Burma: China Finishes $2.5B Pipeline, US. Falling Behind?

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China is now less than a month away from completing a 2.5 billion dollar pipeline in Burma that will pump oil and natural gas into the so-called Middle Kingdom. State owned China National Petroleum Corporation is heading the project and has been pouring millions into local communities to fund schools, hospitals, and other local development projects. With a combination of aggressive economic projects and donations for local development projects, China may now be able to swing Myanmar into its sphere of influence.

Burma: China Finishes $2.5B Pipeline, US. Falling Behind?

China Enters Burma

While the United States has only recently begun to normalize relations with Burma (also called Myanmar), the Chinese have been on the ground for decades. America must now play catch up, and with markets just now opening up, there is plenty of room for growth and expansion.

Swinging Burma into the American sphere of influence could help the United States increase pressure on and encircle China. At least ensuring Myanmar’s neutrality in diplomatic affairs would help ease pressure in Southeast Asia. This is especially important as China has already forged close relationships with Laos and Cambodia. If China brings Myanmar over to their side, it could tip the balance of power in the region.

While Myanmar is sometimes mistakenly viewed as a Chinese satellite state, the Burmese government has largely resisted Chinese domination. Even when China was one of its few allies and major trading partners, both the Burmese government and Burmese people have proven to be wary of Chinese influence. Many of China’s largest pipeline projects, for example, have been met with protests.

Still, Burma is closer with China than with the United States. President Obama made history by visiting in November 2012 . American companies have already been expanding operations, and American cultural symbols such as Coca-Cola Company (NYSE:KO), are now available across the country. All of these steps will help the U.S. shore up support and prestige within the country.

Work remains to be done, however, and if the U.S. is to swing Myanmar to its camp, it will likely need to increase investments and donations to the country. The U.S. need not match China dollar for dollar, however, because America’s brand image gives it inherent advantages. Continuing to fight for human rights and increased freedom for Myanmar’s population will also help the United States gain the favor of the people.

The United States could also launch aid programs, such as bringing the Peace Corps to Myanmar. The Peace Corps and similar programs are generally low-cost, but high-impact. And further, while China donates money, it usually does so in order to protect Chinese projects from backlash from local populations. The United States can offer development projects with no strings attached.

Either way, if the United States is serious about the Asia pivot, it must be serious about building up its relations with Myanmar. China is proving how important Burma is with projects such as the recently completed oil pipeline. With the country only recently opened up and still striving to increase political freedom, it offers America a great opportunity to encourage democracy and human rights. This will help the United States build its brand reputation around the world.

Further reading- Japanese Businesses Looking To Expand Into Myanmar

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