- Expanding Belt and Road economic corridor opens new possibilities for trade
According to Nikkei Asia’s article published on October 20, 2022, When the West cut off aid to Myanmar after the military took control in 2021, China rushed to fill the vacuum under its Belt and Road infrastructure-building initiative. But growing concern over China's so-called debt trap diplomacy threatens the of progress of a jewel of the initiative, the China-Myanmar Economic Corridor.
Part of the project appears to be full-steam ahead after a rail network section that connects western China to Myanmar begun operating in recent months. For Beijing, the development is seen as crucial because it has the potential to open up a vital route to the Indian Ocean.
In June, freight trucks carrying 60 containers' worth of electronics, auto parts and other goods arrived in Mandalay, Myanmar's second-largest city. The freight had originally left Chongqing, China, on a train in late May before being placed on trucks in the Yunnan Province city of Lincang and taken over the border in Myanmar's Shan State.
The new route was made possible by a railway link between the western Chinese cities of Lincang and Dali, which began operating in December 2020. It will "shorten the transportation distance and time" and optimize international shipments from inland China to the Middle East and Europe, China's Communist Party-affiliated Global Times reported.
In a separate shipping trial in August 2021, cargo was first transported by sea from Singapore to Yangon, by truck to Lincang, then finally by train to Chengdu.
The state-owned China Railway Group has been a main driver behind these developments. It is building a 330-kilometer railway from Dali to Ruili, China's most important gateway for overland shipments from Myanmar. Service to the midway point in China's Baoshan started in July, 14 years after construction began.
China Railway is also involved in projects in Myanmar. It signed a memorandum of understanding with Myanmar's state railway in 2018 to conduct a feasibility study for a rail link between Muse, a town across the border from Ruili, and Mandalay. The project includes 36 stations, 124 bridges and 60 tunnels, and is estimated to cost $8.9 billion.
In January 2021, it signed another memorandum for a feasibility study on further extending rail service to all the way Kyaukphyu, a special economic zone on the Indian Ocean.
Chinese state-owned conglomerate CITIC Group is leading the development of a large-scale port and industrial park at Kyaukphyu. It held an information session for local residents in August as part of its environmental and social impact assessment, which is expected to conclude by July 2023.
Together, these projects would connect China's landlocked western regions to the Indian Ocean, making the China-Myanmar Economic Corridor, or CMEC, an even more important piece of the Belt and Road Initiative. Meanwhile, Myanmar would be able to boost exports to China and become an international logistics hub.
As part of the CMEC, a joint venture between the two countries last week opened a $180 million, gas-fired 135 megawatt power plant in the Kyaukphyu Special Economic Zone, according to local media Irrawaddy.
Still, little visible progress has been made since the military took control of the country in February 2021.
China has grown more sensitive to political developments and anti-Chinese sentiment in Myanmar, said a researcher at the Institute for Strategy and Policy -- Myanmar. In an expert poll conducted by the think tank, 83% of respondents said the economic corridor will benefit China more than Myanmar, while 12% said it will benefit both.
Towering costs and increasing financing challenges for the projects have stoked concern as well, along with the country's troubling history of farmland seizures.
China appears eager to ensure the economic corridor's success in light of growing criticism that it is ensnaring developing countries in debt traps, placing them in so much debt that they have no choice but to make diplomatic and economic concessions to Beijing. The China-Pakistan Economic Corridor, another piece of the Belt and Road Initiative, has triggered local opposition as well as a debt crisis for the Pakistani government.
Myanmar actually has relatively little foreign debt. Its external debt stock equaled 17% of gross national income as of 2020, compared with 95% for Laos and 71% for Cambodia, according to the World Bank. China accounted for 25% of its borrowing, a smaller percentage than Japan.
Myanmar reduced its dependence on China after it shifted to civilian rule in 2011, such as by suspending construction of the Chinese-backed Myitsone dam. But with Myanmar's military government facing increasing isolation on the international stage, Naypyitaw is only expected to rely more heavily on ties with Beijing and Moscow.
