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China Gives Burma US$4.2 Billion Loan, Interest Free

Last week I blogged about recent advances in the construction of the China-Burma crude oil and natural gas pipelines made public during Burmese leader Than Shwe’s state visit to Beijing to meet with Chinese President Hu Jintao, Premier Wen Jiabao, and other leaders.

Although only a week has passed since posting that blog, some interesting new information about China-Burma relations has been published, including an article by the Irrawaddy that claims that during Than Shwe’s trip to Beijing, China agreed to provide Burma with a US$ 4.2 billion interest-free loan.  The article quotes an official from Burma’s Ministry of National Planning and Economic Development as saying “the 30-year loan is intended to help fund mass hydropower projects, road construction, railway development and information technology development.”  If this report is correct, the size of this loan is several times larger than previous ones China has given Burma, and raises serious concerns about the human rights violations – like forced labor, land confiscation, and livelihood destruction – that local communities will have to confront if such ample funding for the construction of new energy and infrastructure development projects is made available.

Also released this past week was a new report from International Crisis Group (ICG) on China’s relationship with Burma, which highlights Chinese investment, the ethnic politics in border areas, and Burma’s upcoming elections.  This report identifies several Chinese-backed energy development and infrastructure projects, including the China-Burma crude oil and natural gas pipelines, and illuminates the social, political and economic complexities of China’s growing investment in Burma.  Particularly of interest in this report are the interviews from along the China-Burma border which give perspective to China’s dual engagement with ethnic cease-fire groups and the government in Naypyidaw, as well as the sometimes divergent interests of the governments of neighboring Yunnan Province and distant Beijing.

Regardless of how Burma’s political, social or economic landscapes might change following the national elections on November 7th, China’s priorities for Burma are sure to include maintaining stability and protecting its investments in the energy, trade and transportation corridor to the Indian Ocean being spearheaded by the two China-Burma crude oil and natural gas pipelines.