Feb 19, 2013

Myanmar’s transition provides fresh opportunities for Chinese enterprises

The dramatic changes in Myanmar nowadays present China with some problems.

Some China-invested projects in Myanmar have been protested against and even suspended. China is failing to prevent Myanmar from hurting its interests in such cases.

There is a global anxiety about the overwhelming volume of Chinese resource extractions in frontier economies from Africa to Latin America to Southeast Asia. Myanmar is only one of numerous countries where there is growing pushback against massive long-term resource agreements with China.

Some reasons for this antagonism can be found in the terms of the agreements, which appear to favor Chinese financial interests, and the lack of transparency in the contracts.

This does not mean that the projects will ultimately fail. China has firms that are willing to make substantial investments and absorb large risks, and it is often in the best interests of countries to harness their natural resources. So eventually, I believe that Chinese investment may slow or diversify or change in terms, but it will continue.

Due to its democratic transition, Myanmar is witnessing big changes in its economy and politics. Myanmar is beginning to practice the strategy that I have coined "multi-alignment."

This means that it will pursue multiple partnerships with the US, Europe, India, Japan, as well as China, without any exclusive alliance. Successful emerging markets, such as Brazil, Kazakhstan and Saudi Arabia, practice precisely this type of multi-alignment strategy.

Given the challenges Chinese investments face in Myanmar and Myanmar's shifting diplomatic orientation, some are worrying that the country is drifting away from China.

However, it is clear that Myanmar's intent is not to alienate China, but to broaden relationships that benefit the nation as a whole such as by receiving more diversified foreign investment, and purchasing weapons from multiple suppliers.

China should adapt to these changes. As in other countries, China must build relationships beyond the government and the Chinese community toward the local population, civil society, business community, and others. It must think more in terms of mutually beneficial joint ventures, not just efficient extraction of resources.

Especially as China and Myanmar are neighbors, China still enjoys the most advantageous position among the great powers active in Myanmar, so it should think long-term about maintaining good relations with Myanmar now and in the future.

Source: Global Times