Yunnan proposes cross-border special zone with Laos

July 21, 2012

According to Yunnan Ribao 云南日报, Yunnan Province has proposed to Laos’ Luang Namtha Province to set up a Mohan-Boten cross-border special economic zone (SEZ) based on the “two countries, one zone; separate administrations, joint planning” 两国一区、分别管理、统筹协调 model. According to the proposal, this would require an agreement between the two national governments.

Earlier this year, the prefect of Sipsongpanna, Dao Linyin 刀林荫, announced that a Chinese-Lao cross-border nature reserve established in 2009 would be expanded to 1.5 million mu (100 thousand ha), in part to promote tourism. A previous report by Xinhua claimed that the initiative encompassed 550 thousand ha in Sipsongpanna Prefecture and Laos’ Phongsaly Province, and that talks were underway with Burma’s Shan State Special Region 4 to create a similar zone.

Currently, the Golden Boten City Special Economic Zone in Laos is the private concession of a Chinese company, which recently acquired it from its earlier, Hong Kong-registered concessonaire. While the latter had sometimes conflicted relations with the Yunnan officialdom — and was eventually forced by the Chinese government to roll up its gambling business — the new owner is said to be a high official from Sipsongpanna Prefecture in Yunnan, and may be better positioned to broker between the two governments. Although Golden Boten City has often been described by Western observers as essentially an extension of China, I argue in a recent article that its private investors used the paraphernalia of the Chinese state to enhance their own developmental clout. But if the new plan is implemented, the special zone will become more closely intertwined with Chinese bureaucracy, and questions about sovereignty may have to be asked anew.


Chinese hydropower company donates funds to Kachin refugees

July 20, 2012

Xinhua reports that Upper Irrawaddy Power, a Sino-Burmese joint venture that is building several dams in the Kachin State of Burma, has donated the equivalent of $24,000 via Christian organisations to Kachin refugees displaced by the fighting between the Burmese army and the Kachin Independence Army.

Earlier, a different Chinese hydropower company involved in the suspended Myitsone dam construction has built a Baptist church for local villagers at the dam site.

The efforts are indicative of steps taken by Chinese hydropower companies to improve relations with locals, especially as they are afraid that more projects may be stopped. These are buoyed by government instructions and public suggestions in China that state enterprises investing abroad should handle political risks more prudently and that they should not only deal with governments but also other actors.

This particular news is interesting not only because the beneficiaries are Christian churches — which tend to have close ties with U.S. organisations — but also because the Chinese government does not to recognise refugees in general and has leaned toward the Burmese government in the recent conflict.

Protecting the rights of cross-border migrant workers

February 16, 2012

Legal Daily (法制日报)published an intriguing news item. Relatives of two Sichuanese workers who worked at a Yunnanese-owned mine in Burma and disappeared after a traffic accident turned to a migrant-worker rights-protection agency in Yunnan, 云南省农民工法律援助维权中心. The agency contacted “relevant government organs” and got the employer to pay compensation of 540 thousand yuan.

What is interesting is that migrant workers who worked abroad were included in the category of nongmingong, “peasant workers,” and in the institutions of “rights defense” 维权 , which often carries an overtone of dissidence against state power in labour rights cases.

Chinese hydropower company inaugurates Baptist church at Myitsone dam site

January 30, 2012

Yunnan International Power Investment Co., a daughter of China State Grid, inaugurated a Baptist church at the resettlement village built for villagers resettled from the site of the now-suspended Myitsone Dam. The ceremony, according to the report in Chinese media, was attended by some 500 people, including the “chairman of the Myitkyina Baptist Association” and, surprisingly, nuns. 2,146 people have already been resettled. A clinic, a school, a police station, a post office, an electricity and water grid have also been constructed.

The article makes no mention of the fact that the dam construction has been stopped. What will happen with the resettled people?

In related news, Sinopec signed a new agreement with the Burmese government on increasing assistance to the areas affected by the construction of its oil pipeline from the port of Kyaukpyu to China. So far, Sinopec has offered $6 million for health and education purposes, including the construction of 8 schools. The new agreement is to build 18 village clinics and one hospital. Sinopec has also pledged to donate $1 million annually to the areas affected. So perhaps these are all efforts to improve the image of Chinese companies in Burma and hedge against political risks, as demanded by the Chinese government.

Foreign Policy lists two “China-in-X” books among 25 notable books of 2011

January 4, 2012

Thant Myint-U’s Where China meets India: Burma and the new crossroads of Asia and La silenciosa conquista china, by Juan Pablo Cardenal y Heriberto Araújo, have been named by Foreign Policy‘s list of 25 notable books in 2011.

China takes measures to improve image in Burma

November 20, 2011

According to an article in 东方早报, China is engaging in “public diplomacy” toi improve its image in Burma. This is because negative reporting about the Myitsone Dam project in the newly semi-freed media is said to have contributed to the president’s decision to suspend it, and in the Chinese government’s view such reporting was based on Western media reports rather than independent assessments of what was happening.

So now, the government is inviting members of the “popular” (non-state) media to study tours of China, as it has done in African countries. It also has set up satellite broadcasts of China Central Television to Burma, which were — like any other satellite channels — previously banned by the Burmese junta. So the government seems to be banking on the chance that more openness may bring more, not less, attraction to China.

Failed Chinese rubber planters’ experiences in Burma

November 19, 2011

The recent killing of 13 Chinese sailors on the Golden Triangle section of the Upper Mekong led to China’s suspension of shipping there and recriminations against Thailand on the Chinese Internet. In an article published on QQ’s finance page, Chinese rubber planters on the Burmese side of the region — Special Region No. 2, controlled by the United Wa State Army — reported on previous encounters with violence.

One of them planted 5,000 mu in 2002 but, in 2006, UWSA commanders forced him at gunpoint to sign what he describes an extortionate lease contract. He fled to China and was later persuaded to sign the land over to Wa. Another planter, who first invested in Burma in 1998, had two plantations taken over in similar ways by Wa soldiers.

Meanwhile, as part of the media coverage that has followed Burma’s suspension of the Myitsone Dam project, a power industry website published an article about how electricity companies in Dehong Prefecture have been providing power across the border, starting as early as 1985 — that is, when the Burmese Communist Party still controlled the region. An employee would go across the border once a month to take electricity readings. He got himself into dangerous situations but assured the reporter that the company provided the same service to cross-border customers as to domestic ones.

This is a reminder of the complicated power relations in the region. The local ceasefire armies, particularly UWSA, are not simple victims or co-perpetrators of Chinese exploitation: they can also be adversaries. Chinese investors, for their part, can be victims or service providers trying to “act normal”.

Gary Locke, Jin Liqun, the Chambishi mine and the Myitsone dam

November 12, 2011

Today’s International Herald Tribune writes about the popularity of Gary Locke, the American ambassador to China, who queues up at the Great Wall like an ordinary citizen and flies economy class. But the article also notes that Locke likes to talk about how his father, an immigrant from China, “worked every day of the year and taught him respect for family, education and hard work.”

This is a refrain that resonates with the Chinese government and many Chinese people, including those building dams and investing in factories. So it does with many Americans: in the same issue of the newspaper, economist Tyler Cowen advocates a “pro-discipline and pro-wealth cultural revolution,” bringing to mind Aihwa Ong’s observation years ago that “Asians” (i.e., increasingly, Chinese) had become the ideal enterprising American subjects.

Europeans are clearly the laggards here: Jin Liqun, the head of China’s overseas investment agency, recently admonished Europe’s “worn-out welfare societies” to change labour laws that “induce sloth, indolence rather than hard working.” As a friend from Benin commented, “For the very first time since I don’t know when a non-Westerner is dictating a code of conduct to Westerners! Are Chinese going to devise conditionalities for loans to the West similar to the ones of Structural Adjustment Programme to the Third World?”

Maybe. For now, Hungary, whose government has recently come out with the vision of a “work-based society,” announced the opening of two more Confucius Institutes. Do so many Hungarians really want to learn Chinese? Probably not, but the mayor of Szeged, where one of the new institutes is planned, says Chinese investors have “more trust in cities that have them.” (The mayor, by the way, is from the opposition Socialist Party.)

These reports make interesting reading against the background of the two biggest news about China’s overseas investments in the past month: the suspension of the Myitsone Dam project in Burma and the strike at the Chambishi mine in Zambia that led to the — albeit temporary — collective dismissal of all workers over demands for higher wages. A new report by Human Rights Watch criticizes Chinese-owned mines in Zambia for maintaining poor wages, long shifts and low standards of health protection compared to other foreign investors. Perhaps the most interesting finding of the report is that Chinese companies tolerate the presence of one union but not the other, more combative one.
The Myitsone halt triggered a range of diverse responses, but aside from political implications, the reaction of a frustrated Chinese worker on the construction site was this: “It’s tragic that a country like this doesn’t hurry up to develop! And it has the nerve to talk about democratically elected president this, bowing to popular opinion that! … What’s even sadder is the ignorance of ordinary people stupefied by politicians!” In contrast, a promotional film by Sinohydro’s 11th Office, the project’s contractor, describes the progress of the construction as a heroic and victorious battle against the jungle, malaria and Dengue fever, in terms reminiscent of the labour competitions of the Maoist era, such as “battleground” 战场 and “front” 战线. (The film has been removed from the company’s website, but a description is available here.)
What gives such talk weight is that, state and corporate propaganda aside, managers of Chinese companies abroad — not only state-run ones but also the private telecommunications giant Huawei — genuinely take hard work seriously, often take pride in their dedication, and are nonplussed by the lack of ambition they see in their local colleagues. A thirty-year-old manager at Huawei Hungary echoed Jin Liqun avant la lettre when I talked to him in October. If Europeans did not change their work habits they would lose out definitively to Asia in ten years, he said. Yet he phrased his concerns in corporate rather than national terms, as befits a multinational company: “The Hungarians have difficulties adapting to the culture of the company,” he said. “We don’t want people to just hang around (混). We want people who can perform.” The ideal managerial subjects, indeed.

Chinese reactions to the suspension of the Myitsone dam project

November 12, 2011

Chinese reactions to the suspension of the Myitsone Dam project have been diverse.

Du Ping, a political talk show host at the Hong Kong-based and very mainland-friendly satellite broadcaster Phoenix, called the stop on Myitsone an American plot and insisted that Burma “should be made to feel that it has sustained an irreparable loss.” But Zhu Feng, deputy director at Peking University’s Institute for International Strategic Studies, wrote that

unless China begins to offer necessary public goods — which in addition to trade must include mature regional governance based on the rule of law, human rights and regional economic growth — its neighbours will not sincerely consider China’s interests

and the appropriate response to the dam issue is “more cooperation” rather than “turning tough.” And Peking University international relations professor Zhao Daojiong wrote, in Singapore’s Lianhe Zaobao, that “nothing can replace transparency” in China’s energy projects abroad.

More surprisingly perhaps., the English edition of the generally nationalistic Global Times published an editorial entitled “China has reasons to be happy about Burma’s changes.” It notes that, so far, Burma is showing no signs of “Westernisation” but is rather undergoing a process of “self-correction” after a period of military extremism. This process entails uncertainties, but the opportunities that a more independent Burmese politics (compared to its past reliance on China) would bring China more opportunities than problems. To think that China will lose in a free competition to access the Burmese market is ignorant, as is to compare reforms in Burma (open access to BBC and Twitter, for example) with those in China, as such indicators in themselves cannot be used to describe the “overall level of political modernization.”

The liberal Southern Weekend published a fairly neutral report from the site — the reporter had been duly detained by the Burmese military — noting nonetheless that China Power International has already paid resettled villagers compensation in cash, a year’s rice, and land plots, constructed a new village of two-story houses and a sewage treatment plant, and was now constructing a church.

A church. The state-owned company that, according to the Chinese Communist Party news portal, offered a new model for “overseas Party construction” 海外党建 at its Myitsone site. Party members, the report said, were at the frontline of danger after the “terrorist attacks” on the site in 2010. It was also the Party’s task to raise Chinese workers’ morale dampened by their isolation (they are not allowed to leave the site, which has been subjected to periodical sabotage by the Kachin Independence Army). And finally it was the Party’s task to apply the “mass line” and the “Yanan spirit,” known from the mythical days of the CCP’s struggle for power, to Burmese villagers: building roads and schools, donating to the poor, importing provisions from China in order to avoid causing a rise in local prices. I am sure the church construction was also a Party project.

40 thousand Chinese workers were projected to work on the site during the peak of the project. Before the suspension, the project employed over 5,300 Chinese and some 4,500 Burmese, according to the Party website. Gao Fengbiao, a Chinese worker at Sinohydro’s Fourth Office, one of the project’s contractors, wrote a bitter post about the “humiliation” of the project’s suspension, asking what would have happened if the Burmese government had stopped an American project. To add insult to injury, the announcement was made on the eve of the anniversary of the founding of the People’s Republic of China, an official holiday. “When will the Chinese people straighten their backs?” the worker asks. “Wake up, all the Chinese!” He then launches into a litany of recent national humiliations — from Japanese, Korean and Philippine military exercises near disputed islands to American pressure to let the yuan depreciate — and concludes that China is in an encirclement (四面楚歌) and its officials are failing to react. Even a “small country” like Burma dares bully China. Why is China, which has not yet eliminated hunger, “throwing money right and left to buy diplomacy” and “save foreigners”? Gao finishes his post with an evocation of the “spirit of the people’s army.” He does not ask why the Burmese government wants to stop the project if it is in fact a gift of aid. (According to Chinese articles, it is, rather, an extension of a plan to use power generated in the country’s west to supply the eastern seaboard.) The story bears an uncanny resemblance to the famous case of the Wusong Railway, China’s first railway built by Western concessionaries, then bought and torn up by the Qing government in 1876.

Whether or not the Myitsone project eventually restarts — construction of the smaller Chinese-built dams in the area continues — the reactions to its suspension are a reflection of the complex and contradictory narratives around China’s development export. A strategic project whose stopping is a humiliation to China; an undeserved gift to a “poor, backward, corrupt and closed” country (in Gao Fengbiao’s words); a result of China’s skewed incentives for state companies that lead to ignoring political risks; a reflection of a wrong-headed diplomacy that is insensitive to popular opinion. All of these views are publicly voiced in online and print media, sometimes by the same individuals.

Burma stops Myitsone dam, or the extraordinary Peter Bosshard

October 2, 2011

In a second, but much larger setback — or sign of a policy change? — following the announcement of Southern Grid’s withdrawal from Cambodia, the Burmese president has announced the stopping of the construction of Myitsone Dam, the largest planned dam in Southeast Asia and the largest Chinese hydropower project abroad, which has been the source of armed conflict in northeastern Burma. Environmental organisations and ethnic ceasefire armies, as well as the Burmese democratic opposition, have opposed the project.

Although other Chinese dam plans in northern Burma are going ahead, there are signs that the Chinese government (or some of its agencies) is once again demonstrating sensitivity to criticism and political risk. I have written about how existing Chinese criticisms of the wastefulness and lack of foresight in Chinese investments abroad, probably already embraced by the Development and Reform Council, were amplified after the loss of projects due to the ouster of Gadhafi in Libya. Since then, several high-level government officials called for better risk assessment before projects go ahead.

Days before the Burmese announcement, a Chinese trade publication called 中国能源报 (Chinese Energy) published a remarkable interview with Peter Bosshard, director of International Rivers and one of the main campaigners against the Myitsone dam. The interview, which was then posted on the People’s Daily website, was occasioned by the IPO of Sinohydro on several stock exchanges. The IPO was more limited than originally planned due to delays in a number of contracts. Even so, it is extraordinary that a publication subordinate to the Ministry of Energy would publish a critical article featuring a foreign activist instead of celebrating the success of the IPO. (In the article, very unusually, only Bosshard’s Chinese name is used, so that readers may be unaware that he is a foreigner. Citing foreign critics in such contexts is routinely associated with hostility to China.) Such an act almost certainly signals a policy shift on the part of the ministry, which must already have known, and probably been consulted on, the Burmese decision.

The article mentions that International Rivers has consulted Sinohydro repeatedly, and cites Bosshard as saying that the company has now agreed to refuse projects that are seriously damaging to the environment or local society, including any project in a World Heritage area or national park; that it will enter into dialogue with local “communities” before carrying out a project; that it will set up a complaint mechanism; and that it will implement World Bank social and environmental impact assessment guidelines as a minimum standard.

But these measures are explained in terms of managing risk, rather than as ends in themselves. Bosshard is quoted as saying that they are necessary if Chinese companies are to solve “problems of reputation and control.” There is no doubt that International Rivers’ willingness to adopt such language instead of that of radical environmentalism that has given it unprecedented access to Chinese hydropower companies and state media.