Despite the opening of a major gas pipeline from Burma to China last week, Beijing may not find Naypyidaw so willing to answer its energy needs in the future

On July 28, China and Burma inaugurated an oil and gas pipeline which will transport gas from the Bay of Bengal to Yunnan, in south western China. The pipeline was built by China National Petroleum Corporation (CNPC) in cooperation with six companies from China, Burma, South Korea and India. Planners say it will be able to transport 22 million tons of oil and 12 billion cubic meters of natural gas to China each year.

China Daily greeted the decision with fanfare: “trade and economic cooperation between China and Myanmar [Burma] have risen to a new level. The upcoming completion of the China-Myanmar oil and gas pipelines will significantly reduce the cost of China’s energy imports and bring benefits to people in Myanmar.”

The pipes for a 770 kilometer (480 mile) pipeline are seen placed in fields near Ruili in China's Yunnan province last year. Pic: AP.

CNPC’s website reports a statement dating back to 2011 according to which in April that year the company signed a letter of intent with Burma’s Ministry of Energy to provide $6 million to Burma to support health and education initiatives among local communities. In December of the same year, CNPC signed an agreement with Burma’s Ministry of Health to help improve the medical conditions in local communities by offering assistance to 19 medical sub-centers. The company also claims it has paid substantial attention to local employment, hiring 2,505 local employees, accounting for more than 50% of the total recruitment.

A commentary on Xinhua – calling for an end to western criticism of the projects – argued that more than 220 local enterprises participated in the construction and that the project will create opportunities  for people living in the area. It also claimed that companies running the pipelines “have so far donated 20 million U.S. dollars for use in education, medical treatment, health and disaster relief. Besides, 45 schools and 24 clinics have been built, which benefit nearly 1 million local people.”

Local organizations paint a darker picture. In November 2012, a report by the Ta’ang Students and Youth Organization (TSYO) – an organization connected to the homonymous ethnic group – complained about safety and environmental issues, adding that information concerning the compensation for land confiscation was not correct and that the distribution was unfair.

Mai Amm Ngeal, a member of TSYO, reportedly said that “even though the international community believes that the government has implemented political reforms, it doesn’t mean those reforms have reached ethnic areas, especially not where there is increased militarization along the Shwe Pipeline, increased fighting between the Burmese Army and ethnic armed groups, and negative consequences for the people living in these areas.”

(READ MORE: China opens pipeline to bring gas from Burma)

The Shwe Gas Movement, a group which describe itself as “raising awareness about the social, economic and environmental impacts of the Shwe Gas Project,” has reported various protests. In April, it claimed that hundreds of people took to the streets to voice complaints against unfair compensation.

The pipeline is supposed to tackle one of Beijing’s strategic nightmares, that of an energy blockade stemming from a crisis in the Strait of Malacca. Through the relatively narrow waterway between Indonesia and Malaysia passes the vast majority of China’s oil imports and many experts see it as a strategic liability. Zha Daojiong, Professor of Non Traditional Security Studies at Peking University, begs to disagree: “I think it is oversold: why would an adversary wait for the Malacca strait? It would be a mess for Singapore, Malaysia and Indonesia. And in any case the ocean is wide open,” he told Asian Correspondent. He added that the argument has acquired some persuasive power because many scholars seem to be concerned about it.

A more significant issue might be political feasibility of the project. “The issue of transport security is up for more scrutiny – who knows you do not have a repetition of a Russia-Ukraine situation. There are a lot of things going on between China and Myanmar at the moment,” said Professor Zha, who mentioned the abrupt suspension of the Myitsone Dam in 2011 as evidence of political volatility. The dam was supposed to produce electricity for china to China, but the construction was stopped shortly after the military-backed civilian government took office.

On that occasion, President Thein Sein stated that “being the government elected by the people, it upholds the aspiration and wishes of the people.” Suspicious words from a former member of the military junta and head of a government which stands accused of continuing abuse of human rights: was it not more about politics than the people’s will? The answer, for many, was affirmative and the case has become a chief example of cooling relations between Beijing and Naypyidaw.

It is widely believed among experts that the opening up of the country to western influence has reduced Beijing’s sway, increasing competition for business and political influence. Jürgen Haacke, a Southeast Asia expert at the London School of Economics, wrote in a recent paper: “the geopolitical competition over Myanmar between Washington and Beijing is set to intensify. The present US role in Myanmar’s political and economic reforms will in all likelihood lead in the future to a greatly expanded presence in the country. [..] China’s often much exaggerated political hold over Naypyidaw has taken a knock with US-Myanmar rapprochement.” According to Professor Haacke, however, “far from pulling back, the  Chinese leadership also seems eager to continue to boost the bilateral relationship with Naypyidaw, which will probably prompt more rounds of competition for greater influence between Beijing and Washington concerning Myanmar.”