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China-Myanmar Warming Continues With Energy Export Talks

China Myanmar

China may soon start selling electricity to neighbor Myanmar in the latest sign that bilateral relations are thawing. China/Myanmar relations have been tense since 2011, when the Myanmar government blocked a hydropower project supported by China.

Now, Reuters reports, China’s energy needs aren’t as urgent as six years ago as it shifts away from industrial production and into services, while Myanmar’s new leader, Aung San Suu Kyi has demonstrated she is determined to improve relations with Beijing.

The warming is in line with the One Belt, One Road initiative in China, which focuses on international investments in infrastructure projects and foreign trade. In fact, there are already three Chinese utilities that have devised plans to connect Myanmar’s power grid with the network in the province of Yunnan, sources told Reuters.

Yunnan generates almost all of its electricity from hydropower capacity and transmits the surplus output to eastern China as well as Laos and Vietnam. Myanmar, meanwhile, is suffering a serious electricity shortage. Only a third of the almost 55-million-strong population is connected to the grid, and blackouts in the big cities are not uncommon.

Some government officials in Myanmar, however, are showing signs of worry about China’s growing influence in the region, which electricity exports would only strengthen. Already, they note, China has gained access to a strategic port in Myanmar.

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This access is via a pipeline that will supply crude oil to China’s Yunnan province from the port at Made Island in Myanmar. The launch of the pipeline was delayed by several years until Myanmar agreed to lower the transit fees.

Another criticism is that Myanmar has plenty of hydropower resources, and it would be smarter to develop these instead of buying electricity from China. However, the country needs energy and it needs it urgently. Developing the local hydropower resources will take time and money. For now, the government apparently believes partnering with China is the better option.

By Irina Slav for Oilprice.com

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