West-imposed sanctions give China leverage in Myanmar

There has been a flare-up in fighting between the Tatmadaw (Myanmar’s military) and an alliance comprising three prominent ethnic insurgent organisations (EIOs) — the Myanmar National Democratic Alliance Army (MNDAA), the Ta’ang National Liberation Army, and the Arakan Army — and others since the last week of October in the country’s northeast states of Shan and Kachin with sporadic events of protests and attacks on military elsewhere in Myanmar.

These events have reinvigorated the questions over the military junta’s ability to consolidate control over a politically-divided country over ethnic and sectarian differences. Whether it is a moment for the revival of democracy depends on several factors, including the unlikely collapse of the military regime. In all this, the role of outside players is significant in terms of whether and how long the military can hold on to power.

Delicate balance

While the United States and its European allies have sanctioned the military junta, India has attempted to balance between its support for democracy and pragmatic engagement with the military junta. Another significant player is China, which has substantially invested in Myanmar through the Belt and Road Initiative (BRI), energy projects, cross-border trade, and politically, by backing the military junta after the coup in February 2021.

So far, China has supported the junta while it has also engaged with the ethnic groups, particularly in the Kachin and Shan states, along with its border with Myanmar.

This balancing approach is under severe stress as the fighting intensifies, prompting China to call for a ceasefire and dialogue.

Despite gains by the opposition groups, any decisive shift in the balance between the military and these groups hinges on what other countries, namely India, the US, and their allies, do. Without that, the current crisis provides a window of opportunity for China to entrench itself.

China’s concerns in Myanmar

China has called for a ceasefire of violence and reiterated its adherence to the non-interference principle and the spirit of pauk-paw (fraternal) friendship between the two countries.

The primary concern for China is the security of its assets, nationals, and a host of infrastructure and energy projects it has invested in.

A lucrative cross-border trade is another layer to China’s efforts to integrate Myanmar and extend its economic and strategic interests. China has invested in cross-border connectivity and infrastructure, energy pipelines, and other small-scale infrastructure namely, border trade zones, plantations, and roads.

Another serious concern for China is the cross-border crimes conducted from Northern Myanmar and the potential flow of refugees across the porous border, which is difficult to control. Local police in the Yunnan province have attempted to control these crimes while these issues also provide impetus for official dialogue and cooperation with the military rulers of Myanmar.

China’s leverage

While China is interested in the status quo with the military junta in power, its strategy is to have a working and pragmatic relationship with the military and opposing groups.

Over some time, China has gained immense influence in Northern and Northeastern Myanmar. Chinese actors — local level governments, commercial enterprises, and more recently, the reported presence of private security companies — have developed deeper commercial, social, and security stakes in the country’s north, including with ethnic insurgent groups.

Several ethnic insurgent groups part of the alliance fighting the military; such as the Kachin Independence Organisation (KIO), the New Democratic Army Kachin (NDA-K), the United Wa State Army, the Myanmar National Democratic Alliance Army (MNDAA), among others, have had a good relationship with different levels of the Chinese State at prefectural, provincial, and national levels.

Apart from local tax, all these organisations depend on cross-border trade with China, drug trafficking, and other forms of licit and illicit trade for their political and military sustenance, so does the military. Its importance became visible when China closed its borders for three years during the Covid-19 pandemic. By having control over border trade, China can dictate its terms.

Uncertain future

Despite gains by opposition groups, the chances of the collapse of military rule are, at best, uncertain due to, among other things, the difficulties of overcoming ethnic and regional differences among themselves to form a viable national unity government and, most importantly, the uncertain diplomatic and political support from other external players.

Given the context, the unfolding situation within Myanmar has broader geopolitical and security implications for India and other countries in the Indo-Pacific region.

The US, the European Union, and their partners have imposed sanctions. However, the sanctions do not always work as intended to force the military to sit for political dialogue. At the same time, in Myanmar, this approach has also led to the military depending more upon China.

Thus, India, an immediate neighbour with substantial national security stakes, should take the lead and rethink its current approach of balancing, and work with ASEAN and its partners in the Indo-Pacific framework to put diplomatic and political pressure on the junta for political dialogue.

(Devendra Kumar is Associate Fellow, Centre for Himalayan Studies, School of Humanities and Social Sciences, Shiv Nadar University.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.