Chinese President will visit Myanmar aiming to move ahead the development of the Kyaukphyu Special Economic Zone (SEZ) in Rakhine State

14 มกราคม 2563

Myanmar and China are expected to ink a deal on the US$1.3 billion Kyaukphyu port project during President Xi Jinping’s visit this month.

The Chinese embassy in Yangon announced today that President Xi will travel to Myanmar on January 17, marking his first visit to the Southeast Asian country in 19 years and the first as China’s leader.

This year marks the 70th anniversary since the People’s Republic of China and Myanmar established formal diplomatic recognition. Xi’s visit is seen as an attempt to further cement bilateral relations and pushing ahead the China-Myanmar Economic Corridor scheme as well as other projects under the Belt and Road Initiative. 

One of the most watched developments is the highly-anticipated inking of Kyaukphyu port, a China-backed scheme under Beijing’s Belt and Road Initiative (BRI). A consortium led by CITIC, comprised of four other Chinese firms and Thailand’s Charoen Pokphand Group, aims to develop the deep-sea port as part of a special economic zone (SEZ) in the restive state.

“There are seven agreements under the framework agreement for Kyaukphyu. Two will be signed,” deputy commerce minister U Aung Htoo told the reporters in Nay Pyi Taw on Thursday, referring to the “framework agreement” signed by the two sides in late 2018.

Other Memoranda of Understanding (MOUs) are also expected to be signed during the Chinese leader’s visit, including the export of crops and cattle, according to the minister, who made no mention of the now-suspended Myitsone dam.

The controversial hydrodam, a project whose fate remains undecided under almost four years of the Daw Suu administration, is not expected to be one of the deals sealed, according to Ma Khin Khin Kyaw Kyee, deputy director at the Institute of Strategy and Policy Myanmar.

Kyaukphyu port’s 2018 framework agreement paves way for an actual concession-granting deal, said executive president of CITIC Myanmar Yuan Shaobin in 2017. The industrial park involves three agreements: an investment, shareholder and lease agreement, while the port requires a concession agreement on top of those three agreements.

The megaproject was awarded to the consortium during the last months of U Thein Sein’s presidency. Negotiations stalled in the first two years under the National League for Democracy-led government, which then renegotiated the port’s price tag from US$7.5 billion to $1.3 billion.

The project proponents a few months ago started the environmental and social impact assessment (ESIA) and preliminary geological survey, hiring Canadian firm Hatch as project manager.

Xi will meet with State Counsellor Daw Aung San Suu Kyi as well as Commander-in-chief Senior General Min Aung Hlaing during his trip, China’s vice foreign minister Luo Zhaohui said at a press conference on Friday.

“As this trip is to foster positive relations and this is the year [marking the] 70th anniversary of China-Myanmar diplomatic relations, I don't think China would do such an inconsiderate move,” said Ma Khin Khin Kyaw Kyee of the Institute of Strategy and Policy Myanmar, referring to the resumption of Myitsone dam.

“Given the advancement in CMEC - which runs through several conflict-sensitive areas - China is likely to be more deeply involved with the Myanmar peace process,” the analyst added.

Ma Khin Khin Kyaw Kyee argued that conflicts have to be managed before key business deals along the CMEC could take off. Beijing-backed plans for road and rail construction linking Muse and Mandalay were undermined when parts of northern Shan State had bridges blown up and roads ambushed in mid-2019 because of fighting between the Tatmadaw and the Brotherhood Alliance, a coalition of ethnic armed groups.

Bilateral relations have warmed since the days when U Thein Sein halted Myitsone dam, as Daw Aung San Suu Kyi faces a barricade of criticisms from the international community, including those in Europe and America, for her handling of the ongoing humanitarian crisis in northern Rakhine.

China is by far the biggest source of cumulative FDI commitments in Myanmar, while Beijing is seen by Nay Pyi Taw as a key stakeholder in the peace process.

Looking ahead, Ma Khin Khin Kyaw Kyee said Myanmar would move even closer to China’s orbit as the international backlash against the State Counsellor’s defence against accusations of genocide at the International Court of Justice last month. Western Union this week became the latest foreign firm to cut ties with Myanmar military companies. 

 

(The Myanmar Times: https://www.mmtimes.com/news/xis-myanmar-visit-move-ahead-china-backed-port.html )