PRC-BURMA BORDER: CHINESE ACADEMICS SAY PRC INFLUENCE

C O N F I D E N T I A L SECTION 01 OF 03 CHENGDU 000203

SIPDIS

DEPT FOR EAP/CM AND EAP/MLS - LAURA SCHEIBE

E.O. 12958: DECL: 9/25/2019
TAGS: PREL PHUM PGOV BM CH
SUBJECT: PRC-BURMA BORDER: CHINESE ACADEMICS SAY PRC INFLUENCE
LIMITED

REF: A) RANGOON 644, B) RANGOON 601, C) CHIANG MAI 130, D) BEIJING 2493

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CLASSIFIED BY: David E. Brown, Consul General.
REASON: 1.4 (b),(d)

1. (C) Summary: Chinese officials from both the central
government and Yunnan Province are directly involved in current
negotiations between the Government of Burma (GOB) and the
leadership of ethnic minority "ceasefire groups" in northern
Burma, according to a Kunming-based scholar. Other Chinese
scholars suggested, however, that PRC influence over GOB actions
on the border was limited and that the GOB did not give advance
warning to the PRC about its attack in Kokang, part of a
strategy to force armed ethnic groups to accede to GOB authority
before planned 2010 national elections. PRC government response
to the border tensions was partly driven by "netizen" outrage
over the attack. Chinese scholars also stated that Chinese
businesses investing in Burma will have to suspend many of their
activities in the short term, and reorient their business
relationships away from local authorities to the central
government in the long-term. One scholar speculated that the
PRC may reconsider the Burma-China oil and gas pipeline
agreement. Although many of those who fled the Kokang clashes
remain in China, including several hundred Kokang soldiers now
remaining in a "designated area," they will not be labeled as
refugees to avoid triggering international obligations, one
scholar noted. End summary.

PRC Influence Limited
--------------


2. (C) Yunnan University Institute of Southeast Asia Studies
Director Li Chenyang told ConGenOff September 17 that Chinese
officials from both the central government and Yunnan Province
were directly involved in current negotiations between the GOB
and the leadership of ethnic minority "ceasefire groups" in the
areas bordering the southern Chinese province of Yunnan,
including the Kokang and Wa. Professor Li expressed confidence
that between these negotiations and the increased Burmese Army
(BA) presence in these areas, the GOB can "maintain security" in
the short term and extend firm control over these areas in the
longer term. Professor Li argued that the United Wa State Army
(UWSA) has no current source of armaments and would therefore
quickly run out of supplies if they opted to directly engage the
BA. Moreover, he asserted, the UWSA lacked effective military
leadership. The current leaders were all over 45 years old, he
noted, and had failed to cultivate a younger generation to take
their place. Li said that the Wa leadership could be convinced
to "retire" with sufficient economic incentive, such as being
granted control of large companies, and that the lower ranks
lack the power to object to such arrangements. (Note: Embassy
Rangoon believes the Wa are well-armed and well-financed, and
would not be inclined to accept a "buy-out." DEA Rangoon notes
the UWSA produces its own weapons in numerous factories
scattered throughout Wa territory. End note.)


3. (C) Regarding the Kokang, Professor Li acknowledged that the
new local leadership allied with the BA commands only a small
number of soldiers and that as a consequence "it is difficult"
for them to control the Kokang territory on the GOB's behalf.
However, he asserted, interim support from the BA will close the
gap while they work out longer-term arrangements.


4. (C) Expressing a skeptical view of China's role on the Burma
border, Yunnan Academy of Southeast Asian and South Asia Studies
Professor Zhu Zhenming told EmbOff September 15 that the PRC
government has "no influence" over the BA and said the PRC could
do little more than reiterate PRC MFA Spokesperson's August 28
statement urging Myanmar to maintain stability in the border
region and to "protect the security and legal rights of Chinese
citizens in Myanmar." "China is certainly not going to threaten
Burma (with military force)," Zhu insisted, adding that the
Burmese junta would not respond to outside pressure. Yunnan
University School of International Studies Vice Dean Qu Jianwan
separately concurred, telling EmbOff September 15 that the
Burmese junta was unconcerned about foreign views, including the
PRC's, on its military actions, arguing that the only factor the
junta would consider in continuing its current campaign was
whether it had sufficient force to crush its opponents. Given
the huge size advantage of the BA over ceasefire group forces,
Qu said, "the junta will get what it wants." (Comment: Embassy
Rangoon notes that a battle with the Wa in Wa territory may
prove to be very difficult for the BA. End comment.) While
acknowledging current tension between the BA and UWSA over the
latter's refusal to join the proposed BA-led Border Guard Force
(see para 6),neither Professors Zhu nor Qu, however, stated
that hostilities were certain to break out.

5.(C) State Council-affiliated China Academy of Social Sciences
(CASS) Southeast Asia scholar Han Feng told EmbOff September 15
that the Burmese junta indicated that Burma authorities did not
provide Beijing any advance notice before it launched military

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operations in Kokang and had felt emboldened to take on ethnic
militias because the threat to their power from opposition
groups had diminished following Aung San Suu Kyi's announced
verdict and subsequent confinement through planned 2010 national
elections.

Border Situation and 2010 Burma National Elections
-------------- --------------


6. (C) CASS' Han suggested that recent fighting between BA and
ethnic forces was directly linked to the Burmese government's
efforts to force armed ethnic groups to accede to the BA
authority by joining a BA-led "Border Guard Force" before
planned 2010 national elections. Professor Zhu said separately
that the BA attack on the Kokang forces in late August had been
"unexpected" as China had predicted the Burmese government would
implement its border guard force integration measures more
gradually in the lead-up to the 2010 elections. Yunnan
University Professor Qu argued that tensions on the border would
likely continue because the ceasefire groups saw no advantage in
joining the BA-controlled border force as such a move, in
addition to giving up ultimate authority to the BA, would entail
a drastic reduction in the size of their existing militias -- an
unappealing prospect for groups that deeply mistrust the Burmese
regime.

Netizen Displeasure with PRC Response to Conflict in Kokang
-------------- --------------


7. (C) CASS' Han described Chinese authorities' sensitivity to
online criticism of China's perceived weak response to BA
operations against ethnic Han citizens in Burma's Kokang region.
Han stated that "netizens" in unanticipated numbers had
criticized Chinese authorities for not taking stronger measures
to discourage the BA from occupying Kokang, and warned that BA
incursions into the Wa region, which has historical ties to
China as a power base of the Communist Party of Burma, would
lead to "netizens" placing stronger demands on China to pressure
Burma to halt military operations. Han described a
widely-circulated web-post that compared Russia's willingness to
use force to defend its nationals in Georgia to China's
calibrated statement by the Foreign Ministry spokeswoman, and
indicated that netizens' unflattering comparison of China to
Russia had touched a nerve within the Chinese Communist Party.
Yunnan University Professor Zhu dismissed "netizen" reaction to
events in Kokang, stating that most did not understand the true
situation in Yunnan. He underscored that the Kokang, though
ethnically related to Han Chinese, were citizens of Burma and
should not be perceived as China's responsibility and that
Chinese citizens doing business in Kokang well understood the
risks of doing business along the border

A New Strategy for Chinese Investment in Burma?
-------------- --


8. (C) Yunnan Professor Li reported that he would meet with
scholars and Chinese business representatives to discuss
investment strategy in Burma in light of the recent
developments. He said that Chinese businesses operating in
northern Burma have, to date, been dealing directly with the
ceasefire group authorities, but will now be told to cut those
relationships and deal only with the Burmese central government.
In the meantime, Chinese companies are being asked to suspend
investment and trade for a period of several months. Beijing
authorities have previously paid relatively little attention to
Chinese private investment in Burma, and have limited
understanding of the operational environment, he noted, but are
now focused on increasing their understanding and developing new
regulations.

Impact on Planned Oil Pipeline Project Uncertain
-------------- ---


9. (C) Professor Li stated that initiation of the Burma-China
pipeline project, involving construction of an oil and gas
pipeline from Burma's west coast to Kunming, originally due to
begin in September, would be delayed until next year. CASS
Professor Han suggested, however, that recent conflict in
Burma's Kokang region could compel China to re-visit its
agreement with Burma on the pipeline project.


10. (C) Han cited a four-point argument within the Party to
terminate the project: 1) construction would undermine China's
message to Burmese authorities to halt conflict and resolve
differences with ethnic groups through peaceful means; 2) media
reports of Chinese construction workers building a pipeline in
Burma at the same time as BA forces were routing ethnic Han
forces in northern Burma would arouse strong public opposition

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-- particularly among netizens -- to the project; 3) the project
carried a cost in China's zero-sum relationship with India on
Burma; and 4) it might not be tenable for China or Burma to
guarantee the security of the pipeline, particularly portions
that may have to get routed through ethnic-controlled territory.



11. (C) Han cautioned that further instability in
ethnic-controlled territory would cause supporters of the
project to receive criticism from within the Party. Han also
acknowledged China's strategic interest in finding a way for
imported energy products from the Middle East and Africa to
bypass the Strait of Malacca, and concluded that it was too
early to tell whether the Burma - Yunnan oil pipeline project
would be affected by recent instability in Burma. (Note:
Embassy Rangoon has heard that China may be actively searching
for a foreign oil company to partner with on the pipeline in
order to mitigate possible risk. End note.)

Remaining Refugees
--------------


12. (C) Although a number ("yi bufen") of the Kokang residents
who fled into China during last month's clashes have now
returned, an uncertain but large number remain, Professor Li
told us. Many of those who hold Chinese citizenship may not
return at all, he continued. However, he emphasized their
designation as "border people" (bianmin) rather than refugees
(nanmin),noting that authorities will not designate anyone
coming over the border as a refugee in light of the
international obligations that would be triggered. Among the
current "border people", he confirmed, are several hundred
Kokang soldiers who are now in a "designated area". The Chinese
and Burmese governments will have to negotiate their ultimate
dispensation, he said, noting that they are currently free to
return to Burma but cannot go elsewhere in China.


13. (U) This cable was coordinated with Embassy Beijing and
Embassy Rangoon.
BROWN