As China surges forward again in Myanmar, new pressure to restart a controversial dam project could represent a watershed moment for bilateral relations.

The Beijing-backed US$3.6 billion Myitsone dam project, which if built as previously designed would flood 600 square kilometers of forestland in northern Kachin state and export 90 % of the power produced to China, was suspended by Myanmar’s previous military-dominated government in September 2011.

In justifying the landmark decision, seen by many at the time as the beginning of a shift away from China, then Myanmar president Thein Sein said the project, “it was against the wishes of the people.”

The dam is designed to block a confluence that forms the culturally significant Irrawaddy River, the nation’s longest running from north to south. The project was previously strongly opposed by local Kachins and across the entire country.

Renewed Chinese pressure for the dam was in the news earlier this month, when The Irrawaddy news site reported that Hong Liang, the Chinese ambassador to Myanmar, had dispensed warnings and threats against local Kachin leaders during a visit to the state capital Myitkyina.

According to the report, Hong reportedly warned them against opposing the project and threatened them with “difficult consequences” if they had more frequent contacts with Western envoys and Christian church organizations.

Artist's rendition of the postponed Myitsone Dam project in northern Myanmar. Photo: Wikipedia
Artist’s rendition of the postponed Myitsone Dam project in northern Myanmar. Photo: Wikipedia

It was neither a new nor unprecedented threat. In 2016, the same Chinese ambassador urged his US counterpart in Yangon not to travel to northern Kachin State or certain parts of eastern Shan State because Washington “should respect China’s interests.”

Beijing’s interests in Myanmar are largely strategic, including as an outlet for its landlocked southwestern provinces to the Indian Ocean. A hydroelectric dam at Myitsone would provide power to Yunnan and other southern areas across the border where a proposed Myanmar-China Economic Corridor (MCEC) would feasibly begin.

The US-based Institute for Peace said in a report referring to the threat that China believes it “deserves to have predominant presence and influence in these areas, if not elsewhere in Myanmar, regardless of the wishes or interests of Myanmar, let alone the interests of other countries.”

Two years later, China is in a much stronger position to push its Myanmar-based policies and projects.

The US has imposed only limited sanctions on Myanmar’s military over its brutal “area clearance” operations against Muslim Rohingya in Rakhine state, which drove more than 700,000 people across the border into Bangladesh.

The European Union has leveled similar targeted sanctions against seven senior military, border guard and police officials accused of serious human rights violations against the Rohingya. The United Nations has said the expulsion may have had “genocidal intent.”

Myanmar-Aung San Suu Kyi-Myitsone Dam-River-2011-Facebook
Aung San Suu Kyi in front of an anti-Myitsone dam poster in 2011. Photo: Facebook

Aung San Suu Kyi, lauded as a civil rights and pro-democracy icon before she became State Counselor in 2016, has since been stripped of several of the accolades and prizes she received in the West because of her refusal to condemn the carnage against the Rohingya. That’s pushed her away from her previous backers in the West and increasingly into China’s welcoming embrace.

On December 7, 2018, she was appointed chairperson of a Myanmar government steering committee tasked with implementing the establishment of the MCEC, a venture under China’s Belt and Road Initiative (BRI).

During his meetings in Myitkyina, Chinese ambassador Hong told Kachin community leaders that Suu Kyi, once a staunch and vocal opponent of the Myitsone project, has changed her mind and that they should follow suit.

Suu Kyi has made no official announcement indicating that is her position and people close to her have said rather bluntly that any such move to resurrect the deeply unpopular project would be tantamount to “political suicide.”

That’s definitely the case among Kachin activists. Lahpai Seng Raw, a Kachin community worker and Ramon Magsaysay Award winner — which honors former Philippine President Ramon Magsaysay’s example of integrity in governance and public service — said in a recent commentary piece that the BRI is “a form of neo-colonialism, a thinly-veiled attempt at gaining dominance on the world stage.”

She argued that clear mechanisms need to be put in place for resource-sharing and evaluating the social and environmental impacts of any MCEC projects before they are implemented.

“Unless such steps are taken, the trust deficit in China-backed economic ventures will only intensify. China also stands to lose credibility as an honest mediator in the peace process” between central authorities and the country’s various ethnic armed groups, Seng Raw warned.

The lack of local consultation has backfired on China’s designs for Myitsone in the past. In 2010, the dam site was hit by several bomb blasts detonated by disgruntled locals that injured and killed Chinese workers. At the time, an estimated 300 Chinese workers were employed at the project site.

Myanmareses living in Malaysia display placards in protest against the Myitsone dam project, outside Myanmar embassy in Kuala Lumpur September 22, 2011. A group of Myanmar activists on Thursday staged a protest against the Myitsone hydroelectric power development project on the Irrawaddy River in the Myanmar's northern state of Kachin. REUTERS/Bazuki Muhammad (MALAYSIA - Tags: CIVIL UNREST POLITICS BUSINESS) - RTR2RNHU
A protest against the Myitsone dam project on September 22, 2011. Photo: Reuters/Bazuki Muhammad

But is Myanmar, now isolated again from the West, in a position to withstand Chinese pressure? China accounted for nearly 40% of Myanmar’s trade in 2017, according to World Bank figures, while Chinese official sources say between 40%-50% of foreign investment came from China, including Hong Kong and Macau.

Now, Myanmar is likely even more economically dependent on China, a reliance that has been compounded by the need for Beijing’s political and diplomatic support at the United Nations and against Western nations critical of the Rohingya issue.

China has also managed to outmaneuver other foreign interlocutors and emerge as the main broker in Myanmar’s staggering peace process, which is a major reason why Hong is opposed to Western diplomats visiting Myanmar’s war-torn north that borders on China.

Beijing clearly enjoys closer connections with the ethnic armies operating in Myanmar’s north than any of the Western-backed peacemaking outfits that have tried to influence the peace process.

China is also wielding a carrot and stick in the conflict areas. A four-month pause in fighting, announced by the Myanmar military on December 21, is widely seen as a result of Chinese pressure on the Myanmar government.

That announcement, however, has been ignored by ethnic armed groups in the area because it does not cover Rakhine state, where fighting against the rebel Arakan Army has recently intensified. During his meeting in Myitkyina in January, Hong offered to initiate negotiations between the Myanmar military and the Kachin Independence Army (KIA), which has been under attack since 2011.

People displaced in the conflict between Kachin Independence Army (KIA) and Myanmar military for the control of an amber mine pass their time at a Christian church in Tanai township, Kachin state, Myanmar June 16, 2017. REUTERS/Soe Zeya Tun
Internally displaced people at a Christian church in Tanai township, Kachin state, June 16, 2017. Reuters/Soe Zeya Tun

An estimated 120,000 people have fled the fighting and are living in makeshift camps in KIA-controlled areas along the Chinese border or near government-administered centers such as Myitkyina and Bhamo. Refugees in KIA-controlled areas are dependent on food and medical supplies from China, which makes the Kachin rebels especially vulnerable to Chinese pressure.

At the same time, huge shipments of Chinese weapons have been moved across the border to select rebel outfits, putting even more pressure on the Myanmar government and military. The 20,000-strong United Wa State Army (UWSA) is now equipped with new, sophisticated Chinese weapons which it has shared with ethnic Kokang, Palaung, Shan and Rakhine rebels, with much smaller quantities also being given to the KIA.

Yangon-based diplomats speculate that China is now, as ever, playing a sophisticated “good cop, bad cop” routine to win concessions in Myanmar, including for the Myitsone dam.

Hong’s sharp warning stands in contrast to the approach of Sun Guoxiang, a smooth-talking Chinese diplomat who has attended several meetings with the Myanmar government’s peace commission as well as talks between the central authorities and ethnic rebels.

When Myanmar opened to the West and permitted unprecedented political freedoms in 2011-2012, the policy shift was driven by a desire of the then ruling military to mitigate its dependence on China.

That reliance had steadily grown since a brutal military crackdown on pro-democracy demonstrators in 1988, which led to the imposition of Western sanctions and boycotts, and raised concerns about sovereignty among the top brass.

A graffiti is seen on a stone at the confluence of the Mali and Nmai river at Myitsone, outside Myitkyina, capital city of Kachin state, Myanmar March 30, 2017. Picture taken on March 30, 2017. REUTERS/Soe Zeya Tun            To match Exclusve CHINA-SILKROAD/MYANMAR-DAM - RTX347PC
Graffiti on a stone at the confluence of the Mali and Nmai river at Myitsone, outside Myitkyina, capital city of Kachin state, Myanmar March 30, 2017. Photo: Reuters/Soe Zeya Tun To 

The Rohingya crisis has restored the country’s previous pariah status after a brief period of Western engagement that saw the lifting of a previous generation of sanctions imposed for rights abuses.

That new shift, analysts say, could have devastating consequences for the country’s political future and sovereign interests. Since last year, China has strongly lobbied for new economic concessions and for previously promised projects to be swiftly implemented.

The previous Thein Sein government allowed a 2011 memorandum of understanding with China to build a high-speed railway from its southern Yunnan province to Myanmar’s Kyaukphyu port to elapse without any track laid.

Now, the project is back on the table, as are a number of smaller hydroelectric power projects Beijing aims to build. But China’s new push for the Myitsone dam represents a gamble, one that could reignite the popular anti-China movement that swept the country in 2011, and one that even Suu Kyi would be hard-pressed to stop once started.