Is Myanmar abandoning China for Japan?

Photo: Facebook page of MOFA Japan.

By Zofia Reych

On 3 May, Japan’s foreign minister Fumio Kishida met with Myanmar’s newly appointed State Counsellor, Aung San Suu Kyi, and expressed Japan’s support for her administration. Although Kishida’s eight day trip across Asia had started in Beijing, his subsequent meetings with ASEAN leaders were not viewed favourably by China, which ostensibly fears losing its influence in the region.

“We hope Japan can meet [us] halfway,” said the spokesperson for the Chinese foreign ministry, Hua Chunying, ahead of Kishida’s visit in Beijing, referring to the ongoing tensions over what China calls the South China Sea issue, as well as longstanding territorial grudges.

The road to amicable relations between the two countries is still a long one as Kishida’s visits in Myanmar, Thailand, Laos and Vietnam confirmed openly conflicting interests between Beijing and Tokyo.

An important meeting in Naypyidaw

Daw Suu, as the icon of democracy is known among the people of Myanmar, welcomed Kishida’s pledge to support her country through development assistance. Japan is Myanmar’s most generous benefactor.

Already in January, Shinzo Abe’s government announced the preparation of US$885 million in loans and grants to support Daw Suu’s administration. According to the Japan Times, details of the programme are expected to be announced in June 2016.

On top of that, in late April, Japan contributed US$31.7 million to aid the United Nations’ activities in Myanmar. The donation will be mostly used by The World Food Programme in the eastern states of Chin and Rakhine, which still face severe food shortages following Cyclone Komen’s destruction of farmland in 2015.

Japan is also to assist Myanmar, a country continuously struggling with ethnic violence, with the national reconciliation and democratisation processes led by Daw Suu.

China’s militarisation in the South China Sea basin and North Korea’s nuclear activities were also discussed during the Naypyidaw meeting between Kishida and Daw Suu.

Tensions with Beijing

Historically, the rule of Myanmar’s military junta was largely dependent on Beijing as its main supplier of arms and funds in exchange for strategic outposts, allowing China to maintain its strategic influence in the Bay of Bengal and Southeast Asia more broadly.

However, the bilateral relationship between the two countries was largely cooled by ethnic violence on the China-Myanmar border in 2009. Some commentators saw this as a moment when Myanmar decided to prioritise its domestic agenda over ties with Beijing.

In 2012 China had to abandon the project of the Myitsone hydropower station on one of Myanmar’s most important rivers. As China’s internal rivers are drying out, Beijing is seeking opportunities to harness international and foreign alternatives. Aware of the massive environmental and social cost, Myanmar’s then government brought a halt to the Myitsone development.

Among the strongest opponents of the project was Aung San Suu Kyi and it will now be time for her government to deal with this difficult issue.

Further estranging itself from its powerful patron, Myanmar had to assume an assertive attitude towards Beijing’s claims in the South China Sea basin, during the time of its 2014 ASEAN chairmanship. As Japan has been a vocal advocate both for strengthening the ASEAN community and in establishing a code of conduct that would prevent incidents in the South China Sea, strengthening the bond with Tokyo is a chance for Myanmar to shed its image as a Chinese protégé.

Meanwhile, Beijing insists on dealing with the territorial issues on a bilateral basis with individual ASEAN countries and sees Japan as “mounting a campaign against China” in order to “like the United States […] advance its own economic and strategic interests in Southeast Asia”.

In April this year Japan intensified its military operations in the region, sending a clear message to China that the Self Defense Forces will not shy away from actions aimed at ensuring the collective security of Japan’s allies.

An attractive market

With the Trans-Pacific Partnership (TPP) signed as of February this year, China’s trade position in the region is at a risk. Myanmar has not yet expressed interest in joining the free trade agreement, most pressingly because it is not in the position economically to do so.

But Myanmar is among the world’s fastest growing economy, and it is undoubtedly an incredibly interesting, promising market. Entering the TPP at an early stage is key.

Across the region, China and Japan are racing for lucrative infrastructure contracts, and Myanmar is one site of that competition. During their meeting with Aung San Suu Kyi, Japanese officials expressed its full-fledged support for Myanmar’s “infrastructure building, system reforms, and human resource training” as well as “job creation, agriculture, and healthcare” and through an extensive official development assistance (ODA) programme Japan might get the upper hand over China.

However, if China is given green light for the Myitsone dam, Beijing’s position will be dramatically strengthened again, especially in the north of the country. How Daw Suu solves the issue might set the tone for future China-Myanmar dialogue.

For now, it seems that State Counsellor is leaning eastwards, and has already reached out to a strategic ally.