China ups its game in Myanmar’s SEZ race
CHINESE investors have expressed an interest in investing and developing the area across Yangon River and to construct an international airport, a port and housing projects, according to a local Chinese business association. The proposed locality and projects overlap with the prospective South Korea-led special economic zone.
Members of the Yangon-headquartered Myanmar Chinese Chamber of Commerce (MCCC) plan to leverage the upcoming business convention as a platform to attract investments for infrastructure projects from international Chinese businesses.
The 14th World Chinese Entrepreneurs Convention (WCEC), an annual business meeting for the Chinese businessmen and the Chinese business diaspora, is going to be held in Myanmar. The event will take place in Yangon from September 15 to 18.
The organiser, the MCCC, expected more than 2,000 businessmen to gather in Yangon for the highlight: around 800 investors from Hong Kong and other countries, 800 investors from mainland China and 400 participants within Myanmar.
Not surprisingly, the theme for the Chinese business meeting will be “Achieving historical milestones through economic liberalisation of Myanmar” with two emphases: ASEAN and the Belt and Road Initiative (BRI). Businesses hope to exchange information and draw up strategies on navigating the emerging risks and opportunities in the BRI as well as ASEAN economic integration.
Nay Pyi Taw, the government, needs to show that it has the clarity and vision regarding its involvement in China’s Belt and Road Initiative in order to make good use of this opportunity
– U Ni, Myanmar Chinese Chamber of Commerce
During the WCEC press conference on September 6, Yangon Mayor U Maung Muang Soe said that countries with weak or underdeveloped economies, such as Myanmar, need the collaboration from large economies, such as China, who act as a big investor. Securing the support of the top investors is essential in bringing Myanmar into the international economy.
“We need to make the most out of the [WCEC] conference and grab the opportunities to speed up our economic growth,” he said.
U Myint Shwe, MCCC chair, said Myanmar enjoys a unique strategic advantage in the BRI because of its geography, and that the country needs to take the chance to develop its economy alongside China’s scheme.
Airport and port in southern Yangon
Chinese businesses have expressed an interest in an urban development project in southern Yangon Region spearheaded by Yangon Chief Minister U Phyo Min Thein, according to the MCCC chair. The project will be located across Yangon River, covering numerous townships including Dala.
“According to the Yangon chief minister, there will be a big project involving a big international airport, a big port and housing projects in Dala and Kawhmu townships.
“The investors behind this project may be Japanese or Chinese.
“There is a Chinese business chamber, which is the biggest in mainland China, which is ready to invest US$5,000 million for that particular project.
“I think the Chinese are rather affluent economically and have experiences in constructing infrastructure projects, and they can implement that project within a short time frame if they are allowed to invest,” he added.
In December 2016, The Myanmar Times reported that plans were afoot for a second special economic zone (SEZ) in Yangon Region, which include a new international airport and access to a deep-sea port, according to regional government officials.
The SEZ will be implemented across three southern townships – Dala, Kawhmu and Kungyangon, the MPs said. The chief minister declared that the Union government had given its support, and that work would begin in 2018, they told The Myanmar Times at that time. The proposed SEZ will be the second in Yangon Region after the Thilawa SEZ. The new zone will also have an international airport and a deep-sea port nearby, the Dala and Kungyangon MPs said.
It appears that the urban development project in question is very similar to the South Korea-backed SEZ. Geographically, the two schemes overlap. In terms of infrastructures, both involve a new international airport and a port.
More options for Myanmar
The Chinese investors are not satisfied with the delay in the Condominium Law, which will allow them to invest with much more options and flexibility in the country, U Myint Shwe said.
Chinese investments in Myanmar have changed dramatically within the past few years. Government-to-government agreements have given way to the prominence of business-to-business deals, said U Ni, MCCC spokesperson.
U Ni, who is also MCCC vice-chair and chair of WCEC organising committee, said that the Chinese used to be involved in many government-backed projects like Myintsone dam and mining sectors, but business-to-business investments have become very active nowadays. Chinese investments in bilateral trade have adopted a long-term view.
This change in investment pattern is due to Myanmar’s liberalisation of its economy, and the new Investment law has provided much-needed clarity for foreign, including Chinese, investors, he added.
Due to Western sanctions before 2012, Myanmar never had the options to pick and choose its investors. Now, the country has many more options on the table, and having more choices is good for Myanmar, U Ni explained.
“Our intention to organise this conference in Myanmar is to have better choices which are not limited to mainland Chinese investors.
“China has never refused to make a deal with Myanmar when Myanmar was suffering from sanctions. There is nothing to be worried about when any country plans to invest in Myanmar.
“The key is to make sure investments align with the national interest of both sides,” he noted.
U Ni said Myanmar needs to strategically map out how it can benefit from China’s surpluses in goods and expertise to fill its infrastructure gap.
“China has a surplus of construction materials, manpower and technology, all of which are urgently needed in Myanmar.
“Nay Pyi Taw, the government, needs to show that it has the clarity and vision regarding its involvement in China’s Belt and Road Initiative in order to make good use of this opportunity,” he said.