Myanmar’s military junta has reportedly offered major concessions to China on the $8 billion Kyaukphyu deep sea port and special economic zone in western Rakhine state on the Bay of Bengal. The nature of the concessions is not clear with the junta’s commerce ministry merely stating that “Addendum was signed for clearer and more accurate understanding of the concession agreement regarding the powers and responsibilities of both sides.”
Critics of the junta say it was forced to “sweeten” the deal on the Kyaukphyu project which a Chinese company CITIC is committed to build. It appears work has not got off the ground because of the fighting which has swept the country after the army overthrew the civilian government in Feb 2021.
Evidently, the junta hopes the concessions offered on Kyaukphyu will persuade China to prevail upon the ethnic groups to bring down the level of violence. Case in point is northern Shan State which borders China. Ethnic groups here are known to have close ties across the border. With border trade also stopped, the junta is banking on Beijing stepping in to ensure border trade resumes and these groups also stop backing the rebels fighting the junta. They also want China-funded BRI projects to resume.
According to Irrawaddy.com, the Kyaukphyu port project is seen as key to the “1,700-kilometer China-Myanmar Economic Corridor connecting Kunming in Yunnan province to the Indian Ocean’. It said ‘the signing ceremony (in the capital Naypyitaw) drew top junta officials and diplomats from the Chinese Embassy.’
At a subsequent press briefing, they said the two sides are working together to start the project promptly, which, when completed, will become the trade hub connecting the markets of Asia, Africa and Europe, and spur the socio-economic development of Myanmar and the region. India, which has funded the Sitwe Deep Sea Port barely 105 km north of Kyaukphyu in 2016 as part of the Kaladan Multi-Modal Transit Transport Project, connecting south-western Myanmar and India’s northeast, will be watching the new developments with unease.