By Eric Vandenbroeck

"Some observers believe that the US move is aimed at counter-balancing China's influence in the Asia-Pacific region, especially on Burma." Wu Chengliang in Beijing's Renmin Ribao

"Burma is not leaning toward the West - all it wants is to have Western sanctions lifted." Regional expert Song Qingrun on Hong Kong's Phoenix TV

"Despite US eagerness to influence Burmese affairs, it cannot break the status quo of 'thriving' China-Burma relations." Column in Hong Kong's Beijing-backed daily Ta Kung Pao

The US-China rivalry over influence in Myanmar/Burma that started with the 2011 visit by Hillary Clinton no doubt will increase during the coming decade or more.

Since the election of U.S. President Barack Obama, Beijing has been concerned about the United States' pledge to re-engage with Asia, particularly Washington's intent to move closer to the members of the Association of Southeast Asian Nations (ASEAN). China is afraid U.S. re-engagement in Southeast Asia will undermine its energy security and existing geopolitical influence over the region. And as is well known this now includes Myanmar/Burma. But while the US is 'far away' China is just across the northeastern border. This has recently once more has been noticed.

Yesterday, the Kachin News Group website (producing the image below) reported Myanmar/ Burma army jets fired on positions of the northern Kachin. Four fighter jets and two helicopters took part in air-attack on rebel positions near Laiza, the Kachin Independence Organization’s de facto capital on 28 December. Apparently the Myanmar Army has been attacking the ethnic Kachin rebels’ frontline outpost fiercely since Christmas Day. Refugees International has warned tensions between the Kachin Independence Army (KIA) and the Burmese military has reached boiling point after a 17-year cease fire agreement broke down in June 2011 in Kachin state. Access routes exist from China, but Beijing supports the Myanmar Governement, for example when it was forcing Kachin refugees back to Burma. During her four-day visit the first week of December 2012, the United Nation’s Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, Valerie Amos, urged access to some 40,000 people displaced by fighting between government troops and the KIA.

The fighter jets news hasn’t hit the popular press like BBC and CNN yet, but when it does, the US is bound to log a complaint with Myanmar something China will not like. Note that China has exploration interests in the (see map below) Kachin area.

In fact 2013 will be critical for Myanmar/Burma. The changes of 2012, such as the nascent political opening, parliamentary by-elections in April, and the official return of democracy activist Aung San Suu Kyi to national politics, were important but largely cosmetic first steps. 2013 in turn will test the regime's ability to maintain the appearance of opening, as well as to implement the concrete economic and political reforms necessary to attract foreign investment, especially from the West. Doing so would enable Naypyidaw to reduce its overwhelming dependence on Chinese patronage and to further integrate into the Association of Southeast Asian Nations.

This, in turn, would lift one of the major obstacles blocking the United States' own pivot to Asia. The Southeast Asian economic and political bloc is central to U.S. strategy in the region. To strengthen ties with the association, Washington must be able to engage politically with each member, something it could not do until this year. Thus, in addition to those in Myanmar, 2013 will be critical for China's interests in Southeast Asia and the broader Indian Ocean region. If Beijing can succeed in stalling or undermining Myanmar's opening, it will have taken a critical step toward securing its regional interests going forward.

Washington's practice of criticizing the use of force against civilians or rebel forces, particularly with aircraft or artillery, will complicate relations with the Myanmar government unless it shows military restraint. Moreover, since the U.S.-Myanmar relationship directly threatens Chinese interests, Beijing could attempt to drive a deeper wedge between Washington and Naypyidaw to maintain its historical primacy in the Southeast Asian nation.

However, Beijing views the possibility of closer relations between Myanmar and the United States as part of a broader U.S. containment strategy, with Washington strengthening ties with many of China's neighbors. This perceived strategic threat to its interests could drive China to attempt to undermine U.S. support for Naypyidaw by exploiting certain levers of influence it has established in Myanmar.

China has been Myanmar's only major ally, investor and trading partner since the country became isolated from the West in 1962. Ultimately, Beijing's modern approach to Myanmar stems from China's need to secure energy supply lines and access to the Indian Ocean basin and international sea lanes as well as to maintain border security.

The Kachin Independence Organization (KIO) rebel movement has controlled most of Kachin state since the movement's founding in 1961 and is the only remaining major ethnic opposition group to have not reached a peace agreement with the government. The region's relative autonomy stems from its geography, culture and ethnic makeup, which are distinct from the rest of the country and make the area difficult for the central government to control.

China is concerned about oil and natural gas pipelines that begin at the Myanmar coastal port of Kyaukphyu but run through both ethnic Shan- and Kachin-dominated territory on their way to Kunming in Yunnan province.

Geographically, Myanmar dominates the Bay of Bengal. It is where the spheres of influence of China and India overlap. Myanmar is also abundant in oil, natural gas, coal, zinc, copper, precious stones, timber and hydropower, with some uranium deposits as well. The prize of the Indo-Pacific region, Myanmar has been locked up by dictatorship for decades, even as the Chinese have been slowly stripping it of natural resources. Think of Myanmar as another Afghanistan in terms of its potential to change a region: a key, geo-strategic puzzle piece ravaged by war and ineffective government that, if only normalized, would unroll trade routes in all directions.

Ever since China's Yuan (ethnic Mongol) dynasty invaded Myanmar in the 13th century, Myanmar has been under the shadow of a Greater China, with no insurmountable geographic barriers or architectural obstacles like the Great Wall to separate the two lands -- though the Hengduan Shan range borders the two countries. At the same time, Myanmar has historically been the home of an Indian business community -- a middleman minority in sociological terms -- that facilitated the British hold on Myanmar as part of a Greater British India.

But if Myanmar continues on its path of reform by opening links to the United States and neighboring countries, rather than remaining a natural resource tract to be exploited by China, Myanmar will develop into an energy and natural resource hub in its own right, uniting the Indian subcontinent, China and Southeast Asia all into one fluid, organic continuum. And although Chinese influence in Myanmar would diminish in relative terms, China would still benefit immensely. Indeed, Kunming, in China's southern Yunnan province, would become the economic capital of Southeast Asia, where river and rail routes from Myanmar, Laos and Vietnam would converge.

Much of this infrastructure activity is already under way. At Ramree Island off Myanmar's northwestern Arakan coast, the Chinese are constructing pipelines to take oil and natural gas from Africa, the Persian Gulf and the Bay of Bengal across the heart of Myanmar to Kunming. The purpose will be to alleviate China's dependence on the Strait of Malacca, through which four-fifths of its crude oil imports pass at present. There will also be a high-speed rail line roughly along this route by 2015.

India, too, is constructing an energy terminal at Sittwe, north of Ramree, on Myanmar's coast, that will potentially carry offshore natural gas northwest through Bangladesh to the vast demographic inkblot that is the Indian state of West Bengal. The Indian pipeline would actually split into two directions, with another proposed route going to the north around Bangladesh. Commercial goods will follow along new highways to be built to India. Kolkata, Chittagong and Yangon, rather than being cities in three separate countries, will finally be part of one Indian Ocean world.

The salient fact here is that by liberating Myanmar, India's hitherto landlocked northeast, lying on the far side of Bangladesh, will also be opened up to the outside. Northeast India has suffered from bad geography and underdevelopment, and as a consequence it has experienced about a dozen insurgencies in recent decades. Hilly and jungle-covered, northeast India is cut off from India proper by back breakingly poor Bangladesh to the west and by Myanmar, hitherto a hermetic and undeveloped state, to the east. But Myanmar's political opening and economic development changes this geopolitical fact, because both India's northeast and Bangladesh will benefit from Myanmar's political and economic renewal.

With poverty reduced somewhat in all these areas, the pressure on Kolkata and West Bengal to absorb economic refugees will be alleviated. This immeasurably strengthens India, whose land borders with semi-failed states within the subcontinent (Pakistan, Nepal and Bangladesh) has undermined its ability to project political and military power outward into Asia and the Middle East. More broadly, a liberalized Myanmar draws India deeper into Asia, so that India can more effectively balance against China.

But while the future beckons with opportunities, the present is still not assured. The political transition in Myanmar has only begun, and much can still go wrong. The problem, as it was in Yugoslavia and Iraq, is regional and ethnic divides.

Myanmar is a vast kingdom organized around the central Irrawaddy River Valley. The ethnic Burman word for this valley is Myanmar, hence the official name of the country. But a third of the population is not ethnic Burman, even as regionally based minorities in friable borderlands account for seven of Myanmar's 14 states. The hill areas around the Irrawaddy Valley are populated by Chin, Kachin, Shan, Karen and Karenni peoples, who also have their own armies and irregular forces, which have been battling the Burman-controlled national army since the early Cold War period.

Worse, these minority-populated hill regions are ethnically divided from within. For example, the Shan area is also home to Was, Lahus, Paos, Kayans and other tribal peoples. All these groups are products of historical migrations from Tibet, China, India, Bangladesh, Thailand and Cambodia, so that the Chin in western Myanmar have almost nothing in common with the Karen in eastern Myanmar. Nor is there a community of language and culture between the Shans and the ethnic Burmans, except for their Buddhist religion. As for the Arakanese, heirs to a cosmopolitan seaboard civilization influenced by Hindu Bengal, they feel particularly disconnected from the rest of Myanmar and compare their plight to disenfranchised minorities in the Middle East and Africa.

In other words, simply holding elections is not enough if all elections do is bring ethnic Burmans to power who do not compromise with the minorities. The military came to power in Myanmar in 1962 to control the minority-populated borderlands around the Irrawaddy Valley. The military has governed now for half a century. Myanmar has few functioning institutions that are not military-dominated. A system with generous power awarded to the minorities must now be constructed from scratch; peaceful integration of restive minorities requires vibrant federal institutions.

Myanmar, it is true, is becoming less repressive and more open to the outside world. But that in and of itself does not make for a viable institutionalized state. In sum, for Myanmar to succeed, even with civilians in control, the military will have to play a significant role for years to come, because it is mainly officers who know how to run things.

But given its immense natural resources and sizable population of 48 million, if Myanmar can build pan-ethnic institutions in coming decades it could come close to being a midlevel power in its own right -- something that would not necessarily harm Indian and Chinese interests, and, by the way, would unleash trade throughout Asia and the Indian Ocean world.


Myanmar Ethnic Conflict and China

While in the past, China at times has positioned itself as a par time ‘translator’ in ethnic conflicts with the government. China has also demonstrated an ability to inflame ethnic tensions near the Sino-Myanmar border as a way to manipulate the Myanmar government. Maintaining relations with both the Kachin and Naypyidaw gives Beijing the ability to escalate conflicts between them, albeit on a limited basis, since Kachin state lies along the Chinese border. But inciting the Kachin further would likely provoke a more violent response from the Myanmar government, in spite of U.S. and international objections. Such a move could force the United States to lessen its involvement and investment in Myanmar which is what China is hoping for.

A second lever China could utilize is its ability to direct large amounts of investment into Myanmar. The United States does not have such a tool since, unlike Beijing, Washington does not have the authority, ability or desire to direct U.S. companies to invest in other countries. Such an influx of Chinese funding and investment could encourage Myanmar to temper its relationship with the United States.--- The long, flat Irrawaddy River Valley houses most of the country's largest ethnic group, the Bamar. Sparsely populated mountainous regions, the traditional homeland of Myanmar's primary ethnic minorities, surround the valley. Along the India-Myanmar border are the Rakhine/Rohingyas, Chin and Kachin ethnic groups, the latter of which live in the country's northernmost corner by the border with Yunnan. Along Myanmar's eastern border are the Shan, Karenni (Kayah) and Karen peoples. Each group inhabits its own distinct geographic subregion, and over time this relative isolation encouraged the formation of independent spheres of cultural influence.

Of these groups, the Kachin are both the most geographically isolated from the heart of Myanmar and possibly the most culturally distinct. They belong to the Sino-Tibetan ethnic umbrella and speak Jingpo, a Tibetan dialect. But due to British influence during the 18th and 19th centuries, most Kachin today practice Christianity.

Historically, their location in the Himalayan foothills prevented the Kachin from being subsumed within the Burmese kingdom and cultural sphere. But neither did they belong naturally to China, seated as they are on the southern side of the Himalayas.

The primary lines of ethnic conflict in Myanmar stretch back to British occupation beginning in 1886. The British excluded ethnic Burmese from the colonial military, instead employing soldiers from the Chin, Kachin, Shan and Karen minorities. This allowed the British to prevent anti-colonial and Burmese nationalist sentiments from infiltrating the army. It also laid the foundations for modern ethnic conflict in Myanmar by engendering distrust between the Burmese and ethnic minority groups and providing those ethnic groups training and organizational structures that would later aid opposition insurgencies.

A turning point in modern Kachin and Myanmar history came in 1947 with the Panglong Conference. Representatives from four ethnic groups, including the Kachin, met with Burmese Independence Army leader Gen. Aung San (father of opposition leader Aung San Suu Kyi) to outline a plan for political cooperation and unity. An agreement was reached outlining provisions for self-determination and administrative autonomy in the frontier areas populated by ethnic minorities. In exchange, the agreement required cooperation and peace while the interim government formalized Myanmar's independence.

But after the assassination of Aung San later in 1947, the promise of Panglong did not materialize. The decades since have been dominated by low-intensity conflict between the Myanmar government and the major ethnic groups. In Kachin state, conflict was mostly informal until the formation of the KIO and its militant wing, the Kachin Independence Army, in 1961. The KIO has controlled the majority of Kachin state since its founding.

Armed conflict in Kachin state continued throughout the 1980s and 1990s until 1994, when the KIO signed a cease-fire agreement with the Myanmar government. The cease-fire did not result in disarmament, but it did give the KIO enough room to consolidate its regional hold and develop a working bureaucracy as well as relative economic autonomy. This allowed the KIO to establish a toll system on the roads linking Myanmar to China, providing the Kachin with a secure source of income and making them the de facto intermediaries of cross-border trade.

The fundamental fact of Kachin state is that Naypyidaw has very little real control over it. Historically, geographically, culturally and now politically, the state is different, and that difference makes it restive and resistant to Myanmar's influence.

China has taken advantage of that difference, positioning itself as moderator and in effect translator between the ethnic opposition and the Myanmar government. Since Myanmar's isolation from the West after 1962, China has been Naypyidaw's only major ally, investor and trading partner. China's approach to Myanmar is grounded in its need for energy and alternate international trade routes to the South China Sea. As Myanmar's value grows, Beijing eyes warily any domestic political shift that could affect those interests. This entails a two-fold tactic: build strong relations with the central government while maintaining a balance of power between the government and ethnic opposition groups.

However, after the 2009 Kokang Incident, in which ethnic conflict in Myanmar's Shan state drove as many as 30,000 refugees into Yunnan province, Beijing has been forced to acknowledge Naypyidaw's need for peace and unity between its 135 ethnic groups. That need will continue to influence Myanmar's policies in relation to China and, in turn, will shape the balancing act Beijing maintains between the Myanmar government and the armed ethnic forces that have developed economic and political connections with China. As China's interests and investments in Myanmar evolve, so do the risks posed by unfavorable political dynamics inside the country.

For now, Myanmar seems poised for greater openness. But Naypyidaw is approaching reconciliation with ethnic groups cautiously. It hopes that engaging in bilateral talks with each rebel group will secure cooperation without risking a unified but hostile ethnic minority front. That the talks simultaneously serve to boost Myanmar's new democratic image, even as reports emerge that the ethnic groups continue to distrust Naypyidaw, enhances the government's efforts to attract greater international attention.

Though Beijing encourages peace negotiations in Myanmar, genuine reconciliation between Myanmar's ethnic opposition groups and the central government is not necessarily in China's immediate interest. China will likely suffer from Naypyidaw's attempts to improve its reputation on the international stage, as Thein Sein's move to halt construction on the Chinese-financed Myitsone dam projects near Myitkyina in Kachin state suggests. Part of a seven-dam hydropower complex planned for the upper reaches of the Irrawaddy River in Kachin state, the Myitsone dam sparked public controversy in 2011 when it was learned that completion of the project would require an area the size of Singapore to be flooded, which would displace several thousand Kachin civilians.

Conflict at Myitsone thus threatens both China's material interests and its reputation within and beyond Myanmar's borders. A similar concern for China is that its oil and natural gas pipelines begin at the Myanmar coastal port of Kyaukphyu but run through both Shan- and Kachin-dominated territories on their way to Kunming in Yunnan province, leaving them open to sabotage from a variety of potential antagonists.

Therefore, China will continue to openly support political stability in Myanmar, while simultaneously working to maintain a balance of power within the country. This way China reaffirms its importance for Naypyidaw's efforts to maintain stability without relinquishing its role as arbiter between Myanmar's center and periphery. As the only remaining major ethnic opposition group to have refused a peace agreement with Naypyidaw and China's closest cultural and historical link to the region, the Kachin may shape Myanmar's ability to secure international attention or investment and, in turn, its relationship with the Chinese.

But where on the one hand China will maintain its charm offensive vis a vis the Myanmar/Burmese government, if need be it can also use a stick. In such situation, China could use its influence in the ethnic regions of northern Myanmar against the Myanmar/Burmese government. This includes the United Wa State Army (UWSA). The UWSA sprung out of the army of the now-defunct Communist Party of Burma (CPB), which was supported by China in the decade between 1968 and 1978. Chinese arms dealers have supplied the UWSA with an array of weapons that the old Communists could never have dreamt of.