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Is Burma breaking out of China's embrace?

By Eric Baculinao, NBC News Beijing Bureau Chief

BEIJING-Burma has caught its giant neighbor China off-guard recently by very publicly distancing itself from its political and economic patron in several ways.

First came the move to halt the construction of the Chinese-supported $3.6 billion Myitsone hydro-electric project, a gigantic dam that would have inundated an area the size of Singapore.

Burmese President Thein Sein’s decision to stop the project seemed intended to mollify domestic opposition, but it was a direct hit at Chinese interests and came not too long after he forged a “strategic partnership” with Beijing  in the wake of his controversial election early this year.

While Burma’s decision was praised by U.S. Senator John McCain, who called the pariah state’s move “bold and responsible,” the head of the Chinese company behind the dam deal said he was “totally astonished” by Burma’s decision.

Lu Qizhou, President of China Power Investment Corporation, also hinted at legal action after investing “huge amount of money” in the giant hydroelectric project. Meanwhile, a Chinese government spokesman urged protection for the “legitimate rights and interests of  Chinese enterprises.”

Sein recently followed through with another surprise – a mass amnesty for thousands of prisoners that reportedly included a few hundred political detainees.  One analyst dubbed this move and other initiatives “The Burma Spring.

The reasons behind these uncharacteristically independent stances is unclear -- Burma's government has presided over one of the world’s most oppressive and isolated regimes  -- but the brutal death of Moammar Gadhafi last month is surely a cautionary tale to dictatorships around the world, Burma’s included.

‘Not too surprised’
While some involved in the Chinese dam project were angry and shocked at Burma’s decision, a Chinese scholar who closely follows Burmese affairs declared that he was “not too surprised” by Burma’s recent distancing. 

The academic who works for a think-tank in the province of Yunnan that borders Burma — a province that would have been a beneficiary of increased electricity from the project – spoke to NBC News on condition of anonymity due to sensitive diplomatic issues involved.

“The dam project has been under a lot of pressure for some time, there was significant opposition from NGOs, and it was even a target of a bombing attack last year, so Burma’s decision was not too sudden,” the Burma specialist said.

He attributed Burma’s decision to its desire “to improve its domestic and international image, ease America’s sanctions and strengthen its bid for the chairmanship of the ASEAN in 2014,” referring to the regional grouping of Southeast Asian Nations.

It’s “too early to tell” whether the more strategic Trans-Burma oil and gas pipelines project will be the next target, but “Burma is still very  much in flux,” the Chinese expert said.

Not a setback for China?
“However, Burma’s decision does not mean a setback or retrogression of relations with China, there is no reason to be extra-sensitive about this,” the academic added.

Jim Della-Giacoma of the International Crisis Group agrees.  The Southeast Asia Project Director, Della-Giacoma helped author a report in September that proved prescient for  broadly anticipating Burma’s recent reform initiatives

While the dam decision was “a dramatic gesture and it should be a wake-up call” for China, it would be going too far at this stage to describe it as a failure of Chinese policy, he told NBC News. 

“The economic ties between the two countries are still significant and we would expect them to continue to be so,” Della-Giacoma said.

“A more significant indicator of a change its foreign policy would be the interactions between the U.S. and Myanmar or Myanmar and the EU,” he added, using Burma’s official name.

Western support for reform?
There are signs that recent moves by Burma’s leadership are leading towards greater openness and independence from China, Della-Giacoma said.

“The methodical way these reforms have been set up in recent years by putting in place the constitution, the elected legislatures and new government makes it more difficult to reverse course,” he said.  “They have changed the way the country is being governed and produced a more collective leadership that is less susceptible to the capricious whim of one individual.”

But Della-Giacoma cautioned Western powers against “moving the goal posts by imposing new conditions” on Burma’s government , adding that “no political change is walk in straight line.”

In other words, severe economic sanctions imposed by the West may need to be lifted in order to hasten more reform. 

“With reform underway, lifting restrictions and sanctions can add momentum and encourage more, but holding them in place will see the West’s influence wane,” he said.