Burma was the first non-Communist country to recognize the Communist-led People's Republic of China after its foundation in 1949. Burma and the People's Republic of China formally established diplomatic relations on June 8, 1950. China and Burma signed a treaty of friendship and mutual non-aggression and promulgated a Joint Declaration on June 29, 1954, officially basing their relations on the Five Principles of Peaceful Co-existence. However, Burma maintained a neutralist foreign policy in the 1950s and 1960s. Anti-Chinese riots in 1967 and the expulsion of Chinese communities from Burma generated hostility in both countries. Relations began to improve significantly in the 1970s. Under the rule of Deng Xiaoping, China reduced support for the Communist Party of Burma ("CPB") and on August 5, 1988 China signed a major trade agreement, legalizing cross-border trading and began supplying considerably military aid. Following the violent repression of pro-democracy protests in 1988, the newly formed State Peace and Development Council, facing growing international condemnation and pressure, sought to cultivate a strong relationship with China to bolster itself; in turn, China's influence grew rapidly after the international community abandoned Burma.
Bilateral trade between China and Burma exceeds $1.4 billion. Chinese imports to Myanmar typically focus around oil, steel and textile products, while Myanmar imports range from natural rubber to raw wood. China is providing extensive aid and helping to develop industries and infrastructure in Burma and aims to be the chief beneficiary from cultivating Burma's extensive oil and natural gas reserves. It is one of the chief partners of the Burmese regime in the project to renovate and expand the Sittwe seaport and has received rights to develop and exploit natural gas reserves in the Arakan region. China has offered loans and credit to the military regime, as well as economic aid and investments for the construction of dams, bridges, roads and ports as well as for industrial projects. China extensively aided the construction of strategic roads along the Irrawaddy River trade route linking Yunnan province to the Bay of Bengal. Chinese firms have been involved in the construction of oil and gas pipelines stretching 2,380 km (1,480 mi) from Burma's Arakan coast to China's Yunnan Province. China National Offshore Oil Corporation and the China National Petroleum Corporation hold important contracts on upgrading Burmese oilfields and refineries and sharing of production. PetroChina is in process of building a major gas pipeline from the A-1 Shwe oil field off the coast of the Rakhine State leading to Yunnan, accessing and exploiting an estimated 2.88 to 3.56 trillion cubic feet of natural gas. A proposed Sino-Burmese oil pipeline off the western coast of Burma may permit China to import oil from the Middle East, bypassing the Strait of Malacca. There have been protest against Chinese oil projects.
China Power Investment Corporation's investment in the $3.6 billion Myitsone hydropower station on the Irrawaddy River has hit a snagged in early October 2011 as Burmese government suspended construction due to local residents' concern about the human, environmental impact and perceived benefits. Most of the power generated will be exported to Yunnan province in China and local residents claimed the lack of community feedback in the planning process. China's government is stating Burma will get 54 billions dollar in tax revenue, shared profits, free electricity. At stake is China's huge financial stake in the project and also risk to other big projects China has in the country. China Power Investment Corporation stated only five villages with a total of 2,146 needed to relocated. The firm has provided affected villagers with two storey houses, 21 in televisions and a 100,000 Burmese kyat compensation.
China is the most important supplier of military aid and maintains extensive strategic and military cooperation. Since 1989, China has supplied Burma with jet fighters, armored vehicles and naval vessels and has trained Burmese army, air force and naval personnel. Access to Burma's ports and naval installations provide China with strategic influence in the Bay of Bengal, in the wider Indian Ocean region and in Southeast Asia. China has developed a deep-water port on Kyaukpyu in the Bay of Bengal. It has also built an 85-metre jetty, naval facilities and major reconnaissance and electronic intelligence systems on the Great Coco Island, located 18 kilometres from India's Andaman and Nicobar Islands, giving China capabilities to monitor India's military activities, including missile tests. China assists in constructing a naval base in Sittwe, a strategically important sea port close to eastern India's largest city and port, Kolkata. Beijing also funds road construction linking Yangon and Sittwe, providing the shortest route to the Indian Ocean from southern China.
China and Russia once vetoed a U.N. Security Council resolution designed to punish Burma. In recent years, China has shown a lack of willingness to back the Burmese government and has attempted to stabilize the political situation in Burma.
In recent years, Burma has moved to develop strategic and commercial relations with India, with which it shares a long land border and the Bay of Bengal. Increasing trade and military cooperation with India and developing bilateral relations with Japan and within the Association of South East Asian Nations (ASEAN) shows a shift in Burma's foreign policy to avoid excessive dependence on China.
After the Kokang incident in August 2009 which gained international media interest, some experts questioned its impact on Burma–China relations, which were considered to be strong. Bertil Lintner stated that Burma was prioritizing internal conflicts over its ties with China, however some Chinese analysts, such as Shi Yinhong, played down the relationship between Burma and China, saying "They're not great friends. They don't listen to what China says." China had urged Burma to ensure the stability of the border area and protect the interests of its citizens in Burma. The Burmese Foreign Ministry later apologised to China about the incident, but also ran a story on the Dalai Lama in the government newspaper the Myanmar Times, the first mention of him in the state controlled Burmese media for 20 years. Chinese officials were said to be "furious" and "extremely upset" over not being forewarned about the offensive on the border.
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