China welcomes Than Shwe, India concerned

Burma’s junta chief Than Shwe touched down in China today accompanied by a 34-man delegation that includes current Prime Minister Thein Sein, and the junta’s third-in-command, Shwe Mann, both recent retirees from the military. The five-day visit follows a high-level Chinese delegation to Burma in June headed by Premier Wen Jiabao.

“Chinese Premier Wen Jiabao should not embolden Burma’s generals by ignoring the flawed November elections and the need for accountability,” said Sophie Richardson, acting Asia director at Human Rights Watch. “The Chinese government should reject ‘business as usual’ and join other governments in pressing Burma for robust and durable change.”

Whilst western human rights groups call on China to heap pressure on the military leaders over controversial elections in exactly two months time, it is likely that the bilateral meetings will be smoothed out by shared business dealings, even if China will be casting a slightly nervous eye over its unstable southern neighbour.

Burmese analysts have said that the junta delegation will thus be keen to reassure China of its capability in steering Burma through its first elections in 20 years and the alleged transition it will bring.

Than Shwe will also meet with President Hu Jintao in Beijing before making a beeline for the Shanghai World Expo 2010. It is here that the Burmese pavilion stands, a construction that, like many of the smaller nations displaying at the Expo, was paid for entirely by Beijing.

Such symbolism marks a geopolitical reality, and perhaps the starkest expression of the strategic imperatives of the day came from the normally mild-mannered Indian prime minister, Manmohan Singh. He told the Times of India recently that, “There is a new assertiveness among the Chinese. It is difficult to tell which way it will go. So it’s important to be prepared”.

Such frankness may be inspired more by India’s problems in its western state of Kashmir, where Beijing has been a quiet backer of rival Pakistan and its long-standing claims over the troubled region. Singh’s strong tone however holds a worrying note for the future of relations between the two possible superpowers of the future.

Whilst the meaning of Singh’s so-called “preparation” is unclear, economic leverage over China in Burma appears a major area of competition, and securing such a position will be certainly more apparent to President Hu and his colleagues than concerns over the openness of an election already roundly condemned by the west.

Only recently was the idea of a Bangladesh-China road mooted that would bypass India, plugging yet another satellite state into China’s growing garden of client ‘gnome’ states.

Chinese-owned enterprises are also avidly looking at securing energy and mineral reserves for future years of double-digit growth. Chief amongst such state-owned enterprises (SOEs) is Chalco, China’s largest manufacturer of aluminium and the third-largest on the planet.

Despite being a key component in much of China’s industrial output and exports, the company, which recently announced plans to diversify in their supply chains, is also the country’s largest loss-making SOE, losing US$1.06 billion in 2009.

“In neighbouring countries such as in Southeast Asia, there are rich bauxite, coal and hydropower resources and Chalco is actively seeking investment opportunities,” Chalco chairman Xiong Weiping told Bloomberg Television. “We are willing to form strategic partnerships with power and coal companies by stake purchases to ensure stable and low-cost supplies.”

Burma offers both coal and hydropower opportunities at extremely competitive rates: Burma’s extractive and hydropower sectors are among the world’s least regulated, with military-inspired laissez faire rules attracting neighbouring countries.

China it seems has been most successful at streamlining infrastructure in Burma, a case in point being the forcefulness with which the controversial Shwe gas pipeline project has been driven through objections from rights groups. This may be almost as troubling to New Delhi as the alleged presence of Chinese forces in Gilgit-Baltistan, a Pakistani province near the contested state of Kashmir: such projects demonstrate Beijing’s commitment to expansion into the Indian Ocean.

The scope of the Shwe project is breathtaking when considering the terrain and the political instability of Burma’s north, through which the dual oil and gas pipelines will pass. China however has an upper hand in this part of the country which is populated largely by ethnic Chinese, which seemingly provides a trump card of sorts: minority groups such as the Wa and Kokang have traditionally leant towards Beijing in order to counter Burman domination.

Chinese-owned companies involved in the Shwe pipeline, such as the China National Petroleum Corporation (CNPC), are the most profitable in Beijing’s stable, in part due to their extensive involvement in Burma’s energy sector. Such businesses have played a key role in elevating bilateral trade between the two countries towards US$3 billion.

But as China sees economic prizes across the border and a ‘healthy’ scrap with rival India, the Burmese generals look set to have yet another productive interaction with Beijing, whose continued political support, bargained for with gas, access and electricity, could prove invaluable if and when Burma’s so-called ‘roadmap to democracy’ ends in hot air.

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