China’s non-interference could harm China, says analyst

China’s “laissez-faire” approach to Myanmar’s military coup could hurt the Asian giant’s strategic and economic interests in the Southeast Asian country, said a political risk analyst.

In contrast to strong condemnations and sanctions by Western powers – including the US and the European Union – China’s response to the February 1 coup and the violence that followed was quieter. Beijing has been cautious and is emphasizing the importance of stability.

“But while China may be happy to deal with those in power in Naypyidaw, it is increasingly clear that the chain of events that the coup has unleashed could threaten its interests,” Gareth Price, senior researcher for the Asia program- British think tank Chatham House said in a March note.

Naypyidaw is the capital of Myanmar and one of the centers of anti-coup protests. Security forces have used increasingly violent tactics to crack down on demonstrations, killing more than 550 civilians, Reuters reported.

Protesters, outraged by Beijing’s apparent lack of concern over those killed in protests, attacked Chinese-run factories in Myanmar last month, the Associated Press reported. In response, Beijing urged Myanmar to “ensure the safety of life and property for Chinese companies and personnel”.

“China’s frustration with the risks faced by its economic interests indicates that the coup has become a major test for the already complex Myanmar-China relationship,” said Kaho Yu, senior analyst for Asia at risk consultancy Verisk Maplecroft, in a March report.

China is a major investor in Myanmar, a Southeast Asian border country that shares one of its borders. Myanmar is also an important part of President Xi Jinping’s belt and road initiative.

“In general, Beijing hopes that investments in Myanmar will contribute to energy security, trade and stability in its neighborhood,” said Yu.

“China says that an economic slowdown in its neighborhood would result in social instability and security threats, which in turn would threaten the political stability of provinces bordering China, such as Yunnan,” added the analyst.

The latest data available from Myanmar’s Directorate of Investment and Business Administration showed that China’s approved foreign investments hovered around $ 139.4 million from October 2020 to January this year. Myanmar’s financial year begins in October.

The approved Chinese investments were surpassed only by those in Singapore, which totaled about US $ 378.3 million in the same period, the data showed.

In commercial terms, China is Myanmar’s main export destination and the largest source of imports to the Southeast Asian country.

But Myanmar’s importance to China goes beyond the economy, said Price of Chatham House.

“The oil and gas pipelines that pass through Myanmar diversify China’s sources of supply and help to avoid using the Strait of Malacca, a piracy center,” he said. “And the development of ports and land connectivity between China and Myanmar also helps to facilitate a greater Chinese presence in the Indian Ocean.”

In the past, Beijing has cultivated cordial ties with the Myanmar military and also with the civilian government of de facto leader Aung San Suu Kyi, Yu said. In recent years, international pressure on Myanmar due to the Rohingya crisis has pushed the country closer to China, he added.

China’s adviser of state, Wang Yi, reportedly said last month that “no matter how the situation in Myanmar changes, China’s determination to promote China-Myanmar relations will not falter.”

But any sentiment on the part of China that it will continue to be Myanmar’s main partner, regardless of who is in charge, could be an “error of judgment,” said Price.

“If the military is forced to retreat, it could result in a more pronounced anti-China bias, threatening (China’s) strategic interests,” he said.

Instead, Beijing could help end the coup – a move that may threaten its interests in Myanmar in the short term, but is likely to move them forward in the long run, Price said. Myanmar generals have no intention of giving up power, but will struggle to maintain it without China’s support, he said.

“As its global role expands, China must learn to differentiate between the various types of authoritarian government and judge its response accordingly,” said Price.

“China needs to be aware that a ‘one-size-fits-all’ policy of non-interference will not win many friends, and anyone who wins is likely to be the least wholesome type.”