China Reform Monitor: No. 968

May 4:

China’s Ministry of Commerce has issued a travel advisory to Chinese citizens in a response to escalating violence between Myanmar’s army and the rebel Kachin Independence Army (KIA). Beijing warned Chinese businessmen not to travel to northern Myanmar and abstain from investments there. Chinese already there are to “take effective action to avoid injury or destruction of property,” the Irrawaddy reports. The KIA has ordered its “troops to provide security to the evacuation of Chinese personnel in order to secure the lives of employees and the integrity of the machinery of China Power Investment.” China Power Investment Corp. is the Chinese state-owned company contracted by Myanmar’s government to build dams in Kachin State, including the controversial Myitsone Dam project, which has been suspended. An unknown number of Myanmar’s government officials in Kachin State have fled to Tengchong, Yunnan along with hundreds of others where China is holding them awaiting repatriation.

May 7:

U.S. Defense Secretary Leon Panetta and China’s Defense Minister Liang Guanglie have agreed to strengthen bilateral military-to-military exchanges. “We believe our military-to-military dialogue is critical to ensuring that we avoid dangerous misunderstanding and misperceptions that could lead to crisis,” Panetta said after the talks at the Pentagon. Liang, the first Chinese defense chief to visit the U.S. since 2003, called the military-to-military relationship “an essential component of bilateral relations, reaffirmed the need for a continuous strategic communication and upheld that the two sides should enhance strategic mutual trust through dialogues and consultations.” Panetta and Liang also discussed North Korea, maritime security, cyberspace and nuclear proliferation. Liang invited Panetta to visit China later this year, Japan’s Kyodo News Agency reports.

May 9:

China has become the first country to explore for deep-water oil and gas in the South China Sea. China National Offshore Oil Corp.’s (CNOOC) CNOOC 981, the country’s first semi-submersible deep-water rig, has begun drilling about 320 km southeast of Hong Kong at a depth of 1,500 meters. CNOOC plans to drill to a depth of 2,335 meters in a 25-square-km area for an estimated 30 billion cubic meters of natural gas,the official Shanghai Daily reports. “In a long-term vision, more than 700 million tonnes of oil resources and 1.2 trillion cubic meters of natural gas resources will be found in this area. There are a dozen such areas in the northern part of the South China Sea,” said a CNOOC representative. “Large deep-water drilling rigs are our mobile national territory and strategic weapon for promoting the development of the country’s offshore oil industry,” said CNOOC Chairman Wang Yilin, adding that the drilling would help ensure China’s energy security and sovereignty over the contested waters. The CNOOC 981 rig, which took over three years to build, has a deck the size of a football field, cost 6 billion yuan ($952 million), and is capable of offshore drilling at depths of up to 3,000 meters.

May 10:

After three rounds of failed peace talks between Myanmar’s government and the KIA hosted by China in Ruili, Yunnan, the rebels have launched a wave of attacks aimed at destroying infrastructure and transportation. On May 6 and 7 bombs killed 70 government soldiers and blocked all travel on the road between Bhamo to Loije, a main artery for Chinese goods and materials, the Mizzima News Agency reports. On April 29, an explosion on a passenger train on the Mandalay-Myitkyina rail route caused eight coaches to derail injuring two people. KIA attacks have also damaged three key bridges in Kachin State,the official People’s Daily reports.

May 11:

Suspected drug lord Nor Kham, a Burmese ethnic Shan, accused of masterminding the murder of 13 Chinese sailors on the Mekong River last October has been extradited to China from Laos. China, Laos, Myanmar and Thailand worked together to arrest Kham and his gang’s “core members,” the official China Daily reports. Kham, his gang, and a number of Thai soldiers hijacked the two cargo ships and bound, blindfolded, and shot the crewmembers. Nine Thai soldiers have also been charged with murder and concealing the corpses. Thai authorities seized both boats after a gun battle with the hijackers and found nearly a million amphetamine tablets worth $3.22 million, Radio Free Asia reports. For years Kham’s gang, which had more than 100 members armed with assault rifles, bazookas, and machine guns, engaged in drug trafficking, kidnapping, murder, and other crimes along the Mekong River.