Kyaukpyu Port: China’s Strategic Hub for Geopolitics, Economy, and Military in the Indian Ocean

The expansive nature of the Kyaukpyu project, aside from its financial implications for Myanmar, suggests that China’s enthusiasm is driven by long-term military considerations.

Kyaukpyu holds significant military importance due to its geopolitical location, aligning with China’s broader ‘string of pearls’ strategy aimed at encircling India in the Indian Ocean. Positioned nearly directly across from INS Varsha, the future headquarters of India’s Eastern Naval Command near Visakhapatnam, Kyaukpyu becomes a strategic outpost in this maritime strategy.

The expansive nature of the Kyaukpyu project, aside from its financial implications for Myanmar, suggests that China’s enthusiasm is driven by long-term military considerations. Despite the strategic value, the permanent deployment of the People’s Liberation Army (PLA) military assets in Myanmar appears improbable. This is primarily due to Myanmar’s historical commitment to maintaining sovereignty and sensitivity to external influence, particularly from Beijing.

While Kyaukpyu may enhance China’s strategic reach, a permanent military presence in Myanmar remains an unlikely outcome, balancing the geopolitical dynamics of the region. Kyaukpyu Port, beyond its geopolitical significance, carries the potential to mitigate China’s reliance on maritime energy imports. Notably, gas and oil pipelines have been established, connecting Kunming to Kyaukpyu. Paradoxically, while these pipelines aim to enhance China’s energy security, they have exacerbated local opposition to subsequent phases of the Kyaukpyu Port project.

The initial pipeline projects were marred by issues such as inadequate compensation for land acquisitions, environmental shortcuts, and a notable dependence on foreign labour at the expense of local workers. This, in turn, has fueled discontent among local communities, introducing a complex dynamic to the overall development of Kyaukpyu Port. The economic dimension of Kyaukpyu Port is noteworthy.

Beyond its geopolitical and military implications, the port stands to facilitate easier global market access for industries based in Yunnan via the Indian Ocean. This economic advantage is further accentuated by the potential for renewed political support for high-speed rail projects. These projects aim to connect Ruili on the China-Myanmar border to Mandalay and eventually extend to the coast.

While a contract was initially signed in 2011 to establish a Kunming-Rangoon rail corridor, the project faced challenges and was ultimately cancelled in 2014 due to widespread protests against the People’s Liberation Army (PLA) terms of the deal. The proposed terms would have granted the railway to China as a 50-year concession, leading to public discontent.

Despite setbacks, road projects are expected to parallel the rail corridor between Ruili and the coast, enhancing transportation capacities for the movement of goods from Yunnan to Kyaukpyu Port. This integrated approach underscores the multifaceted economic considerations surrounding the development of Kyaukpyu Port.