Secretary of State Hillary Clinton’s recent two day visit to Myanmar is causing immense anxiety to the Chinese leadership. This is the first visit by a senior US official after almost fifty years. Secretary Clinton’s visit was preceded by important concessions granted by the Myanmar government in that they took the hitherto unprecedented step of releasing some political prisoners and generally easing the political situation leading to the decision of well known dissident Aung San Suu Kyi to participate in forthcoming bye-elections to the National Assembly.

Earlier Chinese anxiety had increased when Myanmar decided to order the halt the construction of the Chinese funded and built US $ 3.6 billion Myitsone hydro –power project. The Chinese media speculated that it was the US that was behind this move. The decision of the ASEAN countries to pass on the Chairmanship of ASEAN to Myanmar in 2014 was also seen in the same light.

The reason why China has a cause for worry is that it has enormous stakes in Myanmar. China this year alone invested US $ 8 billion in Myanmar and China is Myanmar’s second largest trading partner with Sino-Myanmar trade standing at US $ 4.4 billion this year. China’s south-west-provinces having a population of about 200 million people directly depend upon Myanmar for their access to the sea, as otherwise the alternative route would mean increasing the distance by at least 3000 kilometres. In addition the South-East Asia Pipeline Co., an affiliate of the China National Petroleum Co.[CNPC], signed a deal with the Myanmar National Oil and Gas Co. to build two pipelines [Oil and Gas] from the Myanmar port of Kyaukpyu situated on the west coast of Myanmar to Ruili in Yunan Province of China. From there the pipelines can be extended to feed besides Yunan, the other southern Chinese provinces of Guangdung, Guangxi and Hunan. The two pipelines are 1100 kilometres in length and are expected to carry 22 m/t per year of crude oil and 12 bcm of gas on an annual basis and are expected to be completed by 2013. Along with the oil and gas pipelines, China has also undertaken to build a rail link from the west coast of Myanmar to the Yunan province of China. It is said that the alignment of this railway line will be the same as of the oil pipeline. With such measures China hopes to minimize the economic impact of disruptions that can occur to its sea-borne energy flows. And yet China continues to worry about its vulnerability because of the situation prevailing near the Malacca Straits.

The Malacca Straits are a shallow and a narrow waterway linking the Indian Ocean with the South China Sea. At some points it is only 23 metres deep. At its narrowest point the navigable channel is about 1.5 to 2 kilometres wide and yet it is one of the busiest waterways in the world. Nearly 60,000 ships, including huge oil tankers carrying oil from West Asia to the major oil consuming nations of China, Japan and South Korea, navigate through the Straits on an annual basis. Nearly 80% of China’s oil imports pass through this route. China relies heavily on imported oil, gas and other natural resource commodities to feed its growing economy and these are mainly transported by sea. It is expected that China’s imports of crude oil may exceed 300m tons by 2012 and by 2030 nearly 75% of its oil consumption would be based on imported oil. Today China is the world’s second largest importer of oil after the US and it has even overtaken Japan. Nearly 10% of China’s total energy consumption is based on imported oil.

Even in the past, the Chinese have always considered Myanmar to be an important country that was very strategically located for China. Former PM Zhou Enlai visited Myanmar at least nine times and former Myanmar President Ne Win visited China eleven times. It is not surprising therefore that China has always considered Myanmar as a ’pivot’ country.

In the present times, when the Myanmar Army Chief visited China the Chinese took the unusual step of inviting him to hold talks with the Chinese Vice-President Xi JInping. Xi Jinping is no ordinary Vice-President, for he is also the Vice-Chairman of the Central Military Committee where the most important political decisions are taken. In addition, Xi Jinping is expected to succeed the present Chinese President and Chairman of the Central Military Committee, Hu Jintao who is expected to retire from his post shortly. Therefore the talks between Xi Jinping and the Myanmar Army Chief were of a crucial nature. At the end of the talks the Chinese media announced that the ’two military forces agreed to enhance exchange and deepen co-operation’. It seemed that such a statement was necessary to reassure the Chinese public that all was well with the relationship.

Secretary of State Clinton herself confirmed in Myanmar that her visit was not undertaken on the basis of a sudden change in policy, but as a result of deliberate soundings taken over a period of two years. The US announced a token grant of US $ 1.2 million for health care initiatives and for the care of land-mine victims. Clinton also announced that the US wishes to be a ’partner with Burma [Myanmar]’ and that the US would like it to take its ’rightful place in the world’. As for the lifting of sanctions Clinton promised that ’if there is enough progress than obviously we will be considering lifting sanctions’. Nevertheless as a sop to the Chinese Clinton publicly confirmed that ’we regularly consult China about our engagements in the Asia-Pacific region, including how we see events unfolding here’.

None of the above developments have found any resonance with China, but on the contrary have only fuelled her suspicion that the US was trying to supplant her influence in Myanmar as the US once again engages with Asia. For the moment the Chinese are playing a watchful game. They realize that it will not be easy to hinder China’s position built up so assiduously over the last decade or so. Nevertheless, China continues to show anxiety and as a Chinese commentator remarked in the official People’s Daily, China would see to it that its interests were not ’stamped on’.

Concluded

Views are those of the author

* The author is a former Secretary, Ministry of External Affairs.

Author can be contacted at rskalha@hotmail.com