SOURCE / ECONOMY
Myanmar's political disruption yet to have major impact on operations of Chinese businesses
Political tremor sends shockwaves through financial markets
Published: Feb 01, 2021 09:03 PM

A man walks past a closed cosmetics booth in a shopping centre in Yangon on February 1, 2021. Photo: AFP


An abrupt change in Myanmar's political landscape on Monday sent instant shockwaves through its financial markets.

For Chinese businesses exploring opportunities in the Southeast Asian economy, one of the fastest-growing in the Asia-Pacific region, the disruption has yet to have a major impact on their operations, according to interviews conducted by the Global Times with employees of locally operated Chinese firms.

Myanmar's military on Monday declared a one-year state of emergency and said that power had been handed to the commander-in-chief of the armed forces, following detention of Myanmar's government leaders including Aung San Suu Kyi.

In two statements issued on its website on Monday, the Yangon Stock Exchange announced the suspension of trading and settlement from Monday "due to a network connection error," and said that trading and settlement will be halted until a further announcement. 

Myanmar banks agreed on a temporary closure of all financial services on Monday owing to "poor internet connections", Reuters reported, citing the Myanmar Bankers Association.

"The banks would seek permission from the central bank for the temporary closure and inform it when they planned to restart services," the association said in a statement.

Communications began to be restored at noon (local time), with phone calls and internet connections provided by local telcos MPT and MYTEL back to normal across the country, while services from two other mobile operators are being restored, according to China's state broadcaster. 

As a consequence of the changing political situation, the Yangon International Airport will be closed until May, according to civil aviation authorities, the Xinhua News Agency reported on Monday.

A Myanmar Airways International flight bound for Yangon from Guangzhou, South China's Guangdong Province, originally scheduled for Tuesday afternoon, has been canceled, information provider VariFlight revealed to the Global Times on Monday. There have been no Myanmar-bound flights from Chinese airlines over the past week, according to VariFlight.

"China is a friendly neighbor of Myanmar, and we hope that all parties in Myanmar can properly handle differences under the constitutional and legal framework, and safeguard political and social stability," Foreign Ministry spokesperson Wang Wenbin told a regular media conference on Monday.

The uproar that primarily occurred in Naypyidaw, the Myanmar capital, has yet to pose a serious problem for local operations of Chinese businesses that are largely based in Yangon, the industrial and commercial hub of Myanmar, according to some employees of Chinese companies.

An employee at a Chinese-owned private company in Yangon surnamed Zheng told the Global Times on Monday that there is "an obvious traffic decrease" in the street, and he is concerned about possible road closures.

"There is nothing left in the nearby convenience store, and I will stay home for safety reasons," Zheng said. He noted that mobile networks provided by local telecom operators have been cut off, but wireless signals are still functioning, although not very fast and efficient as before.

Chinese private entrepreneurs said that they're worried that the political turmoil could take a toll on their business in Myanmar, which has slumped under the fallout of the COVID-19 outbreak. 

An employee at a state-owned energy enterprise based in Yangon, who spoke on condition of anonymity, told the Global Times that some Chinese firms' business involving government dealings has been affected, but large projects such as the China-Myanmar pipeline, copper mine and nickel ore mine are operating as usual.

"Most Chinese employees have returned home for Spring Festival, and some returned even earlier due to the disruptions of the epidemic," he said. 

The local business community estimated that more than 100,000 Chinese are now working in Myanmar, but the number hit 300,000 before the pandemic.

There has been no further notification from the Chinese Embassy in Myanmar on a withdrawal of Chinese employees from Myanmar. But a Yangon-based fintech industry Chinese manager surnamed Liu told the Global Times that the embassy has released contact information for emergency use.

Myanmar's economy is among the fastest-growing in the Asia-Pacific region. As a result of the fallout of the COVID-19 pandemic, its economic growth was estimated to have slowed to 1.7 percent in the fiscal year 2019-20, from 6.8 percent in the prior year, per a World Bank report in mid-December. 

The Southeast Asian nation's economic growth is forecast to remain subdued at 2 percent in the fiscal year 2020-21, according to the World Bank.

Myanmar's trade with China - its top trading partner - through the maritime and land trade route and land border, topped $12 billion in its fiscal year 2019-20, the Myanmar News Agency reported in November, citing local official data. 


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