Myanmar's army chief challenges Biden, and bets big on China

Army chief Min Aung Hlaing already faces sanctions from the United States and Britain.
Army chief Min Aung Hlaing already faces sanctions from the United States and Britain.PHOTO: AFP

NAYPYIDAW (BLOOMBERG) - By seizing power on Monday (Feb 1), Myanmar's generals are providing US President Joe Biden with an early test of his efforts to counter the appeal of China's authoritarian model in Asia.

Army chief Min Aung Hlaing, who was bumping up against a mandatory retirement age this year, already faces sanctions from the United States and Britain due to a brutal crackdown against Rohingya Muslims that has led to accusations of genocide.

Beijing, meanwhile, has shown him respect: In a meeting last month with the 64-year-old general, Chinese Foreign Minister Wang Yi called the two countries "brothers" while praising the military's "national revitalisation".

"While the coup will no doubt come with costs, the army clearly views them as affordable," said Mr Sebastian Strangio, author of In the Dragon's Shadow: Southeast Asia in the Chinese Century.

"Recent events in Southeast Asia have shown that with China's growing power, and democratic backsliding in the West, the US and other Western countries no longer have the moral authority or economic and political means to set the normative agenda in the region."

A key part of the US strategy to counter China's rise has been an effort to rally democracies in Asia to back a "free and open" region that contrasts with Beijing's single-party rule.

Yet democracy advocates in places like Malaysia and Thailand have lost ground without consequences under the presidency of Mr Donald Trump, whose own bid to overturn the US election results prompted a deadly mob to storm the Capitol.

Although ousted Myanmar leader Aung San Suu Kyi's status as a democracy icon has taken a hit due to her defence of the army's actions on the Rohingya, she still has key allies in Congress.

Ms Suu Kyi, who was detained along with other key leaders, issued a statement calling on the country's 55 million people to oppose a return to "military dictatorship".

Mr Biden now faces a dilemma in crafting a response that will punish Myanmar's generals without hurting the wider population, which suffered under sanctions imposed in the 1990s before the country's shift toward democracy a decade ago.

The White House has already threatened to take action if the army doesn't reverse course, and will likely come under more pressure to act: Democratic Senator Bob Menendez, incoming chairman of the Senate Foreign Relations Committee, called for "strict economic sanctions" against military leaders.

China's reaction was muted. Foreign Ministry spokesman Wang Wenbin called Myanmar a "friendly neighbour" and urged all sides to "properly manage differences".

As of the end of last year, China stood as Myanmar's second-biggest investor behind Singapore with US$21.5 billion in approved foreign capital. Beijing also accounts for about a third of all Myanmar's trade - about 10 times more than the US.

Still, China will be careful to avoid doing anything that could alienate it with Ms Suu Kyi's supporters. During his visit last month, Foreign Minister Wang met with Ms Suu Kyi and spoke about how they could cooperate on a number of investment projects connecting the mainland with the Indian Ocean.

'Burned before'

"For the Chinese, Burmese politics is highly volatile and highly unpredictable," said Ms Yun Sun, director of the China Programme at the Stimson Centre. "China has been burned before."

Other Asian nations will also hedge their bets. While the UK, Australia, Canada and the European Union have joined with the US in condemning Myanmar, the reaction of countries in the region was more restrained.

Most Asian countries continued doing business with Myanmar while it was ruled by a junta, and in recent years Japan and other nations have invested in the country as an alternative manufacturing base to Thailand.

Myanmar's military has retained a heavy hand even after it transitioned to democracy more than a decade ago. On Monday it said the power seizure complied with the constitution, which allows generals to take over during vaguely determined times of "emergency".

Nascent democracy

But an expectation of democracy has grown among its relatively young population. Since 2011, Myanmar has opened industries such as energy exploration, insurance and banking to foreign participation, while liberalising the telecom sector to allow millions of people to access mobile phones and the Internet for the first time. It also lifted draconian censorship rules.

The military's statements showed an awareness of the broader shift in society, emphasizing that the moves were not opposing democracy. It vowed to hold "free and fair" elections after the state of emergency expires in a year.

Even so, it moved swiftly to announce a new cabinet, some of whom had served as ministers under prior military-backed governments. A state-run television broadcast on Monday night announced the new foreign minister as Ms Suu Kyi's predecessor, Mr Wunna Maung Lwin, while former finance minister Win Shein was reinstalled in that post.

While it's unclear yet how fervently the population will resist the military, on Monday some residents of the country's biggest city saw the move as a clear step backward.

Mr Aung Kyaw Oo, a teacher at a private school in Yangon, said poor people are likely to suffer the most if the US and others now put sanctions on Myanmar.

"I am not a big supporter of the NLD, but I do believe we will see further development of our country only under a civilian government," he said, referring to Ms Suu Kyi's National League for Democracy party. "Myanmar cannot go ahead and progress under the military rule."