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China to Europe via a new Burma road
By David Fullbrook

KUNMING, China - Pipe dreams of a cheaper, shorter and safer trade route between China and Europe through Myanmar to the Bay of Bengal are once again edging onto official agendas. High oil prices, competitive advantages and strategic imperatives are set to midwife this route that might have painful implications for Southeast Asia's ports and shipping.

Driving a modern transport network through Myanmar from Yunnan province following an age-old trade route to the sea should cut shipping bills significantly by saving a week or more on shipping time from China to key European markets. Yunnan, situated in the southwest corner of China, borders Tibet, Myanmar, Laos and Vietnam.

It would also ease fears of disruption to Middle East oil supplies should terrorists wreak havoc on Southeast Asia's pirate-infested Malacca Strait, the waterway through which most of Northeast Asia's fuel and goods pass.

Bhamo, an old port far up the Irrawaddy River about 12 hours from the Chinese border, is the likely linchpin where goods will switch between Chinese trucks or trains and riverine ships ferrying goods along the Irrawaddy. The river, Myanmar's most important commercial waterway, flows 2,170 kilometers across the center of the country, and empties into the Bay of Bengal.

"Earlier, there were talks about a multi-modal transport route through Yunnan to Bhamo and onwards by river. It was then postponed. But now interest is reviving," said Professor Wang Chung Lee, director of the Yunnan Academy of Social Sciences (YASS). "It's the attitude of the Myanmar government. Now they agree to have discussions, previously they refused," he told Asia Times Online.

This route could open within a few years if China gets investment approval from Myanmar. Preparations appear to be under way. Traders report that Chinese engineers have been surveying Bhamo port, which needs modernizing and expanding in order to handle a sharp increase in trade that more China traffic would mean.

A Chinese railway might later bypass Bhamo, running to the Myanmar railhead at Lashio, the terminus of the railroad line from Mandalay made famous during World War II as the starting point of the Burma Road. But for now, cost, time and the challenges of rebuilding the poorly maintained railway between Lashio and Mandalay count against it. "At present we are yet to discuss investment in the railway. The focus is on the multi-modal road and river transport," said Wang.

Meanwhile, Chinese construction crews are building a railway from Kunming, the capital of Yunnan, southwest to Mangshi, the capital of Dehong Dai. People in China's Ruili - a busy cosmopolitan border town astride roads to Bhamo, 80 kilometers west, and Lashio - expect the railway to arrive from Mangshi within a few years. That will leave the Chinese and Myanmar railways only 145km apart.

If the Bhamo river-road nexus proves a success, the case for pipelines through Myanmar, complementing those from Central Asia to China's booming east coast, will be strong. "There are rumors of all kinds, but there are no clear plans. It is reasonable. China's need for oil is great and urgent. Any pipeline, any route would be beneficial," said Wang. An idea tried and tested. In Yunnan's Baoshan, villagers curiously call water pipes "oil water pipes". A few rusting remnants of the first pipeline they saw, one laid by the allies in World War II from Kolkata to Kunming, still litter Yunnan and Myanmar.

And not just China's oil, but Japan's and Korea's too could conceivably flow through pipelines from Myanmar's coast via China, earning Beijing a pretty yuan or two in pipeline fees. Then again, Beijing might well waive such fees in order to burnish an image as the friendly Big Brother.

Such an alternative oil and freight route could cause traffic to slow, fall even, at key Oriental ports, including Malaysia's Johore Bharu, Singapore and even those dotting China's Pearl River Delta. It would almost certainly snuff out talk of a link across Thailand's Isthmus of Kra.

Of course there are a few potentially nasty potholes. Myanmar rebels could threaten attacks. However, their threat is diminishing as they continue splintering into obscurity while others succumb to payoffs from Myanmar's junta. Trickier is getting the generals to sign and stick to a deal in deed as well as in letter. "More important is the agreement to facilitate transit shipment of goods," said Wang, head of the Yunnan Academy of Social Sciences. But the changing strategic situation, which sees China's economic and military prowess growing while the junta fears an Anglo-American invasion, makes for ever-warmer relations between Beijing and Yangon.

Myanmar is not the only trade route China hopes to revitalize. It wants a railway south from Jinghong in southern Yunnan through Laos to Thailand's deepsea port at Laem Chabang, near Bangkok. Furthering its cause are United Nations efforts to fill gaps in the Eurasian railways and Association of Southeast Asian Nations' (ASEAN's) talk of a Kunming-Singapore railway. China is also helping build a second road through Nepal to India while repairing the existing one, and nudging Kathmandu to clear the way for a third. Such routes will receive a fillip when the Lhasa railway, now under construction, opens later this decade.

Taken together China has not made such strenuous efforts to open trade since Ming Dynasty Admiral Cheng Ho led huge fleets west to India and East Africa 600 years ago. Locally, however, Yunnan has long looked south. "Historically, Yunnan has closer transport and economic links with neighboring countries than with eastern China," said Wang.

In the 19th century, when the British and others were barging their way into hermit China, Yunnan's Tengchong - where government offices now occupy the sturdy former British consulate - Mangshi and Simao hosted some of the earliest customs offices in China, overseeing trade along the southern Silk Road. "It was because of these trading activities that it was possible to develop this route into a very strategic road, the Burma Road, during the Second World War," said Wang.

Such was the growing volume of trade that the British proposed a railway between Kunming and India at the beginning of the 20th century. Other proposals followed, but the opening of the Sino-French railway between Hanoi and Kunming a few years later delayed, but did not eliminate, the imperative. "We are now solving a historical problem," said Wang.

Indeed, prior to the founding of the People's Republic of China, the fastest and the safest route between Kunming and Shanghai lay via Hanoi and then Hong Kong, because the transportation system was so poor.. And despite age-old caravan routes, it was still quicker to reach Lhasa via British India.

Yunnan's trade, not surprisingly, is once again booming, with its neighbors benefiting from economic reforms that began in 1978. In 1998, China-Myanmar trade totaled US$580 million, of which $310 million originated or moved via Yunnan. Four years later, the figures stood at $862 million of which $410 million was via Yunnan, rising to $493 million in 2003.

Myanmar is Yunnan's biggest trade partner, accounting for a fifth of its $2.5 billion international trade, followed by Hong Kong, Japan and the United States. Trade with Laos and Vietnam is also rising fast, with the latter seen surpassing Myanmar within a few years.

The prospective benefits of better transport links have not gone unnoticed in Kunming. "Now the Yunnan government has formed a strategy for turning it into a corridor to Southeast and South Asia. Once this dream is realized, the present strides in trade will be nothing compared to what will happen," said Wang.

Languid ever ince World War II destroyed the commerce that made it throb with huge steamers and barges, the Irrawaddy may well find itself chock-full again, giving rise to scenes not dissimilar to those immortalized by a constable serving in British-ruled Upper Burma, George Orwell.

(Copyright 2004 Asia Times Online Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)


Sep 23, 2004



China-SE Asia: Shades of tribute diplomacy (Aug 31, '04)

Big Brother Beijing blocks Yangon reform (May 12, '04)

Falling into the Chinese orbit  (Apr 17, '04)

Bumpy road to Thai-China trade efficiency (Apr 8, '04)

 


   
         
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