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SPF China Observer


No.2 2018/03/05

The Myitsone “Dam” Today
-China’s peripheral diplomacy as seen from China-Myanmar relations-

Kazuyuki Suwa (Professor, School of International Relations, University of Shizuoka)

 Following the first-ever Peripheral Diplomacy Work Conference held in October 2013, the Xi Jinping administration has repeated its intention to strengthen relations with neighboring countries. [1] A recent example is the report given at the 19th National Congress of the Communist Party of China in October 2017 in which the secretary-general laid out his foreign diplomacy policy for neighboring countries stating, “China will deepen relations with its neighbors in accordance with the principle of amity, sincerity, mutual benefit, and inclusiveness and the policy of forging friendship and partnership with its neighbors” under the grand design of “following a path of peaceful development and working to build a community with a shared future for mankind.” However, its “implementation,” which the administration sees as the “only standard for determining the truth,” has yet to prove the administration’s philosophy to be true. [2] This has been the case of China’s relationship with Myanmar for the past several years.
 Myanmar, under military rule, began construction of the Myitsone Dam in an impoverished village in the northern state of Kachin with the assistance of China. While it was initially heralded as a massive project demonstrating the close ties between China and Myanmar, more than six years have passed since construction was suspended following Myanmar’s transition to civilian rule. I traveled to the dam site on December 17, 2017 to confirm the state of construction. I also visited the area to be flooded and interviewed the people living in the villages where they were relocated.
 This paper looks at China’s diplomacy with its neighbors by examining recent China-Myanmar relations with an emphasis on the construction of the Myitsone Dam.

The history of China-Myanmar relations

 China-Myanmar relations have gone through a series of twists and turns to date.
 China and Myanmar established diplomatic relations on June 8, 1950 and concluded a border treaty on October 1, 1960 that went into effect on January 4, 1961. The signing of the treaty has been widely publicized in China as an example of defining borders through amicable negotiations that the country can take pride in. In the mid-1960s, the leaders of both countries frequently visited each other, but the relationship worsened during the Cultural Revolution. Relations started to gradually improve in the 1970s, but 1988 proved to be a major turning point. With a military government coming to power in Myanmar in September and Western countries imposing economic sanctions, China took advantage of the opportunity and moved to strengthen its relationship with Myanmar. As a result, China became Myanmar’s largest donor nation, but relations began to sour on 2011 when Myanmar transitioned to a civilian government. [3] The impalpable symbol of this relationship is the construction of the Myitsone Dam which will be discussed in this paper.
 There is no doubt the effect of suspending the massive dam construction project on the relationship between the two countries is not negligible. However, China’s involvement in Myanmar is by no means simple as the country is geopolitically critical for China’s energy security. Along with the Myitsone Dam, the construction of oil and natural gas pipelines is considered a pillar of China’s economic cooperation with Myanmar and has proceeded smoothly without being affected by the suspension of construction of the dam, with the first crude oil flowing through the pipeline to China starting on May 19, 2017. [4] The natural gas pipeline was completed in 2013. [5] In December 2013, I confirmed several oil storage tanks on Made Island in the waters of Kyaukpyu, the western origin of the oil pipeline (Photo 1). Also, in December 2014, I confirmed the presence of oil and natural gas pipelines extending north near Lashio (Picture 2).
 It is impossible to discuss the entire China-Myanmar relationship through the suspension of the construction of the Myitsone Dam alone.

2. The Myitsone Dam

  Many dams are being built in Myanmar to supply water for agriculture, a major industry, and to improve the poor supply of electricity in urban areas.
According to materials from the Myanmar government, more than 200 confirmed dam construction projects have been started over the roughly 20 years since the military government began in 1988. [6]
 China’s full cooperation is indispensable to Myanmar in building these dams as it lacks technical skills and financial capabilities, but the reason why Myanmar relies on China is not just because China is a neighboring major power. As mentioned above, of all the reactions from major nations in response to the military regime born in 1988 from suppressing pro-democracy demonstrations, only China maintained a nonintervention stance on domestic matters and strengthened relations. Since Myanmar’s resource export diplomacy matched China’s resource procurement diplomacy, the two countries have managed to build a good relationship.
  With serious power shortages in Yunnan province bordering Myanmar, the Myitsone Dam began as a joint China-Myanmar project based on a memorandum of agreement between the governments of China and Myanmar for the joint development of hydroelectric power in March 2009. [7] If the project was completed as planned in 2017, it would have been the largest power plant in Myanmar at a total cost of $3.6 billion dollars and capable of generating 6,000 megawatts of electricity. [8]
 However, there were many incidental problems that needed to be solved in building the dam, one of them being the issue of relocating villagers. Completion of the Myitsone Dam would mean flooding 390 square kilometers of land and relocating about 10,000 people in 47 villages. Hence, state-owned China Power Investment Corporation, the Chinese project owner, decided to provide daily necessities, such as two-story houses, living expenses, color TVs, rice, and other necessities to the first 410 households to be resettled. [9] Other reporting has said that assistance such as the construction of cement roads, running water, and free power 24 hours a day was offered. [10]
 However, as soon as the project began at the end of September 2011, then-President Thein Sein issued a presidential order suspending construction during his term of office (until March 30, 2016). While there was some regret from within China noting that some Chinese companies have a tendency to cling to large-scale projects and that they did not communicate well with local governments, [11] much criticism was leveled at Myanmar. The decision to halt the project lay in issues such as the public’s strong fear of environmental destruction, their distrust and dissatisfaction with the distribution of the benefits of the project with China (90% of the electricity generated would be for China), and opposition from armed ethnic minorities (the Kachin Independence Army controlled nearly half of the land to be flooded). In addition, the opposition of Aung San Suu Kyi, who had the overwhelming support of the people, also had a major impact. [12]
 Naturally, since the end of Thein Sein’s regime in April 2016, China has been calling for Myanmar to resume construction of the dam. [13] In turn, Suu Kyi visited China later that year in August and reserved her decision to resume construction pending a report from the investigation committee, [14] but the interim report issued in November postponed the decision. [15]
 Has construction really stopped? Did it start up after pressure from China? What kind of lives are the people who have been relocated living and how do they feel? With these questions in mind, I went to see the construction site for myself.

3. What I saw at the Myitsone Dam (December 17, 2017)

(1) The sightseeing area of Myitsone
 Myitsone is a small sightseeing area where you can rent a boat for fun (Photo 3).
 I chartered a boat at the source of the great Irrawaddy River (the confluence of the Mayhka and Malikha rivers) and traveled for just under an hour. Through a cheerful Myanmarese female interpreter, I asked the captain of the boat if he would take us to the construction site of the dam, but he replied that he would make a U-turn at the site and go back as the authorities seemed to have issued a notice, and that he could not even stop the boat.
 Our cruise through a mundane forest landscape on both sides of the shore revealed nothing connected to the construction of the dam save for a single dump truck at work as we neared the U-turn point. Just then, several bridge piers appeared from the water (Photo 4), and we made a U-turn after passing under them. Although I saw a low-rise building on the riverbank at the U-turn point (Photo 5), I was unable to determine if it was related to the construction of the dam.

After getting off the boat, I passed through the entrance to the dam construction site. The “entrance” was to a place that was off limits. I was not allowed to take photographs. In the photo taken using a camera with a telephoto lens, the gate had “Dam Power Station Project” written on it in Burmese (Photo 6). According to the young Myanmarese guard, he said that there were only two Chinese currently in the office on the premises. Their boss was in Myitkyina (the state capital of Kachin, several tens of kilometers from Myitsone).
 This is how I was able to confirm that construction of the dam had completely stopped. But rather than saying it had stopped, it would be more accurate to say that it had never started in the first place.
(2) The girl who decided to remain at the relocation site (interview 1)

 Aung Myin Tha is the name of a relocation site about 30 minutes by car from Myitsone. At Aung Myin Tha, I spoke with a 17-year-old girl working at a small Kachin style restaurant. “I am from Tan Hpre, which was to be flooded in 2013. I work with my mother and my cousin who is one year younger than me in the restaurant. This is my first time to meet someone from Japan. I have met Chinese [16] several times, including those who can speak Burmese. Everyone living around the restaurant is a relative of mine. This area is very rocky and not very good for agriculture or gathering firewood. When I first moved, business was good, but as competition grew more intense as the number of shops increased, life has not been that easy. However, I do not want to return to Tan Hpre. Unlike Tan Hpre, this place has electricity that I can use throughout the day. Water costs 500 kyat per day (over 40 yen), and all families receive a supply of rice every three days. There is a hospital here and a high school, so households with eligible children have chosen to live here. Me? I failed [school], so I dropped out. On the other hand, those who have work in Tan Hpre go there during the day. (Should the dam be built?) I don’t think the dam is a good idea. That’s because if there is a heavy rain, there is the danger of flooding downstream.”
 After the interview, I walked through Aung Myin Tha (Photo 7) and did not find anything resembling a shop, but there were two-story houses (houses with raised floors), a hospital (photo 8), a school, and a church.

(3) The farmer who returned home after being relocated (interview 2)
 I traveled to Tan Hpre near Myitsone where the village would have been flooded if the dam were built, and interviewed a farmer. Byung Chu (50 years old) welcomed me and spoke politely. “A total of around 380 households (of which, about 200 were from Tan Hpre) were relocated from the three villages of Tan Hpre, Myitsone, and Hapa to Aung Myin Tha. I lived in Aung Myin Tha from 2010 to 2017, but eventually I came back here. In Tan Hpre alone, I think that 50-60 households have come back. The civil servants live over there. But while they live over there, some farm here during the day. They have electricity and water where they relocated, plus a hospital (but you have to go to Myitkyina for emergencies and surgery), and an elementary and high school. They also received farmland and a house. However, the houses were cheaply built and leak in the rain, and there are mountains over there where the land is rocky and not good for farming. Also, while I was given 10 acres of land here, they only gave me two acres over there. Farming is the only thing I know, so I came back here. Even though I came back, I have water but no electricity, so I depend on the small solar panel I bought. (What do you think are the good things and bad things about China?) Myitsone is an important place for the country, but I don’t think that building a dam here is good. They built a hospital and schools, but it’s not good to force people to relocate.”[17]

4. Evaluation and prospects: The formidability of Chinese diplomacy

(1) Evaluation
 To end the 70-year civil war between the military and ethnic minority insurgent groups, the Suu Kyi administration held the 21st Century Panglong Conference twice by the end of 2017. [18] Settling ethnic minority issues is a pressing issue to achieve domestic stability in Myanmar, but in thinking about relations between China and Myanmar, of the approximately 20 armed ethnic minority groups that are said to be in Myanmar, we should recognize that the armed groups in the border region between China and Myanmar were born under the strong influence of the Chinese Communist Party.
 Since the rapid deterioration of relations in 1967 between the two countries during the reactionary diplomacy of the Cultural Revolution, the Communist Party of China adopted a policy of intervention to put pressure on the Ne Win administration at the time by supporting the Communist Party of Burma with weapons and logistics. Although that support continued until the 1980s, China halted support as its own reform and opening up policy took place. As a result of this, a mutiny within the Communist Party of Burma in April 1989 caused it to split into four armed ethnic minority groups, and China’s contact with these groups continued at a working level. [19] This is probably the kind of foundation that existed. State Counsellor Aung San Suu Kyi, who visited China prior to the Second Panglong Conference in May 2017, called for President Xi Jinping’s cooperation for peace and stability in the border region. [20] Ultimately, seven ethnic minority armed groups that did not sign the ceasefire agreement participated as observers at the Conference, which was thought to be due to the efforts of China. [21] In other words, China is trying to take the lead in relations with Myanmar by taking Myanmar’s negative legacy brought about by China interfering in Myanmar’s domestic affairs (meddling with internal affairs by providing arms to anti-government armed minority groups) and changing it into a positive influence on the country (by urging armed ethnic minority groups to cooperate with the Myanmar government). It can be said that China’s response to Myanmar’s armed ethnic minority group problem is a typical example that illustrates the formidability and cunning of China’s realist approach to diplomacy.
 The large-scale project in the Myitsone area that is believed to be under the strong influence of armed ethnic minority groups is a serious matter that should be deliberately and carefully advanced by China as it continues to try and maintain the initiative in diplomacy with Myanmar. The fact that I was able to observe the construction site and conduct interviews indicates that China is not using brute force to push forward its established policy. China may also wish to avoid criticisms of “neo-colonialism” within Myanmar and abroad. As my interviews show, although there is discontent among the people in areas targeted for relocation, such discontent may be limited due to the constant care from China. However, prior to visiting Myitsone, the response I received from the Chinese embassy staff in Yangon where I visited to obtain some information, was, as usual, impersonal and rude.
(2) Prospects
 The following may be a useful reference in thinking about the fate of the construction of the Myitsone Dam.
 As of 2013, there are more than 35 power station construction projects in Myanmar in which Chinese enterprises are the lead company, so the suspension of the Myitsone Dam project can be seen as having a limited impact on China’s presence. [22] Moreover, although the purpose of building the dam was to meet Yunnan province’s need for electricity as previously noted, Yunnan province has experienced an electricity surplus in recent years and it appears that interest in resuming construction of the dam by China is waning. [23]
 If this is the case, it will have to consider scrapping the project.
 According to a spokesperson for State Counsellor Aung San Suu Kyi, she is trying to propose to China the construction of multiple small hydroelectric power stations that pose less risk of environmental destruction as an alternative to building the Myitsone Dam. [24]According to Chinese Myanmar researchers, the Chinese ambassador to Myanmar officially stated that if construction of the dam was completely canceled, investors in China would consider requesting preferential treatment in other projects in place of full compensation ($800 million). [25] Negotiations over a final decision will likely continue for the time being.
 According to professor Bi Shihong of Yunnan University, who is a personal friend, he asserted that judging by the series of measures taken by Myanmar (for example, the visit to China by the president’s envoy) after construction was suspended, the Myitsone Dam issue has not exacerbated the relationship between China and Myanmar as of 2014. [26] Based on the above analysis and news coverage, and from what I gained during my visit to Myitsone, I think that this assertion is sufficiently persuasive. Regardless of how the construction of the Myitsone Dam develops, it seems that China is taking the initiative, so that “amicable” China-Myanmar relations will continue for the time being.

 Since the “nationalization” of the Senkaku Islands in 2012, China has “downgraded” Japan, so to speak, from a great power to a neighboring country in terms of China’s foreign policy. Since June 2017 when Prime Minister Shinzo Abe showed a cooperative stance toward the One Belt One Road Initiative, China has started to repair relations with Japan. [27] However, at the beginning of this year, a Chinese nuclear attack submarine passed submerged through Japan’s contiguous zone surrounding the Senkaku Islands. It is an incomprehensible act that is worthy of protest.
 However, from the Chinese perspective, such criticism seems to be unfounded. This is because, as mentioned at the beginning of this paper, while declaring a path for peaceful development and a community with a shared future for mankind at the National Congress, Xi Jinping warned that China would never give up its legitimate rights and interests, and that “no one should expect us [China] to swallow anything that undermines our interests.” The Communist Party of China maintains that it has “wonderfully realized” the system integration of socialism with a market economy, a concept widely regarded as being incompatible, but China seems to believe that it is possible to realize the simultaneous parallel advancement and realization of the soft aspect of peaceful development and the hard aspect of maintaining sovereignty. If I can borrow a 2017 Japanese buzzword, it is trying to herald the arrival of a new paradigm by aufheben (sublimation).
 If Xi Jinping seeks to be a leader along the lines of Mao Zedong, then this inconsistent thinking may be understandable.

(Dated Jan 26, 2018)

1 In China, the expression “periphery” or “peripheral country” can be used in the sense that Xi has the authority in relations between states and that it revolves around himself.

2 Kazuyuki Suwa, “Xi Jinping chouki seiken no shidou” (The Start of the Long Xi Jinping Administration), Intelligence Report, Policy Research Institute, Ministry of Finance, No. 1 (2018), p. 4-17.

3 Tetsuya Kasei et al., “列国志 缅甸,” Social Sciences Academic Press (China), 2009, p.410-422.

4 “中缅原油管道原油进入中国”, People’s Daily (May 20, 2017). The pipeline terminal is in Anning, Yunnan province (Yunnan Petrochemical Company, a subsidiary of China National Petroleum Corporation).

5 “Chuugoku sekiyu yunyuu ruuto tayouka” (China Diversifies its Oil Import Routes), Asahi Shimbun (January 30, 2015). The terminal of this route is Guigang, Guangxi Zhuang Autonomous Region.

6 Katsumi Tamura and Masahiko Matsuda, eds., Myanmar wo shiru tame no 60 sho (Know Myanmar in 60 Chapters), Akashi Shoten (2013), p, 110.

7 “李长春与缅甸平和与发展委员会第一秘书长会谈”
[] (Accessed January 4, 2018).
The memorandum of agreement between the governments of China and Myanmar for the joint development of oil and gas pipelines had also been signed at the time of this meeting.

8 Chen Junfeng, “Misson damu no kensetsu touketsu ni miru chuumen kankei no henka mekanizumu” (Change Mechanism of China-Myanmar Relations Viewed from the Suspension of Construction of the Myitsone Dam), Journal of Global Studies, Vol. 4, p.128.

9 “中电投集团:密松电站项目有利於中缅互利共嬴”
[] (Accessed December 27, 2017)

10 “密松水电站项目的中国留守者”
[href="] (Accessed January 8, 2018)

11 “习近平李克强先後发话 密松水电站要重启了?”
[href="] (Accessed December 29, 2017)

12 “Two Rivers: The Chance to Export Power Divides Southeast Asia”
[href="] (Accessed December 28, 2017)

13 “2017年11月8日外交部发言人华春莹主持例行记者会”
[] (Accessed January 16, 2018)

14 “Chuugoku ga damu kensetsu saikai he atsuryoku kukyou ni tatsu myanmaa no suu chii-shi” (Aung San Suu Kyi Struggles with Pressure from China to Resume Dam Construction).
[] (Accessed March 5, 2017)

15 “Hydropower review taskforce stalls, waiting for instructions”
[[]] (Accessed January 17, 2018)

16 When I spoke to an employee at the Dehong Dai commerce office (Dehong Dai and Jingpo Autonomous Prefecture in Yunnan Province), I was told that there were at most 100 Chinese staying long-term in the area. Thus, “Chinese” in this text seems to refer to Chinese who have Myanmarese nationality. According to one of the leaders of a Chinese community from Yunnan that lives in Myitkyina, I was told there were more than 10,000 Chinese from Yunnan living in the area.

17 See the website for photos of Myitsone taken by the author.[]

18 The Japanese government (Special Envoy of the Government of Japan for National Reconciliation in Myanmar, Yohei Sasakawa) is actively cooperating to help realize a ceasefire agreement between the Myanmar government and ethnic minority armed groups.
“Ceasefire Agreement Signed with Ethnic Armed Groups in Myanmar”
[] (Accessed February 19, 2018)

19 Bi Shihong, “Kokkyochitai no minzoku seiryoku o meguru Chuugoku myanma kankei” (China-Myanmar Relations with Ethnic Groups in the Border Region), Toshihiro Kudo ed., Myanmaa seiji no jitsuzou (The Reality of Politics in Myanmar), Institute of Developing Economies, Japan External Trade Organization (2012), p.180.

20 “习近平会见缅甸国务资政昴山素季,” People’s Daily, May 17, 2017.

21 “Myanmaa wahei kaigi eikyouryoku o masu Chuugoku” (China’s Increasing Influence at the Myanmar Peace Conference), Sankei Shimbun (May 25, 2017).

22 Toshihiro Kudo and Mariko Watanabe, “Myanmaa no shigen gaikou to chuugoku” (Myanmar’s Resource Diplomacy and China), Ajiken World Trend, No. 211 (April 2013), p.10.

23 “China may scrap divisive dam in Myanmar to advance other interests”
[] (Accessed January 12, 2018)

24 “A Chinese-Backed Dam Project Leaves Myanmar in a Bind”
[](Accessed: January 9, 2018)

25 “Damned be Myanmar’s Myitsone dam?”
[] (Accessed January 12, 2018)

26 Bi Shihong, “Aratana chuu men kankei” (A New China-Myanmar Relationship), Ajiken World Trend, No. 220 (February 2014), p. 30-33.

27 The day after Abe’s remarks (June 6), during a regular press conference, China’s foreign ministry spokesperson commented that “we have noted the statement by Prime Minister Abe.”
[href="] (Accessed January 24, 2018)

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