China’s Engagement in Myanmar: From Malacca Dilemma to Transition Dilemma

By Transnational Institute • July 19, 2016

As neighbours on a strategic crossroads in Asia, the relationship between China and Myanmar is today one of the most important in international geo-politics and regional development. After Myanmar’s independence, tensions with China were often deep as conflict and political turmoil swept both countries. In recent decades, ties have become closer due to social and political changes on both sides of the Yunnan frontier. Under previous military governments in Myanmar, this witnessed China becoming the largest foreign investor and dominant international influence in the country.

Since political transition began in 2011, many aspects of China’s engagement in Myanmar have come under challenge. Fundamental difficulties remain that can destabilise Myanmar-China relations at any time. These include ethnic conflict, Chinese investments, communal tensions, political reform and international power struggles. With the advent of a National League for Democracy (NLD) government this year, a new “Great Game” is underway that could have consequences for both the country and region for many decades to come.

This briefing examines the changing political and economic landscape, outlining the key histories, developments and strategies in recent Myanmar-China relations. A particular concern is the continuing conflict in the ethnic borderlands in Myanmar, which are in the front-line of contention and where many of the country’s most valuable natural resources are located. History has long warned that instability and political failure will continue until there is inclusive peace and reform in these territories.