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China and Thailand Bolster Business Expansion in Myanmar Amid Western Sanctions

Despite Western countries imposing sanctions on the Myanmar military government, Chinese and Thai companies are actively expanding their operations in the country across various sectors, from infrastructure to consumer products.

The enduring business relationships between China, Thailand, and Myanmar have led to continued growth, as these neighboring nations maintain diplomatic ties with Myanmar.

In a significant diplomatic development, the Deputy Prime Minister of Myanmar and the Minister of Foreign Affairs of Myanmar held a meeting with the Chinese Ambassador to Myanmar on August 30 in Naypyidaw. During the meeting, the two diplomats discussed strengthening bilateral relations and expediting the implementation of the China-Myanmar framework, signaling a commitment to collaborative economic endeavors.

According to data from the Myanmar Institute for Strategy and Policy, Myanmar has attracted a total of $5.4 billion in foreign direct investment (FDI) from China, including Hong Kong, between February 2021 and March 2023. This substantial investment constitutes approximately 55% of the total FDI influx, totaling $3 billion.

Prominent Chinese companies, such as Union Resources & Engineering and Yunnan Energy Investment, are actively involved in Myanmar’s infrastructure development. They are currently constructing a $2.5 billion power plant in the Rawdi industrial sector in southern Myanmar. This state-of-the-art facility will utilize liquefied natural gas (LNG) to generate approximately 1.4 gigawatts of electricity and is scheduled to commence commercial operations by 2027.

The Myanmar Apparel Manufacturers Association reports a significant presence of Chinese clothing factories in Myanmar, numbering over 300. These factories account for more than half of the garment manufacturing facilities in the country, highlighting the substantial contribution of Chinese companies to Myanmar’s industrial landscape.

Thai companies are also actively participating in Myanmar’s business landscape. Fraser & Neave (F&N), the Singapore-based subsidiary of Thai Beverage, announced plans in July to invest $14.1 million (S$19.2 million) in acquiring an alcohol license and land use rights in Myanmar. F&N intends to collaborate with local companies to establish a brewery in the country, emphasizing the enduring interest of Thai enterprises in Myanmar’s market.

Moreover, Myanmar’s consumer spending has shown signs of recovery, with restaurants and shopping centers reopening in major cities over the past two and a half years since the military takeover. The Purchasing Managers’ Index (PMI) for Myanmar’s manufacturing sector, published by S&P Global, has consistently exceeded the 50-point threshold for the past seven months, indicating sustained expansion in business activities.

These developments underscore the resilience of Myanmar’s economy and the continued interest of neighboring nations in the country’s growth potential, despite the challenges posed by international sanctions.

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