A silent dependence: How China exploits and sustains Myanmar amid war and rare earths

The relationship between China and Myanmar is an intricate web of geostrategic interests, economic dependence, and internal turmoil. For Beijing, Myanmar isn't just a neighbor; it's a highway to the Indian Ocean and, crucially, a strategic goldmine of rare earths, essential minerals for its global technological leadership.

A strategic bridge and ambitious projects

Myanmar offers China a vital alternative to the Strait of Malacca, a busy and potentially vulnerable shipping route. This vision is embodied in the China-Myanmar Economic Corridor (CMEC), an integral part of the colossal Belt and Road Initiative (BRI). The BRI, a global infrastructure network, connects the terrestrial "Silk Road Economic Belt" (comprising six development corridors, including the CMEC as part of the China-Indochina Peninsula Corridor) with the "21st Century Maritime Silk Road." Both "roads" ultimately converge in Rotterdam, underscoring Beijing's global ambition. CMEC projects in Myanmar include ports, railways, and oil/gas pipelines linking China's Yunnan province to the port of Kyaukphyu on the Bay of Bengal, key nodes in this vast network.

In this scenario, the deep-water port of Sittwe, which China is building, takes on crucial importance. Beijing has proposed creating an economic corridor through Myanmar's Rakhine State, including roads and railways that would connect directly to Yunnan. A potential naval base in Sittwe (or the nearby Chinese-developed Kyaukphyu port), combined with the China-Myanmar economic corridor, would give the PLA (People's Liberation Army) convenient access to the Indian Ocean and the possibility of overland resupply. Such a military facility could help China manage traffic passing through the Strait of Malacca from the west and marks the beginning of the Myanmar oil pipeline, crucial for crude oil destined for southwestern China. These strategic interests are supported by increasingly close military ties. As early as 2017, over half (56.5%) of foreign direct investment in Myanmar came from China, and by 2019, Beijing held an estimated 40% of Myanmar's debt, a clear sign of its growing economic and strategic influence.

Myanmar, for its part, finds itself increasingly dependent on China, especially after the 2021 military coup that led to Western sanctions and greater international isolation.

Beijing's role in the coup and support for the regime

Although China did not openly endorse or condemn the 2021 military coup, its position and subsequent actions have had a decisive impact on the regime's ability to remain in power. Beijing has officially maintained a policy of "non-interference" in Myanmar's internal affairs, but in practice, it has provided crucial support to the military junta, shielding it from international pressure and providing essential economic and military aid.

This support manifests in several ways. Diplomatically, China has used its veto power in the United Nations Security Council to block resolutions that could have imposed harsher sanctions or significant actions against the junta. It has also expressed opposition to the International Criminal Court and requests for the arrest of General Min Aung Hlaing. This diplomatic shield has allowed the regime to resist international condemnation and continue its internal repression.

Economically and militarily, China remains the primary supplier of arms and technology. Even after the coup, sales of sophisticated weaponry continued, crucial for the Tatmadaw (the Myanmar armed forces) in its fight against ethnic militias and People's Defense Forces (PDFs). Furthermore, technological support for building a Myanmar "cyber firewall," similar to China's, has strengthened the regime's internal control and surveillance, helping to consolidate its power and offering China privileged channels for intelligence gathering.

Economy and predatory strategies

China is the largest trading partner and foreign investor in Myanmar. This economic relationship unfolds on multiple fronts. While China is the main destination for Myanmar's exports, BRI projects in Myanmar, such as deep-water ports, new cities, and high-speed railways, attract substantial Chinese investment. This influx of Chinese capital has been particularly significant given that Western investors have reduced their presence due to political instability and human rights concerns.

A worrying aspect of this relationship is Beijing's predatory policy, which has exploited Myanmar's severe national economic crisis, exacerbated by political instability and sanctions. Through an aggressive lending strategy, China has progressively increased Myanmar's financial dependence, setting the stage for strategic acquisitions. This "debt diplomacy" has allowed Beijing to gain control or significant influence over key infrastructure, such as ports, which translates into direct and strategic access for the PLA.

The crucial issue of rare earths and risks to China's supply chain

A particularly sensitive and strategic aspect of the economic relationship is China's growing and now more pressing dependence on rare earths extracted in Myanmar. China holds a near-monopoly in processing heavy rare earths, essential for producing magnets used in key sectors like wind turbines, medical devices, and electric vehicles. Despite this dominance in processing, Beijing relies heavily on Myanmar for the raw materials, specifically the rare earths and oxides needed for their production. In the first four months of this year, war-torn Myanmar was the source of nearly half of China's imports of these resources, according to Chinese customs data.

In recent years, China has also begun to rely on rare earth extraction in Myanmar's bordering regions. Imports come from poorly regulated mines in that country and likely also from illegally mined Chinese minerals recycled across the border.

China also faces vulnerabilities in its rare earth supply chain. For example, when Covid-19 policies temporarily closed the China-Myanmar border, rare earth prices began to rise dramatically, highlighting the sensitivity of this dependence. These price pressures were somewhat alleviated with the border's reopening.

The situation became even more critical for Beijing after a major rare earth mining belt in northern Myanmar, previously under control, was recently seized by an armed group fighting the junta, jeopardizing China's access to new supplies of minerals like dysprosium and terbium.

In response to this threat to its strategic supply chains, in June 2025, a China-backed militia is actively protecting new rare earth mines in eastern Myanmar (Shan State). According to sources familiar with the matter, Beijing is moving to secure control of these minerals, viewing them as a crucial bargaining chip in its trade war with Washington. Chinese miners are opening new deposits in the hills of Shan State, between Mong Hsat and Mong Yun. At least 100 people are working shifts, day and night, digging and extracting minerals with chemicals, with trucks transporting the material to the Chinese border, about 200 km away. Satellite images (Planet Labs and Maxar Technologies) confirm the opening of these new sites. This move underscores China's urgency and determination to secure its rare earth supplies, even if it means militarily supporting controversial mining operations. These operations, often conducted in collaboration with armed groups, have a devastating impact on the environment and local communities, causing deforestation, toxic ponds, and water contamination. The grabbing of raw materials, particularly rare earths, is the most striking aspect of China's predatory policy, which exploits the weak central government and fragmented territorial control to secure privileged access to these vital resources.

Current risks of supply chain disruption

The Myanmar regime has escalated military operations in Kachin State, in northern Myanmar, targeting rare earth and jade mining centers controlled by the ethnic Kachin Independence Army (KIA). KIA spokesperson Colonel Naw Bu stated that the regime plans to reclaim Special Region 1, a rare earth hub controlled by the New Democratic Army-Kachin (NDA-K), a junta-aligned group. This Special Region 1 extends along the eastern borders of Kachin State and includes towns like Chipwi, Tsawlaw, Pangwa, Kanpiketi, and Waingmaw. Chipwi and Pangwa are important rare earth mining centers located near the Chinese border, while the KIA also controls a key cross-border trade route with China through Kanpiketi.

Naw Bu reported on junta movements across Kachin State. They have conducted ground, artillery, and drone attacks in Waingmaw, and frontline KIA troops assess that regime forces are planning an offensive to reclaim Special Region 1. Junta infantry, supported by drones, has reached Lamyan village on the road leading east from KIA-controlled Sadone town towards Waingmaw. The regime is also reportedly arming militias in Khaunglanphu town, in Putao township, on the northern Kachin State border with China.

Junta forces are also fighting to reclaim Kachin's jade hub, with daily aerial and artillery attacks in the Hpakant, Indawgyi, and Bhamo areas. Fierce clashes erupted in Lone Khin village, near Hpakant, as regime forces attacked jade mines under KIA control. The junta's assault between June 3 and 6 caused explosions at two mining sites in Lone Khin, killing a civilian and causing destruction. Naw Bu accused the regime of burning mines and machinery to diminish their capabilities and deter mining companies from cooperating with them, warning residents to prepare for a prolonged battle for Hpakant. On Saturday, a KIA ambush reportedly killed at least 10 junta soldiers, though The Irrawaddy could not independently verify this claim.

Meanwhile, fighting has raged since December for Kachin State's second-largest city, Bhamo, where the KIA has surrounded the junta's Military Operations Command and upstream battalions, leading to fierce clashes. On May 20, the ethnic army attacked three junta helicopters transporting reinforcements and supplies to Bhamo. The junta launched its counteroffensive in Kachin State in late April, with two columns totaling about 1,000 soldiers beginning to advance on Hpakant from Kamaing and Mohnyin. The Mohnyin troops were intercepted by resistance forces in Nam Mun, near Indawgyi Lake, 100 kilometers south of Hpakant. However, the junta's column from Kamaing, consisting of about 600 soldiers, arrived in Lone Khin, 12 km from Hpakant, in late May after overcoming KIA positions along the road. They arrested civilians and burned heavy machinery at mining sites.

In parallel with these military developments, the junta arrested Colonel Kyaw Hset Myint, commander of Battalion 33 based in Hpakant, for alleged involvement in illegal jade extraction and sales. Reportedly, his wife and mother-in-law were also detained and later released after interrogation. He was replaced by Colonel Kaung Min Htutt.

Military cooperation and current clashes

Military cooperation between China and Myanmar is a fundamental element for the Myanmar military junta, especially after the 2021 coup.

China has continued to sell sophisticated weapons to Myanmar, with sales exceeding $250 million after the coup. This military support is crucial for the Tatmadaw in its fight against ethnic militias and People's Defense Forces (PDFs) resisting the regime.

Beijing has provided the Myanmar military regime with technology necessary for building a "cyber firewall" similar to China's, strengthening internal control and surveillance in Myanmar. This technological support is an example of how China helps the regime consolidate its power.

Despite supporting the junta, China also has an interest in the stability of its border regions. The civil war in Myanmar has led to a flow of refugees and instability in border areas, sometimes prompting Beijing to mediate between the junta and ethnic armed groups to safeguard its interests. The active protection of new rare earth mines by China-backed militias, as reported in June, is a clear example of how Beijing's direct economic and strategic interests (in this case, rare earth supply) can translate into direct military and logistical support on the ground, beyond mere support for the junta. This dual approach reflects the complexity of Chinese foreign policy in the region.

Current military clashes continue to devastate Myanmar. Hundreds of families are fleeing their homes to escape escalating fighting between the army and anti-coup guerrillas. Since the military takeover in 2021, the country has been engulfed in a complex civil war that has displaced over 3.5 million people, according to United Nations data.

In an attempt to de-escalate tensions, a local broadcaster reported on Sunday that the Myanmar army has extended the current ceasefire agreement until June 30, 2025. This extension, effective from June 1, is intended to facilitate reconstruction and resettlement after the recent catastrophic earthquake that struck the country on March 28 (magnitude 7.7, with approximately 3,800 casualties and tens of thousands displaced), also aiming to bolster nationwide peace and order. The initial ceasefire was active from May 6 to May 31. In a statement on Saturday, the army urged ethnic armed groups and other rebel factions to avoid any activities that could jeopardize public well-being or undermine national stability, including refraining from road ambushes, targeting civilians or security personnel, attacking military installations, recruiting new members, or attempting to seize additional territory. The army emphasized that, should such violations occur, it would take defensive measures to ensure public safety. Despite this ceasefire, Myanmar continues to face significant unrest, particularly in northern regions, where fighting persists between the junta and various ethnic resistance forces.

Challenges and future prospects

The relationship between China and Myanmar faces a series of challenges. Myanmar's internal instability, with the ongoing civil war and the increasing control of rebel militias over certain areas, poses a significant risk to BRI projects and Chinese investments. The loss of control over important rare earth deposits in the north has demonstrated the vulnerability of Chinese supply chains and has pushed Beijing to seek new sources and actively protect them. China must balance its support for the regime with the need to protect its vital economic interests and border stability.

At the same time, Myanmar's dependence on China is expected to grow, given the West's reluctance to fully engage with the military junta. This further strengthens Beijing's influence over the country, making it an almost irreplaceable actor for the economic and military survival of the Myanmar regime. The move to militarily protect new rare earth mines highlights the strategic priority China places on these resources and its willingness to act directly to secure them, confirming the depth of interdependence and the impact of global dynamics (such as the trade war with Washington) on regional Chinese policies.

In summary, China plays a central and indispensable role in Myanmar, characterized by deep economic interdependence, vital military support, and privileged access to strategic resources like rare earths. This relationship, while mutually beneficial in various contexts, also carries significant implications for regional stability, human rights, and the environment in Myanmar, with China not hesitating to use direct means to safeguard its vital interests, often exploiting the country's economic vulnerability to strengthen its grip and sustain the ruling regime.