China’s Xi faces dilemma as consulate blast sparks fear of Myanmar chaos

SINGAPORE – For decades, China has sought to maintain influence among armed ethnic groups in Myanmar in lawless border areas while also providing support to military leaders in charge of the Southeast Asian nation. An attack on its consulate last week shows that balancing act is becoming untenable.
China has demanded an investigation and lodged “serious protests” with the Myanmar authorities after its consulate in Mandalay, the country’s second-largest city, was hit on Friday with an explosive device — reportedly a grenade. It’s unclear who was responsible for the incident, which was quickly condemned by the junta and pro-democracy forces.
Both sides have been angered by recent actions from China under President Xi Jinping. Min Aung Hlaing, whose overthrow of the civilian government led by Aung San Suu Kyi in 2021 renewed a civil war, signalled his annoyance with Beijing after it appeared last year to back rebel groups in an operation to clear out scam centres taking advantage of Chinese citizens.
The success of that offensive raised the possibility that Min Aung Hlaing’s regime could collapse, and the armed ethnic groups would take control of Myanmar. Faced with that scenario, China began exerting more pressure on the rebels to stick to their sphere of influence in the northern areas of the country, backing the government in a move to ensure the nation didn’t devolve into chaos.
“While it’s no fan of this regime, it definitely doesn’t want a disorderly kind of collapse of power in Naypyidaw because it doesn’t know what comes next,” Richard Horsey, senior Myanmar adviser with the International Crisis Group, said of China. “It worries that would be even worse,” he added. “Unpredictable kinds of outcomes are not what they want.”
In additional to its losses in the north, recent reports show the junta is on the verge of being expelled from the western-most state bordering Bangladesh, while others show it has lost control of townships covering about 86% of the country, raising questions over how long the generals can retain power.
In early August, Min Aung Hlaing’s forces suffered one of their most significant military defeats yet with the loss of Lashio, the capital of the northern Shan State. That potentially opens the way for an assault on Mandalay, which is connected by highway to Naypyidaw, the capital, and Yangon, the nation’s biggest city.
“If successful, such an operation would open an avenue for attacks on the capital at Naypyidaw, posing an existential threat to the regime,” reads an assessment published this month by the London-based International Institute for Strategic Studies. “The recent fall of Lashio has placed the Myanmar military in its most vulnerable position since the 2021 coup.”
Whether an attack on Mandalay happens, and which groups would be involved, is unclear. Observers, however, point to sporadic gains in the region by forces loyal to a parallel government set up by ousted lawmakers.
The alliance of ethnic-armed groups in the north began to make real progress last October, when it routed junta forces from some key strongholds. The “Three Brotherhood Alliance,” as they are known, also sought to eradicate cybercrime syndicates operating in the area that had been siphoning billions of dollars from Chinese citizens since the Covid-19 pandemic. Working in tandem with Chinese authorities, the groups helped transfer tens of thousands of suspects back across the border to China.
The military’s nationalist backers soon hit the streets to protest China’s perceived support. Min Aung Hlaing himself used speeches to rail against unnamed foreign countries for supporting his enemies with food, money and other provisions — clear references to China, which has long pledged to maintain a non-interference stance in Myanmar’s domestic affairs.
As the rebel groups gained strength, China moved to broker a cease-fire in January that fell apart only months later. Once the ethnic army began overrunning junta positions further south, those groups say Beijing started using economic coercion and vague threats of retribution to halt their advance.
“The Chinese government has pressured us to stop fighting and not make any offensive moves,” Lway Yay Oo, spokesman of Ta’ang National Liberation Army active in Shan State, told Bloomberg News. China has since imposed travel restrictions in the areas they control and restricted border trade including access to pharmaceuticals, she said.
Asked in an August briefing if China told the group to stop fighting, Foreign Ministry spokesman Lin Jian didn’t answer directly, saying that Xi’s government has been working to promote a cease-fire.
“As Myanmar’s biggest neighbouring country, China has all along sincerely hoped that Myanmar will achieve stability and development, and has worked actively to this end,” he told reporters. “China will continue to play a constructive role for Myanmar’s peace and reconciliation process and promote the de-escalation in northern Myanmar.”
During a recent summit of the Association of Southeast Asian Nations in Laos, Myanmar’s neighbours expressed frustration that efforts to stop the violence have failed. Singapore Prime Minister Lawrence Wong called on partner nations like China to “lean forward” and pressure Myanmar authorities to end the war.
China has recently ramped up public engagements with the junta. Its top diplomat, Foreign Minister Wang Yi, touted the longstanding “pauk-phaw friendship” between the two countries — a phrase Chinese officials say means “brothers born together” — in August talks with Min Aung Hlaing. The junta chief is reportedly set to travel to China next month in what would be his first known trip there since the coup.
A visit from Min Aung Hlaing to meet officials in Beijing “will be a clear policy pivot from China,” according to Horsey of the International Crisis Group. “If he was to meet Xi Jinping, that would be an even more significant move. So, China’s trying to undo the damage.”