Myanmar is a huge investment for China. We’re talking about billions of dollars in infrastructure, including oil and gas pipelines, mines, and a deepwater port--not to mention a massive amount of trade.
Those billions of dollars in projects are now under threat, with a coup on Monday that saw the country’s military overthrow leader Aung San Suu Kyi and place her under house arrest, and then proceed to take control of the internet, most notably by blocking Facebook.
Now, the military is in control under the protection of a one-year state of emergency.
The coup was timed to coincide with the convening of a new Parliament that came out of November elections in which the military party suffered severe losses but claimed voter fraud (with no evidence).
The coup is not in China’s interests, but Beijing will certainly seek to make it so. Yes, China and Russia have blocked the UN from issuing a joint condemnation, but now it’s about damage control. China wants stability for its billions of dollars in projects. It doesn’t want to rock the boat now. The specter of U.S. sanctions would indeed rock that boat. China is non-interventionist. It’s not bothered by democracy vs. military junta. It’s bothered by its inability to implement its soft power and watch its projects be derailed. So, whatever ensures the smooth completion and operation of those projects is the path China will pursue.
Nor is it just China that has an interest in Myanmar from an oil and gas perspective. French Total SA, Australia’s Woodside Petroleum, and Posco International are all leading exploration projects here. There is no indication yet that these companies will pull up stakes or halt projects, but it will be difficult for their reputations to handle it. There will certainly be pressure on them. The massive growing trend of ESG (environmental, social, and governance) investing is no joke. Not even close. These days, the reputational damage can inflict severe pain, and no doubt these Western companies are quietly waiting to hear what the global jury comes back with.
