China moves in on Myanmar

China has been pushing for preferential access to the US$7.3 billion deep-sea port of Kyauk Pyu on the Bay of Bengal as part of its ambitious ‘One Belt, One Road’ infrastructure plan to further develop its global trade links.

The deep-sea port on the Bay of Bengal is strategic for China because it would give the country a boost in developing maritime infrastructure on the Indian Ocean.

In addition, Kyauk Pyu port would also give China an alternative route for energy imports. It complements the deal it signed with Myanmar last month to open a cross-border pipeline into south-east China, allowing Beijing to diversify oil supply routes and reduce its dependence on the contentious South China Sea.

The proposed Chinese stake which is said to come from China’s CITIC Group, is substantially larger than the 50/50 joint venture proposed by Myanmar late last year, which was rejected at the time.

Media reports suggest that a stake in Kyauk Pyu should help to push forward two development projects, one at the port itself, and the other at a US$10 billion special economic zone in Myanmar’s western Rakhine State.

CITIC’s consortiums include the Chinese state owned China Harbor Engineering Company Ltd, China Merchants Holdings, TEDA Investment Holding and Yunnan Construction Engineering Group and Thailand’s Charoen Pokphand Group.

It remains to be seen how the situation develops because Myanmar’s leaders have traditionally been wary of domination by China.