A Stimson Center report issued today examines efforts by Chinese investors and the government of Myanmar to work together to reduce distrust and hostility and increase responsible investment in Myanmar to benefit both nations.
The report, “Chinese Investment in Myanmar: What Lies Ahead?”, says greater foreign investment is needed in Myanmar – particularly in the Southeast Asian nation’s underdeveloped and inadequate infrastructure – to speed industrialization and modernization.
The study documents a dramatic drop in Chinese investment in Myanmar. After a reformist government replaced a military junta in Myanmar in 2011, Chinese investment in the nation formerly known as Burma fell from the U.S. equivalent of $13 billion in the period of 2008-2011 to just $407 million in the 2012-2013 fiscal year.
China now perceives Myanmar as an unfriendly and risky place to invest and is displeased that the Myanmar government is not doing more to protect Chinese interests in the country, the study concludes.
The three largest Chinese investments in Myanmar – the Myitsone Dam, the Letpadaung Copper Mine and the Sino-Myanmar oil and gas pipelines – have sparked local opposition and criticism in Myanmar to varying degrees, creating problems and uncertainties for Chinese investors.
The reduced Chinese investment could hurt Myanmar’s economy in unexpected ways, according to the Stimson report.
Some progress is being made. “In a move to gain greater acceptance of its investments in Myanmar, China is improving its profit-sharing, environmental and corporate social responsibility programs in the nation,” the report says. It goes on to state: “China has learned important lessons about investing in other countries from the problems it has encountered in Myanmar.”
The study is the first Stimson report written by Yun Sun, who recently joined the nonprofit and nonpartisan international security think tank as a fellow with the East Asia program. She was previously a visiting fellow at the Brookings Institution, a China analyst for International Crisis Group based in Beijing from 2008 to 2011, and earlier worked on U.S.-Asia relations at the Maureen and Mike Mansfield Foundation and the Asia Society in Washington.
Sun’s expertise is in Chinese foreign policy, U.S.-China relations, and China’s relations with neighboring countries and authoritarian regimes.
“Yun Sun is an outstanding scholar who will strengthen Stimson’s East Asia program with her insightful research and analysis,” said Stimson President and CEO Ellen Laipson. “We’re delighted to have her join Director and Distinguished Fellow Alan Romberg and Senior Associate Yuki Tatsumi in the program.”
Sun, who conducted research in Myanmar for her study, will produce three more short reports – called issue briefs – on the changes and challenges that Myanmar is facing in its domestic and foreign policies since the beginning of democratization in the nation in 2011.
The reports will explore various aspects of Myanmar’s internal development, including economic growth, ethnic conflicts and national reconciliation. They will also look at the evolution of Myanmar’s relationship with major powers in and outside the region, especially China and the United States.
“These issue briefs will provide greater understanding of the profound changes and challenges faced by Myanmar since its political reform,” Sun said.
Future briefs will explore the development of the Myanmar government’s peace process with border ethnic groups (the Kachin and the Wa) in northern Myanmar, U.S.-China dynamics inside the country, and the roles and policies of other regional players.
Photo by -AX- via flickr