Chinese energy firms assess changes as Myanmar upheaval has a mixed impact

The political upheaval in Myanmar that is sowing uncertainty for the future of the Southeast Asian economy may have a mixed impact on local operations of Chinese energy companies, which have acted swiftly in response to the changing situation, several sources told the Global Times.

The Myanmar President’s Office declared a one-year state of emergency after the military’s detention of government leaders including Aung San Suu Kyi on Monday. State power has been handed over to the commander-in-chief of the armed forces.

Internet services have been reactivated while banking services are running regularly, the Xinhua News Agency reported on Tuesday, citing an announcement by Myanmar’s military. Local banks under the Myanmar Banks Association temporarily halted services for poor internet connections, according to the association on Monday.

The Yangon Stock Exchange, which announced the suspension of trading and settlement on Monday, has yet to reveal a timetable for resuming operations.

The uncertainty hanging over Myanmar’s future calls attention to the involvement of Chinese businesses in the Southeast Asian nation as tremendous efforts have been taken to push for the China-Myanmar Economic Corridor (CMEC), which encompasses an array of infrastructure projects allowing for increased connectivity between the two countries.

China is maintaining communication with all parties involved, said Chinese Foreign Ministry spokesperson Wang Wenbin on Tuesday, regarding a UN Security Council meeting on the situation in Myanmar. Any move by the international community should be propitious to Myanmar’s political and social stability, support Myanmar’s peace and reconciliation, and avoid further exacerbating conflicts and complicating the situation, Wang stated.

On the part of Chinese energy and construction companies, the incident’s impact on their local operations seems to be mixed.

A Chinese employee of the state-owned Power Construction Corp of China (PowerChina), who prefers not to be identified, told the Global Times on Tuesday that all of the company’s projects under construction in Myanmar have been suspended following the political upheaval.

“We’re standing by and personnel mobility is strictly forbidden so as to protect the workers’ safety,” the employee said. He noted that the company set up an emergency working group on Monday to arrange related work.

PowerChina has reported all employees’ information to the Chinese Embassy in Myanmar and is keeping in touch with the embassy to share and update information, the employee said.

PowerChina has seven energy projects in Myanmar, including some in the capital of Naypyidaw and in Mandalay. The employee noted that power plants that have been put into production are operating as usual, but the impact on projects that are still in progress could be significant.

“It will not only affect personal safety, but also pose barriers in terms of capital flows and the delivery of equipment and materials within Myanmar, as main roads in certain cities have been blocked. Hiring local employees could also be difficult. These will all in turn affect investors’ confidence,” the employee said.

He added that the vice minister of Myanmar’s energy department has reportedly been discharged from his position, which could further weigh on project investments.

As for whether Chinese nationals will be withdrawn from Myanmar, the anonymous employee said that such move is unlikely in the short term, as he has been notified that all Myanmar’s domestic and international flights have been suspended until April 30.

An employee of state-owned China Communications Construction confirmed with the Global Times late Monday that the company’s projects in Yangon have been halted since Monday and the local subsidiary has entered emergency status. The company mainly undertakes infrastructure construction projects in Myanmar.

“We’re waiting for further instruction from the Chinese Embassy in Myanmar on whether there will be a withdrawal,” the employee noted.

The Chinese Embassy in Myanmar Monday issued an urgent warning to Chinese citizens and Chinese-funded institutions in Myanmar, calling on them to keep a close eye on the development of the local situation, enhance risk awareness, strictly abide by local laws and rules, and avoid participating in any political activities.

The embassy advised them to stockpile necessities, stay home and avoid crowds.

A manager with a Chinese construction company told the Global Times on Tuesday that the company just won bids last year to build three photovoltaic power generation projects in Myanmar. “In response to the incident, we just held an internal meeting discussing the possible impact on the projects,” said the manager, noting that at the moment, the business department is still studying the impact of the political situation in Myanmar.

A senior source at a large Chinese state-owned electricity generation company told the Global Times on Tuesday that the company’s major project in the country was a large hydropower station project, which hadn’t been going smoothly. Work on the project was suspended not long ago.

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Source: Global Times

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