China’s Growing Partnership With Myanmar

Courtesy of a recent New York Times’ op-ed and a Financial Times report, we have a chance to peek into Myanmar’s economic position in Asia & China’s increasing involvement in such.  As the articles note:

“…According to the nonprofit group EarthRights International, at least 26 Chinese multinational corporations are now involved in more than 62 hydropower, oil, gas and mining projects in Myanmar. This is only the tip of the iceberg. In March, China and Myanmar signed a $2.9-billion agreement for the construction of fuel pipelines that will transport Middle Eastern and African crude oil from Myanmar to China. When completed, Chinese oil tankers will no longer be required to pass through the Straits of Malacca, a time-consuming, strategically vital route where 80 percent of China’s imported oil now passes.

If Chinese commercial influence in Myanmar continues to grow, a military presence could easily follow. Russia is assisting the Myanmar government on a nuclear research project. None of these projects have improved the daily life of the average citizen of Myanmar, who has almost no contact with the outside world and whose per capita income is among the lowest in Asia.

It would be wrong for the United States to lift sanctions on Myanmar purely on the basis of economic self-interest, or if such a decision were seen as a capitulation of our long-held position that Myanmar should abandon its repressive military system in favor of democratic rule. But it would be just as bad for us to fold our arms, turn our heads, and pretend that by failing to do anything about the situation in Myanmar we are somehow helping to solve it…”

And for more detail on the pipeline itself:

“…The Korean-led consortium developing a gas field off Burma’s coast is to invest billions of dollars in a project to supply gas to China over 30 years, including a controversial plan to build a supply pipeline between the countries.

Starting in 2013, the consortium will feed 500m cubic feet of gas a day, or approximately 3.8m tonnes a year, to China National United Oil Corp.

The consortium is led by Daewoo International, with a 51 per cent stake, and includes India’s Oil and Natural Gas Corp with 17 per cent and Myanmar Oil & Gas Enterprise, with 15 per cent. India’s GAIL holds an 8.5 per cent stake and Korea Gas Corp (KOGAS) has 8.5 per cent. Daewoo said it would invest $1.68bn in the project, with KOGAS contributing $299m. The entire project is estimated to cost $5.6bn.

The consortium will spend the money on building an offshore production platform, pipelines and a land terminal, Daewoo said.

The pipeline from the Burmese coast will bring energy direct into China’s impoverished Yunnan state, while bypassing the Malacca and Lombok/Makassar Straits.

China is particularly worried about the strategic vulnerability of the two narrow straits, which are the current route for more than 60 per cent of China’s oil imports.

As China’s population rises, the country is expected to become more reliant on Middle Eastern oil, making new supply routes all the more important. Last week, China signed a $41bn deal to buy natural gas from Australia – the latest in a string of big deals to secure China’s energy supplies.

Since 2005, Daewoo and other project partners have been the targets of campaigners who believe that the revenue from their gas investments in Burma will be used to enrich the country’s elite and provoke further human rights abuses from a regime that has been accused of using forced labour on large projects.

The international community has used extensive sanctions to try to isolate the generals who run Burma in an attempt to promote democratic reforms, but with little effect.

The sanctions were recently strengthened in the wake of Burma’s decision to sentence Aung San Suu Kyi, the opposition leader and Nobel Laureate, to an extra 18 months under house arrest after she allowed an American to stay in her house.

China, India and Thailand have developed extensive trade ties with the country, hungry for Burma’s energy and mining resources and in China’s case, potential access to a port in the Andaman Sea.

One of the arguments put forward by western opponents of sanctions, notably James Webb, the US Democrat senator from Virginia, is that they have served to push the Burmese authorities into the arms of China.

On Tuesday, H S Brahma, India’s power secretary, told Reuters his government was considering setting up a Rs250bn ($5.1bn) gas-fired power plant in Iran to supply 5,000 megawatts of electricity to the energy-starved nation.”

This entry was posted on Wednesday, August 26th, 2009 at 9:52 am and is filed under China, Myanmar.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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