Heavy scrutiny on Chinese investments in Myanmar

YANGON: In Myanmar, opposition to Chinese-backed projects is mounting. Locals allege that Beijing is only interested in exploiting their natural resources, and new trade deals may lead to growing scrutiny over Beijing’s influence there.

The suspended Myitsone dam development in northern Myanmar is just one example of how citizens have long been up in arms against Chinese projects. Locals say the hydropower project will largely benefit China, and President Thein Sein suspended the project in 2011 for the duration of his term.

More recently, citizens demonstrated against the construction of a copper mine, backed by a Chinese state-owned company, accusing the Chinese of grabbing their land, causing environmental damage, and paying insufficient compensation.

The recent altercations between the protesters and police left one woman dead and several injured. Businessmen say these incidents should serve as a reminder to Chinese companies that they need to quickly adapt to new realities.

“Chinese companies last time didn’t care about our people’s vision,” said Chit Khine, chairman of Eden Group and chairman of the Myanmar Rice Federation. “There was no transparency and we could also hear about their corruption. Now they need to change these things first, then they need to give more information about their business and their projects to make them more familiar to the people.”

Chinese businessman Xu Hongtao, who has lived in Myanmar for 16 years, says that though the situation is a lot better now, there is room for improvement. “The way work is being carried out and how they treat the locals must be further improved. Better understanding between the people of the two nations and improving the investment environment will benefit both countries,” said Xu, who operates a mining and investment consultancy business.

From projects in infrastructure to mining, China’s investment footprints are evident across Myanmar. China remains Myanmar’s top international investor, contributing over US$14 billion – accounting for one-third of the country’s total foreign investments.

Business players say the two countries continue to need each other due to geographical proximity and their respective growth potential. In November, Chinese Premier Li Keqiang and his Myanmar counterparts signed deals worth nearly US$8 billion in areas as diverse as energy, telecoms and finance.

But there is also a growing army of Japanese and South Korean firms trying to cash in on what is widely seen as Asia’s last frontier market.

Analysts say now that Myanmar is opening up further, with the government continuing to offer tax and regulatory incentives, Chinese investment is slowly starting to look less appealing.

Source: Channel News Asia

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