Two years after the Burmese junta made a turn toward the West, investment from China has slumped and the fall has not been compensated by inflows from the US and Europe. The lack of investment and jobs is leading to rising social tensions. Unemployment and poverty remain widespread.
The military-backed government’s decision to suspend the Chinese-financed Myitsone Dam on the Irrawaddy River in September 2011 sent a message to the US that Burma (Myanmar) would distance itself from Beijing. Washington had been engaged in diplomatic moves to undercut Chinese influence, culminating in a visit by US Secretary of State Hilary Clinton in December 2011.
According to a September report by the Washington-based US think tank, the Stimson Centre, falling Chinese investment reflects Beijing’s top priority to protect existing projects “from further damage caused by domestic politics and social unrest in Burma… For now, new large Chinese investment initiatives are generally suspended.”
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