Opportunities in Burma

The developing humanitarian catastrophe in Burma is bringing attention to an issue that has received little thus far in the international security community. That is, the close relationship between Beijing and the Burmese junta. As the international community and the U.S. try to get aid to the Burmese people, they are assuming that Beijing holds the key influence that could force the junta to open up the country and receive assistance. This assumption is reasonable, but its wider implications are both significant and neglected.

Sino-Burma relations are extremely relevant to U.S. national security for a reason that should be all too familiar to Americans: oil. With the Chinese economy expanding at spectacular rates, it has since 1993 relied on increasing amounts of imported oil to fuel this growth. As of 2008, China is the 3rd largest importer and the 2nd largest consumer, burning over 7 million barrels per day, and importing from foreign sources about half of this amount. This trend is predicted only to increase; by 2030, China will need to import over 80% of the 16.5 million bbl/d that it will be consuming.

Because China’s principle suppliers are in the Middle East and Africa, its oil supplies must travel along the main sea lines of communication (SLOCS) in the Indian Ocean as they make their way to the Chinese coast. This presents an enormous security challenge for Beijing, since it lacks the naval capability to directly protect its own oil shipping and must free-ride on the security services of the U.S. navy and other regional powers. As long as China remains a status-quo power and does not threaten the security environment, this situation is tenable, since the U.S. relies on those same SLOCs for much of its own trade. However, in the event of a military confrontation between the U.S. and Beijing – over Taiwan, for example – China’s crucial oil supplies are completely vulnerable to U.S. blockade, and the Chinese economy could be brought to a standstill within days. The government in Beijing has reinvented itself as a nationalist regime and has staked much legitimacy on continued economic progress. If this progress were halted, the very survival of the “communist” government would be in question. Thus, the current vulnerability of its energy supplies deters China from revisionist behavior in the region and helps maintain the peace. Obviously, however, Beijing is not content with this situation.

China‘s SLOCs are most vulnerable at a single geographic point in Southeast Asia: the Strait of Malacca, which is the primary conduit that links the Indian and Pacific Oceans. The Strait is one of the busiest shipping routes in the world, with over 60,000 ships passing through it on an annual basis, constituting one-third of the world’s global trade. More to the point, over 80% of China’s imported oil must transit the strait, making it the key chokepoint for the Chinese economy. Hu Jintao has referred to this situation as the “Malacca dilemma” and the issue has become one of the primary topics within military circles and the security-related academic community. Indeed, it is fair to say that the problem is causing a significant amount of anxiety in China’s security community. Yang Yi, director of the Institute of Strategic Studies at China’s National Defense University, recently commented:

[W]hen I was the naval attache at the Chinese embassy in the United States, an American asked me how we would defend our strategic sea passages if it became necessary to do so. I said, speaking diplomatically, that the U.S., the world’s traffic cop, is very good at maintaining order and that we could go along for the ride. But, truthfully speaking, this is not reliable. If we do not have any conflicts of interest with the U.S., we can go along for the ride. As soon as conflict occurs, however, it will be disastrous. For example, if the U.S. implements a large scale blockade or embargo…would we be able to withstand it?

Note in particular that Mr. Yi’s comments are a speculation on what might happen when – not if – conflict occurs.

To cope with the “Malacca dilemma” and establish some form of energy security, China has embarked on a strategic program with 3 key components. First, China is seeking to project its influence all along its SLOCs, from the mainland coast itself all the way to Africa. This has become known as the “string of pearls” strategy, with each “pearl” being a nexus of Chinese power and influence from which military power could eventually be projected. Second, China is seeking to decrease reliance on Malacca by developing alternative routes of supply, namely through overland pipelines. Finally, China is diversifying its foreign energy holdings.

Which brings us back to Burma. Burma plays an instrumental role in the first two components of China’s energy security strategy. First of all, the close relationship between Beijing and the Burmese junta will probably allow the basing of Chinese military forces along the Burmese coast in the near future. China may already have a listening station on Great Coco Island, though past reports of such a presence have been prone to exaggeration. The mere possibility of a Chinese base near the mouth of the Strait of Malacca is enough to send tremors through the regional security environment, and by actually establishing such a presence, China would drastically improve its ability to project power along its SLOCs and maintain access to the Strait.

China is also planning on constructing an oil pipeline that will originate at Kyukphyu on the Burmese coast and carry oil north to Yunnan province at a rate of 400,000 bbl/d. Burma does not have any domestic supplies of crude, and thus, the sole purpose of the pipeline is as an alternative route to the Strait of Malacca. Thus, Beijing values its southern neighbor primarily because of its position within China’s larger energy security strategy. The recent comments of an economist at a Western embassy in Thailand encapsulate this:

[T]he Chinese government doesn’t just want some stability on its southwest border and a gas source; it needs to use Burma as a conduit, as part of its wider strategy for energy security.

The close relationship between China and Burma is unusual given Burma’s historic sense of nationalism. In the late 1960s, as the Cultural Revolution spilled over into Burma itself, the early leaders of the junta instigated riots in Rangoon to drive out Chinese interests. Diplomatic relations were suspended and only resumed in the early 1970s. In 1988, after the junta crushed the “8888 uprising,” the international community applied a host of sanctions to the regime, leaving China as its only diplomatic outlet. Since then, China has provided the junta with the political, economic, and military support that has kept it in power. The junta elite have become rich from the trade with China, and the tatmadaw have become the privileged ruling caste. As long as the junta refuses to relinquish its stranglehold on power, Burma will be drawn ever closer to China, as it is the only source of the support that keeps the regime in office.

However, there is still a very strong undercurrent of nationalism within Burma. Resentment of Chinese domination of the economy is widespread, and some have speculated that there is a risk of a replay of the anti-Chinese riots of the late 1960s. The younger officers within the tatmadaw who have not benefited from the relationship with China are enraged that their leaders have seemingly sold their country’s sovereignty. In 1992, military intelligence disrupted an assassination plot by nationalist officers targeting the junta leadership. Since Chinese influence has only grown in the past 16 years, it is reasonable to assume that such sentiments remain widespread.

This nationalism, in combination with the aftermath of Cyclone Nargis, presents an opportunity for the U.S. and the international community. The junta’s refusal to allow humanitarian aid has provoked a boiling resentment of the regime within Burma itself, and in the U.S. voices have openly called for military action against the regime. The real solution need not be so drastic. The U.S. could conduct a covert operation to precipitate an internal coup within the regime by identifying nationalist officers and signaling to them that the U.S. would recognize their new government, provided that they open the country to humanitarian aid, curtail the egregious human rights abuses that have characterized the junta, and maintain their independence from China. After a successful coup, the new regime could immediately gain legitimacy among the Burmese people and international community by focusing on disaster recovery and humanitarian relief.  Sanctions applied against the junta would be lifted, and Burma would no longer be a pariah state.

It would be unrealistic to expect any new Burmese government to renege on the many commercial deals with China. However, a nationalist regime would certainly not allow the basing of Chinese military forces, and if the U.S. lifted sanctions on the new government, gradually increasing U.S. investment could reduce Chinese influence and ensure a relationship that would well-serve U.S. interests as the confrontation with China escalates. At the very least, Beijing could no longer rely on Burma as a conduit for crude oil and raw materials. This alone would moderate Chinese behavior in any future international crisis. And there is no doubt that a new regime would improve the lot of the Burmese people; it could even restart the process of democratization, which has been suppressed by the junta ever since the 1990 elections.

Thus, if an internal coup were to occur, the international community would get its aid through; the Burmese people would gain a government that doesn’t slaughter them wholesale, and the U.S. would gain a relationship that could neutralize Chinese influence over the country. In short, everybody (except China) wins. The U.S. now has a golden opportunity to make this happen; it should not squander this opportunity as it did with last year’s “Saffron Revolution.”

Even absent a change of regime in Burma, there will still be opportunities for the U.S. to interdict Chinese oil supplies in a future confrontation; the capacities of the pipelines that China is constructing simply is not large enough to alleviate the “Malacca dilemma,” which will remain in play indefinitely, and the oil must still transit vast, vulnerable lengths of SLOCs.  However, if Burma remains in the Chinese orbit, it will provide Beijing with the means to project power into the Indian Ocean and to the Strait itself. This would complicate any interdiction campaign significantly. U.S. interests are best served by an engineered coup that brings to power a nationalist regime in Rangoon.