China seizes opportunity in Suu Kyi’s isolation

As Western governments weigh sanctions in punitive response to Myanmar’s recent rash of rights abuses against ethnic and religious minorities, China is taking full advantage of the country’s new era of international isolation to seek out new investment opportunities.

Myanmar Yang Tse Copper Limited, a subsidiary of the Beijing-based Wanbao Mining Limited, is now reportedly pursuing permission to carry out ground inspections for a possible copper mining site in a 100,000-acre large area in Monywa, west of the central city of Mandalay.

Wanbao, a subsidiary of China’s state-owned arms manufacturer China North Industries Corporation, or Norinco, operates mines in Gabon and the Democratic Republic of Congo and has operated in Myanmar since 2010.

It’s Myanmar operations, concentrated in the Letpadaung mining region, have been highly divisive and politically charged issue pitting locals against authorities, and even reportedly created divisions within the powerful military on pro- and anti-China lines.

Wanbao’s new exploration activities have the potential to put State Counsellor Aung San Suu Kyi in a political firing line as perceptions gather her quasi-democratic government is increasingly receptive to Chinese interests as an economic hedge against new punitive measures from the West.

The Chinese company’s previous mining activities at Letpaduang, a joint venture with the Union of Myanmar Economic Holdings, or UMEH, a company owned by the Myanmar military, sparked protests that were harshly suppressed by security forces, with local villagers and Buddhist monks suffering injuries from incendiary devices.

Suu Kyi first waded into the controversy in 2013, soon after becoming a member of parliament after spending years in house arrest under previous military regimes.

In an event that presaged her subsequent political turn towards protecting military interests, Suu Kyi urged farmers who had their lands confiscated to make way for the China-backed project to stop their protests because they were hurting the environment for foreign investment.

In a telling exchange, when Suu Kyi tried to explain to an agitated crowd at the site that the government had contractual obligations for the project to proceed, an angry female protester shouted back at Suu Kyi, saying, “all we had to eat was boiled rice and we voted for you, but you are not standing with us anymore.”

Suu Kyi, then widely adored across the nation as a pro-democracy icon, was reportedly shaken by the experience and quickly retreated to her car and left the area.

The impassioned people versus state protests have continued in perhaps the most potent example of popular pushback against perceived as exploitative Chinese investments in the country.

During the height of the protests in 2013, the then Chinese ambassador in Yangon, Li Junhua, claimed that the company had paid adequate compensation for the confiscated 3,200 acres to the displaced villagers.

But they have always claimed, and even told Suu Kyi during her visit to the mining site, that they are not interested in compensation and insist on maintaining their ancestral lands. They have also complained that reglious sites have been desecrated in the mining zone.

In December 2014, police shot and killed a female demonstrator near the mine. After her death, demonstrators clashed with police outside the Chinese embassy in Yangon.

In March last year, ten villagers were injured when police fired rubber bullets at protesters who were trying to block the road leading to the Letpadaung mine.

Despite the still boiling unrest, the Chinese company now wants to invest between US$6-10 million for an initial inspection of a much larger area around Kani, Yinmabin and Sarlingyi near the old mine. Any new project is bound to be met by wider protests, an issue Suu Kyi’s elected government will need to weigh carefully.

China’s rising role in Myanmar after the bloody campaign against Rohingya Muslims in western Rakhine state and the West’s condemnation of the carnage also raises the question of how much her government is willing to concede to Beijing.

Myanmar’s moves towards a more open society, and the introduction of what appeared to be democratic reforms after elections in 2010 and 2015, were largely prompted by the military’s desire to lessen the nation’s dependence on China in the name of sovereignty.

That reliance became overwhelming when the country was subjected to debilitating Western sanctions and boycotts in the 1990s and early 2000s and China was one of the country’s few sources of foreign investment.

When previous President Thein Sein initiated that weening process in 2011, several Chinese projects were suspended or stalled. But Suu Kyi seems increasingly willing to reverse that trend as her government desperately seeks new sources of investment to lift a sagging economy.

Yet sources close to the still powerful military assert that many officers are wary of the increasingly pro-Chinese stance that Suu Kyi had recently adopted after — as she sees it — being let down by the West, once her most ardent supporters.

Given the new geopolitical reality that Myanmar now finds, the copper mining saga in Monywa could easily turn into an intra-government proxy conflict pitting Suu Kyi’s increasingly pro-China administration against a more China-skeptic military.

And the villagers at Letpadaung, now as ever, will be stuck mercilessly in the middle.