Although economic cooperation between China and Myanmar has continued to accelerate since Aung San Suu Kyi and her National League for Democracy (NLD) took power in the Southeast Asian nation in 2015, things are far from hunky-dory for Chinese investors.
The reality is that Chinese investors in Myanmar constantly face an undercurrent of discontent and suspicions both among the local population and within the Myanmar government.
One typical example of the setbacks that Chinese companies in Myanmar have experienced is the abortive project of building a hydroelectric power station in Myitsone.
First conceived back in the 1990s, the project was given the green light in 2001, under which the State Power Investment Corporation (SPIC) from China would form a joint venture with a local Burmese company to undertake work on the venture. Once completed, it would become the 15th largest hydroelectric power station in the world.
SPIC signed a memorandum of cooperation with the government of Myanmar in 2006, and construction work began in 2009. However, due to mounting opposition from the local population and public pressure from across the nation, Myanmar’s former president Thein Sein called an indefinite halt to the project in 2011.
On the surface, Thein Sein put the project on hold because of public outcry against it. However, the truth behind the matter is a lot more complicated.
It might have been true that the local people in Myitsone were opposed to the project, but their anger was mostly because of the “top-down” and dictatorial way the local authorities handled the issues of land compensation and human relocation rather than the project itself.
Also, the project got a lot of bad press across Myanmar, with many getting increasingly worried about the growing economic influence of Beijing. As a result, public opinion was turning against the project, and to a considerable extent, SPIC was simply made a scapegoat for the Myanmar government’s failure to compensate and relocate the people of Myitsone properly.
Meanwhile, another reason why the Myitsone hydroelectric power station project was struck down was because the Myanmar government was having second thoughts about the terms of the agreement, which it believed were tilted overwhelmingly in China’s favor.
For example, according to the initial terms, 90 percent of the power generated by the station would be sold back to China at cheap prices, not to mention the fact that SPIC was given a 50-year franchise to run the station.
The mounting public outcry against the project simply offered president Thein Sein a perfect excuse to overturn the agreement.
Compared to investors from the West, who are often more willing to bear social responsibilities in the course of making their investments, Chinese companies are usually obsessed with making profits.
Their exploitative approach to investing in Myanmar has alienated not only many of the local population but also some in the former military government as well.
Given that, one should probably not have been surprised by the “sudden death” of the Myitsone power station.
This article appeared in the Hong Kong Economic Journal on March 28
Translation by Alan Lee
[Chinese version 中文版]
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