China Reform Monitor: No. 769

June 16:

In September Chinese state oil firms will begin construction on a 1,100 km long pipeline to import 20 million tons of oil and 12 billion cubic meters of gas per year through Myanmar. The pipeline – which is actually two parallel structures for gas and oil – will allow China to avoid the troublesome Straits of Malacca, cut transportation costs, and considerably shorten the sea journey from the Middle East and Africa. The pipelines will start in Kyaukryu on the west coast of Myanmar and enter China at the border city of Ruili in Yunnan province, the Times of India reports. The natural gas pipeline will be extended an additional 1,700 km from Yunnan to Guizhou and Guangxi provinces. China National Petroleum Company (CNPC) will build the pipelines in Myanmar and either CNPC or PetroChina will build the domestic section, the official China Securities Journal reports. The announcement came the day before Maung Aye, Myanmar’s second-in-command, landed in Beijing. Myanmar prime minister's General Thein Sein’s meeting with Premier Wen Jiabao last April laid the ground work for the pipeline deal.

[Editor’s Note: This deal has concerned India. New Delhi has watched the expansion of Beijing’s influence in Myanmar with anxiety. Most recently it’s firms lost a 30-year concession for the construction of Myanmar hydroelectric dams to Chinese firms.]

June 17:

Police in Urumqi, the regional capital of the Xinjiang Uighur Autonomous Region, fired into a crowd protesting a real estate project and fatally wounding a man. The victim, a supervisor with the Guanghui Real Estate Ltd. company, was shot when the officer’s “gun went off accidentally” the official People’s Daily reports. Guanghui is the real estate company building the project objected to by the protesters. Although it is unclear if ethnic strife contributed to the incident, the policeman’s name is of a non-Han minority while the victim had a Han Chinese name. Every year China sees tens of thousands of protests, with attacks on police or government offices becoming increasingly common. The day before in eastern China Agence France Presse reported hundreds of furniture-makers protesting tax hikes smashed police cars and blocked a highway. In Beijing, China's top law official, Zhou Yongkang, said labor and business disputes increasingly threaten China’s social stability.

June 18:

While meeting in Moscow Russian President Medvedev told President Hu Jintao that China and Russia’s new oil deals are worth “roughly $100 billion, the largest of any agreement ever signed by our countries,” Russia’s Interfax News Agency reports. A year ago the two presidents established a mechanism to prioritize oil project approval that “allowed for signing off on new, extremely beneficial projects, " Medvedev said. The next step, continued the Russian president, is how to expand cooperation in oil to "other forms of energy cooperation, for example in the sphere of gas and coal production."

June 19:

China has expressed "strong dissatisfaction" over the Asian Development Bank's (ADB) decision to approve India's $2.9 billion country strategy for 2009-12 including a $60 million flood-management program for Arunachal Pradesh; a region both countries claim. Beijing said the ADB had "tarnished" its name by approving the plan and urged the bank to reconsider its decision. The ADB's Board of Directors approved the loan. Ann Quon, ADB’s Principal Director of External Relations, told The Hindu that she rejected the Beijing’s suggestion that the ADB had involved itself in a political dispute between the two countries: "The ADB takes no position on territorial disputes between its members," said Quon, "only economic considerations" were relevant to the bank's decision.