China’s sudden shift in policy will almost certainly lead to escalating violence and instability in Myanmar. The country’s National Unity Government (NUG), established by lawmakers deposed in last year’s coup, condemned China’s moves as “deeply disrespectful and offensive” to Myanmar’s people. For the United States, China’s enhanced support for a genocidal military regime at the heart of the Indo-Pacific region represents a direct threat to long-term regional commitments identified in the February 2022 Indo-Pacific Strategy. But for China, it seems that open cooperation with the regime now appeared necessary to rapidly reboot plans for tens of billions of dollars of strategic investments in Myanmar.

The End of China’s Friendship with the Myanmar People? 

China’s initial public response to the February 1, 2021 military coup was to pretend nothing had happened — it described the putsch as a “cabinet reshuffle” — but by last March attacks on Chinese factories and businesses across Yangon had created a crisis. Chinese officials feared that a strong show of support for the junta might further inflame anti-China sentiment. To cool the situation, Beijing crafted careful policy statements emphasizing China’s friendly relations with the National League for Democracy Party (NLD), and stressing that China-Myanmar friendship is “open to all people of Myanmar.” In the following months, the Chinese Embassy opened discreet channels of communication with the NUG, and the Chinese Communist Party re-activated its relationship with the NLD, inviting its leaders to attend a virtual gathering of South and Southeast Asian political parties. 

The Chinese government also slowed economic activities in Myanmar, even freezing loans for new projects by state-owned enterprises, and warning all parties in the conflict to pay greater attention to securing Chinese investments.

Despite the overtures and hedging, as Chinese decisionmakers began to view the opposition as unlikely to win and potentially inimical to China’s interests, they leaned on China’s strategic partnership with Russia to achieve their political goals in Myanmar: counter Western sanctions and support for democracy and human rights; prevent deeper involvement by the U.N. Security Council and other international bodies in Myanmar’s periphery; and provide support to the military to weaken the democratic opposition.

By November 2021, China was alarmed that the Association of Southeast Asian Nations (ASEAN) was challenging the junta’s legitimacy and China’s regional influence by blocking Myanmar’s participation in the “ASEAN-China Special Summit to Commemorate the 30th Anniversary of ASEAN-China Dialogue Relations.” References to the NLD disappeared from official Chinese statements, and China resumed all working level exchanges with the coup regime. Beijing went so far as to have its ambassador essentially apologize to the junta for failing to persuade key ASEAN states to include the military’s representatives in the meeting. 

As the ASEAN chair passed from Brunei to Cambodia, China saw a new opportunity to strengthen the junta’s position. Beijing encouraged Cambodian Prime Minister Hun Sen to visit Myanmar, and publicly pushed for Cambodia to link ASEAN’s Five Point Consensus (an agreement between the 10 ASEAN states to end violence and seek a peaceful solution to the political crisis in Myanmar) with the military junta’s Five Point Road Map. The road map is scheme to turn over the government to a military proxy party through a fraudulent election before August of 2023. 

These efforts, which involved a burst of Chinese shuttle diplomacy across Asia, did nothing to change the views of key ASEAN states including Indonesia, Malaysia and Singapore. As such, on the eve of the Ukraine invasion, China was already rethinking its Myanmar policy. 

By late March, China began to see a dramatic weakening in Russia’s ability to provide the junta with political and military support. The Chinese government stepped into the gap, inviting three ASEAN foreign ministers and the Myanmar army’s Wunna Maung Lwin, who handles “diplomacy,” to China for bilateral discussions including on the “negative impacts” of the Ukraine crisis on Southeast Asia. 

Finally, on April 1, China’s foreign minister, Wang Yi, received Wunna at a lavish reception in China’s Anhui Province. Afterward, China’s state-sponsored Xinhua News Agency referred to the junta’s emissary as the “counterpart” of the Chinese foreign minister, emphasizing that Wang had told Wunna that China would back the regime “no matter how the situation changes.” 

Both parties announced a major increase in Chinese support for the military’s governing body, the State Administrative Council (SAC): more than $100 million in new financial assistance, a new Myanmar consulate in China, a pledge to “jointly oppose unilateral sanctions,” a commitment to advancing cooperation under China’s Belt and Road Initiative, and plans for the junta to host the foreign ministers of the Lancang-Mekong Cooperation Forum in Myanmar (China, Cambodia, Laos, Thailand, Vietnam and Myanmar). 

Economic Drivers of China’s New Policy

China’s new approach is also driven by the economic needs of its southwestern provinces and by private Chinese capital networks, which have a strong appetite for risk and an attraction to countries with weak governance. 

Among China’s southwestern provinces, Yunnan is by far the most eager to resume development of the China-Myanmar Economic Corridor as the key engine of its economic growth. The Yunnan Provincial Government signaled this urgency in November of 2021 by appointing an academic with close ties to the Myanmar army to direct the Yunnan Department of Commerce. 

Li Chenyang, one of several architects of China’s strategic natural resource corridor through Myanmar, had championed a China-Myanmar army partnership in the early 2000s as a means of curbing U.S. strategic advantage in the region. Such an alliance, he argued, would reduce Chinese dependence on the Malacca Straits for energy imports. Unsurprisingly, shortly after Li assumed his new positions he led delegations to the border to re-open China-Myanmar trade and visited key cities to reactivate cross-border industrial zones. 

Meanwhile, a shady network of Chongqing-based entrepreneurs developing a casino resort island with a military-backed businessman in Myeik — located off the coast of Myanmar’s Tanintharyi region — emerged as another push factor for deeper relations with the military. From October to February, the South Asia Future Group visited almost every key ministry of the military’s ruling council, later signing a deal with the Lincang government to advance cross-border industrial zones and connectivity between Yunnan and Myanmar’s Shan State. The company also forged a relationship with Myanmar’s ambassador in Beijing, and along with a Myanmar-based network of Chinese companies, played a role in advancing the new consulate in Chongqing. 

China’s Real Intentions

While strengthening ties with the junta, China has maintained, and often tightened, its traditional links with the northern ethnic armed organizations (EAOs), particularly the most powerful ones. Beijing has showered these groups with COVID-19 assistance, and in the case of Shan State, is standing with the northern EAOs near the Chinese border as they successfully press a military campaign against a rival ethnic army — the Shan State Army South. As a sign of respect for the EAOs, China sent a senior official to Shan State in late March for the funeral of a key former leader of one of these groups — Peng Jiasheng, the founder of the Kokang Army, also known as the Myanmar National Democratic Alliance Army. Peng had also been instrumental in the expansion of several of Myanmar’s most powerful EAOs, including the powerful Arakan Army, whose leader also attended the funeral. 

In short, China is making itself critical to all of Myanmar’s most powerful military actors. The junta, dependent on China, is surrounded by well-armed EAOs in China’s orbit, all of which are gaining in influence and power as the military’s violent campaign against the pro-democracy forces continues. This has given these EAOs strong incentives to support the armed resistance against the military, and many are now training and even arming people’s defense forces.  

Chinese leaders believe this web of involvements creates leverage to best advance China’s interests.

This is a dangerous strategy. 

To be sure, China may pressure EAOs to stop supporting pro-democracy forces and recognize the junta. But this will prove problematic. First, this turns a blind eye to the key driver of the current crisis — decades of military oppression and attacks on the population, the most recent iteration of which has displaced more than 600,000 people since February 2021. Second, EAO constituencies have unequivocally rejected military rule, and turning to support the military will ultimately undermine their legitimacy.

In the end, China is likely to find that increased support for the junta will simply amplify anti-China sentiment, putting its hundreds of billions of dollars of strategic investment at greater risk. By propping up an illegitimate regime, China further sets the stage for protracted conflict.  

Need for a Global Strategy in Support of Democracy 

China’s recent moves represent a growing threat to peace and democracy at the heart of the Indo-Pacific region. While its violence and urgency may not match Russia’s assault on Ukraine, Myanmar’s democratic opposition sees the parallels. Its leaders have already started calling on the United States and other Western states to dramatically increase their support, worried that Russia’s war on Ukraine will leave their struggle, and that of their regional counterparts for peace and democracy, forgotten at a critical moment.

As Western states help Ukraine meet an existential threat, it is critical that they not ignore China’s moves in Southeast Asia. As an immediate step, the United States could encourage much higher levels of support from its QUAD partners to bolster democracy as a pillar of regional security. Another measure would be for the United States and its allies to look for more creative ways to assist the full range of opposition actors in Myanmar — especially key EAOs supporting the NUG. Finally, Washington might communicate clearly to China the dangers its strategy presents to regional stability and offer to establish high-level exchanges on the crisis to manage tensions between the two powers as efforts to restore democracy continue.