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Sino–Japanese competition heats up over Myanmar’s SEZs

China and Japan are eager to be involved in massive special economic zone (SEZ) projects in Myanmar, amid rising economic competition in the Greater Mekong Subregion (GMS). Since 2011, Myanmar has rapidly improved its diplomatic relations with the West and Japan in order to broaden its economic relations and mitigate its excessive dependence on China.

By Atsuko Mizuno, Kyushu University

Myanmar, April 11, 2016

East Asia Forum

China and Japan are eager to be involved in massive special economic zone (SEZ) projects in Myanmar, amid rising economic competition in the Greater Mekong Subregion (GMS). Since 2011, Myanmar has rapidly improved its diplomatic relations with the West and Japan in order to broaden its economic relations and mitigate its excessive dependence on China.

Currently, three SEZs are being implemented in Myanmar: Kyaukphyu in Rakhine state, Thilawa in the Yangon region and Dawei in the Tanintharyi region. China has been mainly involved in the Kyaukphyu SEZ, in the troubled western Rakhine state, where a Chinese consortium, led by the Chinese state-owned China International Trust and Investment Corporation (CITIC), began development in February 2016.

But Chinese involvement in SEZs in Myanmar can be traced back to a note on the master plan for ‘Thanlyin-Kyaukdan Industrial zone’ signed in 2004. While the proposed site was located in same area as the present Thilawa SEZ, the project was not implemented at the time, since neither the military regime nor China viewed it as a high priority.

China’s strategic involvement in Kyaukphyu is motivated by sea lane and energy security concerns, as the site provides an alternative to the Strait of Malacca sea route. An oil and gas pipeline constructed by the China National Petroleum Corporation now links Kyaukphyu overland to the landlocked Yunnan Province. This has attracted the ire of locals over displacement, inadequate compensation and environmental degradation.

Read more at East Asia Forum

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