More than trains, trucks & trade

Myan­mar joins meet­ing to plot out China’s grand scheme to shake up the world

Mizzima Business Weekly - - CONTENTS - An­drew Lan­den

Wel­come to a ma­jor shift in the world power and trade or­der. That is the mes­sage that un­der­lies this year’s big­gest in­ter­na­tional sum mit set to be held in Bei­jing this month.Myan­mar State Coun­sel­lor Aung San Suu Kyi and other Myan­mar del­e­gates are set to join 27 other world lead­ers in a dis­cus­sion on China’s One Belt One Road (OBOR) ini­tia­tive that looks set to re­jig the 21st-cen­tury global econ­omy to in­te­grate Asia, Europe, and Africa through a com­pre­hen­sive net­work of trans­port and com­mu­ni­ca­tions in­fra­struc­ture.

Bei­jing plans to of­fer a mes­sage of hope and out­line the steps cur­rently un­der­way to kick this mod­ern-day Silk Road into ac­tion. This is no “pie-in-the-sky” project. Parts of the puzzle are al­ready in place, un­der­way af­ter long pain stak­ing work.Over the last cou­ple of months, cargo trains have made the epic over­land jour­ney from China to Lon­don and Budapest.A host of steps is al­ready un­der­way to more ef­fec­tively con­nect the coun­tries and mar­kets in Asia, Europe, and Africa.Up un­til now, OBOR has tended to run “un­der the radar” of Western me­dia cov­er­age, in part due to scep­ti­cism over whether the grand de­sign can be rolled out,the com­plex­ity and long timescale,and be­cause the project and vi­sion threaten the world’s Western-cen­tered power and eco­nomic sta­tus quo.

At a time when Washington’s for­eign pol­icy ap­pears to be at sea un­der the stew­ard­ship of US Pres­i­dent Don­ald Trump, Chi­nese Pres­i­dent Xi Jin­ping’s grand vi­sion is be­ing shifted cen­tre-stage, even though it does not get the main­stream me­dia ex­po­sure it prob­a­bly de­serves.

Myan­mar is caught in a tus­sle over Chi­nese and Amer­i­can in­flu­ence and it is un­clear how this will play out over the com­ing months, years and decades.

Myan­mar’s Suu Kyi is one of many world lead­ers who will be at­tend­ing, with rep­re­sen­ta­tives from 110 coun­tries in all. OBOR mat­ters to Myan­mar in terms of the op­por­tu­ni­ties pro­vided by the in­creased Chi­nese in­vest­ment and in­fra­struc­ture. Nay Pyi Taw may be in two minds as to how to bal­ance re­la­tions with Bei­jing and Washington. But there is clear recog­ni­tion in Myan­mar’s halls of power that en­gage­ment with neigh­bour­ing China is nec­es­sary and needs to be cau­tiously em­braced. A com­bi­na­tion of fac­tors – both pos­i­tive and neg­a­tive – see Myan­mar slip­ping in­creas­ingly into China’s or­bit.

Bei­jing is pro­mot­ing OBOR as a “win-win” sit­u­a­tion for the coun­tries on the three con­ti­nents – Asia, Europe and Africa - the idea sold as help­ing in a whole range of ar­eas from trade, in­vest­ment, com­mu­ni­ca­tions, skills, ed­u­ca­tion, and cul­tural ex­change. Yet oth­ers view it as a zero-sum game – an ex­pan­sion of China’s strate­gic and po­lit­i­cal in­flu­ence at Amer­ica’s ex­pense.

Myan­mar is caught in a tus­sle over Chi­nese and Amer­i­can in­flu­ence and it is un­clear how this will play out over the com­ing months, years and decades.

As Aus­tralian scholar, Hugh White says, there are sev­eral eco­nomic im­per­a­tives driv­ing the OBOR ini­tia­tive. They in­clude the need to fos­ter devel­op­ment in China’s own more re­mote and un­derde­vel­oped re­gions, and the hope of find­ing out­lets for China’s mas­sive over­ca­pac­ity in key in­dus­tries like steel-mak­ing.

But the key mo­tive is much big­ger and more am­bi­tious than these, writes White in the Straits Times. China wants to con­sol­i­date its po­si­tion at the cen­tre of the global sup­ply and man­u­fac­tur­ing net­works which will be the key to the global econ­omy over the com­ing decades. Bei­jing un­der­stands that as China’s econ­omy ma­tures and its in­come lev­els rise, the lower-wage in­dus­tries which have fu­elled China’s growth so far will mi­grate to less-de­vel­oped coun­tries where labour costs are lower.

This is al­ready prov­ing a plus for Myan­mar, de­spite some hic­cups over projects such as the My­it­sone dam power scheme and the Wan­bao Myan­mar cop­per min­ing project in Let­pad­uang.

Ac­cord­ing to oil and gas spe­cial­ist An­dre Wheeler, Myan­mar is a cru­cially im­por­tant piece of the OBOR jig­saw puzzle. It in­cludes a cor­ri­dor or out­let for goods and oil and gas pipe­lines to and from China’s south­west. Strate­gi­cally, Myan­mar has the po­ten­tial to free China from the Malacca Straits bot­tle­neck for the trans­port of prod­ucts and raw ma­te­ri­als – a route that could be com­pro­mised in the event of ris­ing US-China ten­sions.

“Fur­ther­more Myan­mar has an im­por­tant strate­gic lo­ca­tion in the im­por­tant BCIM (Bangladesh China In­dia Myan­mar) cor­ri­dor as well as the China Indo-China eco­nomic cor­ri­dor. These cor­ri­dors con­nect the likes of Danang (Viet­nam) with Mawlaymine in the Mon State and Dawei with Bangkok-Ho Chi Min – Vung Tau as well a mar­itime route to In­done­sia and Sri Lanka that by­passes Sin­ga­pore and the Malacca Straits,” says Wheeler.As White writes, it would be un­wise to dis­miss the Belt and Road Ini­tia­tive as a mere pipe dream. “It has the power and pres­tige of Pres­i­dent Xi Jin­ping be­hind it. It is at the cen­tre of his vi­sion for China, and of his am­bi­tion to trans­form China’s place in the world dur­ing his time as its leader. He is de­ter­mined to make it work, and in China to­day that counts for a great deal.”

The irony is that Xi is pro­mot­ing glob­al­iza­tion and com­mu­ni­ca­tion at a time when his US coun­ter­part ap­pears to be at­tempt­ing to shrink its global eco­nomic role un­der the mantra of “Make Amer­i­can Great Again.”

As scholar White puts it: “The con­trast could not be starker. Amer­ica wants to shrink its role in the global econ­omy and cling to old in­dus­tries, while China wants to ex­pand its global role and move its econ­omy into new ones. No prizes for guess­ing which of these vi­sions is more likely to suc­ceed.”

Chi­nese cargo train ar­rives in Lon­don. Photo: EPA

Chi­nese Pres­i­dent Xi Jin­ping, seen here with his wife, has done a lot to pro­mote his One Belt One Road vi­sion. Photo: EPA

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