Why is Myanmar's Look East policy important?

Myanmar President Min Aung Hlaing is going on a five-day state visit to China. Against the backdrop of shifting global geopolitics and Western economic sanctions, Myanmar's "Look East" policy is no longer just an option but has become a practical and viable development path.

An urban view of Myanmar

Reducing over-reliance on the US dollar

This is key to mitigating the impact of Western financial sanctions and creating breathing room for Myanmar's economy.

Establishing a direct RMB-kyat payment system can effectively circumvent banking obstacles within the SWIFT system. This helps stabilize exchange rates with China, Myanmar's largest trading partner, and reduces costs for importers and exporters.

During times of difficulty in accessing US dollars, direct RMB–kyat settlement can boost border trade, ensure the smooth flow of goods, and stabilize domestic commodity prices.

China-Myanmar Economic Corridor (CMEC)

The corridor is not merely a transport route but has the potential to become an engine driving Myanmar's national industrial development.

The initiatives such as the Kyaukphyu Deep-Sea Port, the Muse–Mandalay Railway, and the China-Myanmar Border Economic Cooperation Zone are paving the way for foreign direct investment into Myanmar. These projects will not only create temporary employment but also lay the foundation for long-term manufacturing growth.

By establishing industrial zones along the CMEC and bringing in Chinese technology and investment, Myanmar has the opportunity to transform into a producer of high-value-added finished goods.

Regional supply chain restructuring

Against the backdrop of regional supply chain restructuring, Myanmar—situated between China, India, and ASEAN countries—has the opportunity to occupy a key node in this new landscape.

Myanmar possesses an outlet to the Indian Ocean and serves as the most direct corridor from China's southwestern inland provinces to the Indian Ocean. This advantage should be leveraged to position Myanmar as a regional "logistics hub."

As China's basic consumer goods manufacturing shifts to neighboring countries, Myanmar can attract Chinese enterprises by cultivating a skilled labor force.

From geo-corridor to economic hub

The China-Myanmar oil and gas pipelines not only ease China's "Malacca Strait dilemma" but also provide Myanmar with strategic leverage.

By developing domestic oil refineries and fertilizer plants along the pipeline network, Myanmar can provide key inputs at more affordable prices for its agricultural and industrial sectors.

Building on cooperation with China, Myanmar should more deeply integrate into ASEAN and Asia-Pacific markets and actively participate in regional economic cooperation frameworks such as the Regional Comprehensive Economic Partnership (RCEP).

In summary, China-Myanmar economic cooperation provides a "safety net" for Myanmar's economy amid the current crisis. The government needs to steer this cooperation to serve the national interest and improve the socioeconomic well-being of the people, driving Myanmar's transformation from a geographical "corridor" into an "economic hub."

(The author Naing Swe Oo is a senior advisor at the Strategic and International Studies Institute, Myanmar’s Ministry of Foreign Affairs.)