Chinese Investment and Tourism Booms in Myanmar

The ripple effects of the Rohingya refugee crisis have made Western investors rethink their investments in Myanmar. This has encouraged the country to turn to China to counter its foreign investment loss. In fact, China has turned out to be the biggest investor in Myanmar, having invested in 65 of 113 approved projects with foreign investment in fiscal 2018-19.

Despite prior expectations of economic growth, Myanmar has seen a decline in overall foreign investment since the National League for Democracy (NLD) was elected to govern in March 2016. Chinese investment, however, has increased noticeably since the NLD took power. Since the current government sees the increasing involvement of China in new projects as an opportunity to prosper rather than a threat.

Although most of the new Chinese investment has been in projects centered in Myanmar’s commercial hub Yangon, China plans to invest in ventures in other regions of the country as well.

Thanks to its tactical location between China and the Indian Ocean, Myanmar is emerging as possibly the most vital link in Beijing’s $1 trillion BRI. New high-scale projects include a high-speed railway line starting at the Chinese border and ending in Mandalay, a central city of Myanmar, a deep seaport with an adjoining free trade zone in Rakhine State and an ambitious new metropolis in front of the river flowing from the old capital Yangon.

Chinese investors are also pouring funds into constructing a series of hydroelectric power stations, and simultaneously trying to restart the stalled $3.6 billion Myitsone dam venture in the north of Myanmar, which was shelved by the prior government for ecological reasons.

China’s investment in more and more BRI projects is increasing Myanmar’s financial dependence on China. Myanmar’s collective national debt was projected at roughly $10 billion in 2018. China is owed $4 billion of that debt.

The number of Chinese tourists has also skyrocketed. This is primarily because of the relaxed visa regulations for Chinese visitors and the easy accessibility of China-based tour operators in Myanmar.  Last year, Chinese tourists made up 297,400 of the 3.55 million who visited Myanmar, making them the leading national group amid foreign visitors.

Serge Pun, a Sino-Myanmar tycoon, has set up a new company, Memories Group, to add to his growing collection of tourism-related investments. He has recently opened resorts in the southern Myeik Archipelago in the Tanintharyi Region, which comprises of more than 800 idlyllic islands.