Myanmar's conflict-hit Rakhine a magnet for Chinese cash

Battered by global outrage over an army crackdown on Rohingya Muslims, Myanmar has found comfort in an old friend –- China, an Asian superpower whose unflinching support is tied to the billions it has lavished on ports, gas and oil in violence-hit Rakhine state.

Close to half a million Rohingya have fled to Bangladesh in the last month after a militant attack sparked a vicious military campaign that the UN has called "ethnic cleansing".

China -- which is expected to speak later Thursday at a UN Security Council meeting on the crisis -- has fallen out of step with much of the world in condemning the army-led crackdown.

"We think the international community should support the efforts of Myanmar in safeguarding the stability of its national development," foreign ministry spokesman Geng Shuang said earlier this month.

That support was far from unexpected from an ally who ploughed cash into Myanmar even as its economy choked under a half century of military rule and US sanctions.

Most of those sanctions were rolled back in 2014 as a reward for democratic elections.  

But those freedoms meant little to Beijing anyway.

Between 1988 and 2014, China invested more than $15 billion in the junta-run country, according to its official Xinhua news agency, mostly in mining and energy. It also propped up the pariah military regime with weapons. 

"They have a few major economic projects under way with the Myanmar government," said Sophie Boisseau du Rocher, Southeast Asia expert at the French Institute for International Relations. 

That includes a planned $9 billion deep-sea port and economic zone in Kyaukpyu, south of the epicentre of the recent violence, by Beijing's massive CITIC investment group slated for 2038.

China has already pumped money into the restive state. 

In April this year, a $2.45 billion pipeline from Rakhine to China's Yunnan province opened, securing a key route for Beijing to import crude from the Middle East. 

That same month, Chinese President Xi Jinping, whose 'One Belt, One Road' strategy aims to hook in China's neighbours with huge trade and infrastructure projects, rolled out the red carpet for his Myanmar counterpart Htin Kyaw in Beijing.     

- Valuable land -

Rakhine, a vast area of farmland, coast and off-shore gas reserves, has been roiled by communal violence for decades, pitting ethnic Rakhine Buddhists against Rohingya Muslims -- labelled illegal 'Bengali' immigrants by many in Myanmar.

Clashes erupted last October when the Arakan Rohingya Salvation Army (ARSA) carried out deadly attacks on unsuspecting border police. 

The militants attacked again on August 25, prompting an army crackdown that has forced some 480,000 Rohingya to flee into Bangladesh in the past month.

Swathes of land have been abandoned with scores of Rohingya villages burnt to the ground allegedly by the Burmese army and Rakhine mobs. 

"The land freed by the radical expulsion of the Rohingya might have become of interest to the military and its role in leading economic development around the country," said Saskia Sassen, sociology professor at Columbia University.

"Land has become valuable due to the China projects," she added. 

The government said this week it would manage all fire-damaged land in Rakhine for "redevelopment" purposes, without elaborating. 

It is not clear what that might mean for the masses of Rohingya who have been pushed into Bangladesh over the past month -- with questions looming about how or when they could return. 

Despite its natural resources, Rakhine is one of Myanmar's poorest states -- some 78 percent of the population live below the poverty line, nearly double the national average. 

Ethnic Rakhine, who remain deeply suspicious of the motives of Myanmar's Bamar majority, have seen scant benefits from increased investment in the area.

There is also discomfort among the public with Chinese influence across Myanmar.

"These massive Chinese projects in Rakhine state have deeply upset local populations who have not seen any positive fallout," said Alexandra De Mersan, Rakhine expert and researcher at the French School of Oriental Studies (Inalco). 

An August report by a government-backed commission on Rakhine's troubles, led by former UN chief Kofi Annan, echoed alarm about who is really benefitting from investments in the area. 

"Profit tends to be shared between Naypyidaw and foreign companies, and as a consequence, local communities often perceive the government as exploitative," the report read. 

But Myanmar's de facto leader Aung San Suu Kyi has said that development is a top priority for the region, even as rights groups have warned against investing in Rakhine.

"We have been continuing with our socio-economic development programmes in Rakhine," she said last week in her first national address since the latest crisis erupted.