Amid losses, Myanmar regime draws attention to Chinese-backed Kyaukphyu development project

Facing ongoing battlefield defeats, the Myanmar junta issued a public statement on Tuesday regarding an ongoing investment project in Kyaukphyu Township, Rakhine State to be completed in partnership with a Chinese government-owned conglomerate. The military regime’s announcement did not provide details on what new provisions were stipulated in the contract for investment in the the Kyaukphyu Special Economic Zone (SEZ), saying only that both parties—the Myanmar junta and the China International Trust and Investment Corporation (CITIC) Group—were looking forward to its prompt implementation. According to the original contract, the CITIC Group has the majority stake in a joint initiative to develop the Kyaukphyu SEZ, including the construction of a port on Maday Island in Kyaukphyu Township. The last significant changes to the contract occurred under the elected National League for Democracy (NLD) government, which reduced CITIC’s shares in the project out of concern for debt. When reached for comment by phone, a junta official told Myanmar Now that there had been no significant changes to the existing terms of the contract. “We did not amend it. We only added a few more provisions,” said Aung Naing Oo, chair of the junta’s central working committee for Myanmar SEZs. “We are going to start the project as soon as the preparations are finished.” He added that more detailed information is confidential according to the terms of the contract and cannot be disclosed. Aung Naing Oo became the military regime’s minister of investment and foreign economic relations for a year and a half following the coup, was later appointed commerce minister, and has since been transferred to the Ministry of the Union Government Office 1. The current terms for the Kyaukphyu SEZ project were reached in November 2018, under the administration of the NLD, giving a 70 percent stake to CITIC and 30 percent to the Myanmar government. This amended an earlier allocation of 85 percent of shares to the Chinese entity, as stipulated in an original contract concluded during the previous administration of Thein Sein. Aung Naing Oo posted on social media that the parties to the Kyaukphyu SEZ contract had been reviewing it since 2022, and had reopened negotiations with CITIC in early 2023. He said that it was the Myanmar regime, not its Chinese partners, that had proposed signing a new contract. “Some points are added in the new contract so as to make it as clear as possible to both parties. This is not a contract we agreed to haphazardly with because of incidents in northern Shan State,” Aung Naing Oo said in his post. Evoking the people’s will Military council officials said it was the people of Rakhine State who were hoping for the swift implementation of the Kyaukphyu SEZ project, although many of the state’s people are currently displaced or preoccupied with other difficulties arising from their proximity to the intensifying conflict in Myanmar. “Kyaukphyu locals want the project to begin as soon as possible, and the locals’ attitude towards the project is positive,” said Aung Naing Oo after the signing ceremony in Naypyitaw on Tuesday. At the time, battles were breaking out between the Myanmar military and the Arakan Army (AA)—the most powerful ethnic armed organisation in Rakhine State—on southern Rakhine State’s Ramree Island, which is part of Kyaukphyu Township. The military had shut down the township’s ports and beaches, effectively enforcing a blockade by prohibiting travel on waterways in and around the township and arresting locals who defied the ban. Authorities also arrested a former political candidate and member of the NLD during the crackdown. Although the regime claimed that they were close to completing the environmental screenings required before the project could be implemented, neither CITIC nor the Chinese government has issued any statement suggesting work will begin in the near future. The only Chinese official present at the new contract’s signing ceremony was a temporary embassy representative, while several high-placed junta officials from Myanmar, including a deputy chief minister, were in attendance. Myanmar Now tried to reach the CITIC corporate offices in Yangon but all calls went unanswered. When reached by email, Evonne Xiao, a CITIC media contact and director for the company’s Hong Kong-based public relations firm responded that she could not offer any comment. The military invited companies owned by Myanmar nationals to invest in the Kyaukphyu SEZ project in early November, but has not announced any response since then. “We are still accepting applications. The deadline is December 29. Some companies are applying as we speak and some are still preparing,” Aung Naing Oo said, adding that the selected investors would be announced in January.

Amid losses, Myanmar regime draws attention to Chinese-backed Kyaukphyu development project

Touting a renegotiated contract with their Chinese investment partner, regime officials arranged a signing ceremony but declined to give details about how the contract’s terms had changed

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