Myanmar Analysis Group delves into China’s policy on western Myanmar

Mizzima

China’s policy towards western Myanmar, particularly Rakhine State, is driven primarily by the protection of its strategic infrastructure, energy security and competition with regional rival India, according to the October report by the Myanmar Analysis Group.

The report, “China’s Calculus in Western Myanmar”, argues that Beijing is pursuing a cautious, pragmatic strategy that combines formal diplomatic support for Myanmar’s military authorities with informal engagement with the Arakan Army (AA), which now controls most of Rakhine State. Rather than seeking to resolve Myanmar’s wider political crisis, China’s immediate objective is to prevent the conflict from damaging its key investments around Kyaukpyu.

China’s strategic interests in Rakhine State stem from its desire to reduce dependence on the Strait of Malacca for energy imports and international trade. The China–Myanmar oil and gas pipelines, operational since 2013 and 2017 respectively, run from Kyaukpyu to China’s Yunnan province and beyond. Worth approximately US$2.5 billion, they represent China’s largest investment in Myanmar. Although they carry only a fraction of China’s total oil imports, they are important to energy security and the economies of southwestern China.

Beijing also envisages Kyaukpyu as a major Indian Ocean gateway through a proposed deep-sea port and special economic zone (SEZ). Additional plans include a railway and highway linking Kyaukpyu with Mandalay and the Chinese border. More recently, China has promoted the China–Myanmar–Bangladesh Economic Corridor, intended to connect Yunnan with Bangladesh through Myanmar. These initiatives could strengthen regional trade and Chinese influence while providing an alternative to routes vulnerable to geopolitical competition.

However, these ambitions have been undermined by Myanmar’s civil war. Following renewed offensives after Operation 1027, launched in October 2023, the AA expanded its territorial control, capturing 14 of Rakhine State’s 17 townships. By October 2026, the military retained Sittwe, Munaung and Kyaukpyu. The AA’s advance has created a serious dilemma for Beijing: many Chinese projects are located in territory increasingly contested or controlled by an armed organisation that China cannot readily compel to follow its wishes.

The operational pipelines remain functional, but the conflict threatens terminals, pumping stations and other infrastructure. Fighting has also forced Chinese workers to evacuate. Meanwhile, the deep-sea port, SEZ, railway and highway projects remain stalled, with little visible construction progress. A Chinese-funded power plant intended to supply the SEZ even had to be dismantled and relocated following clashes near the project site.

China’s approach reflects its limited leverage over the AA. In northern Myanmar, Beijing has applied considerable pressure to ethnic armed organisations, including the Myanmar National Democratic Alliance Army and the Ta’ang National Liberation Army, to accept ceasefires and return captured territory. In Rakhine, however, the AA is geographically distant from China’s border and can seek trade and other relationships with India and Bangladesh. Beijing therefore relies more on diplomatic persuasion, economic incentives and informal channels than coercion.

India’s presence adds another dimension. New Delhi’s Kaladan Multi-Modal Transit Transport Project connects India’s northeastern state of Mizoram with the port of Sittwe. China regards this initiative as a potential challenge to its own ambitions at Kyaukpyu. Beijing’s proposed economic corridor through Bangladesh and Myanmar could help counterbalance India’s growing regional influence.

The report also examines China’s handling of the Rohingya crisis. Beijing favours a state-led process involving Myanmar and Bangladesh, emphasising ceasefires, bilateral repatriation negotiations and economic development. Yet the AA’s control of much of northern Rakhine undermines this approach, since the military authorities in Naypyidaw can no longer guarantee security across the areas from which many Rohingya fled. Reported abuses against Rohingya under AA administration further complicate prospects for safe and voluntary repatriation.

The report identifies three possible trajectories for Chinese policy. The most likely is continued engagement with the military authorities alongside informal contact with the AA, concentrating on protecting existing assets. A second possibility is greater accommodation of the AA if fighting subsides and strategic projects become viable again. The third, considered less likely, is more active Chinese intervention through mediation, pressure on armed groups or expanded security arrangements if Chinese infrastructure comes under serious threat.

Ultimately, the report concludes that China is unlikely to prioritise peace or political reconciliation in Rakhine State. Its policy is principally about safeguarding pipelines, protecting Chinese personnel and preventing India from gaining a stronger foothold. Beijing’s ability to influence events remains limited, and its immediate strategy will depend heavily on the fighting around Kyaukpyu and the durability of ceasefires in northern Myanmar. China’s approach is therefore likely to remain pragmatic and reactive, protecting its interests without committing itself to resolving the underlying conflict.

Source: Myanmar Analysis Group