Myanmar’s rapidly political reform dazzled and puzzled many watchers, Chinese included. Multiple internal and external factors contributed to the decision to adopt the reform. Internally, the political change is the result of a process designed and implemented by the military government, which was necessitated by the military’s lack of professional governance skills and made possible by its consent. Externally, Myanmar’s desire to mitigate its overdependence on China, to improve relations with U.S. and to repair its reputation at ASEAN motivated its reform at home.
The democratic reform in Myanmar unveiled a series of unpleasant uncertainties for China. Economically, the suspension of the Myitsone dam project has encouraged further scrutiny and criticism of Chinese investments, threatening the viability of strategic projects such as the oil and gas pipelines. The pressure on Chinese existing economic interests on the ground is strengthened by the increasing competition from the west. Politically, the preliminary success of Myanmar’s democratic reform has raised questions inside China about China’s political system and the long postponed political reform. Strategically, Myanmar’s changing foreign policy undercuts China’s original blueprint regarding the strategic utilities of Myanmar at ASEAN, in the Indian Ocean and more broadly in the region.
As a result, China has adjusted its posture and policy toward its southwest neighbour. Since the suspension of the Myitsone dam, China has dramatically reduced its economic investment in Myanmar, intentionally cooled down the bilateral political ties while established historical relations with the democratic oppositions. At the same time, China also launched massive public relations campaigns inside Myanmar that aimed at improving its image and relations with the local communities. The security of China’s energy investment, such as the oil and gas pipelines and the Myitsone dam, remain China’s priority. And the issues are substantially complicated by the conflict in the ethnic border areas.