Myanmar Consolidated Media

China, Myanmar close in on agreement to settle dispute over Myitsone suspension

By Sann Oo
October 17 - 23, 2011

MYANMAR and China have agreed to “properly settle” their dispute over the suspension of the Myitsone dam, Chinese state media reported last week.

Foreign Minister U Wunna Maung Lwin travelled to Beijing as a special envoy of President U Thein Sein and met with his Chinese counterpart, Mr Yang Jiechi, on October 10. China’s state news agency, Xinhua, reported that the pair agreed to “properly settle” the matter, increase bilateral cooperation and “work toward bringing mutual benefits to the two nations”.

Later the same day, Chinese Vice President Xi Jinping told U Wunna Maung Lwin that “bilateral relations have been developing well” and “both sides should cherish the hard-earned good situation”, according to a statement from China’s Foreign Ministry.

“Xi urged the two sides to properly settle relevant matters that have emerged during the course of cooperation through friendly consultations so as to ensure the healthy and stable development of China-Myanmar exchanges and cooperation in various fields,” the statement said.

President U Thein Sein announced the suspension on September 30 following widespread criticism from activists and environmentalists. The decision provoked an angry response from Beijing and the president of state-owned China Power Investment Corporation, the main investor in the project, had threatened legal action.

It was not clear last week whether a settlement had yet been reached and, if so, what compensation Myanmar would have to pay to China. The 6000-megawatt Myitsone dam was one of seven dams CPI was to build on the upper reaches of the Ayeyarwady River. Upon completion in 2019 it was expected to produce 29,400 million kilowatt hours a year, 90 percent of which would be exported to China.

The website said CPI would continue work on six other dams it is constructing in Kachin State.

U Ko Ko Hlaing, an adviser to President U Thein Sein on political affairs, told The Myanmar Times the government was legally obligated to follow contracts signed by the State Peace and Development Council.

“The new government cannot neglect this [contract], according to the law. The new government has responsibility to solve this issue. In the president’s statement, [he said] both countries would continue with their friendly relations. On the other side, the government has a responsibility to respect the people’s desires and also the government has duty to fulfil the rights of the Chinese company.

“In such a complicated situation, the government will have to solve this issue gently. I expected the government will find a suitable solution for all sides.”

Dr Nicholas Farrelly, a Southeast Asia specialist at the Australian National University in Canberra and founder of the New Mandala website, said that while there would “inevitably” be some short-term damage to bilateral relations “pragmatism would override any potential for long-term animosity”.

Daw Aung San Suu Kyi, who campaigned against the dam project on the grounds it could damage the environment and would harm national reconciliation efforts, said both sides needed to show respect for each other.

“As neighbouring countries, we cannot live separately even if we don’t like each other. I want [Myanmar] to be okay with all the neighbouring countries,” she told reporters in Yangon on October 8. “I want both sides to solve the issue with mutual respect and open-mindedness.”

– Additional reporting by Kyaw Hsu Mon and Thomas Kean