China, Myanmar Advance Strategic Railway Linking Southern China to Bay of Bengal via Kyaukphyu Port

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.