EXECUTIVE SUMMARY

1. • The Chinese government and a range of allied commercial enterprises, cultivated close relations with the Myanmar side during the years when interactions with Western democracies were constrained

2. • For a time, there was talk that China's “soft power” in Myanmar had become suffocating and that the large numbers of recent Chinese migrants served as a vanguard for wider economic and strategic interests.

3. • Over the past 25 years, the Chinese population in Myanmar is estimated to have grown by over 2 million people.

4. • During Myanmar's present process of political and economic liberalization, the central role of such Chinese interests is being challenged from a range of angles. It is in this environment of greater diversity and competition that China's once firm position may be set to diminish.

5. • While the government of Myanmar was previously prepared to tolerate an expanding Chinese presence, there is little popular acceptance of Chinese migrants until they more fully integrate with Myanmar society and culture. • Chinese influences now jostle for position alongside an ever-increasing array of other foreign populations, ideas, cultures and approaches, including those that have recently re-engaged Myanmar from among the Western democracies.

6. • While the Chinese continue to hold some measure of influence in many spheres of Myanmar life, the extent to which they can exercise their influence is subject to limits imposed by the fiercely patriotic Myanmar people and government.

7. • During the ongoing political transformation under President Thein Sein there is emerging evidence that such limits will be more consistently demarcated.

INTRODUCTION: RELATIONS IN FLUX

In September 2011 Myanmar President Thein Sein made an abrupt decision to suspend construction on the Myitsone dam.Ð This multi-billion dollar project, spearheaded by major Chinese and Myanmar construction interests, had long served as a magnet for controversy but the decision nonetheless took local and international observers by surprise. They wondered aloud whether Thein Sein was sending a new signal to his allies in Beijing. Curiosity about the deeper significance of the project's suspension was fuelled when Chinese disapproval began surfacing in the media.