Robert Walsh, sometime Seattle resident and long-time friend of our law firm (we worked on a number of China deals together and we — Dan and Steve — met up with him on our last trip to Myanmar), has spent the last four years in Myanmar, where he operates a vibrant business consultancy. Robert is fluent in Chinese and Korean and, amazingly enough, Burmese (multiple dialects), having learned Burmese while working in the U.S. Embassy in Yangon many years ago.

We have written a number of Myanmar-focused blog posts for China Law Blog over the years and if you want the full flavor of what has been going on there, I urge you to go back and read those as well. In 2013, it was Myanmar Foreign Investment. Difficult And Expensive, But Opportunities Are There. In 2014, it was Myanmar: Open For Business? In those posts, we talked about how Myanmar is a difficult place in which to do business and many of companies going there are bigger companies looking to get in now and make money later. In 2017, in A Report from Myanmar from an old China Hand we talked about how much had changed, due in large measure to the relaxation of sanctions. Last year, in Doing Business in Burma/Myanmar: An On the Ground Report, Robert wrote how optimism in and about Myanmar is waning as things just keep getting worse there.

Yesterday, Robert emailed us an article from the Irrawaddy (for more on this newspaper and its interesting history go here) about “China’s ambassador to Burma going up to Kachin State to throw his weight around.” In response to that, we asked him to provide us an on the ground report of China’s activities in Myanmar. The below is Robert’s report:

Over the past five years I’ve had front row seats to watch how Chinese companies in Burma operate, as SOEs, as SMEs and as outright outlaws. The latter predominate.

The Chinese SOEs were initially focused on getting a beachhead at Kyaukhpyu on the Rakhine coast NW of Rangoon. Between 2012-2014 a pipeline running from the coast across Burma to Yunnan was built. There were on again/off again plans for a railroad paralleling the pipeline, but nobody could figure out what good it would be for anybody local.

I’ve previously described other Chinese mega-projects in Myanmar, but the only place where anything is happening is a bizarro 5000-acre resort-industrial zone-Las Vegas in the Jungle sort of thing on the Thai border across the river from Mae Seot being done by Jilin Yatai Group. For background on this project go here. I am baffled how the Chinese are doing a very large project by working directly with an ethnic armed organization, on Burmese soil, and without much in the way of compliance with Burmese foreign investment laws and procedures. I am even more baffled with how Yatai’s operation is being done in an area where the local armed groups haven’t exactly hammered everything out with the government yet.

Other Chinese SOE projects like the Myitsone dam and other hydropower projects are stalled, largely due to pushback from locals in the intended project areas. The Myitsone dam project has gotten nationwide pushback because it would affect the entire watershed of the country and China does not have a great track record on either domestic or overseas hydropower projects, especially when it comes to having environmental impact studies done that are deliberately superficial. As of this writing we know of six such projects that are going nowhere. For a really great story on a really botched Chinese dam, check out It Doesn’t Matter if Ecuador Can Afford This Dam. China Still Gets Paid.

The major feature of all these Chinese projects in Myanmar is that Chinese SOEs think engagement with locals is not needed and so long as the right people in the Union government are paid enough under the table any and all objections should cease. The Chinese are not alone in this approach, as many international NGOs also take the same approach, pouring out largesse in Naypyidaw, while leaving crumbs to filter down to project areas. Up in Putao, people are fighting against various conservation NGOs because they have paid off people in the forestry department in Naypyidaw to expand the national parks in a way that drives people off the land. For an example of this, see Over 200 villagers march to demand the abolishment of Hkakhaburazi National Park.

For Chinese SMEs and outlaws looking to do something here, compliance with local law is the last thing on their minds. Their collective mode of operations are as follows: