Center for a New American Security

On Friday, the Burmese government announced that it would halt the construction of a Chinese-backed dam on the Irrawaddy River, marking a significant setback for China that has increasingly relied on Burma for access to energy and natural resources to feed its growing economy.

(Note: I first saw the report on The Wall Street Journal on Friday, but was glad to see it make it into the weekend news with a report by The New York Times on Saturday. Both reports are worth a read.)

As I noted on Twitter on Friday, the Burmese government’s announcement is an interesting departure from its close partners in Beijing, and may signal a growing rift between the two states. “The dam’s suspension was a blow to China, long considered a benefactor to the government in Myanmar,” The New York Times reported. “China Power Investment, a state-run Chinese company, was leading the construction of the project, which would have delivered electricity to southern China. It is unclear how the suspension will affect six other Chinese-led hydroelectric projects in northern Myanmar.”

China has increasingly relied on close ties with the Burmese government in order to secure access to natural resources and to gain rights to develop overland energy pipelines to deliver natural gas and other fossil fuels to southern China. Indeed, Burma has become a critical energy transit state for China that is busily developing a portfolio of overland pipelines and access to maritime resources as part of its overall energy strategy. For example, as the Times reported, “A pipeline that would carry natural gas and oil from the Bay of Bengal to southern China is currently under construction.”