety on the Mekong River, is
facing China.
The ChinaMyanmar landwater passages full name is The China Kun
mingMyanmar Yangon Irrawaddy River Portage Passage which is an integra-
tive land and water carriage system including land transport from Kunming to
Bhamo via Baoshan and Ruili, the water course from Bhamo port to Yangon,
as well as other ports, portage transfers, and sea ports.
When He Zhiqiang, the Governor of Yunnan Province, visited Myanmar in
1989, Myanmars Head of State General Saw Maung suggested that both sides
make joint use of Irrawaddy River navigation. After this, China and Myanmar
held a series of talks, explorations and pre-feasibility studies on the proposal.
The construction of RuiliBhamo road and Bhamo port, with estimated
investment of RMB0.37 billion and RMB0.16 billion, are at the core of Sino
Myanmar land and water passage. Both countries originally agreed on joint
construction and operation, joint share venture and profit. Nevertheless,
Yangon later claimed that China would build the passage only in the form of
BuildOperateTransfer (BOT) in a thirty-year operating period. China
agreed to Yangons claim of BOT.
Myanmar agreed that China could use the Irrawaddy River as its outlet
to the Indian Ocean when Chinas President Jiang Zemin visited Myanmar
in 2001. In the meantime, Burmese generals, however, attached three harsh
conditions so that the blueprint went once more on the shelf. Naypyitaw
still has not given the green light to the project. Obviously, Myanmar is very
conscious that the project, Chinas access to the Indian Ocean, will change
the geopolitical structure in the AsiaPacific region. It has to consider its
peripheral counties and other stakeholders postures, notably India and the
ASEAN countries. Myanmar continues to take the wait-and-see attitude and
to make risk-reward calculations.
Myanmars hesitation on the project has not retarded Chinas efforts for
it. Zhangfeng is the nearest Chinese port to Bhamo. Because of the limited
transport capacity of ZhangfengBhamo road, the Longchuan government
provided a sum of RMB28 million to upgrade the road between Longchuan
and Bhamo. The project was completed in 2006 and transferred to Myanmar.
China is still responsible for the maintenance of the road.53 The 224 km
MyitkyinaKanpiketeTengchong cross-border road began to be built in 2004
53 Fan Lichuan and Li Qichang, The Upgrade of ZhangfengBhamo Road Starting, Yun-
nan Daily, 6 December 2004.

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through joint efforts with the prior section on the Myanmar side. With the
assistance of Chinese engineers, the 96-km MyitkyinaKanpikete section in
Myanmar was completed and opened in April 2007.

Implications of the SinoMyanmar Transport Corridor

The SinoMyanmar Transport Corridor has four critical dimensions: histor-
ical, regional cooperation, Chinas overall strategy, and Yunnans perspective.
History is a factor conditioning Chinas perception of the ChinaMyanmar
transport corridor as well as Myanmars strategic significance, as it has a
bearing on Beijings strategic thinking and policies towards its Southern
neighbor.
Historical evidence shows that Chinas current vision of opening a route
through Myanmar is nothing new. The famous Southwest Silk Road linked
up China with Southeast Asia and South Asia via Yunnan. In the late Qing
Dynasty and early Kuomintang era, China planned to build a YunnanBurma
road. During the Second World War, China began to build the ChinaBurma
railway with the aid of the U.S. and the U.K., but the project had to be
abandoned when Japan overran Burma and the west of Yunnan in 1942. But
the newly built Burma Road and Stilwell Road functioned to a certain extent
in this period.
Beijing suggested that the two countries negotiate a ChinaBurma through
transport in 1955.54Former Vice Minister of Chinese Communications, Pan
Qi, proposed in 1985 that The opening of the southwest can run parallel
to that of the east, and can be carried out at the same time. Two channels
from the southwest to the outside world were available: one to the East China
coast along the Yangtze and Xijiang Rivers; the other to the South via Burma.
There were several possible passages from Yunnan to the outside world. From
Tengchong, one highway leads westward to Myitkyina, in Burma, where a
railroad is available to transfer cargo to the sea. A second highway leads south
to Lashio, another major Burmese railhead. And between those two, a third
road leads to Bhamo, on the Irrawaddy River. None of these roads is over 300
kilometers long.55

54 China suggests negotiations with Burma about highway transportation between the two
countries, AMFA, File no. 105-00177-01(1).
55 Pan Qi, Opening the Southwest: An Expert Opinion, Beijing Review, 28:35(2 September
1985), p. 23. Western scholars often cite this article to illustrate that the Chinese vision of
seeking an outlet via Burma is an old dream, such as: Bertil Lintner, Friends of Necessity,
Far Eastern Economic Review, 164:51 (27 December 20013 January 2002), p. 24; J. Mohan
Malik, Sino-Indian Rivalry in Myanmar: Implications for Regional Security, Contempo-

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 Regional Impacts: Narcotics, Transport, and the Military in Sino-Myanmar Relations

In the late 1980s and early 1990s, Yunnan proposed to rebuild the China
Burma rail, but the proposal was not adopted by Beijing. All the historic
routes the YunnanBurma ancient tea caravan trail, the Burma Road, the
Stilwell Road and the ChinaBurma rail had the same economic, strategic
and military significance as the ChinaBurma transport route. Since the end of
the nineteenth century and the beginning of the twentieth century, the Chinese
made many efforts to build the Sino-Burmese railway but they failed because
of Chinas frail power and turbulent political situation. Now, with the advent of
rapid globalization, Chinas rise, and the launch of West Development, Yunnan
and Beijing have blown the clarion of constructing the ChinaBurma road and
rail again, and wishes to realize its old dream. The SinoMyanmar transport
corridor is Beijings important measure of maintaining its influence and leading
role in the arrangement of regional and sub-regional cooperation, resulting in
increased Chinese participation in Southeast Asia and South Asia.
At present, Southeast Asia, particularly the Indochina Peninsula, is one of the
most energetic regions of regional and subregional cooperation in Asia; various
organizations for regional cooperation and platforms are overlapping. Myanmar
is a nexus in this multiple network. With regionalism rising in Southeast Asia,
China is being confronted with the challenge of how to maximize its interests
in regional cooperation. On these regional and subregional platforms, bilateral
and multilateral cooperation on transportation are high priorities.
The ChinaMyanmar railway is the western route of the Trans-Asia Railway,
which is an important project cooperatively to be built by China and ASEAN.
In December 2002 and September 2003, China and Myanmar acceded to the
GMS Agreement for the Facilitation of Cross-Border Transport of People and
Goods. The road between Kunming and Lashio via Ruili will be a route for
GMS transport under that agreement.
In 1998, the 8th GMS Ministers meeting advanced a plan to build an
economic corridor, combine the construction of the transport corridor with
economic development, and provide the facilitation for GMS members coop-
eration and traffic. The GMS economic corridor consists of the NorthSouth
Economic Corridor (covering KunmingBangkok, KunmingHanoi, and
NanningHanoi three economic zones), the EastWest Economic Corridor
(covering Mawlamyine to Thailand and middle Vietnam), and the South
Economic Corridor (covering the area from Bangkok to Phnom Penh and the

rary Southeast Asia, 16:2 (September 1994), p. 141; J. Mohan Malik, Myanmars Role in
Regional Security: Pawn or Pivot?, Contemporary Southeast Asia, 19:1 ( June 1997), p. 57.
Actually, Chinas scheme was conceived at least in the beginning of 20th century.

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 Modern ChinaMyanmar Relations

south of Vietnam). In accordance with the general layout of the GMS transport
net, the economic corridor will develop in three stages: transport construction,
logistics construction, and economic corridor construction.
China and ASEAN leaders signed the Joint Declaration of the Heads
of State/Government of The Peoples Republic of China and The Member
States of ASEAN on Strategic Partnership for Peace and Prosperity at the
seventh ASEANChina Summit on 8 October 2003 in Bali, Indonesia.
Pursuant to the Joint Declaration, a Plan of Action to Implement the Joint
Declaration on the ASEANChina Strategic Partnership for Peace and
Prosperity was formulated to serve as the master plan to deepen and
broaden ASEANChina relations and cooperation in a comprehensive and
mutually beneficial manner for the next five years (20052010). In light
of the Plan of Action, ASEAN and China pursue the following three joint
measures: Develop the SingaporeKunming Rail Link; Build railways and
roads from Kunming to Yangon and Myitikyina; Carry out a feasbility study
of building railway links from China to Laos and Myanmar.56 Cambodia,
China, Laos, Myanmar, Thailand, and Vietnam signed the Memorandum
of Understanding toward the Sustainable and Balanced Development of
the GMS NorthSouth Economic Corridor and Enhanced Organizational
Effectiveness for Developing Economic Corridors on 31 March 2008. It
stated, The economic NorthSouth Economic Corridor consists of three
major routes linking economic and population centers in the northern and
central parts of the GMS, namely:(I) the KunmingChiang RaiBangkok via
Lao PDR and Myanmar route, including both land transport and waterway;
(II) the KunmingHanoiHaiphong route; and (III) the NanningHanoi
route.57
In Chinas overall strategy, the SinoMyanmar transport corridor is the
basis of a Two-Ocean strategy and one step of the Western Development
strategy. In the AsiaPacific area, Chinas interests are focusing on the eco-
nomic and security dimensions which are reflected in its peripheral diplomatic
principles good neighbor, good partners, and good friends. Chinas good

56 Ministry of Foreign Affairs of PRC, Plan of Action to Implement the Joint Declaration on
ASEANChina Strategic Partnership for Peace and Prosperity, 21 December 2004, www.
fmprc.gov.cn/eng/w jb/zzjg/yzs/dqzzywt/t175815.htm.
57 Memorandum of Understanding Toward the Sustainable and Balanced Development
of the GMS NorthSouth Economic Corridor and Enhanced Organizational Effective-
ness for Developing Economic Corridors, www.adb.org/Documents/Events/2008/3rd-
GMS-Summit/NSEC&Economic-Corridor.pdf.

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neighbor policy is characterized by mutual security, mutual cooperation, and

mutual development.
China shares land borders with 14 countries, whose border regions are mostly
impoverished ethnic minority-inhabited areas. Such conditions are antithetical
to the political stability of Chinas frontier, defense, and the eradication of ethnic
separatism. Therefore, Beijing launched the initiative of PBELP. The project is a
reflection of Chinas strategic and security considerations in its periphery.
The problems in the border regions to which Beijing addresses itself are
very prominent and serious in Yunnan. There are 25 border counties in Yunnan,
which include 22 autonomous ethnic counties and 17 key poverty-alleviation
counties. In addition, 16 trans-border ethnic groups live in the frontier regions of
Yunnan. One hundred thousand people in Yunnan have migrated to neighboring
countries such as Myanmar, Thailand, Laos, and Vietnam in recent years thanks
to poverty and comparative economic attractions abroad. Some of them
become the object of ethnic separatists, who enlist them, and some have joined
their armed forces on the Yunnan frontier.58
Chinas interest in Myanmar primarily lies in ensuring the security of the
2,186 km-long boundary. China thus needs to solve the difficult problems of
border control, trans-border ethnic issues, AIDS control, and drug smuggling.
The various color revolutions in Central Asia since the advent of 21st century,
the turbulence in Myanmar, and Washingtons attitude to Naypyitaw also cause
Beijing to keep a close watch on the Myanmar situation. Consequently, China
must necessarily influence and control the SinoMyanmar frontiers if it wants
to solve threats to its national security.
The ChinaMyanmar transport corridor, in addition, is necessary to carry
out the Two-Ocean strategy. When Japan occupied Chinas eastern seaports
and cut off the Pacific in 1940s, the Burma Road played an important role in
defending Chinas national security. The experience has continued strongly
to impress on Chinas memory. Currently, Chinese weak naval capacity, the
Malacca dilemma, the South China Sea dispute, the Taiwan issue, and
other potential threats in the Pacific further increase Beijings anxiety about
complete reliance on Pacific Ocean access, and thus heighten its attention to
Myanmars role as a strategic passage. Therefore, China looks to construct
a new strategic thoroughfare, the ChinaMyanmar transport corridor with
access to the Indian Ocean, in order to reduce the reliance on the Pacific
Ocean and the Malacca Straits. To expand Chinas influence in Southeast Asia

58 Chen Yanhui, The Blurred Border, Phoenix Weekly, No. 19, 2007.

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and South Asia and counterbalance Indias presence in the two regions are
also aims of this transport corridor.
The ChinaMyanmar transport corridor is an extension of the West
Development strategy for mutual cooperation and mutual development.
Transport infrastructure has continuously been weak and the economy has
developed slowly in west China. In the West Development strategy, China
wants to use Myanmar as a relay station for the export of west Chinas products,
the import of resources, and a convenient channel for southwest Chinas
opening. For Yunnan, Guizhou, Sichuan, and other western provinces in
China, the ChinaMyanmar transport corridor not only facilitates access to
foreign markets far better than the Pacific route, but it can break the bottleneck
of inadequate transport.
Yunnan is the direct promoter and beneficiary of a ChinaMyanmar trans-
port corridor. Yunnan is a landlocked plateau province, and 94 percent of
its area is mountainous and semi-mountainous regions. Yunnans backward
transport infrastructure impedes its economic development. Hence, Yunnan
is the protagonist and activist of the program, striving for Beijings support. In
recent years, Yunnan has submitted the proposal for the International Passage
to Beijing many times, and wants the project to be incorporated in the central
governments macro plan, gaining Beijings funding and policy support. For ex-
ample, the Yunnan delegation proposed that the International Passage be in-
cluded in the list of the National General and Special Transportation Program
at the Fourth session of the Tenth National Peoples Congress in 2006, and
brought forward the Proposal of Central Government Supporting Yunnan to
Construct the International Passage linking South Asia and Southeast Asia at
the First Session of the Eleventh National Committee of the Chinese Peoples
Political Consultative Conference in March 2008.
Above all, the construction of a ChinaMyanmar transport corridor would
bring Yunnan the most immediate and greatest advantage of offering an op-
portunity to improve its transportation, which has been lagging. It also is a
means to improve its economic and political status in China through its role as
the channel and pivot to the Indian Ocean.59
Nowhere is the game of encirclement and counter-encirclement between
China and India more evident than in Myanmar. Although Beijing has not,
until recently, admitted to the Two-Ocean strategy, its efforts in pursuit of an
export and import outlet to mainland Southeast Asia, and access to the Indian
59 Li Ping and Li Yigan (eds), Study of the SingaporeKunming Route of the Trans-Asia Rail-
way, Kunming: Yunnan Minority Press, 2000, p. 22.

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Ocean via Myanmar, are obvious and are now public. It undoubtedly incurs
Indian suspicions and worries.
There is the purported Chinese physical presence in Burma in particular
reports of Chinese military bases in Myanmar, although these have been
discounted.60 The imperatives of Chinas expanding economy (including its
energy needs) have added another dimension to the debate. Whatever the
case, the fact remains that in recent years Myanmar is seen as having moved
too close to China for Indias or ASEANs comfort. It does not matter whether
Chinas expansion is dictated by economic or by strategic interests. What
matters is that Beijings Myanmar policy is a manifestation of a Chinese desire
to be a major power in both the Pacific and Indian Oceans.61
The corridor not only more closely integrates the two countries economies,
but also combines both political and strategic interests. Thus, it contains Indias
influence in Myanmar, and expands Chinas strategic influence into Southeast
Asia and the Indian Ocean. Also, Yangons isolation provides China a favorable
opportunity to push the ChinaMyanmar transport corridor. Nevertheless,
Chinas old dream still faces challenges and difficulties. In the long run, the
achievement of the two countries transport link, and the emergence of a
Myanmar traffic pivot, will require at least six factors: further trust between
China and Myanmar; Myanmar economic development and prosperity (which
requires massive traffic infrastructure); the stability of, and some form of
democratization or pluralism, in Myanmar, particularly a solution of the
ethnic minorities problems; deeper regional integration and cooperation
between China, Southeast Asia and South Asia; stable economic development
in the three subregions; and a degree of Myanmar integration into the global
economy and the acceptance of the international community of this.
The current construction of the ChinaMyanmar Transport Corridor will
accelerate the regional integration between China and Myanmar in the near
future. In this process, the economic connections between Yunnan and northern
Myanmar, first of all, will move ahead. This transport project will improve Chinas
control ability over the ChinaMyanmar border areas and further expand its
influence in Myanmar. At the same time, it will also result in some challenges for
ChinaMyanmar ties. The more convenient transport between the two countries
will probably facilitate the flow of Burmese narcotics into China and the flow of

60 See, for example, Andrew Selth, Burma, China and the Myth of Military Bases, Asian
Security, 3:3 (2007), pp. 279307.
61 Malik, Sino-Indian Rivalry in Myanmar, p. 61.

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Chinese commodities and illegal immigrants into Myanmar. It is probable that

Myanmar nationalists will not turn a blind eye to this.

The Military Factor

The Sino-Burmese relationship has caused considerable concern in interna-
tional circles, but none has prompted more disquiet than that of the military
relationships with China. This anxiety has been heightened by the lack of
transparency, compounding the unease that whatever observers can glean
from abroad is simply a small portion of reality. At the same time as these rela-
tions have expanded, massive increases in the size of the Tatmadaw since 1988
are evident. These two factors are inter-related, but not causally determined.
Even during the civilian period, the role of the military in Burmese history
since World War II has been pervasive. This pattern exacerbates problems in
relationships with many Western states that subordinate the military to civilian
authority. That Burma/Myanmar has not followed the modern Western model
further complicates a considered response to that country. The Tatmadaw has
rewritten history to glorify its role, infused this into the educational system,
and inculcated and expanded it through the militarys own propaganda mecha-
nisms and training programs, as well as into museums.
It seems evident that since 1962 the Tatmadaw has effectively determined
that it would for the foreseeable future lead the state either directly or through
mechanisms under its control.62 The former was the case in 19581960,
19621974, 19882010, when the military ruled by decree, often under martial
law. The latter was apparent under the Burma Socialist Programme Party
administration (19741988), and is built into the constitution of 2008 that
came into effect in 2011 with the formation of a new government based on the
elections of 7 November 2010.
There is a strong element of patriotism and nationalism built into military
education and thinking. This is apparent in the ideology that the Tatmadaw has
developed. It contains strains quite similar to those of the Thai and Chinese
military (sovereignty and national unity), even if presented in more strident
and propagandistic forms.63 The military is not simply a nest of thugs, as

62 When the military founded the Burma Socialist Programme Party in 1962, it was com-
pletely military, and once one joined, which was virtually required at the higher levels, one
supposedly could never resign. Ne Win did so in July 1988 as the regime was disintegrat-
ing. In 1988, high-level officials privately indicated that the military had no intention of
giving up control. Personal interviews.
63 The Chinese are obviously concerned about Tibet, Taiwan, and Xinjiang; the Thai over
the Muslim-Malay south.

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some in the U.S. Congress have declared. Nor are they solely prompted by
their exploitation of corruption or rent-seeking opportunities in their society,
as other critics attest, although these factors are evident in some circles.
Senior General Than Shwe outlined the military ideology to his senior
commanders in July 1997, and the contents were released to the public in
February 1999. The ideology is based on the Three National Causes: to
project the unity of the state, and the non-disintegration and the maintenance
of state sovereignty. These are hardly surprising attitudes given the multitude
of ethnic insurgencies, some of which in the earlier period of independence had
been predicated on independence for their areas, and given the sorry colonial
history of Burma in the 19th and 20th centuries. It would be surprising if these
were not core attitudes.
Four points are stressed in this national defense policy:
To perpetually safeguard national values concerning independence and
sovereignty and prevent all acts detrimental to the three main national
causes ... [see above]

To build national defense avoiding external dependence as much as possible

in striving for stability of the state, community peace and tranquility and
prevalence of law and order based on the strength of national forces within
the country and with the armed forces as [the] pivot, combining the
strength of auxiliary defence forces;

To valiantly and effectively prevent interference in our internal affairs ...

To employ a defence system that gives priority to world peace ...

Within this context, the Tatmadaws mission is, inter alia, to build strong, capable
armed forces, to have a modern defense system involving the entire citizenry,
to abide by the provisions of the new constitution, and To train and develop
a strong defence force which possess [sic] a military, political, economic and
administrative outlook in order to participate in the national leadership role in
the future state.64 A critical principle of the 2008 constitution is the leadership
role of the Tatmadaw.
Auxiliary defense forces may be interpreted both as the attempted inte-
gration of minority forces into the single tatmadaw, in accordance with the
2008 constitution, and as the paramilitary training of civilians. Avoiding ex-

64 The above is taken from Maung Aung Myoe, Building the Tatmadaw: Myanmar Armed
Forces Since 1948, Singapore: Institute of Southeast Asian Studies, 2009, pp. 34.

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 Modern ChinaMyanmar Relations

ternal dependence, however, seems at first review at variance with the record
of Sino-Burmese military relationships. Obvious efforts to diversify this de-
pendence on China are evident to mitigate this concern, as is strong Burmese
nationalism. Western sanctions and the perceived concern of foreign military
intervention based on the regime change mantra all may have contributed to
reliance on China in many fields, but the junta probably believes they are not
externally dependent.
The militarys perceptions of the threats to the state may be considered
under two categories: internal subversion/rebellion and external invasion.
These have not been unrelated. The external threat to the youthful state of
Burma after independence was considered to be China (see Chapter 2). Prior
Nationalist and Communist claims to the northern reaches of Burma were
evident in officially released maps of that period, and were greatly exacerbated
by the fears of Chinese incursions or an invasion to wipe out the Kuomintang
troops that had retreated into Burma and were backed by the U.S. and Taiwan.
This was complicated by a Sino-Burmese boundary dispute that was finally
settled, much of it on Burmese terms, under the leadership of General Ne Win
during the military-controlled Caretaker government (195860), although
signed by U Nu following that period.
The Burmese military concept, in contrast to that of Prime Minister U Nu,
in the 1950s was that China was the only credible external enemy of the new
state, and the military policy planning group recommendation to the prime
minister was to expand the Burmese armed forces (three infantry divisions,
one armored division) to hold off the Chinese with conventional warfare
until the U.N. (essentially the U.S.) came to Burmese aid, on the model of the
Korean War. U Nu opted instead for friendly relations with China.
Today, the external threat has been redefined and expanded. Here, I
would like to argue that while the internal armed security threat to the state
continues to play an important role, it is the external security threat that has
given more weight to the expansion and modernization of the Tatmadaw since
1988. I would also argue that, despite its imperfections, the Tatmadaw is in the
process of transforming itself from essentially a counter-insurgency force into
a conventional one.65
This fear of external aggression, although palpable, is unrealistic. The
potential enemy is the United States, with Thailand (as a U.S. ally) acting as
its surrogate. At first, the Burmese strategy seems to have been predicated on

65 Ibid., p. 11.

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an early Chinese communist strategy of a peoples war warfare in depth or

guerrilla warfare. Senior leadership has long advocated a Peoples Warfare
strategy to defend the country against foreign invasion by engaging in a war
of attrition.66 This approach has changed, however, since 1988, perhaps based
on, or at least intensified by, the charge that the U.S. is the greatest danger to the
regime. This fear, which has been documented in a leaked junta memorandum,
is based on the U.S. call for regime change (until 2009), the operations of
dissidents on the Thai frontier some with U.S. government funding, and
some internal and external expatriates advocating a U.S. invasion.67 Thus,
offensive weapons, such as fighter aircraft, and defensive weapons, such as
artillery, surface-to-surface shorter range missiles, surface-to-air missiles, and
anti-aircraft units have been imported.
Three diverse schools of thought have articulated issues in Myanmar
China strategic relationships: Myanmar will succumb to Chinese influence
as the weaker state; there will be an unequal but partner relation; and those
who reject Chinas expansionist designs. The third group argues that Burma/
Myanmar has always been suspicious of China, China has not always been
regarded as close to Myanmar, and Myanmar could draw back from this
relationship. Selth continues, Indeed, it can be argued that, in many respects,
it is not Beijing but Rangoon that has the whip hand in this relationship.68
The internal security concerns of the Tatamadaw are twofold: the pos-
sibility of a peoples revolution, on the order of 1988 or what might have
turned into one in 2007, or revitalized minority insurrections from some of
the major cease-fire groups, or the most dangerous of the possibilities a
combination of the two. The Myanmar army has traditionally been struc-
tured and deployed primarily for internal security operations, both to quell
civil dissent in major population centres and to conduct counter-insurgency
operations in rural districts against communist guerillas, ethnic separatists
and the armies of narcotics warlords.69 With the cease-fires, the collapse of

66 Janes Sentinel Security Assessment Southeast Asia, Army, Myanmar, 11 December 2009.
67 These irrational fears are exacerbated by films such as Rambo IV. Authorities refused to
have the U.S. Navy directly distribute relief supplies in the Delta during Cyclone Nargis
in May 2008 because they felt the U.S. would not leave. The rumor in Yangon was that if
the U.S. effectively occupied the Delta, the Chinese would send in 20,000 troops to oc-
cupy the northern Shan State. Although this rumor is unlikely to be accurate, that it was
believed in some senior circles is important.
68 This discussion is from Andrew Selth, Burmas China Connection and the Indian Ocean
Region, Canberra: Australian National University, Strategic and Defence Studies Centre,
Working Paper #377, September 2003.
69 Janes Sentinel Security Assessment Army, Myanmar, p. XX.

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the Burma Communist Party in 1989, and the reduction in narcotics (opium)
production, the emphasis has shifted.
The rapid expansion and modernisation of the armed forces after 1988
seems to have been based primarily on the fear that it might lose its
monopoly of political power. The Tatmadaws recruitment campaign and
arms procurement programme seem aimed above all else at preventing,
or if necessary, quelling, renewed civil unrest in the population centres.
Efforts to defeat ethnic insurgent groups in the countryside have also been
part of the regimes continuing determination to impose its own peculiar
vision of the modern Burmese state upon the entire country. Yet, by relying
on armed force to guarantee the countrys unity and stability, the regime
has mortgaged Burmas vast and diverse political, economic and social
resources to continued dependence on military strength.70

The most significant results of the arms deals with China were the reorganization
and expansion of the Tatmadaw supplemented by Chinese arms and training,
and the increased military control the SLORC was able to extend into the
country. Following the popular uprisings of 1988, the military high command
judged that it did not have the capacity to guarantee control of the cities and at
the same time continue its containment of the ethnic insurgencies. Tatmadaw
modernization and expansion preserved the regime by enhancing the armys
capacity to control the cities and, in the civil war, to move from a strategy of
seasonal combat to one of year-round occupation.71 This concern over military
capacity likely led to the negotiating of 17 cease-fire agreements with various
ethnic rebellions.72
The total armed forces in 1988 have been estimated at 198,681 (of whom
184,029 were army).73 Since that time under the SLORC/SPDC, the Burmese
seem to have developed a goal of armed forces totaling some half a million
troops. Observers have discounted the attainment of that plan, believing that

70 Andrew Selth, Transforming the Tatmadaw, Canberra: Strategic and Defence Studies Cen-
tre, Australian National University, 1996, p. 154.
71 David Arnott, ChinaBurma Relations, in Challenges to Democratization in Burma: Per-
spectives on Multilateral and Bilateral Responses, International IDEA, 2001, p. 72.
72 Burmese military intelligence explained that the surrender of the well-armed forces of the
drug army of Khun Sa was accepted by the Tatmadaw because his group was better armed,
inflicting unacceptable casualties on the Burmese, and he was willing to retire in Yangon
and invest in development projects. The Military Intelligence spokesman said that the
U.S. regarded that as money laundering, while the Tatmadaw thought of it as develop-
ment. Personal interview, Yangon.
73 Maung Aung Myoe, Building the Tatmadaw, p. 33.

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the military may number 406,000, although the exact figures are obscure, as is
much to do with the Tatmadaw. There have been reports of desertions and the
padding of unit figures, the latter perhaps in part to shield the authorities from
unpleasant news as well to garner at lower levels the meager salaries of shadow
soldiers. There has been evidence of false reporting, haphazard inspections
and poor record keeping.74
Of primary interest is the motivation for this increase in the military. Three
general propositions, of which two have been noted above, have been set forth:
the shifting perceptions of the dangers of external enemies, and the need for in-
creased internal control because of the potential for minority or general unrest.
The third, which is more subtle, is the intent to build up a major supply of a
loyal cadre through military training who will ensure military control (directly
or indirectly) in governmental administrative roles (the future triumphant
elite as the Defense Services Academy logo has it), both at the center and
in regional governments, into the future. It is likely that all of these factors to
some degree have motivated the military, with perhaps different emphases at
different periods. With the expansion in Tatmadaw size has come an increase
in the numbers and scope of their training. Advanced military training and
physical facilities have increased in a variety of fields, as well as in the intake
of the military academy by three-fold to 1,500 annually. These numbers, as
well as other avenues of military advancement, indicate a planned, primary
role for the military into the future.
In response to the augmentation in size and perceived threats have come
major influxes of new and more sophisticated equipment, and with them the
need for enhanced levels and areas of training. Where once it was possible to
discuss the Burmese military as a labor-intensive armed force, in contrast the
Thai army which, with U.S. assistance, has become capital intensive, this is no
longer the case.
Whatever the precise figures, there is little question that the growth of the
Tatmadaw has been paralleled by the infusion of new and massive amounts
of equipment mainly from China. This seems to have started, or have been
accentuated, by the visit to China in October 1989 of the then Vice-Chair of
SLORC, General Than Shwe, and a large entourage. They met with the Chinese
prime minister, chief-of-staff, and defense minister.75 As in all Burmese statistics,
accurate data are unavailable, but estimates have been suggested that about at

74 Janes Sentinel Security Assessment Army, Myanmar, p. XX.

75 Bertil Lintner, Myanmars Chinese Connection, Janes International Defence Review. Vol.
027, Issue 011, 1 November 1994.

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 Modern ChinaMyanmar Relations

Figure 5: PRC worldwide arms sales customers, 20032007. Source: Annual Report to Congress:
Military Power of the Peoples Republic of China 2009, Department of Defense, U.S., p. 58.

the beginning of the SLORC administration in 1988, the Chinese supplied some
US$1.2 billion in military hardware, then followed by some US$0.4 billion, with
a total today in the neighborhood of US$3 billion. The equipment provided
include naval vessels, aircraft, weaponry, radar systems, rocket launchers, and
over 5,000 of various types of vehicles. Since 1989, Myanmar has become an
important customer for Chinese conventional weapons (see Figure 5).76
Chinas arms sales are the result of a combination of supply-side and
demand-side factors. On the supply side, Beijing conducts arms sales and
training both to enhance foreign relationships and to generate revenue
to support its domestic defense industry. Chinas arms sales range from
small arms and ammunition to joint development or transfer of advanced
weapons systems.77 Chinese companies sell primarily to developing countries
where Chinas low-cost weapons sales serve both commercial and strategic
purposes.78 Strategic concerns include a desire to strengthen foes of Chinas
rivals and to expand Chinas political influence in regions such as the Middle
East and Southeast Asia.79 Obviously, as the Burmese government faces
international sanctions, ethnic insurgencies, and other anti-government
forces, and as the generals worry that they might lose political power, Chinas
arms sales are the most direct and instrumental support to Naypyitaw, which
76 The most complete public sources are Andrew Selth, Burmas Armed Forces. Power With-
out Glory. Norwalk: EastBridge, 2002, and various Janes publications.
77 Another report suggests that the Chinese do not supply small arms so that they cannot be
accused of helping suppression of minority groups or the common people.
78 Military Power of the Peoples Republic of China 2009, p. 57.
79 Daniel Byman, Roger Cliff, Chinas Arms Sales: Motivations and Implications, RAND
Corporation, 2000, p. X.

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 Regional Impacts: Narcotics, Transport, and the Military in Sino-Myanmar Relations

enhances bilateral political ties. The security factor is most prominent in

Beijings strategic calculations.
In Chinas guideline of diplomatic strategy, framed at the 10th Chinese
Ambassadorial Conference held in Beijing from 25 to 29 August 2004, Chinas
neighboring countries were positioned in the second place after relations with
the major powers. At the 11th Ambassadorial Conference in 2009, Beijing
stressed the need to maintain the stability of, and establish a geostrategic
fulcrum on, Chinas periphery. Strategically, as in the field of real estate,
geographical position primarily determines the price. When a great power is
perceived to control Southeast Asia or South Asia, it menaces Chinas security.
At the same time, when such a strong presence occurs in Northeast Asia, China
feels strategically encircled and besieged. In the 20th century, China believed
itself hobbled three times: the Sino-Japanese War in the 1940s, the U.S. and its
allies encirclement in 1950s and 1960s, and the Soviet Unions strong presence
in Northeast Asia, the Indochina peninsula, and South Asia.80
Chinas security threat arises from border areas. Since Southeast Asia consists
of both maritime and mainland areas, the latter bordering China, Beijing
deems this of great importance. Beijing is always concerned that Washington
could build an antiChina coalition around its periphery, stretching from
Japan and South Korea, through Taiwan and Southeast Asia to Australia,
thereby creating a containment arc along Chinas Pacific coast, limiting its
Pacific access. For China, military cooperation and arms sales between the
U.S. and Chinas neighboring countries are a critical weathervane indicating
the latters inclination towards China. In 1953, Burma suspended BurmaU.S.
military cooperation and won Chinas applause (see Chapter 2). The latest
military exercises of U.S.South Korea and U.S.Vietnam in July and August
2010, annoyed Beijing. Accordingly, China needs to ensure that Myanmar
becomes a void in any potential U.S.-sponsored encirclement process. Chinese
arms sales are designed to improve political ties. Further, after the elections
of November 2010, the Tatmadaw still plays the dominant role in Myanmar
politics, and China needs to rely on it as well as the new government to protect
the security of the ChinaMyanmar oil and gas pipelines, hydroelectric pro
jects, and mining concessions.
Major military and political visits have been exchanged, and agreements
signed. Training in China has been a major component of the Chinese effort.
From 19901999, 615 officers were trained in China out of a total of 942 sent
80 Andrew Nathan, Robert S. Ross, The Great Wall and the Empty Fortress: Chinas Search for
Security, New York: W. W. Norton, 1997, p. 171.

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abroad. Some 665 officers and 249 other ranks were sent to China for 163
different courses from 19902005.81 Of course, spare parts and replacements
will make the Burmese dependent on China for a considerable period.82 In
September 2010, Chinese naval vessels paid a call at the Yangon port for the
first time.
There have been rumors of disquiet over some of the equipment supplied.
There have been charges that some were second hand, others not fully op-
erational, and others that have been defective. Yet whatever the defects in the
equipment may have been, it is evident that training in China, Chinese techni-
cians in Myanmar, and spare parts will continuously link the two militaries.
Myanmar, however, seems reluctant to be completely dependent on China. It
has diversified its military suppliers, which have included Singapore, North and
South Korea, the Ukraine, Israel, Russia, Pakistan, India, and other countries.
When the United States sold fighter aircraft to Thailand, Myanmar immediately
bought MIG-29 aircraft from Russia. It has since also bought 62 combat and
support helicopters from Russia as well. Russia was to be the source of an
experimental 10kw nuclear reactor, and hundreds of Burmese have been trained
in that country.
Recent evidence indicates that North Korea, with which diplomatic rela-
tions were reestablished after the 1983 attempted assassination of South Korean
President Chun Doo Hwan in Yangon,83 have not only been supplying conven-
tional arms, but have been building tunnels in the capital of Naypyitaw and
elsewhere.84 There have been charges raised in opposition circles that the North
Koreans have been engaged with the Burmese in some sort of nuclear weapons
planning.85 The evidence is presently lacking, but the concern may not only
stem from previous North Korean efforts in Pakistan and Syria, but because of
the emotional link between both states as included in the outposts of tyranny

81 Maung Aung Myoe, Building the Tatmadaw, p. 139.

82 For the most comprehensive discussion of the military, see Andrew Selth, Burmas Armed
Forces, and Maung Aung Moe, Building the Tatmadaw.
83 Three North Korean agents performed the act: two were killed and one died over two
decades later in Insein prison. South Korea, toward the close of the Roh Moo Hyan ad-
ministration, officially informed the Burmese that South Korea would have no objection
to the reestablishment of relations. Personal Interview, Yangon.
84 See Bertil Lintner, Military Cooperation between Burma and the Democratic Peoples
Republic of Korea, October 2010 (unpublished paper).
85 See Robert E. Kelley and Ali Fowle, Nuclear Related Activities in Burma, For the Demo-
cratic Voice of Burma (Oslo) 25 May 2010. One study is Andrew Selth, Burmas North
Korean Gambit. A Challenge to Regional Security. Canberra: Australian National Uni-
versity, Strategic and Defence Studies Center, Canberra Papers on Strategy and Defence
#154. 2004.

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 Regional Impacts: Narcotics, Transport, and the Military in Sino-Myanmar Relations

charge of Secretary of State-designate Rice. Perhaps the example of North

Koreas nuclear capacities has prompted junta beliefs that such a program would
safeguard them from U.S. attack, or could be used as some sort of bargaining
chip, but Burmese capacity has not been demonstrated, even if the intent or
hope may be there. Myanmar has signed the Nuclear Non-Proliferation Treaty.
As a member of ASEAN, it is supposed to adhere to Southeast Asia as a nu-
clear weapons-free area. In 2011, Myanmars vice president assured U.S. Senator
McCain that Myanmar was not pursuing a nuclear weapons program.
Perhaps the greatest concern, especially to India, has been the build up of
Burmese naval capacities with Chinese assistance.86 It is not only the purchase
of patrol boats and fast attack craft, but it includes the internal construction
of frigates (108ms.) with Chinese technical assistance. Most importantly,
however, have been the fears of Chinese access to Burmese bases and listening
posts close to the Indian naval facilities in the Bay of Bengal and close to the
western reaches of the Straits of Malacca. Although the fear of Chinese bases
in Myanmar has been exploded, the possibility of the use of Burmese facilities
in the expansion of Chinas blue-water navy has been evident. Myanmar
thus becomes one of the string of pearls Chinese access to Indian Ocean
facilities in Pakistan, Sri Lanka, Bangladesh, and Myanmar.
Wherever its sources of supply, the implications are that Myanmar will
have to spend increasing resources to keep up its military establishment, and
thus may be more reluctant to spend on the social services (health, education)
and agriculture, which are in such abysmal conditions.
The attempt by the junta in 2009 and 2010, before the elections of 7
November 2010, to emasculate the cease-fire groups by reorganizing them into
Border Guard Forces (with 10 percent regular Tatmadaw added to every bat-
talion) met with failure among the cease-fire groups. Most militarily important
are the Wa, and there was a postponement of the elections in that area.87 The
new government in 2011 postponed that program.

86 See Janes Sentinel Security Assessment Southeast Asia, Navy, Myanmar, 11 December
2009.
87 The original plan for the cease fire groups was that they were to turn in their weapons be-
fore the referendum on the constitution in 2008. This was blatantly unrealistic. Since the
constitution specifically notes that there shall only be one Tatmadaw, the border defense
forces concept seemed to the junta, but not to the minorities, a means to meet this quali-
fication and eliminate any possibility of a significant future minority insurrection.

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 10
International Strategic Issues

C hinese policies in Southeast Asia for the past decade or two have been
eminently successful. Through individual bilateral relations with each
of the ASEAN nations, together with an effective policy toward ASEAN
itself and its related instruments, it has created an aura in which the economic im-
age of China Rising has been combined with the traditional, pre-colonial, and
pre-revolutionary perceptions of Chinese soft power China in socio-cultural
terms as the literal Middle Kingdom.
China has exhibited deft diplomacy as far south as Australia, and has also
reassured the states of the region that its prior claims to the allegiance through
Chinese citizenship of the extensive expatriate and often wealthy Chinese
communities in Southeast Asia no longer apply. The previous perceived
threats of China sponsoring local insurrections in the name of its expansive
Maoist ideology have vanished, following a major shift in foreign policy after
the Cultural Revolution and economic reforms. Through these events and
negotiations, including signing the ASEAN Treaty of Amity and Cooperation
and negotiating a free trade agreement with it, visits by high-level Chinese
dignitaries, and Chinas former policy to delay antagonisms that could surface
(such as claims to the sovereignty of the islets and resources of the South China
Sea), China has been positively perceived. The resurgence of Chinas territorial
claims to the South China Sea in 2010, however, while specifically assuring free
ocean passages, has caused disquiet in the region. Vietnam has indicated that
it wants the U.S. to play a greater role in this regard (and in Myanmar as well),
but Secretary of State Clinton has indicated that the U.S. has no claims on the
area and wants a diplomatic process of dispute settlement. Chinese claims on
the sea area may have been publicly delayed because of their potential negative
impact on the Beijing Olympics and the Shanghai Exposition. China has been
reassured, but perhaps not successfully, that the U.S. has no claims in that area
and that U.S. policy is not to contain China by controlling that sea but rather
to ensure that no state does control it. Yet Chinese perceptions of a U.S. con-
tainment policy have become even more evident in 2011, with the partial thaw
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 International Strategic Issues

in U.S.Myanmar relations with the visit of the U.S. Secretary of State and the
Burmese stoppage of the Myitsone dam construction, supposedly encouraged,
in Chinese eyes, by the U.S.
If China has been objectively successful to date in its policies, it has been
made to appear even more so because of Japanese effective abandonment of
influence in Southeast Asia, and because of the past ineptness of U.S. actions
or inactions in the region, including a number of instances in which high-level
U.S. officials avoided some of the regions significant meetings. This indicated
to ASEANs leaders a lack of concern for or a low priority to the area, except
in issues related to terrorism following the 9/11 tragedy. Increased U.S. interest
lately in ASEAN and the region has been warmly welcomed in Southeast Asia.
Overall, Chinese strategy in Asia has been categorized under six broad
objectives:
[1]Maintain a stable environment on its periphery.
[2]Encourage economic ties that contribute to Chinas economic moderni-
zation and thus to regime stability.
[3]Further isolate Taiwan and block moves toward its de jure independence.
[4]Convince others that China is not a threat.
[5]Increase Chinas influence in East Asia, in part to prevent containment
of China in the future.
[6]In Southeast Asia, secure recognition as the most influential external
Asian power.1
To these more traditional goals we now must add the development of a Chinese
two-ocean strategy access to the Indian Ocean, and with special reference
to Myanmar in Southeast Asia, and Pakistan in South Asia.
These goals have been applied not only to East Asia more broadly, but
to Southeast Asia as well. Chinese strategy as focused on Myanmar has had
impacts not only on Myanmar itself, but on the individual countries of the
region, ASEAN and the United Nations as institutions, Japan, India, the E.U.,
and the United States. In some cases, China has pursued its strategic concerns
or tried to mitigate potential problems. In others, economic interests have
been paramount, or a mixture of the two. China has both initiated actions and
responded to Burmese events, and used benign Burmese relations as a model to
reassure other peripheral countries. To these broad Chinese objectives should
be added more specific requirements for Chinese access to energy and mineral
resources in Southeast Asia and elsewhere, most specifically in Myanmar, and
1 Bronson Percival, The Dragon Looks South. China and Southeast Asia in the New Century,
Westport: Praeger Security International, 2007, p. 5.

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 Modern ChinaMyanmar Relations

for ensuring that such resources can be freely and economically transported
to areas of Chinese need. Various aspects of the effects of SinoMyanmar
relations on the international sphere will be considered below.
Foreign observers of contemporary Myanmar, however, have sometimes
characterized that country as lacking a coherent foreign policy, although there is
general agreement that in the early period of Burmese independence neutralism
was the prevailing catchword and impression. Even with the strong position of
China in Myanmar, or perhaps because of it, the Burmese junta has attempted
to achieve an imperfect balance between unstated but partial dependence on
China and articulate autonomous action. In spite of reliance on China and to
a far lesser degree India, and having signed agreements related to border issues
and trade with some of the contiguous states, Burmese foreign policy has been
based on suspicions of all neighborly intent, and the fear of U.S., and to a lesser
degree Western, designs for regime change, control, or influence.
This assessment is historically accurate, but those concerns about its neigh-
bors stem from a half-century past. The junta and the new 2011 government
seem in part caught in a time capsule, in which all the neighboring states (except
Laos), and the U.S. and the U.K., had supported separatist elements. Although
this has generally been mitigated by more judicious policies, Burmese suspicions
remain, spurred by the announcement from the U.S. that the 7 November 2010
elections had not conferred international legitimacy on the new government,
and that the U.S. continued to support institutionally (not simply the former
members thereof) the opposition National League for Democracy, officially
deregistered as of 14 September 2010, but later reinstated with a change in party
registration legislation so that it might compete in hluttaw by-elections. Coupled
with the internal demands by many of the larger minorities for some form of
federalism, anathema to the military for a half century as well, the contemporary
foreign policy of Myanmar is guided by this fear and perceived vulnerability,
resulting in the assertion that only the Tatmadaw can hold the state together
against the perfidious minorities and their neighboring allies (or minions as
the regime is wont to say) of any ethnicity. This has been their cardinal fear
and probably has been a factor in their interest in joining ASEAN, along with
potential investment that never materialized, a modest increase in legitimacy,
and perhaps a balancing of Chinese influence.

Chinese Strategy in Myanmar

Chinese relations with Myanmar and their effects in the region, however,
are complex. Although all of the seven factors listed above apply to some de-

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 International Strategic Issues

gree, they are an inadequate explanation of Chinas past role in Myanmar,

especially since 1988, and of likely future interests. Chinese strategic policies
toward Myanmar both transcend the broad issues noted above, and, in addi-
tion, should be disaggregated. China as a centralized political system of Chinese
Communist Party control permeates to its own periphery and forces national
political compliance. But since Deng Xiaopings reforms, economic interests are
reflected in considerable local autonomy, expressed localized needs, priorities,
and aspirations, as well as its foreign relations. Although we may consider China
as politically singular, internal specific regional and provincial economic inter-
ests also need analysis in the plural, and indeed localized priorities have affected
and influenced Chinese national policies and strategies. Sub-national Chinese
interests are factors that have prompted some provincial governments and
corporations to pursue their singular interests. The provincial self-interests of
Yunnan, and even those of Yunnans xian (counties), have sometimes provoked
the suspicions of higher authorities at each level, and must be disaggregated if an
understanding of Chinas role in Myanmar is to be accurate and future relations
anticipated. These bureaucratic entities, large state-owned enterprises, together
with a highly entrepreneurial private sector, have demonstrated capacities to
influence the center on aspects of development in which they are especially
interested. It is apparent that Yunnan Province, and indeed Southwest China as
a whole (defined by its military district and encompassing Yunnan, Guangxi,
Guizhou, and Sichuan), have specialized interests in Chinese relations with,
and in support of, the government of Myanmar. But to a great degree, Yunnan,
for example, has been an executor of Chinas strategy and policies, although it
has its own concerns on which it sometimes neglects to inform Beijing. Yunnan
not only operates bilaterally with Myanmar, but also through two regional
groupings: the Greater Mekong Sub-region Development Scheme2 and the
BangladeshChinaIndiaMyanmar (BCIM) regional economic cooperation
program.
More specifically at the Chinese national level, China is evidently intent on
pursuing the objectives noted above, but also fostering not only a stable regime
in Myanmar, but one that will allow China to exploit both the natural resources
and the strategic location of that country. The natural resources of Myanmar
and their exploitation by China are extensively treated elsewhere in this
volume (Part II), as their importance warrants. Oil and gas, mineral resources,
large infrastructures, and timber (both with the central government and with
2 See Kunming Declaration, A Stronger GMS Partnership for Common Prosperity. Kun-
ming, China, 45 July 2005.

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 Modern ChinaMyanmar Relations

ceasefire groups, as well as illegally) are major attractions for national and local
firms, as is the hydro-electric potential of the various major rivers of Myanmar.
Chinese investment, major but publicly undocumented economic assistance
in both loans and grants, training, technical services, and numerous BOT
(BuildOperateTransfer) projects that are neither considered investment nor
grants and the magnitude of which are great but obscure, also bind Myanmar to
China to a highly significant degree. Should that assistance falter in the future
for any number of political reasons, Myanmar would still be bound to China
for spare parts and intermediate goods for an indefinite period.
Economic exploitation, however, has not been the primary objective of
relations with Myanmar (as arguably it was for the colonial and Japanese
governments). The extensive, indeed over-powering, assistance that China
has provided to the Burmese military probably has a dual motivation: internal
Myanmar stability as well as strategic access through Myanmar to peripheral
areas. Chinese support is neither essentially designed, nor is it sufficient, to
enable the military junta to defend itself against major external aggression, even
though the Burmese may fear foreign incursions and attempted regime change.3
BurmeseThai relations have been in sporadic conflict for several centuries.
Thailand is a non-NATO treaty ally of the United States and proxy skirmishes
have taken place between the Burmese surrogate, the Wa State Army, and the
Thai surrogate, the Southern Shan State Army (supplied with U.S. equipment
through Thai channels). Myanmar is fearful of Western aggression and invasion,
especially from the United States and Thailand. Beyond the junta and some
wishful thinking among some of the Burmese dissidents, this fear is externally
dismissed as an illustration of paranoia.4 The Chinese must know full well, as
do the more astute of the Burmese Tatmadaw and the American leadership, that
any externally derived forced change in Myanmar by the U.S. or the West would
severely damage U.S.Chinese relations, which are a central, pivotal concern of
both governments. Myanmar is a lower priority than other SinoU.S. interests,
3 When the Thai bought F-16 fighter aircraft from the United States, the Burmese bought
MIG -29 fighters from Russia. Myanmar is obviously trying to refrain from being too de-
pendent on China. Myanmar also bought 62 combat and transport helicopters from Rus-
sia. See Min Lwin, Burma Buys 50 Combat Helicopters, Irrawaddy, 8 September 2010.
4 For a study of this fear of invasion, see Andrew Selth, Burmas Fear of Invasion: The Fan-
tasy and the Reality, Griffith Asia Institute, Griffith University, Brisbane. 2008. For an
amusing essay on the shift from China as the potential external enemy in the 1950s to the
United States in that role today, see David Steinberg, Defending Burma, Protecting My-
anmar. Irrawaddy, May 2006, Vol. 14, No. 5. The U.S. seemed to have misunderstood the
refusal of the junta to allow direct military supply of relief goods to the Irrawaddy Delta
after Cyclone Nargis in 2008. It was fear of a U.S. excuse for an invasion, as the U.S. had
called for regime change in the harshest terms for a decade and a half.

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such as Taiwan, North Korea, trade, currency valuation, and other issues, so it
will not drive overall U.S. policy in East Asia.
The extensive support of the Chinese to the Burmese military, variously
estimated at some US$3 billion (see Chapter 9), together with a great deal of
training and technical assistance, was probably calculated by the Chinese as an
attempt both to curry favor with the regime, and to ensure its internal stability.
The real threat to the junta is internal: from a general uprising like 1988 or
that of some of the minorities who earlier wanted independence, then some
form of federal structure, and who might still settle for greater autonomy; they
have, however, no power to oust the present leadership. More importantly, the
greater potential threat is from the Burmese people, who have much power if
prompted to exert it in the streets because of the governments egregious policy
miscalculations. There is no question that the Chinese authorities have tried to
support the junta in a wide variety of ways, although there are indications that
the Chinese are aware of the delicacy of the juntas control over its population,
even though they may believe that the junta would prevail in any people-
derived showdown (as in the Saffron Revolution of 2007), and have quietly
urged the Burmese military to curb some of their internal excesses to ensure
the stability of the 2011 civilianized military rule; they are said to be in touch
with the Burmese opposition. A basic difference in international approaches
to mitigating Burmese military rule has been illustrated by the strident public
declarations for change, as exemplified by the U.S. together with the E.U., in
contrast to the Chinese, who cajole more effectively in private.5
In strategic, if extreme, terms, Chinese interests have been analyzed thus:
Myanmar is not only a potential supply route [for China] bypassing the
Malacca Strait, but also a strategic point for controlling access to Malacca
Straits western approaches. While controlling the Malacca Strait is a key
strategic objective of China to the point of risking armed conflict with
the regional states and the U.S., access to Myanmars ports and overland
transportation routes through Myanmar is seen as a vital and strategic
security asset for China. 6

5 It is instructive to note that the economic change that took place in 1988 from a rigid
socialist system to one encouraging the private sector came about through very quietly ex-
pressed demands for liberalization by the Japanese to the Burmese Deputy Prime Minister
in Tokyo in March 1988, not through blatant public statements, which would have forced
a Burmese nationalistic response.
6 Zhao Hong, China and Indias Competitive Relations with Myanmar, Institute of China
Studies, University of Malaya, Working Paper #2008-7, 2008, p. 2, also quoting Yossef
Bodansky (1998), Beijings Surge for the Strait of Malacca. The actual language from

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Access to the Bay of Bengal is essential if the Chinese are to have a two-
ocean navy, the importance of which in Chinese planning seems to have
increased. The ability to transport goods and material overland, by riverine
transport, and through pipelines for both oil and gas, all assist the Chinese
to some important degree in circumventing any potential blockage of access
to the Malacca Straits by its littoral authorities, ASEAN, terrorists, or by any
major power, such as the United States. This seems evident as a longer range
strategy, and is intelligent from a Chinese perspective, although Myanmar
does not in any sense replace the importance of the Straits passage. Although
internal Myanmar markets for manufactured Chinese goods are still relatively
small because of the poverty of that country (see trade figures in Chapter
8), trade demands will rise. In September 1987, Chinese consumer goods
increased their penetration of Burma because of the ineptness of the military
authorities under General Ne Win in demonetizing a large percentage of the
Burmese currency. This, together with the decline in Burmese light industrial
production and the fear of holding Burmese currency, prompted the demand
for Chinese goods to explode.7
As the Burmese authorities have written, they consider that the U.S. has
been interested in regime change in Myanmar not simply for human rights
concerns, but perhaps more importantly because Myanmar is the weakest link
in the containment policy of the U.S. toward China.8 Conversely, it may be
argued that in playing the U.S. card against China, or the China card against
the U.S., Myanmar is strengthening its claim to Chinese resources and support.
Cold War attitudes and Chinese suspicions of the U.S. remain. Some Chinese
unrealistically charge, without evidence, that the U.S. Obama administration
reconsideration of its Burma/Myanmar policy, the 2007 Saffron Revolution,
and the 2009 Kokang imbroglio were all fomented by the U.S. to prevent
completion of the Chinese pipelines in Myanmar.

Bodansky is even more compelling: For Beijing, this reality [Malacca Straits] is increas-
ingly a vital interest. Any Chinese naval and military surge into the Indian Ocean a major
strategic priority of Beijing must pass through the Strait of Malacca. Beijing considers
its surge into the Indian Ocean as part of a strategic surge of global proportions aimed at
consolidating military posture in a hostile environment (from a both global and regional
strategic point of view), and in a strategic grand design that anticipates the possibility of a
major military clash with the U.S. in the foreseeable future.
7 See David I. Steinberg, Burma: The State of Myanmar, Washington, D.C.: Georgetown
University Press, 2001, pp. 131132.
8 Hla Min, Political Situation of Myanmar and Its Role in the Region, Yangon: Office of Strate-
gic Studies, Ministry of Defence, 2000, p. 78. Hla Min was spokesman for the government.
Indeed, in the 1950s Burma was Chinas outlet to the rest of the non-communist world.

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More specifically, however, Myanmars strategic location is a critical ele-

ment in any potential problems that China may have with India. India, too,
believes that Myanmar is a vital element in Chinas strategic thinking. Thus, the
ChinaIndiaMyanmar nexus looms large in strategic consideration of all par-
ties in the region, including that of ASEAN itself. As the containment policy,
actual or perceived, by the U.S. has been used by the Burmese, so the Chinese
containment policy toward India, as perceived by the Indian government,
has caused a major shift in Indian policy toward Myanmar.

ChinaIndia: Myanmar as Nexus

China and India have entered into a state of mutual diplomatic grace. Relations
are, and have been for some years, reasonably cordial and cooperative. Geo
political issues such as the status of Tibetan refugees in India are important but
not decisive; it has not destroyed the present cordiality of the relationship at
the official level. The present major rivalry between India and China, at least as
interpreted by foreigners, is dominated by economic and technological issues.
How will the economic expansion and competition for markets and natural
resources, including energy, of both states have impacts on each other and the
developed and developing world? The proliferation of articles and volumes on
the rise of both China and India in juxtaposition has become a staple of the
economic literature on Asia.9
Yet there is little in Western policy circles (and more in Indian sources than
in Chinese) on the strategic implications of Myanmars role in this incipient ri-
valry that transcends economics. There is more media and advocacy literature,
however, on the two countries negative political and human rights impacts on
Burma: how China and India have been considered to be the effective sup-
porters of the military junta and thus provide an economic lifeline for the
regime and retard Myanmars transition to some form of democratic rule. The
accuracy of this assessment is subject to question. Yet, in all economic, stra-
tegic, and political respects, Myanmar plays a significant role in Sino-Indian
relations. If China and India affect Myanmars policies, so too does Myanmar
have impacts on the positions of both of these states. Myanmars importance is
likely to increase over time.

9 For example, see David Denoon, The Economic and Strategic Rise of China and India. Asian
Realignments after the 1997 Financial Crisis, New York: Palgrave, 2008. For a recent study
of Sino-Indian relations in the context of Myanmar, see Thant Myint-U, Where China
Meets India: Burma and the New Crossroads of Asia, New York: Farrar, Strauss and Giroux,
2011.

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Before the Burmese coup of 18 September 1988, Sino-Indian relations

had markedly improved from its nadir a quarter-century earlier. China and
India found mutuality in an external third party on which to concentrate, and
devoted considerable attention to anti-hegemonic cooperation, a major
aspect of Chinese propaganda.10 This was convenient, as it avoided facing their
overlapping interests and rivalries. Even following the coup, at a meeting in
India on 12 December 1988, Rajiv Gandhi and Deng Xiaoping stressed the
prospects of Sino-Indian cooperation and such broad issues as lessening resort
to military blocs as a means to security ...
Sino-Indian relations were not always so cordial.11 Almost a half-century
ago in 1962, war between the two states over border issues, especially in Indias
northwestern frontier in the Himalayas, broke out. It was likely the high-
est war in the modern world, not in casualties but in altitude. Attention was
naturally focused on the northwest frontier, as the disputed territory contained
critical roads with strategic links and had as its obscure predecessor the 19th-
century imperial struggle between Britain and Russia, in the Great Game,
with China included in that arcane competition. The northeastern frontier,
however, was generally ignored because the boundaries, although disputed,
were more amorphous and less immediately strategic, and Burma, whose
northern frontier intruded into the IndiaChina border region, was adamantly
neutral. There were, however, later skirmishes in the Northeast Frontier Area
(later renamed as Arunachal Pradesh) in the 19841986 period, although they
do not appear to have been substantive. Although Burma had signed a border
agreement with China in 1960, after the military took control of the former
under the Caretaker Government, there was no indication of a Burmese tilt
northward toward China, although as one observer remarked, Burma was
always neutral in Chinas shadow.12 Yet India did quietly and indirectly express
concern.13 Although there was increasing unrest in northeast India, and the
Kachin went into revolt inside Burma in part because of U Nus declaration
of Buddhism as the state religion, a policy on which he had campaigned in

10 John W. Garver, Protracted Contest. Sino-Indian Rivalry in the Twentieth Century, Stanford:
Stanford University Press, 2001, pp. 225226.
11 For an overall analysis, see Garver, op. cit.
12 See Thomson, Burma: A Neutral in Chinas Shadow, pp. 330360.
13 In the period leading up to the war, India encouraged tribal migration into the frontier
areas of India to act as a buffer against possible Chinese expansion. Personal interview,
Putao, 1961. At that time, the BurmaIndiaChina frontier area was quiet. Burma had
just undergone the coup of 1962 and was internally focused. The Kachin rebellion had
started but was not that extensive, and Burma was not then a sanctuary for Naga rebels in
northeast India.

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the 1960 election, this did not trigger an Indian reaction. The Kachin were
sporadically supported by the Chinese.
The events of 1988 and 1989 changed the importance of Burma to both
India and China. The 1988 failed peoples revolution in Burma, which ended
in the 18 September 1988 coup to shore up previous military rule there,
coupled with the Tiananmen incident in Beijing nine months later, brought
both regimes closer together. Burma, soon to become Myanmar (the name
change occurred in 1989), effectively and quietly shifted its foreign policy to
one far more closely aligned to China. The Burmese were always concerned
about China.14 General Ne Win was said to be fearful of a Chinese population
inundation of Burma.15
The boycotts of both Burma and China after their respective incidents may
have brought both regimes closer together. Japan cut aid to China following
Tiananmen, and in the case of Burma had to re-recognize that country before
more assistance could be forthcoming (this occurred just before the formal
funeral of Emperor Hirohito).16 The U.S. stopped economic and military (anti-
narcotics and training) assistance to Burma, and the World Bank and the Asian
Development Bank stopped new projects, in the case of the former in part
because Burma was in arrears in loan repayments, and under pressure from the
United States.
Even before the coup, however, and quietly but effectively prodded by
Japan in March 1988 during a visit to Tokyo by the Burmese Deputy Prime
Minister, Burma was prompted to recognize that its economic policies needed
substantial change. It transformed its socialist system to stress the importance of
the private sector and legalized overland trade with China in the Sino-Burmese
Trade Agreement of 5 August 1988, in the waning days of the Burma Socialist
14 For example, Burma left the non-aligned movement in 1979, when the meeting was to be
in Cuba, apparently because of Chinese objections to the pro-Soviet stance of the move-
ment at that time.
15 It is said that Ne Win was against family planning programs in Burma because he wanted
to increase the Burmese population in light of the overwhelming populations of both Chi-
na and India, and even Bangladesh. Abortions, although widespread, were only legal with
the approval of the local chapter of the Burma Socialist Programme Party.
16 According to the Japanese ambassador to Rangoon at the time, a lack of formal recogni-
tion would have meant that the Burmese delegation to the funeral would have had to sit
next to the Palestine Liberation Organization, a major insult. Further, a dozen or so major
Japanese firms formally complained to the Japanese Embassy in Rangoon that they were
losing business with the stoppage of Japanese assistance, and they wanted it resumed. Per-
sonal interview, Rangoon. Japan supplied some US$2.2 billion in assistance to Burma up
until 1988. See David I. Steinberg, Japanese Aid to Burma: Assistance in the Tarenagashi
Manner? In Koppel and Orr (eds), Managing Japans Foreign Aid. Power and Policy in a
New Era, Boulder: Westview Press, 1993.

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Programme Party regime. Just before its legalization, two-way trade, which was
then officially unrecognized, was variously estimated as up to US$1.5 billion.17
The causes were both internal and external. China had moved to open its
economy in this period, and both the private sector and provincial governments
were more free to engage in trade. Internally, the disastrous September 1987
Burmese demonetization of perhaps two-thirds of the Burmese currency (the
third and most severe since military rule in 1962, since no redemption of larger
currency notes for new ones was allowed) drove the Burmese to hoard goods
and to avoid holding currency, as further demonetizations were feared.18 As
farmers held their only asset, paddy (unhusked rice), this increased its urban
price, contributing to the extensive unrest in urban areas in 1988, while urban
consumers bought any commodities and staples as a hedge against any future
demonetization.19 Burmese light industry was already in trouble because of the
lack of foreign exchange to purchase intermediate goods and spare parts. The
informal trade along the Sino-Burmese border brought in Chinese consumer
goods at low prices. They often were of better quality than Burmese produced
products, thus resulting in the effective collapse of Burmese light industry.
Mutual need prompted the agreement on legalizing trade and the setting
up of procedures so that both Burmese and Chinese could cross the frontier
without visas for both trade and work. Shortly thereafter, in 1989, the collapse
of the Burma Communist Party, which had occupied a strategic area in the Wa
State on the Chinese border since the 1970s, opened up new portals for Sino-
Burmese trade. In essence, the broad sweep of the ChinaMyanmar border
became open to both legal and illegal trade and immigration.
Closely following the 1988 coup, Indian policy toward Burma became
stridently anti-military. Rajiv Gandhi had visited Rangoon in 1987, and after
the Burmese coup initiated an anti-junta policy. All India Radio became known
as the most vociferous critic of the military State Law and Order Restoration
Council (SLORC), even hiring U Nus daughter to run its Burmese service.
This was also the period when Rajiv Gandhi was pursuing an interventionist
regional policy that had expanded Indias role in Nepal, the Maldives, and
Sri Lanka. Gandhis assassination in 1991 and the obvious extent of Chinese

17 A Burmese official, personal communication, Rangoon, May 1988. By May 1988, the
Yunnan authorities had established an export promotion office in Kunming, which had a
sector devoted to Burma.
18 It is significant that the new Burmese constitution, approved by referendum in May 2008,
specifically excludes the possibility of any further demonetization. The Constitution of
2008, Chapter 1, Article 36(e).
19 See Steinberg, Burma: The State of Myanmar, 2001.

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penetration into Myanmar caused rethinking of Indias position toward the

Burmese junta.
Historically, if Burma owes much to India (the subcontinent) in religious
and cultural terms, and even learned from the Indian model (the Congress
Party) in the rise of Burmese nationalism, the British ill-advised ruling of Burma
as a province of India until 1937 resulted in extensive economic power flowing
to a large Indian minority (Rangoon was largely Indian at that time), a power
that has been continuously resented, so that there are still strong prejudices
against those from the subcontinent in Myanmar, although more against the
Muslims (who are believed to attempt to convert Buddhist women). That the
Burmese have accepted with some alacrity Indian assistance is a signal that
they do not want to be too dependent on China, as additionally illustrated by
Senior General Than Shwes two trips to Delhi (2004 and 2010).
The Burmese military had generally been deprived of high-tech equipment.
It had been considered a labor-intensive military, as contrasted with the Thai
military, which with U.S. support in supplying modern materiel was becoming
capital-intensive. Burma turned to China for its new military needs.20 The
exact amount of Chinese military equipment supplied to Burma/Myanmar is
unknown, but general estimates range in the neighborhood of US$3 billion
over several years, with the initial support of US$1.4 billion.
At the same time, the Chinese were assisting the SLORC in the construc-
tion of extensive infrastructure projects including airfields, roads, ports,
hydroelectric and irrigation dams, and railroads; this was coupled with an
infusion of Chinese traders and illegal immigrants. The official trade, evidently
a small portion of actual trade, between China and Myanmar for 1991/1992
(the Burmese fiscal year starts 1 April) was only US$106.99 million, while
the Chinese figure for approximately the same period is US$392.09 million.21
Both are likely to be wildly underestimated. Chinese entrepreneurs were
knowledgeable about Burmese fads and fashions, and they were even able
quickly to copy Indian textile designs popular in Myanmar and thus cut Indian
imports. Since that early period, Chinese support for a wide range of Burmese
infrastructure has mushroomed, as has Chinese economic assistance.

20 The upgrading of the Burmese military through new and more sophisticated equipment
will mean that those who would like to see the amount spent on the military diminished
and provided instead to social services are likely to be disappointed. More sophisticated
equipment will mean more training and more costly spare parts.
21 The Chinese figure is from the China Statistical Yearbook, while the Burmese one is from
the Myanmar Ministry of Commerce. Maung Aung Myoe, SinoMyanmar Economic
Relations Since 1988, p. 6 and p. 10.

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To the Indians, traditional Burmese neutrality had been compromised, and

China had penetrated Myanmar. This had strategic implications, for as the
former Indian Defense Minister Fernandes famously said in 1998, India could
militarily take care of Pakistan, but China was the real potential enemy.22
As Zhao noted:

Myanmar is of special importance to China, and the shift in New Delhis

stance has thus generated a sense of rivalry between the two for the affec-
tions of Myanmar from the tangibles of trade and investment to the intan-
gibles of cooperation and support for their respective regional influence.
China and India are all anxious to tap Myanmars huge oil and gas reserves.
China and India are also seeking access, through Myanmar, to the Indian
Ocean to help open their poor landlocked provinces in their southwest and
northeast respectively.23

The perception of Chinese influence in Myanmar had strategic implications

for India. The whole Indian Ocean, let alone the Bay of Bengal, was considered
by India to be its mare nostrum. A major Indian naval base operated in the
Andaman Islands at Ft. Blair, and India tested its missiles along its east coast in
the Bay. Chinese construction of naval facilities along the long Burmese coast
was of obvious concern to India.24 Although India may not have appeared as
a major threat to China, the reverse was not perceived to be the case. From
Delhis vantage point, with Pakistan aligned with China on the west, China
to the north, and to the east Myanmar effectively within the Chinese sphere
of influence, this meant India was virtually surrounded. Chinese development
of a two-ocean navy with potential refueling and servicing facilities, if not
bases, in Myanmar, would increase Chinese capacities in that area. These
port facilities (along with Gwadar in Pakistan, Chittagong in Bangladesh, and
Hambantota in Sri Lanka) were called Chinas string of pearls. India tends
to treat seriously Chinese capabilities, rather than its present intentions, and

22 When India took a hard-line position against the SLORC, Pakistan began supplying some
arms to the SLORC. Burmese Military Intelligence claimed that the Burmese needed
spare parts for previously supplied U.S. equipment, and this was the only place they could
procure them because of a U.S. embargo on military sales and aid. Personal interview,
Military Intelligence, Yangon.
23 Zhao Hong, China and Indias Competitive Relations, p. 4.
24 As a retired Burmese colonel said, a Chinese airfield in Pegu (Bago near the coast) would
make an Indian aircraft carrier obsolete in the Bay of Bengal. Personal interview, Rangoon,
mid-1990s. Ostensible fishing vessels were captured by the Indians. They turned out to
have no fishing equipment, only electronic gear, and were manned by Chinese.

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although relations are now reasonably good, any increase in Chinese military
capacities is of obvious concern to India.25
A further issue was the volatile nature of Indias northeast area. Here the
Indians, Kachins, Nagas, the BCP, and China were engaged over time in
various, transitory alliances of convenience. By 1975, the Kachin Independence
Army (KIA), itself already in revolt against the Burmese BSPP government,
allied itself with the insurgent BCP and in 1976 began to receive massive
supplies of Chinese-made arms and ammunition.26 The Kachins were the
initial liaison between the Indian Nagas and the Chinese. General Than Shwe,
in a top secret letter dated 22 February 1991, cited India as a country which
encourages and supports internal insurgents and interferes in [Burmas]
internal affairs, [acts which are] not compatible with the [expected] behavior
of a friendly neighbor.27 India is said to have supported Burmese dissident
groups in Thailand.28 Burma built up its forces in the region and created a new
regional command in the Sagaing Division and the Chin State. Brang Seng,
the charismatic leader of the KIA who had extensive Chinese contacts, tried
to contact Rajiv Gandhi in 1986 volunteering to help solve the cross-border
insurgency. India was also assisting the KIA by supplying arms, and Brang
Seng made a secret trip to Delhi in 1991 and the Kachin posted a liaison officer
there. During part of this period, the Chinese were aiding the Naga insurgents.
Later, following their cease fire with the SLORC, they engaged in extensive
logging, resulting in much deforestation in the area under their control. The
Naga tribes straddle the IndoMyanmar frontier, and the Naga rebels in India
often sought refuge in Burma.29 Burma began supporting the Indian insurgents
as the Indians had supported some Chin dissidents, although on an unofficial
basis, and in 1991 illegally penetrated 30 kilometers into India to chase a
Burmese Chin rebel. The Kachin trained and equipped Kukis and Chins to
counter Naga rebels who were opposed to the Indian government, which in
turn was opposed to the Burmese regime. Lintner notes:

25 For a discussion of these issues, see the Conference Report, Burma/Myanmar: Nexus on
the Bay of Bengal. February 2002, Washington, D.C. See also, Robert Kaplan, Rivalry in
the Indian Ocean. Foreign Affairs, March/April 2009.
26 Janes World Insurgency and Terrorism. Kachin Independence Army (KIA), 25 May 2007.
27 This, and the following, are from Janes Intelligence Review, Bertil Lintner, The IndoBur-
mese Frontier: A Legacy of Violence, 1 January 1994.
28 Andrew Selth, Burma and the Strategic Competition Between China and India, in John
Brandon (ed.), Burma: Myanmar in the Twenty-First Century: Dynamics of Continuity and
Change, Bangkok: Chulalongkorn University, 1997.
29 Under the 2008 constitution, there is a semi-autonomous Naga area, and how this may
relate to Nagaland in India will be carefully watched.

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The Indians also began to re-evaluate their Burma policy. It was argued
that India had achieved nothing by supporting the resistance. On the
contrary, it was argued that these tactics had pushed the Burmese further
into the hands of the Chinese. New Delhi decided to counter the Chinese
by moving closer to Rangoon. An exchange of high-level trade delegations
was initiated and, in March 1993, Burma and India signed an agreement to
co-operate in the suppression of narcotics trafficking, which had become
rampant across their common border. Burmese support for the Nagas also
seemed to have ceased in early 1993. Relations between India and China
were also improving, a development that was marked by Prime Minister
Narasimha Raos visit to Beijing in September 1993. For the first time in
decades, the two countries began a dialogue aimed at solving their long-
standing border disputes; the possibility of Chinas resuming any kind of
assistance to the insurgents in Indias northeast appeared more remote than
ever.30

Further to the south along the same frontier, the multiple Chin tribes strad-
dle the frontier, and Chin rebels against the Burmese regime have migrated into
Indias Mizoram State (the term Zo is also used by the Chin as their indigenous
designation of their people). The arbitrary border thus split this diverse but sin-
gular ethnic group. There have been reports that rebels of the United Liberation
Front of Assam (ULFA) have been seeking refuge in Myanmar, and that the
Myanmar government launched a counter-insurgency operation targeting
ULFA and National Socialist Council of NagalandKhaplang (NSCNK) mili-
tants operating in its territory on 19 November [2007] with the result that it
has certainly affected us [ULFA, NSCNK] badly.31 Better Indian relations with
Myanmar then serve dual purposes: easing problems for India in its northeast,
and mitigating Chinese influence in Myanmar.
With the assassination of Rajiv Gandhi came a reconsideration of Indian
policy toward Myanmar. The shift took time, but has been dramatic. Foreign
Minister Dixit visited Yangon in 1993, and General Khin Nyunt, then Secretary-1
30 Lintner, The Indo-Burmese Frontier, Janes Intelligence Review, 1 January 1994. There
are said to be between 70,000100,000 Chin, both political and economic migrants, in
Mizoram. The formal trade in that area is estimated at Rps. 100,000,000 and the infor-
mal trade at Rps. 230,000,000. See Julien Levesque and Mizra Zulfiqur Rtahman, Ten-
sion in the Rolling Hills: Burmese Population and Border Trade in Mizoram, New Delhi:
Institute of Peace and Conflict Studies. IPCS Research Papers #14, April 2008. For a study
that encompasses both the Mizoram and Naga regions, see Samir Kumar Das, Conflict and
Peace in Indias Northeast: The Role of Civil Society, EastWest Center, Washington, D.C.
Policy Studies #42, 2007.
31 Janes Terrorism and Insurgency Centre, 20 November 2007, quoting the Nagaland Post.

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 International Strategic Issues

and head of military intelligence (and a decade later Prime Minister), went to
New Delhi in 1994.32 India and Myanmar have signed agreements for expand-
ing the land links between the countries. India provides economic assistance to
Myanmar, there are new trade agreements, and there have been high-level mili-
tary and diplomatic exchanges between the two states. For the first time since
Burmese independence in 1948, the Burmese head of state, Senior General
Than Shwe, visited Delhi in October 2004, and again in 2010, when various aid
agreements were signed.33
The change in Indian policy has been attributed to the obvious importance
of Chinas strategic penetration of Myanmar.
Such an approach, variously dubbed as pragmatism, constructive engage-
ment, or inclusive approach, has been based on two-fold understanding:
improbability of ascendancy of democratic regime in Myanmar; and the
previous experience of the more India isolates the military regime, the
more its geo-strategic concerns are compromised.34

Following the death of Rajiv Gandhi and the reassessment of Indias relations
with Myanmar, Indian policy toward Myanmar (and thus peripherally toward
China) may be considered in three stages: security-centric early engagement
(19931997); look-east-centric engagement (19982004); and develop
North-East [India]-centric engagement (2004 onwards).35
The objectives of the first stage of the period of early engagement (1993
1997) were to try to limit Chinese influence in Myanmar, especially its increased
role along the Bay of Bengal and the spectre (erroneous, as it turned out) of
Chinese bases along the littoral, while at the same time attempting to limit the
growing insurgency in Indias North East along the Myanmar border, which
became a sanctuary for such rebels.
The second stage (19982004) coincided with Indias general Look East
policy (toward ASEAN), but more importantly marked (in 1997) Myanmars
32 Andrew Selth. Burma and the Strategic Competition Between China and India. Paper
presented at a Chiangmai conference in June 1995, and later published in the Journal of
Strategic Studies.
33 The 2004 visit immediately followed the arrest of General Khin Nyunt, Burmese prime
minister and former head of military intelligence, indicating the confidence of the senior
general in his own internal position and the loyalty of the Tatmadaw (armed forces).
34 Vibhanshu Shekar, A Federal Democratic Myanmar Indias Strategic Imperative, Insti-
tute of Peace and Conflict Studies, New Delhi, IPCS Issue Brief # 67, May 2008. Since
Indias energy and transportation interests traverse minority areas within Myanmar, and
these regions have been volatile in the past, the author believes that some sort of federal
structure in Myanmar would help ensure Indias interests.
35 Ibid.

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joining ASEAN in July of that year, and the formation of BIMSTEC, the
BangladeshIndiaMyanmarSri LankaThailand Economic Cooperation
organization, which also provided an avenue for Indias improved relations
with ASEAN, and which also had close ties with China, as China had signed
the ASEAN Treaty of Amity and Cooperation in October 2003. India had set
up its Far Eastern Naval Command in the Andaman Sea to counter possible
Chinese influence there.
The third stage (2004) is related to the development of Indias North
East, an area plagued by poverty, diverse ethnic peoples (some of whom have
ties to ethnic relatives in Myanmar), dissensions, and outright rebellion.
The development of that region, which lacks easy and inexpensive access to
the heart of India, could mitigate the unrest in that remote area. To provide
access, the plan has been to expand the port of Sittwe (Akyab) in the Rakhine
and employ the Kaladan River north through the Chin State to link to the
Indian North East, which could transform that region as it is far behind in
development compared to many other parts of India. Further, road links have
been expanded, and the improvement of links to Yunnan through Myanmar
using the World War II Ledo or Stilwell Road through the Hukawng Valley is
underway. India and Myanmar on 13 February 2001 began the 160 kilometer
IndoMyanmar Friendship Road though the Chin State. India had already
been upgrading the TamuKalemyo road in Myanmar.36 India has said to
agree to expand its rail system to the Myanmar border. India is also supplying
Myanmar with some economic assistance. India has lost out to China on the
bidding for major off-shore gas reserves in the Rakhine region of Myanmar;
these will be imported through a pipeline through that country to Kunming,
the capital of Yunnan Province.
Indias policy toward Myanmar and its support of that government has been
the object of much criticism from the West and advocacy groups. To many,
India as the worlds largest democracy should have close links to the Burmese
democratic opposition. There should be, according to these advocates, a
confluence of concerns about the restoration of democracy in Myanmar for
ideological reasons. Further, Aung San Suu Kyi was brought up in India and
went to school there when her mother was Burmese Ambassador in New
Delhi. India, therefore, is betraying its principles as the largest democracy, so
some would argue. But India has strategic concerns that are more immediate
and powerful.
36 Mohan Malik, Burmas Role in Regional Security, in Morten Pedersen, et al. (eds), Bur-
maMyanmar: Strong Regime, Weak State? Adelaide: Crawford, 2000.

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 International Strategic Issues

Change in Myanmar will very unlikely see the advent of democracy. India
should therefore bank on a military regime, but try to enhance its reliability.
The evolution of the Burmese junta into an illiberal but efficient regime is
a very plausible scenario and could satisfy Indias needs in the mid-term
... India, for economic reasons as well as security considerations, would
stand to gain greatly if such [economic and administrative] reforms were
to be adopted, and should thus, along with China and ASEAN, try to exert
pressure on the military junta in this direction.37

Whether Myanmar society could incorporate liberal economic policies and

their implementation (the policies exist on paper but their personalized and
skewed implementation has undercut the efficacy of the laws) with continued
authoritarian rule, or as the Senior General and the junta has proclaimed, the
new discipline-flourishing democracy, is a question that has often been
raised. China itself is cited as an example of a country that has managed this
intellectual and managerial dualism, as has Vietnam. But it has drawn on a wide
spectrum of Chinese society for expert knowledge, expanded the elite structure
to encompass more diverse segments of society, and has even officially admit-
ted capitalists into the Chinese Communist Party. But Myanmar, in which the
military has had effective control at all levels, has indicated a profound mistrust
of Burmese civilian experts and others who have not been subject to military
discipline. Thus, whether in Myanmar political change and economic change
can be independently pursued, as in China, and if so, how soon, is a matter of
some conjecture.

Sino-Myanmar Cooperation and Japanese Concerns

Japans interests in Myanmar have been, and are, profound and broad. The mo-
tivations behind this interest have been multiple: access to Myanmars natural
resources; markets; Japan acting as a developed state to provide economic
assistance to the poor; strategic in relation to limiting Chinese influence in
Myanmar; and even nostalgic, because of the role of Japan during World War
II and the genuine affection many Japanese had for individual Burmese, even
though the Japanese were brutal to many in that society, and the independence
that they offered after the British retreat was blatantly false.
Culture also continues to play a role. Burmese Buddhism creates a sympa-
thetic bond (even if of two different Buddhist schools the Mahayana in Japan
37 Julien Levesque, A Reformed Military Junta in Myanmar in Indias Strategic Interests,
Institute of Peace and Conflict Studies, New Delhi. IPCS Issue Brief # 69, May 2008. This
analysis could have been written about Chinas Myanmar policy.

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and the Theravada in Myanmar), further enhanced by the famous novel and
then film, Harp of Burma, in which a Japanese soldier after the wars end stays
behind as a virtual monk to help bury the war dead. Many Japanese tourists
return to Myanmar to visit graves and places their relatives served in during
the war. There is a sense of guilt about the Burma campaign in World War II
and the tens of thousands of Japanese lives lost there, more than in any other
theater of operations.
During World War II, the Japanese invasion into Southeast Asia served as
both a catalyst and an inspiration to the nationalist movements in this region
because it destroyed the myth of the western supremacy of the past: the
colonial powers and their representatives in Southeast Asia could be defeated
by Asians, and the white-skinned aliens could be toppled from their privileged
positions. The myth of European superiority was over.
In planning for war, the Japanese trained a group of 30 Burmese nationalists to
fight against British colonialism. Among them were both Aung San and Ne Win,
both of whom had profound influences (positive and negative) on the future
of that society. The prominence of General Ne Win, and his close attachment
to the Japanese, ensured that Japan would play a vital role in that society as
long as he had influence, an influence he maintained even after he resigned as
head of state in 1980 (while he kept the chair of the BSPP), and even beyond
his resignation from the party in 1988 and into the 1990s.38 Japanese assistance
was critical to Burma before 1988 and supported the country during the
period of virulent socialist policy when most foreign assistance was stopped.39
Steinberg calculated that Japan supplied US$2.2 billion from the start of war
reparations in the 1950s to 1988, while Seekins believes it was US$1.94 billion
from 1970 to 1988.40 He also calculates (pp. 12830) that Japanese aid, mostly
in humanitarian assistance and debt forgiveness, was approximately US$887
million from 19882003. Some claim that Japan miscalculated its assistance
program after 1988, basing it on the assumption that the rise of democracy and
civil society were inevitable trends, as exemplified by Thailands progress.41 It
is more likely, however, that the rationale for Japanese assistance after that date
had little to do with democratic principles. In the earlier, pre-Myanmar, period,

38 General Saw Maung was ousted as head of the SLORC in 1992 only after Ne Win gave his
approval from his home in retirement. Personal interview, Yangon.
39 For a review of the change in Burmese policy, see David I. Steinberg, Burmas Road Toward
Development: Growth and Ideology Under Military Rule, Boulder: Westview Press, 1981.
40 Donald M. Seekins, Burma and Japan Since 1940: From Co-Prosperity to Quiet Dialogue,
Copenhagen: NIAS Press, 2007, pp. 6264.
41 Ibid., p. 149.

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economic interests were paramount, although they may have been supplanted
after 1988 by the rise of Chinese influence in Myanmar. There is little question
that Seekins is correct when he writes, Although it may be an exaggeration
to say that Burma has become a Chinese satellite (or a neo-colony), the
influence of Beijing has eclipsed that of Tokyo.42 Quoting a leading member
of Japans Liberal Democratic Party, Seekins notes Because it is coming under
Chinas influence, Myanmar may have conflict with India, causing regional
instability. In order to avoid this, it is necessary for Japan to support the present
government, including the reopening of yen loans.43
If Japanese policy toward Myanmar is apparent, the internal process by
which that policy is determined is opaque. There are few debates on the issue in
the Diet, and decisions are reached through backroom negotiations involving
the political parties and the bureaucracy. Although there are both Myanmar-
(pro-military) and Burma (anti-military) Japan friendship societies, their
influence on Japanese policy seems limited.
Japan and the United States have been at odds on Myanmar policy.44
Concerned about the growing Chinese influence in that country, Japan has
attempted to retain its past position as the most favored nation under Ne Win,
but to no success. It has wanted to provide more assistance, but the Japanese
response to Myanmar has been fractured by a Japanese Foreign Ministry that is
under pressure from the U.S., and the economic ministries under the influence
of Japanese businesses. The U.S. of course would have liked Japan to impose
sanctions on Myanmar, something the Japanese did not do. In spite of multiple
Japanese interests in Myanmar, the security element of the equation perhaps
now looms largest. Japanese security is tied to the supply of energy and other
raw materials through open shipping lanes, and the present interpretation of
the pacifist Japanese constitution allows for their protection within certain
limits. But as a retired Japanese general said, if China can import oil through
Myanmar to its Southwest and avoid the Malacca Straits and the South China

42 Ibid., p. 150.
43 Ibid., p. 115.
44 Part of the dispute concerns the policy implications of semantics. Humanitarian assis-
tance is interpreted by the Japanese very broadly to include what the U.S. would regard
as infrastructure projects, such as the rehabilitation of the Rangoon airport and the refur-
bishing of the Belachaung hydroelectric project. The U.S. adheres to the meaning of the
term earlier used for such assistance, basic human needs, which includes health, educa-
tion, nutrition, and agriculture. When the author was negotiating the reentry of USAID
into Burma in 1979, he turned down the request from the Burmese Deputy Prime Minis-
ter for reconstruction of the Rangoon airport as it did not meet basic human needs. Per-
sonal interview. The Japanese later assisted in its reconstruction as a humanitarian project.

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Sea, that is not in Japans national interests.45 Following U.S. engagement with
Myanmar in 2011, Japan also plans to resume ODA to Myanmar. Japan will not
miss the opportunity created by the U.S.Myanmar thaw and SinoMyanmar
friction to renew and expand its influence there.
The Burden of Proximity: Thailand46
The first response to Myanmars 1988 coup by any ASEAN state was by Thailand.
Even before Chinese penetration, General Chaovalit Yongchaiyuth, the Thai
commander of the army, was the first high-level foreign visitor in December
1988. He managed to secure a variety of timber and fishing concessions. The
cry from the Thai at this time was for constructive engagement, a term that
seemed to have an implicit hypothesis that business and market economics,
which the Burmese seemed to have embraced just before the coup, would
lead to better internal conditions and international relations, and perhaps
even democracy. To many outside of the system, it seemed more motivated by
avarice than altruism.
Yet Thailand has had a special problem with Myanmar. Historical memory
becomes important. Burmese occupied parts of northern Thailand for long pe-
riods and the Thai still cite the Burmese destruction of their capital Ayutthaya
in 1767, while recent Thai films have depicted brave Thai responses to Burmese
invaders at various times.47 Thailand has been the sanctuary of choice of those
Burmese who flee from war or poverty. This is both because Thailand is rela-
tively accessible, and also because some of the prolonged ethnic wars have been
close to the Thai border.
There are some 150,000 Karen, Kayah, and Mon refugees in U.N. camps
inside the Thai border, some two million Burmese who work in Thailand,
especially in the northwest, and about 540,000 internally displaced Burmese
(mostly Shan), within eastern Myanmar, many of whom would, if possible,
seek dubious shelter in Thailand. In addition to the poor, there are Burmese
dissidents who operate with relative freedom (writing journals, newsletters,
etc., some of which are supported by the United States government), who
have captured the Burmese Embassy in Bangkok, attacked a hospital, and
demonstrated against the Myanmar government on Thai soil.48 Myanmar
45 Personal interview.
46 Surin Pitsuwan, in a speech in Seoul to the conference on the role of South Korea in
Southeast Asia, March 2008.
47 The term for Thailand in spoken Burmese is Yuhtiya.
48 When President Bush visited Thailand in August 2008 on his way to the Beijing Olym-
pics, he met with a number of Burmese dissidents, but the Thai government insisted he
meet them on American soil (the U.S. Embassy residence grounds). Personal interview.

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 International Strategic Issues

relations, except for the period of the Chuan Leekpai government (when Surin
Pitsuwan was Foreign Minister), have effectively been handled by the Thai
security apparatus, not the Ministry of Foreign Affairs. The Burmese have felt
more secure with the former, who have been more conciliatory to the junta.
Thailands policies toward Burma/Myanmar have shifted over time. Before
1988, the Thai policy effectively was to foster a series of buffer states (rebel
areas) between the radical regime (as it was viewed from Bangkok) in Rangoon
and the conservative one in the Thai capital. Insurgents and Burmese dissidents
operated with apparent impunity in the border regions, and even U Nu was able
to lead a rebellion while quietly resident in Bangkok. This policy was coupled
with one that allowed the Thai military to create the impression of Burma as
enemy to provide political legitimacy to the Thai military, which for much of that
period controlled the Thai government.49 This policy was changed following the
November 1997 election of the Chuan Leekpai government. Surin Pitsuwan,
Foreign Minister, advocated flexible engagement by ASEAN, essentially
allowing member states to comment on inappropriate internal policies of any of
the members, rather than the standard ASEAN approach on non-interference in
member states internal affairs. Chuan had to prove his Thai-ness, and show he
was not controlled by farang (foreign) influences. This resulted in the concept
of khwamruchak phit chop chua di, or moral consciousness, a Thai perceived
primordial value, rather than simple expedient foreign policy.50
Prime Minister Thaksin Shinawatra was most conciliatory to the Burmese,
and he had private financial dealings with General Khin Nyunts son in the
company Pagan Cybertech. Thaksin started the Bangkok Process, through
which he planned, through a seven step process, to assist Myanmar toward
democracy. This was aborted when the Burmese indicated they were not
interested in it. Thaksin all along appeared as Myanmars chief apologist
because he seemed more anxious about his familys businesses rather that
promoting democracy in this neighboring country despite his creation of the
Bangkok Process.51 The former Thai Prime Minister, Samak Sunchrakej, in
what has to be one of the most bizarre public statements by a person in his
position, said after a one-day visit to the new Burmese capital at Naypyitaw,
that he had learned that the Burmese were Buddhists and meditated, and so
they must be all right.
49 See Pavin Chachavalpongpun, A Plastic Nation. The Curse of Thainess in ThaiBurmese
Relations, Lanham: University Press of America, 2005, p. 58.
50 Ibid., p. 145.
51 Pavin Chachavalpongpun, Reinventing Thailand: Thaksin and His Foreign Policy, Singa-
pore: Institute of Southeast Asian Studies, 2010, p. 143.

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On 2 November 2010, Thailand announced a multi-billion dollar project of

factories, refineries, power plants, etc. for the development of Dawei (Tavoy), a
Burmese port close to the Thai border. This Italian-Thai project would be the
largest industrial zone in Myanmar. Its contribution to Burmese development
might be substantial but its environmental impact could be highly detrimental to
Myanmar. The then Thai Prime Minister Abhasit said that Some industries are
not suitable to be located in Thailand. Thai use of Myanmar as a site for economic
exploitation in violation of sound environmental procedures is not new the Thai,
who had banned logging in their own country in 1988 because of mudslides with
large losses of life, pursued widespread and environmentally insensitive logging
just over the Myanmar border later that same year.52 In an effort to re-establish
prominence in Myanmar, the Japanese have discussed their intent to invest heavily
in the Dawei project, and use that port as a horizontal trade and investment route
to eastern India. In January 2012, President Thein Sein cancelled a planned coal-
powered electricity plant in the Dawei project because of environmental concerns.
Thailands relations with China have evolved from a period of antagonism
and fear. During the earlier stages of the Cold War, the concern was over a
major (but variously figured) large Chinese minority in Thailand that could be
subject to Chinese ideological infiltration, and a Thai communist insurrection,
especially in the Northeast where American air bases were used during the
Indochina war. Thai control over their borders was fragile. In the 19581959
period, when the Thai government, on World Bank and USAID advice, rejected
a strong socialist path, the government recognized it needed the entrepreneurial
Chinese community, and the result was the most successful integration of the
Chinese in any country in Southeast Asia.
The Thai border trade vies with the Chinese over prominence in parts of
Myanmar. Economics is less of a concern, however, than it is in the Chinese
penetration of Myanmar and its overall influence in that country. As a non-
NATO treaty ally of the United States, Thailand is held to be a surrogate
of U.S. policy in relation to Myanmar. This view is furthered by the annual
Cobra Gold joint U.S.Thai military exercises that on occasion have been
held close to the ThaiMyanmar border. The Thais have been fearful of U.S.
sanctions policy toward Myanmar in the past, and such fears were expressed at
the highest level of Thai society in the mid 1990s.53

52 David I. Steinberg, Myanmar: The Elections Year and Beyond, in Southeast Asian Affairs
2011, Singapore: Institute of Southeast Asian Studies, 2011.
53 Personal interview, in which the view that U.S. sanctions would only hurt Thailand was
expressed. Naratiwat, Thailand, 1994.

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The United States Burma Policy: The Luxury of Distance.54

Whether China and the United States consider each other as a competitor or
collaborator in the new Pacific/Asian era and more broadly on the ground in
the region, the issue of their relations with Burma/Myanmar and that countrys
future development reflect their distinct differences in both foreign policy
and in the vision each has for the future of the Burmese state. Proximity, of
course, plays an important role, but by no means does it completely determine
policy approaches to a government in Myanmar that by any consideration has
not provided its citizens and inhabitants with the modicum of an improved
quality of life. Myanmar may not be a threat to the peace and security of
the region, as the U.S. charged in the Security Council in January 2007 (the
resolution on which was vetoed by both Russia and China), but it is a nexus
of social instability in the area through illegal migration, the spread of disease,
trafficking, and a much smaller, but still significant, trade in narcotics, now
more methamphetamines than opium and heroin.
In contrast to single-strand U.S. policy, Chinese policy toward Myanmar is
based on one dominant strand and several subordinate strands. Primary is the
geo-political strategic interest of China in having a compliant, if not a client, state
on its southern border. This gives China access to the Bay of Bengal directly,
through pipelines, and through water, railway, and road transport. Chinese access
is not unlimited, however. The Burmese rejected a Chinese plan to develop a
merchandise route from Bhamo, near the China border on the Irrawaddy and the
traditional staging area for nineteenth-century mule trains north into Yunnan,
down the Irrawaddy to the Henzada region, and then over the Rakhine Yomas
(Arakan hills) to the newly expanded deep water port of Kyaukpyu.
The second strand is economic: access to Myanmars energy (gas, hydro-
electric power), natural resources (timber, minerals, jade), and to a state in
which it can produce and sell manufactured products directly to the Burmese
and also through the increasing overseas Chinese community there. A third
strand is in access to ASEAN institutionally and indirectly through Myanmar,
and this may increase in importance as the South China Sea imbroglio intensi-
fies and China seeks Myanmars support within ASEAN. A fourth strand, of
less importance, is having Myanmar as an ally in supporting Chinese interests
in international fora, especially on Taiwan, Tibet, and Xinjiang Uigur issues.
The positive aspects of Chinese interest in Myanmar are complimented by
a set of equally positive issues, but perceived in the negative. A strong Chinese-

54 Surin Pitsuwan (see footnote 46, this chapter).

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oriented Myanmar precludes other foreign interests (the U.S., Japan, India,
Thailand) from asserting pressures or too great an influence on the regime
in Naypyitaw, capturing markets, and otherwise harassing the Chinese via
Myanmar. Myanmar evidently needs China, as became evident in January 2007
when China, along with Russia, vetoed a Security Council resolution introduced
by the United States calling Myanmar a threat to regional peace and security.
China diplomatically does not need Myanmar (although strategically the rela-
tionship is important and economically it is useful), although good relations with
that state may be related to Chinas broader interests in ASEAN. Human rights
and economic development are irrelevant to Chinese interests except insofar as
their absence or perceived absence by the Burmese contributes to instability in
that country and thus could affect popular unrest. If, on the other hand, resident
Chinese are perceived to be unduly economically benefiting, especially at the
expense of the Burmese, this could become a grave issue and lead to ethnic strife,
as in 1967. Chinese policy toward Myanmar is driven by Chinese bureaucratic
elites at several levels, and is institutionally focused, at this stage in any case, on
one Burmese institution the Tatmadaw (armed forces).
The United States policy has had but a single, and a completely different,
strand. It has followed a human rights agenda that essentially and effectively
considers political rights as the basis on which other rights, such as economic
rights, social mobility, and growth may eventually be built. It has ignored, at
least in public fora and documents, any strategic considerations, and through
the self-imposed sanctions policies that have been inflicted on the regime
piecemeal, it has effectively eliminated any economic interests. In essence,
U.S. policy has been determined by its public; the legislative and executive
branches essentially have followed the public outcry that has been effectively
mobilized by human rights and expatriate Burmese groups. While Chinese
policy has been focused on the lone cohesive bureaucratic mechanism left in
that state, the military (which has essentially destroyed any other institution
that it might not have been able to control, e.g., an independent legislature or
judiciary), United States policy has been effectively focused on an individual
Aung San Suu Kyi, the now iconic Nobel laureate. Insofar as it can be argued
that the U.S. public determines U.S. policy, this reinforces the background role
of Aung San Suu Kyi in determining that policy, or rather what her supporters
have believed what was her policy when she could not communicate with
the outside world.55 This has been accentuated by the public statements of
55 See David I. Steinberg, Aung San Suu Kyi and U.S. Policy Toward Burma/Myanmar.
Journal of Current Southeast Asian Affairs, September 2010.

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President Bush and Laura Bush in support of the opposition. Mrs. Bush has
indicated that her interest in Burma was prompted by reading about Aung San
Suu Kyi.56
Even earlier, U.S. policy in the pre-1988 socialist era was demand driven:
the U.S. supplied military and economic assets to the government to decrease
the Burmese opium-to-heroin trade that was supplying the bulk of these
narcotics entering the U.S. More attention was paid to trying to cut off the
source of the supply than to controlling the entrepreneurs, the retailers,
and eventually the users.57 Politically, it was far more acceptable to castigate
foreigners than to admonish local users. The United States provided tens
of millions of dollars for anti-narcotics activities, including military aircraft
(helicopters) for use against producers and their fields, stipulating that these
could not be used for other purposes. Yet Karen insurgents shot down one
that was obviously employed for military use in violation of those principles,
and the helicopters were also used to ferry senior military on various non-
narcotics-related trips.58 There was also an extensive U.S.- sponsored military
training program.
The United States has invoked sanctions on Burma/Myanmar in four
separate stages with the intent to punish the regime for its human rights
transgressions and unwillingness to abide by the 1990 elections. It has been a
set of policies designed for regime change that have not succeeded.
The first tranche of sanctions (although it was not called such) came
immediately following the coup of 18 September 1988. All military sales
and assistance and anti-narcotics activities were terminated, as was the
modest USAID economic development program. The second occurred in
1997 and placed restrictions on all new investment in that country, and
travel bans on some of the top military figures. This was in response to the
juntas refusal to recognize the results of the May 1990 elections (for what
is still a matter of some dispute) overwhelmingly won by the opposition
National League for Democracy (NLD). Previous U.S. investments,
such as that of the Unocal oil company (the largest U.S. investor in both

56 See Andrew Selth, Burma and the Bush White House. Blog at www.lowryinterpreter.
org/post/2008/08/Burma-and-the-Bush-White-House.
57 Some in the U.S. in the late 1970s seriously advocated buying up the total opium crop
and its heroin product and then burning it. Commentators pointed out that this would do
wonders to increase the crop the following year.
58 The Director of Information during that time warned state photographers that they should
not photograph departing high-level military with the helicopters in the background. Per-
sonal communication.

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 Modern ChinaMyanmar Relations

Burma and Thailand, later bought by Chevron), were able to continue

operations.59
The third stage was in 2003, prompted by a May 2003 incident in which
military- controlled thugs broke up an opposition political caravan in Depayin,
central Myanmar, killing a large but unknown number of democracy supporters,
and also threatening Aung San Suu Kyi, who was at first reported hurt but was
later shown by an U.N. envoy to be unharmed. This was the most draconian
of all sanctions, increasing the restrictions on travel by regime members and
their families, but more importantly stopping all Burmese imports amounting
to some US$350 million annually (later amended to allow in educational
materials, handicrafts, and works of art), and preventing the use of U.S. banks
from dealing with Myanmar. This created hardships because even regional
Asian transfers of funds often went through New York and international NGOs
operating in Myanmar (almost four dozen at that time) paid their staff in U.S.
dollars. A tedious process of each individual NGO obtaining a Department
of Treasury warrant was required for supplying humanitarian assistance. This
process was eased after the Nargis cyclone of 2008.
The last of the sanctions from the U.S. was in response to the Saffron
Revolution in which Buddhist monks were brutally beaten in September
2007. President Bush declared a ban on gemstones (rubies) and jade (and
inscrutably not sapphires), and more restrictions on travel; this legislation was
passed in the summer of 2008.60
The United States has, however, been even more intrusive than sanctions
themselves. The Burmese Freedom and Democracy Act of 2003 states The
policy of the United States, as articulated by the President on 24 April 2003, is
to officially recognize the NLD as the legitimate representative of the Burmese
people as determined by the 1990 election.61 Thus, this determination was
made prior to the Depayin incident. Aside from the vexed question of the
purpose of the May 1990 elections (whether to form a new government, as
the U.S. and the NLD maintain, or a constituent assembly to write a new
constitution, as others maintain), the U.S. had already exerted overlooked
but important provisions of the U.S. Foreign Assistance Act that requires that
United Nations Development Programme projects be approved by Aung San

59 Various members of the Congress not only wanted a ban on new investment, but the with-
drawal of all previous investment. The U.S. Department of State disagreed, and a compro-
mise was reached on new investment alone.
60 That legislation has proven to be singularly ineffective. See the U.S. General Accountabil-
ity Office report on that subject.
61 Public Law 10861, 28 July 2003, Section 2 (findings) (14).

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Suu Kyi and the NLD.62 Throughout much of the biannual reporting by the
U.S. Department of State to the U.S. Congress until 2009, the legitimacy of
the May 1990 elections had often been cited as a prerequisite of changed U.S.
policy.63
The United States policy on sanctions has differed substantially from its allies,
all of which have imposed some restrictions but not to the degree imposed by
the U.S.64 All have shown far more flexibility toward Myanmar than the U.S. for
their own national reasons. The U.S. and Japan have had substantive differences
over how to deal with Myanmar, the Japanese goal primarily being to try to offset
Chinese influence in that country.
The junta, of course, was not been unaware of these developments. As we
have noted, in an official publication, Military Intelligence asserted that the
reason the United States seeks the overthrow of the military in Myanmar is
because Myanmar is the weakest link on the U.S.s containment policy against
China.
China, in the U.S., is regarded as the primary support to Myanmar, and
thus the essential anchor of regime survival. This is unlikely to be accurate
for two reasons. The first is that junta members, who do not want to be too
close to any foreign power especially one of such magnitude on its northern
frontier, would be unlikely to succumb to sanctions or other pressures brought
by distant or neighboring states or both in combination. Such a confluence
of pressures would more likely give rise to an even more fervent degree of
nationalism, even xenophobia, characteristics that seem continuously latent
and occasionally obvious in the Burmese government. High Burmese officials
have constantly maintained that as they were isolated for a generation during
the socialist period, then can survive such treatment again.65
The second is that China, recognizing the need for stability in Myanmar,
has quietly attempted to influence positively the junta to make concessions. In
moderated terms, likely to be far more acceptable to Burmese nationalism, they
62 Section 1106, Limitations on the United States Voluntary Contributions to the United
Nations Development Program of the Foreign Affairs and Restructuring Act of 1998.
For a discussion of the legal implication of this, see David I. Steinberg, Turmoil in Burma:
Contested Legitimacies in Myanmar, p. 198.
63 Steinberg, op. cit., p. 189.
64 See David I. Steinberg, The United States and Its Allies: The Problem of Burma/Myan-
mar Policy. Contemporary Southeast Asia, Vol. 29, No. 2, 2007. This article was based on
a Washington conference in November 2006. Presentations were made by representatives
of Australia, Japan, Thailand, and the E.U. (Germany).
65 See David I. Steinberg, Burmas Multiple Crises: Globalized Concerns and Myanmars
Response. Paper given at the Swedish Institute of International Affairs, Stockholm, 89
May 2008.

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have called for reforms in Myanmar (even putting pressure on the government
to resolve the minority problems on the border), and even arranged for the
U.S. Deputy Assistant Secretary of State to meet with three Burmese ministers
in Beijing in June of 2007. It is not in Chinese interests to see a popular uprising
or minority unrest that could jeopardize Chinese access to pipelines across
Myanmar, nor do they wish to see an increase in Indian influence in that country.
The meeting in Beijing may have been an effort by the Bush administration to
reclaim its legacy by attempting a belated but positive approach to the Burmese
junta. Suspicion of the U.S. on the part of the junta remained profound, at least
until 2011. An orthodoxy had been built up in Washington, supported by the
expatriate Burmese and human rights communities, concerning policy toward
Burma: regime change through recognition of the results of the May 1990
elections won by the opposition National League for Democracy.
This orthodoxy was threatened by the Obama administration, which deter-
mined that Myanmar (still referred to as Burma) would be one of six countries
subject to a policy review. That process was extensive in the first half of 2009,
and involved the various components of the executive branch, including the
intelligence community. After much consideration, the Obama administration
had to face the political reality that the bipartisan support in the Congress was
far too strong to offer any significant diminution of the sanctions regimen,
even though both the Burmese and the U.S. had sent modest signals that they
wanted improved relations. These signals were insufficient to warrant change
in the opinion of both states leaders, with a resulting stalemate in relations
that has lasted through the Burmese 2010 elections and the formation of a new
government in 2011. The U.S. has shifted to pragmatic engagement, which
meant the continuation of sanctions but the intent to have high-level dialogue.
At senior levels, officials from both the Department of State and the Senate
have visited Myanmar and met with both junta leaders and Aung San Suu Kyi,
but the status quo continued until December 2011. The engagement policy
has continued following the Burmese elections. Aung San Suu Kyi has been
mentioned 1598 times on the floor of the Congress (until January 2010), and
her views, or what are purported to be her views, continue to prevail. Since a
potential policy shift was an Obama administration effort, criticism of it has
come from the opposition, and there have been calls for further sanctions and
a U.N. Commission of Inquiry into human rights abuses, to which the U.S. has
officially agreed. The sense of the administration and the Congress is that the
Burmese 2010 elections were neither fair nor legitimate. At the same time, the
Obama administration has determined that its engagement with Myanmar will

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continue under the newly elected Myanmar government. It has also reassured
China that containment is not U.S. policy. The era of SEATO [the Southeast
Asia Treaty Organization an anti-communist alliance] is over.66

The Role of International Organizations: The United Nations and

ASEAN
Sino-Burmese relations may be viewed through a prism of regional bilateral
relationships, which offers one critical picture emerging from that particular
lens. It may also be considered through the broader, institutionalized, multi-
lateral framework of ASEAN and the U.N., which add additional dimensions
to the scene. Neither alone is sufficient to encompass both the actualities and
potentials of these multiple relations.
Myanmars entry into ASEAN was a product of diverse positive and negative
interests. The thirtieth anniversary of the organization was to be held in Kuala
Lumpur in July 1997. Prime Minister Mahathir of Malaysia wanted to ensure
that on that occasion all the countries of Southeast Asia would be included.
Thus, he specifically pressured Myanmar, Vietnam, Laos, and Cambodia to
join at that time. This would have been a personal as well as an institutional
triumph.67 ASEANs motivation for the inclusion of Myanmar in this grouping
was more than the simple wishes of the Malaysian Prime Minister, no matter
how powerful he was, or his evident desire to show his authority by disagreeing
with the U.S. Secretary of State, who was publicly adamant against Myanmars
joining as it would further legitimate a government that the U.S. regarded as
illegitimate. Chinese penetration of Myanmar had already caused considerable
concern in ASEAN, and no matter how deftly China had managed negotiations
with the group, the strategic impact on Southeast Asia by Chinese influence
along the Straits of Malacca was of considerable worry. Myanmar in ASEAN
could, some thought, provide more of a balance on Myanmars policy options.
Myanmar itself had been interested in joining ASEAN. It had informally con-
sidered joining long before it became an official observer in 1996.68 Secretary-1,
General Khin Nyunt, was not only in charge of military intelligence but also
of international affairs. It seems likely that of all the senior junta members he
66 Assistant Secretary of State Kurt Campbell, 29 September 2010.
67 As it turned out, Cambodia, which joined later, could not join at that time because of a
coup.
68 Years before Myanmar joined, the author was sounded out by a Myanmar official in the
region about the U.S.s likely reaction to Myanmar being admitted to ASEAN. As U.S.
policy was to open up hermit regimes (e.g. North Korea), he replied that he thought the
U.S. would approve. This was before the hardening of the U.S. position when the junta
ignored the results of the May 1990 election that the NLD had won.

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was most interested in Myanmars membership for two reasons. It was true that
joining ASEAN might give Myanmar a modicum of additional legitimacy, at
least in the region if not beyond, and perhaps internally as well. Perhaps more
important was the likelihood that joining ASEAN would encourage the mem-
ber states to make more investments in Myanmar. Insofar as that policy worked,
then Khin Nyunts own position might be strengthened, for as the only member
of the junta who had not commanded troops in the field, his internal military
credibility was somewhat tenuous. If the intention was to get ASEAN invest-
ment on joining, the timing was unfortunate. The very month that Myanmar
joined was the start of the Asian financial crisis that spread from Thailand to
Indonesia, Malaysia, and later that year to Korea. Although Myanmar was not
particularly affected by the crisis directly, investment was severely limited.
Myanmar attended the various ASEAN meetings after joining, but the
continuous deterioration of the internal political climate and the incidents that
had prompted U.S. retaliation through sanctions led to obvious frustration
and embarrassment of ASEAN leaders. Dr. Surin Pitsuwan, now Secretary
General of ASEAN but then Foreign Minister of Thailand, had called for
flexible engagement, emphasizing that ASEAN should set aside its policy of
non-interference in the internal affairs of member states for a more proactive
democratic stance. He did not succeed, but there developed among some of the
members of individual ASEAN state legislatures an active bloc calling for the
expulsion or suspension of Myanmar from ASEAN. In 2006, when Myanmar
was to chair ASEAN and the summit was to be in Yangon, as its turn occurred
in alphabetical order, there was considerable anxiety over this possibility, and
Myanmar was pressured to agree to let the chair pass to the next in alphabetical
line, the Philippines, even though physical preparations for the summit were
already evident in Yangon. The next possible year for Myanmar chairing
ASEAN is 2014, to which ASEAN agreed in November 2011.
ASEAN has not been effective in transforming the political stasis in Myan
mar, and there were many foreign observers who felt that it was unrealistic
to expect that it could do so. The ASEAN Regional Forum (ARF), with no
specific secretarial support, has never taken up the security issues even within
the region, such as the ThaiBurmese border clashes of 2001, the Cambodian
Thai problems of the burning of the Thai Embassy in Phnom Penh the same
year, and the ThaiCambodian temple dispute of 2008.
In November 2007, ASEAN approved its new charter on the fortieth anni-
versary of its founding. It was ratified by the member states by the fall of 2008. It
has a provision in it on human rights, but it contains no monitoring or punitive

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 International Strategic Issues

provisions. When, at that meeting in Singapore, U.N. special envoy Gambari

was invited by his Singapore hosts to brief the ASEAN group on his latest trip
to Myanmar and his negotiations there, Myanmar demurred, saying that since
all ASEAN members were also U.N. members, Ambassador Gambaris briefing
should take place at U.N. headquarters. This proved to be a great embarrass-
ment to Singapore.
Yet following Cyclone Nargis, it was ASEAN that was able to obtain Burmese
approval to send in an assessment team and help organize relief operations.
China has contributed over US$ three million toward the relief effort there.
The role of the United Nations has been mixed. Special envoys and human
rights envoys sent by the United Nations have had limited impacts, and some
have even been denied entry into the country for years. Ambassadors Razali
and Gambari had both met with Aung San Suu Kyi, but external expectations
that either could change her status were far too optimistic. Rather than moving
the process of political or economic change forward, they have made no inroads
into the effective structure of power in that society, although procedures for
dialogue between the junta and Aung San Suu Kyi have been set up on two
occasions, but with little effect. Such efforts have been important, but not
sufficient to affect change.69
Myanmar has been protected by Chinas veto power in the U.N. Security
Council over any condemnation of Myanmar that could lead to U.N. action, It,
along with Russia, exercised this veto power in January 2007 when it prevented
action on a U.S.- sponsored resolution that Myanmar was a threat to regional
peace and security. As the Russian Ambassador noted, to be such a threat
would require the agreement by the states surrounding Myanmar if that were
indeed true, but since none of those states had supported this assertion, the
issue should be taken up by the U.N. Economic and Social Council, which could
consider the issue of human rights. The United States was well aware before
the vote that there would be these vetoes, and thus the proposal was more
political theater designed for an American audience and international human
rights groups rather than for any practical effect on policy. Interventions by a
succession of U.N. human rights monitors over a decade and a half and special
envoys, and even the visit of U.N. Secretary General Ban Ki Moon in relation
to the cyclone relief effort, have only had modest impacts and not affected
the power structure in the country. Since the new Burmese government was

69 In August 2008, Ambassador Gambari was not allowed to see Senior General Than Shwe,
and Aung San Suu Kyi did not go to an appointment that had been arranged for both of
them.

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installed in the spring of 2011, more productive contacts with the U.N., both in
Myanmar and New York, have occurred.
In spite of the fact that the most famous Burmese citizen in history (before
Aung San Suu Kyi) was U Thant, Secretary General of the United Nations,
the U.N.s role has been limited although important. Its importance has been
in the humanitarian work of its related agencies (WHO, UNICEF, WFP, etc.)
under the auspices of the United Nations Development Programme, which
has also coordinated international NGO activities in the country. When in
November 2007 the resident representative attempted to catalogue the crises
facing Burmese society to the Minister of Information, his visa was terminated.
Secretary General Ban Ki Moon has twice been snubbed by the junta.70
In 1995, the U.N. formulated the concept of the Responsibility to Protect
(R2P) endangered populations.71 This would allow international intervention
without the approval of the local government where such populations existed.
Although developed as a response to war, certain influential foreigners, includ-
ing the French Foreign Minister, publicly maintained that it should be invoked
in relation to the completely inadequate response of the Myanmar authorities
to the tragedy of the Nargis cyclone. Although the motivation of those pro-
posing such action seems prompted by the terrible devastation and the slow,
secretive, and incompetent response by the government to the needs of its
own population, if such action had been approved by the U.N., it would have
further inflamed Burmese junta fears of foreign invasion and regime change.
The refusal by the authorities to allow U.S. ships and helicopters directly to
deliver relief supplies to the victims was probably based on the decade and a
half call by the U.S. for regime change, and the belief that this would be a good
excuse for U.S. action.72

SinoMyanmar Relations and International Responses

The general reaction of the developed world to the plight and poverty of the
Myanmar peoples and the excesses of their military regime has been mixed.
There has been extreme criticism of the junta, led by the U.S. but with the
U.K. not far behind. For the European Union, Myanmar is not a nation of any
70 In the early 1990s, the UNDP was almost expelled from Myanmar. The UNDP headquar-
ters, under obvious U.S. pressure, changed the UNDP programming eliminating all refer-
ences to the Myanmar government. Members of the SLORC were incensed and wanted
to stop the UNDP program, but cooler heads prevailed. Personal interview, Yangon.
71 See Edward C. Luck, The United Nations and the Responsibility to Protect. The Stanley
Foundation, Policy Analysis Brief, August 2008.
72 See Andrew Selth, Burma and the Threat of Invasion: Regime Fantasy or Strategic Real-
ity? Brisbane: Griffith Asia Institute, Griffith University, August 2008.

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 International Strategic Issues

significant strategic interest. Geographic distance is the main reason why the
whole Southeast Asia region is much less important than regions bordering
Europe. Myanmar had only relatively minor trade relations with Europe before
the trade sanctions by the E.U. were imposed, although they had increased
after the U.S.s were in place, as the E.U. market replaced the U.S. in Burmese
textile exports. They are hence more symbolic rather than having any deep
impact on Myanmars economy.73 The E.U. sanctions, including travel (partly
mitigated in 2011), have been less stringent than those of the U.S. The E.U.
Common Position sets forth their policies toward Myanmar, and has provi-
sions for providing humanitarian assistance.74 But policy within the E.U. is not
uniform. Custom dictates that the European former colonizer takes the lead
on issues related to its former colony. The U.K. has taken a hard stance on
Myanmar, a stance that is not universally shared within the E.U. Norway has
supported the Burmese opposition, while Germany and France have looked
for alternative policies, as has Sweden. All those governments have recognized
that there is a humanitarian crisis in that country, as the U.N. has also noted
through its Development Programme in Yangon, and all provide some form of
humanitarian assistance. When certain U.S. congressional pressures forced the
U.S. to abandon participating in the Global Fund (anti-malaria, tuberculosis,
HIV/AIDS) US$90 million effort over a five year period, the E.U. went ahead
with a similar US$100 million Three Diseases program over the same period.
The U.S. participated in the cyclone relief effort as well, and has reconsidered
supporting the Global Fund. In 2011, the E.U. somewhat modified its sanctions
policy to allow visits by some hitherto banned Burmese officials.
The now former Burmese opposition, the National League for Democracy
(2010 no longer a legal party as it did not register to participate in the forth-
coming elections), through its secretary Aung San Suu Kyi when she was
available of access, was against foreign investment, tourism (modified in 2011),
and even foreign humanitarian assistance, although the plight of the Burmese
seem to have relaxed her last position because it is politically untenable to be,
in effect, in favor of poverty.75 Although she gave a positive statement to the
2011 Davos economic conference on positive types of foreign investment,

73 Magnus Petersson, Myanmar in E.U.ASEAN relations, AEJ 4, 2006, p. 571.

74 Common Position Defined by the Council on the Basis of Article J.2 of the Treaty on
European Union of Burma/Myanmar. 28 October 1996. It withdraws military attaches,
embargoes arms supplies, restricts visas for high-level Burmese military, and suspends
higher-level bilateral visits to the country. For the text, see Steinberg, Turmoil in Burma,
pp. 28283.
75 These views were prior to the 2008 cyclone Nargis.

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 Modern ChinaMyanmar Relations

she later agreed with an NLD statement that sanctions were not hurting the
Burmese people a position of questionable accuracy and disputed by a U.S.
Embassy cable released through Wikileaks. Yet the debate continues: whether
political reform should proceed or follow economic change, or whether they
might go in tandem. China has not participated in this public dialogue, and
the important relationships of each of the other actors with China mean that
China suffers little in relations with these states, many of which take opposing
views on Myanmar. Although China has been widely criticized because of its
relationship with Sudan and has not pressured that government to do some-
thing positive about Darfur, international criticism about China in relation to
Myanmar has been far less severe. Perhaps most recently the relatively open
Chinese response to their Sichuan earthquake contrasted so positively with
the closed, cynical response of the Myanmar junta to its cyclone.
Bilaterally, Myanmar is for China a geopolitical interest.76 History plays some
role, as the China has a long memory, and the interests of China in Myanmar are
multiple, profound, and modern. There are, first, strategic interests. Chinese
access to the Bay of Bengal through Myanmar is of strategic importance. Even
though the scare about multiple Chinese bases along the Myanmar littoral
seems to be over, and there had been a great deal of inaccurate reporting on
this possibility in the recent past, the presence of China in Myanmar shifts the
strategic balance of Chinas influence in Southeast Asia. Through Myanmar,
China has the capacity to monitor Indian missile tests in the Bay of Bengal,
and potentially to influence passage through the important Straits of Malacca,
through which the energy supplies for Japan, Korea, and Taiwan essentially
flow, and which is the United Statess life-line to the Persian Gulf and related
states and bases, such as Diego Garcia in the Indian Ocean. It is significant that
the Chinese themselves regard the Straits as a strategic impediment.
As we have earlier demonstrated, Chinese access to Myanmars natural
resources has significantly changed the economic and security equation for
Southwest China. Although the Burmese off-shore natural gas fields are the
most dramatic developments of Chinas search for energy in Southeast Asia, its
extensive investments in some 20 hydroelectric projects between 19902002,
and 19 more after that period, will assuage the thirst for electricity in Chinas
east and south, but through Yunnan Province and the Southwest.77 Three
transmission lines are anticipated: north, middle, and south, with the southern
line extending as far as Guangdong. Both legal and illegal timber exports to
76 Personal conversation with a Chinese Embassy military official.
77 See Chapter 7.

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 International Strategic Issues

China have been major elements of Chinas construction boom, and China has
been dealing both with the Myanmar central government and with minority
groups near the China border. Investment in mineral production has been
extensive (gold mining in the Kachin State has caused much environmental
anguish).
Trade and investment opportunities also loom large. At a meeting in Cheng
du (also the military headquarters for the southern Chinese command78) some
years ago, provincial officials of the southeastern Chinese provinces indicated that
industries in their region could not compete with east-coast Chinese manufacturers,
as their transportation costs prevented them from being competitive. Their market
is to the South, and in this sense Myanmar, in spite of its low per capita income,
was attractive. Myanmar is also attractive to small businessmen who wish to invest
there, and the lack of visa restrictions, the access to capital through traditional
Chinese clan, linguistic, and regional associations, and the corruption in Myanmar
society on which the economy effectively rests allows them informally to migrate
into that country and do well. Their entrepreneurship and relative wealth give
them positions of some prominence, which could be the seeds of an eventual
backlash against them, as has occurred in other Southeast Asian countries when
the apparent discrepancies in income excited envy and when the Chinese could
become the scapegoat for local social and economic dissatisfaction. The number
of illegal Chinese in Myanmar is obviously unknown, but former high military
officials have indicted that it may be as high as two million. Ironically, as Myanmar
has lost about two million workers, mostly from the minorities, to Thailand to
seek employment and to escape war and its ravages, perhaps an equal number of
Chinese have entered Myanmar to seek better employment, although it is the poor
who have left and the entrepreneurs who have arrived.79
Myanmar apparently was somewhat concerned about its dependence on
China. Some observers claim that General Khin Nyunt, former Secretary-1 of
the junta and then Prime Minister, who was arrested in October 2004, tried for

78 For the area of Chengdu Military Region, see Military Power of the Peoples Republic of
China: 2009, Office of the Secretary of Defense, Washington, D.C., 2009, p. 61.
79 Zhuang Guotu, Interactions Between Trade and Migration: On Factors to Drive New Chi-
nese Migrants for Southeast Asia. [sic] Paper presented at the Xiamen University conference
on Myanmar 2008. He estimates that 2.32.6 million Chinese migrants went to Southeast
Asia in all capacities, of whom about one million went to Myanmar. These are those entering
illegally. About 30,000 Chinese workers entered Myanmar from 1995 to 2005, according to
the National Bureau of Statistics of China, but these are likely to include only those attached
to officially approved projects. Observers have pointed out that Chinese projects in Myanmar
are designed to provide jobs for Chinese, not Burmese. A Chinese who might annually earn
RMB 60,000 in China might receive RMB 300400,000 in Myanmar. Personal interview.

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 Modern ChinaMyanmar Relations

corruption and under house arrest until January 2012, was a strong advocate of
Chinese support. Yet the blossoming of IndoMyanmar relations, the purchase
of Russian jet fighters (and later combat helicopters) to offset the Thai purchase
of American fighters, and the intended purchase of a small nuclear reactor pro-
gram with Russia, ostensibly for medical purposes, show that even before Khin
Nyunts ousting Myanmars eggs were to be dispersed in a number of baskets.
This attempt at balance may have partly paid off in the veto by Russia and China
in the U.N. Security Council against Myanmar being charged by the U.S. as a
threat to regional peace and security in January 2007.
Myanmars relations with North Korea have come under scrutiny, and the
purported North Korean activities may be regarded by China with some un-
ease. Both North and South Korea have supplied Myanmar with conventional
weapons, and the re-recognition of North Korea by Myanmar, after relations
were broken off because of the 1983 North Korean attempt to assassinate South
Korean President Chun Doo Hwan in Rangoon, was officially endorsed by South
Korea.80 But evidence has been unearthed of North Korean tunnel construction
in Naypyitaw, and the visit to North Korea of General Thuru Shwe Mann, the
third in rank in the junta at that time, has caused concern. North Korea seems
to be supplying Myanmar with short-range missiles, and there are rumors that
Myanmar has been interested in some nuclear program beyond the experimental
reactor they had contracted (but subsequently cancelled) from Russia. The evi-
dence is sketchy and incomplete, and comes from opposition sources attempting
to vilify an already discredited regime.81 The presence of both Myanmar and
North Korea in the former U.S. Secretary of States outposts of tyranny speech
tends to equate the two governments and provide a tenuous basis for assum-
ing the worst in their relationship. It seems evident that China would regard a
nuclear Myanmar with a great deal of concern. Janes believes that, There is no
question Myanmar is attempting to build the components for a nuclear fuel cycle
... Careful analysis of the recovered data reveals that Myanmar is vastly out of its
depth in terms of nuclear pursuit ... Nevertheless, despite the lack of capability,
Myanmar certainly has the intent to develop its nuclear programme.
Chinas relations with ASEAN have been careful and effective. China has
approached Southeast Asia on two fronts: the bilateral relations with each of the
states within the region, and relations with ASEAN itself. China has multiple
80 See Andrew Selth, Myanmar, North Korea, and the Nuclear Question. In Lex Rief-
fel (ed.), Myanmar/Burma. Inside Challenges, Outside Interests. Washington, D.C.: The
Brookings Institution, 2010, pp. 181194.
81 The report was released by the Democratic Voice of Burma in June 2010, and later ana-
lyzed by Janes Intelligence Review, 20 July 2010.

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 International Strategic Issues

ties to ASEAN. It has signed the ASEAN Treaty of Amity and Cooperation,
has negotiated a free trade agreement with the region, is a member of the
ASEAN Plus Three (along with Japan and Korea), and is a member as well of
the ASEAN Regional Forum (ARF). Although territorial disputes concerning
the sovereignty of the South China Sea and the oil and gas potential of that area
have not been resolved and have indeed resurfaced, and Vietnam, Malaysia,
the Philippines, and Singapore all claim various parts of the region, China had
not until 2010 pushed its claims in the past several years. It is ironic that as
one argument to bring Myanmar into ASEAN in July 1997 was the attempt
to ameliorate Chinese influence in Myanmar, which was of concern to some
ASEAN states such as Singapore, that influence seems to have grown.
Although the expanding Chinese population in Myanmar has been politically
quiescent since the riots of 1967, much in contrast to the exceedingly vocal political
activities of Burmese expatriates in North America and Europe, it seems likely that
antipathies will develop between the resident Chinese in Myanmar and Myanmar
citizens if income disparities between the two groups continue to grow, and if the
social development tide that could take place in that country from gas-related
and transit incomes does not raise all ships. The new middle class in Myanmar
may end up composed of higher-ranking retired military and the Chinese. If the
Burmese perceive that their economy has once again slipped from their control, as
it did in the colonial era, then the social consequences could be dire.
A Japanese scholar has characterized the Chinese contribution to the
Myanmar economy as follows:
Chinas economic cooperation and commercial loans apparently support
the present regime, but their effects on the whole economy will also be quite
limited under an unfavorable macroeconomic environment and distorted
incentives structure. In particular, the newly built state-owned factories may
become a burden on the Myanmar government budget and eventually bad
loans of Chinese stakeholders. After all, strengthened economic ties with
China will be instrumental in regime survival in the midst of economic
sanctions by Western nations. However, it will not be a powerful force pro-
moting the process of broad-based economic development in Myanmar.82
Chinas rise, the 2008 Olympics, issues with North Korea and Taiwan, and the
burgeoning Chinese trade surpluses have all diverted attention from what is
one of the most significant areas of Chinese strength and influence, and one
that is likely to play an even more important role in the future.

82 Toshiro Kudo, Myanmars Economic Relations JETRO Discussion Paper No. 66, July
2006, p. 18.

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 Part IV: Conclusions

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Steinberg book.indd 346 19/04/2012 16:05
 11
Dilemmas of Mutual Dependence in a
Globalized World

M yanmars complexities make predictions precarious. Strategic

ally located between two major regional powers, Myanmar
is composed of a multitude but disputed number of ethnic
groups in a heterogeneous multicultural society that has been at odds or at war
for two generations. Its borders are ethnically amorphous, often with polarized
internal and external relations. While its extensive natural resources are in
worldwide demand, its decision-making processes have been opaque. The
very complexity of the internal, regional, and international relations among
these peoples should indeed prompt those concerned with policy to approach
Myanmar analysis with humility.
China is equally complex on a grander scale. Its complexity is a product
of its size and bureaucratic diversity, its regional and global influence, its
remembered history, its less than transparent policy environment, and its
multitude of national/regional/local development plans.
The review of ChinaMyanmar policies herein demonstrates the mercurial
potential not only for those states, but for Myanmar as a nexus in the region. But
by considering the web of conflicting dilemmas that now face a variety of the state,
sub-state, institutional, and private actors that will continue to affect the future
of Myanmar and the region, it may be possible to pose relevant questions, the
answers to which, however, may not be so readily forthcoming. But even if answers
may be obscured, employing dilemmas as the pivotal approach emphasizes the
dynamic of evolving relationships and tensions that pervade the region and its
variegated issues, and thus the need for continuing and sustained inquiry. The
formation of a new government in Myanmar in 2011 further complicates analysis
as it seeks to establish modified ground rules for governance with, perhaps, a more
diverse decision-making process, even if military domination continues.
These multiple, complex dilemmas are internal to both China and Myan
mar, to bilateral international relations both with Myanmar and between other

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states and institutions, within regional/international organizations such as

ASEAN and the United Nations, and in international triangular and other
complex geometric international configurations. The dilemmas extend to ten-
sions and relations within, between, and among ethnic groups, bureaucratic
institutions, the private sector, and political entities and organizations. Even
cataloguing the various elements in this policy jigsaw puzzle is daunting, yet
necessary if an accurate analysis of the region is to be essayed. Each of these
dilemmas, directly or obliquely, affects the future of the ChinaMyanmar rela-
tionship and thus the region. All are in need of assessment and re-assessment,
for such snapshots at any single point do not reflect the dynamism of far more
daunting and evolving dilemmas. This is especially evident in the Myanmar
transition to the new government in 2011, for no matter how apparent military
domination may be, some opposition views will be tolerated, or perhaps (if
censorship laws are revised) even broadly circulated, affecting the dynamic of
internal relationships. For the first time since 1962 political opposition voices
will be present in the various legislatures.
Perhaps to escape from an intellectual, frustrating maze, observers tend to
think in the singular. Thus, as the word military is grammatically singular,
we conceive of the Tatmadaw through a single lens as always united, as if
their unified command system reflects uniform beliefs, interests, and even
policies. We do the same with states, asking ourselves: What are Chinas,
Indias, or the U.S.s interests in Myanmar? rather than disaggregating various
relevant decision-making influences and their possible impacts. We even do
this with institutions composed of diversified components and interests, such
as ASEAN or the U.N., considering them as holistic entities. The problems
of policy formulation under this schematic approach, already so evident, are
compounded by the rarely questioned hypothesis that organizations are the
essential decision-making entities. Yet, there is ample evidence to question the
ubiquity of this assumption, for it seems obvious that in many circumstances
and societies, power and decision-making are highly personalized,1 affecting
both their process and its speed. This further complicates our understanding
of these already daunting dynamics.
We will begin by examining the varied interests of China in the Myanmar
relationship, and then move on to reciprocal Burmese interests and those from
other sources, as well as intimations from the new Myanmar administration.
1 Note the importance of the relationship between U Nu and Zhou Enlai, and later Ne Win.
See Chapter 2. For a general discussion of personalized power in Myanmar, see David
I. Steinberg, Burma/Myanmar: What Everyone Needs to Know, Oxford University Press,
2010, Chapter 7.

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 Dilemmas of Mutual Dependence in a Globalized World

Chinas Dilemmas: Internal and External

This volume has catalogued many of the national interests of China in as-
suring a stable, amicable relationship with Myanmar. International strategic
considerations, security issues of both traditional and non-traditional natures,
transit rights, access to natural resources and energy, markets, and other fac-
tors have been discussed throughout this volume.2 Reference has been made
to other, diverse Chinese interests, however, which although not in obvious
tension (but sometimes in surreptitious disagreement) with Beijings policies,
do influence, supplement, and direct it toward ends that might materially and
primarily benefit sub-national actors.
A sharp escalation of Beijings national interests and control has been
evident over the past several years. Beijings domination of national policy has
not always been so evident, as this volume has attempted to demonstrate, but
national interests now have become more focused and intense as Myanmar as-
sumes a greater role in Chinese strategic thinking, as we will discuss later.
At least five internal Chinese forces interact with Beijing on planning,
policies, and implementation related to Myanmar issues. These are: provincial
level concerns, especially those of Yunnan Province; xian (county) interests,
which may supplement provincial directions, and zhou (autonomous pre
fecture) minority relations; ministerial interests that provide added foci or
pressures on sectoral and other policies; business and commercial objectives;
and overall ethnic concerns. Entrepreneurial interests also affect policies in
various directions, advancing or inhibiting progress toward Chinese national
goals. One dilemma for the Chinese central administration has been managing
all of these multidirectional interests to support Beijings overall regional
strategy and its vision of its future relationship with Myanmar. As these
relationships grow and interests become reified, Beijing has begun to exert
stronger influence to ensure improved coordination.
Yunnans concerns about energy have been earlier discussed; it is a prime
consideration of Yunnans perceived economic needs. The potential benefits
of close relations with Myanmar have been a driving force for both its policies
and its pressures on Beijing. Not only has increasing access to Myanmars
energy profited Yunnan directly in terms of business, investment, energy
supply, and employment, it also enables Yunnan to benefit economically by
supplying other provinces in the region (Guangxi, Guizhou, etc.) with energy
they lack but need. Yunnan was a critical factor in advocating the Myanmar

2 See especially Chapter 9.

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oil pipeline and first proposed it, thus strongly influencing Beijings decision
to proceed. We have also demonstrated that Yunnanese trade is dependent on
Myanmar. Yunnans progress to rise from one of the poorer provinces of China
is also largely influenced by Myanmar relations. Should Beijings relationship
with Myanmar cool, or border insecurity result from internal Myanmar ethnic
discontent, Yunnan would be the first to suffer. Even more than Beijing, Yunnan
needs border tranquillity and access; innumerable trade and other delegations
from Kunming regularly attempt to ensure these conditions. But Beijing has
been reasserting its leadership in Myanmar relations. This is evident through
the 2009 decision to replace provincial border forces with PLA (Peoples
Liberation Army) units. Thus, Yunnans role has become secondary to Beijing.
Yunnan can no longer manipulate Beijing on key issues, since those factors are
now defined by Beijing and are beyond narrowly-defined provincial interests.3
Individual xian (counties) and zhou (autonomous prefectures) in Yunnan
have their own interests as well. Many are concerned both with the authorized
low-level border trade permitted with Myanmar, and also with the opportunities
for smuggling and concern over narcotics activities that immediately affect
their areas. They have demonstrated interests in gambling, and have profited
from the day-trip tourists that engaged in that activity across the Myanmar
frontier. The potential economic problem of refugees flooding into border
areas was amply illustrated in the August 2009 Kokang affair when 37,000 fled
into Yunnan. Although evidence is lacking, local officials may also be involved
in corruption tied to cross-border activities. This was certainly the case
involving Burmese military intelligence officials on the Myanmar side with the
October 2004 dismissal and trial of the former Prime Minister, General Khin
Nyunt, military intelligence chief, on such charges, although they are likely to
have been the ostensible, rather than the primary, reasons for his dismissal. As
Li notes, However, some county authorities in Yunnan province and some
Chinese companies have signed natural resource exploitation agreements with
cease-fire groups in the northern part of Myanmar. This phenomenon persists
even though Chinas central government forbids it.4
Economic activities of both a public and a private nature also affect the
relationship and push policies. Chinese state and provincial companies are
documented in Chapter 8 as adhering to the priority investment requirements

3 Personal Communication, Yun Sun, Brookings Institution.

4 Li Chenyang, The Policies of China and India Toward Myanmar. In Lex Rieffel (ed.),
Myanmar/Burma. Inside Challenges, Outside Interests. Washington, D.C. The Brookings
Institution, 2010, p. 127.

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of the Chinese government, and there are ample reasons for them to advocate
contracts and aid projects in which they would be the suppliers and employers,
as most Chinese infrastructure projects import Chinese labor for much of
their work. Private Chinese entrepreneurial activities are extensive through
legal investment, through often undocumented activities not reviewed by the
Myanmar Investment Commission, and through illegal trade.
Ministerial interests also vary. The Ministry of Defenses concerns over
strategic and security issues, especially related to India, and the capacity of
the Tatmadaw, are obvious. But the Ministry of Public Security (in Myanmar
called the Ministry of Home Affairs), controlling the police, have their anti-
narcotics focus and anti-smuggling assignments, while ministries connected
with overseas trade and investment have their assigned roles that they strongly
advocate. The Ministry of Health has concerns both about drug addiction and
the spread of HIV/AIDS, which has had its regional nexus in Myanmar, which
for a long period denied the problem. United States discussions with China
over Myanmar relations involve the Ministry of Foreign Affairs, and as tension
exists in Japan between its Foreign Ministry and its economic ministries over
whether to be responsive to U.S. pressures on Myanmar, the same has existed
to some degree in China.
Yunnan has emphasized its ethnic cultural diversity in its tourist relations.
Although ethnic groups and autonomous regions have no national power in
China, their ethnic cousins across the frontier in Myanmar share with them
some common concerns, interests, close relations, and sometimes economic
activities. Disquiet in ethnic regions in Myanmar would have impacts both on
ethnic groups in Yunnan and on the very structure and power relationships
among those cross-border groups, the most important of which are the Wa
(some 420,000 in Yunnan) and the Kachin ( Jingpo, as they are known in
China, or Jingpaw), totalling 150,010, Hmong/Miao 1,072,100, Lisu/Suso
679,600.5 The Xishuang Banna (Sip Song Banna) Autonomous Region in
Yunnan is Dai/Shan, and the Dai/Shan population of the province is 1,340,000.
The smuggling of arms to ethnic rebels in Myanmar by ethnic compatriots
in Yunnan has been well known in the past. Unrest among Myanmar border
groups that could spread into Yunnan itself could affect the safety of Chinese
infrastructure.
So the internal Chinese scene is highly complex. Beijing is no longer able
to control certain kinds of local interests and activities. Reports indicate that
5 Yunnan Yearbook 2009, Kunming: Yunnan Yearbook Press, 2009. p. 332. Figures are from
2008.

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Beijing has lost trust in Yunnans reporting, and has sent its own agents to
that province and to the Kachin and Wa regions because Yunnan has not ac-
curately analyzed or anticipated events and activities, some of which involve
cease-fire groups. Kunming authorities are also suspicious of some xian roles
and relations, which sometimes involve illegal activities. All those strained
relationships are supplemented by those of an entrepreneurial nature that af-
fect the position of the Chinese in Myanmar. Although there may not be room
for policies toward Myanmar at any of the local or institutional levels that are
intentionally antithetical to those of the central government, there has been
room for advocacy and pressures, both public and covert, and differing priori-
ties that have affected national policy directions, to which we now turn. How
to navigate these sometimes conflicting priorities and maintain appropriate
relations with a new government in Myanmar is critical for China.
Chinese external dilemmas in mainland Southeast Asia are multiple.
Extensive Chinese concerns about Vietnam and the South China Sea, over
which sovereignty and resource control have surfaced due to Chinese claims
against those of the littoral nations in the region, have become the most con-
tentious issue in the region.6 Chinese bilateral interests are presently focused
on Myanmar and its internal dynamic at the close of about a half-century of
military rule. This is not only due to Myanmars strategic position as a pil-
lar of Chinese Indian Ocean strategy, and not only because of the wealth of
Myanmar natural resources that China is efficiently extracting and exploiting,
but also because in any dispute with ASEAN over claims to the South China
Sea, Myanmars support to Chinese interests (together with those of Laos and
Cambodia) would be valuable in that consensus-driven body. This is not to
deny that Chinese influence in Cambodia, Laos, and Thailand are important,
but because of present resource control and direct border relations, Myanmar
seems of the highest immediate bilateral priority, although in the longer term
Vietnam (because of the South China Sea) and Indonesia may loom larger.
Following the 7 November 2010 elections and the movement into a civil-
ianized administration in which the military continues in its paramount role,
the Chinese will have to begin to adjust at central and local levels to a new type

6 Some influential Chinese believe the U.S. objection to Chinese interests in the South
China Sea (where even its name prejudges control) is because the U.S. wishes to con-
trol that region, and not simply ensure free navigation through it. In fact, the staple U.S.
policy in that area, and indeed in East Asia as a whole, has been to discourage any hegem-
onic power from control. This policy dates from the 19th-century open door policy on
China, through World War II, the Korean and Vietnam Wars, and the U.S. foreign aid
programs in that area.

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of administrative structure that will present a different set of dilemmas. The

previous junta command structure (before the new government was installed
in 2011) could make unquestioned, unannounced, and unclarified decisions
on Chinese-related issues. In the future, at both the central hluttaw (bicameral
parliament) level as well as at the levels of regional/state and lower adminis-
trative legislatures, even military domination may not result in unquestioned
acceptance of previous Chinese activities and interests. In addition to seven
regional hluttaws in the Burman areas, and seven ethnic-dominated states each
with its hluttaw, there are six local, semi-autonomous areas, each with a more
modest legislature. The most important and germane to the Chinese is the
Wa Division along the Chinese frontier. The space for parliamentary debate at
any level has already resulted in questioning some of the previously accepted,
centrally-approved Chinese activities (the Myitsone Dam), and these poten-
tial debates, should they be allowed to occur, could have negative impacts on
perceived Chinese interests.7 Indeed, in the Wa case, as well as in Kokang,
Naypyitaw could become concerned over too extensive Chinese interests.
A U.N. socio-economic survey of the Wa area indicated that Chinese seems
to be the principal language of instruction in most of the primary schools in
that region, and Chinese migration into that area is extensive (see Chapter 8).
Has Myanmar effectively lost sovereignty over this important region? Chinese
investment in that area is also extensive. Whether internal and alternative leg-
islative views will be able to be expressed to the general public are unknown.
The military may consider any criticism of any Chinese economic or other
role as against Myanmars national interests, and thus may attempt to censor or
control it, but it would continue to do so at some political and social costs that
might not be sustainable over time, and could result in increased minority ten-
sions. Centrifugal forces along the Chinese, Thai, and Indian frontiers are cre-
ating economic and social dependencies that effectively undercut Naypyitaws
authority.
Chinese infrastructure projects have been approved and built without
consideration of local attitudes or impact. The most important dam has been
the Myitsone Dam at the confluence of the Mayhka and Malihka Rivers that
form the Irrawaddy River Myanmars essential lifeline. With a reservoir the
size of the state of Singapore, it is to flood a sizeable Kachin population in an

7 One could well imagine strains developing at local levels as Chinese projects generally
employ Chinese, not local, labor. The Chinese have made disparaging remarks about the
low productivity and unreliability of Burmese, and they view their projects as designed to
employ Chinese.

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area that is regarded as a site of cultural importance. Protests have occurred and
some bombings have taken place in the vicinity of the construction. More than
the Kachin have mobilized against this construction, undertaken by the China
Power Investment Corporation. China would construct the dam at an initial
cost of US$3.6 billion, operate it for 50 years under a BOT transfer agreement,
and most of the electricity would go to China while Myanmar would collect
substantial revenues from it some US$54 billion over the 50 year period.
On 30 September, in a memo to the hluttaws, Myanmars President Thein
Sein announced to decide to suspend the Myitsone Dam during his tenure
(until 2015) because this project is against the will of the people. This is an
unprecedented concession to popular opinion unknown in half a century
of military rule. Is this a real and rare concession to the civil society in a
repressive country? Does it indicate an internal divergence (inside the military
or between it and the new government) over the countrys dependence on
China? Will the halted dam restart in future? (The Chinese believe it will not.)
Will the scenario of the Myitsone Dam spread to other major projects with
environmental impacts built by the Chinese, such as ChinaMyanmar oil and
gas pipeline, which have also been criticized for its potential adverse impact on
the environment?
Given the new upgraded ChinaMyanmar relationship to that of strategic
partnership during Myanmars President Thein Sein visited Beijing at the end
of May 2011 (see Appendix 5), the dams suspension is a blow to China. How
much in advance the Chinese were informed and at what level is still unclear.
Some observers believe that China was warned about volatile public opinion
in Myanmar, and refused to believe its relevance to state decision-making.
Regardless of the answers to these questions, this event reveals new dynamics
of Myanmars China policy and signals a possible breach of contract signed
by the former military government with China. Whatever the conclusion,
there are the high political risks and vulnerabilities facing Chinese investment
in Myanmars infrastructure sectors, and the negative impact on Burmese
attitudes toward the Chinese role in Myanmar society.
Beijing has considered carefully and reinforced its close relationship with
the Burmese military, and will no doubt hope to continue it. There have,
however, been rumors of Burmese dissatisfaction with some of the quality of
Chinese-supplied equipment. There also is evidence that the Chinese in the
recent past have officially been in contact with the civilian political opposi-
tion in Myanmar, and one dilemma for the Chinese might be how to strike a
balance between civilian, military, and minority leadership so that as the new
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government evolves, Chinese strategic interests will be protected. Aung San

Suu Kyi has indicated that friendship with China is important to Myanmar.
As we have extensively illustrated in this volume, Chinas strategic interests
on its southern flank are focused on Myanmar, and involve relations with India,
Pakistan, ASEAN, and Thailand, and more peripherally with the United States
through Myanmar. Chinese policy no doubt concentrates on ensuring that
a friendly government in Naypyitaw is maintained, for as Chinese interests
grow, and as they are solidified in infrastructure (pipelines, dams, etc.), they
need even more the acquiescence of a Burmese regime acquiescence that
could be reinforced through economic dominance. In a sense, as Chinas
interests expand and become more physically solid, its leverage decreases,
because China would have grave difficulty in abandoning its investments
should disagreements arise. The Burmese will recognize that the Chinese
need them as much as the Burmese have relied on the Chinese.8 But Myanmar
will no doubt recognize that they can only push China so far without exciting
potential problems. Thus, both the Burmese and the Chinese recognize the
need for tranquillity along their mutual frontier. The Chinese have thus tried
to mediate the dispute that led to the central Burmese invasion of the Kokang
cease-fire zone,9 and are said to have pressured both the Wa and Kachin, as
well as the Burmese, to reach some agreement on the Border Guard Forces
dilemma. The Chinese have exerted considerable pressure on the junta to
prevent disruption of their interests.
The Chinese, with major investments in such infrastructure, will want to
ensure that a regime favourable to them will continue to govern. To that end,
they have approached the Burmese and suggested reforms that would prevent
the rise of popular unrest and any future colored (e.g., saffron) revolution.10
As China has loosened some of the economic and local-level political stric-
tures in its country while still maintaining the control of an expanded and
more heterogeneous CCP, so in Myanmar the Chinese may be advocating
8 It is simple to invest in, for example, textile-clothing production, for the imported sew-
ing machines, equipment, and supplies can easily be removed if the political or economic
climate changes. With infrastructure, such as dams, roads, and pipelines, the sponsors are
in effect held hostage to the whims of the local government.
9 See Li Chenyang, Effects of the conflict between the ceasefire groups and the Myan-
mar military government in northern Myanmar on China since 2009, unpublished paper,
2010. No new armed forces conflicts in northern Myanmar broke out since September
2009 because of Chinas positive mediation.
10 Some in the West have questioned whether the wave of Middle Eastern unrest and dis-
satisfaction with dictatorial regimes could affect Myanmar. The 2010 elections may have
been a (temporary) safety valve on popular unrest, but for how long, unless significant
liberalization takes place, is obviously unknown.

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changes as a means for continued, more subtle, military domination. Whether

the new government under the 2008 constitution will fulfil this need cannot
yet be determined. There are Chinese who believe that some form of more
popular or pluralistic (even possibly democratic) pattern of governance may
develop in Myanmar over time, which could pose difficulties for China. Yet
this might be more to Beijings long-term advantage than a rigid Myanmar
political structure that could crack rather than bend. Yet the standard Western
hypothesis that democracy is somehow inevitable within calculable temporal
limits in Myanmar should not remain unquestioned.
The influx of Chinese, both legally but especially illegally, over which Beijing
has no control, could present problems for the Chinese state. In addition to
state-authorized and encouraged investment in selected fields (see Chapter 7),
the capacity of the Chinese to access private credit through clan and linguistic
connections, their knowledge of regional and international markets, and
their international networks give them a distinct economic advantage. Their
presence is an immediate economic advantage to China; but uncontrolled, their
roles could create political and diplomatic difficulties. The dilemma for China
is whether they can be subordinated to Beijing or Kunmings interests, and if so,
how. In contrast to the colonial period, there is no longer a major resident and
influential Indian community with which to compete for economic dominance.
If private Chinese (backed by state-sponsored economic aid and contracting)
were to be perceived by the Burmese as threatening their own (Burmese)
control over the economy, there could be dire reactions. If one were to predict
the composition of the rise of a middle class in Myanmar, it would likely to be
composed largely of higher-level military retirees and the Chinese and Sino
Burmans, and this itself may be an issue in future Burmese political stability.
The intense nationalism of the Burmans when the economy has been under
foreign control, as in the colonial and civilian periods and during the early days
of military rule, could result in anti-Chinese sentiment or even violence.11 The
newly-arrived Chinese in Myanmar today have not exhibited the sensitivity
toward Burman culture that is necessary for successful relationships and to
mitigate the discrepancies in wealth that are already so apparent. It is said that
more than 80 percent of the criminal acts in Yangon are committed by Chinese.
As a result, the people of Myanmar have an increasingly negative impression of

11 Although unlikely, a bloody popular rising against the government could result in a xeno-
phobic tirade that could force the evacuation of Chinese and even prompt Chinese inter-
vention. Lessons from the 2011 Libyan experience are probably a subject of interest and
study in China.

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the Chinese people and Chinese-funded businesses.12 But this impression may
be a product of a perceived lack of business ethics in the Burmese context and
sensitivity to Burmese culture.
Economists might argue that Chinas economic decentralization gives it a
global edge over India in the race for regional economic dominance. But this very
decentralization creates dilemmas for the Chinese in dealing with the diverse
and multiple aggressive economic forces that operate in and on Myanmar at
all levels. An example might be the gambling casinos that mushroomed on the
Myanmar side of the border but were frequented by the Chinese. Most have
subsequently been closed.
The issue of the Kokang cease-fire region and the easy defeat of its modest
forces by Naypyitaw in August 2009 points out the nature of the problem.
Although, Generally speaking, China supports Myanmars central government
to solve the problem of ceasefire groups and achieve national reunification
... The issue of the ceasefire groups in northern Myanmar is a touchstone of
SinoMyanmar relations. If the issues are not resolved, refugees, smuggling,
narcotics, and other problems will increase and could affect the rest of the
Chinese in Myanmar. Already in Kokang alone, eight Chinese alternative
cultivation projects have suffered losses of RMB31.23 million.13
China has in the past attempted to use its good relations with Burma/
Myanmar as an example to the region that China harbours no territorial
expansion intentions (see Chapter 3). Burma was to be the model, especially in
frontier dispute settlement, and for a period this was successful.14 The Cultural
Revolution ended that era, but the treatment of Myanmar in the context of
ASEAN may also be considered by the Chinese as a potential benign model.
Here again the balance of Chinese interests, but not domination, would be
important. Some ASEAN states advocated Myanmars admittance as a means
to stem Chinese influence. This has been an obvious failure. Perhaps some
in Myanmar may have advocated joining ASEAN to mitigate too extensive
Chinese penetration.
The Vietnamese are also concerned about Chinese influence in their coun-
try and the region. Having historically and more recently fought the Chinese,

12 Li Chenyang, Effects of the conflict, p. 127.

13 Ibid. In 2009 there were 119 Chinese enterprises in Myanmar carrying out alternative
cultivation projects, of which 89 are in the minority regions of the north. Total investment
in such projects is RMB1.2 billion, of which RMB264 million were in 50 projects in the
Wa area. Only one of these projects is insured by the Chinese government.
14 Some minority groups within China were against the border settlement.

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any expansion of Chinese influence in Myanmar is viewed as detrimental to

Vietnamese interests.
The impulse to forge stronger east-west regional ties with its neighbors, in
part, leads some Vietnamese to criticize Western human rights-motivated sanc-
tions against Burma: they feel that its isolation merely drives Myanmar further
toward China. The Vietnamese see Burmas growing military cooperation with
the PRC and call for the West to engage with Burma, as it has done with China
and Vietnam itself. One senior National Assembly official implored, You
Americans should pay attention to what is happening in Burma. Engagement
with Burma would have rub-off effects. You and Europe are wrong on Burma.15
Vietnam has begun to invest in Myanmar, and as relations have been strength-
ened direct flights have been inaugurated between Hanoi and Yangon. Vietnam
has been one of the strongest supporters of Myanmar in ASEAN.
The complex relationships that the U.S. have with China, and the variety
of policy issues on which negotiations are ever present, mean that Myanmar is
generally of a lower priority in the SinoU.S. bilateral dialogue. The U.S. has
no doubt approached the Chinese to use their good offices to convince the
junta to reform, and the Chinese response has been one of quiet diplomacy
with the Burmese, while the U.S., because of its transparent political process,
prefers public, and often heterogeneous, displays of concern or anger. Due to
nationalistic tendencies, the U.S. verbal abuse of the junta has been an eminently
unsuccessful tactic in attaining U.S. goals. The efficacy of the different, quiet
approach of Chinese influence has yet to be demonstrated. To what degree
should either approach be continued with a new Burmese administration in
place to achieve the aims of either China or the U.S. should be assessed.
Myanmar is not a central issue in SinoAmerican relations. In spite of
some residual Cold War attitudes, SinoU.S. potential rivalries in Myanmar
are not necessarily a zero-sum game. One dilemma for the Chinese is: what
degree of U.S. relations with Myanmar are in the Chinese national interests?
How do the triangular relationships among China, Myanmar, and the U.S.
serve or undercut Chinese security and its perceived role in the region? Is
the U.S. a rival of Chinese hegemonic interests in its southern littoral? The
Chinese quietly have not called for the exclusion of the U.S. from some role
in Myanmar. They have obviously attempted to improve BurmeseU.S.
relations, especially through arranging (under U.N. pressures) the meeting of
an American Deputy Assistant Secretary of State with three Burmese ministers
15 David M. Lampton. The Three Faces of Chinese Power. Berkeley: University of California
Press, 2008, p. 193.

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in Beijing in June 2007. China may have informally agreed that a resumption
of the U.S. economic aid program in Myanmar in 1979 was desirable. Some
U.S. interests in Myanmar have been beneficial for China, such as previous
anti-narcotics programs, as China has been very concerned about the spread of
narcotics in and through its territory.
Some Chinese officials have recognized that if Myanmar is to prosper and
become a modern, stable state that could be supportive of Chinas position in
Myanmar, neither China nor India separately or together can help Myanmar
achieve that goal. It will take the West, and especially the United States, to assist
in that process.16 And if a prosperous and stable Myanmar is in Chinas interests,
then on the one hand encouraging the Myanmar authorities to improve rela-
tions with the West would be quite appropriate, but on the other, too close an
association might deprive China of the influence it seeks to maintain in that
country. There are still in Chinese circles, and in the United States as well, rem-
nants of the Cold War syndrome. Some in the U.S. fear a Chinese expansionist
potential and enhanced Chinese military capacities, especially a blue-water
navy with access to the Indian Ocean and the Bay of Bengal. Many Chinese
believe that the U.S. is still intent on a containment policy toward China, and
one place to prevent that is in Myanmar. A major issue for the Chinese is how
to balance their needs and position in Myanmar against a potential role for
the U.S. with the new Burmese regime that would ensure continued Chinese
access to its Myanmar interests, while using U.S.Myanmar relations to help
improve the lot of the Burmese peoples to prevent any potential danger to the
Myanmar government from popular unrest. China wants two things from U.S.
Myanmar relations: China wants the U.S. to improve relations with Myanmar
to the extent that China will no longer be criticized for the poor political record
of Naypyitaw; and China wants U.S. investment to improve the Burmese
economy and to share that burden with China. Yet China does not want that
relationship to be too close, and if given the choice, would prefer the status quo,
which allows more room for Chinese manipulation.17 The rapidity with which
the U.S. Obama administration is moving to improve relations with Myanmar,
with the nomination and confirmation of a U.S. special ambassadorial coordina-
tor for Myanmar policy and his several trips to Myanmar, and then with the visit
of U.S. Secretary of State Clinton (coupled with stopping construction on the
Myitsone Dam) all have prompted more intense Chinese concerns over what it
regards as the U.S. containment policy toward China.
16 Discussions at a Chinese conference on Myanmar, June 2010.
17 Personal communication, Yun Sun, Brookings Institution.

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China must also deal with its ASEAN relationship, which until recently
has been eminently successful. Delayed negotiations on the South China Sea
(which changed in 2010 when China reasserted its claim to primacy in that
area), the free trade zone plan, and detailed bilateral relations have given China
an edge in ASEAN that Japan has lost and the U.S. never had. Yet, Chinas role
in Myanmar could jeopardize that relationship should China appear too ag-
gressive in that country. At the time that Myanmar joined ASEAN in July 1997,
some member states advocated that move in the hope that membership in
ASEAN would tend to mitigate Myanmars dependence on China and Chinas
influence in that country. Myanmar, however, in its nationalistic stance, may
not only have wanted to acquire increased investment from the ASEAN states
and obtain a modicum of legitimacy from joining, it may also have considered
the reverse: Myanmar may have wanted to join ASEAN to limit Chinese influ-
ence, although this hypothesis is undocumented.

Myanmars Five Dilemmas

The approaches to and the methods by which the Burmese leadership will deal
with four general internal Burmese dilemmas, and one directly related to China,
will profoundly influence the future of the state and Chinese relations. These
generalized issues are: (1) the role of minorities in the distribution of national
assets and power, and thus the question of border and internal tranquillity; (2)
the degree to which the authorities are prepared to open the society to a flow
of information and ideas from both internal and external sources, including
China; (3) the degree to which rational economic policies can be initiated
and pursued; (4) an adherence to the 2008 constitution that an independent
judiciary, and through it the rule of law (and predictable, if not limited,
corruption) could be instituted. Each of these issues affects the relationship
with the Chinese. The fifth, specifically Chinese, issue that has not yet been
addressed is the question of controls on private Chinese entrepreneurship in
and immigration into Myanmar. These questions cannot simply be ignored,
citing constitutional rhetoric as resolving the problems, for they are likely to
fester and become more acute if unaddressed.
Minority problems are the single most enduring and perplexing issue that
has faced the state since independence; they are also likely to be the issues of
greatest importance in the Chinese relationship.18 The Sino-Burmese border,

18 The authors would argue that although international attention to Myanmar has focused
on political and human rights, the most enduring problem facing any state administration
is the minority question.

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so carefully negotiated over many years and regarded as a triumph by both

sides, is ethnically arbitrary, and the stability of those border peoples will affect
the bilateral relations. This was apparent in the case of the Kokang in 2009,
when 37,000 refugees fled into Yunnan to the chagrin of the Chinese, and
was apparent in 2010 when Wa and the Kachin had grave problems with the
Myanmar authorities plan to convert their troops into Border Guard Forces,
and thus castrating their capacity for rebellion or more autonomy.19 The final
decision on this issue, after about two years in which a series of deadlines were
passed without resolution of the problem in the Wa, Kachin, and other areas,
had been postponed until the 2011 government was in place under the 2008
constitution, and since has been further set aside. This issue remains explosive.
The Chinese are said to have pressured the junta to avoid confrontations with
the Wa and Kachin. In 1990 the Chinese government issued its Regulations
on Specific Policies toward Myanmars Armed Ethnic Minority Groups,
declaring that China would give no political recognition, military support, or
economic assistance to the armed ethnic minorities but would regard them as
Myanmars local authorities temporarily conducting general business based on
the actual situation.20
Not only do a variety of ethnic peoples with sizeable populations straddle the
border, many of the Chinese infrastructure projects pass through or are located
in their regions. The two pipelines and some dams are thus vulnerable should the
central Myanmar authorities and the minorities revert to armed struggles. Thus,
stable and peaceful minority relations are essential to Chinese interests even
though some Chinese businesses and others have made extraction agreements
with rebel groups, agreements that allow such cease-fire organizations to maintain
themselves and their armies. The dilemma facing every Burmese government
since independence has been how to maintain a veritable Union of Burma or
later, Myanmar.
No Burmese government has effectively resolved that issue, and although
no major minority group or faction now seeks independence (and the pri-
mary slogan and self-designated task of the Tatmadaw is national unity), many
have called for various types of federalism that to the military are anathema.

19 The Burmese proposed that that the total Wa contingent of the Burma Guard Forces
would be two battalions, or about 700 men. The Wa now command between 15,000
25,000 men, and thus the Burmese proposal was clearly unacceptable.
20 Li Chenyang, Effects of the conflict, p. 119, based on an article by Yu Jiang and Wang
Chaozuo, Reflections on policy cooperation with Myanmar local minority armed forces
in Sino-Myanmar border management, Journal of Yunnan Public Security College, No. 1
(2001) p. 6771.

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The 2008 constitution does call for more local government than any previ-
ous Burmese administration has granted to the minorities (but is explicitly
against any secession), but this may not be sufficient to assuage their interests,
for as nationalism has grown in Myanmar and among Burmans, it has also
grown among various minority groups. The relationship between China and
Myanmar in a sense is held hostage to the tranquillity of the minority regions.
Although China may be faulted for some controls on information flows in
its country, those in Myanmar are far more severe. If Myanmar is to achieve
a degree of prosperity and development and assuage popular unrest, it will
need to deal with the issue of a freer flow of information. This is essential for
economic growth and thus is in Chinese interests. Yet each Burmese regime
has had problems to some degree with this issue, and after a half-century of
censorship, it may be difficult for the new government to open to internal and
external criticism. How much political debate in legislatures will be available
in the public media is an issue. The wall against foreign influences has long
been breached, and government attempts to suppress free exchanges of views
will be increasingly viewed as archaic, ineffective, and self-defeating. First,
tentative steps were taken in May 2011 that allowed public, direct criticism of
state policies for the first time in perhaps a half-century, even in front of the
President. Such relative freedom, however, is new, and although censorship has
been relaxed, the internet is now open, and some foreign journalists have been
allowed in, controls still exist, although positive changes are evident.
Economic rationality and predictability are essential for economic growth
and more directly for China for the operations of Chinese investment. Controls
on, and the predictability of, corruption levels is essential for successful foreign
investments and those of the overseas Chinese. Myanmar has been listed by
Transparency International as the second most corrupt state in the world, and
while such a designation may be questioned as to its accuracy, all evidence
indicates that the situation is severe and uncontrolled. President Thein Sein in
2011 has publicly recognized the importance of the issue. Corruption is also a
delegitimizing element that could prompt unrest as well. China has officially
indicated that Myanmar is a country of high political uncertainty in terms of
Chinese investment potential (eight out of nine on a nine-point political risk
scale), and yet has encouraged it for Chinas national interests.
An independent judiciary, as specified in the 2008 constitution, is also re-
quired if there is to be an autonomous arbitration platform on which industrial
disputes can be adjudicated, and if immigrant Chinese are to be assured of their
rights and duties. The new administration might do well to reconsider its 1982

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citizenship law that limits foreigners, even those who have lived in Burma/
Myanmar for generations, to certain positions and rights. Although personal
relations are likely to guide and resolve disputes, even those of an international
nature, the need for the predictability of rules and processes is required. Under
the SLORC/SPDC, policy trumped law and regulations, which were often
changed suddenly, arbitrarily, and seemingly by whim. This has hindered for-
eign investment, as obviously have sanctions, but in the long run the former
may be more destructive. Aung San Suu Kyi has stressed the need for the rule of
law.
The Burmese have also to deal with the obvious and pervasive influence
of private Chinese business. Negative comments have been frequently heard
within the country about of the loss of Burmese businesses. The lack of capital
available to the private sector through the Burmese banking system, unless
changed, will mean the continuing and increasing domination of business by
the Chinese community. Some estimate that 60 percent of the business private
sector (excluding agriculture) is in Chinese hands. This could lead to political
instability and the spectre of heightened anti-Chinese nationalistic sentiment.
In a sense, then, those dilemmas that Myanmar faces in relations with the
Chinese state and its various manifestations are those that other foreign
investors face, and indeed the indigenous population as well.
Myanmar officials have proudly proclaimed through a variety of media,
fora, and personal conversations that they do not need the outside world; they
have rice and resources and have gone it alone for several decades and could do
it again if necessary. Although only partly accurate in an earlier era, this bravado
no longer relates to the reality of changing times, conditions, communications
technology, and the expectations of much of the urban Burmese population.
Myanmar, perhaps against its will and its attempts at censorship and the control
of information, is part of the region. The dilemma for the new government in
the post 2010 period is how to balance the requirement for outside relations,
and the multitude of aid and other relationships, against the need for the
military to feel that they are fulfilling their self-identified role of protectors of
the state and national unity. In a singular sense, the opening of Myanmar to
external influences will do more to mitigate excessive Chinese influence than
any other single approach.
In Thailand, there has been a palpable shift in the rural Buddhist population
as to its increased expectations of central government delivery of goods and
services. This has occurred in a country that like Burma/Myanmar, where
traditional Buddhist karmic concepts have predominated: the socio-economic

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status of an individual is dependent on previous incarnations, not on the states

delivery of goods and services. All Myanmar governments at all levels will have
to resolve the dilemma of anticipating this likely change over time in order to
retain public order and legitimacy.
The dilemma of too great a reliance on China prompted Myanmar to en-
courage closer ties with and assistance from India. It is likely that similar con-
siderations prompted them to make modest gestures to the United States as the
Obama administration considered re-examination of the U.S. policy toward
Myanmar. So one of the prime dilemmas for any new Myanmar government is
the degree to which they are prepared to make concessions for better Western
relations to maintain (or perhaps better, regain) the traditional neutralism
that had been a hallmark of Burma during the Cold War. The degree to which
openings to the West might prompt internal political questions or ferment
must also be on the minds of the Burmese leadership. Whether improved rela-
tions with the U.S. might jeopardize Chinese support (or perhaps increase it)
should be of Burmese concern.
The Burmese face a variety of other dilemmas as well. How much should
the political opposition cooperate with the government, and the government
with the opposition? To do the former might result in their cooptation, but to
avoid participation would result in their further marginalization. The National
League for Democracy faced this problem in April 2010, when it decided against
registering in the planned 2010 elections.21 Its executive committee made this
decision based on the predilections of Aung San Suu Kyi. In an effort to reach
out to the opposition, the government changed the political party registration
laws that enabled to NLD to re-register as a legal party, and Aung San Suu Kyi
then indicated her interest in running for a hluttaw seat in the by-elections called
for those positions vacated when their incumbents became ministers. The eth-
nic groups have had a set of similar problems to agree to the stringent regula-
tions of the Border Guard Forces plan, or to threaten to return to insurrection
and revert to the jungle. They and Naypyitaw have been under strong pressure
from the Chinese to negotiate some face-saving compromise, and a new agree-
ment has wisely set aside the problem, at least for the time being. How will the
expatriate Burmese react to the elections and the new government? To attempt
to participate may give some of them marginal influence, but compromise their
principles, while eschewing all contacts will only continue their isolation and

21 In May 2011, the NLD had decided not to re-register for the by-elections eventually held
on 1 April 2012 (Yangon, personal communication). It later reconsidered, and was of-
ficially registered on 5 January 2012.

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exile. The president has stipulated that those Burmese who have committed no
crimes are invited back. There are no easy answers here.
There is the distinct possibility that, for a period, the new Burmese gov-
ernment will deny the existence of any of these dilemmas, even though they
may be apparent to external observers and have longer range impacts. The
Burman leadership may remain content in both their accomplishments and
prospects. Hypothetically, they might argue that the SLORC/SPDC has built
more infrastructure than all previous governments since independence, has
grown foreign exchange reserves from US$30 million to about US$5 billion,
has constructed a new capital, and has given the minorities more local control
than they ever have had since pre-colonial times. The prospects, they might
continue, look equally positive, with considerable revenue from Chinese
contracts and investment, from Indian support, sale of gas to Thailand, and
the natural resources of the country. Although in some Western circles the
government may still be called a pariah, they might argue, this will not affect
the future of the new administration. Such a view would be short-sighted, for
globalization has not only brought wealth and power to some, it will intensify
socio-political and economic demands on the state that it myopically may not
recognize and increase income disparities, to the detriment of the people as a
whole and to the future of the anticipated power structure. Yet the new admin-
istration, under presidential leadership, has engaged in the beginnings of an
anti-poverty campaign, one that is unprecedented under military leadership.
Macro-economic policies are also being re-examined. Foreign observers will
watch these developments very carefully.
The dilemmas of the Sino-Burmese relationship also may have impacts on
three major external states: the United States, India, and Japan.

U.S. Dilemmas
The dilemma for the United States, clearly influencing Sino-Burmese rela-
tions, is the degree to which it is prepared to exert whatever residual influence
it may have on Myanmar for reforms, while at the same time not jeopardizing
U.S.China relations. If Myanmar is a boutique issue in the U.S., and thus not
one on which any administration is prepared to expend a great deal of political
capital, it seems far more important to the Chinese in spite of Myanmars very
low percentage of Chinas international trade.22 Any move by the U.S. admin-
istration to normalize fully economic and diplomatic ties (raising the level of

22 See David I. Steinberg, The United States and Myanmar, pp. 175194.

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representation in Myanmar back to an ambassadorial level, alleviating the

sanctions regimen, etc.) was likely to be met by strong moral criticism from
the opposition, human rights groups, the Burmese expatriate community, and
more widely in the Congress, unless there were significant changes in Myanmar
and agreement by Aung San Suu Kyi that she endorsed those changes. After the
release of additional political prisoners in January 2012, the U.S. announced it
would nominate an ambassador to Myanmar. Although the U.S. legally must in-
voke the mantra that Myanmar is a threat to U.S. interests and national security
to approve sanctions, patently that is not the case and is simply a required bu-
reaucratic mechanism by which any administration can inaugurate or continue
those policies.23 At the same time, should it back to vociferously the reformers
and discredit their nationalistic credentials, this could cause a local backlash
against reform measures.
The Obama administration has formulated its new policy toward Myanmar
by advocating pragmatic engagement, which simply recognizes the internal
U.S. political realities sanctions will remain but high-level dialogue will con-
tinue. The influence of Aung San Suu Kyi has been dominant in U.S. policy
formulation and continuation.24
To date, stark and important as are the differences between Chinese and
U.S. policies toward Myanmar, they have been at best a minor irritant in
that critical relationship. A modest public outcry against Chinese support to
the junta has been evident, and even in one case a congressman introduced
legislation, which was not included in the bill that passed, to impose sanctions
on China if it did not stop military support to the junta. Yet a new era exists in
Myanmar as a result of the 2010 elections.
Insofar as the U.S. and the West in general have negative predilections about
contemporary military regimes, then a longer range perspective may be called
for. Any military that has pre-empted all avenues of social mobility in a society
will lose influence and retire to barracks only when other significant non-
militarily controlled avenues of mobility open up (the private sector, academia,
civil society, even politics) and dominate. This will require a considerable
period, but if U.S. policy has that as a goal, then the dilemma for the U.S. at
the present time is how to foster such evolutionary changes without creating an
American political backlash against any such, obviously longer-range, programs.
23 See Thihan Myo Nyun, Feeling Good or Doing Good: Inefficiency of the U.S. Unilateral
Sanctions Against the Military Government of Burma/Myanmar. Washington University
Global Studies Law Review. Vol. 7:455, 2008, pp. 46970.
24 See David I. Steinberg, Aung San Suu Kyi and U.S. Policy Toward Burma/Myanmar.
Journal of Current Southeast Asian Affairs, September 2010.

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And how can or should the U.S. attempt to broaden the militarys world vision?
Under both civilian and military governments in Burma/Myanmar, the U.S.
supported an extensive IMET (international military and education training)
program that was stopped after the coup of 1988. About two-thirds of the
Burmese military who go abroad are, however, now trained in China. Aung San
Suu Kyi has continuously said that the Burmese must solve their own problems.
The U.S. has already indicated that the 2010 elections and the 2011 govern-
ment are not considered legitimate, although it has intensified relations with
the visit of the Secretary of State which itself has created another dilemma
for the U.S., but the Chinese (along with India, ASEAN, and the U.N.) claim
progress, even if modest, and thus will continue to work with the new govern-
ment. Anecdotal evidence indicates that the Chinese were pleased with the
election results. Should the new Burmese administration engage in significant
economic reforms, such as (required by ASEAN) to unify its foreign exchange
rate in 2012, and take other economic reform steps, the U.S. may find itself
faced with the problem of demonstrating approval of the economic progress
while still denouncing the legitimacy of the newly elected government because
the elections were not deemed free, fair, and inclusive. The U.S. is caught in
the dilemma of maintaining that position while Aung San Suu Kyi has agreed
to run for a hluttaw seat under a government declared illegitimate by the U.S.
The question of the release of political prisoners is important, but the
various numbers (up to 2,200) are in dispute; yet major, continuing releases
are the sine qua non of better relations. A more rational economic system
together with a controlled political process would invite comparisons between
Myanmar and China, but to the detriment of China because Myanmar will
have a multiple political party system (no matter how ineffective), while China
(as well as Vietnam and Laos) have proclaimed single party dictatorships
(even if China has opened wide the CCP). The release of political prisoners
including Aung San Suu Kyi was obviously required for any U.S. policy shift,
but it has become evident that that alone has not been sufficient.
In 2011, there have been strong forces within the U.S. (less in the execu-
tive branch) for increased sanctions, especially targeted on high-level Burmese
bank accounts. An ambassadorial level coordinator for Burma has been nomi-
nated and approved and is in office and has been appropriately welcomed in
Naypyitaw on several occasions, and the U.S. has agreed to a potential U.N.
commission of inquiry to explore whether the military has committed crimes
against humanity. If instituted, this would only increase military suspicions of
U.S. intent.
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Regional Actors
The economic malaise in which Japan has festered and the loss of its mo-
mentum in Southeast Asia has affected its role in Myanmar. But the issue is
more complex. Although the Japanese media have blamed various Japanese
governments for its loss of influence in Myanmar, they neglect the impor-
tance of personal relations. Because Ne Win (along with Aung San) was one
of the thirty comrades trained by the Japanese to fight against the British
before World War II reached Asia, his personal relationship with the various
Japanese administrations was close. Economic assistance poured in, and
Japanese officials had relatively easy access to him as president, prime minister,
commander-in-chief of the army, and chair of the Burma Socialist Programme
Party. Following the coup of 1988, when he was in retirement, he seems to
have still wielded considerable influence on critical decisions (the ousting of
General Saw Maung, for example25) until his decline through ageing and his
house arrest. Japanese influence after 1988 was eclipsed by China because in
large part Japanese relations were built on a personal engagement with General
Ne Win, and the Japanese economic malaise.
The Japanese had other reasons for involvement. One was an emotional
attachment to Myanmar based on their World War II experiences and heavy
losses there (some two-thirds of Japanese troops in the Burma campaign died
there). Another was potential access to Myanmars extensive natural resources.
Japan is likely to become a major investor in the Dawei Ital-Thai project.
More important was the perceived need to counter Chinese influence through
competition on foreign assistance. This was in fact bound to fail because
Japan could not supply the armaments that the Tatmadaw wanted. But the
relationships between Myanmar and China materially strengthened China,
this has the Japanese government concerned. It is highly likely that Japan will
resume its foreign assistance program to Myanmar.
As previously demonstrated (Chapter 9), India also has security needs
to mitigate Chinese influence, as well as to protect and develop its Northeast
region which is primary is disputed. So the shift in Indian policy in 1993 from
antipathy toward the junta to provision of foreign aid and high-level diplomatic
and military visits simply was a reflection of geo-political reality. The dilemma
for India is how much they might be prepared to invest in Myanmar, and
whether their perceived goal of balancing China, or at least moderating Chinas
internal role in Myanmar, is sustainable. How much internal political pressure

25 Personal interview, Yangon.

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 Dilemmas of Mutual Dependence in a Globalized World

on its Myanmar policy will be put on any Indian administration as the largest
democracy in the world, and how would that government respond? Whether
the close assistance relationship with Myanmar will positively have impacts
on Indias turbulent Northeast region is as yet unclear. This is, however, a high
Indian priority.
In turn, ASEAN and the U.N. must decide how strong a position each
might take related to any continuing repression in Myanmar and the inability
or disinterest of its government in improving the welfare of its diverse peoples.
Secretary General Ban Ki Moon has been twice insulted by Senior General
Than Shwe. ASEAN has a new Charter as of 20072008 that contains human
rights and other provisions that are unenforceable but might serve as sign posts
for positive change. The various countries in ASEAN have strongly differed in
their assessment of the problems of Myanmar. Each has it own problems with
human rights or has a checkered heritage in that regard. Although ASEAN may
have the most positive foreign influence on Myanmar policies, it is likely to be
reduced to bland statements in spite of its Charter containing human rights
provisions. Non-interference in any members internal affairs still remains its
modus operandi. Myanmar has indicated interest in hosting ASEAN in 2014,
and in late 2011 ASEAN approved of that decision. The dilemma for the U.S.
is whether it would attend, but between the decision and 2014 there will be a
U.S. election, and any executive branch will watch closely the degree to which
reforms in Myanmar continue.
There are, in addition, the dilemmas of the expatriate Burmese community,
stalwart in their demands for internal freedom and political changes. How
will they react to the evolving patterns of internal and external Burmese
relationships, and what impact might they continue to have on the U.S.
decision-making process related to Myanmar? International human-rights
groups too will need to assess whether any changes that occur are significant
enough to cause reconsideration of their positions toward the country.
The multiple dilemmas facing all the significant actors in the evolving
drama of change in Myanmar, and Chinese relations with it, should prompt
more nuanced policy considerations among all parties than has been evidenced
to date. Not all those states, administrations, and institutions involved in
ChinaMyanmar relations will be able to achieve their maximum objectives,
but recognition that dialogue at all levels may clarify the dilemmas and their
choices is a minimum requirement.
Myanmar is on the cusp of administrative change, if not in power relation-
ships. Military control will continue, but administrative change, and change in

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the generation of military leadership, may mitigate some problems or exacer-

bate tensions and force reconsideration of relationships and activities on the
part of the diverse Sino-Burmese actors and their international relationships.
We may hope for the former. But we should be prepared for the latter the
following Burmese proverb is still relevant: May we be spared the misfortunes
that arise from a changing of kings.26

ChinaMyanmar Relations under Discipline-Flourishing

Democracy
Upon the inauguration of the new Burmese government at the end of March
2011, the Chinese government spokesman of the Chinese Foreign Ministry, in
answer to a press question, said:
We congratulate Myanmar on its democratic process and inauguration of
the newly elected leader. China respects the development path chosen by
the Myanmar people based on its national conditions and hopes Myanmar
will maintain stability, steadily push forward its democratic process and fi-
nally achieve democracy and development. When it comes to international
relations, China has always upheld respecting the development paths cho-
sen by the peoples and disapproved imposing sanctions or exerting pres-
sure. We hope the international community will create a lenient environ-
ment for Myanmars national reconciliation and economic development.27

The elections obviously reassured the Chinese leadership. Whether they were
free and fair seems to have been less important than that they were tranquil.
Even the simple fact of having held them may have prevented any residual
influence from contemporary Middle Eastern Arab spring popular unrest.
Certainly, the continuity of much of the Burmese military leadership in mufti
must also have reassured the Chinese that their interests would be protected.
New developments in SinoMyanmar ties have emerged, intensifying
relationships. Myanmar has become a comprehensive, strategic cooperative
partner (see appendix 5), a term never previously used. This is likely a result
not only of the exploitation of Burmese resources, but also, and now perhaps
even more important in Chinese military and security terms, the development
of a two-ocean naval strategy, now a publicly stated Chinese policy. The Sino-

26 Quoted in Andrew Selth, CivilMilitary Relations in Burma: Portents, Predictions and Pos-
sibilities. Brisbane: Griffith University, Griffith Asia Institute, Regional Outlook Paper 25,
2010.
27 Ministry of Foreign Affairs spokesperson Jiang Yu, 31 March 2011.

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Burmese oil and gas pipelines and KyaukphyuRuili highway and railroad are
concrete demonstrations of the strategic cooperative partnership between
the two countries. Although Chinese point out that the phrase involving the
comprehensive strategic partnership has been used in a number of Chinese
relationships, this is the first time it has been used with Myanmar, and was
significant. How the Myitsone Dam decision will affect its implementation is
of great interest. Strengthened U.S. cooperation with Pakistan, and turmoil in
that country, may prompt China to believe that Pakistan is not as reliable an
ally as it once was. Improved IndianU.S. relationships are also of concern.
Thus Myanmar becomes even more important in the context of an Indian
Ocean strategy.
The Chinese military have pursued closer ties. The Vice Chair of the Central
Military Commission visited Myanmar in May 2011, emphasizing Chinese
training, supply, and strategic cooperation with the Myanmar Tatmadaw. The
Chengdu Military Region (in charge of South Asia, Tibet, southwest China
and Myanmar28) commander also visited and in August 2010 two Chinese
missile destroyers called at Yangon. President Thein Sein went to Beijing on
his first foreign trip after his inauguration, picking up a US$745 million credit
package. There is an unmistakable intensification of the relationship, which has
been generally neglected in official U.S. and Western discourse on Myanmar.29
Yet, internally, if the Myanmar Pandoras box of pluralism is not yet open,
the taut bindings have been loosened, and resecuring them may be difficult if
the leadership were to feel it necessary, and even if constitutional provisions
exist for the military to do so. Several questions occur. How much voice will
the people of any ethnicity have and over what issues? The cessation of the
construction of the Myitsone Dam in the Kachin State, prompted by local
and national concerns, may be just the first of other questions on Chinese
construction projects. Will the military in the party have divergent views from
the military in uniform, as happened in the socialist era? How will the regional
military commands relate to local legislatures, especially in border regions,
since this is not spelled out in the constitution? Can the new administration
assuage popular dissatisfaction with the conditions of life and livelihood of
the population, even though the new president, Thein Sein, has indicated his
interest in doing so in his inaugural speech? These and many more issues will
test the SinoMyanmar relationship, as well as those in the region and beyond.

28 The Guangzhou Military Region and the South Sea Fleet cover the rest of Southeast Asia.
29 We are indebted to Yun Sun of the Brookings Institution for comments and ideas on this
section.

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 Modern ChinaMyanmar Relations

The Chinese ties will also be subject to strain. The new Myanmar ad-
ministration has in unmistakeable terms signalled a desire for improved U.S.
relations, perhaps to mitigate overdependence on China. How the increasingly
close relationships with China will affect Myanmar, the region, and the U.S. is
of importance to all elements, and will be increasingly analyzed.

Coda
To many external observers of the Myanmar scene, in the more than two dec-
ades since the failed peoples revolution of 1988 and the re-imposition of direct
military rule, only glacial change seemed apparent in that country. This atti-
tude was especially prevalent among those who had called for immediate and
liberalized shifts in the fundamental Burmese power configurations that have
remained relatively constant. That perception, however, was never accurate.
The continuity of pervasive and continuous authoritarian military rule masked
subtle modifications in that society modifications that have become obvious
in 2011 since the inauguration of a new Myanmar civilianized administration.
The year 2011 also witnessed the Arab Spring series of popular revolts and
demonstrations against authoritarian regimes in the Middle East. Although they
are unlikely to have been the impetus for reforms in Myanmar, for the timing of
the inauguration of the new Myanmar President came before most such dem-
onstrations peaked, the changes in Myanmar, in contrast, significantly stemmed
from a decision by the top leadership that some systemic modifications were
necessary. Although not unique in Asia, Myanmar is unusual in the Asian
context as liberalization, sometimes called authoritarian reform, emanated
from the top; the leadership moved in more liberal directions without being
directly and immediately threatened from below. The new Myanmar govern-
ment would likely have been given a honeymoon period even without the
announced reforms, for some opposition was officially allowed and somewhat
articulate. Perhaps the Middle East spectacle, however, may have spurred the
Myanmar leadership on.
Since 2011 and the inaugural speech of President Thein Sein at the end
of March, changes and planned changes have been and are continuously
occurring at a rapid rate that even the most seasoned observers, foreign and
domestic, have found unexpected. As this volume goes to press in early 2012,
internal modifications in governmental affairs are incomplete and external
relations constantly in flux.
Most important in terms of relations with China has been, of course, the tem-
porary termination of construction of the Chinese-sponsored Myitsone Dam

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 Dilemmas of Mutual Dependence in a Globalized World

Plate 12: President Thein Sein meets with U.S. Secretary of State Hillary Clinton, Naypyitaw, 2011
(photograph courtesy U.S. State Department)

through 2015 (although the Chinese believe this stoppage will be permanent),
which had been estimated to cost some US$3.6 billion and on which the Chinese
had already spend US$42.5 million. They will have to be reimbursed for their sunk
costs in any case. The repercussions of the Myitsone Dam decision by President
Thein Sein are still being assessed. The president of the Chinese construction
firm has made an elaborate statement on the studies that have gone into ensuring
environmental safeguards and social considerations, but these are questioned.
The Chinese, to ease relations, have newly changed the status of the project from
one of a bilateral governmental project to a commercial enterprise, thus easing
diplomatic tensions. This expression of Burmese nationalism will affect the level
of trust between the two governments. Although such an action caused much
anxiety in the bilateral relationship, this will not destroy Sino-Burmese relations,
as each side has too much invested in it. Although the Chinese may suspect that
the impetus from this was engendered by the U.S. (through civil society sup-
ported in part by the U.S.) as part of a vast U.S. Asia-wide plan to contain China
(and included in this assessment was the visit of the U.S. Secretary of State to
Myanmar), the impetus for this action came from Burmese resentment of the
dam and may be part of a Burmese effort to restore a semblance of neutralism
to its foreign policy a position that has a long history since Burmese independ-
ence, but always, as we have earlier noted, in Chinas shadow.
Some Burmese and foreign environmentalists want to expand their success
to other foreign-supported projects, including the Thai offshore gas pipeline.

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How much internal dissidence the authorities will tolerate on any vital national
concern is an issue, but the government is vulnerable on the absence of
internationally acceptable environmental studies on many major projects, and
pressures are likely to continue. Although the role of indigenous civil society
(for which there earlier was no word in Burmese) cannot legally threaten the
governmental structure, it has become far more important in Myanmar than
heretofore.
This search for a more balanced U.S. foreign policy was also evident in
the visit 12 December 2011 of U.S. Secretary of State Hillary Clinton, a trip
that was the culmination of a series of visits by high-ranking U.S. officials, all
of which have served to support the reform agenda of President Thein Sein,
and were so intended. This reform agenda, which still in its infancy at the
close of 2011, is broader than many might have imagined. It includes relaxed
censorship, regulations on forming free trade unions, the right to protest
with government notification and approval, the formation of a human rights
commission, revisions in regulations on political party registration that has
allowed the National League for Democracy to re-register and compete in by-
elections, and effective dialogue with Aung San Suu Kyi, who indicated her
intention to run for a hluttaw seat.
If Secretary Clintons trip was the acme of U.S. visits, others followed.
French Minister of Foreign and European Affairs Alain Juppe and British
Foreign Secretary William Hague both visited in January 2012, along with
U.S. Congressional leaders. The apparent opening of Myanmar has attracted a
variety of influential foreign visitors at numbers and rates unprecedented in a
half a century.
President Thein Sein has also called for the formation of a Myanmar
Development and Resource Institute that would have three components:
economics, political affairs, and law. Many reforms of an economic nature are
on the agenda under the Institute; among them is a unified currency exchange
rate, and the IMF has been brought in to consult on it. Japan has dispatched
investment and economic missions to Myanmar to support the establishment
of market economy and consider ODA programs. More attention is being
paid to agriculture. The banking system is under review. The President has
recognized the need for major improvements in education and health care
services, and in relation to poverty and the minorities. Corruption, estimated
as the second most prevalent in the world by Transparency International, is
under presidential scrutiny. Aung San Suu Kyi has stressed the need for the
rule of law.

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Although fighting has broken out in the Kachin State, the government has
reached cease-fire agreements with the Wa and some Shan, has placed a hold
on the Border Guard Forces plan that could have excited even more violence,
and has entered negotiations with the Kachin. Moreover, in January 2012, a
cease-fire was signed with the Karen National Union, the first step towards
ending the Karen insurrection a revolt that started in 1949 and has been the
longest in modern times. The President has called on disaffected Burmese
to return home, where they will be allowed to live normal lives without
retribution unless they have committed some criminal act, such as murder.
Some prominent individuals have temporarily gone back to test the system.
Large numbers of political, now called security, prisoners have been freed and
other releases are said to be planned. Improved U.S. relations are contingent on
this continuing.
In response to all of these reform measures, the spectre of more hard-
line elements exerting pressure on the administration to rescind or reduce
them is always in the background. Former Senior General Than Shwe, who
manipulated the structure of power in the state, seemingly attempted to
balance more liberal with more conservative (hard-liners vs. soft-liners are
perhaps inaccurate terms sometimes used) elements within the civilianized
former military command. Thus, any administration so structured may have to
proceed more carefully than they might wish to prevent reversion to martial law
(allowed under various provisions of the constitution) or essentially a palace
coup. President Thein Sein does not have the all-encompassing authority of
his predecessor, Senior General Than Shwe, so reforms are necessarily more
cautiously introduced and implemented.
In November 2011, ASEAN agreed that Myanmar could chair the ASEAN
meetings in Naypyitaw in 2014. Although many observers considered the
Myanmar authorities cynical for making reforms to assure approval of that
chairmanship, and that reforms might cease after the 2014 meetings, the very
fact of being selected may encourage expansion, rather than contraction, of the
reform agenda, strengthen the influence of those committed to the reforms,
and thus contribute to a greater chance for their continuity. At some stage after
the U.S. presidential elections of November 2012, the president will have to
decide whether that person will attend those meetings, and if so, under what
conditions, if any.
Critical in the new political configuration in Myanmar is the role of Aung
San Suu Kyi, who ran in the hluttaw by-elections that took place on 1 April 2012
and won her constituency with 85 percent of the vote. She had been denied

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the ability to run in 1990, as she was then under house arrest. Her future role
in Myanmar politics after the NLDs landslide victory of 43 of the 45 contested
seats is likely to be considerable. A constitutional amendment, however, would
be required to enable her to become president after 2015 through an indirect
election process; this would entail military concurrence since a vote is
necessary for amendments and the Tatmadaw have 25 percent of the seats.
The dilemmas facing the Sino-Burmese and U.S.-Burmese relationships
have increased toward the end of 2011. There is growing dissatisfaction with
the internal role of the Chinese in Myanmar, which has become evident in
the increasingly open literature, while both countries need the relationship to
continue.30 Nowhere is this more important in China than in Yunnan.
The Myanmar authorities may expect more from the United States than
it politically can deliver in the short term. The full lifting of sanctions and
the development of a normal bilateral relationship will likely be incremental,
dependent on Burmese positive actions, and may proceed more slowly than
the Burmese want or expect. This may create problems in the growing, positive
relationship.
So too, if the United States justifies its changed position, one that was long
overdue, on the basis that democracy as understood by the U.S. is expected
and imminent, than it too may be disappointed. The Burmese military have
indicated for a half century their intention to hold on to significant power in
that state in a manner that is quite different from civil-military relations in
the modern West. They have done so most recently through provisions in
the 2008 Constitution that solidify their role for the indefinite future. These
can be amended, but only with military concurrence. This does not mean,
however, that greater space between the state and the individual in terms of
freedoms may not be established, that an independent judiciary might not
develop, and that economic reforms might not improve the sorry lot of the
average Burmese. It also does not necessarily means that majorityminority
relations might not be improved. But control over the unity and security of the
state legally rests with the military, not the hluttaws, and the former alone can
determine a return to military rule if in their view the situation so demands.
If the U.S. official attitude at this writing may be characterized as cautiously
optimistic, perhaps the Chinese attitude is quite different cautious if not
cautiously pessimistic. China has recognized the broad spectrum of change.

30 See Min Zin, Burmese Attitudes Toward the Chinese: Portrayal of the Chinese in Con-
temporary Cultural and Media Works. Paper presented at the Georgetown University
conference on ChinaMyanmar relations, 4 November 2011.

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 Dilemmas of Mutual Dependence in a Globalized World

The world is currently going through a period of great development, momen-

tous changes, and enormous adjustments.31 The If U.S.Myanmar relations
are normalized or further improved, Western influence will substantially rise.
Beijing expects this, and probably will not object if essential Chinese interests
are maintained. In response, China will retain its same diplomatic mode to-
wards Myanmar between 1988 and 2010 maintaining and strengthening ties
with the Tatmadaw. This is still the foundation of Chinas Myanmar policy. Yet
China cannot solely concentrate on only one factor in Myanmar politics. Beijing
will certainly develop ties with the opposition parties. The Chinese ambassador
at her request called on Aung San Su Kyi for the first time in December 2011.
She has reiterated her call for good relations with China.
The Myitsone event has been a lesson. China will do all it can in the future
to minimize the risk of similar incidents. It will have to consider how to deal
with the anti-Chinese sentiment in Myanmar, how to improve its public image,
and how to enable the Myanmar people to benefit from ChinaMyanmar rela-
tions, economic cooperation, and investment. The history of ChinaMyanmar
relations from 1988 to 2010 indicates that the Burmese people did not perceive
of benefits from the Chinese presence. China ignored the Burmese popular
dimension; it will do so in the future only at the peril to its privileged position.
In the past, China simply bargained with the junta and got project approval,
regardless of the opinion of the Burmese public. China also now will have to
face the coming competition with Western companies as Myanmar opens. But
China continues to promote its soft power. The elaborate loan of a Buddhist
tooth relic from China was greeted in November/December 2011 both with
warm official and unofficial enthusiasm and ceremony.
The Chinese official response to Secretary of State Clintons visit was gen-
erally subdued. But the Peoples Daily said that the U.S, gloated and applauded
the Myitsone Dam decision, and was to blame. The Xinhwa News Agency, an
organ of the state, mentioned her trip only following the reports of the visits to
Myanmar of the Vice Chair of the Chinese Central Military Commission and
that of the Vice Chair of the National Peoples Congress Standing Committee.
On 10 October, the Myanmar Foreign Minister visited China as a special envoy
of the Myanmar president, no doubt to ease tensions over the cancellation of
the dam construction. Myanmars Commander-in-Chief of the Armed Forces
visited China between 27 November and 2 December, and signed a memoran-
dum of understanding on defense cooperation on 29 November; from 16 to 19
31 Communiqu of the Sixth Plenary Session of the Seventeenth CPC Central Committee
meeting, 18 October 2011.

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October, the New Light of Myanmar four days in succession published articles
designed to maintain and strengthen Sino-Burmese friendship and relations
The Global Times (a Chinese nationalistic newspaper with a website)
regarded the dam decision as undermining the foundation of Chinese inter-
ests (lit. digging the corner of the [Chinese] wall wa qiang jiao) Another
article in the same publication claimed that if China lost Myanmar, China
would feel suffocated. One author even mentioned the crazy idea that the
U.S. through the visit set up a smoke screen and was trying to overthrow the
Burmese government.
Myanmar has changed, but how permanently is unclear. It may be on the
cusp of internal development and foreign policy equilibrium. Such progress
was unanticipated, is evident at a pace unheralded, in fields hitherto unrec-
ognized by any Burmese administration, and with an international response
unprecedented in modern Burma/Myanmar history. SinoMyanmar relations
have entered a new era in the context of these potential reforms and changed
relationship between Myanmar and the United States. Whether future rela-
tions with China are termed Pauk Paw or simply ones based on mutual bilateral
need is unclear. Nevertheless, it seems evident that Myanmar will pursue what
it regards as its national interests in terms of its internal power structure and
external geopolitical setting and realities. The myths of Chinese hegemonic
influence in Myanmar, which has been a mantra of much of international opin-
ion, should be modified to recognize the dynamic of the relationship and its
impact on the region and the world. The dilemmas facing both states and other
actors will need constant re-evaluation.

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 Appendices

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 Appendix 1

Joint Statement Concerning Framework

Document on Future Cooperation in
Bilateral Relations between the Peoples
Republic of China and Federation of
Myanmar

S ince the establishment of diplomatic relations between the Peoples

Republic of China and Federation of Myanmar (short for both sides
there after) in 8 June 1950, cooperation in the political, economic,
military, cultural, educational and other fields has seen continuous develop-
ment on the basis of the 5 principles of peaceful coexistence initialed jointly
by both sides. Further consolidating and developing Sino-Burmese friendly
relation is not only in the basic interests of the two countries and their people,
but conducive to peace, stability and development in this region.
At the start of the new century, it was unanimously agreed by both sides
that stable and long-standing neighborliness, friendship and cooperation
between the two countries should be further developed so that Paukphaw
friendship between the Chinese and Burmese people would go on from
generation to generation. For this, both sides made the following declaration
on the framework and guiding principles for the future cooperation in the
bilateral relations:
1. Both sides agree that the basic norms guiding Sino-Burmese relations are
the aim and principles of U.N. Charter, 5 principles of peaceful coexistence,
principles stipulated in Southeast Asian Treaty of Friendship and Cooperation
and universally acknowledged principles of international law.
2. Both sides will maintain frequent contacts and exchanges of visits between
the top leaders of the two countries, actively carry out exchanges of visits
and contacts between various government departments, non-governmental
bodies and people from different walks of life, so as to strengthen under

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standing and friendship and promote further development of bilateral

cooperation.

3. Both sides agree to maintain multi-tiered consultations and contacts between

the foreign ministries of the two countries, exchange views in time on the bilateral
relations and regional and international issues of common concern and make use
of various occasions to keep frequent exchange of ideas and coordination.

4. Both sides agree to further strengthen cooperation in trade, investment,

agriculture, fishery, forestry and tourism on the basis of equality and mutual
benefit, priority to actual results and taking advantage of the others strength.

1) Bring into full play the role of Sino-Burmese Joint Committee on

Economic, Trade and Technological Cooperation and actively explore new
ideas and channels that will help develop economic and trade cooperation
mutually beneficial to both sides. Functional departments concerned from
both sides should further strengthen guidance and to coordination over
economic and trade cooperation, continue perfecting rules and regulations
concerned, standardize enterprise behavior and create favorable conditions
and provide necessary facilities for the economic and trade activities of
companies, enterprises and organizations from both sides so as to protect
their legitimate rights and create a sound environment for economic and
trade cooperation between the two countries. When conditions are ripe,
both sides will discuss and sign an agreement on investment protection.

2) Strive to expand the bilateral trade. The potential should be fully tapped
so as to increase commodity trade. Cooperation in border trade should be
further strengthened and standardized in accordance with Memorandum of
Understanding in Border Trade between the Governments of the Peoples
Republic of China and Federation of Myanmar. Sustainable, steady and
healthy development of bilateral trade should be promoted in the spirit of
exchanging needed goods and mutual benefit and reciprocity.

3) Encourage and support its respective enterprises to engage in two-way

investment and make them earnestly undertake the obligations stipulated
in the bilateral investment agreements so as to ensure the smooth imple-
mentation of joint venture projects.

4) Create in an active manner favorable conditions for the enterprises from

both sides to launch engineering projects and labor cooperation.

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 Joint Statement Concerning Bilateral Relations

5) Actively promote agricultural and fishery cooperation between the two

countries. Make good use of its respective rich natural resources and com-
plementary edge, support and encourage mutually beneficial cooperation
in agricultural technology, produce-processing, prevention and monitoring
of animal disease, sea-fishing and marine culture between the enterprises
and departments concerned of the two countries.

6) Strengthen forestry cooperation between the two countries, and encour-

age bilateral cooperation in prevention of forest fire in border areas, forest
management, resource development, wildlife protection, development of
forest industry, timber-processing, forestry machinery, ecological tourism,
forestry education and training.

7) Further expand tourism cooperation between the two countries. China

has agreed to make Myanmar a country of destination for Chinese citizens
to go on overseas tours. Both sides will decide through consultation detailed
ways for implementation.

5. Strengthen exchanges and cooperation in the cultural, educational, health,

sport and religious areas between the two countries. Further promote under-
standing and friendship between the people of the two countries by exchang-
ing visits of delegations and art troupes, experts as well as holding exhibitions
in the other country.

6. Both sides agree to work out at the earliest possible time detailed steps for
implementation, based on Agreement on Management of and Cooperation in
Sino-Burmese Border so as to jointly promote stability, tranquility and devel-
opment in their border areas.

7. Strengthen legal cooperation and exchange of information. Work together to

fight cross-border crimes, drug-trafficking, smuggling, illegal border-crossing
and other criminal activities.

8. The Chinese side reiterates that it respects Myanmars independence, sover-

eignty and territorial integrity. The Burmese side reiterates that it will continue
to pursue its one China policy and recognize the Government of the Peoples
Republic of China as the sole legitimate government of China, and Taiwan as
inseparable part of Chinas territory. The Chinese side appreciates Myanmars
position on refraining from developing in any form official links with the
Taiwan authorities.

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9. Both sides hold that the 4-party economic cooperation (China, Laos, Myanmar
and Thailand) and Mekong Rivers sub-regional economic cooperation (China,
Cambodia, Laos, Myanmar, Thailand and Vietnam) are in the common and
long-term interests of the two countries and other countries concerned in this
region, and will give them greater support.
10. Both sides will strengthen cooperation in such multilateral bodies as the
U.N., ASEAN, ARF and the Informal Meeting of East Asian Leaders and work
hard to promote peace and development in this region and the world at large.

This statement is signed on 6 June 2000, in Beijing.

Representative of the Peoples Republic of China
Tang Jiaxuan Foreign Minister
Representative of the Federation of Myanmar
U Win Aung Foreign Minister

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 Appendix 2

Peoples Republic of China Plans and

Strategies Mentioned in the Text

Central Government Plans

Leaning to one side: A leading foreign policy of PRCs earlier period. It
meant that China leant to the side of socialism camp, which was articulated by
Mao Tsetung in his article The Peoples Democratic Dictatorship on 30 June
1949, in commemoration of the Chinese Communist Partys twenty-eighth
anniversary.
Two Camps Theory: The doctrine of the two camps was first enunciated
by Zhdanov at the inaugural conference of the Communist Information Bureau
in 1947 and stated that the world was divided into two camps, the forces of
socialism and those of imperialism, with no third road possible. In the first
years after the founding of the Peoples Republic, Chinese statements echoed
the Soviet view. By 1953 China began reasserting its belief that the newly
independent developing countries could play an important intermediary role
in world affairs.
Putting the house in order before inviting guests and Starting Anew:
The concepts were a vivid description of the PRCs diplomatic pattern before
1954. To make a clean break with the foreign policy of the Republic of China
(ROC), the CCP renounced all the diplomatic relations the Kuomintang
Government had established with foreign countries, treated heads of foreign
diplomatic missions accredited to the ROC as ordinary foreign nationals instead
of diplomatic envoys, reviewed all the treaties and agreements the KMT had
concluded with foreign countries, gradually cleared up the prerogatives and
influence the capitalist countries had in China, and established new diplomatic
relations with other countries.
Peaceful Coexistence: A theory developed by the Soviet Union during the
Cold War and was adopted by Soviet-influenced Communist states that they
could peacefully coexist with capitalist states. China first applied it to relations

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 Modern ChinaMyanmar Relations

with the non-socialist countries in the peripheral countries. In 1954, Zhou Enlai
and Prime Minister Jawaharlal Nehru of India and Burmas Prime Minister U
Nu agreed on the Five Principles of Peaceful Coexistence as the underlying
basis for conducting foreign relations. The principles were reiterated by Zhou
at the Bandung Conference of Asian and African countries where they were
incorporated into the conference declarations.
New Democratic Revolution: Mao Tsetung developed the theory of
New Democratic Revolution as a road to socialist and communist revolution
in countries defined by semi-feudal, semi-colonial relations. The Maoist
concept was the requirement of CP leadership-the idea that the local CP
should gain control of the nationalist movement and use it as a vehicle to
attain state power after which it can transform the national revolution into a
socialist one.
Prosper the Borders to Enrich Local Peoples (PBELP): In response to West
ern Development, the State Ethnic Affairs Commission of the PRC initiated
the program in 1999 to earmark funds to 135 land border counties and 58 divi-
sions to the Xinjiang Production and Construction Corps (XPCC) for poverty
alleviation and infrastructure improvement.
Go Global: Chinas current strategy to encourage its enterprises to invest
overseas, which was initiated in 1999 by the Chinese government.
Western Development: A policy and program launched by the State Council
in 1999 to boost its less developed western regions and eliminate or narrow the
economic gap between Chinas east and west. The policy covers 6 provinces
(Gansu, Guizhou, Qinghai, Shaanxi, Sichuan, and Yunnan), 5 autonomous
regions (Guangxi, Inner Mongolia, Ningxia, Tibet, and Xinjiang), and 1
municipality (Chongqing).
WestEast Power Transmission: One of three key energy development
projects of Western Development, transmitting power generated in Guizhou,
Yunnan, Guangxi, Sichuan, Inner Mongolia, Shanxi provinces to the east China
provinces and municipalities suffering power shortages such as Guangdong,
Shanghai, Jiangsu, Zhejiang, Beijing, Tianjin through the northern, the middle
and southern routes.
National Medium and Long Term Energy and Development Plan Outline
20042020 (Draft): Approved by State Council in 2004 and it clarifies the
strategy of energy security and development in Chinas future.

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 Peoples Republic of China Plans and Strategies Mentioned in the Text

The 11th Five-Year Plan for National Economic and Social Development of
the PRC: The Plans outline was approved by the Fourth Plenary Session of the
10th National Peoples Congress in March 2006. Among the main purposes of
the guidelines are securing economic growth and economic structure, urban-
izing the population, conserving energy and national resources, encouraging
sound environmental practices, and improving education.

The 11th Five-Year Plan for Energy Development of the PRC: Released by
the NDPC in April 2007 and articulated Chinas energy strategy, goal, and
layout for the following five years.

Countries and Industries for Overseas Investment Guidance Catalogue:

The Chinese Ministry of Commerce and the Ministry of Foreign Affairs jointly
promulgated the Guidance (I, II, III) in 2004, 2005, and 2007, which listed the
encouraged and supported sectors for the investment of Chinese enterprises in
129 countries.

Countries and Industries for Overseas Contract Project Guidance Catalogue:

The Guidance (I & II) was released by Department of Outward Investment and
Economics, Chinas Commerce Ministry, in 2008 and 2009. It provides Chinas
enterprises with market introductions and policy directions in overseas contract
projects in 28 countries.

The 11th Five-Year Plan to Prosper the Borders and Enrich Local Peoples:
Endorsed by the State Council in June 2007 and sets forth the main mission,
measures and goals of the PBELP over 5 years.

The 11th Five-Year Plan of Chinas Railways: In October 2006, Chinas

Ministry of Railways released the plan that stated the major projects and main
tasks of railway development in 20062010.

National Middle/Long Term Transport Plans of China: was endorsed by

the State Council in 2004 and devised the blueprint of Chinas railway network
for 2020.

National Highway Network Planning: was issued by Chinas Ministry of

Transport in January 2005, (approved in 2004), to build a highway network
largely consisting of 34 new highways totaling 85,000 kilometers.

National Plan for Mineral Resources 20082015: Framed by Chinas Min

istry of Land and Resources and endorsed by the State Council in 2008,

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 Modern ChinaMyanmar Relations

provides policy guidance for Chinas mineral resources sector, particularly its
security and sustainable development.

Scientific Development Concept: The current official guiding socio-econom-

ic ideology of the CCP incorporating sustainable development, social welfare,
a person-centered society, increased democracy, and ultimately, the creation
of a Harmonious Society. This is the newest addition to the idea of Socialism
with Chinese Characteristics ratified in the CCPs constitution at the 17th Party
Congress in October 2007.

The 11th Five-Year Plan for Overseas Investment: Issued by NDPC in 2007,
stressed the orientation and expected goals of Chinas overseas investment.

National Program on Mineral Resources: Policy guidance for Chinas min-

eral resources sector; enacted by Chinas Ministry of Land and Resources and
approved by the State Council in 2001.

The White Paper for Chinas Policy on Mineral Resources: Released by the
State Council on 23 December 2003, documents programming for Chinas
mineral resources sector.

Guidelines for Overseas Investment and Cooperation in Other Countries

and Regions (Myanmar): Formulated by Chinas Ministry of Commerce and
the Commercial Counselors Office of Chinas Embassy in Myanmar on 15
June 2009, provides information concerning the investment environment in
Myanmar.

The 11th Five-Year Plan for Land and Resources 20062010: Introduced
by the Ministry of Land and Resources, provides a program of action for
the development in the sector of land, mineral resources, and geological
prospecting for 20062010.

Yunnan Government Plans

Yunnan International Passage: Yunnans corresponding program to carry out
Beijings Western Development in 1999, building the province as a traffic hub
linking China to Southeast Asia and South Asia.

Layout of Yunnan Road Net 20052020: Drawn up by Yunnan Provincial

Department of Transportation in 2007, designs a road network centered at
Kunming City connecting the network of neighboring provinces such as

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 Peoples Republic of China Plans and Strategies Mentioned in the Text

Sichuan, Guizhou, Guangxi and Tibet as well as the neighboring countries

such as Myanmar, Laos, Vietnam and Thailand.
Draft Resolution on the Implementation of Yunnan National Economic
and Social Development Plan for 2007 and the National Economic and
Social Development Plan for 2008: A report presented by the Department of
Finance of Yunnan province on 18 January 2008 at the 1st Session of the 11th
Yunnan Peoples Congress.
New Three-Year Action Plan to Prosper the Borders to Enrich Local People
in Yunnan: Formulated by the government of Yunnan Province in May 2008
with plans to invest RMB10.7 billion in border areas in the province between
20082010.

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 Appendix 3

Chronology of Sino-Burmese Relations

1948

4 January: Burma gained independence from British colonial rule.

28 March: BCP went into rebellion against the new government.
December: CCP dominated northern China through three campaigns Liao
shen Campaign, Pingjin Campaign, and Huaihai Campaign. The outcome of
these encounters was decisive for the military outcome of the civil war.

1949

1 October: The Peoples Republic of China (PRC) was formally established,

with its national capital at Beijing.
18 December: Burma recognized the PRC and became the first non-socialist
country to recognize the Chinese communist regime.

1950

JanuaryMarch: Over 2,000 Kuomintang (KMT) forces from Yunnan crossed

the border to set up a base in Kengtung, eastern Shan State following the com-
munist victory in China.
8 June: China and Burma established diplomatic relations at the ambassado-
rial level. Burma was the sixteenth country to have diplomatic relations with
Beijing.

1951

20 October: BurmaChina Friendship Association was founded in Rangoon.

1952

11 May: ChinaBurma Friendship Association was set up in Beijing.

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 Chronology of Sino-Burmese Relations

1953

March: Burma charged the Chinese Nationalist government with unprovoked

aggression before the United Nations.
November: from this month to May 1954, Taiwan withdrew 6,986 troops from
Burma in 3 batches, handed over 1,323 pieces of weapons, and 822 of them
were carried back to Taiwan.

1954

22 April: China and Burma signed their first economic trade agreement.
2829 June: Chinese Premier and Foreign Minister Zhou Enlai visited Burma
for the first time. Zhou claimed that revolution cannot be exported. In the
joint statement of Zhous visit, both advocated the Five Principles of Peaceful
Coexistence, and regarded it as the guide for ChinaBurma relations.
116 December: During Prime Minister U Nu first trip to China, he prom-
ised that Burma wouldnt be an underling of Chinese opponents and provide
Chinas enemies with any vital loci used as navy and air force strategic bases
to launch attacks on the PRC. Meanwhile, Mao Tsetung made a commitment
that China should not interfere in Burmese internal affairs or subvert it. Both
sides agreed to hold negotiations about the nationality of overseas Chinese
and the boundary problem in near future.

1955

1416 April: Shortly before he attended the AsianAfrican Conference in

Bandung, Indonesia, Zhou Enlai visited Rangoon at U Nus invitation. The
problems mentioned in the joint statement of 1954 and the agenda of the
Bandung Conference were discussed.
26 August: Burma established a consulate-general in Kunming.
8 November: An agreement on air transportation between two countries was
signed in Rangoon.
20 December: A skirmish between the Burmese army and PLA occurred at
Yellow Orchard to the west of the 1941 Line, causing several casualties in the
two armies.
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 Modern ChinaMyanmar Relations

1956

78 February: The Burmese government organized a gathering of border resi-

dents at Lwejel to win their support for resolution of the border dispute with
China. Also present were the Chinese ambassador, the PRCs Consul General
in Lashio, and the Secretary-General of the Yunnan Peoples Committee.
11 April: China launched an air service between Kunming and Rangoon via
Mandalay.
21 September: The letter of congratulations that the BCP sent to the CCP for
its 8th Session was published in the Peoples Daily. Although the letter didnt
touch upon anti-Burmese government sentiment, it was the first time that
China publicly released a BCP Central Committee letter in the Peoples Daily.
22 October 8 November: U Nu, the President of the AFPFL, was invited to
Beijing to negotiate the boundary settlement. Beijing accepted the status quo of
the ChinaBurma boundary in principle, and gave up most of its previous ter-
ritorial claims. China agreed to withdraw the PLA to the east of the 1941 Line.
1020 December: Premier Zhou Enlai and Vice Premier He Long visited Bur-
ma. Both sides discussed the border dispute. Zhou visited Rangoon, Mandalay,
Pyin Oo Lwin and Myitkyina. On December 18, Zhou Enlai made a speech at
the welcome meeting held by local Chinese and articulated Chinas overseas
Chinese policy towards them.
1517 December: A gathering was organized in Mangshi, Yunnan, that lasted
for 5 days, with about 350 official representatives and 15,000 border residents
of the two countries. Burma Prime Minister U Ba Swe, Chinas Premier Zhou
Enlai and Vice Premier Chen Yi were present.

1957

22 March 2 April: U Nu proposed that the two countries sign a friendship

and non-aggression pact at an opportune time.
9 July: Zhou Enlai presented a Report on the BurmaChina Boundary Problem
at the fourth Plenary Session of the first National Peoples Congress outlining
Chinas proposals and guidelines on the BurmaChina boundary settlement.
4 December: Burmese Vice-Prime Ministers U Ba Swe and U Kyaw Nyein vis-
ited China.
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 Chronology of Sino-Burmese Relations

1958

21 February: A one-year trade agreement was signed by the two countries.

12 December: Up to this date, 114,510 Yunnanese escaped to neighboring
countries because of the Great Leap Forward with 80 percent of them fleeing
to Burma in 1958.

1959

March: The Burmese army launched its Spring Campaign against the KMT
army.
30 September: The BCP sent a congratulatory telegram to Beijing for the 10th
anniversary of its national celebration in 1959. The letter was carried in the Peo-
ples Daily and focused on accusations concerning Burmas domestic politics
and foreign policy.

1960

2429 January: Prime Minister Ne Win visited Beijing. On 28 January both

sides signed a treaty of friendship and mutual non-aggression and reached an
agreement on the BurmaChina boundary issue.
1519 April: During Premier Zhou Enlai and Vice Premier Chen Yi visited
Burma, Zhou attended the Water Festival celebrations in Rangoon and invited
U Nu to visit China.
14 May: The two countries governments exchanged the treaty of friendship
and mutual non-aggression and the instrument of ratification of agreement on
BurmaChina boundary in Rangoon.
8 September 4 October: Prime Minister U Nu led a delegation of 350 mem-
bers including Ne Win to attend the Chinese National Days celebrations. Bei-
jing organized 100,000 people to greet U Nu. On 30 September, U Nu gave
a lecture in Beijing University. The two sides formally signed the boundary
treaty in Beijing on 1 October.
22 December 9 February: The PLA entered Burma twice and engaged in
battles against the KMT troops, whose general headquarters in Burma were
destroyed. Most of the KMT army moved to the frontier area of BurmaLaos
Thailand, and 4,349 of Liu Yuanlin troops were withdrawn to Taiwan.
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 Modern ChinaMyanmar Relations

1961

29 January: Zhou Enlai visited Burma with nine groups of 400 delegates to
take part in the celebration of Burma Independence Day and exchanged the
ratification of the BurmaChina boundary treaty. On 9 January an econom-
ic and technological cooperation protocol was signed stipulating that China
would loan Burma 30 million.
616 April: Prime Minister U Nu went vacationing in Yunnan for ten days. He
visited 7 cities in Yunnan and attended the Water Festival celebration in Xish-
uangbanna. Zhou Enlai and U Nu discussed the situation in Laos and agreed
to cooperate to solve the problem of the KMT in Burma.

1962

2 March: Ne Win launched a military coup.

7 March: Chinas Ambassador to Burma Li Yimang submitted a note of rec-
ognition to the Burmese Foreign Minister and a congratulatory telegram to
Ne Win, respectively. China became the fourth country to recognize Ne Wins
military regime.

1963

12 March: Chinas Foreign Ministry instructed its embassy in Rangoon not

to directly comment on Burmese political platform and the Burmese Way to
Socialism whether in public or in personal contacts, and only express general
support to Rangoons neutral, peaceful foreign policy, and friendly attitude to-
ward China.
2026 April: President Liu Shaoqi visited Burma to mediate peace talks be-
tween the BCP and Burmese government.
18 June: Xinhua News Agency reported that the Chinese government had de-
cided to forego its right to repatriate back to China the capital and assets (1
million Kyat) of two Chinese banks that were were nationalized by the Ne Win
government in February 1963.
28 June: Thakin Ba Thein Tin, Vice Chairman of the BCP, and Kyaw Win, Burm
ese Ambassador to China, held peace talks in Beijing arranged by the Chinese.
July: Geng Biao, the Vice Foreign Minister, was appointed the new Ambas-
sador to Burma.
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15 November: The Burmese government released the statement of the Revo

lutionary Council, National Democratic United Front (NDUF), and the BCP
on the failure of negotiations. The Ne Win government took the negotiators to
their bases in Burma and Ba Thein Tin was permitted to return China.

23 November: Ne Win asked the Chinese Vice Premier, Marshal He Long,

who visited Rangoon en route to Indonesia, to send word to Beijing that the
failure of peace talks was a Burmese internal affair and by no means impacted
on BurmaChina friendly relations.

1964

1418 February: During Zhou Enlai and Chen Yis visit to Burma, a joint com-
munique reaffirmed the April 1963 joint communique released during Liu
Shaoqis trip to Burma, particularly the principle of non-interference in each
others internal affairs.

19 March: Ne Win nationalized the economy and pursued a policy of autar-

ky. More than 10,000 private stores were nationalized, including 6,700 stores
owned by Chinese.

17 May: The Burmese government issued a decree that K.50 and K.100 notes
would cease to be legal tender.

1011 July: Zhou Enlai secretly visited Rangoon and held three talks with Ne
Win and expressed Chinas support for Ne Win.

3 October: On the 15th anniversary of Chinas National Day, the BCP sent a
letter of congratulations to Beijing. Beijing broadcast the letter in English and
Burmese, and published it in the Peoples Daily. In this letter the BCP attributed
the failure of peace talks in 1963 to the sabotage of the imperialists, domestic
reactionaries, and revisionists.

1965

1 April: 129 private middle schools including 16 Chinese schools were nation-
alized.
34 April: Zhou Enlai visited Burma and held talks with Ne Win.
24 July 1 August: Ne Win visited China, and visited Beijing, Shenyang, Aan
shan, Shanghai and Kunming, and discussed the Vietnam problem and the
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international situation. A joint communique reaffirmed the five principles of

peaceful coexistence.

1966

1719 April: President Liu Shaoqi visited Burma in an attempt to get Burmese
support for its position on Vietnam.

1967

JanuaryJune: Articles and reports extolling Mao Tsetungs thoughts, anti-So-

viet attitudes, support for the Chinese Cultural Revolution, and the personal-
ity cult around Mao in Burma were continually published in the Peoples Daily.
4 January: Vice Premier Chen Yi declared at the reception of the 19th anniver-
sary of Burma Independence at the Burmese Embassy in Beijing that an eter-
nal socialist China will more effectively struggle against imperialism, modern
revisionism and reactionaries of foreign countries, more forcefully patronize
peoples struggle for world peace, national independence, people democracy
and socialism in Asia, Africa and Latin America, and the world, and more suc-
cessfully fulfill our internationalism responsibility.
19 June: The Burmese Ministry of Education banned the wearing of all un-
authorized badges by students. The order was aimed at the wearing of Mao
badges. However, the number of badge-wearers increased.
2628 June: Anti-Chinese riots occurred in Rangoon, with Chinatown, schools,
and the Embassy attacked by thousands of Burmese.
28 June: The BCP Central Committee issued a statement on the anti-Chinese
riots in Rangoon and supported China as well as the overseas Chinese.
29 June: Beijing declared that the Chinese Ambassador to Burma would not
return to his post. Burma recalled its Ambassador to Beijing two months later.
200,000 people protested outside Burmas Embassy in Beijing against the Bur-
mese anti-Chinese riots.
30 June 3 July: A total of over one million Chinese joined demonstrations in
front of the Burmese Embassy in Beijing. On July 3, the demonstrators broke
into the Burmese Embassy, tore up the Burmese national flag, and smashed the
Burmese national emblem.
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7 July: Burma suspended the Chinese economic assistance program, and pre-
sented a note to China to withdraw all of its Chinese aid experts. A total of 412
Chinese aid experts returned to China prior to 4 November 1967.

1968

January: An NCNA correspondent in Rangoon was expelled from the country,

the fourth since July 1967.
1 January: Troops of the BCP in China led a military offensive across the Bur-
mese frontier along three routes, each including a PLA company manned by
soldiers from Chinas southwest ethnic minorities All-out Chinese support for
the BCP insurrection began.
March: some leaders of Chinese associations and pro-Maoist Chinese activists
throughout Burma were detained and deported.
19 July: the Chinese Charg Daffaires in Burma attended Burma Martyrs Day,
and placed a wreath on the tomb of Burmas National Father, Aung San.
1 October: Some Burmese officials, public figures, and military officers were
invited to attend the reception for National Day sponsored by Chinese Em-
bassy in Rangoon.

1969

January: Ne Win, visiting Pakistan, discussed the possibility of resuming rela-

tions with Chinese officials there.
6 November: At the opening session of the Fourth Party Seminar of the BSPP,
Ne Win expressed his willingness to make a reconciliation with China.

1970

3 January: Vice Minister of Foreign Affairs of China, Xu Yixin, appeared at the

celebration of Burma Independence at the Burmese Embassy in Beijing.
1 May: During May Day celebrations on the Tiananmen Rostrum, Mao greet-
ed the the Burmese Charg dAffaires and asked him to give his regards to Ne
Win.
October: Rangoon appointed U Thein Maung as the new Ambassador to Chi-
na. He arrived in Beijing on November 16.
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1 October: High-ranking Burmese officials attended the reception for Chinas

National Day held by the Chinese Embassy. On the same day, Ne Win sent a
congratulatory telegram to Zhou Enlai.
22 November: Burma voted for the proposal by eighteen countries to award
Chinas seat in the UN to the PRC and deprive Taiwan of its membership.

1971

March: The new Chinese Ambassador, Chen Zhaoyuan, reached Rangoon.

The Voice of the People of Burma (VOPB) started its transmission from Yunnan.
612 August: Ne Win was invited to visit Beijing, where he and Zhou Enlai
held five separate meetings on ChinaBurma relations and the overseas Chi-
nese. This trip symbolized the renormalization of ChinaBurma ties.
9 October: Burma and other 20 countries together proposed to the U.N. that
Chinas legal seat in the U.N. and Permanent Membership on the U.N. Security
Council be awarded to the PRC.

1975

21 May: The Peoples Daily published the BCPs statement on the deaths of
both the Chairman and Secretary of the BCP Central Committee, Thakin Zin
and Thakin Chit, and released the full text of the CCPs telegram of condo-
lences. Both the telegram and statement recognized the necessity of the BCPs
armed combat against class enemies at home and abroad.
August: U Hla Phone, Foreign Minister of Burma, visited China. This visit was
regarded as preparation for and the prelude to Ne Wins visit three months later.
1115 November: Ne Win visited China for four days and was received by a
sick Mao on November 13. Ne Win promised that Burma would never allow
any country to maintain military bases on Burmese soil. A Joint Communique
stressed the significance of the Five Principles of Peaceful Coexistence, and
agreement to build a peaceful, neutral and liberal zone in Southeast Asia.

1976

25 January: Zhang Chunqiao, member of the Standing Committee of the Po-

litical Bureau of the CCP Central Committee, met and banqueted with Thakin
Ba Thein Tin, the Chairman of the BCP in Beijing.
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18 November: Hua Guofeng, Chairman of CCP Central Committee gave a

welcome dinner for Thakin Ba Thein Tin and the Vice Chairman of the BCP,
Thakin Pe Tint.

1977

511 February: Deng Yingchao (Zhou Enlais widow), Vice Chairman of the
Peoples National Congress, visited Burma.
27 April: Ne Win visited China and negotiated the BCP problem with Beijing.
18 September: Ne Win stopped in Beijing on his visit to Korea, and met Hua
Guofeng and Vice Premier Deng Xiaoping, and discussed Chinas domestic
situation and foreign relations with the U.S., Japan and Yugoslavia.

1978

2631 January: Vice Premier Deng Xiaoping visited Burma. He signaled its good-
neighbor policy to the outside world and attempted to establish a united front against
the Soviets in order to contain Soviet and Vietnamese expansion in Southeast Asia.
1215 September: Burmas Foreign Minister Min Maung visited Beijing.

1979

913 July: Burmese Prime Minister U Maung Maung Kha visited Beijing and
an agreement on economic and technical cooperation was signed. Under the
agreement, China would provide Burma with a RMB0.1 billion interest-free
loan for 7 years from 1980 to 1986.
9 September: Burma announced its withdrawal from the Non-aligned Movement.
1920 and 2426 November: Chinas Foreign Minister Huang Hua visited
Burma.

1980

2023 October: Ne Win paid his 11th visit to China.

1981

2630 January: Premier Zhao Ziyang visited Burma. The two sides discussed
international and Southeast Asian affairs.
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1984

21 June: An agreement on economic and technological cooperation was signed.

28 October 7 November: Burmas President U San Yu visited China and held
talks with Premier Zhao Ziyang. Both discussed the problems of Cambodia
and Afghanistan. On 1 November, the Chairman of the CCP Central Commit-
tee, Hu Yaobang, met San Yu.

1985

48 March: President Li Xiannian visited Rangoon and reaffirmed Chinas

overseas Chinese policy from the Zhou Enlai era.
49 May: Ne Win visited China at Deng Xiaopings invitation.

1986

1018 April: Burmese Prime Minister U Maung Maung Kha visited China.
The PRCs economic reforms, the Cambodia issue, and bilateral economic co-
operation were discussed.

1987

16 November: an economic and technical cooperation agreement was signed

in Rangoon. China would provide an RMB80 million (Kt.142.4 million) inter-
est-free loan to supplement the funds for the RangoonSyriam Bridge.

1988

22 September: Jin Guihua, the spokesman of Chinas Foreign Ministry said

that China did not interfere in Burmas internal affairs but hoped the situation
would returned to normal. In 1988, China preserved a prudent silence towards
Burmas domestic turbulence, and Chinese media only reported the situation
in Burma without comment.

1989

25 May: When meeting Myanmars newly appointed Ambassador to China,

Premier Li Peng reaffirmed Chinas foreign policy.
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13 June: Khin Nyunt, the Secretary of State Law and Order Restoration Coun-
cil (SLORC), called in Chinas Ambassador to Burma, Cheng Ruisheng, and
expressed sympathy and understanding on the Chinese government use of
force against the demonstration at Tiananmen Square in Beijing.
1829 October: A 24-man senior Burmese military delegation, led by Com
mander-in-Chief (Army) Lt-Gen Than Shwe, visited China.

1990

78 December: PLA Air Force Commander-in-Chief Wang Hai and Defense Min-
ister Qin Jiwei met Myanmar Air Force Commander-in-Chief Tin Tun in Beijing.
27 December: An economic and technical cooperation agreement was signed
stipulating that China would provide a five-year interest-free loan.

1991

28 January 1 February: State Councillor and Secretary-General of the Chi-

nese State Council, Luo Gan, visited Myanmar and called on SLORC Chair-
man Senior General Saw Maung. He also formally handed over the National
Theatre, constructed with Chinese aid, to the Myanmar Government.
18 July: Myanmar donated 1,500 tons of rice to Chinas disaster areas.
2025 August: SLORC Chairman Gen. Saw Maung visited Beijing and met
Premier Li Peng and President Yang Shangkun, and discussed bilateral ties. On
August 23, an agreement on economic and technical cooperation was signed.
1216 December: Chinas military and friendship delegation led by Vice-Chief
of the General Staff of the PLA visited Myanmar.

1992

18 April: Chinas Foreign Ministry denied that the border guards attacked My-
anmar refugees who fled to China because of the fight between a Kachin force
and the Tatmadaw.

1993

11 February: Chinas Foreign Ministry denied Chinas intention to use a naval

base in Pathein.
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30 July: China and Myanmar signed an agreement on economic and techni-

cal cooperation, granted Myanmar an interest-free loan of RMB50 million
(US$6.8 million).

31 July: The YangonThanlyin Bridge was completed with the PRCs special
envoy Bu He attending the completion ceremony. The bridge, the biggest eco-
nomic cooperation project between the two countries, was constructed with a
RMB0.1 billion Chinese loan.

1 September: The Myanmar Consulate-General in Kunming reopened.

1994

1015 August: A Chinese government trade delegation visited Myanmar and

signed a MoU on border trade with Myanmar.

22 August: The Chinese Consulate-General reopened in Mandalay.

714 September: SLORC First Secretary Lt-Gen. Khin Nyunt visited China
accompanied by 8 ministers and vice ministers as well as the Northern Military
Region Commander.

2628 December: Premier Li Peng visited Myanmar and met SLORC Chair
man Senior General Than Shwe on 27 December. Li stressed that the PRC
Government would encourage PRC companies and economic enterprises to
cooperate on major projects; business should be the core of cooperation. Li
reiterated Chinas concern about the stability of ChinaMyanmar border, the
border trade, and Myanmars policy towards the Five Principles of Peaceful
Coexistence and the overseas Chinese.

1995

3 June: Myanmar Airways International launched an air service between Yangon

and Kunming.

512 July: An 11-member goodwill delegation led by Chinese State Councillor

and Minister of Defence Gen. Chi Haotian visited Myanmar.
11 October: Officials from China, Laos, and Myanmar met in Vientiane to ex-
change written authorization and a letter ratifying the agreement on the tri-
junction point where the borders between the three countries meet.
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812 December: Li Ruihuan the Chairman of the Chinese Peoples Political

Consultative Conference (CPPCC) visited Myanmar at the invitation of Vice-
Chairman of the SLORC Gen. Maung Aye.

1996

713 January: SLORC Chairman Than Shwe visited China and signed an
agreement on economic and technical cooperation, a protocol on cultural coop-
eration between the two countries Cultural Ministries, and a framework agree-
ment on provision of an interest-subsidized preferential credit to Myanmar.

31 January: The SLORC established the Leading Committee for Promotion

of Economic Cooperation between Myanmar and China for promotion of
bilateral mutual economic cooperation and for implementation of Myanmars
economy with momentum during the short-term five-year plan beginning
199697 fiscal year.

28 April 3 May: General Zhang Wannian, the Vice-Chairman of the Chinese

Central Military Commission, led a 16-member goodwill delegation that vis-
ited Myanmar and met Than Shwe, who reaffirmed Burmas one China policy
and adherence to Five Principles.

2229 October: Vice-Chairman of SLORC, Gen. Maung Aye, visited China at

the invitation of General Zhang Wannian to boost military cooperation.

1997

2427 March: State Councilor and Secretary General of the PRC State Coun-
cil Luo Gan led a 15-member delegation to Myanmar, and signed an agreement
on border area management and cooperation and a MoU on technical and eco-
nomic cooperation, extending RMB5 million in aid to Myanmar to purchase
equipment and spare parts for the agriculture sector and to provide technical
assistance.

29 May: In Yangon, China and Myanmar signed an agreement establishing a

joint working committee on trade, economic and technical cooperation.
16 October: Fu Quanyou, the Chief of General Staff of the PLA, received
Lieutenant General Tin Ngwe, the Commander-in-Chief of the Myanmar Air
Force in Beijing.
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2729 October: Vice Premier Wu Bangguo led a 40-member party to Myan-

mar and signed a framework agreement on a preferential loan with interest
subsidized by the Chinese Government.
712 November: A Chinese PLA delegation, led by General Liu Jingsong,
Commander of the Lanzhou Military Region, visited Myanmar.
16 December: Chinas President Jiang Zemin met the Myanmar Chairman
of SLORC, Than Shwe, and congratulated him on Myanmars entry into
ASEAN, when they attended the first informal ChinaASEAN summit in
Kuala Lumpur.

1998

3 February: An agreement on mutual exemption of visas for holders of diplo-

matic, official/service passports was signed when Chinese Vice-Foreign Min-
ister, Tang Jiaxuan visited Yangon.
9 June: Chi Haotian met visiting Myanmar Air Force Commander-in-Chief
Major-Gen. Kyaw Than in Beijing.
4 November: The Myanmar Morning Post began publishing in the Chinese lan-
guage in Myanmar. This was the first time in 30 years that Myanmar/Burma
allowed a newspaper in the Chinese language to be published.

1999

711 June: SPDC First Secretary Khin Nyunt visited China, and met Chinas
leadership and exchanged views on the two countries bilateral relations, bor-
der management, anti-drug cooperation and matters of common concern. An
economic and technological cooperation agreement expected to boost bilat-
eral trade ties was signed.

2000

2425 May: Chi Haotian, the Chinese State Councillor, Vice-Chairman of the
Chinese Central Military Commission, the Vice-Chief of General Staff of the
PLA and Minister of Defence and Fu Quanyou, the Chief of General Staff of
the PLA, a member of the Central Military Commission received the visit-
ing Myanmar military friendship delegation led by the Army Chief of General
Staff, Tin Oo.
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2 June: SPDC Chairman Than Shwe, received the visiting Chinas State Coun-
cillor Ismail Amat.
512 June: Vice-Chairman of SPDC, Gen. Maung Aye, visited China, and dis-
cussed bilateral ties, common concerns, economic globalization, and the ex-
tension of ChinaMyanmar economic trade cooperation. Two Foreign Min-
isters signed a Joint Statement on the Framework for the Future of Bilateral
Relations and Cooperation on 6 June (see Appendix 1 for fuller details).
1618 July: Chinas Vice-President Hu Jintao paid an official visit to Myanmar
on the occasion of the 50th anniversary of the establishment of diplomatic
relations between China and Myanmar, and signed three agreements on eco-
nomic and technical cooperation, tourism cooperation, and science and tech-
nology cooperation.
18 September: The project Paungluang Hydropower Plant built by YMEC
took out a loan of RMB1 billion from The ExportImport Bank of China.

2001

2529 April: A Chinese military delegation led by Fu Quanyou, the Chief of

General Staff of the PLA and a member of the Central Military Commission
visited Myanmar.
18 September: Fu Quanyou, Chief of General Staff of the PLA met the visiting
Commander-in-Chief of the Burmese Air Force Myint Swe.
1215 December: Chinas President Jiang Zemin paid a state visit to Myanmar
with a large entourage of 135 members at the invitation of Than Shwe. The
two signed documents on bilateral cooperation, including an agreement on
phytosanitary cooperation; an agreement on cooperation in fisheries; a con-
tract for improving petroleum recovery on IOR-4, Pyay Field; a protocol for
cooperation in border areas; an agreement on economic and technical coop-
eration; an agreement on the promotion and protection of investment; and an
agreement on cooperation in animal health and quarantine.

2002

2021 January: SPDC First Secretary Khin Nyunt and the Chairman of SPDC
Than Shwe, received the visiting Chinas State Councillor and Secretary-Gen-
eral of State Council Wang Zhongyu, respectively. The aim of Wangs visit was
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to implement the consensus reached by Jiang Zemin and Than Shwe during
Jiangs trip to Myanmar in 2001 and promote the bilateral economic coopera-
tion, particularly in the domain of human resources.

2003

611 January: During SPDC Chairman Than Shwes visit to China, both sides
signed agreements on health cooperation, economic and technical coopera-
tion, and on cooperation in sports. Jiang Zemin promised that China would
provide Myanmar with US$0.2 billion concessional loan to develop the econ-
omy.
1415 January: Vice-Premier Li Lanqing visited Myanmar to implement the
consensus reached by Jiang Zemin and Than Shwe during the latters earlier
trip to Beijing in 2003. Than Shwe reaffirmed that Myanmar will forever be
on the side of China on the matters relating Chinas interest. Agreement was
reached to expand bilateral cooperation in trade, technology, education, cul-
ture, hygiene and sports, notably personnel training. The two sides signed an
Agreement on Partial Debt Relief for Myanmar; a Memorandum of Under-
standing on Extending a Grant for the Supply of Culture, Education and Sport-
ing Goods by China to Myanmar; and a Memorandum of Understanding on
the Program of Aerospace and Maritime Courses.
35 July: Myanmar Foreign Minister U Win Aung visited China as special en-
voy for Than Shwe, calling upon Chinas State Councillor Tang Jiaxuan and
Foreign Minister Li Zhaoxing.
22 August: Chinas President Hu Jintao met the visiting Vice-Chairman of the
SPDC, Maung Aye.
6 October: Premier Wen Jiabao met Myanmar Prime Minister Khin Nyunt
in Bali, Indonesia, when they attended the seventh summit meeting between
ASEAN and China, Japan and the Republic of Korea (ROK).
15 December: The International Support for National Reconciliation in My-
anmar Forum was held in Bangkok. Delegates from 11 countries, as well as
Myanmar Foreign Minister Win Aung, attended to discuss Myanmars road
map to national reconciliation and democracy. Chinese Assistant Foreign
Minister Shen Guofang attended the forum and expounded Chinas Myanmar
policy.
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2004

2327 March: Vice Premier Wu Yi led a 33member government delegation

and a 46entrepreneur delegation on an official visit to Myanmar. During the
visit, the two countries signed 21 agreements, MoUs and exchange of notes,
including: a Memorandum of Understanding on the Promotion of Trade, In-
vestment and Economic Cooperation; an Agreement on Economic and Tech-
nical Cooperation (Provision of a Grant of RMB50 million); the Framework
on Cooperation for Promoting Trade and Investment between China Export
and Credit Insurance Corporation and the Myanmar Ministry of Finance and
Revenue; Government Concessional Loan Agreement for MPT Project Phase
II between the ExportImport Bank of China and the Financial Institution
Authorised by the Government of Myanmar; a Memorandum of Understand-
ing between UMFCCI and the China Council for Promotion of International
Trade; a Loan Agreement on Hydraulic Steel Structure (Lot HSS-1) of Yeywa
Hydro-Power Project; Strategic Cooperation Agreement on Myanmar Na-
tional Telecommunications Network Construction Project; a Commercial
Contract for the Supply of Hydraulic Steel Structure Works and Electrical and
Mechanical Equipment for Kun Hydro-Power Project; a Commercial Con-
tract for MyaungtakaHlinethayaYekyi 230KV Transmission Lines and Sub-
station Project; a Memorandum of Understanding on the Supply and Instal-
lation of Complete Equipment for Float-Glass Production Line with Melting
Capacity of 150 TPD and for Tempered Glass, Laminated Glass and Mirror
Glass Production Lines; a Contract for Construction of No. 4 Urea Fertilizer
Factory at Taikkyi Township; a Memorandum of Understanding on Hydraulic
Steel Structure (Lot HSS-2) and Electromechanical Equipment (Lot EM-1)
of Yeywa Hydro-Power Project; the National Theatre Renovation Project; a
Rice-Milling Machine Installation Project; a Combine Harvester Production
Project; the Three Small-Scale Hydro-Power Plants Project; a Project for
Propagation of Quality Sugarcane and Cotton Strains; Geological and Min-
erals Exploration in MyanmarChina Border Region; and the LashioMuse
Railroad Project.

1117 July: Myanmar Prime Minister Khin Nyunt paid an official visit to Chi-
na. The two countries signed 12 agreements, MoUs and exchanges of notes.

2128 July: SPDC First Secretary Soe Win led led a delegation to visit China
and met Cao Gangchuan, the Chinese State Councillor, Defence Minister and
Vice-Chairman of the Chinese Central Military Commission and Luo Gan,
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Standing member of the Political Bureau of CCP Central Committee in Bei-

jing on July 22.

26 November: The first foreign trip after taking office of Soe Win, Khin
Nyunts successor as Prime Minister, was a four-day visit to China to attend
the ChinaAssociation of Southeast Asian Nations Business and Investment
Summit in Nanning, Guangxi Zhuang Autonomous Region.
15 December:The Vice-Chief of the General Staff of the PLA, General Ge
Zhenfeng, led a delegation to Myanmar. Their stay resulted in the signing of a
MoU on the establishment of a border defense talks mechanism and the man-
agement of border affairs

3 December: Chinese Vice Foreign Minister Wu Dawei led a delegation to at-

tend the 6th bilateral diplomatic consultations held in Yangon

2005

31 March 4 April: A delegation from the Chinese Association for Inter

national Understanding visited Myanmar and held talks in Yangon with USDA
Secretary-General Htay Oo.

23 April: President Hu Jintao met Senior General Than Shwe during the
AsianAfrican Summit in Jakarta, Indonesia.

2830 April: Foreign Minister of Myanmar U Nyan Win visited China. When
meeting U Nyan Win, State Councillor Tang Jiaxuan reaffirmed Chinas good-
neighbour policy towards Myanmar and stressed the value of cooperation on
trade, the economy and drugs.

4 July: Premier Wen Jiabao met Myanmar Prime Minister Soe Win at the sec-
ond GMS summit in Kunming. The President said China would provide more
assistance to Myanmar. After discussing trade volume, the investment of Chi-
nas enterprises in Myanmar, economic aid, and the cooperation of anti-drug,
both signed an economic and technical agreement.

28 July: SPDC Chairman Than Shwe and Prime Minister Soe Win received
the visiting Chinese Foreign Minister Li Zhaoxing.

1416 November: Committee member of the CCP Central Politburo and

Vice-Chairman of the NPC Standing Committee Wang Zhaoguo visited
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Myanmar and met SPDC Chairman Than Shwe and USDA Secretary-Gen-
eral Htay Oo.
14 December: Premier Wen Jiabao met with Prime Minister Soe Win when
attending the 1st East Asia Summit held in Kuala Lumpur.

2006

1418 February: Prime Minister Soe Win met President Hu Jintao, Pre-
mier Wen Jiabao and Chairman of the Standing Committee of the NPC
Wu Bangguo in Beijing. Soe Win and Wen Jiabao held discussions on the
problem of anti-drug activities, treatment of ethnic Chinese in Myanmar,
and economic cooperation. After the meeting, eight agreements and MOUs
were signed.

7 April: A delegation from the USDA visited China and met Luo Haocai, Vice-
President of Chinese Association for International Understanding and Vice-
Chairman of the CPPCC National Committee in Beijing.

26 September: He Luli, the Vice-Chairman of the NPC Standing Committee

received the visiting USDA delegation in Beijing.
22 October: SPDC Chairman Than Shwe received the visiting Chief of the
PLA General Staff and member of the Central Military Commission, Liang
Gaunglie. On the same day, Liang held talks with Gen. Maung Aye, SPDC
Vice-Chairman, Deputy Commander-in-Chief of Defence Services, and Com-
mander-in-Chief (Army).

31 October: Chinese Premier Wen Jiabao met with Myanmar Prime Minis-
ter Soe Win on the sidelines of the ChinaASEAN Commemorative Summit
marking the 15th anniversary of the establishment of Dialogue Relations be-
tween China and the ASEAN.

23 November: When Assistant Minister of Commerce of China Chen Jian

visited Yangon, both signed an agreement on economic and technical coop-
eration; the minutes of the second consultation meeting between the govern-
ments of China and Myanmar on cooperation in trade, timber and mining;
the protocol of Chinese governments exemption of Myanmar governments
partial debt; and a framework agreement on provision of a preferential loan to
Myanmar.
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2007

2225 January: The Vice-Chairman of the National Peoples Congress (NPC)

Standing Committee Li Tieying led a delegation of NPC members to visit
Myanmar.

31 January 2 February: The visiting Chief of the General Staff Thura Shwe
Man called upon Premier Wen Jiabao and Cao Gangchuan, the Chinese State
Councillor, Defence Minister and Vice-Chairman of the Chinese Central Mili-
tary Commission.

2527 February: Tang Jiaxuan, the Chinese State Councillor paid a working
visit to Myanmar. SPDC Chairman Than Shwe met with Tang Jiaxuan in Nay-
pyitaw on February 26.

3 April: Zhou Tienong, Vice-President of Chinese Association for Interna-

tional Understanding and Vice-Chairman of the CPPCC National Commit-
tee, received a delegation from the USDA in Beijing.

510 June: Secretary-1of Myanmar SPDC Thein Sein led a delegation to Chi-
na.

1013 June: SPDC First Secretary and Acting Prime Minister Thein Sein re-
ceived the delegation of the ChinaASEAN Association led by the Vice-Chair-
man of the NPC Standing Committee, Gu Xiulian. The ChinaASEAN Asso-
ciation and the USDA signed a MoU of cooperation. This was the first visit to
Myanmar of the ChinaASEAN Association since it was established in 2004.

12 July: The Myanmar Foreign Ministry issued a statement that Myanmar reaf-
firmed the one-China policy and opposed any Taiwanese attempt to join the
U.N. under any name.

1418 August: A PLA delegation led by the Political Commissar of Jinan Mili-
tary Region, General Liu Dongdong, visited Myanmar.

13 September: Myanmar Foreign Minister U Nyan Win visited China, as spe-

cial envoy of Than Shwe.
13 September: Responding to international concern about widespread anti-
government protests and a government crackdown in Myanmar, Chinese U.N.
Ambassador Li Baodong stated that China called on all parties concerned in
Myanmar to exercise restraint, restore stability through peaceful means, pro-
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 Chronology of Sino-Burmese Relations

mote national reconciliation, and achieve democratic progress, while support-

ing the work of the U.N. Secretary-Generals Special Advisor on Myanmar,
Ibrahim Gambari.

2425 October: Chinese Assistant Foreign Minister He Yafei held talks with
Gambari in Beijing. Chinese State Councillor Tang Jiaxuan met Gambari on
October 25 and expressed the commitment to continue to support Ban Ki-
moon and Gambaris good offices and to support ASEANs role on Myanmar
issues.

1416 November: Vice-Foreign Minister Wang Yi, as a Chinese special envoy,

visited Myanmar and met Senior-General Than Shwe on 15 November. Wang
also held talks with the members of the SPDC who reaffirmed that they would
take positive and pragmatic measures to accelerate the democratic process.
Wang reiterated Chinas Myanmar policy and hoped to see a Myanmar with
political stability and economic prosperity.

19 November: Premier Wen Jiabao met Prime Minister Thein Sein in Singa-
pore while attending a series of regional summit meetings there. Wen said that
as an immediate neighbor of Myanmar, the Chinese Government and leader-
ship was deeply concerned about the developing situation in Myanmar and
hoped for strengthened dialogue to promote national reconciliation. China
maintained that the future of Myanmar should be determined by its people,
and the international community should provide constructive assistance to the
country to achieve stability, national reconciliation and democratic progress.
China would continue to support the mediation efforts by United Nations
Secretary-General Ban Ki-moon and his special advisor Ibrahim Gambari and
was willing to play a positive role in properly resolving the Myanmar issue.

2008

11 January: He Luli, the Vice-Chairman of NPC Standing Committee and the

President of Chinese Peoples Association for Peace and Disarmament met
Htay Oo the Secretary-General of USDA in Yangon.

21 January: Tang Jiaxuan, the Chinese State Councillor met with the visiting
Vice-Foreign Minister U Maung Myint, as the special envoy of the Myanmar
Prime Minister.
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 Modern ChinaMyanmar Relations

1819 February: The U.N. Secretary-Generals special advisor, Ibrahim Gam-

bari, visited Beijing and met with Vice-Foreign Minister Wang Yi and Foreign
Minister Yang Jiechi.

18 March: Myanmars Foreign Ministry issued a press statement that Myanmar

opposed any form of Taiwanese independence and a referendum on Taiwans
United Nations membership.
25 May: Foreign Minister Yang Jiechi met with Prime Minister Thein Sein at
the sidelines of an International Pledging Conference for Cyclone Nargis held
in Yangon.

August 2008: Prime Minister Thein Sein attended the Beijing Olympic Games.

21 August: Myanmar Chief of Defense Industry Lt-Gen Tin Aye visited Chi-
na where he met with Gen Liang Guanglie, a member of the Central Military
Commission and Chief of General Staff of the PLA.

27 October: Gen Zhang Li, the Vice Chief-of-Staff of the PLA met with Senior
General Than Shwe in Naypyitaw.

1820 November: Zhang Gaoli, a member of the Political Bureau of the CCP
Central Committee and party chief of Chinas Tianjin municipality, met with
Myanmar Prime Minister General Thein Sein and others in Naypyitaw.

29 November: Chief of General Staff of the Armed Forces Thura Shwe Mann
visited Beijing and met Chinese military officials and the Chief of the General
Staff of the PLA, Chen Bingde.

45 December: Foreign Minister Yang Jiechi met the Myanmar Foreign Minis-
ter U Nyan Win and SPDC Chairman Than Shwe in Naypyitaw.

2009

18 March: Chen Bingde, Chief of the General Staff of the PLA, led a military
delegation to Myanmar for an official goodwill visit.

2529 March: Li Changchun, a member of the Standing Committee of the

Political Bureau of the CCP Central Committee, visited Myanmar. Li held
talks with SPDC First Secretary Tin Aung Myint Oo. Li Changchun suggested
maintaining high-level exchanges for increasing mutual trust; advancing coop-
eration in key sectors and big projects in such areas as energy, transport and tel-
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 Chronology of Sino-Burmese Relations

ecommunication; expanding the channels for friendly contacts and increasing

communications between the political organizations. In addition, China will
continue to encourage competent enterprises to invest in Myanmar or partici-
pate in your infrastructure construction. Relevant government departments
inked cooperative agreements, including one pact to jointly build up the crude
oil and gas pipelines and the other to jointly develop hydropower resources in
Myanmar.
17 April: Premier Wen Jiabao met Prime Minister Thein Sein in Sanya on the
sidelines of the Boao Forum for Asia (BFA) Annual Conference 2009.
20 April: Chief of the General Staff of the PLA Chen Bingde met with Tin Aye,
member of Myanmars SPDC in Beijing.
1520 June: General Maung Aye paid a six-day goodwill visit to China at the
invitation of Chinese Vice President Xi Jinping. They held discussions on co-
operation in politics; cooperative measures in the financial crisis; mutual co-
operation in human resources development, energy, electrical, transport, trade,
industrial sectors and other sectors. Three documents were signed, including
an agreement on economic and technical cooperation; a memorandum of
agreement on development, operation, and transfer of hydropower projects
in Maykha, Malikha and the upstream of AyeyawaddyMyitsone River Basin;
and a memorandum of understanding related to development, operation and
management of the MyanmarChina crude oil pipeline project.
During the visit, China National Petroleum Corp (CNPC) signed an agree-
ment with Myanmars Energy Ministry to receive exclusive rights to build and
operate the ChinaMyanmar crude oil pipeline. This granted operating con-
cession of the pipeline to the CNPC-controlled South-East Asia Crude Oil
Pipeline Ltd. The pipeline company would also enjoy tax concessions and
customs clearance rights. The agreement stipulated that the Myanmar gov-
ernment should guarantee the companys ownership and exclusive operating
rights, as well as the safety of the pipeline.
19 October: Chinese Vice Premier Li Keqiang met with SPDC First Secretary
Tin Aung Myint Oo in Nanning, when both of them came to attend the 6th
ChinaASEAN Expo held 2024 October. Li said the Chinese government
paid high attention to SinoMyanmar relations and would keep supporting
Myanmars economic construction and sustainable development. China and
Myanmar should make efforts together to strengthen exchanges and coopera-
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 Modern ChinaMyanmar Relations

tion, as well as safeguard stability on the border areas for the sake of the funda-
mental interests of the two peoples.
20 October: The Consulate-General of Myanmar in Nanning, the capital of
Guangxi, opened.
24 October: Wen Jiabao told his Myanmar counterpart Thein Sein on the side-
lines of the Association of Southeast Asian Nations (ASEAN) summit that he
believed Myanmar could properly handle problems and safeguard peace and
stability in the ChinaMyanmar border region. To develop good-neighborly
ChinaMyanmar relations with mutually beneficial cooperation conforms to
the fundamental interests of the two countries and will be conducive to re-
gional peace and stability.
1920 December: Chinese Vice President Xi Jinping put forward a four-point
proposal to upgrade relations with Myanmar during his visit and held talks with
the Vice-Chairman of the SPDC Maung Aye. The proposal included maintain-
ing high-level contact, deepening reciprocal cooperation, safeguarding peace and
prosperity of the border area, and strengthening coordination on international and
regional affairs. During the talks, Than Shwe said the Myanmar side recognized
the importance of safeguarding peace and stability in the border area. The peace
and tranquility in the border area between China and Myanmar is a demonstration
of good neighborly friendship and cooperation. The two countries signed a total
of 16 documents, including five agreements on development of trade, economy,
transport infrastructures, technological cooperation and purchase of machinery;
seven financial agreements, three agreements on hydroelectric power; and one
agreement on the energy sector and the oil and natural gas pipeline.

2010

26 February: A delegation of the CCP visited Myanmar, led by Wang Jiarui,

head of the International Department of the CCP Central Committee at the
invitation of Htay Oo, Secretary General of USDA.
23 June: Chinese Premier Wen Jiabao visited Myanmar and attended the cel-
ebrations of the 60th anniversary of ChinaMyanmar diplomatic ties in Nay-
pyitaw. During the visit, the two leaders attended a signing ceremony for 15
documents on cooperation in natural gas, hydropower, and other fields.
59 June: A PLA military delegation led by Fan Changlong, Commander of
Jinan Military Region, visited Myanmar.
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 Chronology of Sino-Burmese Relations

711 June: Myanmar Foreign Minister U Nyan Win visited China and attend-
ed the celebration in Beijing marking the 60th anniversary of MyanmarPRC
diplomatic relations. He held talks with his counterpart Yang Jiechi and briefed
Yang on the preparatory work for Myanmars general elections.
27 June 1 July: At the invitation of the USDA, a Chinese Association for In-
ternational Understanding (CAFIU) delegation headed by Zhou Tienong, the
Vice-Chairman of NPC Standing Committee and President of CAFIU, visited
Myanmar.
312 July: SPDC First Secretary Tin Aung Myint Oo visited China at the in-
vitation of Member of the Politburo Standing Committee of the CCP Central
Committee, Vice Premier Li Keqiang. During a meeting with Tin Aung Myint
Oo, Li Keqiang pledged to speed up and expand cooperation with Myanmar
on energy and transport.
29 August: The 5th Escort Task group of the PLA Navy, comprising the war-
ships Guanhzhou and Chaohu, visited Yangons Thilawa port.
711 September: SPDC Chairman Than Shwe paid a state visit to China, pick-
ing up a US$4.2 billion interest-free loan (30-year term) for hydropower, in-
formation technology, roads and railways projects in Myanmar. Besides Bei-
jing, Than Shwe visited Shanghai and Shenzhen. During the last two legs of his
China trip, he expected to learn from Chinas experiences in reform and open-
ing up the country, and to promote economic and trade cooperation between
Myanmar and Chinas developed areas.
1620 September: At the invitation of the SPDC, He Yong, the Secretary of Sec-
retariat of CCP Central Committee and Deputy Secretary of the CCP Central
Commission for Discipline Inspection, led a party delegation to visit Myanmar.
9 November: Beijing welcomed Myanmars smooth general election conclud-
ed on 7 November and believed that it was a vital part in Myanmars seven-step
roadmap in its transition to an elected government.

2011

216 March: A PLA delegation led by Jia Tingan, deputy director of the PLA
General Political Department, visited Myanmar.
31 March: U Thein Sein appealed to western countries for cooperation with
his country at his inauguration ceremony on 30 March. For this, Beijing said
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 Modern ChinaMyanmar Relations

the international community would create a lenient environment for Myan-

mars national reconciliation and economic development.
25 April: The Chairman of the CPPCC National Committee Jia Qinglin vis-
ited Myanmar, and met President Thein Sein and Amyotha Hluttaw Speaker
U Khin Aung Myint, and held talks with Pyithu Hluttaw Speaker Thura Shwe
Mann. Five contracts or MoUs were signed.
1215 May: Vice Chairman of Chinas Central Military Commission Gen
Xu Caihou visited Myanmar and met President Thein Sein, Pyithu Hluttaw
Speaker Thura Shwe Mann, and Tatmadaw Commander-in-Chief Min Aung
Hlaing. Both sides discussed bilateral military ties and international and re-
gional security issues of common concern.
2628 May: Myanmars President Thein Sein visited China, signing 9 coopera-
tion agreements including a US$765 million credit package. Both sides signed
a ChinaMyanmar joint statement on establishing a Comprehensive Strategic
Cooperative Partnership (see Appendix 5 for fuller details). This was Thein
Seins first state visit after his inauguration.
14 June: Li Yuanchao, a member of the Political Bureau of the CCP Central
Committee, the Secretary of the Secretariat of the CCP Central Committee
and Head of the Organization Department of the CCP Central Committee,
visited Myanmar and met President Thein Sein, Vice President U Tin Aung
Myint Oo, Pyithu Hluttaw Speaker Thura Shwe Mann, and USDP Secretary-
General U Htay Oo. Both signed bilateral cooperation accords and a MoU be-
tween the CCP and the USDP on exchange and cooperation.
9 June: Deadly fighting between the KIA and the Burmese army broke out near
a dam project built by China, bringing this strategic region neighboring China
to the verge of civil war.
30 September: In a memo to the hluttaws, President Thein Sein announced
to decide to suspend the Chinese-sponsored Myitsone Dam during his ten-
ure (until 2015) because this project, which had been estimated to cost some
US$3.6 billion and on which the Chinese had already spend US$42.5 million,
was against the will of the people. In response, Beijing only stated that China
had noted the report and was verifying it.
1 October: Chinas Foreign Ministry spokesperson Hong Lei remarked that
the Myitsone Dam was a jointly invested project by two countries that had
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 Chronology of Sino-Burmese Relations

gone through scientific verification and strict examination on both sides. Rele-
vant matters arising from the implementation of the project should be handled
appropriately through friendly bilateral consultation.
12 October: Chinese Ambassador to Myanmar Li Junhua visited two major
China-Myanmar joint projects, the MyanmarChina oil and gas pipeline and
the Mon Ywa copper mine developed by Myanmar Wanbao Mining Copper
Ltd.
7 October: Chinese Ambassador Li Junhua called on both President Thein
Sein and Pyithu Hluttaw Speaker Thura Shwe Mann. They discussed recent
developments in bilateral relations and further strengthening friendly ties and
mutual benefits between the two countries.
10 October: The Myanmar Foreign Minister U Wunna Maung Lwin visited China
as a special envoy of the Myanmar president to ease tensions over the cancellation
of the dam construction. Vice President Xi Jinping held talks with him and urged
the two sides to properly settle through friendly consultations all relevant matters
that had emerged during the course of cooperation. U Wunna Maung Lwin said
President Thein Sein and the Myanmar government highly valued the friendly
relations with China and were paying close attention to Chinas relevant concerns.
19 October: An USDP cadre delegation visited China.
2027 October: Vice President U Tin Aung Myint Oo visited China to attend
the 8th ChinaASEAN Expo and the 8th ChinaASEAN Business & Invest-
ment Summit held in Nanning. He met Premier Wen Jiabao and visited Nnan-
ning, Yulin, Shenzhen and Guangzhou.
6 November24 December: The Chinese Buddhas tooth relic was conveyed
to Myanmar for a 48-day public obeisance in Naypyitaw, Yangon and Mandalay
and during the obeisance was worshiped by over 4 million Myanmar Buddhists.
This is the fourth enshrinement visit of the Buddhas tooth relic to Myanmar.
1115 November: At the invitation of USDP Secretary-General U Htay Oo, a
member of the Political Bureau of the CCP Central Committee and Secretary
of CCP Beijing Municipal Committee Liu Qi visited Myanmar and met Presi-
dent Thein Sein and Pyithu Hluttaw Speaker Thura Shwe Mann.
27 November and 2 December: Tatmadaw Commander-in-Chief Min Aung
Hlaing visited China and signed a MoU on defense cooperation with China.
During talks between Vice President Xi Jinping and Min Aung Hlaing, both
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 Modern ChinaMyanmar Relations

declared an interest to further deepen bilateral military relations and coop-

eration. Xi stated that China would work with Myanmar to further bolster the
comprehensive strategic partnership of cooperation. Min Aung Hlaing reiter-
ated that Myanmar would adhere to the one-China policy and support Chinas
position on issues concerning Taiwan, Tibet and Xinjiang.
1 December: US Secretary of State Hillary Clinton visited Myanmar. Beijing stated
that China was willing to see Myanmar strengthening contact and improving rela-
tions with relevant western countries based on mutual respect; western countries
should lift the sanctions against Myanmar to push for its stability and development.
15 December: Chinas Foreign Ministry revealed that the Chinese ambassador
to Myanmar had met with Daw Aung San Suu Kyi.
1920 December: State Councilor Dai Bingguo participated in the 4th Sum-
mit of GMS Economic Cooperation Program in Naypyitaw, where he met
President Thein Sein and Vice President U Tin Aung Myint Oo. Dai stressed
the need to boost ChinaMyanmar cooperation, implement existing plans,
and jointly safeguard the stability of the ChinaMyanmar border regions. He
urged both sides to make use of their complementary advantages, properly
work out the ChinaMyanmar Economic and Trade Cooperation Program,
and implement major projects well between the two sides.
2012
16 January: After Washington announced to restore full diplomatic ties with
Myanmar, Beijing stated that it was glad to see the U.S. and other western coun-
tries strengthening contacts, and restoring and developing ties with Myanmar.
10 February: Chinas Ministry of Foreign Affairs refuted international me-
dia reports of a mass exodus of Kachin refugees from Myanmar to China but
acknowledged that some people had sought refuge in Yunnan from fighting
between the KIA and Tatmadaw. The main refugee camps were said to be in
border areas close to the route of the MyanmarChina oil and gas pipeline.
2226 February: Myanmar Pyithu Hluttaw Speaker Thura Shwe Mann visited Chi-
na at the invitation of the Chairman of the NPC Standing Committee, Wu Bangguo.
5 April: Beijing noted the by-election results of 1 April 2012, the Foreign Min-
istry hoping they would facilitate political reconciliation and promote nation-
al stability and development, and calling upon all parties to completely lift
sanctions against Myanmar at an early date.

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 Appendix 4

Major Chinese Companies in Myanmar

(List of Chinese companies follows)
Source: opensource.gov, Chinese Companies Doing Business in Burma.
10 June 7 July 2010; the data of registered capital is from Hubei, Beijing,
Henan, Zhejiang, Tianjin, Shanghai, Shenzhen and Shandong Administration
for Industry & Commerce as well as the web sites of the companies.
Notes:
1. This is a partial list of major corporations, and a truncated list of their
involvements. Many others are not registered or listed. Other sources indicate
that there are some 400 Chinese corporations opening in Myanmar, not
counting small businesses. Also, for list of the leading Chinese companies in
Myanmar, see the website of Economic and Commercial Counselors Office
of Chinas Embassy in Myanmar, mm.mofcom.gov.cn/static/column/catalog/
zgqy.html/1
2. Some Chinese company names from opensource.gov are misleading and
confusing because they have been out of use and terminated. Yunnan Huaneng
Lancang River Hydropower Co. was renamed Huaneng Lancang River
Hydropower Co. and its registered capital was changed from RMB2 billion
to RMB4.166 billion on 17 November 2008; China Gezhouba Water and
Power (Group) Co. Ltd was renamed China Gezhouba Group Co. Ltd on 28
September 2007; China International Trust and Investment Corporation was
renamed CITIC Group in 2002; China National Building Material Equipment
Corp., Ltd.(CBMEC) was renamed Sinoma Equipment & Engineering Corp.,
Ltd on 12 November 2008; China Three Gorges Project Corporation was
renamed as China Three Gorges Corporation since 27 September 2009, while
abbreviated as CTGPC as unchanged; Sinohydro Corporation was established
on the basis of former China National Water Resources and Hydropower
Engineering Corporation (CWHEC) with registered capital of RMB2.2
Billion in 2002.

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 Name Sector Location Ownership Registered Remarks/projects

Steinberg book.indd 420

capital (RMB
million)
Central Electric power engineering; Wuhan, State 148.00 230 KV transmission line; Dapein Hydropower Plant
China Power export of power station Hubei owned (I)
International Trade equipment and electric Shareholders:Central China Grid Co, Ltd., and the
Co. transmission and Electric Power Companies of Hubei, Henan, Hunan,
transformation equipment Jiangxi provinces.
Chevalier Group Construction, engineering, Hong Kong Activities in Myanmar unclear
hotels, insurance
China CAMC Engineering procurement Beijing State 190.00 Equipment project (US$8.18 million); Myanmar
Engineering Co. construction (EPC) projects, owned Thanlyin Glass (US$1.9332 million); Sarlingyi spinning
Ltd. industrial field infrastructure, (US$21.92 million); Myanmar Glass (US$1.0 million);

420
energy, transportation Yadanabon bridge (US$10.9 million); Myanmar
Shipyard
China Datang Power energy Beijing State 15,390.00 Dapein Hydropower Plant (I); On 7 January 2010
Corporation owned signed a MoU with Myanmar on Ywathit, Lampang
River, Nandan Pa Lay absurd River and River 4
Modern ChinaMyanmar Relations

hydropower projects.
China Financing, credit, invstment Beijing State Tagaung Taung nickel mine.
Development Bank owned
China Export and Export credit insurance, Beijing State Chinas only policy-oriented insurance company
Credit Insurance investment insurance, bond owned specializing in export credit insurance.
Corporation and guarantee.
(Sinosure)

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Steinberg book.indd 421

capital (RMB
million)
China National Project engineering and Beijing State 22.00 Kyaukse High Heat Duty Fire Brick Factory
Building Material construction, equipment owned
Equipment Corp. manufacturing as well as
Ltd. international trade
China National Undertaking China-aided projects Beijing State An exclusive organization entrusted by the Chinese
Complete Plant in foreign countries and supplying owned government in executing China-aided complete plant
and Export general goods to recipient projects in foreign countries, Complant functioned
Corp. Ltd. countries; general contracting internally as government agency to organize and
(COMPLANT) of various projects abroad; manage all China-aided projects, and externally as
maintenance, equipment renewal, general contractor The YangonThanlyin Railway-
technological innovation and cum-Road Bridge; The Myanmar No. 1 National

421
supply of spare parts for China- Gymnasium. Many plants.
aided projects accomplished.
China National Energy, construction project Beijing State Kengtawng hydroelectric plant (US$11.5),Burma Float
Construction contracting, supply of owned Glasswork Project; Mandalay Bridge, Minbu Bridge,
& Agricultural complete equipment packages Yangdong Bridge, Maobin Bridge, Myitkyina Bridge,
Machinery Import and the import & export Salingyi Textile Plant, Kyaukse Cement Plant, Dirawad
Major Chinese Companies in Myanmar

& Export Corp. trade taking machinery and Ship Plant I, Okha Sugar-refinery
(CAMC) electrical products
China National EPC contracting, complete Beijing State Kabaung hydroelectric plant; metal structure of
Electric Equipment equipment supply, power owned Kengtawng hydroelectric plant (US$350)
Corp. (CNEEC) energy, and constructions.

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Steinberg book.indd 422

capital (RMB
million)
China Gezhouba Infrastructure construction, Yichang State 1,428.00 Yeywa hydroelectric project (US$46.3 million); Pyu
(Group) Corp. investment, hydroelectrical and Wuhan, owned hydroelectric project; Tasang hydro project, etc.
(CGGC) works and highways Hubei
China Guangdong Power energy, transportation Zhuhai, State 1.20 Dahutkone and Taung Zin Aye Sugar mills (US$32.88
New Technology Guangdong owned million); Pyintphyu hydroelectric (US$20 million); Bu-
Import and Export ywa Hydroelectric project (US$18.2 million); Kyeeon
Company of Zhuhai Kyeewa Hydroelectric project (US$18.2 million)
China Huaneng Energy Beijing State 20,000.00 Ruili I Hydropower Station
Group owned
China Huanqiu Energy, engineering, industrial Beijing State Taikkyi Ammonia and urea plant (US$195 million)

422
Contracting and field infrastructure owned
Engineering Corp.
(HQCEC)
CITIC Group Financing, energy, heavy Beijing State Several hydroelectric projects. Multipurpose Diesel
(formerly China industries, infrastructure, owned Engine Factory (US$126 million); Monywa Copper
Modern ChinaMyanmar Relations

International Trust engeering, www. Project

and Investment burmariversnetwork.org/
Corporation) investors/chinese.html
China Construction, EPC business Beijing One of 500 largest corporations in the world)
Metallurgical (engineering, procurement and Thabaung pulp mill (US$90 million); Okkan sugar
Group Corp. construction), natural resources plant; designed Tagaung Taung Nickle project
(MCC) exploitation, papermaking
business, equipment fabrication

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Steinberg book.indd 423

capital (RMB
million)
China National Construction, energy, mining Beijing State Tigyit thermal power plant as well as its transmission
Heavy Machinery owned and transformer projects; KUN hydroelectric plant;
Corporation Yeywa 230KV transmission and transformer projects;
(CHMC) Kabaung hydroelectric plant Tigyit opencut coal mine;
Kyaukse Knitwear Mill
China National Agriculture, construction, Beijing State Two multipurpose cargo vessels; two liquid petroleum
Machinery and power energy, export owned gas factories; pump station project of Myanmar
Equipment Import of complete plants, Agriculture Ministry; Kabaung hydroelectric plant;
and Export Corp. communication, Renovation of paper mill; supply of machinery and
(CMEC) transportation and mining. services of Thaukyegat II hydroelectric plant(US$77
million)

423
China National Oil and gas exploration, Beijing State 94,900.00 The largest offshore oil and gas producer in China;
Offshore Oil Corp. development, production and owned onshore Block M; offshore Block A-4 and Block M-10;
(CNOOC) sales, technical services onshore Block C-1, Block C-2 and offshore Block M-2
China National Oil and gas exploration & Beijing State Chinas largest integrated oil and gas company. 13th
Petroleum Corp. production, refining & chemicals, owned largest in world. SinoMyanmar Oil and gas pipeline,
Major Chinese Companies in Myanmar

(CNPC) natural gas & pipelines and Kyaukphyu port, etc.

marketing & trading
China National Construction, energy, Beijing State 1000 TPD Dry Process Cement Plant in Pangpet;
Technical Import transportation, owned supply of generators, turbines, machinery of Upper
and Export Corp. communication, Keng Tawng Hydropower plant
(CNTIC) petrochemical, import and
export of key technologies and
complete plants

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Steinberg book.indd 424

capital (RMB
million)
Sinohydro Corp. Hydropower construction, Beijing State Hutgyi Hydropower Project; Yeya Hydropower
civil works, transportation owned Project; Ruili River Hydropower Station I; Dapein
(I) Hydropower Project; Thapanzeik Hydropower
Project; Mone Hydropower Project; Upper Paunglaung
Hydropower Project; Tasang Hydropower projec
China Nonferrous Development of nonferrous Beijing State Tagaung Taung nickel mine (expected investment
Metal Mining (Group) metal mineral resources, owned US$800 million)
Cp. Ltd. (CNMC) construction engineering
China North Defense products, petroleum Beijing State Defense projects, chemicals, engineering contracting;
Industries & mineral resources owned Monywa Copper Mine Project

424
(NORINCO) development, international
engineering contracting
China Oilfield Offshore oil and gas exploration, Beijing State- The largest listed offshore oilfield services company
Services Ltd. development and production. geo- holding in China and a subsidiary of CNOOC. Contract with
(COSL) physical services, drilling services, Daewoo (US$6 million); drilling and other operations
Modern ChinaMyanmar Relations

well services, marine support and (US$6 million).

transportation services
China The exploration, production, Beijing State- 130,600.00 Worlds 9th largest company. Myanmar offshore oil,
Petrochemical and transportation of holding gas, pipeline involvement; YAGYI-1, PATOLON-1 and
Corp. (Sinopec oil and natural gas; oil PATOLON-2 Well drillings in Block D
Group) refining; construction and
installation of petroleum and
petrochemical engineering
projects

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Steinberg book.indd 425

capital (RMB
million)
China Power Power energy, construction, Beijing State 12,000.00 Built Ruili dam, Kachin projects
Investment Corp. complete and component of owned.
(CPI) electric equipment supply
China Shanghai Contracting for industrial Shanghai State- 700.00 Generators for Zawgyi hydropower project
(Group) and civil construction, roads holding
Corporation For and bridges and other civil
Foreign Economic engineering projects
& Technological
Cooperation
(SFECO)

425
China Southern Power energy Guangzhou State Salween project; import electric power from Ruili
Power Grid Corp. owned River Hydropower Station I; maintenance of 220kV
Ltd. (CSG) double-circuit transmission lines in Myanmar
China Three Hydropower project Yichang, State 111,598.00 In addition to Three Gorges Project, working
Gorges Hubei owned group to implement Salween project. Part of
Corporation consortium(CTGPC, Sinohydro Corp, CSG) to build
Major Chinese Companies in Myanmar

(CTGPC) Tasang Hydroelectric project (Shan State) (US$9

billion)
Chinnery Assets Oil British Virgin AD-1, AD-6 & AD-8 Block; onshore block IOR 4;
Limited Islands Chinnery is a 50:50 joint venture formed by two
subsidiaries of CNPC: CNPC (Hong Kong). Ltd. and
CNPC International.

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Steinberg book.indd 426

capital (RMB
million)
DianQianGui Oil exploration Kunming State Explore, drill and produce oil and gas at onshore
Petroleum owned Block D in Monywa District, Sagaing Division, and
Exploration Bureau at Mahutaung Region in Pakokku District, Magway
Division.
The Export Export credit and import Beijing. State A government policy bank; Financed Paunglaung
Import Bank of credit; Loans to overseas owned hydroproject (US$120 million); various ministries
China (China construction contracts and (US$200 million); buying vessels (US$70 million);
Exim Bank) investment projects; Myanma Posts & Telegraphs (US$31.5 million); Yeywa
Chinese Government hydroporject (US$200 million); Seeding China
Concessional Loan; ASEAN Investment Corporation Fund (US$300
International guarantee million); etc.

426
Gold Mountain Mining industry investment Hong Kong A subsidiary of Zijin Mining Group and is involved in
(Hong Kong) Mwetaung nickel ore.
International
Mining Co.
Modern ChinaMyanmar Relations

Hanergy Holding Power energy Beijing Private Kunlong Hydropower Project; As the largest non-
Group Co. state-owned enterprise of power generation with clean
Ltd.(formerly energy in China.
Farsighted
Investment Group)
Jardine Schindler Elevators, escalators. Hong Kong A joint venture between Jardine Matheson in Hong
Group Kong and Schindler Group of Switzerland

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 Name Sector Location Ownership Registered Remarks/projects

Steinberg book.indd 427

capital (RMB
million)
Kingbao ( Jinbao) Mining Hong Kong The joint venturer of Zijin Mining Group and Wanbao
Mining Co. (See Mining Company. Zijin held a 90% equity interest in
North China Kingbao Mining it was accounted for as a subsidiary as
Industries and Zijin at 31 December 2008.
Mining Group Ltd.)
PetroChina Co. Exploration, production and Beijing State- Subsidiary of CNPC. Chinas largest gas and oil
Ltd. transportation of oil and holding producer distributor; 2nd largest company in the world
natural gas by capitalization. Signed agreement to buy 6.5 trillion
cubic feet of natural gas over 30 years. By the end of
2007, CNPC possessed 86.29% of PetroChina shares.

427
Shandong Machinery Construction, export of Qingdao, State 41.89 Quinine sulfate Pharmaceuticals Factory
& Equipment Import complete sets of equipment Shandong owned
& Export Group
Corp. (SDMECO)
Shandong Shantui construction machineries and Jining, State- Chinas largest manufacturer and exporter of
Construction its related spare part Shandong holding construction machinery.
Major Chinese Companies in Myanmar

Machinery Import Subudiy of Shantui Construction Machinery Co.

& Export Co. Ltd.
Shanghai Bell Co. Communications. Shanghai Alcatel 5,759.09 Joint venture with Chinese state-owned Assets
Ltd. Lucent Supervision and Administration Commission and
holding AlcatelLucent SA of France. Telephone exchanges.
Rangoon exchanges (US$16.9 million); with Shanghai
Bell supplying information-technological equipment for
Yadanabon Cyber City (US$30.2 million)

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 Name Sector Location Ownership Registered Remarks/projects

Steinberg book.indd 428

capital (RMB
million)
Sinoma Equipment construction, non-metal Beijing State Involved in Hsinmin-1 Cement Plant; Kyaukse brick
and Engineering materials industry and mining owned factory (US$3.24 million).
Corp. Ltd.
(CBMEC)
Tianjin Machinery Construction. import and Tianjin State 509.50 Textile mills Pyintphyu (US$37.28 million), and
Import and Export export of machinery and owned Pakokku (US$23.36 million); Thabaung Pulp Factory
Corporation electronic products and
(Group) relevant technologies.
XJ Group Power generation, electric Xuchang, State 6903.95 Thagara Engine plant (US$112 million); equipment
Corporation network system, and industrial Henan owned supply for Ruili, Yeywa, Thapanseik, and Mone

428
power distribution hydropower projects; paper Pulp Factory Project
(control & protection panel and DC power supply etc.)
Huaneng Lancang Engineering, mining Kunming, State 4166.00 Holding subsidiaries China Huaneng Group (CHNG);
River Hydropower Yunnan owned Salween river valley hydropower projects; Yangon
Co. thermal power plant; Ruili Hydropwer project I and II;
Modern ChinaMyanmar Relations

Yunnan Power energy Kunming, State- 1000.00 Ruili Hydropwer project I; Share: Huaneng(50%),
Joint Power Yunnan holding Yunnan Hexing Investment and Development
Development Company (34%) and YMEC(16%)
Co. (See Yunnan
United Power
Development Co.)

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 Name Sector Location Ownership Registered Remarks/projects

Steinberg book.indd 429

capital (RMB
million)
Yunnan Machinery Energy, export of electric Kunming, State Wholly owned subsidiary of China Southern Power
& Equipment products complete set of Yunnan owned Grid Corp. Dozens of hydropower projects
Import & Export equipment
Corp. (YMEC)
Yunnan Power Energy power Kunming, State Subsidiary of Southern Power Grid Company. Involved
Grid Corp. Yunnan owned with Ruili project I; power supply to Kongkang; Nam
Hka river and Nam Lei rive hydropower projects.
Zhejiang Power energy; water-turbine Tonglu, State- 1431.90 Joint stock limited company. Signed joint venture with
Fuchunjiang generator set Zhejiang holding Russian Power Machines Company for a Salween and
Hydropower Hutgi plant project.

429
Equipment Co.
Ltd.
Zhejiang Orient international trade, real estate Hangzhou, State- 5054.73 In cooperation with CNEEC supplied materials/
Holdings Group development and business of Zhejiang holding equipment hydro substation Kengtawng (US$11.5 and
investment US$4.56 million)
Zijin Mining Mining Longyan, State- Mwetaung nickel project
Major Chinese Companies in Myanmar

Group Ltd. Fujian holding

ZTE Corp(Zhong Communications. Shenzhen, State- 19111.54 Mobile communication network; GSM network;
Xing Telecom Global provider of Guangdong holding 95,000 cellular phone connections (US$12.5 million)
munication Equip telecommunications
ment Company software equipment. telecom
Limited) equipment provider

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 Appendix 5

Joint Statement Between The Republic of

the Union of Myanmar and The Peoples
Republic of China on Establishing a
Comprehensive Strategic Cooperative
Partnership

A t the invitation of President Mr. Hu Jintao of the Peoples Republic

of China, President U Thein Sein the Republic of the Union of
Myanmar paid a state visit to the Peoples Republic of China from
26 to 28 May 2011.
During the visit, President Mr Hu Jintao held talks with President U Thein
Sein. Premier Wen Jiabao of the State Council and Chairman Mr Jia Qinglin
of the National Committee of the Chinese Peoples Political Consultative
Conference met withPresident U Thein Sein. The two sides had in-depth
exchange of views on bilateral relations and international and regional issues of
common interest in a friendly atmosphere.
The two sides agreed that since the establishment of diplomatic relations
on 8 June 1950, the good neighborly friendship and cooperation between
China and Myanmar have been developing smoothly. Especially since the be-
ginning of the new century, the leaders of the two sides have maintained close
contact, friendly cooperation in political, economic, cultural, scientific, and
technological areas have kept expanding, and the traditional Paukphaw friend-
ship between the two peoples has been growing from strength to strength. The
two sides are satisfied with the development of the bilateral relations.
The two sides stressed that ChinaMyanmar relations, which are based on
the Five Principles of Peaceful Coexistence jointly initiated by the two sides,
have stood the tests of the changes in the international situation and in the
respective domestic situation and enjoy broad prospects for development.
The two sides agreed that the world today is undergoing great development,
great changes and great adjustment, and the trend towards multipolarity and

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 Establishing a Comprehensive Strategic Cooperative Partnership

economic globalization have gained momentum. Countries have become

more interdependent. Peace, development and cooperation not only represent
the trend of the times, but also serve the common interests of the countries
and peoples in the region. Under the new circumstances, further promoting
ChinaMyanmar relations on the basis of the existing friendly cooperation
meets the need of the two countries to realize common development, serves
the fundamental interests of the two countries and their people, and is condu-
cive to peace, stability and prosperity of the region. On the basis of the above-
mentioned common political will, the two sides agree to establish China
Myanmar comprehensive strategic cooperative partnership and reached the
following agreement:
1. The two sides will maintain close high-level contacts, continue to promote
strategic mutual trust and further enhance friendly exchanges and cooperation
between the parliaments, governments, judicial departments and political par-
ties of the two countries.
2. The two sides will continue to carry out consultations between the foreign
ministries of the two countries on an irregular basis, have timely exchange of
views on bilateral relations and international and regional hotspot issues, and
hold regular meetings on bilateral and multilateral occasions to strengthen
strategic communication.
3. The two sides will follow the principles of equality, mutual benefit, drawing
upon each others strengths and emphasizing practical results, further enhance
the size and level of the economic cooperation and trade between the two
countries, work to strengthen healthy, stable and sustainable business ties,
make joint efforts to create a favourable environment for trade and investment
cooperation, enhance the closer economic and trade exchanges between the
two countries in accordance with their economic and trade policies.
4. The two sides will continue to conduct friendly cooperation in such areas
as education, culture, science and technology, health, agriculture and tourism
on the basis of mutual benefit, strengthen people-to-people and cultural ex-
changes, increase mutual visits, and deepen mutual understanding and friend-
ship between the two peoples.
5. The two sides will strengthen border management cooperation, conduct
timely communication on border management affairs, and strive to maintain
peace, tranquility and stability in border areas.

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 Modern ChinaMyanmar Relations

6. The Chinese side reaffirms its respect for Myanmars independence, sov-
ereignty, and territorial integrity and its support for Myanmars pursuit of its
development path suited to its national conditions. Myanmar reiterates that its
adheres to one China policy, recognizes that the Peoples Republic of China is
the sole legal government representing the whole of China and that Taiwan is
unalienable part of the Chinese territory, will continue to support the peaceful
development of cross-Strait relations and Chinas cause of peaceful reunifica-
tion.
7. The two sides will further enhance coordination and cooperation in the
United Nations and other multilateral areas, jointly safeguard the interests of de-
veloping countries, strengthen cooperation in such mechanisms as the ASEAN
Plus China, Japan and the ROK, ASEAN plus China and Greater Mekong Sub
regional Economic cooperation, and promote common development and pros-
perity of the region.

Beijing, 27 May 2011

Chinese Embassy in Myanmar, all rights reserved.

mm.china-embassy.org/eng/xwdtlt861106.htm

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 Appendix 6

Summary: Peking and the Burmese

Communists: The Perils and Profits of
Insurgency. Secret (later declassified) CIA
Report, 1971
The salient feature of Chinas relations with the Burmese Communist party
(CPB) during the past twenty years is the degree to which Peking has used
the CPB to promote Chinese national interests. For more than fifteen years
(19501967), while the Chinese enjoyed good relations with the Burmese
Government (GUB), Mao Tsetung was more than willing to sacrifice the
interests of the CPB to the priorities of Sino-Burmese state relations. This
was made perfectly clear in repeated Chinese initiatives to cement the
already close relations between the two countries, while Peking all but
ignored the revolutionary effort of the Burmese Communists even going
so far as to urge them in private to seek an end to their armed struggle against
the Rangoon government. Only in mid-1967, after Sino-Burmese relations
were virtually ruined by an unexpected outbreak of anti-Chinese riots in
Rangoon, did the Chinese suddenly begin actively to support insurrection
in Burma and in this case, up-country ethnic minority groups having no
connection with the CPB.
Although conventional wisdom might have presumed that the Chinese had
always strongly supported the armed effort of the Burmese Communists, who
were, after all, faithfully following Maos precepts in waging rural guerrilla war-
fare, the fact is that for many years Peking contrived to ignore the insurrection
being waged by the CPB in the Pegu Mountains of central Burma. In the years
immediately following the 1949 Communist takeover in China, Peking gave
some propaganda support to the national liberation war in Burma, but even
this limited support was toned down during the early 1950s; by 1955, it had
stopped altogether; from 1955 until 1967, the Chinese maintained a discreet
public silence on the whole subject. Despite many suppositions and rumours

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 Modern ChinaMyanmar Relations

that the Chinese were providing covert aid to the Communist insurgents,
Peking is not known to have supplied any material assistance prior to 1967,
other than some portable radio equipment.
Through radio contact and the establishment of an organization known
as the Overseas CPB in China, the Chinese managed surprisingly well in the
1950s and early 1960s to keep the allegiance of the CPB, even while they
were doing nothing to advance its insurgent effort. Apparently, the Chinese
Communist Party (CCP) had first suggested the idea of a Peking branch of the
CPB to the Burmese Communists as a means of maintaining control over the
Burmese Party; once in China, CPB officials served Chinese interests above all
else. The Overseas CPB, led by CPB Vice-Chairman Thakin Ba Thein Tin; re-
ceived secret directives directly from the CCP Central Committee and relayed
them by radio, in the name of the CPB, to Party Chairman Thakin Than Tun
and the other Communist leaders in Burma.
In June 1963, Ne Wins offer of peace talks to all insurgents (Communist
and non-Communist) provided a long-awaited opportunity for the Peking-
trained Burmese Communists, who had lived in China since the early 1950s, to
return to Burma. Ne Wins initiative also offered the possibility of a negotiated
peace between the CPB and the Burmese Government, which the Chinese had
long been pressing both the Communists and Rangoon to accept. Although
the peace talks ultimately collapsed, to Chinas disappointment, the return
to Burma of the China-trained Overseas Burmese Communists managed to
bring the CPB under virtual Chinese control. This development was reflected
in a new Maoist campaign atmosphere in the CPB, featuring prolonged Mao
study sessions, mass ideological meetings, intensive self-criticism, increasing
fanaticism and, ultimately, a prolonged and ruthless purge. By early 1967,
Thakin Than Tun had begun to execute his opponents within the Party, go-
ing well beyond the practices of the Chinese Cultural Revolution in his ex-
traordinary use of terror, including particularly gruesome, ritualistic murder
sequences. The climax to this series of events came with the assassination of
Thakin Than Tun by a disillusioned Party member in September 1968. With
his death, the CPB reached not only the end of a pathetic chapter in its history,
but also the end of its long and close association with the CCP.
For at this important juncture in CPB history, the Burmese Party hap-
pened, for the first time in years, to be without radio contact with Peking as
the result of a damaging Burmese army attack on Party headquarters only a few
days before Thakin Than Tuns death. Thus, the Chinese were completely left
out of the CPB decision on Thakin Than Tuns successor, the first major deci-

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 Peking and the Burmese Communists: The Perils and Profits of Insurgency

sion to be made without direct Chinese advice in twenty years. Apparently, to

this day, the Chinese bear a grudge against the surviving CPB leadership for its
choice of Thakin Zin, rather than Pekings most trusted protg, Overseas CPB
leader Thakin Ba Thein Tin, as the new Party Chairman. Indeed, this has been
a major factor in the Chinese decision to shift its interest and attention away
from the Thakin Zin-led CPB effort in central Burma to sponsorship of a new
insurgency in northeast Burma.
The irony of the CCPCPB estrangement at this time was that it happened
soon after a reversal in Chinese state policy toward Rangoon which should
have been helpful to the CPB. That reversal, which discarded a long-held policy
of support for the Burmese Government in favour of a new policy of all-out
opposition to it, had come as a direct result of anti-Chinese riots in Rangoon
in June 1967. It was Cultural Revolution enthusiasm on the part of Chinese
embassy officers in Rangoon which had been primarily responsible for starting
the chain of events that led to the riots. However, Peking would admit no fault
on its part. The GUBs inadequate handling of the riot situation had given the
Chinese some legitimate cause for anger, but Peking clearly over-reacted in
accusing the GUB of instigating the riots, a charge which had no basis in fact
and was guaranteed to infuriate the Burmese. The crisis culminated in Pekings
making certain demands of the GUB. While Peking felt these to be legitimate
demands considering the enormity of the injury as Peking saw it (the death of
many Chinese residents of Rangoon), the Burmese considered the demands
humiliating. Since 1967, Ne Win has yielded to the Chinese on some of the
demands but has stubbornly refused to meet them all.
The direct relationship between the blow-up in state relations and the start
of active Chinese support of insurgency was unmistakable: within a matter of
days of the June riots, Peking mounted a full-blown campaign of anti-Rangoon
vilification; within a few weeks, it began to supply Kachin and Shan ethnic
minority insurgents in northeast Burma with arms and ammunition, special-
ized guerrilla warfare training in China, and even new recruits from among
similar ethnic minority groups living on the Chinese side of the border. There
is probably no better example of the opportunism of Chinese foreign policy
than Pekings sudden willingness to support these ethnic minority insurgents
most of whom were openly anti-Communist simply because of the new
bond between them in their common opposition to the Ne Win government.
Unfortunately for the Communists, Peking was not in a position to do much,
if anything, to help the CPB insurgents, isolated as they were in the Pegu
Mountains of central Burma, far from the border with China. Thus, for signifi-

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 Modern ChinaMyanmar Relations

cant logistical reasons as well as with a mind to creating an operation under

Burmese leaders of its own choosing, Peking embarked on a new undertaking,
the building of a totally new Communist insurgency in northeast Burma with
little or no contact, and very little in common, with the old CPB effort.
In the intervening four years, the old indigenous insurgency has declined,
the new one has prospered. Chinese support of the latter has grown to include
supplies of food, medicines, and extra funds (in Burmese currency), as well as
arms and ammunition, uniforms and other clothing, and propaganda materi-
als. The type as well as the number of weapons has expanded: as of May 1971,
Chinese supplies included B-40 rocket launchers, mortars, light machine guns,
and a few heavy machine guns. At the same time, the Chinese have expanded
their training of Burmese insurgents at a large guerrilla warfare school run by
the Chinese army in Yunnan. During the past year, they have built a power-
ful radio broadcasting facility at the training site, which began broadcasting
clandestine propaganda support for the Burmese insurgency in March 1971.
They have also stepped up their recruiting of ethnic minority peoples living
on the Chinese side of the border, a practice which they have not followed in
supporting insurgencies in Laos and Thailand. Recent firm information also
confirms another unique aspect of the Chinese covert aid program: the pres-
ence of Chinese military advisers attached directly to insurgent headquarters.
It appears that some of the advisers, operating temporarily with certain units,
have accompanied insurgents into battle.
Peking has gradually centred its support on one insurgent commander,
Naw Seng, a Burmese Kachin leader who lived more than 17 years in China.
In early 1968, the Chinese repatriated Naw Seng to Burma as the leader of an
insurgent force of some 9001,200 ethnic Shans and Kachins recruited from
both sides of the border and trained in China. In order to give his movement
Communist credentials, the Chinese simply co-opted Naw Seng into the
CPB, first as a member of the Central Committee, and then as a member of
the Politburo. In the same way that Chinese propaganda has attempted to
condition observers to think of him as a CPB leader, it has created the illusion
of his Northeast Command as being a Burmese Communist insurgency. In
fact, what the Chinese have done has been to take an essentially ethnic mi-
nority rebellion composed largely of persons who have never belonged to the
CPB, to force-feed it with Chinese Communist doctrine, and to label it as the
Burmese Communist movement. This rebellion has little in common with the
long-established CPB insurgency in central Burma, which is and always has
been ethnically Burman and entirely Communist, and whose present leaders

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 Peking and the Burmese Communists: The Perils and Profits of Insurgency

do not even recognize Naw Seng as a Communist. The new Chinese-backed

insurgency, despite its ostensible Burmese character, has all the trappings of
Chinese sponsorship, including Mao badges, Chinese propaganda materials
and Chinese army manuals.
So long as the insurgency is confined to a remote area, composed almost
exclusively of ethnic minority peoples, with virtually no appeal in Burma
proper, it hardly constitutes a serious threat to the survival of the Rangoon
government. The GUB would seem to be easily able to contain the insurgency
at existing levels though not to root it out of upper Burma. This being so, the
GUB still considers it the most serious internal security problem facing the
government. Despite Ne Win s long hesitance to discuss the matter of Chinese
involvement, for fear of further damaging Sino-Burmese relations, he was fi-
nally forced to admit the seriousness of the fighting between Naw Sengs forces
and the Burmese army in late 1969. His hopes of bringing sufficient pressure
to bear on the Chinese to get them to halt their support of the insurgents
were clearly misplaced, however, as Chinese aid and the insurgency were both
stepped up thereafter.
Chinas continuing support of the insurgency has clearly been the main
motivating force behind Ne Wins efforts since early 1970 to improve relations
with Peking. Largely at Burmese initiative, but with obvious Chinese encour-
agement, there has been a definite improvement in diplomatic relations since
the fall of 1970, culminating in the recent exchange of ambassadors. As might
be expected, this change has brought certain changes as well in Chinese policy
towards the Naw Seng operation. For one thing, the Chinese appear to have
taken steps to tone down insurgent operations during the recent dry season
(October 1970May 1971) when secret negotiations concerning the restora-
tion of ambassadors were underway. Also, the Chinese have sharply cut back
their previous overt propaganda support of the insurgency. At the same time,
however, they have taken actions that would seem to be aimed at strengthen-
ing the insurgency as a long-term threat to Burma, albeit one less blatantly
identified with China. For instance, Chinese logistical support for the rebels
has been maintained at an all-time high since the exchange of ambassadors
this past winter, and the Chinese have recently inaugurated the powerful new
clandestine radio facility in Yunnan which broadcasts vitriolic anti-Rangoon
statements in support of the Burmese insurgents. Thus, there would seem to
have been a shift towards making the insurgency less of an overt Chinese chal-
lenge to the Burmese government, but no overall reduction in the scope of
Chinese covert support to the insurgents.

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 Modern ChinaMyanmar Relations

At the moment, the Chinese seem to be following a two-pronged policy

towards Burma of improving state relations while, at the same time, main-
taining an insurgency lever over the GUB to force concessions favourable to
Peking. While they now avoid overt insults and attacks on the GUB and make
obvious goodwill gestures, such as their recent extension of an invitation to Ne
Win to visit Peking, they continue covertly to provide considerable military
support to the insurrection.
It is difficult to judge how far Ne Win might be prepared to go to get the
Chinese to stop supporting the insurgents. Certainly further concessions on
his part cannot be ruled out, although it seems unlikely that he will ever give
in to Mao to the point of publicly assuming all the blame for the events of June
1967 one of the demands that Peking is still insisting upon. In the absence
of Ne Win concessions on this and other points, it is unlikely that the Chinese
will consider giving up their support of the insurgency.
In the long run, that is, after Ne Win and/or Mao, the chances for a sig-
nificant improvement in relations are somewhat better. There is little reason
to believe that a successor military regime in Burma would be much more
inclined than Ne Win to make major concessions to the Chinese, but the
chances of the GUBs making such concessions would be greatly increased in
the less likely event of a civilian successor government. For its part, the new
Chinese leadership, after Maos death, might be more willing to work out
some compromise with the Burmese government, especially if broader foreign
policy benefits might accrue to China at the time. In such a case, the Chinese
might well be inclined to back away from their previously-sponsored clients
and allow the insurgency to wither away. But even then, as now, there would
be powerful forces operating in favour of Pekings continuing support of the
Burmese insurgency: the existence of various benefits in the insurrection for
China, plus the momentum and commitments of policy and pride.

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 About the Authors

Hongwei Fan
Hongwei Fan is Associate Professor at Research School of Southeast Asian
Studies (Nanyang Yanjiu Yuan), Xiamen University, China. He obtained his
Ph.D. in History from the Research School of Southeast Asian Studies, Xiamen
University. In 2008, he was the postdoctoral fellow in the School of Foreign
Service, Georgetown University. He has taught history and international
relations in Xiamen University and is also the Editor of Journal of Southeast
Asian Affairs. Over one decade, he has contributed more than thirty articles
in Chinese, English, and Japanese to journals, edited volumes, and newspa-
pers. His research interests and focus cover Burma/Myanmar issues, overseas
Chinese in Southeast Asia, and ChinaSoutheast Asia relations. He has been
the director of the research projects of the Sumitomo Foundation, and Chinas
Ministry of Education.

David I. Steinberg
David I. Steinberg, Distinguished Professor of Asian Studies, School of Foreign
Service, Georgetown University, was previously Director of that Program (1997-
2007); Adjunct Professor at SAIS, Johns Hopkins University; Representative
of The Asia Foundation in Korea; Distinguished Professor of Korea Studies,
Georgetown University; and formerly President of the Mansfield Center for
Pacific Affairs. Earlier, as a member of the Senior Foreign Service, Agency for
International Development [USAID], Department of State, he was Director
for Technical Assistance for Asia and the Middle East; Director for Philippines,
Thailand, and Burma Affairs; and spent three years in Thailand with the
Regional Development Office. He wrote extensively reviewing and evaluating
previous AID programs while in AIDs Center for Development Information and
Evaluation. Before joining AID, he was Representative of The Asia Foundation
in Korea and Washington, D.C., and Assistant Representative in Burma and
Hong Kong. He has resided for seventeen years in Asia, where he has conducted

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 Modern ChinaMyanmar Relations

field studies and traveled widely. Professor Steinberg is the author of thirteen
books and monographs including one translation, and over one hundred
chapters/articles. Among these books and monographs are: Burma/Myanmar:
What Everyone Needs to Know (2010); Turmoil in Burma: Contested Legitimacies
in Myanmar (2006); Stone Mirror: Reflections on Contemporary Korea (2002);
Burma: The State of Myanmar (2001), The Future of Burma: Crisis and Choice
in Myanmar (1990); The Republic of Korea. Economic Transformation and Social
Change (1989); Crisis in Burma: Stasis and Change in a Political Economy in
Turmoil (1989). David I. Steinberg was educated at Dartmouth College; Lingnan
University (Canton, China); Harvard University, where he studied Chinese; and
the School of Oriental and African Studies, University of London, where he
studied Burmese and Southeast Asia.

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Chinese-Language Sources
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Chen Yi fu zongli xiang Miandian zhuhua dashi jiaowen jieshao Zhou Enlai zongli
fangmian qingkuang [Vice Premier Chen Yi informed Burmese Ambassador to
China of Premier Zhou Enlais trip to Burma], AMFA, No. 106-01144-02.
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Dangqian Miandian huaqiao chujing he cunzai wenti [Current situation and prob-
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and additional comments on the nationality problems facing Overseas Chinese in
Burma], AMFA, No. 105-00510-03(1).

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 Modern ChinaMyanmar Relations

Guanyu wenhua dageming de xuanchuan jiaoyu yaodian [Instruction outline for

disseminating information related to the Cultural Revolution], Xinhua Yuebao
[Xinhua Monthly], No. 6, 1966.
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wenti [The problem of clarifying our position on the Burmese Way to Socialism],
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publication of BCP congratulatory letter], AMFA, No. 105-01600-04.
Guanyu Yunnan Sheng 2007 nian guomin jingji he shehui fazhan jihua zhixing qing-
kuang yu 2008 nian guomin jingji he shehui fazhan jihua caoan de baogao [Draft
resolution on the implementation of the Yunnan National Economic and Social
Development Plan for 2007 and the National Economic and Social Development
Plan for 2008], Yunnan Zhengbao [Yunnan Political Affairs], No. 6, 2008.
Guanyu Zhongguo Miandian jianli waijiao guanxi de sici tanhua jilu [Records from
four discussions about the establishment of ChinaBurma relations], AMFA, No.
105-00001-02(1).
Guanyu Zhou Enlai zongli fangmian de jiaoshe qingkuang [Negotiations of Premier
Zhou Enlais visit to Burma], AMFA, No. 203-00582-04.
Guanyu Zhou Enlai zongli fangmian de waijiao tongbao [Diplomatic bulletin of
Premier Zhou Enlais visit to Burma], AMFA, No. 203-00583-04.
Guobin jiedai qingkuang (Wu Nu de yixie qingkuang he fanying) [Reception to
state guests (some of U Nus responses)], AMFA, No. 204-00119-17(1).
He Long fu zongli fang Yinni luguo Miandian baihui Nai Wen zhuxi [Vice Premier
He Long met Chairman Ne Win in Burma en route to Indonesia], AMFA, No. 105-
01819-01.
Jiang Jieshi jituan canbu zai Zhongguo Miandian bianjing diqu huodong ji yu mian-
fang jiaoshe qingkuang [Operations by remnants of Chiang Kai-sheks troops in
BurmaChina border areas and the negotiations with Burma], AMFA, No. 105-
00604-02(1).
Jianguo yilai Liu Shaoqi wengao [Works of Liu Shaoqi since the establishment of the
PRC], Vol. 1, Beijing: Central Party Literature Press, 2005.
Jianguo yilai Mao Zedong junshi wengao [Military works of Mao Tsetung since the es-
tablishment of the PRC] ( January 1959February 1976), Vol. 3, Beijing: Military
Science Press, Central Party Literature Press, 2010.
Jianguo yilai Mao Zedong wengao [Works of Mao Tsetung since the establishment of
the PRC], Vol. 1, Beijing: Central Party Literature Press, 1987.
, Vol. 12, Beijing: Central Party Literature Press, 1998.
, Vol. 13, Beijing: Central Party Literature Press, 1998.

442

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 Bibliography

Jianguo yilai Zhou Enlai wengao [Works of Zhou Enlai since the establishment of the
PRC], Vol. 1, Beijing: Central Party Literature Press, 2008.
Jiu shifou chengren Miandian junren zhengfu deng wenti yu zhumian shiguan lai-
wang dian [Telegrams between Beijing and the Chinese embassy to Burma re-
garding Chinese recognition of the Burmese military government], AMFA, No.
117-01344-04.
Kuitao Miandian de Jiang Jieshi jundui qingkuang he mianfang de taidu [Situation
of Chiang Kai-sheks troops fleeing to Burma and Burmese attitude], AMFA, No.
105-00605-02.
Liao Zhengbao (ed.), Jiemi waijiao wenxian: Zhonghua Renmin Gongheguo jianjiao dang
an [Declassified diplomatic documents: Archives on establishment of diplomatic
relations by the PRC], Beijing: China Pictorial Press, 2006.
Lifayuan di 12 huiqi shizheng baogao [Command paper of the 12th session of the
Legislature], Archives of Academia Historica (Taiwan), Cat. No. 069, Roll No. 150,
File No. 11-4-3, 22 December 1953.
Lingshisi qingkuang fanying: Nai Wen shixing guoyouhua zhong de huaqiao chu-
jing [Information of the Department of Consular Affairs: Overseas Chinese in the
situation of Ne Wins nationalization], AMFA, No. 118-01328-01.
Liu Shaoqi zhuxi shenyue guo de yu Miandian lingdao ren de tanhua jilu yuangao
[Record of talks between Liu Shaoqi and Burmese leaders, checked and approved
by Liu Shaoqi], AMFA, No. 203-00576-01.
Mao Zedong xuanji [Selected works of Mao Tsetung], Vol. 4, Beijing: Peoples Press,
1991.
Mao Zedong wenji [Works of Mao Tsetung], Vol. 6, Beijing: Peoples Press, 1999.
Mao Zedong zhuxi jiejian Miandian fu zongli Wu Barui Wu Jueying tanhua jilu
[Record of Chairman Mao Tsetungs talk with visiting Burmese Vice Prime
Ministers, U Ba Swe and U Kyaw Nyein], AMFA, No. 105-00339-01(1).
Miandian daogu jianchan qingkuang he caizheng jingji cuoshi [Reduction of Burmese
rice production, and fiscal and economic measures], AMFA, No. 105-01303-04.
Miandian duiwai guanxi [Burmese foreign relations], AMFA, No. 105-01157-03.
Miandian gejie dui Zhou Enlai zongli fangwen Miandian de fanying [Popular reac-
tions to Premier Zhou Enlais visit to Burma], AMFA, No. 105-00512-08(1).
Miandian guonei wai xingshi dongxiang he zhongmian guanxi [Burmese domes-
tic situation and foreign relations, and Sino-Burmese relations], AMFA, No. 203-
00515-03.
Miandian shehui zhuyi gangling dang zong shuji Shan You jiangjun zai disan ci dangdai
hui shang zuo de dangzhongyang weiyuanhui de zhengzhi baogao [Political report
of the Burma Socialist Program Party presented to the BSPP Central Committee

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 Modern ChinaMyanmar Relations

by General U San Yu, General Secretary of the Burma Socialist Program Party, at
the 3rd Party Congress], Dongnanya Ziliao [Information about Southeast Asia], No.
46, 1980.
Miandian shiguan 1961 nian gongzuo zongjie liuer nian gongzuo guihua he you-
guan zhuguan bumen de pifu [1961 work review and 1962 work program of the
Chinese Embassy to Burma and the official reply of the responsible department],
AMFA, No. 105-01079-01.
Miandian shixing yinhang guoyouhua he wo fangqi Zhongguo yinhang, jiaotong
yinhang yangguang fenhang de zichan shi (zhong, ying wen) [Nationalization
of Burmese banks and China abandons the assets of China Bank and Bank of
Communications (Chinese and English Version)], AMFA, No. 105-01822-01.
Miandian waizhang duiwo zhumian dashi zai dangdi huaqiao qunzhong dahui shang
jianghua de kanfa ji wofang de chuli yijian [Burmese Foreign Ministers opinion
on Chinese Ambassadors remarks at local Overseas Chinese gathering and Chinas
response to it], AMFA, No. 105-00067-02(1).
Miandian zeng wo bianmin dami he shiyan ji wofang huizeng lipin shi [Burmese gifts
of rice and salt to Chinese border inhabitants and reciprocal gifts], AMFA, No.
105-00680-01(1).
Miandian zhengfu guanyuan ji baokan dui Zhou Enlai zongli fangmian de fan
ying [Responses by Burmese officials and media to Premier Zhou Enlais visit to
Burma], AMFA, No. 105-00259-03(1).
Miandian zhengfu zai bianjing diqu zuzhi qingzhu zhongmian youhao tiaoyue he bi-
anjie wenti xieding gongbu de huodong [Burmese government holds celebrations
for signing of the friendship treaty and settlement of the boundary agreement for
border areas], AMFA, No. 105-00681-02(1).
Miandian zhengjie yaoren Wu Nu yanlun zhaiyao (1955 nian shiyue shisan ri shangwu
shishi ban) [Abstract of Burmese statesman U Nus speech (10.a.m., 13 October
1955)], AMFA, No. 105-00446-04.
Miandian zhengju dongxiang [Trends in the Burmese political situation], AMFA,
File No. 105-01227-01.
Miandian zhuhua shiguan shangqing waijiaobu xiezhu qi zai yunnan ribao shang fa-
biao guanyu Deqinlun lunwen zhong bu zhengque chu de shuoming [Burmese
Embassy in China requests the Ministry of Foreign Affairs of the PRC to assist
them in publishing a clarification in the Yunnan Daily with regard to the incorrect
message in Thakin Lwins essay], AMFA, No. 105-00078-01(1).
Miandian zhuhua shiguan yimi fouren meiguo zaimian jianli junshi jidi [First
Secretary of Burmas Embassy in China denies the establishment of US military bas-
es in Burma], AMFA, No. 105-00174-02(1).

444

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 Bibliography

Miandian ziliao: Miandian qingkuang jianjie gaikuang zhongmian guanxi cunzai wen-
ti jianshu zhongmian guanxi dashiji [Burmese materials: Introduction and general
situation of Burma, the problems of Sino-Burmese ties, and Sino-Burmese chroni-
cles of events], AMFA, No. 203-00473-02.
Miandian zongli Wu Nu jiu mianbao waiqu baodao zhongmian lianhe shengming shi
zhi Zhou Enlai zongli han [Burmese Prime Minister U Nus letter to Premier Zhou
Enlai on the distorted coverage by Burmas press of the ChinaBurma joint state-
ment], AMFA, No. 105-00037-01(1).
Miandian zongli Wu Nu jiu zhongmian dami maoyi wenti zhi Zhou Enlai zongli han
[Burmese Prime Minister U Nus letter to Premier Zhou Enlai about the China
Burma rice trade], AMFA, No. 105-00036-01(1).
Miandian zongli Wu Nu zai guohui shang de jianghua (zhai yao) [Abstract of Burmese
Prime Minister U Nus speech in parliament], AMFA, No. 105-00814-01(1).
Miangong tong Miandian zhengfu hetan qingkuang [Peace talks between the BCP
and Burmese government], AMFA, No. 203-00515-02.
Ministry of Foreign Affairs, PRC (ed.), Zhonghua Renmin Gongheguo tiaoyue ji [Collection
of treaties of the Peoples Republic of China], 1971, Vol. 18, Beijing: Peoples Press,
1973.
, 1979, Vol. 26, Beijing: Peoples Press, 1983.
, 1997, Vol. 44, Beijing: World Affairs Press, 1999.
, 2001, Vol. 48, Beijing: World Affairs Press, 2003.
Shen Zhihua and Yang Kuisong (eds), Meiguo Duihua qingbao jiemi dangan [Declassified
record of U.S. intelligence on China] 19481976, Vol. V and VI, Beijing: Oriental
Press, 2009.
Shijie geguo dui Miandian junren zhengbian de fanying yiji dui junren xin zhengfu de
chengren qingkuang [Responses of other countries to recognition of the Burmese
military coup as well as their official acceptance of the new military government],
AMFA, No. 105-01077-04.
Waijiaobu dui Miandian shiguan 1963 nian Miandian zhengzhi xingshi zongjie
he 1964 nian gongzuo guihua de pifu [Foreign Ministrys reply to the Chinese
Embassy to Burma on the 1963 Burmese politics summary and the 1964 work pro-
gram], AMFA, No. 105-01864-01.
Waijiaobu yazhou si bianxie de guanyu Miandian huaqiao shuangchong guoji wenti
de ziliao [Files on dual nationality of Overseas Chinese in Burma compiled by
the Asian Affairs Department of the Ministry of Foreign Affairs], AMFA, No. 105-
00510-10(1).
Waijiaobu yi ya guanyu Miandian zhengju he waijiao dongxiang deng de diaoyan cai
liao [Materials for investigation and research on Burmese domestic politics and

445

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 Modern ChinaMyanmar Relations

foreign affairs conducted by the First Asian Department of the Foreign Ministry],
AMFA, No. 105-01314-02.
Wang Huongju, 2008 nian Chongqing Shi renmin zhengfu gongzuo baogao [Report
on the work of Chonqing Government 2008], Chongqing Shi Renmin Zhengfu
Gongbao [Gazette of Chongqing Municipal Peoples Government], No. 3, 2008.
Wo dui Miandian junren zhengfu de chengren wenti (zhongwen yingwen)
[Recognition of the Burmese military regime (Chinese and English version)],
AMFA, No. 105-01780-01.
Wo xiang mianfang jianyi tanpan zhongmian gonglu lianyun wenti [China suggests
negotiations with Burma about highway transportation between the two coun-
tries], AMFA, No. 105-00177-01(1).
Wo yu Miandian zhuhua shiguan lianxi miangong lingdao huimian shi [Contact
between the Foreign Ministry and Burmese Embassy to China for return of BCP
leaders to Burma], AMFA, No. 105-01818-01.
Wo zhu Miandian shiguan fu mian waijiaobu guanyu waijiao zhengce shengming
de zhaohui [Chinese Embassy reply to note from the Burmese Foreign Ministry
about the Burmese foreign policy statement], AMFA, No. 105-01780-02.
Wu Nai wen zongtong de jianghua [Speech of President Ne Win], Xinhuashe Xinwen
Gao [Press release, Xinhua News Agency], 12 November 1975.
Wu Nu zongli zai huanying dahui shang de jianghua [Prime Minister U Nus speech
at welcoming reception], Xinhua Yuebao [Xinhua Monthly], No. 1, 1955.
Wu Nu zongli zai linbie yanhui shang de jianghua [Prime Minister U Nus speech at
farewell banquet], Xinhua Yuebao [Xinhua Monthly], No. 1, 1955.
Wu Nu zongli zai yanhui shang de jianghua [Prime Minister U Nus banquet speech],
Xinhua Yuebao [Xinhua Monthly], No. 1, 1955.
Yijiu liuer nian Miandian sanyue junren zhengbian jingguo [Course of the Burmese
military coup in March 1962], AMFA, No. 105-01077-01.
Yijiu liuwu nian wo goumai 10 wan dun Miandian dami [Purchasing of 100,000 tons
of Burmese rice in 1965], AMFA, No. 105-01604-01.
Youguan Zhongguo Miandian jianjiao laiwang zhaohui [Notes on the establishment
of ChinaBurma diplomatic relations], AMFA, No. 105-00001-01(1).
Yunnan fangong jiuguo jun you mian huiguo an [Return of the Yunnan Anticommunist
National Salvation Army to Taiwan], Archive of Political and History Department,
Defense Ministry (Taiwan), File No: 542.5/1073, June 1953February 1954.
Yunnan Sheng guanyu Zhongguo Miandian bianmin lianhuan de zongjie baogao
[Yunnan Provinces final report on Chinese and Burmese inhabitants gathering in
the border areas], AMFA, No. 105-00512-04(1).

446

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 Bibliography

Yunnan Sheng xin sannian xing bian fu min gongcheng xingdong jihua [New three-
year plan for Prosper the borders to enrich local people in Yunnan], Yunnan
Zhengbao [Yunnan Political Affairs], No. 11, 2008.
Zhang Hanfu waizhang yu Miandian zhuhua dashi wu lamao tanhua jiyao (1955
nian shiyue shisan ri shangwu shishi ban) [Speech notes for Foreign Minister
Zhang Hanfu and Burmese Ambassador to China U Hla Maung (10:30 a.m. on 13
October 1955)], AMFA, No. 105-00175-03(1).
Zhongguo fangmian zai bianjing diqu zuzhi qingzhu Zhongguo Miandian qianding
youhao tiaoyue he bianjie wenti xieding de huodong [China holds celebrations
for signing of the friendship treaty and settlement of the boundary agreement for
border areas], AMFA, No. 105-00681-01(1).
Zhongguo fojiao xiehui foya husong tuan baogao [Report of the Chinese Buddhist
Association on transport of the Buddhas tooth relic], AMFA, No. 105-00182-10(1).
Zhongguo Miandian bianjing bianmin waitao qingkuang de baogao [Reports on the
flight of inhabitants in Sino-Burmese border areas], AMFA, No. 105-00604-01.
Zhongguo Miandian bianjing shuangfang jundui fasheng qiangji shi mianfang zhi wo
zhaohui [Burmese note to China relating to talks on the shooting incident in Sino-
Burmese border areas], AMFA, No. 105-00745-01(1).
Zhongguo zhu Miandian shiguan guanyu shinian lai zhongmian jingji maoyi guanxi
de zongjie [Review by Chinese Embassy to Burma of Sino-Burmese economic ties
in the past decade], AMFA, No. 105-00603-01.
Zhongguo zhu Miandian shiguan guanyu shinian lai zhongmian wenhua guanxi de
zongjie [Review by Chinese Embassy to Burma of Sino-Burmese cultural ties in
the past decade], AMFA, No. 105-00603-02(1).
Zhonghua Renmin Gongheguo duiwai guanxi wenjian ji [Documents on PRC foreign
relations: 19491950], Beijing: World Knowledge Press, Vol. 1, 1957.
Zhonghua Renmin Gongheguo guomin jingji he shehui fazhan di shiyi ge wunian guihua
[Eleventh five-year plan for national, economic and social development of the
Peoples Republic of China], Beijing: Peoples Press, 2006.
Zhongmian liangguo zongli huitan gongbao [Communiqu of the premiers of China
and Burma], Xinhua Yuebao [Xinhua Monthly], No. 1, 1955.
Zhongmian liangguo zongli lianhe shengming [ Joint statement of the premiers of
China and Burma], Xinhua Yuebao [Xinhua Monthly], No. 7, 1954.
Zhou Enlai waijiao wenxuan [Selected diplomatic writings of Zhou Enlai], Beijing:
Central Party Literature Press, 1990.
Zhou Enlai zongli baihui Miandian zong canmouzhang Nai Wen tanhua jilu
[Account of the discussion between Premier Zhou Enlai and Ne Win, Chief of the
General Staff of Burma], AMFA, No. 203-00036-01(1).

447

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 Modern ChinaMyanmar Relations

Zhou Enlai zongli fangmian huitan fangan [Schedule for Premier Zhou Enlais visit
to Burma], AMFA, No. 203-00582-01.
Zhou Enlai zongli fangmian tong Nai Wen zhuxi huitan jiyao [Summary of discussion
between Premier Zhou Enlai and Chairman Ne Win], AMFA, No. 203-00583-05.
Zhou Enlai zongli fangwen Miandian de lici jianghua gao (zhongwen, yingwen, mian
wen) [All the manuscripts from Premier Zhou Enlais talks in Burma (Chinese,
English, and Burmese)], AMFA, No. 203-00085-01(1).
Zhou Enlai zongli fangwen Miandian huitan ji huijian qingkuang zhaiyao [Brief ac-
count of talks and meetings during Premier Zhou Enlais visit to Burma], AMFA,
No. 203-00036-07(1).
Zhou Enlai zongli fangwen Miandian huitan qingkuang de waijiao tongbao [Bulletin
regarding the conditions of Premier Zhou Enlais discussions in Burma], AMFA,
No. 203-00036-08(1).
Zhou Enlai zongli fangwen Miandian qingkuang huibao [Debriefing after visit to
Burma by Zhou Enlai], AMFA, No. 203-00047-05.
Zhou Enlai zongli fangwen Miandian tong mianfang lingdao ren tanhua yaodian
[Main points of talks between Premier Zhou Enlai and leading figures in Burma],
AMFA, No. 203-00019-02(1).
Zhou Enlai zongli huijian Miandian qian zongli Wu Barui huitan jilu [Account of
discussion between Premier Zhou Enlai and former Burmese Prime Minister U Ba
Swe], AMFA, No. 203-00036-04(1).
Zhou Enlai zongli huijian Miandian zhuhua dashi Wu Lamao tanhua jiyao (1956 nian
sanyue qiri) [Summary of discussion between Premier Zhou Enlai and Burmese
Ambassador to China U Hla Maung (7 March 1956)], AMFA, No. 105-00307-
01(1).
Zhou Enlai zongli huijian Miandian zhuhua dashi Wu Lamao tanhua jiyao (1956
nian liuyue ershier ri) [Summary of discussion between Premier Zhou Enlai and
Burmese Ambassador to China U Hla Maung (22 June 1956)], AMFA, No. 105-
00307-02(1).
Zhou Enlai zongli huijian Miandian zhuhua dashi Wu Lamao tanhua jiyao (1956
nian bayue ershiwu ri) [Summary of discussion between Premier Zhou Enlai and
Burmese Ambassador to China U Hla Maung (25 August 1956)], AMFA, No. 105-
00307-03(1).
Zhou Enlai zongli jiejian Miandian daibiaotuan tanhua jilu [Account of Premier
Zhou Enlais meeting with a Burmese delegation], AMFA, No. 105-00130-01(1).
Zhou Enlai zongli jiejian Miandian zhengfu laodong kaochatuan tanhua jilu [Account
of Premier Zhou Enlais meeting with a Burmese governmental labour delegation],
AMFA, No. 105-00110-01(1).

448

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 Bibliography

Zhou Enlai zongli tong Miandian fu zongli Wu Jueying huitan jilu [Record of talks
between Premier Zhou Enlai and Vice Prime Minister U Kyaw Nyein], AMFA, No.
105-00339-02(1).
Zhou Enlai zongli yu Miandian zhuhua dashi Wu Lamao liangci tanhua de yaodian
[Main points of two conversations between Premier Zhou Enlai and Burmese
Ambassador to China U Hla Maung], AMFA, No. 105-00752-02(1).
Zhou Enlai zongli yu Miandian zhuhua dashi Wu Lamao tan guonei jushi wenti (zhai-
yao) [Abstract of talks between Premier Zhou Enlai and Burmese Ambassador to
China U Hla Maung on Burmese domestic situation], AMFA, No. 105-00858-01.
Zhou Enlai zongli zai kunming sheyan zhaodai Wu Nu zongli [Premier Zhou Enlai
hosts Prime Minister U Nu in Kunming], Xinhua Banyue Kan [Xinhua Semi-
Monthly], No. 9, 1957.
Zhou Enlai zongli zai linbie yanhui shang de jianghua [Premier Zhou Enlais speech
at farewell banquet], Xinhua Yuebao [Xinhua Monthly], No. 1, 1955.
Zhou Enlai zongli zai Miandian Yangguang huaqiao huanying dahui de jianghua
[Speech of Premier Zhou Enlai at the welcoming ceremony by Overseas Chinese
in Rangoon, Burma], AMFA, No. 105-00510-08(1).
Zhou Enlai zongli zai zhaodai Wu Nu zongli de yanhui shang de jianghua [Premier
Zhou Enlais speech at the banquet for Prime Minister U Nu], Xinhua Yuebao
[Xinhua Monthly], No. 1, 1955.
Zhu Miandian shiguan dui Miandian zhengju de kanfa [Assessment by the Chinese
Embassy to Burma of the Burmese political situation], AMFA, No. 105-01225-01.
Zhu Miandian shiguan dui waijiaobu gongzuo yijian [Recommendations from the
Chinese Embassy to Burma to the Ministry of Foreign Affairs], AMFA, No. 105-
01816-02.
Zhu Miandian shiguan guanyu mian yuanyi dui huaqiao huiguo tigong bianli de
baogao ji zhong qiaowei, waijiaobu de fudian [Reports of the Chinese Embassy to
Burma on Burmese assistance for the return to China of Overseas Chinese, as well
as replies from the Central Committee of the Overseas Chinese and the Foreign
Ministry], AMFA, No. 118-01322-01.
Zhu Miandian shiguan guanyu Miandian zhengju he duiwai guanxi de diaoyan cailiao
[Materials for investigation and research on Burmese domestic politics and foreign
affairs conducted by the Chinese Embassy to Burma], AMFA, No. 105-00314-01.
Zhu Miandian shiguan guanyu Nai Wen tuixing guoyouhua jingji zhengce deng wen
ti de qingkuang baogao [Situation report by Chinese Embassy to Burma on Ne
Wins economic nationalization], AMFA, No. 118-01251-03.
Zhu Miandian shiguan guoqing qingzhou gongzuo zongjie [Review of the National Day
celebration from the Chinese Embassy to Burma], AMFA, No. 117-00038-02(1).

449

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 Modern ChinaMyanmar Relations

Zong, fen hang guanyu qiaohui (jiefu, liangfu shangpin lianyun deng) wenti de tong-
zhi, qingshi, pifu [Notice, queries and replies to the General Bank as well as to
branch banks with regard to overseas remittances], Documentation in the Archives
of Fujian Province, Roll No. 230, Cat No. 3, File No. 806, 1963.

English-Language Sources
Address delivered by General Ne Win, Chairman of the Burma Socialist Programme
Party, at the Opening Session of the Fourth Party Seminar on 6th November 1969,
Rangoon: Ministry of Information, Burma, 1969.
British Documents of Foreign Affairs: Reports and Papers from the Foreign Office Confidential
Print, Part IV from 1946 through 1950, Series E Asia 1948, Vol. 7, Bethesda: University
Publications of America, 2001.
, 1949, Vol. 9, Bethesda: University Publications of America, 2003.
, 1950, Vol. 11, Bethesda: University Publications of America, 2003.
Burma 1983 Population Census. Rangoon: Immigration and Manpower Department,
Ministry of Home and Religious Affairs, 1986.
Keesings Contemporary Archives, London: Keesings Publications Limited, 28 March4
April 1953.
Minutes of Conversation between I.V. Stalin and Zhou Enlai, APRF, f. 45, op. 1, d.
329, ll. 7587.
Overseas Chinese Business Networks in Asia, East Asia Analytical Unit, Australian
Department of Foreign Affairs and Trade, 1995.
Peking and the Burmese Communists: the Perils and Profits of Insurgency, CIA
Intelligence Report, RSS No. 0052/71, July 1971.

Books, Theses and Reports

Chinese-Language Sources
Baoshan nianjian [Baoshan yearbook], Luxi: Dehong Ethnic Press, 2002.
Burmese Central Bureau of Statistics, Miandian lianbang jihua caizheng bu tongji nian-
jian, 19791989 [Statistical yearbook of the Ministry of Finance of the Union of
Burma, 19791989], Kunming: Institute of International Studies, Yunnan, 1991.
CCCPC Party Literature Research Office (ed.), Deng Xiaoping Nianpu: 19751997
[Chronicle of Deng Xiaoping: 19751997], Vol. 1, Beijing: Central Party Literature
Press, 2004.
, Liu Shaoqi nianpu: 18981969 [Chronicle of Liu Shaoqi: 18981969] Vol. 2,
Beijing: Central Party Literature Press, 1996.

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, Mao Zedong zhuan: 19491976 [Biography of Mao Tsetung: 19491976],

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, Zhou Enlai nianpu [Chronicle of Zhou Enlai: 19491976], Vol. 1, Beijing:
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, Zhou Enlai nianpu [Chronicle of Zhou Enlai: 19491976], Vol. 2, Beijing:
Central Party Literature Press, 1997.
, Zhou Enlai zhuan: 18981976 [Biography of Zhou Enlai: 18981976], Vol. II,
Beijing: Central Party Literature Press, 2008.
Chen Yangyong, Zhou Enlai zai 1967 [Zhou Enlai in 1967], Chongqing: Chongqing
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Selected Newspapers and Periodicals

The Beijing News
China Business Journal
China Business News

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 Modern ChinaMyanmar Relations

China Land And Resources News

China Mining News
China Nonferrous Metal News
China Petrochem
China Petroleum Daily
Chongqing Economic Times
Consumption Daily
Guangxi Daily
International Business Daily
International Business Times
The Irrawaddy
Morning Post
Nanfang Daily
The Nation (Burma)
National Business Daily
New Life News
The New Light of Myanmar
Oriental Morning Post
Peoples Daily
Reference News
Shanghai Securities
Southern Weekly
Spring City Evening
Times Finance
Wenhui Daily (Hong Kong)
Yunnan Daily
Yunnan Economic Daily

Selected Internet Sources

en.oncb.go.th (Office of the Narcotics Control Board, Thailand)
hzs.mofcom.gov.cn (Department of Outward Investment and Economic Cooperation,
Ministry of Commerce, PRC)
ipc.fmprc.gov.cn (International Press Center, Foreign Ministry, PRC)
mandalay.mofcom.gov.cn (Economic and Commercial Section of the Consulate Gen
eral of the PRC in Mandalay)
mm.china-embassy.org (Embassy of PRC in Myanmar)
mm.mofcom.gov.cn (Economic and Commercial Counsellors Office of the Embassy
of the PRC in Myanmar)
news.xinhuanet.com (Xinhua News Agency)
www.adb.org (Asian Development Bank)

470

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 Bibliography

www.blc-burma.org (Burma Lawyers Council)

www.bofcom.gov.cn (Department of Commerce of Yunnan Province)
www.cgs.gov.cn (China Geological Survey, Ministry of Land and Resources, PRC)
www.chinadaily.com.cn (China Daily)
www.dvb.no (Democratic Voice of Burma)
www.fmprc.gov.cn (Foreign Ministry, PRC)
www.gov.cn (Central Government of PRC)
www.iea.org (International Energy Agency)
www.irrawaddy.org (The Irrawaddy)
www.mlr.gov.cn (Ministry of Land and Resources, PRC)
www.mofcom.gov.cn (Ministry of Commerce of the PRC)
www.scio.gov.cn (State Council Information Office, PRC )
www.sdpc.gov.cn (National Development and Reform Commission, NDRC)
www.state.gov (US Department of State)
www.yn.gov.cn (Yunnan Government)

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 Index

ADB (Asian Development Bank), 236, ChinaMyanmar relations and, 157,

257, 315 210, 289, 307, 329, 335, 343, 348,
Afghanistan, 140, 142, 158n2, 269 352, 355, 357, 360
AFPFL (Anti-Fascist Peoples Freedom see also Indonesia; Laos; Singapore;
League), 5, 15, 35, 49, 59, 63, 68, Thailand; Vietnam
148n48 Asian Development Bank. See ADB
Africa, 91, 107, 170, 191, 201 Assam, 239
Andaman Sea, 178, 322 assimilation, 4445, 103
anti-Chinese riots Aung Gyi, 75
Beijing and the occurrence of, 1069 Aung San, 3, 13, 108, 120, 324, 368
Beijings loss from, 1034 Aung San Suu Kyi, 158, 322, 330, 332,
Beijings response, 979 9 334, 3379, 355, 3634, 3667,
ChinaBurma ties and, 1046 3745. See also NLD
Chinese schools and, 9395, 108, 114 Australia, 14, 201, 263, 303, 306
Mao badges and, 946, 114, 138 autarky, 82, 151
Rangoon and the occurrence of,
10913 Ba Swe, U, 8, 256, 46, 52, 57, 59, 62
Rangoons reaction, 99102
Ba Thein Tin, Thakin, 734, 99, 137
Anti-Fascist Peoples Freedom League.
See AFPFL Ban Ki Moon, 3378, 369
Arab Spring, 370, 372 Bandung Conference, 41
Arakan (Rakhine), 167, 171, 286, 322, Bank of China, 83
329 Bank of Communications, 83
ASEAN Bay of Bengal, 159, 233, 305, 312, 318,
ARF (ASEAN Regional Forum), 321, 329, 340, 359
336, 343 Bay of Bengal Initiative for Multi-Secto-
Burma/Myanmar and, 230, 253, ral Technical and Economic Coop-
305, 308, 3267, 3357, 367, 369, eration. See BIMSTEC
375 BCP (Burma Communist Party)
China and, 150, 218, 230, 2336, Burmese government and, 51, 73,
238, 240, 2745, 286, 2912, 306, 756, 139, 434
3423, 360 CCP relations with, 14, 26, 36, 68
ChinaIndia rivalries in Myanmar 70, 746, 78, 105, 118, 1368, 186,
and, 159, 313 4338
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 Index

in ChinaBurma relations, 89, 42, Cambodia 29, 1345, 140, 142, 230,
6870, 76, 78, 98100, 1035, 107, 234, 236, 246, 274, 288, 292, 335,
118, 124, 130, 1324, 136, 139, 186 352
collapse of, 6, 9, 155, 300, 316 CCP (Chinese Communist Party)
Bhamo, 24, 64, 94, 251, 2834, 289, 329 anti-Chinese riots in Rangoon and,
BIMSTEC (Bay of Bengal Initiative for 115,117
Multi-Sectoral Technical and Eco- anti-drug campaign, 271
nomic Cooperation), 233, 322 boundary settlement and, 55, 63, 65
blue-water, 305, 359 Burmas perceptions of, 16, 26
Boao Forum for Asia, 203 Central Committee of, 135, 146,
border dispute, 10, 24, 34, 546, 59, 62, 150, 171
667, 87, 89, 91, 106, 128, 135, 149 Chinas decision-making and, 62
Border Guard Forces, 177, 305, 355, early perceptions of Burma, 1314
361, 364, 375 KMT and, 15, 46, 77
border trade, 1456, 20810, 2123, KMT troops in Burma and, 47
2159, 241, 250, 253, 255, 328, 350
national congress, 151
boundary settlement, 55, 59, 647
revolutionary theory and foreign
1941 Line, 32, 556 58, 60, 62 policy 1214, 189, 25, 29, 33
Yellow Orchard, 56, 57, 59 seizure of power, 15, 35, 47, 49
Brang Seng, 319 structure and dictatorship of, 309,
Britain (United Kingdom, U.K.), 3, 10, 323, 355, 367
15, 160, 229, 264, 290, 308, 314, Yunnan Provincial Committee of,
3389 241
British colonialism, 324 ceasefire area/group, 199, 216, 225, 245,
BSPP (Burma Socialist Programme Par- 279, 310
ty), 67, 70, 93,110, 139, 155, 261,
Ceylon, 29,150
296, 315n15, 319, 324, 368. See also
Ne Win Chen Yi, 41, 107, 126, 136n18, 148n48
Buddha Tooth Relic, 90, 377 Cheng Ruisheng, 73
Buddhism, 90, 314, 323 ChinaMyanmar Pauk Phaw Carni-
val, 244
Buddhist, 90, 317, 323, 327, 332, 363,
377 China Threat, 201, 234, 240
buffer state/zone, 9, 30, 42, 149, 174, Chinese Communist Party. See CCP
240, 314n13, 327 Chit, Thakin, 137
BurmaChina Friendship Association, CIA, 8, 112, 138
59 civil war
Burma Road, 280, 2901, 293 Burmese, 5, 36. See also BCP
Burma Socialist Programme Party. See Chinese, 12, 15. See also CCP; KMT
BSPP citizenship, 435, 93, 143, 253, 306, 363
Burmese Way to Socialism, 6, 76, 79 civil society, 354, 366, 3734
82, 85, 109, 151, 250 Clinton, Hillary, 306, 359, 374, 377. See
also diplomacy; U.S.
casino, 194, 2434, 251, 357 Cold War
Canada 263 Burmese independence and national
caretaker government 63, 298, 314 security and, 124
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 Modern ChinaMyanmar Relations

ChinaBurma relations and, 118, 174 diplomatic relations

end of 6, 9, 155, 162, 183, 233, 250 between Burma and PRC, 7, 1520.
history of, 162 See also Zhou Enlai
regional security and, 139 see also ASEAN; India; Japan; Laos;
start of, 55 Soviet Union; Thailand; U.S.
thinking of 312, 3589 discipline-flourishing democracy,
160, 323
see also containment; U.S
drugs. See Golden Triangle; narcotics
Colombo Plan, 7
dual nationality, 34, 37, 43, 144
confrontation, 42, 130, 131, 140, 149,
174, 361
constitution, 332 E Maung, U, 16
election
of 1949, 17
of 1960, 5, 315
of 1974, 6, 70, 143
of 1974, 6
of 2008, 1556, 160, 2967, 305n87,
316n18, 319n29, 325, 356, 3602, of 1990, 155, 1589, 3312, 334,
371, 3756 335n68
containment, 9, 26, 30, 42, 66, 87, 149 of 2010, 3, 155, 160, 296, 303, 305,
308, 334, 339, 352, 355n10, 364,
50, 300, 306, 313, 333, 335, 359
3667, 370
CPSU (Communist Party of the Soviet
of 2011, 156
Union). See SCP
of 2015, 376
cultural relations, 8992
by-election of 2012, 308, 364, 3745
Cultural Revolution, 28, 42, 914, 98,
10711, 1146, 119, 123, 12531 Thai (of 1997), 327
1334, 136, 1424, 306, 357 U.S. presidential, 369, 375
Cylone Nargis, 158, 186, 299n67, energy
310n4, 332, 3378 ChinaMyanmar oil and gas pipe-
Czechoslovakia, 79, 129 lines, 16873, 175, 178, 180182,
186 210, 224, 230, 247, 285, 303,
354, 371
dam (hydropower plant), 161, 177, 187, cooperation, 173, 175, 185
1899 9, 212, 223n40, 224, 230, 247,
hydropower. See dam
307, 317, 3535, 359, 361, 3713,
3778. See also energy Malacca dilemma, 168, 178, 180,
293
Democratic League of China, 45
security, 1635, 168, 169, 173, 175,
Deng Xiaoping, 131, 1335, 136n18, 178, 180, 183, 186, 231, 233, 247
13941, 143, 151, 309
see also diplomacy; Two Ocean
Deng Yingchao, 1335, 140 Strategy
Depayin incident, 158, 332 E.U. (European Union), 157, 159, 240,
diplomacy 2634, 307, 311, 3389, 339n74
dual-track, 136, 1389 export of revolution, 37, 87, 91, 104,
energy, 165, 173, 183, 186 131
good-neighbor policy, Chinese,
2923 fifth column, 37
oil, 183, 1856 foreign relations. See diplomacy; diplo-
revolutionary, 92, 117, 144 matic relations; xenophobia
474

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 Index

Fujian, 211, 246 Look East, 321

regional cooperation, 2394 0, 309.
Gandhi, Rajiv, 316, 31921 See also BIMSTEC
Gang of Four, 143 relations with Burma/Myanmar, 33,
Gambari, Ibrahim, 337, 337n69 84, 174, 3168, 3202, 357, 3678
gas. See energy relations with China, 84, 1167, 174,
Geng Biao, 77, 84, 86, 107, 127 239, 3134
go global, 1934, 202, 225, 228, 241, road connection, 282, 288
246, 263, 265 triangular relations between Chi-
The Global Times, 378 na, Burma/Myanmar and, 73, 159,
GMS (Greater Mekong Subregion), 174, 184, 186, 261, 289, 2945, 304
2334, 2369, 2912 5, 3078, 3138, 3212, 340, 355,
Golden Triangle, 272, 275, 278 3645, 368
Greater Mekong Subregion. See GMS see also energy; Indian Ocean
Guangdong, 246, 256, 288, 340 Indian Ocean, 139, 174, 281, 289, 293,
Guangxi, 173, 181, 236, 240, 246, 256, 295, 305, 307, 318, 340, 352, 359,
2723, 282, 309, 349 371. See also Two Ocean Strategy
The Guardian, 78 Indonesia, 29, 44, 77, 98, 1167, 229
30, 2345, 292, 336, 352. See also
Guizhou, 173, 181, 2723, 282, 285,
294, 309, 349 ASEAN
International Energy Agency. See IEA
Hague, William, 374 Irrawaddy River, 956, 161, 289, 353
Hall, D.G.E, 124
He Long, 77 Jakarta, 43
He Zhiqiang, 289 Japan
HIV/AIDS, 293, 339, 351 ChinaBurma/Myanmar relations
Hluttaw, 308, 3534, 364, 367, 3746 and, 157, 159, 3256, 333, 340, 365
Hong Kong, 116, 204n119, 211, 229, economic assistance of, 6, 315,
246, 252, 2557 315n16, 324, 326
house arrest, 158, 342, 368, 376. See also influence in Southeast Asia, 307,
Aung San Suu Kyi 360
Hu Jintao, 8, 164, 169, 196, 242 regional cooperation, 240, 343
human rights, 157, 161, 1967, 263, relations with Burma/Myanmar,
3123, 3301, 334, 3367, 358, 263, 280, 311n5, 323326, 368, 374
360n18, 366, 369, 374 relations with China, 149, 293
Hungary, 589, 79 Jiang Zemin, 169, 2212, 289
hydropower. See dam Jiegao, 216
Juppe, Alain, 374
IEA (International Energy Agency),
163, 185 Kachin, 105, 138, 191, 195, 205, 214,
IMF, 374 230, 239, 249, 3145, 314n13, 319,
India 341, 3515, 361, 371, 375
cross-border insurgency, 314, 319 Kachin Development Networking
22, 369 Group, 205
475

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 Modern ChinaMyanmar Relations

Kachin State Special Region, 205, 214, Li Yimang, 72

276 Liu Shaoqi, 14, 16, 47, 73, 75, 80, 85,
Karen, 3, 49, 138, 326, 331 106
Karen National Liberation Army Lwejel, 64, 2134, 216
(KNLA), 199 Lwin, Thakin, 21
Karen National Union, 375
Kengtung, 47 Maday Island, 172
Khin Nyunt, 193n84, 203, 223, 321n33, Mandalay, 97, 101, 175, 189, 203, 2378,
327, 3356, 3412, 350 243, 249, 249n78, 251, 2596 0
KIA (Kachin Independence Army), 319 Mangshi, 8
Kim II-sung, 126 Mao badge, 946, 138. See also anti-
KMT (Kuomintang, Chinese nation- Chinese riots
alist) Mao Tsetung, 146, 18, 25, 30, 35, 37
Burmas relations with, 17, 19 350, 8, 47, 52, 80n156, 91, 1145, 1201,
352, 356 1258, 1323, 133n8, 136n18, 138,
regime, 12, 15, 18n40, 19, 21, 23, 143
102n23, 104, 271, 290. See also Tai- Maoist, 101, 1035, 114, 306
wan Martyrs Day, 120
remnant troops in Burma 3, 8, 8n8, May Day, 120, 244
224, 26, 32, 34, 42, 4656, 87, 149,
298. See also Yunnan Anti-Commu- MekongGanga Cooperation, 233
nist Salvation Army Mekong River, 2367, 239, 2889
see also boundary settlement Middle East, 16970, 173, 180, 191,
Kokang, 177, 2145, 244, 247, 249, 251, 355n10, 370, 372
312, 350, 353, 355, 357, 361 military coup
Korean War, 21, 26, 29, 31, 33, 40, 47, of 1958, 5
298. See also Cold War of 1962, 5, 7073, 79, 93, 10910,
Kunming, 19, 54, 98, 148, 170, 1723, 130, 314n13
181, 220, 23742, 275, 2813, 285 of 1988, 6, 9, 151, 155, 158, 166n15,
6, 2889, 2912, 322 3146, 326, 331, 3678
Kyaukpyu, 171, 182, 285, 329 mineral resources
Kyaw Nyein, U 25 Chinas access to Southeast Asia,
Kyaw Win, 74 307
Kyukok, 214, 216 Chinas countermeasures against the
dilemma of, 2012
Laos, 106, 206, 230, 234, 23641, 246, Chinas investment in Myanmars,
251, 2789, 281, 283, 286, 2889, 2027, 309
308, 335, 352, 367. See also ASEAN Chinas security outlook of, 200
Lashio, 101, 213, 243, 251, 286, 291 Mongolia, 116n88, 129, 206
Latin America, 91, 107 Muse, 2134, 216, 237, 244. See also
Leftist Unity Program, 11, 13 Ruili
Li Jinjun, 262 Myanmar Chinese
Li Keqiang, 165 demographics, 24752
Li Mi, 48 economic power, 2576 0
Li Peng, 224 economic role, 2527
476

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 Index

illegal immigration, 159 ChinaBurma ties thaw and, 131

networks, 2536, 255n101, 356 34, 133n8, 139
see also anti-Chinese riots; Overseas Chinas early backing of, 8287
Chinese; Taiwan demonetization policy of, 312
Myanmar Chinese Chamber of Com- downfall of, 143,151, 324n38
merce, 94, 255, 257 Japan and, 3245, 368
Myanmar Development and Resources peace talks with BCP, 757
Institute, 374 renormalization of ChinaBurma
Myint Thein, U, 15, 26 ties and, 1205, 121n6, 127, 130
Myitkyina, 24, 64, 101, 251, 283, 289 rift in ChinaBurma ties and, 92,
90 978, 101, 1067, 10911, 116. See
Myitsone (dam), 161, 177 191 199 307 also anti-Chinese riots
3534 359, 3713, 377 Sino-Vietnamese War and, 1412
Nepal, 29, 135, 240, 316
Naga, 314n13, 319, 319n29, 320n30 neutralism, 78, 124, 132, 308, 364, 373
Namhkam, 213 New China News Agency (NCNA), 96,
narcotics 101, 116n88
alternative development, 27580 New Zealand, 263
drug addicts in China, 278 NLD (National League for Democra-
drug control, 2736 cy), 308, 3312, 334, 335n68, 339
40, 364, 364n21, 374. See also Aung
drugs-related crime in Yunnan/Chi- San Suu Kyi
na, 270, 2723
non-alignment, 31, 33, 124, 1401, 150
opium/heroin production, 269, 274, 1
2778, 280
North Korea, 25, 206, 3045, 304n83,
poppy cultivation, 276, 278 311, 335n68, 3423
as security threat, 155, 272 Nu, U, 123, 246, 28, 31, 336, 38,
smuggling, 249, 269 40, 57, 596 0, 64, 125, 132, 148n48,
see also Golden Triangle 298, 314, 327
The Nation, 57
National Day, 20, 40, 64, 78, 120, Obama, Barach, 312, 334, 359, 364,
121n6, 136n18 366. See also U.S.
National Democratic United Front, 75 oil. See energy
National Energy Commission, 165 Olympics, 306, 326n48, 343
National League for Democracy. See Overseas Chinese
NLD anti-Chinese riots and. See anti-Chi-
nationalism, 130, 2601, 296, 298, 317, nese riots
333, 356, 362, 373 BCP and, 103, 105, 136
naval strategy, Chinese. See Two Ocean in ChinaBurma relations, 8, 26, 42,
Strategy 44, 87, 121, 1424, 149
Ne Win Chinese Embassy and, 20
anxiety about Chinese population in communist party of, 69
Burma, 315, 315n15 economic nationalization and, 82,
Beijings united anti-Soviet front 845
and, 1401 nationality of, 34, 44
477

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 Modern ChinaMyanmar Relations

networks, 2536, 255n101, 356 San Yu, 139, 142

political function of, 21, 28, 378, Saw Maung, 157, 289, 324n38, 368
43, 456 SCP (Soviet Communist Party), 75
population size, 37, 43, 329 Shan, 105, 138, 194, 205, 214, 239, 252,
see also Myanmar Chinese; Taiwan 269, 276, 299n67, 326, 351, 375
Singapore, 186, 22930, 2345, 237,
Pakistan, 158n2, 169, 175, 288, 3045, 242, 286, 304, 337, 343. See also
307, 318, 318n22, 355, 371 ASEAN
Panthay, 249 SLORC (State Law and Order Restora-
pariah state, 157, 183, 184 tion Council), 9, 155, 157, 300, 316,
Pauk Phaw, 78, 28, 117, 132 318n22, 324n38, 338n70, 363, 365
PBELP (Prosper the Borders to Enrich soft power, 9, 260, 306, 377
Local People), 2845, 293 South China Sea, 293, 306, 329, 343,
Pe Tint, Thakin, 138 352, 352n6, 360
Peaceful Coexistence, 18, 33, 58, 65, 87, South Korea, 1678, 170, 184n67, 211,
128 229, 246, 3034, 304n83, 326n46,
Peaceful Rise, 174 342
Peoples Daily, 21, 70, 78, 91, 97100, Southern Shan State Army, 310
105, 107, 112, 114, 119, 128, 132, Southwest Silk Road, 290
1369, 136n18, 1478, 172, 377 Soviet Communist Party. See SCP
Peoples Liberation Army. See PLA Soviet Union, 7, 14, 25, 29, 33, 77, 106,
pipelines. See energy 123, 125, 12832, 139, 141, 144,
PLA (Peoples Liberation Army), 15, 1489, 174. See also SCP
312, 4851, 546, 54n53, 60, 105, Special Characteristics of Burma Socialist
121n6, 135, 168, 350 Programme Party, 81. See also BSPP
Poland, 589, 79 SPDC (State Peace and Development
pragmatic engagement, 334, 366 Council), 9, 155, 157, 193, 2212,
proletariat internationalism 107, 130 236, 242, 300, 363, 365. See also
Prosper the Borders to Enrich Local Than Shwe
People. See PBELP State Ethnic Affairs Commission, 284
State Law and Order Restoration Coun-
Red Flag, 99 cil. See SLORC
referendum of 2008, 155, 158, 160, State Peace and Development Council.
316n18, 305n87. See also constitu- See SPDC
tion Stilwell Road, 282, 2901
Revolutionary Council, 75 Stittwe (Akyab), 322
revolutionary diplomacy. See diplomacy strings of pearls, 305, 318. See also
Romania 79 Two Ocean Strategy
Ruili, 55, 64, 182, 190, 195, 2136, 237,
2434, 2823, 2856, 289, 291, 371. Taiwan
See also Muse anti-China coalition and, 303
Burma Chinese community and,
Saffron Revolution, 158, 186, 3112, 102, 104, 114
332, 355 Embassy, 19
478

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 Index

Greater China economic sphere, UMFCCI (Union of Myanmar Federa-

252 tion of Chambers of Commerce and
investment in Myanmar, 256 Industry), 236, 242
as an issue, 10, 168, 293, 296n63, U.N. (United Nations), 67, 23, 323,
311, 329, 343 149, 159, 161, 1835, 280, 298, 307,
Myanmar Chinese associations and, 326, 332, 3345, 3379, 342, 348,
256 353, 367, 369. See also U Thant
Overseas Compatriot Affairs Com- UNDCP (United Nations Drug Con-
mission (TOCAC), 247 trol Program), 274
U.N. membership, 122 United Kingdom. See Britain
see also KMT United Liberation Front of Assam
Tatmadaw, 155, 15861, 163, 1778, (ULFA), 320
2967, 3001, 303, 305n87, 308, United Nations. See U.N.
310, 330, 348, 351, 371, 3767 United States. See U.S.
Thailand UNODC (United Nations Office on
anti-drug cooperation, 2745 Drugs and Crime), 274
Burmese perceptions of, 269, 298, U.S. (United States)
304, 310 Burmas balanced diplomacy and,
Myanmar workers in, 341 21, 107, 133, 141, 144
Myanmars border trade with, 209, Burmese perceptions on, 156, 159,
263 269, 2989, 299n67, 308, 310,
in regional cooperation, 2347, 310n4, 312
2394 0, 2912, 322 Chinas energy security and, 168,
relations with Burma/Myanmar, 174, 17980
141, 22930, 263, 326328, 336 heroin market in, 269, 280
relations with the U.S., 310, 328 investment in Myanmar, 167, 229,
Yunnan and, 246, 251, 283, 288 264
see also ASEAN policy towards Burma/Myanmar,
Thaksin Shinawatra, 280n41, 327 1586 0, 184, 263, 263n133, 265,
310n4, 3112, 318, 3256, 32939,
Than Shwe, 8, 156, 222, 297, 317, 321, 338n70, 342, 3647, 369, 374, 376.
337, 369, 375. See also SPDC
See also pragmatic engagement
Than Tun, Thakin, 734
relations with China, 36, 1301,
Thant, U, 6, 122, 338 14950, 250, 303, 358. See also Cold
Thein Sein, 157n1, 160, 193n84, 203, War; containment
328, 354, 362, 3715 relations with Burma/Myanmar, 21,
thirty comrades, 368 23, 125, 159, 3057, 315, 326, 338,
Tibet, 28, 31, 42, 53, 296n63, 313, 329, 359, 372, 3768
371 Straits of Malacca and, 168, 312, 340
Trans-Asia railway, 286, 288, 291 triangular ties between China, Bur-
Two Ocean Strategy, 173, 281, 292 ma/Myanmar and, 9, 36, 1067,
4, 307. See also energy; India; string 123, 132, 157, 184, 3067, 312, 351,
of pearls 355, 3589, 365, 373
USAID (US Agency for International
U Nu. See Nu Development), 325n44, 328, 331
Ukraine, 176n41, 304
479

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Vietnam Yao Zhongming, 201

invasion of Cambodia, 135, 140 Yunnan
joint military exercises with U.S., attitude towards Sino-Burma
303 boundary settlement, 623
relations with Burma, 135, 139, 141, cross-border tourism, 239, 2425
358 as local dynamic in ChinaMyan-
relations with China, 25, 117, 246 mar ties, 186, 2245, 2412, 2467
worries about Chinas influence, trade with Burma/Myanmar 1456,
306, 3578 21420
see also ASEAN Yunnan International Passage,
VOPB (Voice of the People of Burma, 2812, 285, 294
the), 138 Yunnan Anti-Communist Salvation
Army, 22. See also KMT
Wa state, 56, 252, 277, 316 Yunnan Daily, 22
Wang Guangmei, 73
Wang Li, 126 Zhang Chunqiao, 137
Wen Jiabao, 165, 234 Zhao Ziyang, 139, 142
Western Development, 182, 2401, Zhou Enlai
246, 265, 281, 284, 288, 292 articulation of Chinas Burma policy,
World Bank, 315, 328 30, 367, 445, 121, 132
World Revolution, 9, 116, 138, 150 boundary settlement and, 567, 60,
World War II, 6, 234, 128, 162, 280, 625
290, 296, 3224, 352n6, 368 on the establishment of Sino-Bur-
Whittam, Daphne E., 66 mese diplomatic relations, 1617, 19
Wu Yi, 202, 204, 222 personal efforts to improve Sino-
Burmese relations, 28, 345
xenophobia, 333 Zin, Thakin, 137

Yadana gas pipeline, 178. See also energy

480

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