ASEAN KEY DESTINATIONS
Chinese invest $8bn in Myanmar
The $8.173 billion was spread across four projects in the oil and gas, electric power and mining sectors. Mainland China inked two power investments, while Hong Kong signed contracts for mining as well as oil and gas, figures from Myanmar’s central statistical organisation show.
The projects are believed to include two hydropower dams in Kachin State, valued collectively at $5.03 billion, China National Petroleum Corporation’s oil and gas pipeline connecting Rakhine State in western Myanmar to China’s Yunnan province ($2.146 billion) and Norinco’s planned development of the Letpadaung copper deposit near Monywa ($997 million).
All are essentially mainland Chinese companies.
The new investments reflect China’s increasing influence in Myanmar, particularly in major projects in the energy sector.
Dr Maung Aung, a senior researcher at the Union of Myanmar Federation of Chambers of Commerce and Industry, said he expected China to overtake Thailand as the largest foreign investor in Myanmar “in the near future”.
Though Thailand still tops investors, with $7.447 billion spread across 60 projects, mainland China ($6.364 billion, 31 projects) and Hong Kong ($3.653 billion, 34 projects) have a larger combined total – in excess of $10 billion. Little more than four years ago, China had officially invested just $194.22 million in Myanmar.
The UK (mainly through the British Virgin Islands) and Singapore lag well behind at $1.81 billion and $1.6 billion respectively.
U Min Win Myint Aung, former director general at the ministry of electric power, said China’s booming economy had forced Beijing in recent years to secure energy resources outside of its borders.
However, a significant proportion of those investments have yet to be completed, or in some cases started. Both the Tasang and Hutgyi hydro- power projects, which will see Thai and Chinese companies dam the Than Lwin River, have only recently gotten under way despite the contracts being signed in the 2005-2006 fiscal year.
However, most of China’s major investments in Myanmar are made by state-run companies, and immediate profits are not necessarily a high priority.
Derek Tonkin, chairman of NetworkMyanmar, said he expected the investment to be realised.
“The record of Asian private companies is less encouraging – it is suspected that some investment permits are acquired by promoters whose sole intention is to sell the investment on at a profit, such as by investing through an offshore company whose shares can be sold to anyone anywhere while the corporate entity ... remains the same,” he said.
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