Monday, October 10, 2011

China, Myanmar to "properly settle" dispute over dam, Burma seeks to repair China ties

China, Myanmar to "properly settle" dispute over dam

Mon Oct 10, 2011, Reuters
Original Link:

China and Myanmar have agreed to "properly settle" a dispute over
Myanmar's suspension of a dam built and financed by Chinese firms as a
Chinese leader hoped "friendly consultations" would bring a solution to
ensure cooperation and stable ties.

Myanmar's new civilian president, Thein Sein, suspended the $3.6 billion
Myitsone dam in northern Myanmar on Sept. 30 after weeks of rare public
outrage over the project in the reclusive and repressive country also
known as Burma.

The shelving of the project, agreed by Myanmar's then ruling generals in
2006, was also an unprecedented challenge to China's extensive economic
interests in Myanmar, which has long been shunned by the West because of
its poor human rights record.

Last week, China called for talks over the dam, which was being built
mainly to serve China's growing energy needs but had become a symbol of
resentment in Myanmar over China's influence.

Myanmar Foreign Minister Wunna Maung Lwin, visiting China as a special
envoy of Thein Sein, met China's Vice President Xi Jinping, who is
expected to be China's next president, and Foreign Minister Yang Jiechi.

The two ministers "agreed to properly settle matters" related to the
project, and both sides pledged to increase cooperation, the Xinhua news
agency said, citing the Chinese Foreign Ministry, without giving details.

"On the problems that have emerged during the course of cooperation, (I)
hope both sides, through friendly consultations, will seek a proper
solution to ensure China-Myanmar cooperation in various fields and a
healthy and stable development of relations," the Foreign Ministry
quoted Xi as saying in a statement on its website.

It was the first meeting between officials from China and Myanmar since
the project was suspended.

The seniority of the officials involved in the talks and the speed with
which the meeting was arranged apparently underscored the importance
that China places on the project.

The dam at the confluence of the Mali and Nmai rivers, whose waters flow
down into the central Irrawaddy river basin, would flood an area about
the size of Singapore.

Many people in the area, which is close to the border with China, as
well as environmentalists, have opposed it.

Chinese officials have called the project environmentally safe and a
boon to development in Myanmar, struggling with poverty and isolation
after years of military rule.

Myanmar's vice-president, Tin Aung Myint Oo, will visit China this month
to discuss the dam, a senior Myanmar official said on Friday.

In recent years, Myanmar's leaders have embraced investment from China
as a deep and lucrative market for the former British colony's
energy-related resources and to counterbalance the impact of Western

While China and Myanmar have close economic and political ties,
including the building of oil and gas pipelines into southwestern China,
there are also deep mutual suspicions.

Thein Sein became president after elections late last year that
officially restored civilian rule in Myanmar after nearly 50 years of
military rule.

He is due to make his first state visit to another important neighbour,
India, from Oct. 12 to 15.

(Reporting by Sui-Lee Wee; Editing by Robert Birsel)

Burma seeks to repair China ties
Financial Times
By Leslie Hook, October 7

Burma is to send a vice-president to China in an effort to soothe
tensions after the suspension of a $3.6bn Chinese-backed dam in the
country cast a shadow over ties between the normally close allies.

News that Tin Aung Myint Oo will visit Beijing came as Chinese state
media launched a defence of Beijing�s investments in Burma with The
People�s Daily, a state-run newspaper, accusing foreign media of
stirring up public opinion against the scheme.

China, the world�s biggest consumer of energy and commodities, has huge
energy and infrastructure projects in resource-rich neighbouring
countries, including Burma, Mongolia, Kazakhstan and Laos. In several
cases neighbours� opposition to Chinese influence has been growing,
particularly in the countries that contest Beijing�s claims to territory
in the South China Sea.

China's strategic interests in Burma range from hydropower to mining to
natural gas, and Beijing is also Burma�s biggest lender. But last week�s
surprise decision to suspend construction of the Myitsone Dam - which
the government said was based on public opposition to the project -
underscores growing anti-China sentiment in the country and could be a
warning sign for other Chinese interests in Burma, analysts warn.

"The Burmese regime feels that we have to balance Chinese clout," said
Aung Zaw, editor of the Irrawaddy Magazine. "There is a growing fear of
Chinese influence... They realise they have been heavily dependent on
China for so long."

Earlier this year, US diplomatic cables published by Wikileaks revealed
that Burmese officials secretly chafed under China�s influence and hoped
that closer ties with the US might serve as a buffer against Beijing.

Recent political reforms have led to louder criticism of Chinese
investment in Burma because the space for debate has been slightly
expanded, analysts say.

The suspension of the dam project by Burma�s authoritarian government
came after rare demonstrations in the country�s biggest city, Rangoon,
and was welcomed by de facto opposition leader Aung San Suu Kyi and
others as a sign of reform in the country.

Beijing has been a key ally for Burma at the United Nations Security
Council, and has previously used its veto power to block resolutions
against the regime. In return, China has been in prime position to tap
Burma�s natural resources, particularly the large offshore gas fields
that were the subject of a bidding war between China and India. China
has poured capital into the country, investing $10bn in Burma during the
2010-2011 fiscal year. New loans worth $7.4bn have been announced during
the past two years.

The suspended Myitsone Dam, which lies close to the Chinese border and
was already under construction, was being developed by China Power
Investment, a state-owned Chinese power group and funded by Chinese
loans. The dam was the first of seven scheduled to be built on the
Irrawaddy River, and would have provided China�s Yunnan province with
much-needed electricity.

Beijing�s most strategically important project in Burma is a set of oil
and gas pipelines that will run from the Bay of Bengal into southern
China, providing access to oil shipments from the Middle East without
sending oil tankers through the Straits of Malacca and the South China
Sea. The pipelines will also ship natural gas from Burma�s offshore gas
fields into Southern China, creating a key source of revenue for the
Burmese government.

Analysts say the pipeline project, being built by China�s largest oil
producer CNPC, and other large hydropower projects in Burma could be
next in line as anti-China sentiment grows.

The pipeline project has faced opposition from activists as well as
local ethnic groups, particularly in the Shan State, where a
decades-long military conflict between the Shan and the Burmese is ongoing.

Chinese energy and infrastructure companies have been paying increasing
attention to community relations and political risks in their overseas
projects, following the high-profile evacuation of Chinese workers from
Libya earlier this year.

CPI said the Burmese government decision was "very bewildering" and said
a large amount of money had already been spent on construction preparation.

"If suspension means construction halt, then it will lead to a series of
legal issues," said CPI president Lu Qizhou in an interview with state

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