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China uses trade to prop Myanmar regime

RUILI, China—China has tossed an economic lifeline to the military regime of Myanmar, and the lifeline passes through this border city.

Every day, hundreds of trucks disgorge all manner of goods for trade. Across the border, Chinese work crews build roads, fell forests and operate gold and jade mines. A major cross-border oil and gas pipeline is in the works.

China has a habit of coddling repressive regimes. In places such as Sudan, Iran, Zimbabwe and Myanmar, all under some type of international sanction, China has stepped in with diplomatic protection, usually in exchange for market access for its goods or a stake in oil fields or other natural resources.

As China occupies a greater place on the world stage, it faces international pressure to help deal with global trouble spots rather than shore up tyrannical regimes. China has responded in one area: It hosts six-nation talks to coax North Korea to dismantle its nuclear weapons programs.

Yet in remote corners such as this one, snug against the hilly frontier with the nation once known as Burma, China is resisting global efforts to end a decades-old military dictatorship. How China deals with Myanmar reflects how it wields its power in the early 21st century.

In the past few months, China has signed several energy deals with Myanmar, which now has the world's 10th largest known reserves of natural gas.

In November, PetroChina ironed out a deal for 6.5 trillion cubic feet of gas to be piped overland from Myanmar's offshore fields to Kunming in China's Yunnan province.

A month later, Myanmar got a partial payback. China, which occupies one of five permanent seats on the U.N. Security Council, was instrumental in derailing a U.S. push to investigate and punish Myanmar for widespread repression of its citizens.

"That's why they didn't have a formal investigation. It was an informal discussion," said Josef Silverstein, a scholar on Myanmar affairs who's based in Princeton, N.J.

In Ruili, a city of 120,000, an economic boom is the result of a trade bonanza with Myanmar, some of it in vast illegal logging along the 1,370-mile border.

Ruili's ebullient mayor, Gong Nengzheng, offered a visitor plate after plate of tropical fruit as he expounded on China's unusual trading arrangements with Myanmar.

"We build roads for them, and they give us merchandise, like seafood and minerals," Gong said.

China also is building internal roads and railways to facilitate trade. Chinese companies have built 190 miles of highway in Myanmar, Gong said, and they'll soon construct a 67-mile rail link to Lashio, a final link of a pan-Asia network. China provides all know-how, equipment and labor, he said.

Those living in Myanmar along the border with China use water and electricity service from China. Those who can afford them use Chinese cell phones.

Myanmar's growing dependence on China disheartened some ethnic Burmese.

"It is the 25th province of China," U Aung Kyaw Zaw, a longtime resident of Ruili, said of his homeland. "It is an economic colony."

During the 1970s and much of the 1980s, relations between China and Myanmar were tense. Beijing backed an insurgency across the border.

But both nations experienced large pro-democracy protests (Burma in 1988 and China in 1989) that rattled their governments. Isolated from the West, the two nations changed their views of each other.

China started seeing Myanmar, Asia's poorest nation, as a repository of raw materials and a potential outlet to the Indian Ocean. Myanmar's leaders lobbied for diplomatic support, trade and billions of dollars in weapons sales from China.

China vowed not to meddle in Myanmar's affairs in return for investment deals, a template for Chinese behavior elsewhere, such as in Africa and the Middle East.

"They are finding weak countries that have dictatorial governments, with rich material resources and no infrastructure," said Sarah "Meg" Davis, a scholar of ethnic minorities in China. "They go in. They prop up the dictatorial governments. And they get a big cut of the timber and energy."

After a Feb. 14-18 trip to China, Myanmar Prime Minister Soe Win announced that Chinese Premier Wen Jiabao told him that Beijing pledged unwavering support and opposed "imposition of economic sanctions" at the United Nations.

China is leery of Aung San Suu Kyi, the Burmese democracy advocate who was denied power after her party swept 1990 elections and has been kept largely under house arrest since. Instead, China appears to want Myanmar's military leaders to reform the economy without loosening their grip on power.

"They would like to see the Burmese economy develop more rapidly and more effectively, so they could make more money," said Robert H. Taylor, a Myanmar expert at the Institute of Southeast Asia Studies in Singapore.

Chinese merchants already smell profit.

With a tour group in tow, guide Sun Dehong said he was bringing business owners from inland China to "do research about the business situation" in Myanmar.

"They want to export Chinese products, like motorcycles, phones, clothing and motor pumps. They come from Fujian, Sichuan. They are all business people," Sun said.

Bilateral trade between China and Myanmar hit $1.2 billion last year. Myanmar's total trade volume was $5 billion.

Ruili city fathers say the border is on the cusp of greater trade. An expressway from the provincial capital, Kunming, will be finished next year. At the Ruili end, officials have built a 10-lane border customs facility. Already, 12,000 people cross every day.

Emerging out of vacant fields and ponds, the tax-free Jiegao Special Economic Zone has mushroomed, now with more than 1,000 stores and 80 jade factories.

At the city's jade and pearl market, store owner Yang Zhanwei hailed China's economic development.

"Burma has no industry," said Yang, a petrified wood dealer. "I think China helps Burma's economy a lot. But if Burma would open up more, it could develop faster."

Chinese analysts describe Beijing's policies toward Myanmar as pragmatic and useful for both sides, similar to how Washington deals with Saudi Arabia. They say China may be offering vital economic trade to Myanmar, without getting much sway in return.

Many outsiders concur that the generals in power appear resistant to most pressure, even from such a strong economic ally as China.

"We have a regime there that can survive," said Taylor, the scholar in Singapore. "Seventeen years of the regime, and they haven't budged an inch. ... They can stonewall anybody."

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(c) 2006, Knight Ridder/Tribune Information Services.

PHOTOS (from KRT Photo Service, 202-383-6099): CHINA-MYANMAR

GRAPHIC (from KRT Graphics, 202-383-6064): 20060306 MYANMAR

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