[Analytics] China’s Belt and Road detours downstream in Myanmar

A fisherman casts his net on the Irrawaddy, seen by many as the soul of the nation. Photo: Pinterest. Sketched by the Pan Pacific Agency.

Ethnic wars, security concerns and official foot-dragging have all conspired to stall China’s Belt and Road Initiative (BRI) plan to build a high-speed railroad from its southwest down through Myanmar’s volatile northern regions to the Indian Ocean. Bertil Lintner specially for the Asia Times.

But Beijing has an emerging alternate plan: Develop a safer trade route via Myanmar’s Irrawaddy River – a 2,200-kilometer waterway which flows north to south through the length of a nation known for its lack of modern roads and rail links.

The China-Myanmar Economic Corridor (CMEC), a BRI-driven plan to link China and Myanmar via trains, roads and ports, aims to give Beijing an alternative route for fuel and other shipments through the congested Malacca Strait and the contested South China Sea, both potential conflict areas with the United States.

That has made Myanmar a crucial cog in Chinese President Xi Jinping’s signature BRI, a US$1-trillion global infrastructure-building scheme that aims ultimately to put China at the center of a new global trade and security order.

The Irrawaddy River, widely considered the aqueous soul of the nation, is now apparently at the center of Beijing’s grand, but no doubt risky, plan

Commercial vessels already travel regularly along the 1,300-kilometer lower half of the Irrawaddy, beginning in the Kachin state town of Bhamo and down to where the winding waterway opens on to the Indian Ocean.

Raging rapids to the north of Bhamo make year-round navigation of the 200-kilometer stretch to the more commercially significant upstream town of Myitkyina nearly impossible, including from China to the north. [See map]

Recent reports say Chinese contractors have started to survey possible sites for a new, much bigger river port than the basic facility that now exists at Bhamo.

New highways were built years ago to connect the commercial hub of Ruili in southwestern Yunnan province to the same province’s border-crossing at Lweje, where new facilities are in place to accommodate greater trade flows.

Replacing the rugged gravel road connecting Lweje to Bhamo, a distance of approximately 75 kilometers, with a modern highway is reportedly now among Beijing’s top CMEC priorities and in line with building roadways conducive to the Irrawaddy scheme.

Ruili, opposite the town of Muse in Myanmar’s northern Shan state, is the starting point for the CMEC’s now stalled high-speed railroad, which ultimately aims to connect Shanghai with Ruili down to Muse and then via highways to Lweje and Bhamo.

The highspeed railroad’s path from Muse would, if built, eventually terminate at new ports being developed on Myanmar’s southern coast, while the Irrawaddy plan would apparently provide a similar enhanced route for river transport.

Those rail and riparian routes are firmly on China’s BRI drawing board, and on detailed display on billboards seen recently by sources on the streets of Yunnan province.

Myanmar sources suggest that China’s renewed interest in constructing a huge hydroelectric dam at Myitsone north of Myitkyina, a plan suspended in 2011 by Myanmar’s previous government over supposed environmental concerns, fits into the wider Irrawaddy scheme.

Myitsone is located where two rivers, the N’mai Hka and Mali Hka, converge to form the Irrawaddy.

While China does not clearly need the electricity the $3.6-billion power project aims to produce, the dam would enable China to control the flow of water downstream, as it does in a cascade of dams on the upper reaches of the Mekong River.

China’s vision for using the Irrawaddy as an enhanced trade route is not new, to be sure, and was arguably first broached in a September 1985 article in the official Beijing Review weekly.

Raging ethnic wars in the north kept the plan on a drawing board for over a decade. In 1997, however, China and Myanmar conducted their first joint study on the possibility of forging land and water transport routes from Yunnan and along the Irrawaddy.

More headway was made when China’s then-president Jiang Zemin visited Myanmar in December 2001, the first by such a high-ranking Chinese official since the 1980s. The two sides signed a range of bilateral agreements to facilitate more border trade during Jiang’s visit.

Soon after, in March 2002, China presented Myanmar with a proposal titled “Draft Agreement on Highway-Waterway Combined Transport.” Months later, China supplied Myanmar with two dredgers to clear the Irrawaddy so that bigger barges could carry Chinese goods down the river.

Later in 2002, Lweje became an official border post for trade and commerce, as did the Myanmar town of Muse opposite of Ruili and a handful of smaller outposts. The then-dirt track connecting Lweje to Bhamo, meanwhile, was also upgraded with Chinese assistance to its present-day gravel road.

But it is only now that China is forging ahead with more transformative Irrawaddy plans.

The highlight of President Xi Jinping’s visit to Myanmar in January was the signing of 33 bilateral agreements and memoranda of understanding, many of them facilitating development projects along the Irrawaddy, including for new river ports and connecting highways.

China’s vision is not a novel notion. Indeed, river transport has historically been hugely important for Myanmar’s trade and commerce.

During the British colonial era, the fabled Irrawaddy Flotilla Company managed more than 600 ships, mostly paddle steamers, which plied the Irrawaddy and its various tributaries. That fleet, however, was grounded and destroyed to prevent the Japanese from using the vessels for transport up the Irrawaddy when they invaded Myanmar during World War II.

After independence, in 1948, the company was nationalized and became known as the Government Inland Transport Board, though with a much smaller new fleet. Now, the Irrawaddy’s once thriving trade route could soon be revived, this time via China’s CMEC and BRI.

The Irrawaddy news-site reported in December that Chinese researchers at Yunnan-based think tanks had made frequent visits recently to Myanmar, including trips on the Irrawaddy River, “with high hopes of turning Myanmar’s lifeline into a vital trade and logistics link with China.”

Meanwhile, Liu Jinxin, chairman of a Kunming-based institute that studies regional logistics, raised the prospect of refurbishing old and building new ports on the Irrawaddy during a forum held in Yangon in January.

Liu said that infrastructure along the Irrawaddy “is still weak” and that ports “would be a challenge to build without help”, likely meaning Chinese financial and building assistance, according to a Myanmar Times report.

But even with Chinese cash and know-how, it will not be an easy task, logistically or politically.

Hla Oo, chairman of Myanmar’s Cross-Border Trade Development Committee, has warned that “we will have trouble clearing the silt in a cost-effective and systematic way. The conservation work involved will be very expensive.”

Kachin state’s local government has already granted a Chinese company rights to upgrade and maintain the road from Lweje to Bhamo, but many locals are reluctant to support or allow major China-backed port projects in their area.

Zaw Thin, a local parliamentarian from Bhamo, told The Irrawaddy that “we have not agreed who will implement the Irrawaddy project. Whoever invests in the project must follow the Myanmar Investment Commission’s rules.”

His comment echoes concerns heard in many areas in Myanmar where Chinese companies are active, because of local resentment over the influx of Chinese workers, environmental degradation and a general disregard for local input and sentiment.

[Reporting from Yangon]

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