China outward bound through Myanmar
Asia Times – 08/01/2011 – By Brian McCartan
CHIANG MAI – Myanmar is set to become an important regional rail hub connecting China and India with markets in Southeast Asia and beyond should proposed spending plans come to fruition. As with many infrastructure developments across the region, Beijing is the driving force behind the ambitious designs.
China plans to construct several routes linking its remote southwestern region with ports in Myanmar and on to Southeast and South Asia. In particular, a major rail line is planned to connect Kunming with a new deep-sea port and special industrial economic zone under construction at Kyaukpyu on Myanmar’s western coast.
Plans for the route were first announced in the Myanmar Weekly Eleven News magazine on October 16 and is expected to be finished in 2015. China is also involved in developing the port and the industrial zone, both of which are part of its plan to develop a trade outlet for its land-locked southwestern region and an oil and gas transshipment point connected to oil and gas pipelines already under construction.
Another rail route will connect the 1,920 kilometers between China’s Yunnan province capital Kunming to Myanmar’s former capital and major port Yangon. Construction will likely build on Myanmar’s existing north-south rail line rather than lay completely new tracks.
This route would also link with a railway connecting to a new port project at Dawei on the country’s southern coast. A component of the port project announced late last year is the construction of a new rail line between Dawei and Bangkok.
A third route will run through Myanmar’s eastern Shan State connecting Kunming with the northern Thai town of Chiang Rai and from there link into the Thai rail network. This link, together with a route currently being surveyed in Laos, will enable the shipment of goods by rail between China, Cambodia, Thailand and Singapore.
Wang Mengshu, an academic at the Chinese Academy of Engineering, told Chinese media in December that “an expert delegation from the Ministry of Railroads visited [Myanmar] and Laos in mid-November to conduct a survey: as soon as a route for the China-[Myanmar] railroad is determined, construction could start in as early as two months, and may serve as the main transportation route of China’s [rail] link with countries in Southeast Asia”.
Two additional routes connecting southwestern China with Myanmar’s rail network are planned between the Chinese town of Dali with Myitkyina and Lashio. Both Myanmar towns are large trading centers and railheads. China has also contributed to upgrade Myanmar’s rail stock: in October 2010, Beijing donated thirty engines from the rail transport department as “friendship gifts”, according to the official Xinhua news agency.
Once completed, the new routes will strengthen China’s already substantial economic ties with Myanmar and contribute to a more integrated regional economy. China is already in the midst of an estimated US$1 trillion project to expand its domestic railway system from the current 78,000 kilometers to 110,000 by 2012 and 120,000 by 2020. The project aims to connect all major Chinese cities with high-speed lines with trains capable of speeds of over 200 kilometers per hour.
Myanmar occupies an especially important position in Beijing’s ambitious plans to construct a high-speed rail network linking China with the economies of Southeast Asia, South Asia, the Middle East and Europe. Much of this network, especially through Myanmar, corresponds with the 14,000 kilometer Trans-Asian Railway initiative the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) first proposed in the 1960’s. If completed as planned, it will represent the largest infrastructure project in history.
The exact routes of the lines are still unclear, but they will follow three general directions. A northern route will extend through Mongolia, Kazakhstan, Russia, Ukraine and on to connect to the European rail network. A middle route will go through Myanmar, Bangladesh, India, Pakistan, Iran to Turkey. A southern route will link China to Singapore through Myanmar, Laos, Vietnam, and Thailand. Currently, China’s only rail connection to Southeast Asia runs to Vietnam.
One major obstacle for the project is Beijing’s insistence on the use of the same gauge of tracks as its domestic high-speed network. The rail systems in Myanmar and other Southeast Asian nations use different gauges, meaning it will be necessary to replace current tracks or lay new ones to make the connection.
Another is the high cost and how it will be shared. China is reportedly in talks about track gauge, line direction and expense allocations with the tipped 17 countries. However, many observers are skeptical of estimates that the network could be completed over the next 10 years. Beijing must also ensure the long-term profitability of the railways in order to make the huge investment necessary for the project justifiable. So far the only portion of China’s planned network actually under construction is a link between Yunnan province and northern Myanmar.
China has offered to bankroll the construction of new routes and upgrades to Myanmar’s existing system in exchange for access to the country’s rich natural resources. Wang Mengshu, a professor at Beijing Jiaotong University and a key member of the Chinese Academy of Engineering, told German Magazine Der Spiegel in March “We will obtain commodities that the huge Chinese population needs. [Myanmar], for instance, has no money but plenty of resources. We will help such underdeveloped countries to build railroads and to exploit their resources. Many countries have oil, gas and water resources.”
In addition to providing expanded export routes for Chinese goods from its remote southwestern region, the railways will also enable more efficient transportation of energy resources from suppliers in the Middle East and Africa. New deep-sea ports at Cox’s Bazaar in Bangladesh and Kyaukphyu and Dawei in Myanmar will with new rail links cut almost in half the distance needed to transport oil from the Middle East and Africa by sea.
The new ports and rail links will provide alternative routes for Chinese strategic resources that avoid potential maritime bottleneck areas such as the Malacca Straits, where currently as much as 80% of China’s imported energy travels. Strategic analysts have noted that the US could block those energy flows in a potential conflict with China.
China and Bangladesh have discussed establishing a rail link between Kunming and a new deep sea port project under construction at Cox’s Bazaar via Myanmar’s rail network. An agreement with Dhaka has yet to be signed, but the proposed 111-kilometer route is expected to pass through eastern Bangladesh to Gundum in Myanmar where it will either connect with Myanmar’s existing rail network or with the new high-speed route.
Regardless of Chinese assistance, Dhaka seems eager to construct a railway to the Myanmar border. In July 2010, Dhaka announced plans to build a railway to the Myanmar border by 2014 at a cost of $260 million. Construction of the single-track meter gauge route was set to begin in July, but some Bangladeshi observers say this may be more talk than substance. Chinese involvement, however, would put more financial firepower behind Dhaka’s plans.
Bangladesh-Myanmar ties have been problematic in recent years due to disputes over their shared border, Muslim Rohingya refugees from Myanmar, as well as smuggling and ownership disputes of lucrative offshore oil and gas deposits. A new rail link, however, may go some way to interconnecting their economies and reducing the possibilities of further disputes.
India, not to be outdone by Chinese financing of Myanmar’s railway infrastructure, authorized its state-owned EXIM Bank to lend $60 million to Naypyidaw to finance railway projects. The announcement of the funding came during a recent visit by Myanmar leader Senior General Than Shwe to New Delhi where he met with Indian leaders including Prime Minister Manmohan Singh.
India’s assistance is a component of its ambitious Mekong-Ganga Cooperation (MGC) project to link New Delhi with Hanoi by rail. India signed a pact for the project in 2000 with Thailand, Laos, Myanmar, Vietnam and Cambodia. As part of the project, it has extended a $56 million line of credit to Naypyidaw to construct modern railway facilities in its central and northwestern regions. New Delhi has also assisted in the upgrading of the central Yangon-Mandalay rail line.
In order to connect the two countries by rail, Indian Railways has begun initial preparations to extend a broad gauge track from Jiribam in southwestern Manipur state to Moreh on the border with Myanmar. The line will connect with a proposed track in Myanmar from the current railhead at Segyi in its western Sagaing Division to the town of Tamu on the Myanmar-India border.
An established rail link between India and Myanmar would also allow for the more efficient shipment of goods between India and China. Trade between the two countries has been fast growing. China is now India’s largest trading partner, with bilateral trade projected to have reached $60 billion last year. While rivals for influence in the region, especially in Myanmar, their economies are becoming increasingly interdependent despite complaints by some Indian businessmen carping about a trade imbalance which favors China.
Brian McCartan is a Bangkok-based freelance journalist. He may be reached at firstname.lastname@example.org.