Last October, Secretary of State Hillary Clinton gave a speech to the New York Economic Club. She spoke on the need for the United States to improve its statecraft by using economic policy to enhance its diplomatic leverage abroad. The speech was delivered in the context of widespread concern inside the State Department that Beijing’s economic and aid policies have proven more effective than the muddle-through approaches of Western democracies.
From a distance, authoritarian great powers appear far more efficient at harnessing economic tools for strategic advantage. But recent developments in Burma suggest that Beijing’s statecraft may not be as effective as has been suggested.
Burma remains the most ostracized country in Asia outside North Korea. Since the junta’s brutal crackdown of protesters in 1988, the United States and the European Union have imposed increasingly robust economic sanctions against the regime. China also faced international condemnation over the repression of demonstrators following the 1989 Tiananmen protests, and since the 1990s, Beijing has emerged as Rangoon’s most dependable ally.
Rangoon seems willing to take shelter under Beijing’s embrace: China is behind two-thirds of all foreign investment in Burma and is its second-largest trading partner after Thailand. China is the primary supplier of military equipment to the Tatmadaw, Myanmar’s armed forces. Beijing provides diplomatic and political cover for the regime, consistently vetoing U.S. plans to investigate allegations of civilian repression through UN agencies. Without Chinese economic and technical assistance, the stuttering Burmese economy would have completely collapsed, endangering the continued rule of the junta. It is no wonder that Burma is sometimes dismissed as a Chinese “economic colony” or even as the unofficial twenty-third province of China.
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