China’s Engagement with the Myanmar Junta: A High Cost, Low Returns Deal

More observers are predicting the fall of the State Administration Council (SAC) military regime in Myanmar after the rapid battleground successes following Operation 1027. China’s role and reactions vis-à-vis Operation 1027 have also caused much comment. Many have connected the dots between China’s influence on the Three Brotherhood Alliance (3BHA) leading the operation with the SAC’s failure to comply with China’s repeated requests for a crackdown on scam centres in areas where scores of Chinese nationals have fallen victim to trafficking.

However, the issue of scam centres is marginal to China’s interests in Myanmar. Since the 2021 coup, the SAC has failed to consolidate power and has lost significant territorial control.  Consequently, it is unable to ensure the necessary political stability for implementing the China Myanmar Economic Corridor (CMEC), Beijing’s primary strategic interest in Myanmar. CMEC and its two parallel oil and gas pipelines traversing Myanmar from Rakhine State in the southwest to Shan State in the northeast are China’s solution to resolving its Malacca Dilemma. The Malacca Dilemma is China’s strategic vulnerability, where an estimated 80 per cent of China’s imported oil travels through the Straits of Malacca, leaving it susceptible to naval blockades by adversaries.

However, the CMEC’s implementation faces setbacks due to instability caused by the military coup. China is eager to advance the project, which can help secure its sea lanes of communication. Such vested interest in Myanmar’s stability makes China the most likely external actor to initiate mediation efforts to bring peace to Myanmar. It has already made attempts to mediate between the 3BHA and SAC.

Pre-coup, China had inked the CMEC deal with the democratically elected National League for Democracy administration. The 2021 coup, botched by the military’s miscalculations, threw a wrench into China’s plans. Beijing’s pragmatic attempts to push forward the CMEC plan by engaging with the SAC have yielded little if any returns. Instead, China has been the focus of public anger and resentment in Myanmar. There have been mass protests at the Chinese Embassy in Yangon, attacks against Chinese investments, and public rallies denouncing China.

If, as many surmise, Operation 1027 had Beijing’s tacit approval, that approval might be Beijing’s signal to the SAC that it has lost patience with the SAC’s inability to protect or promote China’s interests in Myanmar. China may have come to recognise that engaging with the SAC is a high cost, low returns deal. The Myanmar military’s breaking of – within 24 hours – the latest China-brokered ceasefire between the 3BHA and SAC serves as further proof of this futility.  

Operation 1027 occurred after China’s veteran diplomat Wang Yi returned as foreign minister. Wang Yi is likely more aware than his predecessor Qin Gang that the SAC’s military is not an effective fighting force and that the US’ BURMA Act is not the game-changer that Myanmar’s resistance movement was hoping for.

Beijing’s moves before and after Operation 1027 may thus signal a first step in a long overdue strategic adjustment on Myanmar. However, course-correcting its Myanmar strategy requires more than using influence on the ethnic armed organisations (EAOs) in China’s orbit as leverage against the SAC.

Such vested interest in Myanmar’s stability makes China the most likely external actor to initiate mediation efforts to bring peace to Myanmar.

Beijing needs to turn Myanmar public opinion in its favour or at least mitigate anti-China sentiments which spiked after Qin Gang’s meeting with Senior General Min Aung Hlaing, a move that has implications for the CMEC’s implementation. The Myitsone Dam incident – where the project to build the largest of seven planned dams on three rivers was suspended in 2011 by former president Thein Sein following popular protests – had already warned Beijing that public opposition can thwart major Chinese investments. Unlike previous Myanmar administrations where foreign policymaking was centralised and top-down, a post-SAC federal democratic government will have to take public opinion and local government decisions into consideration. The Federal Democracy Charter, a roadmap for political transition post-SAC, grants considerable authority to state and regional governments.

To alleviate anti-China sentiments, Beijing could begin courting the Myanmar public with some immediate actions, starting with nuancing its UN Security Council (UNSC) veto power to pass or enable, via abstention, the passing of effective measures against the SAC, as demonstrated in the adoption of UNSC Resolution 2669. Humanitarian assistance and cross-border refuge can save lives and earn public gratitude. Beijing will need to limit its engagement with the SAC and visibly increase engagement with the anti-coup resistance including the National Unity Government, EAOs, and in Bamar majority regions such as Mandalay, Magwe, and Sagaing, where anti-China sentiments are highest.

Beijing need not fear retaliation from a struggling SAC. The latter’s inability to respond to China’s perceived role in Operation 1027, beyond short-lived public protests, is proof of its impotence.

Beijing’s present upper hand could help to mediate future stability in Myanmar but it will require considering other options, such as changing negative perceptions towards China. Pressuring the 3BHA into an untenable ceasefire with the SAC in Northern Shan or attempting likewise with the Arakan Army in Rakhine may adversely affect rather than burnish China’s image. It could add to perceptions of China as an enabler prolonging military rule.

Operation 1027’s aftermath, including takeovers of several significant border posts and crossings and drone attacks targeting SAC senior officials, seems to have distracted observers from the situation of imprisoned NLD seniors and former cabinet members, who are effectively hostages in the current political impasse. Aung San Suu Kyi remains the SAC’s key hostage. The sustained resistance to the military shows that the anti-coup movement can continue and succeed even with its senior leaders behind bars. However, the SAC’s reported transfer of Aung San Suu Kyi from prison to an unknown location, allegedly to shield her from the prison’s extreme heat, shows that the coup leaders need her more than ever as a bargaining chip.

If it should take it up, China’s mediation may consider negotiating the SAC’s exit (including safe passage for its leaders) in a post-SAC scenario. Such mediation must prioritise avoiding extreme bloodshed, as the SAC’s indiscriminate aerial bombing may not rule out major cities if it is cornered.

Beijing may yet take on a game-changer role in the current Myanmar crisis. It must determine its next steps swiftly. The good news is that diverse options exist.

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