Burma’s Relations with China: Neither Puppet nor Pawn

Publication: China Brief Volume: 7 Issue: 3

On January 12, China and Russia wielded their vetoes at the United Nations Security Council (UNSC) to defeat a draft resolution tabled by the United States and the United Kingdom, which called on the government of Burma to cease military attacks against ethnic minorities, release all political prisoners, including democracy icon Aung San Suu Kyi and engage in political dialogue leading to genuine democratic transition. The United States had argued that narcotics production in Burma, refugee outflows, widespread human rights abuses and the spread of communicable diseases make Burma a threat to international peace and security. Yet, China vetoed the proposal on the grounds that the issues faced by Burma were internal, sovereign matters, and that Burma did not pose a threat to international peace and security.

China’s action at the UNSC underscores its continued position as Burma’s most valuable ally. Since the early 1990s, Burma has viewed China’s veto-power at the UN as its ultimate insurance policy against an East Timor-style international intervention. Contrary to what many observers believe, however, Burma is neither Beijing’s puppet nor a pawn in China’s grand strategy in Asia. The Burmese are fiercely nationalistic and often xenophobic, and Rangoon’s foreign policy actions since the mid-1990s strongly suggest that the ruling military junta has sought to reduce its dependence on China by reaching out to other countries. Since 2000, this policy—implemented with varying degrees of success—has only accelerated, with India becoming the primary beneficiary. China is likely to retain its privileged position in the hierarchy of Burma’s foreign relations in the immediate future. Yet, the long-term future of Sino-Burmese relations depends on the domestic developments within Burma, developments which could ultimately undermine China’s premier position.

The Development of a Symbiotic Relationship

Burma and China forged a close relationship in response to the international disapprobation that followed their military crackdowns on anti-government demonstrators in August 1988 and June 1989, respectively. For Burma, friendship with Beijing provided diplomatic support and protection at the UN, economic aid to support its moribund economy and military equipment to consolidate power and bring ethnic separatists under control. For China, alignment with Burma offered a golden opportunity to further its interests in mainland Southeast Asia. Access to the Indian Ocean through Burma was an important component in the development of China’s landlocked southwest provinces such as Yunnan and Sichuan. China was also eager to gain access to Burma’s rich natural resources, such as oil and gas, lumber and gemstones. Additionally, China gained a friend on its southern border, a friend who could, in the future, allow the Chinese Navy to project power into the Indian Ocean and the northern approaches to the Strait of Malacca.

During the 1990s, the two countries cemented a valuable relationship. China delivered $2 billion worth of military equipment to the Burmese armed forces (Tatmadaw), including fighter aircraft, tanks, naval patrol boats, armored personnel carriers, field and anti-aircraft artillery, small arms and ammunition. China also provided training to the Tatmadaw, helped upgrade naval bases and established their signal intelligence (SIGINT) capability. This enabled the Tatmadaw not only to become a more effective counter-insurgency force, but also to keep a tighter grip on internal security and resist external aggression. Beijing’s interest-free loans prevented economic collapse, stabilized the economy during the 1997-1998 Asian financial crisis and enabled Rangoon to circumvent Western sanctions. After 1998, China quickly became Burma’s dominant external economic force, flooding the Burmese market with cheap manufactured goods. The opening of cross-border trade was also accompanied by an influx of Chinese nationals who used the identity cards of deceased Burmese citizens to purchase real estate, retail outlets and restaurants, mainly in Mandalay. This economic penetration of Burma in the 1990s was facilitated by improvements to the country’s crumbling infrastructure, including roads, railways, airports and ports, almost all of which were financed by Beijing.

The scale of Beijing’s support to the military junta during the 1990s led many observers to conclude that Burma had completely abandoned its policy of non-alignment and allowed itself to become a client-state of China. Burma’s relationship with China post-1988, however, is far more complex than simply a manifestation of the client-state theory. Facing international isolation and economic collapse in 1988, the military junta, the State Law and Order Restoration Council (SLORC), turned to China out of dire necessity. There can be no doubt that China’s support enabled the SLORC to survive and consolidate power. Yet, a long tradition of nationalism, self-reliance and even xenophobia suggests Rangoon had no intention of becoming a Chinese pawn, and that as soon as conditions permitted, it would move to reduce its dependence on Beijing. Indeed, beginning in 1993 this is exactly what has happened, as Rangoon attempted to broaden its foreign relations by courting two regional actors: India and ASEAN.

India-Burma relations had nose-dived in 1988 after New Delhi threw its support behind the Burmese student demonstrators. In 1993, however, India abandoned its policy of supporting the pro-democracy forces in Burma after realizing that its anti-SLORC policy had helped push Burma into China’s embrace. The Indian government was particularly concerned with Sino-Burmese strategic links and the prospect of the Chinese Navy gaining a foothold in the Bay of Bengal. By engaging Burma, India hoped to lessen China’s influence. Additionally, as part of its “Look East” policy of economic reform, India saw Burma as its gateway to ASEAN. India also sought Burma’s assistance in countering the insurgents in its northeast states, some of whom had taken sanctuary on Burmese territory. Between 1993 and 1994, India and Burma agreed to establish military dialogue and commence counter-narcotics and counter-insurgency cooperation. When India awarded Aung San Suu Kyi the Jawaharlal Nehru Award for International Understanding, however, the forward momentum of India-Burma relations was thrown into reverse and would not regain traction until the new century.

In July 1997, Burma became a member of ASEAN. Rangoon hoped that by developing economic linkages to the advanced economies of ASEAN, it could lessen its dependence on Chinese aid and trade. Rangoon also calculated that ASEAN membership would afford it a measure of international legitimacy, while avoiding censure over its human rights record thanks to the organization’s cardinal principle of non-interference. ASEAN’s existing members hoped that membership would allow them to wean Burma away from China; a shared concern was that China’s bolstering of the junta might precipitate internal instability, resulting in an outflow of refugees into ASEAN countries. Yet, the results for both parties were disappointing. The Asian Financial Crisis actually attenuated economic linkages between Burma and the other ASEAN members, forcing Rangoon to turn to Beijing for economic aid to weather the financial storm.

Sino-Burmese Relations into the 21st Century

At the outset of the twenty-first century, the overriding goal of the Burmese junta, now renamed the State Peace and Development Council (SPDC), is regime survival. Close and cordial relations with China are a key element of the strategy. As such, the two countries regularly exchange high-level visits, while Beijing continues to dole out soft loans to the junta. For instance, in 2003 China helped stabilize the economy after a banking crisis with $200 million in preferential loans and partial debt relief on earlier loans (Financial Times, January 17, 2003). China has maintained its position as Burma’s top trade and investment partner. In 2005, bilateral trade hit $1.21 billion, much of it in China’s favor; China exported $935 million worth of goods to Burma, but only imported $274 million (People’s Daily, July 31, 2006). Nevertheless, given the unreliability of Burmese statistics and the fact that a massive volume of cross-border smuggling goes unreported, these figures undoubtedly underestimate the true extent of bilateral economic interaction.

Since 1988, China has shown a keen interest in exploiting Burma’s energy resources, estimated to be 3.2 billion barrels of recoverable crude oil and 2.46 trillion cubic meters of natural gas (Xinhua, January 25, 2005). Since 2000, this interest has intensified, and China’s state-owned energy companies have all signed major contracts with the Burmese government. The importation of Burmese energy resources enables China to enhance its energy security by lessening the country’s dependence on oil and gas from the Middle East. A proposed $2 billion pipeline that would run from the Burmese port of Sittwe to Kunming, Yunnan Province, would also help mitigate Beijing’s so-called “Malacca dilemma” (China Brief, April 12, 2006). Lucrative energy deals with China and other countries help fill the junta’s coffers and mitigate the effects of Western sanctions. China remains Burma’s number one supplier of arms, though the junta is diversifying its sources of arms procurement.

Domestic developments in Burma in 2003 and 2004 helped strengthen Sino-Burmese relations. Following the attacks on Aung San Suu Kyi’s entourage by pro-SPDC militias on May 30, 2003 in the town of Depanyin, the United States, EU and Japan tightened sanctions against Burma, increasing the country’s reliance on China for economic sustenance. The downfall of Prime Minister Khin Nyunt in October 2004, widely regarded as the architect of Sino-Burmese relations, was initially seen as a blow for China, especially when SPDC Chairman General Than Shwe paid a state visit to India just a week later. Nevertheless, within days of Khin Nyunt’s ouster, his successor, Lieutenant General Soe Win, was in Beijing, followed by Lieutenant General Thura Shwe Mann, Than Shwe’s heir apparent. These visits were no doubt intended to reassure Beijing that the SPDC still valued China as its most important ally.

The continued closeness of relations was underscored in July 2005 when, in a gesture of solidarity with the SPDC after pressure from other members of ASEAN forced it to relinquish the rotating chair of the organization, Chinese Foreign Minister Li Zhaoxing boycotted the ASEAN Regional Forum meeting and headed for Rangoon for talks with the junta. Moreover, when the SPDC suddenly relocated the capital from Rangoon to Naypyidaw, 400 miles to the north in November 2005, the Chinese government provided much of the new capital’s telecommunications infrastructure and air defense systems.

This is not to say, however, that bilateral relations are without any challenges. Beijing has expressed concern over the complete lack of progress toward political reform in Burma, principally because of the potential for social and political unrest. In 2004, Premier Wen Jiabao stated that, while the political process was Burma’s internal affair, the Chinese government hoped the SPDC would speed-up “political settlements of existing disputes so as to enhance stability and peaceful development” (People’s Daily, July 13, 2004). He reiterated this message to Prime Minister Soe Win at the China-ASEAN Summit in Nanning in November 2006 (Jiefangjun Bao, November 1, 2006). Speaking earlier in the year, a senior U.S. State Department official revealed that China had privately expressed its concern to Washington regarding the glacial pace of national reconciliation [1]. Another cause of disagreement that Beijing has with the SPDC is the flow of illegal narcotics from Burma into Yunnan Province, specifically heroin and methamphetamines, which is fueling drug addiction, crime and the spread of HIV/AIDS in China. China has called on Burma to increase counter-narcotics cooperation. China, however, contributes to the problem itself as it funds and arms the main producer of methamphetamines in Burma, the United Wa State Army (Asia Times Online, October 24, 2006).

Despite close links with Beijing, the SPDC continues to diversify its foreign relations in an attempt to lessen its dependence on China. India has been the main beneficiary. Once New Delhi committed itself to a policy of remaining silent on the political situation in Burma, relations with the SPDC improved rapidly. In November 2000, General Maung Aye, the second highest ranking member of the SPDC hierarchy and reputed to favor closer links with India to balance China, visited New Delhi to discuss trade, transport links, counter-insurgency cooperation and arms procurement. Since then the two countries have exchanged high-level visits, including a visit by Indian President A.P.J Abdul Kalam in March 2006. India has supplied the Tatmadaw with tanks, artillery and helicopters, while the two countries’ armed forces have conducted coordinated military operations against Indian insurgents. In addition to the interests listed earlier, New Delhi is in competition with China to exploit Burma’s energy resources.

Since 2000, Burma has also allowed itself to be courted by Russia as well. Enhanced relations with Moscow have provided the SPDC with several benefits, including an alternative source of arms (Moscow has agreed to provide Burma with MiG-29 fighters and air defense systems), investment in the country’s energy sector and, as was demonstrated in January 2007, Russia’s veto at the UNSC, providing an added insurance policy. China is reportedly unhappy with the SPDC’s courtship of India and Russia.

Alternative Futures

There are several possibilities regarding the future of Sino-Burmese relations. In the first, the junta maintains its grip on power through sheer brute force, and the new generation of military leaders continues to adhere to the country’s current foreign and domestic policies. As such, Naypyidaw will continue to look to China for diplomatic protection, economic sustenance and military hardware. Nevertheless, in line with its desire to exercise some diplomatic latitude, Burma will seek to bolster relations with other regional countries as well. India will figure prominently in Burma’s foreign policy, though Beijing will retain its position as Burma’s primary patron; China’s veto power at the UN makes it a far more valuable ally than India, and future Indian governments might yet put pressure on Burma to democratize. Should relations with India sour over human rights issues, Burma’s dependence on China would only increase. Moreover, this dependence would deepen if Naypyidaw’s relations with ASEAN became more strained and Burma’s membership were suspended or voluntarily forfeited. At their annual summit in Cebu in January 2007, the ASEAN leaders agreed to frame a charter, which for the first time, would enable the organization to discipline or sanction members who violate ASEAN principles.

In the second alternative future, the junta relinquishes power, either voluntarily or as the result of a popular uprising, leading to the restoration of democracy. A democratic Burma, possibly led by Aung San Suu Kyi, would likely orient the country’s foreign policy toward the West and Japan. This would be a major setback for China’s interests in Southeast Asia, as Beijing would lose a pliant friend and all the economic and geostrategic advantages it has accrued since 1988. In order to forestall such an outcome, Beijing may be tempted to intervene militarily in support of the SPDC.

A third scenario posits a major nationalist backlash against China as a result of the Sinicization of upper Burma and the growing resentment caused by income disparities between impoverished Burmese and Chinese immigrants. A xenophobic outburst of this nature is not without precedent: in 1964 the Burmese government expelled hundreds of thousands of Indians (who made up the bulk of the commercial class) from the country, and in 1967, violent anti-Chinese riots took place in Rangoon. Such a backlash, possibly orchestrated by the junta itself, would signal an end to the Sino-Burmese alliance and a return to the pre-1988 policy of equidistance between China and India.

As things stand today, with the tightening of U.S. and EU sanctions, and as ASEAN’s patience with the generals wears thin, the first scenario remains the most probable. Yet, mid to long-term, a democratic Burma aligned with the West, or the return to a policy of equidistance, cannot be ruled out.


1. Remarks by U.S. Deputy Assistant Secretary of State for East Asia and Pacific Affairs, Eric John, Harvard Asia Center, Cambridge, MA, February 17, 2006.