Energy-hungry China winces as civil war unfolds in Burma

Originally appeared in Asian Correspondent

June 16, 2011

Heavy fighting over the past week close to Burma’s northern border will concern Beijing, who told visiting Burmese President Thein Sein last month that stability along the volatile frontier must be made a priority of the new government. Hundreds of millions of dollars in overland trade passes through several official crossings along the border each year; millions more is smuggled by timber merchants, drug mules and human trafficking rackets. The value of maintaining the unimpeded flow of trade is crucial to both Burma and China’s developing southern Yunnan province.

As a consequence, government officials in Beijing likely had strong words for Thein Sein last month. He was still prime minister in August 2009, the last time a border conflagration of similar intensity to now occurred, forcing up to 37,000 refugees into China. Uncharacteristically for Beijing, it issued a sharp rebuke to its southern neighbour, which reacted by ratcheting up a campaign to force the myriad armed groups to assimilate into the Burmese army, thereby ending decades-old insurgencies, and threatening war if they do not. This is what originally sparked the 2009 fighting, and is the reason why Burma’s north and eastern borders are now facing the possibility of major upheaval.

At the time of the August 2009 flare up, little analysis was done of the geo-strategic reasons behind the Burmese regime’s border conquests. That is now becoming more apparent: the locations of two major centres of violence over the past two months – Momauk in Kachin state and Hsipaw in Shan state – are both areas where rebel territory lies uncomfortably close to major energy projects whose produce will feed Yunnan’s power-hungry population. Differing somewhat then from historic anti-insurgency campaigns in Burma’s border regions (notably the six-decade war with the Karen close to the Thailand border), this latest wave of fighting has definite financial imperatives for the Burmese government; equally importantly, success or failure will have major implications for its future relationship with the regional powerhouse

Beijing will have already noted the series of clashes that have occurred close to major hydropower sites: the Kachin Independence Army (KIA) yesterday launched an attack on Burmese troops close to the Shweli Dam while for three days this week they surrounded the Taping Dam site some 20 miles from the China border. The Shan State Army (SSA) has also been engaged in fighting close to the Tasang Dam, which upon completion will be the largest of the 40-plus China-backed dams in Burma.

Both the Kachin army and SSA also control territory in northern Shan state, close to the final stretch of the Shwe Gas Pipeline. This is the most valuable bilateral energy venture the two countries have ever pursued, and in some ways has become the backbone of Burma-China relations. Should Burma fail to secure this route, then China will face major problems, given that the project is intended to compensate for what is becoming an ever weaker grip on the Malacca Straits, its traditional route for African and Middle Easter oil cargoes.

China needs this passage through Burma, as it does the output from its hydropower projects. Its future with the Burmese regime hinges heavily on the extent to which it can exploit the country’s natural resources. Armed insurgencies are a hindrance to this, and the coming months will be a test of how far, indeed how aggressively, Naypyidaw will go to maintain this relationship.

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