China investment in Myanmar soars
Chinese funds pour in as foreign investment nears $1bn despite calls for sanctions.
Last Modified: 16 Jul 2009 09:30 GMT

Human rights groups say investors are supporting continued abuses in Myanmar [GALLO/GETTY]

Foreign investment in Myanmar soared to nearly $1bn during the last fiscal year, the country's military government has said, a six-fold increase over the previous year with the bulk of the funds coming from China.

According to a report from the Ministry of National Planning and Development, released on Thursday, investment jumped from $172.7m in the 2007- 2008 fiscal year to $984.9m.

The ministry said 87 per cent of the total invested in Myanmar came from China.

The surge in investment comes despite wide-ranging sanctions imposed on military-ruled Myanmar - formerly known as Burma - that have virtually cut off any investment from the US and European Union.

The country has large and underdeveloped reserves of oil, gas and timber as well as minerals and precious stones.

But human rights groups say that almost half a century of military rule has seen Myanmar's ruling generals exploit the country's rich natural resources for their own gain while leaving the rest of the population mired in poverty.

Strategic projects

China's investment in Myanmar is focused mainly on energy and natural resources, which its needs to fuel its rapidly expanding industrialisation and urbanisation.

According to reports Chinese corporations are involved in at least 90 hydropower, mining and oil and gas projects across the country.

The projects include construction of hydropower dams as well as a large pipeline project across the length of Myanmar aimed at transporting gas and oil to China's landlocked southern Yunnan province.

Despite increased investment, many of Myanmar's citizens live in extreme poverty
The pipeline is designed to open the Indian Ocean for fuel shipments and act as a means to circumvent the congested Straits of Malacca, through which over 70 per cent of China's current oil and gas imports travel.

Sean Turnell, associate professor of economics at Macquarie University in Sydney, told Al Jazeera that resource extraction is the primary means for Myanmar to access to foreign investment.

"Considering the country is a risky place to invest in, projects to extract Myanmar's resources are favoured by the government because it can yield a quick return," he said.

Beijing's commercial advance into Myanmar comes while the United States and Europe impose strict trade and investment sanctions against the military government.

But while the US recently imposed sanctions on the import of precious stones from Myanmar, observers say China's presence in the gem mining and export industry has soared.

A recent Myanmar government-sponsored gem fair in Yangon, the former capital, netted the military government an estimated $175m.


China has become one of Myanmar's closest allies in recent years, but Beijing has long insisted that it does not tie politics to business and follows a strict policy of non-interference in the domestic affairs of other countries.

Aung Zaw, a Burmese exiles and editor of the Thailand-based Irrawaddy magazine, told Al Jazeera that China's non-interference in Myanmar's domestic politics was aimed at squarely protecting its interests.

"The only reason China doesn't want to say all that much about Myanmar's actions, is because of its projects in the country," he said.

"It is protecting its own interests, but recently, considering the events going on there now, it has voiced concern that the ruling generals may not be able to achieve stability."

Al Jazeera and agencies
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