Can China-Myanmar Economic Corridor overcome hurdles to progress?

Recently, U Aung Naing Oo, director general of the Directorate of Investment and Company Administration of Myanmar, said that Myanmar and China will soon sign a Memorandum of Understanding (MoU) on building the China-Myanmar Economic Corridor (CMEC), one of the key projects of the Belt and Road initiative (BRI).

The two sides reached a 15-point MoU at the working group level in February this year and agreed to collaborate on many sectors including basic infrastructure, construction, manufacturing, agriculture, transport, finance, human resource development, telecommunications, and research and technology in order to develop the CMEC. Fresh progress on the CMEC since its announcement during Chinese Foreign Minister Wang Yi's Myanmar tour in November last year indicates Sino-Myanmar ties are heading in the right direction. The corridor connects Yunnan and three important economic centers in Myanmar, including Mandalay, Yangon New City and Kyaukphyu Special Economic Zone (SEZ), and aims to promote the economic integration of the region. This also coincides with the national development plan of Myanmar in which Myanmese leaders are trying to address economic imbalances by enhancing connectivity between developed Yangon and remote and undeveloped Rakhine State. Hence, the economic corridor is the convergence of common interests of Myanmar and China.

After the economic corridor opens, Chinese goods and services would flow into the southern and western regions of Myanmar and even neighboring countries such as India and Bangladesh, leading to increase in trade between China and Myanmar as well as South Asian countries. It would also lead to Myanmar becoming a trade hub between China, Southeast Asia and South Asia.

What's more, China would increase its investment in eastern and western Myanmar in the next few years, and integrate the Kyaukphyu SEZ into the flourishing border economy along the Sino-Myanmese border. Myanmar would embrace a strong momentum to modernize and industrialize the country, especially the underdeveloped western regions. The poor living conditions of Rohingya Muslims in Rakhine State could also be improved with the help of the economic stimulus, which will help resolve the ethnic crisis.

Further, as Myanmar's State Counselor Aung San Suu Kyi said, infrastructure, electricity and other sectors that would promote the livelihood of local residents would become the main areas for Chinese investments under CMEC. This could help reduce the resistance against Chinese investment in Myanmar and improve the image of China in the country. In the meantime, the NLD government could obtain the necessary capital and technology to develop the country, thus consolidating power which has been challenged by the opposition.

Finally, both sides would be able to strengthen political trust through the economic corridor. Actually, although Myanmar is enthusiastic about BRI, few bilateral projects have been implemented between the two countries due to some Myanmese people's skepticism about Chinese intentions and fear of a debt trap. Given this, the agreement on building the CMEC shows that suspicion about Chinese intentions is withering away.

As U Maung Maung Lay, vice president of the Federation of Chambers of Commerce of Myanmar, said, "Myanmar can't sidestep the One Belt One Road initiative, even though we have many views regarding the debt threat."

Moreover, Myanmar would prefer to integrate itself into the region by initiating the CMEC as it is unsatisfied with the slow progress of Bangladesh-China-India-Myanmar Economic Corridor.

Nonetheless, some scholars worried that the corridor may not be completed due to ethnic conflicts in northern Myanmar as well as the xenophobia of Myanmese people. There is no denying these hurdles faced by the CMEC, but I believe that both governments would take measures to mitigate the risks. Beijing has made efforts to push peace talks between the Myanmese government and ethnic armed groups and undertaken public diplomacy to reduce anti-Chinese sentiment in the Myanmese society. Nay Pyi Taw has committed itself to restoring peace and stability in northern Myanmar by holding the 21st Panglong Conference. Myanmese locals would not oppose the project if they benefit from it.

To conclude, due to the multiple benefits that the CMEC would bring, China and Myanmar should construct it as early as possible. In spite of various barriers, the CMEC would be implemented step by step and see its completion.

The author is an assistant research fellow at National Institute for South China Sea Studies based in Haikou, Hainan.