China and Thailand expand investments in Myanmar after military coup

11 September 2023
China and Thailand expand investments in Myanmar after military coup
Image: The Secretary of CPC Yunnan Provincial Committee of China Wang Ning / Photo: AFP

Chinese and Thai companies have expanded their investments in Myanmar despite the sanctions of western countries against the military regime after coup in February 2021.

China has invested US$113 million in Myanmar since the military coup as the China-Myanmar Economic Corridor has been an important economic link between the two countries, including a high-speed railway project between Yunnan and Rakhine. The project was delayed in 2014, and both sides have prepared to resume it.

Moreover, the 770-kilometre-long Chinese-operated oil pipeline has been used to transport Russian oil to China through Rakhine to Yunnan.

Myanmar military’s Minister of Investment and Foreign Trade Communications Dr. Kan Zaw said in August that 597 Chinese investment enterprises are being operated in the country, mainly in the electricity sector with a value of US$21.863 billion contributing to 23.5% of the total amount of foreign investment in the country.

The data of Directorate of Investment and Company Administration of Myanmar showed that foreign Direct Investment in Myanmar increased by $178.35 million in the first quarter of 2023.

The Institute for Strategy and Policy-Myanmar, a private think tank, reported that Myanmar approved $5.4 billion in foreign direct investment between February 2021 and March of this year, and China, including Hong Kong, accounted for 55%, or $3 billion of the total amount of FDI.

According to the Myanmar Garment Manufacturers Association's figure, there are more than 300 Chinese clothing factories in Myanmar, accounted for more than half in this industry of the country.

Meanwhile, Thailand stood third among the countries for the projects approved by the Directorate of Investment and Company Administration of Myanmar as of August 2023.

Nikkei Asia reported that Thai Beverage-owned Fraser and Neave, a Singapore-based brewer, said in July it would spend 19.2 million Singapore dollars ($14.1 million) to acquire alcohol licenses and land-use rights in Myanmar, with F&N building a brewery through a joint venture with a local company.

After the withdrawal of Japan's Eneos Holdings and Malaysia's Petronas from the Yetagun undersea gas project, Northern Gulf Petroleum of Thailand has entered this project.

Moreover, Thailand's state-owned oil and gas group PTT Exploration and Production took over Yadana undersea gas field which was abandoned by French TotalEnergies.

At present, Thailand has reached to third position, with nearly 13 percent of FDI in Myanmar as of August this year, compared to sixth position, with 3.86 percent as of December 2020, followed by Singapore, China, Hong Kong, Vietnam and Japan, according the figure of Myanmar’s DICA.

Just after the Myanmar military coup in February 2021, the Thai government said that the coup in its neighbouring country would not affect the Thai economy but their companies here remain wary of possible international sanctions,

Before the coup, Myanmar stood at 10th position in the list of Thai foreign direct investment (FDI), with an average of US$ 281 million per year between 2015 and 2019, according to the Bank of Thailand.