What’s Behind China’s Changing Myanmar Policy?

On November 18, several Myanmar media outlets reported that Peng Daxun, the leader of the Myanmar National Democratic Alliance Army (MNDAA), a powerful ethnic armed group in northern Shan State, had been placed under house arrest in China. According to the reports, Peng was detained after being summoned to Yunnan for a routine meeting with a senior Chinese envoy in late October.

Peng’s alleged house arrest – the Chinese government has since claimed that the rebel commander was in China for medical treatment – came after a year in which the MNDAA, a group founded by Peng’s father Peng Jiasheng in 1989, had inflicted a number of humiliating defeats on the military junta that seized power in 2021.

As part of the Operation 1027 offensive that was launched by the Three Brotherhood Alliance in October 2023, the MNDAA seized a number of important border crossings and captured the ethnic Chinese-majority Kokang region, from which the Myanmar military had expelled it in 2009. Then, in early August, it overran Lashio, the de facto capital of northern Shan State and the seat of the Myanmar military’s Northeast Regional Command. This was the first regional command that the Myanmar armed forces had lost since their founding in 1945.

These advances gave the forces of the Three Brotherhood Alliance and allied People’s Defense Forces (PDFs) control of major arteries of trade with China, and brought them a step closer to launching large-scale attacks into Myanmar’s central dry zone. With Mandalay, the country’s second-largest city, now potentially vulnerable to resistance attacks, the collapse of the junta began to seem possible, even probable given enough time.

According to the media reports, China detained Peng in a bid to force him to cease the offensive against the Myanmar military, pull MNDAA troops out of Lashio, and re-enter political dialogue with the junta.

Most Myanmar watchers were surprised by China’s apparent decision to detain Peng. For decades, the ethnically Chinese leaders of the MNDAA have maintained close relationships with Chinese officials, and have traveled frequently to China for medical visits and political consultations. The same is true of other ethnic armed groups, including the powerful United Wa State Army (UWSA) and its junior ally, the National Democratic Alliance Army. (All three groups trace their lineage back to the China-backed Communist Party of Burma, and were founded after its collapse in 1989.) By detaining the MNDAA’s leader in such circumstances, China’s government risked eroding the political trust that has bound it to the armed groups of northern Myanmar since the Cold War.

Peng’s detention was just one of several recent developments that suggest an important shift has taken place in China’s policy toward the civil war in Myanmar. On November 15, The Irrawaddy reported that China’s government had proposed the establishment of a “joint security company” with the military State Administration Council (SAC) in order to ensure the safety of Chinese projects and personnel in the country. According to the report, the junta formed a working committee on October 22 to prepare a memorandum of understanding for the establishment of the security company.

According to a subsequent report published by The Irrawaddy on November 21, which cited “Chinese sources in Beijing familiar with the situation,” the Chinese government has come to consider the SAC “too weak and unstable” to protect its interests in the country. As a result, it had resolved that “enough is enough” and that it needed to take more drastic action, including some form of negotiated deployment of Chinese security personnel, in order to secure its interests. While China has used private security companies to safeguard its interests in other countries, this, too, would also mark a significant shift in the Chinese approach to Myanmar.

Until the beginning of Operation 1027, China largely remained skeptical of the SAC. Having established a good relationship with the civilian government that was overthrown in 2021, Senior General Min Aung Hlaing’s military takeover was certainly not welcomed in Beijing, nor were the protests and armed uprising that followed. China maintained its diplomatic links with the military regime, treating it as the de facto governing authority, but held back from conferring certain gestures of recognition, such as inviting Min Aung Hlaing, now the SAC chief, to China.

However, a shift in China’s approach has become increasingly apparent since June, when the Three Brotherhood Alliance launched the second phase of the Operation 1027 offensive. In doing, the ethnic armed organizations broke a ceasefire with the military that Chinese negotiators had brokered during talks in Kunming in January. While Beijing acceded to the first phase of Operation 1027, in large part out because the MNDAA promised to shut down the massive online scam operations that had been set up by a junta proxy force in the Kokang region, China staunchly opposed the resumption of the fighting.

This opposition seems to reflect a fear that for all the junta’s incompetence, the collapse of the SAC would produce an anarchy detrimental to China’s economic and strategic interests in Myanmar. These involve integrating Myanmar into a China-centered regional economy, preventing the spread of Western influence, and fashioning an infrastructure corridor – the China-Myanmar Economic Corridor (CMEC) – between Yunnan province and Myanmar’s Indian Ocean coast.

Unfortunately for Chinese policymakers, CMEC runs through areas of Shan and Rakhine states that have become active conflict zones, if they weren’t already prior to the coup. As a result, despite Beijing’s continued insistence that the Myanmar military safeguard its assets in the country, increasing numbers of Chinese enterprises and joint ventures have been disrupted by the fighting or have fallen into the hands of resistance groups. In July, for instance, PDFs took control of a China-backed factory in Mandalay Region, and a major China-backed nickel processing plant in Sagaing Region.

All the while, the Chinese government has refused any engagement with the National Unity Government (NUG), which is nominally leading the nationwide uprising against military rule. The NUG has publicly assured the Chinese government that it will respect Chinese interests in the country, and refrain from launching attacks on Chinese assets. However, China has come to distrust the shadow government, reportedly believing that it is closely aligned with Western countries, particularly the United States.

As a result, Beijing has seen few options other than to double down on support for the military regime. Since the middle of the year, China has intensified its diplomatic outreach to Naypyidaw. On June 29, former President Thein Sein paid a visit to Beijing, where he met with Chinese Foreign Minister Wang Yi. China’s special envoy to Myanmar Deng Xijun also met with junta Foreign Minister Than Swe in Naypyidaw on June 19, just before the resumption of fighting in northern Shan State. Vice Senior General Soe Win, the junta’s number two, then made an official trip to attend a forum in Qingdao in Shandong province in early July.

Last month, China took the unusual step of inviting Min Aung Hlaing to China for the first time since the February 2021 coup. While he was invited to participate in a series of multilateral meetings in Kunming, rather than for a full bilateral state visit in Beijing, it represented another clear break from post-coup precedent.

During all of these exchanges, Chinese officials have expressed strong support for the junta’s planned “election” as a potential solution to the civil war. While increasing arms shipments to the military, they have also pressured Naypyidaw to do more to protect Chinese assets and personnel in the country.

At the same time, China has begun to put greater pressure on the MNDAA and the rest of the Three Brotherhood Alliance to end their offensive operations and open talks with the military junta. It has closed border gates adjoining territories controlled by the MNDAA and its ally, the Ta’ang National Liberation Army (TNLA), in a bid to force the groups into compliance. Likewise, it has used its considerable influence with the UWSA, arguably the most powerful ethnic armed group in Myanmar, to deny these other groups access to electricity, water, internet, and other supplies. It has asked the UWSA to help pressure the MNDAA to withdraw its forces from Lashio. In August, it held a live-fire drill along the border between Yunnan Province and Shan State as a warning to the MNDAA and TNLA.

Running up against the limits of its influence in Myanmar, China has now seemingly begun to consider more active efforts to share the trajectory of the country’s conflict. How far China’s interventionist policy shift will extend remains to be seen. As the situation in northern and eastern Myanmar deteriorates, Beijing wants nothing more than a return to the stability necessary for the resumption of trade and progress on its integrative infrastructure projects. This is currently a remote prospect.

The military seeks stability and unity on its own terms, from the barrel of the gun. Its opponents argue that the only guarantee of lasting stability is to remove the military permanently from Myanmar’s political and economic life, and fashion an inclusive federal democracy that respects the rights and autonomy of the country’s many ethnic groups.

The zero-sum nature of this conflict admittedly does not leave outside governments a lot of room for maneuver. But to the extent that the current uprising is a result of decades of military abuse and misrule, greater Chinese involvement in the conflict is unlikely to help resolve it. At worst, it could help prolong Myanmar’s agony.