Chinese Investment Accelerates Myanmar Development | China-Myanmar

By Zhang Zhiwen

Residents on Maday Island in Kyaukpyu, Myanmar, have access to clean running water thanks to the network built by the China-Myanmar Oil and Gas Pipeline Company.

“Lately, there has been an increase in the number of business meetings and exhibitions in Myanmar,” explained a staffer from the Myanmar-China Chamber of Commerce. “Chinese companies have come in large numbers.”

In Myanmar’s major economic hubs of Yangon and Mandalay, Chinese enterprises’ advertisements can be seen everywhere. Myanmar Investment Commission statistics show that since the second half of 1988, total foreign investment in Myanmar reached US$69 billion. China has topped the list of foreign investors with total investments of US$18.5 billion.


Color TVs and Motorcycles

In Monywa, Sagaing Region, a booming modern mine is changing the local landscape.

In 2010, China and Myanmar signed a cooperation agreement in which the Wanbao Mining Company of China North Industries Corporation (NORINCO) invested in the development of the Letpadaung Copper Mine with a Myanmar partner.

“When we arrived in Myanmar, the first thing we did was orient ourselves with the local conditions, including local laws and society,” said Luo Daqing, manager of the Wanbao (Myanmar) Copper Company, also known as Myanmar Copper. “We abide by local laws in our business operations, and have joined the local community for common development.”

With efforts from both sides, the project gained the understanding and support of the local community. In March 2016, the Letpadaung Copper Mine began operations. By May 2017, Myanmar Copper had paid taxes totaling US$12 million to the Myanmar government. The company employs 3,294 Myanmar staff members, 84 percent of its total workforce. It also carries out advanced mining technology training, which has benefited around 9,000 local employees.

“The houses in our village used to have palm leaf roofs, which leaked on rainy days,” said U Then Nyuo, chief of Pa Laung Village near the mine. “Now, they have corrugated iron roofs. Previously, there were only two TV sets in our village, both of which depended on generators for electricity. Now, many households have color TVs and motorcycles. Some have bought gold and silver jewelry. This is a life that we had only seen on TV. We never expected we would be able to enjoy such amenities.”

Mandalay, Myanmar’s second largest city, is located 130 kilometers away from Monyway. The fiber optic cables that run under the city’s pavement are connecting it to the future. The Myanmar Fiber Optic Communication Network Company (“Myanmar Fiber Optic” for short) has built a 180-kilometer metropolitan area network (MAN) in the city. The outer ring, the inner ring and the cables in between now serve as the city’s information highway network.

In May 2012, Myanmar Fiber Optic was officially registered in Myanmar as the first foreign investment company that obtained an information infrastructure services license from Myanmar’s Ministry of Communications and Information Technology. With its 15,000-kilometer backbone network that connects all of Myanmar’s regions and the 1,500-kilometer urban and intercity pipeline network, Myanmar Fiber Optic has promoted the effective development of information technology in Myanmar. A mobile phone SIM card in Myanmar cost US$1,500 in 2012. Thanks to the implementation of this IT network, the price has dropped to US$1 today. In January 2016, Myanmar’s Ministry of Communications and Information Technology sent the company a letter of appreciation commending it on its investment in the nation’s information infrastructure and improvement of the nation’s communication networks. According to Lin Minghai, executive deputy general manager of Myanmar Fiber Optic, the company’s investment has accelerated Myanmar’s communication industry development by five to 10 years.


More Cooperation Projects

In April this year, President U Htin Kyaw said in an interview with the Chinese media prior to his visit to China that China is on top of the list of 49 foreign investors in Myanmar. By the end of January 2017, Myanmar had approved 163 projects funded by Chinese firms, which were worth US$18.5 billion in total. He said that bilateral economic cooperation will further the friendly relations between the two peoples, which is conducive to mutually beneficial cooperation.

According to China’s Ministry of Commerce, China’s non-financial investment flow to Myanmar in 2016 was US$309 million, a year-on-year increase of 49.8 percent. By the end of 2016, China’s total non-financial investment in Myanmar had reached US$4.567 billion, putting it in first place of all of Myanmar’s sources of foreign capital. China has long been Myanmar’s largest investor. In recent years, Chinese enterprises have also increased their investment into Myanmar through third countries or regions.

Xie Guoxiang, the economic and commercial counselor of the Chinese Embassy in Myanmar, said that Myanmar’s political and social environment has changed a lot in recent years. Myanmar has gradually opened its door to foreign investment. Economic and financial sanctions against Myanmar have been lifted. With the implementation of the Belt and Road, Chinese enterprises have accelerated their efforts to “go global”. An increasing number of Chinese enterprises have invested in Myanmar. Investment to Myanmar has maintained the momentum of rapid growth in various sectors. There has been an increasing number of large or super cooperation projects. Chinese companies have continued to improve their public relations efforts, gradually fitting in with local communities.

“There are broad prospects for China-Myanmar cooperation in trade and investment,” Xie said. In the future, the two countries will be more closely linked by railways, highways and electricity with the completion of large projects such as the border economic cooperation zone, the Kyaukpyu deep-water port and its industrial park and the Yangon deep-water port and port industrial zone. Bilateral cooperation in trade and production capacity will also be strengthened. The spillover effect of China’s economic development will benefit Myanmar’s economic and social development. Significant achievements will be made with the building of the China-Myanmar Economic Corridor.

Yenangyaung Station on the China-Myanmar gas pipeline.

Bright Prospects

On May 25, 2017, the China-Myanmar Oil and Gas Pipeline (Myanmar) Corporate Social Responsibility Report was released in Yangon. “The China-Myanmar Oil and Gas Pipeline Project is not simply a transportation corridor,” said Khant Nyar, a local employee who has worked on the project since it began. “It is more a golden bridge connecting our two countries.”

The China-Myanmar Oil and Gas Pipelines are Myanmar’s largest energy infrastructure project to date, as well as the largest foreign investment project of the economic reforms initiated by Myanmar’s new government. Myanmar Oil and Gas Enterprise director U Wai Oo believes that the pipeline project has achieved win-win results for all parties. The project is of great significance to the economic and social development of Myanmar, underpinning the industrialization and modernization of Myanmar.

By the end of 2016, 226 local companies had participated in the project’s construction. Local procurement expenditure accounted for one quarter of total investment for the first phase. To build the project into one of win-win cooperation, PetroChina has spent US$5.25 million on local public welfare programs. PetroChina has also cooperated with its partners to invest US$18.3 million in 120 social and economic assistance projects relating to education and infrastructure, such as roads, electricity, healthcare, drinking water and communications projects. As a result, around 20,000 young students in Myanmar have access to better schools. Around 800,000 residents in the surrounding area have greater access to convenient and reliable medical services. Many villages now have 24 hour electricity and safe drinking water.

Nam Yin Mon, a patient at Mandalay’s Singaing Township Hospital, said that the hospital used to be very crowded. With the construction of a new outpatient building, the hospital is now less hectic.

“I know the funding for the new hospital building was donated by a Chinese company,” Nam Yin Mon said. “All the residents in this neighborhood, including myself, appreciate that.”

On Maday Island, where the China-Myanmar Oil Pipeline begins, U Nyin Win, a teacher at Kyaukpyu No. 1 Senior High School, said the pipeline project has transformed the economic and social landscapes of the region. Assistance from the pipeline company has created a favorable environment for an increasing number of local students to have access to a modern, quality education. “I believe this project will bring prosperity to the people in this region,” U Nyin Win said.

Pa Laung Village chief U Then Nyuo is optimistic for future investment. “I hope Myanmar Copper will help us develop small projects,” he said. “We’ll work hard with them to further improve our lives.”

Myanmar Copper has become a popular neighbor, and with the continuous improvement of their lives, the villagers are appreciative of the Wanbao Mining Company. “In cooperating with Chinese companies, we see bright prospects for the future,” U Then Nyuo added.

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