China's Belt and Road Initiative:

How will it impact Myanmar and transform trade in Asia?​

In September 2013 at Nazarbayev University in Astana, Kazakhstan, Chinese President Xi Jin Ping announced that China would fund a New Silk Road Economic Belt across Eurasia to connect China with Europe, the Middle East, and South Asia. Chinese officials subsequently revealed ambitious plans to invest hundreds of billions of dollars in new infrastructure investments and upgrades including highways, pipelines, railroads, and power grids, along with related port and logistics upgrades in maritime partner countries.


One Belt, One Road (OBOR) or the Belt and Road Initiative (BRI) is often described as a 21st-century silk road, made up two parts. The belt is the physical road, which takes one from here all the way through Europe to somewhere up north in Scandinavia. What they call the road is actually the maritime Silk Road, in other words, shipping lanes which make BRI covering about 65 percent of the world’s population, about one-third of the world’s GDP, and about a quarter of all the goods and services the world moves.


BRI will focus on utilizing sea routes and Chinese coastal ports to link China with Europe via the South China Sea and the Indian Ocean, and the South Pacific Ocean through the South China Sea. The scope of the initiative is still taking shape—more recently the initiative has been interpreted to be open to all countries as well as international and regional organizations.


Asian Infrastructure Investment Bank

China proposed the creation of the Asian Infrastructure Investment Bank (AIIB) in 2013, and the bank was founded in 2014. A total of 22 countries signed MOUs to participate and 57 countries have become the founding members of the AIIB. 37 countries are from Asia and Oceania and the rest are from Latin America, Europe, and Africa. It is believed that the bank has been launched to rival the western World Bank. President Xi stated that the bank is aimed at investing in projects that are “high-quality, low-cost”. According to The Diplomat, AIIB serves as the financing arm of OBOR.


What are the risks for countries involved?

For individual countries, it will be important to evaluate the possible effects of participating in the BRI and the needed policies and institutional reforms. Some of the infrastructure and policy reforms envisaged by the BRI will be difficult to implement, creating risks ranging from fiscal sustainability to negative environmental and social implications.

More recently, governments from Malaysia to Pakistan are starting to rethink the costs of these projects. Sri Lanka, where the government leased a port to a Chinese company for 99 years after struggling to make repayments, is a cautionary tale.


Earlier in 2018, the Center for Global Development found eight more Belt and Road countries at serious risk of not being able to repay their loans. Djibouti, Kyrgyzstan, Laos, Mongolia, Montenegro, Pakistan, Tajikistan, and the Maldives – are among the poorest in their respective regions and will owe more than half of all their foreign debt to China.


BRI and Myanmar

Myanmar is geostrategically located in Southeast Asia and South Asia. Since political reformation, the country has engaged in active participation with regional organizations such as ASEAN, BIMSTEC (The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), ACMECS (Ayeyarwady-Chao Phraya-Mekong Economic Cooperation Strategy) and GMS (The Greater Mekong Subregion). Myanmar’s objective in joining those organizations is to gain economic benefits from information exchanges, advanced technology, prevention of transnational crime, elimination of drug trafficking and other improvements. 


The Myanmar-China oil pipeline, one of the OBOR’s ambitions, is being re-visited. The pipeline is linked between Central Asia and Europe. It will carry crude oil from the Middle East and Africa to southwestern China. The country may get a small amount of oil and some revenue from oil storage and pipeline tariff fees, while experience from China in building energy infrastructure will be a boon for the country later. Moreover, State Counselor Aung San Suu Kyi visited China to attend the two-day of “Belt and Road Forum for International Cooperation” in Beijing which was held on May 14 and 15, 2018.


After meeting with Aung San Suu Kyi, President Xi remarked that the two sides could jointly maintain peace and stability on the border. He also noted that they had reached an important consensus on all-round strategic cooperation in the new era when Former President Htin Kyaw visited China in April 2018. He also added, “China and Myanmar share widespread mutual strategic interests”. The State Counselor said, “The Belt and Road Initiative will bring peace, reconciliation, and prosperity to the region and the world at large and Myanmar is willing to work with China on Peace and Stability.” 



The concrete implementation of BRI projects has raised the stakes for China in Myanmar, translating into multi-level engagement, including infrastructure and industrial cooperation, support for the government’s peace process. Regarding the core issue of achieving sustainable agreements between the government and the multiple ethnic armed groups (EAGs), China is the key external actor and BRI engagements are currently contributing to China’s active role. For Myanmar, the BRI holds the promise of much-needed connectivity and industrial development.



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