Chinese diplomats to assess war’s likely impact on Chinese-backed Myanmar pipeline

A Chinese embassy delegation is currently in Kyaukphyu, Rakhine State to evaluate the viability of a pipeline and other projects supported by Chinese investment amid the Myanmar military’s ongoing clashes with the Arakha Army (AA), sources said. Eight diplomats from the embassy in Yangon, including a consul, will spend three days on Maday Island in Kyaukphyu Township, where the starting point of the pipeline is located, according to local sources with direct knowledge of the matter. The pipeline, which Kyaukphyu residents colloquially call the “Chinese Pipeline”, runs more than 500 miles from its starting point on Maday Island in the Bay of Bengal. The island is also the site of a deep sea port currently under construction as part of a broader Chinese-backed project—the Kyaukphyu Special Economic Zone (SEZ), in which the Chinese state-owned conglomerate CITIC Group owns a total of 85 percent of shares. The pipeline runs through Rakhine State, Magway Region, Mandalay Region, and northern Shan State, supplying refineries in the city of Kunming in China’s Yunnan Province. Fees for using the pipeline generate tens of millions of dollars in revenue for Myanmar authorities every year. Revenues from the pipeline totaled nearly US $43 million from gas and more than US $64 million from oil in the 2018-2019 financial year. The AA—Rakhine State’s largest and most powerful ethnic armed organisation, which called itself the Arakan Army before rebranding in April—currently has its forces surrounding Kyaukphyu and is poised to attack and attempt to capture it. The AA’s position puts strategically important junta bases as well as millions of dollars at risk, and may aggravate the strain on the Myanmar junta’s relations with China due to Chinese investors’ substantial stakes in the Kyaukphyu SEZ and pipeline. The AA has stated that its objective is to attain a level of autonomy for Rakhine State’s people comparable to that of the Wa ethnic community within the United Wa State Army’s territories in Shan State, on Myanmar’s eastern borders.

Chinese diplomats to assess war’s likely impact on Chinese-backed Myanmar pipeline

Embassy officials visited the town of Kyaukphyu, Rakhine State, the starting point of a pipeline used to pump fossil fuels from the Bay of Bengal to China’s Yunnan Province

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