On January 10, China Railway Eryuan Engineering Group (CREEG) and state-run Myanma Railways signed an agreement to conduct a feasibility study for the Mandalay-Kyaukphyu railway project, an important section of Beijing’s long-delayed, $20 billion China-Myanmar Railway plan. The plan envisages a high-speed railway project that would further establish an overland route linking southern China to the Indian Ocean. Specifically, the railway would connect China’s southern city of Kunming to Myanmar’s deep-water Kyaukphyu Port, situated on the Bay of Bengal.
The recent agreement is the culmination of a persistent effort by Beijing to realize this project despite past concerns expressed by Myanmar over, among other things, its exorbitant cost. Indeed, the project was suspended in 2014 for this reason, when experts and local officials expressed concern that the project would create unsustainable Chinese debt that could result in the country being compelled to transfer to Beijing influence and control over strategic assets. It is unclear if Myanmar’s past concerns over cost will be addressed in this new iteration of project implementation.
These concerns are compounded by separate national security considerations that China’s potential access and control of Myanmar’s Kyaukphyu seaport on the Bay of Bengal would offer China dual-use naval capabilities. The Mandalay-Kyaukphyu railway and parallel expressway are components of the China-Myanmar Economic Corridor (CMEC) – a series of infrastructure projects intended to boost southern China’s access and connectivity to the Bay of Bengal. Successful completion of these CMEC transit networks are also seen as a means for China to bypass the strategically vulnerable Malacca Strait, which currently functions as Beijing’s main link between the Indian Ocean and the South China Sea. Kyaukphyu is also the location of a terminal for two intersecting pipelines connecting the two countries and a future strategic deep-water seaport.
Notably, just yesterday, China’s Foreign Minister Wang Yi and Myanmar’s Commander-in-Chief of Defense Services Min Aung Hlaing agreed to expedite the construction of CMEC as a way to boost bilateral ties. Amidst scrutiny of the dual-use implications of the project, Foreign Minister Wang reiterated during the meeting China’s commitment to backing Myanmar in safeguarding its sovereignty and national dignity and noted the active role played by the Myanmar army in the process of the country’s development transition.