Until recently, China was Myanmar's number-one partner. Now the Burmese government is introducing reforms that make the country attractive for investment from other countries - at a price for Beijing.
One of the first things Thein Sein did while in office as president of Myanmar, formerly known as Burma, was to stop China's biggest investment project in the country. The construction of the Myitsone Dam on the Irrawaddy River had originally been thought to provide electricity to China's southern provinces. Myanmar's new government cancelled the project. The affront was a two-way sign, said Jost Pachaly, head of the Heinrich Boell Foundation's South Asia office. "On the one hand, he (Thein Sein) signalled a willingness to open up to the West. And he also gained a lot of support from the part of the population that is against China."
Access to the Indian Ocean
Beijing, which has been investing in economic projects in Myanmar undisturbed since the 1990s, was irritated by the cancellation of the construction of the Dam. But it has other ongoing projects. Currently, Chinese companies are working on the construction of a gas and oil pipeline which will connect China's southwest with the Bay of Bengal. And a railway to connect Burmese ports with transport routes to Europe, Africa and the Middle East is also in planning.
Eighty percent of Chinese oil imports have to go through the Straight of Malacca, located between Indonesia and Malaysia. Klaus Wild told DW it would be "a bit of a relief at least if some of the oil could be transported through Myanmar."
A change for China
For decades, the Burmese military junta prevented any reform from taking place. But since 2010, the country has been going through a remarkable transition. The government has released hundreds of political prisoners, including Nobel Peace Prize laureate and opposition leader Aung San Suu Kyi, who had been under house arrest for 15 years. Press freedom has been liberalized, and peace talks with ethnic minorities have been initiated. At the end of last year, US Secretary of State Hillary Clinton held an official visit there. And slowly but surely, sanctions against the country are being suspended.
Up to the year 2011, China was Myanmar's only ally. The deal was simple: China secured the existence of the regime and in return was granted access to valuable natural resources. Myanmar's opening up to other countries has forced China to compete.
"It is a different situation for China now," Pachaly explained. "But it (China) will also profit from a general opening of the country because that will generally create more economic development."
Stability is the key
Wild also said China could benefit from Myanmar's transition, as successful economic development in the conflict-torn country would bring more stability.
"China has a vested interest in stability on its borders," said Wild. "The government in Beijing does not really care whether there is democracy in Myanmar or if it has a different form of government. The main thing is that there is stability."
Stable conditions and economic development were crucial for the country's future development. And as a large economic power, China would continue to play a large role in the region, according to Wild. "China is experiencing unmatched development. It will, at least partially, be important for the economy of Myanmar to couple itself to Chinese growth."
For years, only Myanmar's elite profited from the partnership with China. Now, hopefully, the rest of the country will benefit as well.
Author: Christoph Ricking, Rodion Ebbighausen/sb
Editor: Shamil Shams