Tuesday, June 8, 2010



Prime Minister Wen Jiabo of China visited Myanmar on June 2 and 3,2010, to participate in celebrations to mark the 60th anniversary of the establishment of diplomatic relations between the two countries. During the visit, which was confined Naypyitaw, the new capital, with a transit halt in Yangon, he met Senior General Than Shwe, Chairman of the State Peace and Development Council of Myanmar, and Prime Minister U Thein Sein. Myanmar was the last leg of a four-nation Asian tour which had taken him to South Korea, Japan and Mongolia before he arrived in Myanmar. China’s then Prime Minister Li Peng had visited Myanmar in 1994 and the then President Jiang Zemin in 2001. Chinese Vice President Xi Jinping had visited Myanmar on December 19 and 20, 2009, during the course of a four-nation tour covering Japan, South Korea, Myanmar and Cambodia.

2. The visit of Mr.Wen was mainly to provide a high profile to the 60th anniversary celebrations and to underline the continued importance attached by China to its relations with Myanmar, which has acquired an importance in China’s search for energy security and reduced dependence on the Malacca Strait for the movement of its energy supplies from West Asia and Africa. Speculation in some circles of the Myanmar political exile community seeing an additional significance in the fact that the visit came a few months before the controversial elections from which the ruling junta had manipulated the exclusion of Aung San Suu Kyi and her party appeared to be wishful-thinking. Political stability in Myanmar has become important for China’s energy security and the Chinese are unlikely to do or say anything which could destabilize the junta, which has been favourable to Chinese energy requirements.

3. Renewed speculation on the eve of Mr.Wen’s visit about the alleged attempts of Myanmar to acquire a nuclear capability with North Korean help did not come in the way of the visit. In fact, Chinese sources dismissed the speculation as unworthy of being taken seriously since it emanated from an army defector with an axe to grind against the junta.

4. There were three high-profile events during the visit. The first was a formal function to mark the 60th anniversary at which U Thein Sein and Mr.Wen delivered formal speeches tracing the evolution of the relations between the two countries during the last 60 years. Mr. Wen highlighted the fact that the bilateral trade has increased five-fold from 620 million dollars in 2000 to 2960 million dollars in 2009.

5. The second was the formal launching by the two Prime Ministers of the construction of the Myanmar-China oil and natural gas pipeline project. Even though the two pipelines will not pass through the capital, the launching function was held in the capital. Mr.Wen did not go to the Arakan area for this purpose. There is local opposition to the pipelines in the Arakan area and the two Governments apparently did not want to take the risk of having the function there. In fact, apart from a visit to a school in the capital area, Mr.Wen did not have any interactions with the people or the political leaders of Myanmar. His interactions were confined to the military officers, the civilian bureaucrats and their families who attended the formal functions.

6. The China National Petroleum Corporation (CNPC), the country's largest oil and gas producer and supplier, gave the following details in its web site on June 4: Work has started on the construction of two oil and gas pipelines between China and Myanmar.The Southeast Asia Pipeline Company, one of its affiliates, has been put in charge of the design, construction, operation and maintenance of the pipelines. As a controlling shareholder, the Southeast Asia Pipeline Company signed an agreement with the Myanmar National Oil and Gas Company on June 3 at Naypyitaw. Each with an overall length of about 1,100 kilometers, the gas and oil pipelines are both expected to run from the Kyaukpyu port on Myanmar's west coast and enter China at Ruili, Yunnan Province. The oil pipeline will have a designed transport capacity of 22 million tonnes per year, while the natural gas pipeline a designed transport capacity of 12 billion cubic meters annually.

7. The “ People’s Daily” of China reported as follows on June 7:”There are 793 kilometers of gas pipeline in Myanmar, and also a 771-kilometer-long crude oil pipeline. The China National Petroleum Corporation (CNPC) said it has begun building an oil port in Kyaukpyu as a facility for the planned China-Myanmar oil pipeline project. According to the agreement signed by both countries, the Union of Myanmar is to grant a crude oil pipeline to the Southeast Asia Oil Pipeline Co., Ltd. for the China-Myanmar oil pipeline franchise and is responsible for pipeline construction and operation and so on. The company also enjoys tax breaks, oil transit, import and export customs clearance and related rights such as right-of-way operations. Relevant chiefs from CNPC said that the project could explore new oil product import channels and further ensure the country's oil supply security. Meanwhile, the project also could improve the infrastructure construction in China's southwest area, which is beneficial to implementing the general strategy of the West Development Program.”

8. In a commentary by Mr.Eric Watkins, its oil diplomacy editor, the “Oil & Gas Journal” of the US reported inter alia as follows on June 4: “Kyaukpyu is on Ramree Island about 400 km northwest of Yangon, and is due to become the import terminus for Middle East and African tankers supplying oil to China. The new port will be able to receive vessels of up to 300,000 dwt and will have storage capacity of 600,000 cu m. Analysts said the oil line will diversify China's import routes from the Middle East and Africa, enabling it to bypass the sea route through the piracy-prone Strait of Malacca. The gas line will help meet rapidly expanding demand in southern China. Oil for the line will come from China’s Middle Eastern and African suppliers, while the gas line will be fed by fields in Myanmar, which has the most extensive gas reserves in Southeast Asia at 21.2 tcf. Recent reports claim that Myanmar produces around 1.2 bcf/year of gas but wants to increase this to almost 2.2 bcf/year by 2015. In November 2009, CNPC said it had started construction of a large-scale oil port in Kyaukpyu as a facility for the planned China-Myanmar oil line project.”

9. The third event was the formal handing over by Mr.Wen to his Myanmar counterpart of the Myanmar International Convention Centre-MICC built by Chinese engineers. According to the details given on the occasion, the MICC building was designed by the Beijing Institute of Architectural Design (BIAD) and built by the Anhui Foreign Economic Construction (Group) Co Ltd. The construction of the building started on 15 February 2008 and it was completed on 15 March 2010. It was located on 16 acres of land with 312,000 square feet. The MICC has a Plenary Hall that can accommodate 1900 persons.

10. Officials of the two countries reported that during the visit of Mr.Wen, 15 agreements and Memoranda of Understanding were signed covering bilateral cooperation in economic and technology sectors, rail transportation, trade, hydropower, energy and mining. No details have been disclosed.

11. In an editorial on the visit, the Government-controlled “New Light of Myanmar” said on June 5: “ The two nations maintain good neighborly relations based on equality, understanding and mutual support for each other. Bilateral cooperation in various sectors has made significant progress and the bilateral relations have grown to strategic relations. The two peoples have been dealing with each other through fraternal sentiment.”

12. China is now Myanmar’s third largest trading partner and investor after Thailand and Singapore. Up to January 2010, China had invested $1.848 billion in Myanmar, or 11.5 percent of Myanmar’s total foreign direct investment.

13. A Chinese military delegation from the Jinan Military Region headed by General Fan Changlong of the Chinese People’s Liberation Army, has separately come to Myanmar to participate in the 60th anniversary functions. (9-6-10)

( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate of the Chennai Centre For China Studies. E-mail: seventyone2@gmail.com )