The flag of Myanmar painted on a cracked and peeling wall. Photo: Getty Images
The flag of Myanmar painted on a cracked and peeling wall. Photo: Getty Images

In late March the US naval ship Fall River—a Spearhead-class expeditionary fast transport vessel—arrived at Yangon’s Thilawa Port as part of a disaster preparedness training exercise. The port call, the first by a US navy vessel in Myanmar since World War II, was referred to by American officials as a “goodwill visit.”

To analysts, however, it was the latest sign that the two countries’ militaries are taking tentative first steps towards building strategic ties after decades of US sanctions-imposed separation.

The symbolic docking will not have gone unnoticed in neighboring China. For decades, China aimed to keep Western influence at bay by discouraging such exchanges and providing economic and financial aid to the country’s internationally isolated ruling generals.

Those still strong economic ties were on display during Myanmar President Htin Kyaw’s recently concluded six-day visit to Beijing. The visit coincided with the official opening of a US$1.5 billion oil pipeline that runs through Myanmar to south-western China that will significantly enhance the latter’s energy security.

China’s President Xi Jinping (R) speaks with Myanmar’s President Htin Kyaw after a signing ceremony at Beijing’s Great Hall of the People in Beijing on April 10, 2017. Photo: AFP/Yohei Kanasashi

Such crucial commercial interests explain why China frequently shields Myanmar from international condemnation, including at the United Nations.

That was apparent in March, when the UN’s Human Rights Council agreed to dispatch an international fact-finding mission to Myanmar to investigate mounting allegations of military-perpetuated human rights abuses.

China presented the strongest opposition to the initiative, citing the need to respect Myanmar’s sovereignty. The resolution was sponsored by the European Union and strongly backed by the US.

De facto national leader Aung San Suu Kyi, a Nobel Peace Prize laureate and long- time darling of the West, called personally on certain European envoys to drop the investigation, to no avail, according to diplomats familiar with the situation.

Myanmar State Counsellor Aung San Suu Kyi speaks to the Myanmar community in Singapore on December 1, 2016. Photo: AFP/Roslan Rahman 

Despite China’s stated policy of non-interference in other countries’ internal affairs, Myanmar is an exception. That’s seen most clearly in Beijing’s backing of the United Wa State Army (UWSA), Myanmar’s largest and most heavily armed ethnic armed organization (EAO).

The UWSA recently staged a meeting of other ethnic armed groups, now known as the Panghsang summit, that called for a new peace process separate from Suu Kyi’s and the military’s call for a National Ceasefire Agreement (NCA) to resolve the country’s many unresolved armed conflicts.

The China-backed and armed UWSA, long notorious for its drug trafficking activities, is now bidding to assume a political leadership role atop various smaller armed groups fighting for autonomy and federalism. That means China is poised, by proxy, to play a key future role in the country’s fractious peace politics.

China’s insertion in the process represents a potential headache for both the Myanmar military and its new tentative US and EU allies. Since 2011, Western nations have poured almost US$1 billion into various peace initiatives that have so far wholly failed to arrest armed conflict across the country.

Some of the heaviest fighting over the past two decades has recently erupted in the country’s north and north-eastern regions, with government forces resorting to aerial bombardments to gain a strategic edge, while Western nations have pumped in funds earmarked for peace and reconciliation.

United Wa State Army (UWSA) soldiers march during a media display in Panghsang, Wa territory in northeast Myanmar October 4, 2016. Photo: Reuters/Soe Zeya Tun

At the same time, China has sent conflicting signals to Myanmar’s military by clamping down on certain armed groups operating along their shared border, including through targeted arrests and seizures of bank accounts allegedly linked to insurgent leaders, while maintaining strong political and military ties to the UWSA.

With that known backing, Myanmar’s military has so far opted against attacking the UWSA, which maintains autonomous control over a large swath of territory in northern Shan state. The Panghsang summit, which proposed a new united front among armed groups against Suu Kyi’s government, was safely held in this area.

For the Myanmar military, an attack on the UWSA would effectively ignite a proxy conflict with China. It would also open the potential for a stinging military defeat in view of recent battlefield setbacks against less-armed ethnic Kachin, Kokang and Shan armed groups. The UWSA and government currently share a bilateral ceasefire.

At the same time, the UWSA is cognizant of rising perceptions it is being used as China’s “stick” in a competition for power and influence with the West.

There have been reports of a power struggle between a politically-minded faction eager to elevate the militia’s role and stature, and another business-oriented group keen to maintain ties to Myanmar’s generals to shield their interests and investments.

Bao Youxiang, leader of the United Wa State Army (UWSA), is seen during a meeting of leaders of Myanmar’s ethnic armed groups at the UWSA headquarters in Panghsang in Myanmar’s northern Shan State, May 6, 2015. Photo: Reuters/Stringer

Those include the Wa-owned Hong Pan Company, which runs local businesses ranging from electronics to construction to trading to mining to textiles. Locals note that Hong Pan trucks are never stopped at army checkpoints, a sign of its high-level military ties.

Other Wa-owned companies, including several involved in lucrative jade mining in neighboring Kachin state, would see their trade routes hit hard in any direct conflict with government forces.

The UWSA’s emergence as China’s proxy in Myanmar’s peace politics has caught many Western nations off-guard, according to sources familiar with the situation. Significantly, the development came soon after the EU and US had made certain symbolic strides in building relations with Myanmar’s military.

In November, Senior General Min Aung Hlaing, Myanmar’s armed forces chief, was invited to make an address at the European Union’s military committee. The invitation would have been unimaginable only five years ago, when the EU maintained strict economic sanctions against the then ruling military’s abysmal rights record.

Myanmar Military Commander in Chief Senior General Min Aung Hlaing addresses the opening ceremony of the 21st Century Panglong Conference in Naypyitaw, Myanmar August 31, 2016. Photo: Reuters/Soe Zeya Tun

The National Defense Authorization Act and the Defense Appropriation Bill, both overseen by the US Congress, still strictly limit America’s military engagement with Myanmar’s armed forces, despite the lifting of most economic sanctions.

There are still strong influential pockets of congressional resistance to removing those restrictions, especially in view of the military’s recent alleged egregious rights abuses in ethnic areas, including Kachin and Rakhine states.

Sensing an opportunity to rollback China’s influence, the Pentagon has sought ways to engage Myanmar’s military within legally defined limits. Those overtures have included private meetings in other Southeast Asian countries, including Thailand, outside of the prying eyes of Myanmar’s local media.

State Counsellor Aung San Suu Kyi speaks with former US President Barack Obama during a bilateral meeting at the White House in Washington, DC, September 14, 2016. Photo: AFP/Jim Watson

The “Great Game” for influence in Myanmar has thus now arguably entered a volatile new phase.

While the US and EU tentatively bid to boost military-to-military relations with Myanmar—above the objections of influential constituencies in each that could still prevail, particularly if the UN investigation reveals gross military rights abuses—they are already losing control of their richly funded peace process to China.

Whether this eventually leads to a proxy conflict between a China-backed UWSA and a Western-fortified Myanmar military is yet to be seen. But while that scenario still seems remote, the EU and US now face a dilemma over how to respond to the UWSA’s challenge to a peace process in which they have so heavily invested, diplomatically, financially and geo-strategically.

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