China's expansion of high-speed trains

Jane Perlez, Aug 11, 2014, INYT:

A favourite export from China to its neighbours these days are high-speed rail lines designed to make trade routes in the vast stretches of Asia more accessible and fortify Chinese dreams of turning its southern reaches into the capital of mainland Southeast Asia. But not everyone wants to be bound so close.


A rail project that would pass through the mountains of northeast Myanmar to the coastal plains on the Indian Ocean would give China a shortcut to the Middle East and Europe. For China, the strategic importance of the proposed line can barely be overstated: The route would provide an alternative to the longer and increasingly contentious trip through the South China Sea.

However, the Myanmar government viewed the project as a one-sided proposition and put it on the back burner last month, allowing a memorandum of understanding to lapse. It gave no timeline for when it might reconsider.

“If the project is to be resumed, another memorandum has to be signed,” Ye Htut, the minister of information, said in a telephone interview, “and we have many things to think about before we might do that.”

It is the second major Chinese project to be suspended in Myanmar, once an unquestioning client of China, since a nominally civilian government took over there three years ago, setting off a tussle for influence in the country between China and the United States and its allies. In 2011, soon after the new government took office, construction of the Chinese-financed Myitsone hydroelectric dam at the headwaters of the Irrawaddy River was suspended.

The latest setback in Myanmar was not all bad news for China. With considerable gusto, the new junta in Thailand gave approval on August 1 for two Chinese high-speed rail projects that had been shelved because of financing difficulties under the previous government.

The head of the junta, Gen Prayuth Chan-ocha, announced the revival of plans that call for more than 620 miles of rail links from Thailand to Kunming, the capital of Yunnan province, by 2021.
In all, China wants to build thousands of miles of track that will loop through Laos, Cambodia, Thailand and Malaysia and head south to Singapore as part of a grand, trans-Asian rail accord signed by nearly 20 Asian countries in 2006.

Keqiang, the salesman

“When the people of the mainland countries soon find through the convenience of high-speed rail that Kunming is their closest neighbour, but a few hours away, the Yunnan capital will eventually become, in effect, the capital of mainland Southeast Asia,” said Geoff Wade, a visiting fellow at the College of Asia and the Pacific at the Australian National University.

China’s powerful prime minister Li Keqiang serves as chief salesman, showing off exhibits of Chinese-made high-speed tracks and trains wherever he travels in the region. He pitched them to Quentin Bryce, then the governor general of Australia, when she visited Beijing last year, even though Australia, ever more economically tied to China, is a rich country.

In Myanmar, the rail project was designed to run close to two Chinese-built pipelines for oil and gas that were completed last year, despite widespread opposition from farmers living along the route. Residents and “social organisations” were also opposed to the railway, Myint Wai, the manager of the ministry of rail transportation, said last month.

Resentment against China is widespread in Myanmar, and the grass-roots discontent about the rail project was of great concern to the military junta because the generals who retain seats in Parliament face elections in 2015, Myanmar media reports said.

Investment from China has dropped since the height of its influence under the junta, but China remains Myanmar’s top investor, according to Myanmar government figures. And the growth of Chinese exports, which results in a flood of cheap consumer goods, continues to explode, up by more than 50 per cent since 2011.

The fear of Chinese domination is pervasive. “The China railway project is a national security issue,” said U Than Htut Aung, the chief executive of Eleven Media, a group that publishes newspapers that have campaigned against the project. “Through the Sino-Myanmar railway, China can easily access the Indian Ocean, and Myanmar’s security would be threatened. Because of the rail, Myanmar could become a second Crimea.”

Japan, concerned about the economic strength of its archrival, China, across Southeast Asia, is presenting itself as an alternative benefactor. It has increased its investment in the region and targeted Myanmar with its largess, particularly in the rail projects that are so dear to China.