STRATEGIC IMPLICATIONS OF BRI PROJECTS IN INDIA'S NEIGHBOURHOOD

In Beijing’s strategic thinking, China’s geographic position is unfavorable. Beijing’s vital sea lines of communication pass through the Malacca Strait, which it fears could be subject to blockade by a foreign navy during a military conflict, the “Malacca Dilemma”. About 80 percent of China’s imported oil passes by sea through the Strait, and China is dependent upon foreign oil for 80 percent of its needs. A distant blockade is a potential vulnerability during a war over Taiwan. Beijing has invested billions into establishing infrastructure routes, including oil and gas pipelines, that bypass the Malacca Strait. In Pakistan, China has invested US$65 billion in the China-Pakistan Economic Corridor (CPEC) and US$21 billion or so in the China-Myanmar Economic Corridor (CMEC). To these can be added agreements with Russia and networks extending throughout Central Asia.

CMEC in Myanmar was initially announced in 2017 as a standalone infrastructure route building off of pre-existing efforts, and in 2020, President Xi Jinping personally visited the country to sign 33 Memoranda of Understanding with Aung San Suu Kyi’s government. That this head of state visit occurred in January 2020 during the opening stages of COVID-19 speaks to its significance for Beijing. The CMEC is Beijing’s primary interest in Myanmar. Once complete, the railway and road network will run from Kyaukpyu deep-water port in Rakhine state through Mandalay to Kunming, Yunnan. Some have described CMEC as China’s backdoor to the Indian Ocean. There are a few other related projects - as well as some outside the formal BRI, including energy generation, a special economic zone in Yangon, others along the border, and a rare earth mineral extraction project.

The pipeline promises to carry 22 million metric tons of oil and 12 billion cubic meters of natural gas annually. For context, China imported 325.8 million metric tons of oil this year and has a yearly demand for 385 billion cubic meters of natural gas. Although respectively 6.8 percent and 3.1 percent of Chinese demand for both, the importance of CMEC is that it diversifies China’s access to Indian Ocean energy resources alongside CPEC in Pakistan, the Russia-China pipeline, and Central Asian sources as one part of a larger geostrategic picture.

Myanmar is also important for Chinese foreign policy by virtue of their shared border, the risk of instability, and connectivity to South and Southeast Asia. Beijing’s BRI projects in Myanmar will also tie the country into China’s economic orbit via Yunnan, and, from Beijing’s perspective, mitigate the risk of further instability. If economically dependent on China and physically connected to it, then Myanmar will be structurally inclined towards Chinese preferences. 

China advances CMEC and its overarching political interests via engagement across Myanmar’s shifting and complicated political environment. Through party-to-party ties, the CCP works with political parties, including the National League for Democracy, as well as ethnic armed organizations, such as its close ally, the United Wa State Party. 

Carrots have included development projects and infrastructure, as well as investment, arms, and political cover in the United Nations. Sticks include border closures, leveraging its ethnic armed organizations and supplying them with arms, and threatening to cut off the tap on investments.

Importantly, however, Myanmar’s internal stability complicates China’s ambitions. From Beijing’s perspective, the coup upends what was a fairly strong trajectory for China-Myanmar relations. While the Junta in Myanmar has been receptive to China’s efforts to push CMEC forward, as it wishes to court Beijing’s support, the country remains destabilized. For its part, China has openly embraced the Junta since late 2022 after a period of relative fence-sitting. We are now seeing a regular drumbeat of Chinese visits and engagements, as well as BRI-related announcements.

But the Myanmar people increasingly display widespread anti-China sentiment, and some Chinese factories have been subject to arson. Additionally, a few armed groups at the local level have  launched attacks against the Junta officials guarding Chinese BRI projects. Continued violence and instability, as well as economic mismanagement in Naypyidaw, means that seeing CMEC to fruition is still some ways off.

These instability issues also plague CPEC in Pakistan and other geostrategic BRI projects. China has few reliable partners and few reliable alternatives, but Beijing will push ahead despite the instability and unreliability of its partners. 

Ensuring that Myanmar does not become dependent upon Beijing is an important strategic goal. It would be a negative outcome to see the now firmly pro-China Junta become ensconced in Naypyidaw. Unlike Pakistan, the Junta in Myanmar is less capable of refusing Chinese overtures. For this reason, supporting the pro-democracy coalition in Myanmar is the correct strategic approach as a democratic government in Naypyidaw will be far more amenable to the US and Indian interests than the revisionist Junta, which has continued to embrace Beijing despite New Delhi’s outreach. In the long term, the US and India will need to compete more effectively to prevent China gaining geostrategic advantage. Matching China dollar-for-dollar is ineffective, especially as China is willing to accept a level of risk and delayed return on investment that a private multinational from other countries simply cannot. Beijing is also capable of operating in a corrupt space much more readily. Instead, an emphasis on quality infrastructure projects that meet the needs of local populations is necessary, as the Blue Dot Network promises to do.

From a geostrategic perspective, keeping the Malacca Dilemma open for Beijing will complicate Chinese military planning. The best means of doing so is to neutralize China’s geostrategic BRI partners. While China is establishing a series of infrastructure routes and ports and enmeshing key countries into its economic orbit, the Malacca Dilemma remains a dilemma if Beijing cannot rely upon its partners to acquiesce to its requests. In the event of a conflict over Taiwan or the Line of Actual Control, the United States and India should work to ensure that partner governments in Pakistan, Sri Lanka, the Maldives, and Myanmar deny Chinese military vessels access out of concern of falling afoul of US or Indian retaliation.

These remarks were presented by Mr. Lucas Myers at Global Conference for New Sinology (GCNS), 2023