The Myanmar Conflict and Chinese-Style Diplomacy Part 2: China’s Myanmar Policy
Chinese Diplomacy
The fundamental objective of China’s diplomacy in Myanmar is to maintain the level of stability necessary to secure its economic investments and strategic interests. To this end, China interacts with every actor in the region. For example, the Myanmar National Democratic Alliance Army (MNDAA), one of Myanmar’s most powerful ethnic armies, has historically established close relations with China, while the United Wa State Army (UWSA) has directly enabled China to exert pressure on different actors within Myanmar.
Chinese diplomacy primarily works to prevent Myanmar from leaving China’s sphere of influence. China wants Myanmar to emerge from the diplomatic isolation it experienced during the military regime and develop, but it does not want a powerful actor that could compete with its influence over Myanmar to enter the region. However, the Tatmadaw elite, uncomfortable with the country’s dependence on China, made extensive efforts to bring alternative actors to the region, especially during the peace process with the pro-democracy opposition. The interaction with countries such as Japan, the United States, Norway, and India, and the faster-than-expected development of diplomatic communication, had disturbed China.
Tatmadaw leaders also suspected that the Chinese worker population in the country could pose a demographic threat, so they suspended some of China’s projects during the peace process. The most important of these was the $3.6 billion worth Brimstone Dam project, which China is still trying to restart today.
The biggest advantage for the Myanmar elite, who aimed to reduce China’s influence, was the excitement the country’s democratization process generated in the West. A country ruled by ruthless military juntas for years had begun to build a democratic government, albeit imperfect, as a result of years of efforts by activists demanding democratic rights. Aung San Suu Kyi was a hero of democracy in the eyes of the Western public, representing liberal Western values. Westerners wanted this young democracy to survive and thrive. However, the West would soon realize that the issue was not a struggle between a ruthless dictatorship and a freedom-loving opposition.
The first test that would affect the young democracy’s standing in the eyes of the West was the Rohingya crisis. When ethnic militias and the Tatmadaw in Arakan launched a policy of genocide against Arakan Muslims, the horrified international public expected Aung San Suu Kyi to take action to stop the atrocities. However, Aung San Suu Kyi, the daughter of national hero Aung San, founder of the Tatmadaw, voiced no opposition to the atrocities that were taking place. On the contrary, she supported the massacre under the guise of anti-terrorism. This entire process led to the young democracy being dragged back into diplomatic isolation.
The isolation into which the young democracy was driven presented a tremendous opportunity for China. Investment projects canceled by the Tatmadaw during the peace process were revived one by one by the NLD government. China, regaining its influence over the country, had signed numerous investments that would further strengthen the China-Myanmar Economic Corridor. In exchange for new infrastructure investments made under the Belt and Road Initiative, for new port agreements, China had defended the genocide taking place on the diplomatic stage to the international public as “Myanmar’s internal affair.”
Thus, when we look at it, China’s multidimensional diplomacy had ultimately succeeded. China’s influence and pressure on ethnic armies prevented them from clashing with the government, thereby preventing ethnic unrest that could easily spread to China. Again, China’s influence over these armies gave China a powerful bargaining chip in a scenario where the Myanmar government would try to break away from China. Looking at all this, we see that the situation in Myanmar before the coup was perfect for China.
While the NLD government supported infrastructure projects that would allow China to break out of the geopolitical blockade it felt trapped in, ethnic armies remained within Beijing’s sphere of influence as a means of pressure that China needed. Meanwhile, the political power of the Tatmadaw elites, who were skeptical of Chinese influence, was weakening as time went on. So why is China supporting this coup, which led to the killing or imprisonment of NLD leaders, and the junta that was established afterwards?
State Administration Council vs. National Unity Government: An uncertain future
The 2021 coup was a terrible disaster for China’s interests in the region. While the situation in the country was progressing ideally for China’s strategic goals, the coup completely sidelined the NLD elite, China’s closest friends in the country, leaving only two different actors left to support: An incompetent military junta that kidnapped Chinese citizens (to be explained in the next section) and could be considered racist, and scattered pro-democracy gangs with no clear ideology.
The NLD was an actor recognized by China and with whom it generally had good relations. In fact, it would certainly not be wrong to say that China’s relations with democratic Myanmar under NLD leadership were better than its relations with past military juntas. Although the Tatmadaw’s suspicion of Chinese influence and its past suspension of significant Chinese investments led China to be skeptical of the military, it was still an actor that China recognized and could more or less predict its policies. However, the new democratic opposition gathered around the NUG represents a major mystery for China. China, which has had little contact with the new actors emerging in the wake of the coup that dispersed the NLD elite, does not fully understand these actors’ policies regarding the country’s future.
Unlike the NLD, the NUG is more pro-Western, uncomfortable with China’s economic investments, particularly on environmental grounds, and, due to the many divergent views within it, it is doubtful whether it can achieve proper democratic consolidation after the war. This makes the NUG a risk factor for China.
Normally, China uses its ties with the civilian government to make the investments it wants within the country, uses its relations with the military to protect its investments within the country, and uses its relations with ethnic armies to protect its investments in their regions and use them as a counterbalance to the Myanmar army. With the military removed from this equation and opposition forces with various political ideologies coming to power, it is uncertain not only how these groups’ relations with China will be, but also how their relations with each other will be. According to Chinese commentators, scenarios such as the outbreak of a second civil war after the opposition’s victory, certain ethnic groups tired of the instability in the country making a move for independence, and the West intervening in the situation to allow these independence movements to spread to China are not at all impossible.
Furthermore, the fact that NUG supporters view China unfavorably and have seized Chinese-owned factories in areas where the NUG has advanced (despite stating that they will respect Chinese investments) indicates that a possible NUG government could fundamentally change China-Myanmar relations.
Therefore, China’s primary goal is to use its ties with the ethnic armies that dealt the Tatmadaw the main blow in the civil war to ensure that these groups remain neutral in the civil war between the SAC and the NUG. For example, while the UWSA, which we can say is almost directly affiliated with China, pursues a policy of neutrality, another factor in the MNDAA’s decision to declare a ceasefire in 2025, forced by , is the pressure China exerted on them through the UWSA. These policies will be discussed later in the article.
The Federal Political Negotiation and Consultative Committee is a Chinese-backed coalition formed by seven different ethnic armies, and this coalition is seen by China as the official representative of the different ethnic groups in the country. This coalition includes the UWSA, SSA (Shan State Army), ethnic armies that are members of the Northern Alliance (Arakan Army, MNDAA, Kachin Independence Army, Ta’ang National Liberation Army), and NDAA (National Democratic Alliance Army).
China’s main objectives in today’s political atmosphere, as it exerts pressure on the armies that are members of the Committee, are as follows: to use its influence over ethnic armies to push them toward neutrality in the civil war and prevent them from forming an alliance with the NUG, thereby keeping the junta regime in power; to prevent foreign powers (especially India) from gaining influence over the junta regime; and to protect its investments in areas where the junta regime has no influence by using its relationships with ethnic armies there.
After explaining why China supports the junta despite it being contrary to its coup interests, we will now examine Operation 1027 launched against the junta by the Three Brotherhood Alliance (Arakan Army, MNDAA, and Ta’ang National Liberation Army), formed by the three ethnic armies within the federal committee, the reasons for China’s initial support for this operation and its subsequent opposition, and China’s current policy in Myanmar.
Tension Between SAC and China: Financing the War Through Cyber Fraud and Gambling
We have previously noted that the parties to the Myanmar conflict obtained the necessary financing to win the past war through drug trafficking. As mentioned in the first part of this article, a new area of illegal income has emerged, particularly embraced by the SAC: cyber fraud and online gambling.
Paramilitary gangs collaborating with Chinese criminal gangs have become active in human trafficking, kidnapping more than 100,000 Chinese citizens and migrants living in China and holding them hostage in fraud facilities in Myanmar. These abducted people are used in virtual fraud activities to raise the money needed for the junta and paramilitary groups close to the junta to win the war.
China, whose citizens have been victimized through exploitation and fraud, has directly pressured the SAC to end these practices. However, the SAC is reluctant to lose this revenue stream. The Tatmadaw elite, who have long been uncomfortable with China’s intense influence in the country, continue to seek to develop relations with alternative actors such as Russia. In fact, most of the weapons purchased by the Tatmadaw come from Russia, not China. However, it seems impossible for Russia, currently bogged down in Ukraine, to provide significant diplomatic support to the junta, so the junta still needs China for its limited legitimacy in the international arena.
The last straw for China, which uses its ties with the 3 Brotherhood Alliance to combat cybercrime gangs, came in October 2023. After prisoners at a cybercrime and gambling facility controlled by a paramilitary organization run by a former pro-junta lawmaker attempted to escape and were killed by guards, and four Chinese secret police officers who had infiltrated the facility were buried alive, China decided to use its influence over ethnic armies to punish the junta.
The Three Brotherhood Alliance armies, which currently purchase their arms from China, launched Operation 1027 in October 2023, dealing an incredible blow to the junta and crippling the Tatmadaw’s capacity to continue the war. The alliance, which captured important strongholds controlled by the junta, targeted and eliminated many Tatmadaw officers during the clashes. The capture of important strongholds enabled the democrat partisans under NUG control to launch more aggressive attacks against the junta regime. Even today, footage recorded in the conflict zone consistently shows the same phenomenon: untrained soldiers forcibly conscripted by the Tatmadaw wander around the country like headless chickens, falling into ambushes by NUG partisans at every corner and being slaughtered.
China, wanting to punish the Tatmadaw, certainly did not want the junta to be directly overthrown and the NUG to become so powerful. Therefore, China began to exert pressure to halt Operation 1027, which it had initially supported, and to sever the Three Brotherhood Alliance’s ties with the NUG. However, the fact that the situation on the ground had turned so much in their favor led the ethnic armies to ignore China’s demand.
Seeing that the Tatmadaw junta was on the verge of collapse, China increased its support for the junta to strengthen its influence in the region, but this policy change triggered anti-China sentiment among the Myanmar people. Indeed, unable to achieve superiority on the battlefield, the Tatmadaw often chose to punish the people by bombing civilian settlements where citizens opposed to them lived (i.e., almost the entire country). The Tatmadaw’s military strategy was not only bloody but also backfired strategically. As the Tatmadaw bombed civilians, the relatives of those killed grew resentful toward the junta and joined anti-junta organizations. However, it seems unlikely that the Tatmadaw will change its strategy anytime soon. Hoping to break the spirit of the opposition, the Tatmadaw bombs citizens who live in the pro opposition areas, who then take up arms and rush to the front lines against the junta. The balance of power on the front lines is incredibly unfavorable to the junta, and it seems very unlikely that this will change anytime soon.
Growing anti-China sentiment is not limited to opposition citizens who already lack popular support for the junta regime; even pro-China armed ethnic groups, dissatisfied with the junta’s policies, have begun to resent China’s increasing support for the junta. Support for the regime, whose legitimacy in the country has been reduced to zero and which is trying to stay afloat only through tyranny, was damaging China’s reputation in the country. However, China, which foresaw that the NUG’s rule would be a disaster for its own quest for stability in the region, found no other option but to put pressure on ethnic armies with which it has close ties.
Ceasefire Under the Dragon’s Pressure
China began blackmailing the Three Brotherhood Alliance with threats such as cutting off trade, imposing embargoes, and closing border connections. It expected the Alliance to stop its attacks against the junta and declare neutrality in the civil war between the NUG and the SAC.
The MNDAA, one of the strongest ethnic armies in the country, was the first to bow to Chinese pressure. In September 2024, the MNDAA declared that under no circumstances would it be part of an alliance with the NUG or foreign groups hostile to China and Myanmar. Then, in October, MNDAA leader Peng Daxun, who was invited to China, was allegedly taken hostage. During the period when he was allegedly taken hostage, according to the opposition, or receiving medical treatment, according to China, a ceasefire was reached between the MNDAA and the SAC. On January 18, 2025, the MNDAA signed a ceasefire with the junta and withdrew from important cities it had captured from the junta. Both China’s threats, such as closing the border, and pressure from the UWSA were effective on the MNDAA.
Today, the Arakan Army and the Ta’ang National Liberation Army continue to fight the junta despite all of China’s pressure. The Arakan Army’s capture of the Rakhine region within Myanmar and its role as protector of all critical Chinese and Indian investments there has eased the pressure on them and pushed the junta into a more isolated position.
Myanmar: An ideal testing ground for the Chinese army
It is clear that China is dissatisfied with the junta regime; the regime has no legitimacy, kidnaps Chinese citizens, and is being decisively defeated on the front line. The NUG government, on the other hand, is a risk factor that could completely destroy China-Myanmar relations. The NLD elites imprisoned by the junta and the ethnic armies that are members of the Federal Committee are the actors with whom China has the best relations in the region. For both ensuring stability in the country and protecting China’s interests in the region, the ideal scenario is an NLD government that is not under the threat of the Tatmadaw and allied armed ethnic organizations that can be used as a pressure tactic against them when necessary.
The biggest problem with China’s current policy is that even if the junta regime remains in power, the efforts to keep it afloat both damage China’s reputation and do nothing to alleviate the hatred felt towards the junta regime. Moreover, the victory of a regime that has historically always sought alternative friends to China could turn against China in the long run.
Therefore, in the interests of China, direct military intervention in Myanmar may be the most logical move for China. China could directly fight both the SAC and the NUG and hand over the country to a new power based on cooperation between the Federal Committee and a new NLD government. Of course, the biggest problem for China here would be openly abandoning its much-vaunted policy of “non-interference in the internal affairs of other countries.” However, in line with China’s strategic interests, the most logical strategy would be to reestablish NLD rule with the help of Chinese troops.
Neither the new democratic opposition nor the current junta regime promises a stable future for Myanmar. It seems unlikely that the risk environment in Myanmar will disappear without China using force to build a new order led by actors friendly to it. Moreover, such a military operation would create the necessary environment for testing China’s military capabilities.
Russia entered Ukraine exaggerating its own military capabilities and got bogged down. Although the Russian army saw its own shortcomings by getting bogged down in Ukraine and corrected them somewhat, in the end, its reputation was damaged and it still has not managed to get out of the quagmire. China, which is expected to intervene militarily in Taiwan, can identify its military shortcomings in advance and make the necessary preparations for Taiwan by making a military move in Myanmar beforehand, rather than getting bogged down in a military operation against Taiwan and embarrassing itself in front of the whole world.
Of course, there are also some risk factors preventing China from intervening in Myanmar. For example, while it would be logical for the Chinese army to know its shortcomings in advance and prepare for a conflict with Taiwan (and, of course, the US) accordingly, what if the shortcomings that emerge lead to a result similar to Russia’s fiasco in Ukraine? Such a military intervention could lead to the US, which already aims to destabilize China, providing military support to the NUG and NUG-affiliated partisans, as well as to India deciding to lend military support for the junta regime. If China gets bogged down in a country with an already challenging geography, it is also questionable how ethnic organizations close to it would position themselves. Another issue is how to rescue NLD elites held captive by the junta regime, such as Aung San Suu Kyi. The junta regime could execute NLD elites and prevent China from working with legitimate actors in the post-war order. Therefore, perhaps China’s goal could be to help the junta win the civil war and then pressure the junta in the aftermath to bring the NLD administration back to power.
Although it is a risky move, a possible Chinese military intervention is by no means impossible and should never be overlooked.
Conclusion
The 2021 coup in Myanmar overthrew China’s most important allies in the region, putting China’s strategic interests in the region at great risk and forcing China to cooperate with the coup leaders. While it is important for China’s goal of ensuring stability in the region that anti-junta democratic partisans do not come to power, widespread public hatred of the junta is still dangerous for China’s interests in the long term.
Myanmar’s stability is one of China’s most important strategic priorities. Without the China-Myanmar Economic Corridor, the closure of the Strait of Malacca to Chinese ships and the blockade of China by the chain of islands surrounding its coastline pose a risk that could completely collapse China’s economy.
Therefore, in the long term, it is vital for China to simultaneously dismantle both the NUG partisans and the junta regime in order to ensure stability in Myanmar and build a stable structure with friendly actors.
