Washington’s Weakening Influence: Sino-Indian Competition over Burma

Publication: China Brief Volume: 7 Issue: 17

When President George W. Bush met Chinese President Hu Jintao at the APEC meeting in Sydney on September 6, trade and Taiwan appeared to dominate their agenda. Little notice, however, was made of one of President Bush’s talking points: Burma. The U.S. government has long sought to isolate Burma due to the persistent human rights abuses that have occurred since the military junta refused to recognize the results of a 1990 election. Recent protests over rising fuel prices in Burma’s main city of Rangoon resulted in the detention of protestors and dissidents, ensuring that President Bush would raise the issue during his relatively brief face-to-face meeting with President Hu.

U.S. officials are expectant that they can encourage China to use its long-standing political and economic influence with the Burmese ruling generals to improve its human rights practices and release the winner of the 1990 elections, Aung San Suu Kyi from house arrest. Unfortunately, a significant gap remains between Chinese and U.S. interests in Burma and there is little likelihood that China will abandon its realist approach to its neighbor and become embroiled in Burma’s domestic politics at the behest of the United States.

A State of Insecurity

Late last month, protesters in Rangoon took to the streets to protest recent fuel price increases. The government responded swiftly, arresting dissidents associated with opposition leader Aung San Suu Kyi, ensuring that what has been a low-grade crisis for the past 20 years features more prominently on the U.S. political agenda. Burma, the nom de guerre used by the U.S. State Department, has been in a constant state of disarray stemming from economic sanctions, political isolation and government mismanagement. In addition to ethnic unrest and widespread poverty, the country faces a constant energy crisis at home, despite oil and gas reserves both on and offshore. Trucks, taxis, buses and private cars spend hours each week in long fuel lines, while black market gas stations line highways beyond city limits. Electricity outages are a daily occurrence, and generators dot the sidewalks in front of shops in Rangoon and Mandalay.

A member of the Association of South East Asian Nations (ASEAN) since 1997, Burma’s erratic leadership has long caused embarrassment to the other members, in addition to challenging the grouping’s desire to be a relevant and effective regional force. Bound by treaty and shared principles not to interfere in each other’s internal politics, ASEAN members are determined to employ a “constructive engagement” strategy with Burma. Additionally, both Chinese and U.S. interests have to be taken seriously by ASEAN member nations. As China’s economic and political presence increases steadily, ASEAN nations have to be particularly cautious not to get caught between an increasingly assertive China and the region’s dominant power, the United States.

Growing Competition from India

China has significant historic, political, and economic ties to Burma, while India struggles to catch up. Burma was the first non-communist country to recognize the People’s Republic of China in 1949. The China-Burma border dispute was settled in 1960, compared to the China-India border that remains contested today. China has been a staunch supporter of the current military junta, providing arms and diplomatic support in the UN, as well as aid for infrastructure and projects to increase cross-border commerce. Moreover, northern Burma has a large ethnic Chinese population, creating cultural ties that facilitate trade, both legitimate and illicit, between the two countries. China considers Burma to be securely within its sphere of influence and sees India’s attempts to increase its presence as a direct challenge.

With proven natural gas reserves of about 2.48 trillion cubic meters representing 1.4 percent of the world supply and little capital or infrastructure to exploit it, Burma is increasingly at the center of a growing competition between India and China to develop and transport offshore natural gas to their respective home markets [1]. Compared to China, India’s growing need to import energy is often overlooked. Indian economic growth is second only to China with GDP increases of approximately 9 percent over the past two years, and like China, India is dependent on oil and gas imports to fuel its expanding economy [2]. India is the sixth largest energy importer and its import growth rate is climbing faster than China [3]. Last month, India’s oil minister publicly expressed his concerns that it is losing out to China in the race to ensure its energy security. Though subsequently disputed by other parties, the minister illustrated his point by announcing that Burma had awarded China the right to build a pipeline from two offshore gas fields in which Indian state-owned companies hold a 30 percent minority stake (Reuters, August 14). Regardless of the accuracy of the minister’s remarks (or the poor transparency of the award process), Indian concerns about the success of Chinese investments in Burma’s infrastructure and energy sectors are genuine. Chinese media have recently announced agreements to develop three offshore gas fields and to build a pipeline connecting the port of Sittwe with southwest China (Xinhua, April 21).

This competition for regional influence and resources is shaping geo-strategic perceptions in both China and India. India, which straddles the vital sea lanes linking the Persian Gulf to Asia is concerned about a growing Chinese presence in the Indian Ocean and Middle East. Chinese-funded ports and bases reportedly under construction in Burma, Bangladesh and Pakistan increase India’s concerns that China might someday challenge them in the Indian Ocean, validating their desire to build another aircraft carrier. China’s opaque military build up is an additional cause for India’s concern, as China’s academics debate the geopolitical impact of having their own aircraft carrier while PLA generals consider the technical complexities of building and operating one (China Brief, March 21).

Burma is not Sudan

China, as opposed to India, faces considerably more pressure from the international community to use its influence in countries such as Burma and Sudan. China’s permanent seat on the UN Security Council, an expanding global economic footprint, and its comparable success over India in the energy-security “race” exposes it to greater censure. While Indian officials are questioned about their Burmese ties, which include military aid to the junta, India’s democratic government and comparably better human rights record shields it to some extent (though India’s own human rights record is far from spotless) (Bangkok Post, September 14). Although India imports 3 million tons of “equity crude” per year from Sudan and holds a 25 percent stake in the production consortium, India has received much less criticism from U.S. activists. China National Petroleum holds a 40 percent controlling stake in the venture and imports more than twice India’s volume of crude [4]. While China had previously resisted pressuring the Sudanese government to address the Darfur issue, it has become more proactive in working with the Sudanese government and supporting a peacekeeping plan, wining public support from the UN and even some U.S. officials.

Just as China has demonstrated some flexibility interpreting its long-standing “non-interference” ideology with Sudan, there are some indications that China will also seek to play a positive role in Burma. China is particularly sensitive to criticism in the run-up to the 2008 Olympics, which has provided a platform for activists advocating for various interests. First Lady Laura Bush has been vocal about the political repression in Burma and sees China as a logical instrument with leverage to drive political change. She has met with activists and called UN secretary Ban Ki-moon to discuss the issue of Burma [5]. In a recent interview reported by Wall Street Journal, the First Lady stated her strategy: “China does have a huge amount of influence over Burma,” she says. “They share a border, for one thing. But also, they . . . use the natural resources out of Burma,” and in the end “they prop up a government that– a failed state, really, is what they’re propping up, just like in the Sudan.” Mrs. Bush adds that “right now, after cooperating with China in the six-party talks with North Korea, and with the Chinese Olympics coming up, I think this is a really good time for activists and advocates for Burma and the Sudan and other countries to put pressure on China” [6].

Like in Sudan, China has recently taken an interest in ensuring that U.S. interests in Burma are considered. This June in Beijing, a senior State Department official met with Burma’s minister of foreign affairs in an unusually direct meeting brokered by the Chinese. The last time a similar senior-level U.S.-Burma meeting took place was in 2003 [7].

However, there are undoubtedly limits to China’s willingness and ability to be a “responsible stakeholder” in the case of Burma. While China enjoys good relations with the ruling Burmese generals, guanxi alone is unlikely cause political reforms to take place. Burma is not wholly dependent on China for trade and international political protection and can afford to say “no.” In addition, Burma’s generals view China’s growing political and economic influence in the region with increasing discomfort, and India’s interest in Burma’s energy sector offers a convenient hedge, and an opportunity to obtain better economic terms for licensing access to its energy. Mindful that its leverage is not as strong as critics might suggest, China has been careful to point out that, while not antagonistic, they do not necessarily share ownership with U.S. interests. One Chinese official, when informally queried about human rights in Burma, stated the Chinese position succinctly, saying, “This is your issue.” That said, the United States and China do have some mutual interests in Burma, such as anti-narcotics efforts and other humanitarian and non-traditional security issues, which can form a basis for partnership.

Conclusions

The United States, ASEAN, India and China are all aware that the people of Burma suffer from extensive poverty induced by horrendous governance, though there is no consensus about how best to address that challenge. Fostering change will require continued U.S. attention and dialogue with regional friends, including ASEAN members, India and China to influence the Burmese generals to implement meaningful political reforms. Collaborative efforts that improve the human security situation in Burma is one potential avenue for cooperation that will ease suffering and contribute to long-term efforts to improve the political situation.

Washington must recognize, however, that China and India have a growing need for energy, and Burma is a strategic consideration in both countries’ calculations. A U.S. strategy to promote democracy and human rights in Burma should recognize that ASEAN, Chinese and Indian interests do not necessarily coincide with its human rights agenda. For instance, India, the largest democracy, has shown little interest in “exporting” its political system. Likewise, the United States must recognize that China’s influence in Burma has its limits, particularly as India wages its own effort to woo the generals. Finding common ground on political as well as energy issues will increase the likelihood of success in bringing political reform and stability to Burma, while at the same time providing for China and India’s energy security.

Notes

1. BP Proven Reserves of Natural Gas at end of 2006, available online at:

http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/

statistical_energy_review_2007/STAGING/local_assets/downloads/pdf/table_of_proved_natural_gas_reserves_2007.pdf.

2. Press Information Bureau, Government of India, August 31, 2007, Press Note: Estimates of Gross Domestic Product for the First Quarter (April-June) of 2007-08, available online at: http://mospi.nic.in/t1_31august07.htm. (See also: India’s GDP expanded at fastest pace in 18 years; Annual GDP up 9.4%, but growth could moderate this year, Marketwatch (Dow Jones), May 31, 2007.)

3. The Brookings Foreign Policy Studies Energy Security Series: India 2006, accessed September 5, 2007 at: http://www3.brookings.edu/fp/research/energy/2006india.pdf.

4. CNPC’s 40 percent interest in Greater Nile translates to 6.29-mm tons of equity crude output interest, while India’s 25 percent equals 3 tons. China imports about 125,000 bpd, India 55,000 bpd in “equity crude” from Greater Nile. (55,000 bpd is approximately 3 million tons per year). See: http://www.ongcindia.com/profile.asp and http://www.gasandoil.com/GOC/company/cna52763.htm). China’s global equity stakes can be found at – http://www.energytribune.com/articles.cfm?aid=447 (This 2003 article confirms India’s equity stake, but is highly speculative about future returns, which we can be fairly confident have not materialized today. Overall, the GNPC output has not achieved some outlandish predictions. http://www.sudantribune.com/spip.php?article432).

5. Office of the First Lady, August 31, 2007, Statement by Press Secretary Sally McDonough, available online at: http://www.whitehouse.gov/news/releases/2007/08/20070831-9.html.

6. “Commentary: The Weekend Interview – Laura Bush: Diplomat” by Brendan Miniter, Wall Street Journal, July 14, 2007.

7. State Department Office of the Spokesperson, June 28, 2007 press release.