Fighting in Myanmar’s Kyaukphyu threatens China’s Indian Ocean investments

Mizzima

A new report by Arakan Oil Watch (AOW) details how renewed conflict in Myanmar’s Kyaukphyu Township is threatening billions in Chinese investment and strategic access to the Indian Ocean, as the Arakan Army (AA) advances against the military junta.

The AA has seized control of 14 of 17 townships in Rakhine State since launching an offensive in late 2023. In Kyaukphyu, the junta has managed to retain only the town centre, naval base, and four military outposts. The AA now controls over 90% of the surrounding areas, placing immense pressure on Chinese-backed infrastructure projects.

Kyaukphyu, the report notes, is central to China’s Belt and Road Initiative (BRI), with a deep-sea oil port on Maday Island and the Shwe natural gas terminal. Together, the oil and gas pipelines generate an estimated US$7 billion annually in exports, providing over US$575 million in foreign exchange to Myanmar’s military junta. Planned expansions include a US$8.6 billion Special Economic Zone and a railway linking Kyaukphyu to Yunnan.