Myanmar is a huge investment for China. China invested billions of dollars in infrastructure, including oil and gas pipelines, mines, and a deepwater port–not to mention a massive amount of trade.
Most of these Chinese conglomerates are partially owned by Peoples Liberation Army and direct investment linked to China’s desire to dominate the Indian Ocean region. Myanmar military also has shares and part ownership in Telecom, oil, gas pipelines and infrastructure projects. Losing power would mean Myanmar military will lose control of all these enterprises.
Those billions of dollars in projects were under threat if democratic Suu Ki was to take power, with a coup on Monday that saw the country’s military overthrow leader Aung San Suu Kyi and place her under house arrest, and then proceed to take control of the internet, most notably by blocking Facebook and disrupted news outlets.
Now, the military is in control under the protection of a one-year state of emergency.
The coup was timed to coincide with the convening of a new Parliament that came out of November elections in which the military party suffered severe losses but claimed voter fraud with no tangible evidence.
The coup is in China’s interests, but Beijing will make sure coup certainly seek to make it so. Yes, China and Russia have blocked the UN from issuing a joint condemnation, but now it’s about damage control. China wants stability for its billions of dollars in projects. It doesn’t want to rock the boat now. The specter of U.S. sanctions would indeed rock that boat.
China is non-interventionist. It’s not bothered by democracy vs. military junta. It’s bothered by its inability to criticize Myanmar Army and watch its projects be derailed. So, whatever ensures the smooth completion and operation of those projects is the path China will pursue.
China has an interest in Myanmar from an oil and gas perspective. French Total SA, American Chevron, Australia’s Woodside Petroleum, and Posco International are all leading exploration projects here. There is no indication yet that these companies will pull up stakes or halt projects, but it will be difficult for their reputations to handle it.
There will certainly be pressure on them. The massive growing trend of ESG (environmental, social, and governance) investment is deeply embedded in Chinese interests. Myanmar junta seems not to care about the reputational damage can inflict severe pain, and no doubt these Western companies are quietly waiting to hear what the global jury comes back with.
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