Chinese investors mull expansion plans in Myanmar

Chinese investors have been showing keener interest to do business with Myanmar.

At the China (Dezhou) Myanmar Economic Trade and Investment Cooperation Seminar on Monday, during which Chinese firms sought business partners in Myanmar for the purposes of trade and investment, Li Lian Jun, chairman of China Chamber of International Commerce (CCOIC), said firms are interested in the energy, agriculture and manufacturing sectors.

Chinese firms are showing more interest in Myanmar at a time when the ongoing trade war between China and the US, which has seen the latter slap 25 percent tariffs on up to $50 billion of Chinese goods, is intensifying.

As a result of the trade tensions, some Chinese manufacturing businesses have enquired about moving their production facilities to Myanmar’s Thilawa Special Economic Zone, U Than Aung Kyaw, deputy director general of Directorate of Investment & Company Administration, told The Myanmar Times last month.

As this represents a good opportunity for Myanmar to benefit from more foreign direct investments (FDI), the country must be ready to receive the influx of funds, U Than Aung Kyaw said.

In fact, the government and China’s Yunan province are already finalising an agreement for Myanmar to export its cattle to meet rising demand in the Chinese market.

Dr Yan Naing Soe, retired director of the Ministry of Agriculture, Livestock and Irrigation, told The Myanmar Times that as China is now in a trade war with the US, Myanmar could benefit from higher cattle imports from China, which now imports 6,000 tonnes of beef from the US.

Daw Khin Khin Kyaw Kyee, Lead Researcher of Institute for Strategy and Policy Myanmar, warned though, that it may “be too early to celebrate.”

She said Myanmar should first have a proper strategy which includes plans to provide infrastructure and incentives to retain investors, as this will allow the country to take full advantage of the potential spike in FDI from China.

“Accepting the spike in FDI without a proper plan or strategy may result in a spike in growth for the country in the short term, but not be sustainable in the long term if investors end up pulling out,” Daw Khin Khin Kyaw Kyee said.

She added that, trade war aside, Myanmar also stands to gain from higher Chinese investments as firms look for ways to expand their operations overseas as a result of tighter environmental regulations in China.

“These businesses have difficulties growing their businesses because the Chinese government has tightened its environmental conservation and waste management regulations and requirements. As a result, they may transfer their facilities and operations here,” said U Kyaw Htin, deputy chair at the Myanmar Livestock Federation.

Source : Myanmar Times

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