An investment project in Myanmar by Wanbao Mining Ltd., a Chinese State-owned company, has been protested by local villagers in recent weeks, due to their dissatisfaction with the compensation they received for their land. The Latbadaung Mountain copper mine project was even suspended in August because of the fierce opposition.

The confrontation reveals the increasingly tense relationship between Chinese enterprises and Myanmar locals. Some observers even bracket the Latbadaung project with the Myitsone Dam, another Chinese investment project suspended last September under overwhelming local public pressure.

Currently, the Chinese investments in Myanmar mainly focus on resource exploitation, like development of oil, gas, hydropower and mining, while the locals often have different opinions toward the program from the Myanmar government.

Myanmar's reform has created a country full of entangled interests and confrontations among interest groups. How to accommodate these conflicts of interest has become one of the biggest challenges for overseas investors.

The Myitsone Dam project won support from the Myanmar government, but was strongly criticized by the locals for failing to consider their interests.

The reason why Chinese enterprises often become a target of criticism in Myanmar is that they lack a clear understanding of the national situation of Myanmar, especially the complicated interest pattern in the country.

Chinese enterprises haven't given enough attention to other interest groups besides the Myanmar government and its local partners. And they haven't communicated well with the local NGOs and communities.

When running the Myitsone Dam project, the China Power Investment Corporation kept a rather low profile. It had little contact with the local media and NGOs, and staff involved with the project adopted closed management, which generated many conflicts and made the benefits of the project to locals unknown. Some media unfairly accused the project without a detailed investigation, which left a negative impression on the public.

Chinese enterprises should pay more attention to these challenges when investing in Myanmar. They should take into consideration the interests of the central Myanmar government, local governments and local communities, so as to benefit all sides. 

The Chinese enterprises should enhance the estimation and management of political risks in their investment programs. Sometimes compared with improperly handling market risks, failures in effectively managing political risks may bring more severe results.

Chinese enterprises could seek help through various channels. They could cooperate with local think tanks, universities and colleges, NGOs and other agencies with good reputation to master as much as local information concerning the programs.

Chinese companies could also learn international experiences on risk management from the Guidance on Responsible Business in Conflict-Affected and High-Risk Areas issued by the UN.

The Chinese companies need to attach importance to grass-roots voices.

In recent years, Chinese enterprises' investments in hydropower stations have stirred various local social conflicts. But though some are worrying about the construction of the Myitsone Dam, they do think it's feasible to build two small dams in upstream of the Myitsone Dam.

This reminds us that in the risk evaluation of projects, Chinese enterprises should take social tolerance into consideration.

The dissatisfaction with Chinese enterprises in Myanmar is mainly because the Myanmar government is often considered the biggest beneficiary of Chinese investment rather than the Myanmar people.

Chinese enterprises could formally establish a complaint procedure to learn of locals' problems, and should take them seriously and try to solve them.

More importantly, Chinese enterprises should publicize the details of their social responsibilities and make transparent information on land compensation and demolition.  

It's time for Chinese enterprises to alter their old habit of only catering to the government in Myanmar. Instead, they should pay more attention to the demands of local communities and their cultures and customs.

For example, some new houses built for relocating local villagers are unacceptable because Chinese companies don't know the local customs well. Such conflicts could be avoided by studying more and showing more respect.

The author is associate professor of the Institute of International Studies at Yunnan University. opinon@globaltimes.com.cn