US zeroes in on China’s clout in Burma

Brian McCartan
Asia Times online
October 24, 2009

A high-level American delegation will travel to Burma in coming weeks on a fact-finding mission as part of the United States’ new engagement policy with the military ruled country. The talks will center on improving Burma’s human-rights situation and its claimed intention to move towards democracy, but the subtext will be improving diplomatic relations and fostering influence in a country widely viewed as a key regional ally of China.

US Assistant Secretary of State for East Asian and Pacific affairs, Kurt Campbell, said on October 21 during hearings before the House Foreign Affairs Committee that he will lead a fact-finding trip to Burma in coming weeks to hold discussions with the regime and meet with democracy leader, Aung San Suu Kyi, as well as ethnic group representatives. Campbell said the trip is designed to build momentum behind the policy shift, however, no other details or dates were publicly disclosed.

During the hearings, Campbell reiterated that the new policy does not mean the end of US economic and financial sanctions against the regime and its members. “Our dialogue with [Myanmar] will supplement rather than replace the sanction regimes that have been at the center of our Burma [Myanmar] policy for many years,” he told the committee.

The US says sanctions will only be removed when the regime makes tangible steps towards starting a dialogue with the democratic opposition and ethnic groups, as well as release over 2,000 political prisoners, including Suu Kyi.

There is, however, more to the new policy than mere democracy and human-rights promotion. A desire to build stronger ties with Southeast Asia became clear during US Secretary of State Hillary Clinton’s inaugural tour through Asia in February when she attended the opening of the Association of Southeast Asian Nations (ASEAN) secretariat in Jakarta.

This was followed by her attendance at the ASEAN Regional Forum in Phuket, Thailand, in July. Policy analysts say a major reason for this new gambit is a realization that Chinese influence in the region has blossomed in the past decade while US attention was largely diverted elsewhere, especially on the “war on terror”.

Washington has become increasingly concerned about China’s growing power and influence in the region. While much of the focus has been on China’s rapidly modernizing military and its growing capacity to project power beyond its immediate borders, including towards nearby US ally Taiwan, a quieter competition is emerging between Washington and Beijing for influence in Southeast Asia.

In the late 1990s, China switched to a strategy of improving diplomatic relations and investing heavily in economic and infrastructure development projects in Southeast Asia, a gambit many analysts have referred to as China’s “soft power”. The strategy is a departure from its previous approach to the region which emphasized confrontation and even armed struggle as a way of pushing its interests. Under the new approach, China has made efforts to work with the various authoritarian and quasi-democratic regimes in the region. This has included invitations to meetings and trade fairs, training for government officials and special scholarships to study in Chinese universities. Chinese development aid is often highly publicized and includes high-profile infrastructure projects such as roads and hydro-electric dams and prestige projects such as the main stadium for the 2009 Southeast Asia Games to be held in Vientiane, Laos, in December and the recently completed Council of Ministers building in the capital of Cambodia, Phnom Penh.

China has also emerged as an increasingly important source of low-interest loans, grants, development projects, technical assistance and foreign investment. These projects combined with China’s “no strings attached” approach to aid have made Beijing an attractive partner to regimes with questionable human-rights and democracy records.

In contrast, much of the West’s aid comes with demands for improvements in political freedoms and human rights and initiatives to counter corruption.

Anxious policymakers

China’s inroads have made US policymakers anxious about its possible effects on Washington’s political clout and position in the region. Opinions among analysts vary on whether China is seeking to dominate the region to the detriment of the US or simply securing its interests in a region contiguous to its southern provinces. Either way, the consensus is that if the US is to remain a power in the region, China’s soft power needs to be balanced, especially in the three countries identified as China’s main allies in the region: Cambodia, Laos and Burma.

The US has increased development and military aid to Laos and Cambodia. While some of this effort began in the last years of the George W Bush administration, renewed US intent was signaled in concrete terms when President Barack Obama removed Cambodia and Laos from a trade blacklist. This opened the way for more American companies to apply for financing through the US Export-Import Bank for working capital guarantees, export credit insurance and loan guarantees. Although neither country represents a major market for the US, the move signaled US intentions to improve relations through commercial diplomacy.

In September, US Deputy Secretary of State James Steinberg met in Washington with Cambodian Deputy Prime Minister and Defense Minister Tea Banh to discuss security cooperation. During the same month, the US Embassy in Phnom Penh announced the donation of some US$6.5 million in military equipment through the Foreign Military Financing program. Cambodian national defense spokesman, General Chhim Socheat, also announced in September that about 1,500 American soldiers would participate for the first time in joint military exercises in mid-2010, supported under a US program dubbed the “Global Peace and Operations Initiative” designed to expand global peacekeeping capabilities.

Even Thailand, usually considered one of the US’s staunchest allies in the region, is receiving more attention due to a perceived shift towards China begun under the premiership of now exiled former prime minister, Thaksin Shinawatra. The latest sign of a renewed US interest in democracy promotion in the kingdom is a forthcoming United States Agency for International Development program aimed at improving civil society structures and media capacity across the country. The nationwide program is also slated to include projects in Thailand’s restive southern region, an area where both Thailand and the US had previously wanted to keep US involvement to a minimum.

To US policymakers keen to counterbalance China’s influence in Southeast Asia, Burma provides a conundrum. China has made strong inroads into Burma, and the US, due to its adversarial stance to the regime, currently has very little leverage to counter it. Unlike in Laos, Cambodia and Thailand, the US has no aid programs, civil society building projects or military-to-military exchanges. American interests are currently served by a charge d’ affaires, since the US removed their ambassador to the country after the military regime violently crushed pro-democracy protesters in 1988.

During October 21 hearings before the House Committee on Foreign Affairs, the chairman, Howard Berman, summed up US policy shortcomings in regards to Chinese influence in Burma. “It is also clear that our policy of isolation over the past two decades has resulted in China’s growing political and commercial influence in [Myanmar], and little progress in supporting those calling for reform,” he said. “Historically, China’s relationship with [Myanmar] has been precarious, but in our absence it has been strengthened.”

Years of aggressive posturing towards the junta have made the generals wary of the US and its intentions. Generals have said that the extensive bunker and tunnel complex being constructed around the new capital at Naypyidaw is to protect against a possible US invasion. Army contingency defense plans and the creation of civilian paramilitary groups across the country are as much about controlling the population as they are about preparing for a theoretical US-led armed intervention.

In the wake of the devastating Cyclone Nargis in May 2008, a US naval task force carrying much-needed relief supplies, helicopters and other vehicles as well as manpower was denied permission to land on junta fears it could be a prelude to a military invasion.

Deficit of influence

With this deficit in influence in mind, the Obama administration needed a way into Burma and the policy review provided the opportunity to change tack. However, with a high-profile international campaign accusing Burma’s regime of gross human-rights violations and a strong anti-junta lobby in the US Congress backed up by sanctions legislation, the latest of which, the Tom Lantos Jade Act passed in 2007 with overwhelming support, the administration could not simply step up funding of development and capacity building programs as it had with Laos, Cambodia and Thailand.

Instead, the US has adopted a policy that keeps sanctions in place, but also allows for high-level diplomatic engagement. Washington also reserves the right to put in place new punitive measures should the regime step out of line, as it did during the 2007 crackdown on peaceful demonstrations led by Buddhist monks.

In the policy announcement and during testimony before a senate hearing on the new policy last month, Campbell said that he is skeptical that nationwide elections scheduled for next year will be free and fair. He has also made it clear that progress in Burma will be long and slow. In the meantime, through diplomatic exchanges, the US can create a dialogue to potentially balance China’s influence in Burma.

China’s economic and strategic interests, as well as political clout, have steadily risen in Burma since Beijing reversed previous policies and withdrew support from the insurgent Communist Party of Burma (BCP) in the 1980s. This contributed to the BCP’s later collapse through a mutiny in 1989, and in its splintering the formation of several ethnic-based insurgent organizations, including the narcotics trafficking United Wa State Army, now active along the China-Myanmar border.

Following the suppression of pro-democracy demonstrators in 1988, China stepped in with massive military aid enabling Myanmar’s military to expand to some 500,000 men, the second-largest standing army in Southeast Asia. China has also supported Burma in the United Nations, frequently blocking moves by the US and its allies to censure the junta through the Security Council. In the latest move, earlier this month, China agreed not to question rising civilian deaths as a result of US bombing campaigns in Afghanistan in return for the US and its allies refraining from focusing on Burma’s political and human-rights situation.

Like Cambodia and Laos, Burma has also become a major recipient of Chinese economic assistance in the past decade. This help has often been in the form of interest-free loans, grants, concessional loans and debt relief. China will likely remain a key source for this kind of assistance due to its “no strings attached” approach.

In return, China has been given preferential access to exploit Burma’s natural resources and port facilities along Burma’s coast. China has become Burma’s largest investor, with junta figures claiming that 90% of recent investment came from China. In addition, tens of thousands of Chinese have migrated to Myanmar seeking work and business opportunities, especially in the north and to the second city, Mandalay, which some Myanmar citizens refer to as a “Chinese city”.

Chinese investment also includes involvement in the controversial Shwe gas project off Burma’s western coast. Rights organizations say the offshore project and a dual oil and gas pipeline being constructed from the coast up the length of the country to the southern Chinese city of Kunming have already resulted in human-rights abuses and will likely result in many more as the projects progress.

China also views Burma as an essential component in its plans to develop its landlocked southwestern Yunnan province. Beijing is keen to develop road networks and port facilities to facilitate the transportation of goods through Burma for export to the rest of the world. A new oil and gas terminal at Kyaukphyu on Burma’s western coast together with the pipeline will allow China to import oil and gas without having to send its tankers through the narrow and strategically insecure Malacca Straits.

Love-hate relations

The closeness of the relationship between Beijing and Naypyidaw, however, is often overstated. A Myanmar army offensive against ethnic Kokang Chinese insurgents in August along the China-Burma border was a case in point. Despite clear warnings from Beijing against such a move, Burma’s army went ahead without providing China forewarning. China responded to the offensive with a rare rebuke of the regime and called for stability. China also joined in a call at the UN Human Rights Council on October 2 for the release of political prisoners and a free and fair election process in 2010.

While China has been able to cultivate civil officials and military officers and improve its image with the general population through high-profile cultural projects, including the promotion of Chinese language studies and scholarships to study in China, in Cambodia, Laos and Thailand, Beijing’s efforts in Burma have run into a pervasive xenophobia and wariness of dependence on any singular foreign power.

Knowing the limitations in its own relationship with Burma’s generals, China is reportedly watching developments closely to determine how serious the US and Burma are about improving bilateral relations. A US-Burma detente would undoubtedly be viewed as a threat to Beijing’s strategic interests in the region. A Burma more sympathetic to the US may be less willing to support China’s projection of power into the Indian Ocean and risks negating advantages gained for the security of its sea lines of communication through avoiding the Malacca Straits.

Chinese officials already suspect that the swift campaign against the Kokang in August may have been motivated by signals allegedly given by US Senator Jim Webb during his visit to Burma this month. If true, then China’s leaders would be justifiably concerned that Burma’s generals may feel safe enough in their dialogue with Washington to follow up with attacks against the other ethnic armies along the border. Chinese authorities have already started to build refugee camps should this happen.

In conceding that the engagement process will be long and slow, US policy is aimed more at how Burma will change after the scheduled 2010 elections. Should the elections result in a genuine move towards democracy, the US is expected to increase its engagement beyond mere diplomatic exchanges towards concrete assistance.

A repeal of some sanctions could soon put the US in direct competition politically and economically with China for influence in Burma. And a sudden move towards a democratic federal state would be at odds with China’s apparent preference for Burma’s political scene to evolve through a gradual process guided by a strong central government.

Already, Burma’s regime has made some tentative signals that it is willing to acquiesce to at least some of Washington’s aims, at least in the short term. Two meetings were held this month between the junta’s liaison officer, Labor Minister and retired Major General Aung Kyi, and pro-democracy leader Suu Kyi. Consequently, Suu Kyi was allowed to meet with representatives from the US, Australia and the European Union.

Her National League for Democracy (NLD) party has also been allowed to meet with foreign diplomats, including a meeting on Tuesday with the US charge d’ affaires, Larry Dinger. United States officials announced on October 8 that a senior Myanmar official – most observers believe it will be Prime Minister Lieutenant General Thein Sein – will be at a November meeting held between Obama and ASEAN in Singapore during the Asia-Pacific Economic Cooperation (APEC) summit.

What is not yet clear is why the generals have appeared to change their stance. It may be yet another attempt to put off international pressure only to revert back to repression and intransigence once attention has shifted elsewhere. Or the generals may be purposefully playing the US against China, knowing that any improvement in relations with Washington will improve its negotiating leverage with Beijing.

Conceptually, the US makes for a perfect counterbalance to what the Burmese generals see partially as a threat posed by Chinese domination through its fast expanding economic influence. The US also makes for a much stronger countervailing weight in balancing China’s influence than Beijing’s current major rival for influence, India.

A closer relationship with the US would certainly force China to revise its relations with the regime in order to safeguard its interests in an area that it previously had almost monopolistic control. US influence in Burma could also go some way to negate the strategic advantages China has gained through moves to turn Burma into a corridor for trade and oil and gas distribution to its landlocked southwest and its ability to bypass the Malacca Straits, which Beijing fears the US navy could blockade in case of any conflict.

One area that could see immediate change is China’s support for ethnic insurgents along its border with Burma. The junta is placing heavy pressure on the ceasefire groups to become border guard units under army control and join in the 2010 elections. Ethnic leaders have so far resisted the demand and with a deadline set for the end of this month, civil war has become a real possibility.

So far, China has been careful to provide only enough support to deter the Burmese army from making any rash moves and some have questioned the apparent lack of Chinese support for ethnic Chinese Kokang insurgents who were routed in September.

This may change, however, as closer ties with the US could push China to maintain or even strengthen relations with ceasefire groups along the border in a show of strength to safeguard its interests. Unless Burma’s rulers are serious about change in their country that conforms to US criteria, it will be some time before relations between the two countries normalize.

In the meantime, the US now at least has a seat at the table with the generals to discuss China’s role in Burma, and with concessions could potentially provide the regime with diplomatic and economic alternatives that gradually shift the region’s balance of power.